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38 F.3d 1216NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.
Eddie TAYLOR, Plaintiff-Appellant,v.The GOODYEAR TIRE & RUBBER COMPANY, Defendant-Appellee.
No. 93-4059.
United States Court of Appeals, Sixth Circuit.
Oct. 17, 1994.
Before: MARTIN, NELSON and NORRIS, Circuit Judges.
ORDER
1
Eddie Taylor, a pro se Ohio resident, appeals a district court judgment which construed Taylor's complaint as having been brought under Sec. 510 of the Employment Retirement Income Security Act (ERISA), 29 U.S.C. Sec. 1140, and under Sec. 301 the Labor Management Relations Act (LMRA), 29 U.S.C. Sec. 185. The case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination, this panel unanimously agrees that oral argument is not needed. Fed.R.App.P. 34(a).
2
Taylor was employed by Goodyear from June 27, 1968, until January 23, 1980. Taylor alleged that while he was on layoff status at Goodyear, he was incarcerated in an Ohio prison and was mentally ill. During his incarceration, Goodyear sent Taylor a recall letter on September 30, 1983, despite the fact that Taylor had informed Goodyear that he was incarcerated and being treated for mental illness. After Taylor was released from prison, Taylor requested that Goodyear recall him and retroactively classify him as on sick leave during his period of incarceration, and Goodyear refused to comply. Taylor alleged that it was Goodyear's intent to interfere with Taylor's attainment of benefits in the employee benefit plan and in his future participation in this plan in violation of ERISA, 29 U.S.C. Sec. 1140, and in violation of "a collective bargaining agreement."
3
On May 5, 1993, the district court granted Goodyear's motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) as to Taylor's claim under Sec. 510 of ERISA. The district court treated Goodyear's motion for judgment on the pleadings as one for summary judgment with regard to Taylor's breach of a collective bargaining agreement claim and found in favor of Goodyear on this claim. On appeal, Taylor's brief is construed as arguing those claims which he raised in the district court.
4
Upon de novo review, we conclude that the district court properly dismissed Taylor's claim under Sec. 510 of ERISA pursuant to Fed.R.Civ.P. 12(c), because after accepting all the factual allegations of the complaint as true, there is no genuine issue of material fact and the defendant is entitled to judgment as a matter of law. See Paskvan v. City of Cleveland Civil Serv. Comm'n, 946 F.2d 1233, 1235 (6th Cir.1991). Because 29 U.S.C. Sec. 1140 does not provide a statute of limitations for claims brought under Sec. 510 of ERISA, we adopt the most analogous state statute of limitations. Tolle v. Carroll Touch, Inc., 977 F.2d 1129, 1137 (7th Cir.1992); McClure v. Zoecon, Inc., 936 F.2d 777, 778 (5th Cir.1991). The most analogous state statute of limitations for Sec. 510 ERISA claims is based on employment discrimination and/or wrongful termination law. See Tolle, 977 F.2d at 1137-38 (Illinois five-year statute of limitations applicable to claims for retaliatory discharge was applied to Sec. 510 ERISA claim); Felton v. Unisource Corp., 940 F.2d 503, 512 (9th Cir.1991) (most analogous state statute of limitations for Sec. 510 ERISA claim is wrongful termination against public policy or retaliatory discharge); McClure, 936 F.2d at 778 (proper characterization of Sec. 510 ERISA action for limitations purposes is as wrongful discharge or employment discrimination claim); Held v. Manufacturers Hanover Leasing Corp., 912 F.2d 1197, 1205 (10th Cir.1990) (most analogous state statute of limitations regarding Sec. 510 ERISA claim is one for employment discrimination); Gavalik v. Continental Can Co., 812 F.2d 834, 843-46 (3d Cir.), cert. denied, 484 U.S. 979 (1987) (relied on state statute of limitations applicable to employment discrimination in Sec. 510 ERISA case). Taylor's Sec. 510 ERISA claim is barred by the applicable Ohio statute of limitations as set forth in Ohio Rev.Code Sec. 2305.09(D) because his complaint was filed more than four years after his cause of action accrued.
5
With regard to Taylor's claim that Goodyear breached the collective bargaining agreement, we conclude that summary judgment was properly entered in favor of Goodyear because there is no genuine issue of material fact and Goodyear is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23 (1986). Taylor's claim is barred by the doctrines of res judicata, Kremer v. Chemical Constr. Corp., 456 U.S. 461, 467 n. 6 (1982); White v. Colgan Elec. Co., 781 F.2d 1214, 1216 (6th Cir.1986); Anchor Motor Freight v. International Bhd. of Teamsters, 700 F.2d 1067, 1070 (6th Cir.), cert. denied, 464 U.S. 819 (1983); Nathan v. Rowan, 651 F.2d 1223, 1226 (6th Cir.1981), and collateral estoppel. Montana v. United States, 440 U.S. 147, 153-54 (1979); Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5 (1979); United States v. Three Tracts of Property, 994 F.2d 287, 290 (6th Cir.1993). Taylor has already unsuccessfully litigated the issue of whether Goodyear breached the collective bargaining agreement in terminating Taylor's employment with Goodyear, see Taylor v. Goodyear Tire & Rubber Co., No. C86-3869(A) (N.D.Ohio July 30, 1991), and this court affirmed the district court's judgment on appeal. See Taylor v. Goodyear Tire & Rubber Co., No. 91-3812, 1992 WL 56750 (6th Cir. Mar. 23, 1992) (per curiam). Therefore, Taylor's LRMA claim is barred by the doctrines of res judicata and collateral estoppel.
6
Accordingly, we affirm the district court's judgment. Rule 9(b)(3), Rules of the Sixth Circuit.
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108 F.Supp.2d 116 (2000)
BLUE CROSS OF CALIFORNIA, et al.,
v.
SMITHKLINE BEECHAM CLINICAL LABORATORIES, INC.
No. 3:97CV1795 AVC.
United States District Court, D. Connecticut.
March 31, 2000.
*117 John Burns Farley, Daniel P. Scapellati, Halloran & Sage, Hartford, Thomas W. Brunner, Laura A. Foggan, C. Russell Clause, Eric Mahr, Nicole Telecki, Kirk J. Nahra, David O. Ferry, Clifford M. Sloan, Rand L. Allen, Russell D. Duncan, Wiley, Rein & Fielding, Alison M. Duncan, David L. Douglass, Thomas O. Gorman, Heather J. Stewart, Porter, Wright, Morris & Arthur, Washington, DC, for Blue Cross of CA, plaintiffs.
Bourke G. Spellacy, Richard S. Order, Donald C. Mahoney, Updike, Kelly & Spellacy, P.C., Hartford, CT, Herbert Dym, Mark H. Lynch, Bobby R. Burchfield, Ethan M. Posner, Covington & Burling, Washington, DC, Frederick G. Herold, Thoma H. Lee, II, Dechert, Proce & Rhoads, Philadelphia, PA, John P. Lynch. Joseph A. Sullivan, Lathan & Watkins, Chicago, IL, for SmithKline Beecham Clinical Labs, Inc., defendant.
RULING ON THE DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
COVELLO, Chief Judge.
This is a consolidated action for legal and equitable relief in which the plaintiffs, thirty-seven health care insurers, four health care plans, and six individuals, claim that the defendant, SmithKline Beecham *118 Clinical Laboratories, Inc. (SBCL), engaged in, inter alia, fraudulent billing practices. The second amended complaint and the amended class action complaint assert causes of action pursuant to the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C.S 1961 et seq., ("RICO"), the Employee Retirement Income Security Act, 29 U.S.C. § 1001 et seq. ("ERISA"), the Pennsylvania Insurance Fraud Statute, 18 Pa.Con.Stat.Ann. § 4117(a)(2) and under state common law tenets sounding in fraud and unjust enrichment.
On July 2, 1999, the court dismissed the RICO action asserted in counts I, II, and III of the second amended class action complaint, the ERISA action asserted in count IV of the second amended class action complaint to the extent the claims were asserted by 31 of the plaintiff-insurers, and count V alleging federal common law claims. Further, the court dismissed counts I and III of the consolidated class action complaint alleging causes of action under RICO and federal common law, respectively, and dismissed counts IV, V and VI of the consolidated class action complaint to the extent those claims were asserted by the four plaintiff-employee benefit plans.
Pursuant to Federal Rule of Civil Procedure 56(c), SBCL now moves for summary judgment on the plaintiffs-insurers' state law claims set forth in counts VI, VII and VIII of the second amended complaint. SBCL argues that these claims are barred by the applicable statute of limitations. The issues presented are: (1) whether count VI, which alleges violations of the Pennsylvania Insurance Fraud Statute, 18 Pa.Con.Stat. § 4117(a)(2), is barred by Pennsylvania's two-year statute of limitations governing fraud claims; (2) whether count VII, which alleges common law fraud, is barred by Connecticut's three-year limitation period governing fraud claims; and (3) whether count VIII, which seeks recovery under the equitable doctrine of unjust enrichment, should be dismissed when related legal claims are time-barred.
For the reasons hereinafter set forth, counts VII and VIII are time-barred, and count VIII is properly dismissed on grounds that the related legal claims are time-barred. Accordingly, the motion is granted.
FACTS
The facts underlying this case have been set forth in several of the court's previous decisions, including Blue Cross of California v. SmithKline Beecham Clinical Laboratories, Inc., 62 F.Supp.2d 544, 548 (D.Conn.1998). In light of these decisions, familiarity with which is presumed, the court will recite only those facts essential to the within motion for summary judgment.
Examination of the second amended complaint, affidavits, pleadings, exhibits, supplemental materials, and the Local Rule 9 statements accompanying the motion for summary judgment, and the responses thereto, discloses the following undisputed, material facts:
On August 19, 1997, thirty-seven insurance companies ("the plaintiffs-insurers") initiated this lawsuit against SBCL. SBCL is a subsidiary of SmithKlein Beecham plc, a British corporation and incorporated in the state of Delaware. SBCL owns and operates one of the nation's largest chains of clinical laboratories.
On September 19, 1998, the plaintiffs-insurers filed their second amended complaint against SBCL. The gravamen of the second amended complaint is that from 1989 to 1995, SBCL engaged in fraudulent billing practices that resulted in millions of dollars in losses to the plaintiffs-insurers. Specifically, the plaintiffs-insurers allege that SBCL exploited the health care payment system in five fundamental ways: 1) SBCL billed the plaintiffs-insurers for tests that physicians did not order or intend to order and billed for tests that it had led physicians to believe would not *119 result in separate charges ("add-ons"); 2) SBCL offered physicians discounts for certain test packages, but billed the plaintiffs-insurers for the full price for supposedly discount test packages ("selected discounts"); 3) SBCL billed the plaintiffs-insurers separately for expensive constituents of test panels that should have been billed at a single composite rate ("unbundling"); 4) SBCL performed and billed for more expensive tests than were ordered ("upcoding"), and in some cases performed; and 5) SBCL inserted fabricated diagnosis codes to obtain reimbursement from third-party payers ("code jamming").
Without admitting any of the alleged conduct, SBCL has provided the court with an abundance of undisputed evidence indicating the above enumerated "challenged activities" were widespread in the clinical laboratory industry and known to the plaintiffs-insurers long before the filing of the original complaint. In this regard, between 1990 and 1993, the national media and various professional organizations had released to the public volumes of information concerning fraudulent billing practices by several national, clinical laboratories, to include SBCL.
Specifically, as early as May 1990, the Office of the Inspector General ("OIG") was investigating National Health Laboratories ("NHL"), one of the nation's largest clinical laboratories, for "false billing and improper use of panel testing." (SBCL's Ex. 6, National Health Labs Target of Criminal Probe, Nat'l. Intelligence Rep., May 25, 1990 at 3.) NHL publicly acknowledged the OIG investigation in December 1990. (SBCL's Ex. 8, National Health Labs, Subject to Federal Grand Jury Probe, Says It will Cooperate With U.S. Attorney, Nat'l Intelligence Rep., Dec. 1990.) Media coverage of the grand jury inquiry continued into the summer of 1992. (SBCL's Ex. 11, Don Bauder, Speculation Rises on Probe of La Jolla Firm, San Diego Union-Trib., Aug. 12, 1992.) In September 1992, the media reported that NHL was negotiating with federal officials to settle the probe of its laboratory billing practices, including its billing for tests containing improperly added profiles. (SBCL's Ex. 12, Government May Settle With National Health Labs, Nat'l Intelligence Rep., Sept. 30, 1992.) At the same time, the National Health Care Anti-Fraud Association ("NHCAA") issued a "Fraud-Alert" to its members, including plaintiffs-insurers BC/BS Texas and BC/BS New Jersey, informing them that several unidentified clinical laboratories were "unbundling" certain tests and billing them separately from profiles in order to "generate substantial additional revenue for the laboratories." (SBCL's Ex. 13, NHCAA Fraud Alert # 1992-7.)
In December 1992, the New York Times, among others, reported that NHL had settled the action.[1] (SBCL Ex. 16, Calvin Sims, Company to Pay $110 Million in Health-Claims Fraud Suit, New York Times, Dec. 19, 1992.) In announcing the settlement on December 8, 1992, the U.S. Attorney in San Diego stated that the government was "investigating other companies for similar activity." (SBCL Ex. 15, Dana Priest, Lab Firm to Pay 110 Million in Blood Test Fraud: Company Also Admits Felonies in Billing For Unnecessary *120 Work, Wash. Post, Dec. 19, 1992.) The U.S. Attorney further stated that the "criminal practices that [NHL] has admitted ... are not unique to [NHL]. Indeed [he] would go so far as to say that, in one form or another, these are industry-wide practices." (Id.)
In January 1993, in the aftermath of the NHL settlement, several of the nations largest private health insurers, including the lead plaintiff in this case (Blue Cross of California), asserted publicly that they would be "taking a closer look at claims for lab tests as a result of the [NHL] case." (SBCL's Ex. 23, Mary Wagner, Settlement's Repercussions Feared, Mod. Healthcare, Jan. 11, 1993 at 15.) As one industry consultant remarked, NHL "put[] up the antennae of every insurance company in the nation." (Id.)
In February 1993, the press reported that the Justice Department was probing another top U.S. laboratory company MedPath, Inc., (SBCL's Ex. 27, Feds Pursue Lab Industry Probe, MetPath Cooperating With Requests, Nat'l Intelligence Rep., Feb. 10, 1993.) Several months later, in June 1993, CNN ran a special highprofile "investigative" report on the clinical laboratory industry. The report described how the major laboratories billed for test profiles, and alleged that they often "unbundled" tests. The report also stated that "sources tell CNN that five other large medical labs are also now under investigation on similar fraud charges by state and federal authorities across the country." (SBCL Ex. 28, CNN Probe of NHL Fraud Cases Cites Inaction By Government, Nat'l Intelligence Rep., June 14, 1993.) Moreover, the CNN report quoted an NHL spokesman who said that its billing techniques were "common industry practice." (Id.)
In July 1993, the Justice Department announced that it had reached settlements with Med-Chek Laboratories for the same "unbundling" practices engaged in by NHL (SBCL's Ex. 30, Justice Department Scores More Big-Buck Settlements against Labs, Nat'l Intelligence Rep., Aug. 20, 1993.)
On August 16, 1993, the Wall Street Journal ran a front-page story detailing how the government had built its case against NHL and the impact the prosecution had in sparking equally aggressive investigations of clinical laboratory testing and billing practices. The article also reported that several other clinical laboratories were under investigation, and that these laboratories were employing the same billing practices as NHL. (SBCL's Ex. 31, Rhondle & Amy Stevens, Under Examination: Investigators Intensify Crackdown on Fraud In the Healthcare Industry, Wall St.J., Aug. 16, 1993.) Less than two weeks later, SBCL publicly acknowledged that it had received an OIG investigative subpoena as part of an industry-wide probe of laboratory billing practices. (SBCL's Ex. 32, Milt Freudenheim, U.S. Subpoenas Blood-Test Files in New Health Care Fraud Inquiry, New York Times, Aug. 28, 1993.) One of the named plaintiffs-insurers herein and member of the NHCAA,[2] BC/BS of Texas, admitted that on August 27, 1993, it had actual knowledge of "certain aspects" of SBCL's improper billing practices. (SBCL's Ex. 2, Plaintiff's Response To First Set of Interrogatories.) This information led BC/BS Texas to become suspicious of SBCL's billing, and it commenced an investigation. (Plaintiffs Insurers Opp.Mem. at 17.)
In early September 1993, two more of the nation's largest clinical laboratories Unilab and Metpath agreed to pay the federal government $39.8 million to settle charges that they had improperly "addedon" tests. (SBCL's Ex. 33, Rhonda L. Rundle, Corning Unit, Unilab Pay $39.8 Million to Settle Allegation of Medicare Fraud, Wall St.J., Sept. 14, 1993.)
*121 On September 19, 1993, the CBS television program, 60 Minutes, aired a story called "Blood Money," which discussed the NHL and Metpath settlement. The story sought to explain the billing practices that precipitated those settlements, and attempted to "sting" NHL and SBCL by having a program producer fill a prescription for a blood test profile, along with a complete blood count and thyroid test, at NHL and SBCL testing facilities. The SBCL facility purportedly "added-on" a test for Magnesium, an allegation made on camera. (SBCL's Ex. 37, 60 Minutes, vol. XXVI, No.1, Sept. 19, 1993 Tr. at 63-69.)
The plaintiffs-insurers, for their part, all have standard practices and procedures designed to detect billing irregularities, and "may have found some errors and difficulties with claims submitted by SBCL long before they filed the present action". (Pl.Stmt.¶ 2). Four of the plaintiffs-insurers, BC/BS of Texas, Golden Rule, Guardian, and John Deere, maintain that they contacted SBCL about billing irregularities discovered between 1992 and 1995, and assert that in response, SBCL denied any fraudulent acts.
STANDARD
Summary judgment is appropriately granted when the evidentiary record shows that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In determining whether the record presents genuine issues for trial, the court must view all inferences and ambiguities in a light most favorable to the non-moving party. See Bryant v. Maffucci, 923 F.2d 979, 982 (2d Cir.), cert. denied, 502 U.S. 849, 112 S.Ct. 152, 116 L.Ed.2d 117 (1991). A plaintiff raises a genuine issue of material fact if "the jury could reasonably find for the plaintiff." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Rule 56 "provides that the mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact." Liberty Lobby, supra, at 247-48, 106 S.Ct. 2505 (emphasis original). The Supreme Court has noted that:
Rule 56 must be construed with due regard not only for the rights of persons asserting claims and defenses that are adequately based in fact to have those claims and defenses tried to a jury, but also for the rights of persons opposing such claims and defenses to demonstrate in the manner provided by the Rule, prior to trial, that the claims and defenses have no factual basis.
Celotex v. Catrett, 477 U.S. 317, 327, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). "One of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims ... [and] it should be interpreted in a way that allows it to accomplish this purpose." Celotex v. Catrett, 477 U.S. 317, 323-24, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
DISCUSSION
1. Counts VI and VII.
SBCL first argues that the plaintiffs-insurers' remaining state law claims set forth in counts VI and VII are barred by the applicable statute of limitations. Specifically, SBCL asserts that the undisputed facts demonstrate that the plaintiffs-insurers knew, or should have known, of SBCL's challenged billing and coding practices by 1993. Because the plaintiffs did not file their original complaint until August 19, 1997, SBCL asserts that: (a) count VI, which alleges violations of the Pennsylvania Insurance Fraud Statute, 18 Pa.Con.Stat. § 4117(a)(2), is barred by Pennsylvania's two-year limitation on fraud claims; and (b) count VII, which alleges common law fraud, is barred by Connecticut's three year limitation on fraud claims.
The plaintiffs-insurers respond that SBCL is not entitled to summary judgment *122 because SBCL has failed to prove either that they knew or should have known of SBCL's fraudulent schemes prior to August 19, 1994, and, in any event, SBCL's own active, fraudulent concealment of its schemes tolled the statutes of limitations. The court agrees with SBCL.
Ordinarily, the statute of limitations begins to run "when the plaintiff knows or has reason to know of the injury which is the basis of [the] action." Williams v. Perry, 960 F.Supp. 534, 538 (D.Conn.1996); Pearce v. Salvation Army, 449 Pa.Super. 654, 674 A.2d 1123, 1125 (1996) (cause of action for fraud does not accrue until the fraud has been discovered). A plaintiff that does not have actual knowledge of the injury may nevertheless trigger the running of the limitations period if the plaintiff "should have known" of the injury. Dodds v. Cigna Securities Inc., 12 F.3d 346, 350 (2d Cir.1993). "The means of knowledge are the same thing in effect as knowledge itself." Wood v. Carpenter, 101 U.S. 135, 143, 11 Otto 135, 25 L.Ed. 807 (1879).
Consequently, when circumstances suggest to a person that he may have been defrauded, a "duty of inquiry" arises and knowledge of the alleged fraud will be imputed to him. Armstrong v. McAlpin, 699 F.2d 79, 88 (2d Cir.1983). Such suggestive circumstances are known as "storm warnings" of possible fraud. Ciccarelli v. Gichner Systems Group, Inc., 862 F.Supp. 1293 (M.D.Pa.1994); accord In re Integrated Resources, 815 F.Supp. 620, 639 (S.D.N.Y.1993); Quantum Overseas, N.V. v. Touche Ross & Co., 663 F.Supp. 658, 663-64 (S.D.N.Y.1987). Storm warnings need not provide notice of the entire fraud to constitute inquiry notice. Dodds v. Cigna Securities, Inc., 12 F.3d 346, 352 (2d Cir.1993). Once on inquiry notice, the plaintiff has an obligation to discover the fraud with reasonable diligence. Stone v. Williams, 970 F.2d 1043, 1049 (2d Cir.1992) (citing Campbell v. Upjohn Co., 676 F.2d 1122, 1128 (6th Cir. 1982)). "The test as to when fraud should with reasonable diligence have been discovered is an objective one." Armstrong, 699 F.2d at 88.
Where, on the other hand, a defendant deliberately conceals material facts relating to his wrongdoing, time does not begin to run until the plaintiff discovers, or by reasonable diligence could have discovered, the basis of the lawsuit. Barrett v. United States, 689 F.2d 324, 327 (2d Cir.1982). Deliberate concealment requires "clear, concise and unequivocal evidence" of conduct directed to the very point of "obtaining a delay in asserting the cause of action." Gibbons v. NER Holdings Inc., 983 F.Supp. 310, 317 (D.Conn. 1997); see also Bohus v. Beloff, 950 F.2d 919, 925-26 (3d Cir.1991); Pocahontas Supreme Coal Co. v. Bethlehem Steel, 828 F.2d 211, 219 (4th Cir.1987) (claim of fraudulent concealment cannot "rest on no more than an alleged failure to own up to illegal conduct").
In this case, the plaintiffs filed the original complaint on August 19, 1997. Count VI, which alleges violations of the Pennsylvania Insurance Fraud Statute, 18 Pa.Con.Stat. § 4117(a)(2), is governed by Pennsylvania's two-year limitations period governing fraud claims.[3] Count VII, *123 which alleges common law fraud, is governed by Connecticut's three-year limitation on fraud claims.[4] Consequently, the Pennsylvania statutory claim and the common law fraud claim are time-barred if the challenged billing practices were "knowable" to the plaintiffs before August 19, 1994 (or 1995 for count VI alone).
The court concludes that because the plaintiffs-insurers knew or had reason to know of SBCL's challenged practices prior to August 19, 1994, and there is no evidence of active, fraudulent concealment, counts VI and VII are time-barred.[5] The undisputed evidence demonstrates that between 1990 and 1993, the national media and various professional organizations released to the public volumes of information concerning fraudulent billing practices by several national, clinical laboratories, to include SBCL. This highly publicized information disclosed federal government investigations and settlements with several national laboratories for some of the same conduct as alleged in the within action, to include "unbundling," and "add-ons." Moreover, federal prosecutors were quoted as saying that these practices were "industry-wide" and that SBCL had become the subject of a federal investigation for irregular billing practices. Indeed, one of the plaintiffs-insurers herein, BC/BS of Texas, admitted to having actual knowledge of at least some of SBCL's irregular billing practices as early as August 1993. BC/BS of Texas, as well as other plaintiffs-insurers herein, were members of the NHCAA, an organization where members share information to aid in the investigation of health care fraud.
*124 The court presumes that this highly publicized, industry-wide information was known to the plaintiffs prior to the end of 1993. See In re Integrated Resources Real Estate Ltd. Partnerships Sec. Litig., 815 F.Supp. 620, 640 (S.D.N.Y.1993) ("sophisticated investors legally may be presumed to know of information in the public domain, such as newspapers and magazine articles"); Seibert v. Sperry Rand Corp., 586 F.2d 949, 952 (2d Cir.1978) (plaintiff shareholders presumed to know information in public domain); Hartford Fire Ins. Co. v. Federated Dep't Stores, Inc., 723 F.Supp. 976 (S.D.N.Y.1989) (plaintiffs should have known about "general publicity" in the press and the financial community); Bibeault v. Advanced Health Corp., 1999 WL 301691 at *5 (S.D.N.Y. May 12, 1999) ("when the facts giving rise to a fraud action are in the public domain, courts regularly impute constructive knowledge to the plaintiffs for the purpose of triggering the statute of limitations").
With deference to the rule that a "storm warning" need not provide notice of the entire fraud to constitute inquiry notice, the court concludes that the cumulative affect of the above information constitutes a "storm warning" of sufficient magnitude to place the insurers on inquiry notice of SBCL's potentially fraudulent billing practices no later than the end of 1993.
As set forth supra, if SBCL fraudulently concealed material facts relating to its wrongdoing, the limitations period would not begin to run until such time as the plaintiffs-insurers discovered, or by reasonable diligence could have discovered, the basis of the lawsuit. Barrett, 689 F.2d at 327. In this case, however, the plaintiffs-insurers have failed to offer any evidence that SBCL actively concealed the challenged activities. In this regard, four of the plaintiffs-insurers, Blue Cross/Blue Shield of Texas, Golden Rule, Guardian, and John Deere, maintain that they contacted SBCL about billing irregularities discovered between 1992 and 1995, and assert that in response, SBCL denied any fraudulent acts. Because, however, fraudulent concealment cannot "rest on a failure to own up to illegal conduct," Pocahontas, 828 F.2d at 218-19, the plaintiffs-insurers are not entitled to a tolling of the limitations period. In sum, because the plaintiffs-insurers knew or had reason to know of SBCL's challenged practices prior to August 19, 1994, and there is no evidence of active, fraudulent concealment, counts VI and VII are time-barred.
2. Count VIII
SBCL next argues that count VIII, which seeks relief under the equitable doctrine of "unjust enrichment," is properly dismissed because under Connecticut law, a claim sounding in equity is barred if a plaintiff's related legal claims are time-barred. The plaintiffs-insurers respond that there is simply no authority for SBCL's proposition and, in any event, actions in equity are not governed by a statute of limitations. The court agrees with SBCL.
In Connecticut, claims for "unjust enrichment" are considered "equitable" rather than "legal" causes of action. See e.g. Meaney v. Connecticut Hospital Assoc., 250 Conn. 500, 511, 735 A.2d 813 (1999). Where a plaintiff pursues an action for fraud based on both "legal" and "equitable" principles, it is well settled that "equity will withhold its remedy if the legal right is barred by the relevant statute of limitations." Campbell v. New Milford Bd. Of Educ., 36 Conn.Supp. 357, 364 n. 5, 423 A.2d 900, 905 (1980); see also Williams v. Walsh, 558 F.2d 667, 671 (2d Cir.1977) (affirming summary judgment on "equitable" claim where legal claims dismissed on limitations grounds). Here, the "equitable" claim for unjust enrichment is based on the same conduct as the "legal" claims set forth in counts VI and VII. Because the court has concluded that counts VI and VII are time-barred, the court will exercise its equitable powers to withhold relief on the claim for unjust enrichment. Accordingly, summary judgment *125 is granted with respect to count VIII.
CONCLUSION
For the foregoing reasons, the defendant's motion (document no. 225) is GRANTED.
It is so ordered, this 31st day of March, at Hartford, Connecticut.
NOTES
[1] Other news articles that reported the settlement include: (SBCL's Ex. 14, Richard Turner, National Health Labs Pleads Guilty to Fraud, Agrees to Pay $110 Million, Wall St. J., Dec. 21, 1992), (SBCL's Ex. 15 Dana Priest, Lab Firm to Pay $110 Million in Blood Test Fraud; Company Also Admits Felonies in Billing for Unnecessary Work, Wash. Post, Dec. 19, 1992), (SBCL's Ex. 16, Calvin Sims, Company to Pay $111 Million in Health-Claims Fraud Suit, New York Times, Dec. 19, 1992), (SBCL's Ex. 17, Tony Perris, U.S. Settles Huge Fraud Case with Medical Lab, Los Angeles Times, Dec. 19, 1992), (SBCL's Ex. 18, Medical Marketing at Public Expense, Los Angeles Times, Dec. 19, 1992), (SBCL's Ex. 19, Sharon Jones, Lab Firm Must Pay Millions for Fraud, San Diego Union-Tribune, Dec. 19, 1992); (SBCL's Ex. 20, Connie Cass, Medical Lab Agrees to Pay $110 for Fraudulent Billing, Assoc. Press, Dec. 18, 1992); (SBCL's Ex. 21, National Health Plunges on Fire, Guilty Pleas, U.P.I., Dec. 21, 1992).
[2] The NHCAA exists to educate its members in the "detection [and] investigation of health care fraud" and to provide an "information-sharing network ... to aid in the investigation of health care fraud." (SBCL's Ex. 5, NHCAA January 1993 Fact Sheet.)
[3] Pursuant to the choice of law rules of Connecticut, count VI is governed by a Pennsylvania limitations period. See Rogers v. Grimaldi, 875 F.2d 994, 1002 (2d Cir.1989) (forum state's choice of law rules govern pendent state law claims in a federal question case). Under the Connecticut rule, limitations periods are set by the law of the forum state. Baxter v. Sturm, Ruger & Co., Inc., 230 Conn. 335, 339, 644 A.2d 1297, 1299 (1994) (under the "general rule," limitations period is set by "lex fori"). An exception to this general rule, however, requires that the limitations period of a foreign state apply if (1) the foreign state created the cause of action by statute, and (2) the limitations period is substantive. See Feldt v. Sturm, Ruger & Co., 721 F.Supp. 403, 406 (D.Conn.1989) (applying Georgia limitation in suit where Georgia statute created the cause of action). A statute of limitations is "substantive" with respect to a right or claim that was not present at common law. Id. (cause of action did not exist under Georgia common law). Count VI is created by a Pennsylvania statute, and its limitations period is "substantive" because the statute gives insurers new "rights" to seek treble damages and to prove fraud claims by a preponderance of the evidence, a less stringent standard than the standard at common law which requires one to prove fraud by "clear and convincing" evidence. See e.g., Wexco, Inc. v. IMC, Inc., 820 F.Supp. 194, 203 (M.D.Pa.1993); Majestic Box Co., Inc. v. Frank, 1998 WL 720463 at *2-3 (E.D.Pa. Sept.2, 1998). The limitations period governing Count VI is, accordingly, substantive and is thus set by Pennsylvania law. The Pennsylvania insurance fraud statute does not provide its own limitations period and courts have not ruled on the appropriate limitation. Under Pennsylvania law, a cause of action based on a statute that lacks an express limitation provision is governed by the limitation period covering the most "analogous" enumerated claim. Menichini v. Grant, 995 F.2d 1224, 1229 (3d Cir.1993). The cause of action with a specified limitations period that is most "analogous" to the plaintiffs' insurance fraud claim is common-law fraud. See e.g., Menichini v. Grant, 995 F.2d 1224, 1229 (3d Cir.1993). Accordingly, Count VI is governed by Pennsylvania's two year limitation on claims for common law fraud. See 42 Pa.Con.Stat. § 5524(7) (two-year limitation on claims for "tortious conduct" including "deceit or fraud").
[4] Whether or not count VII is asserted under Connecticut law, it is a common law claim, and therefore is governed by the Connecticut, three year limitations period for common-law fraud. See Conn.Gen.Stat. § 52-577.
[5] The plaintiffs-insurers have moved pursuant to Rule 56(e) to strike SBCL exhibits 24-37 for want of authentication and on hearsay grounds. The motion is denied. While SBCL filed several newspaper articles and other media reports without proper authentication, SBCL subsequently cured this technical defect with the appropriate certifications in its Memorandum In Opposition To Plaintiffs' Motion To Strike, which the court permits SBCL to file nunc pro tunc. See Breitling, U.S.A., Inc. v. Federal Express Corp., 45 F.Sup.2d 179, 182 n. 3 (D.Conn.1999) (accepting nunc pro tunc "additional materials ... because the defendant has cured the defect without prejudice to the plaintiff by filing an affidavit properly authenticating the document in question"); Kidder, Peabody & Co. v. IAG Int'l Acceptance Group, 28 F.Sup.2d 126, 130 (S.D.N.Y.1998) (permitting summary judgment movant to submit, nunc pro tunc, affidavits authenticating challenged materials). Moreover, because SBCL has not offered the newspaper articles and reports for the truth of the matter asserted, but to show that the plaintiffs-insurers were on inquiry notice of the matters reported therein, the plaintiffs-insurers' hearsay objection is overruled. See Perez v. Alcoa Fujikura, Ltd., 969 F.Supp. 991, 999 (W.D.Tex.1997) (admitting newspaper articles so long as they are not considered for the truth of the matter asserted).
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544 N.E.2d 178 (1989)
CITY OF GARY, Indiana, and City of Gary, Indiana Fire Department, Defendants-Appellants,
v.
Joseph BELOVICH and Bernice Belovich, Plaintiffs-Appellees.
No. 64A03-8804-CV-116.
Court of Appeals of Indiana, Third District.
September 25, 1989.
Rehearing Denied February 20, 1990.
Gilbert King, Jr., Corp. Counsel, Robert D. Rucker, City Atty., Gary, for defendants-appellants.
James J. Nagy, Munster, for plaintiffs-appellees.
GARRARD, Presiding Judge.
In a prior appeal, City of Gary v. Belovich (1987), Ind. App., 504 N.E.2d 286, rehearing denied, this court determined that the appellees (Belovichs) had secured valid title to the real estate here in question. When that decision became final it became the law of the case and became binding on the present appeal. See, e.g., Wabash Twp. v. Cooper (1943), 221 Ind. 304, 47 N.E.2d 611; New York Life Ins. Co. v. Kuhlenschmidt (1941), 218 Ind. 404, 33 N.E.2d 340.
After remand Belovichs filed a complaint asserting that the city's continued use of the real estate constituted inverse condemnation, that the city's recording of its previously unrecorded deed constituted slander of title, and that (in the absence of condemnation) they were entitled to ejectment and damages. In partial response the city counterclaimed that it was entitled to the value of the improvements situate upon the real estate by virtue of the Occupying Claimants Statute, IC XX-X-XX-X et seq.
The trial court granted summary judgment on the claim of inverse condemnation and entered its order appointing appraisers. See IC XX-XX-X-XX. It dismissed the counterclaim. The city appeals both determinations. We affirm.
The undisputed evidence is that the city has and is using the property in question as a fire station. Indisputably, it has the power of eminent domain and such a use is an appropriate basis for the exercise of that power. The city attempts to avoid the consequences of these undisputed facts by asserting that Belovichs had actual knowledge of the city's use when they purchased the property. That attempt must fail because it seeks to relitigate the issue *179 of whether Belovichs acquired ownership that was decided in the former appeal. The trial court correctly granted summary judgment on the claim of inverse condemnation.
The city contends it was error to dismiss its claim under the Occupying Claimant's Statute, IC XX-X-XX-X et seq. We disagree.
The undisputed facts establish that the city constructed the improvements which are the subject of its counterclaim during the period between December 20, 1973 and late 1974. At that time the city held valid title to the real estate through the deed received from the Mravcas in 1970. The Belovichs purchased the property at tax sale and received their deed in December, 1984.
The Occupying Claimant's Statute is designed to afford relief where an occupant having only color of title makes improvements to land under the belief that it is his and then learns that someone else is in truth the owner. It has no application where a true owner makes improvements and then subsequently loses his ownership through operation of law. Pulse v. Osborn (1902), 30 Ind. App. 631, 634, 64 N.E. 59.
Similarly, the statute has no application here. When the improvements were made by the city it was, in fact, the fee simple owner of the real estate, at least so far as any claim involving the Belovichs is concerned. Schmidt v. Zahrndt (1897), 148 Ind. 447, 47 N.E. 335 (recording deed not necessary to convey title).
It subsequently lost its title by virtue of the tax sale but that sale conveyed its interest in both the real estate and the improvements. There is nothing for the Occupying Claimant's Statute to operate on. It was therefore not error to dismiss the counterclaim.
Affirmed.
STATON and HOFFMAN, JJ., concur.
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469 N.E.2d 768 (1984)
In the matter of the Trust Created under Agreement Dated September 19, 1983, by Ralph W. Johnson.
Paul E. Lowe, Trustee, Appellant (Petitioner below),
v.
CHARMAINE JOHNSON, Individually and As Executrix of the Estate of Ralph W. Johnson, Appellee (Respondent), Methodist Hospital of Gary, Inc. (Claimant below).
No. 2-384A73.
Court of Appeals of Indiana, Second District.
October 24, 1984.
Rehearing Denied December 6, 1984.
*769 A. Donald Wiles, II, Wiles & Niederhauser, Indianapolis, for Paul E. Lowe, Trustee, appellant.
Max Cohen, Cohen & Thiros, Merrillville, for appellee.
SHIELDS, Judge.
Paul E. Lowe (Trustee) appeals the trial court's grant of Charmaine Johnson's motion to transfer venue from Hamilton County to Lake County. We consider the following issues in this interlocutory appeal:
1) whether, under Ind.Rules of Procedure, Trial Rule 75(A), preferred venue for this proceeding lies in Hamilton County, and
2) whether either the doctrine of forum non conveniens or Ind.Rules of Procedure, Trial Rule 4.4(C) applies to intrastate transfers of venue.
We reverse, because preferred venue lies in both Hamilton and Lake Counties and T.R. 75(A) allows for transfer only if preferred venue does not lie in the original forum. Further, the forum non conveniens of T.R. 4.4(C) does not apply to venue transfers within the state.
The trial court included the following facts in its order. Record at 117-19. Approximately three months before Ralph W. Johnson (Settlor) died, he executed a trust agreement appointing Paul Lowe as trustee. Paul Lowe is a resident of Hamilton County and has kept the records of the trust in Hamilton County. Two months after the execution of the agreement, Trustee removed trust assets from Settlor's Lake County safety deposit box and closed out two of Settlor's bank accounts. Two weeks before he died, Settlor, a Lake County resident, purportedly executed a document revoking the trust and requesting *770 that Trustee deliver the assets of the trust and an accounting to Charmaine Johnson. Charmaine Johnson is a resident of Lake County, as are the two witnesses to the execution of the revocation and the attending physicians during Settlor's last illness.
Trustee questioned the validity of the revocation and filed a Petition to Docket Trust and Obtain Instructions in Hamilton Circuit Court on December 6, 1983. Settlor died on December 13, 1983. Charmaine Johnson, the executrix of Settlor's estate, filed a Motion to Transfer on December 23, 1983 for the purpose of changing venue to Lake County.
The trial court granted the motion for transfer.
"The Court now finds that Lake County, Indiana, pursuant to the terms of Rule 75, is the county of preferred venue. The Court further finds as an additional ground for granting transfer that the cause should be transferred to Lake County under the doctrine of forum nonconveniens as authorized by the provisions of Trial Rule 4.4(C). That all of the witnesses who will testify as to the material issues in this cause with the exception of the Trustee are residents of Lake County, Indiana. [sic]"
Record at 118.
Preferred Venue
T.R. 75 provides in relevant part as follows:
"(A) Venue. Any case may be venued, commenced and decided in any court in any county, except, that upon the filing of a pleading or a motion to dismiss allowed by Rule 12(B)(3), the court, from allegations of the complaint or after hearing evidence thereon or considering affidavits or documentary evidence filed with the motion or in opposition to it, shall order the case transferred to a county or court selected by the party first properly filing such motion or pleading if the court determines that the county or court where the action was filed does not meet preferred venue requirements or is not authorized to decide the case and that the court or county selected has preferred venue and is authorized to decide the case. Preferred venue lies in:
(1) the county where the greater percentage of individual defendants included in the complaint resides, or, if there is no such greater percentage, the place where any individual defendant so named resides; or
....
(8) the county where a claim in the plaintiff's complaint may be commenced under any statute recognizing or creating a special or general remedy or preceeding; ... ." (Emphasis added.)
The application of T.R. 75(A) is described clearly in the following comments:
"A plaintiff may elect to bring suit in any county qualifying under subdivisions (1) through (10) of Rule 75(A), and each such county is a county of preferred venue... . The effect will be to give the plaintiff the possibility of bringing suit in a number of places, and if the county is one of preferred venue, the defendant has no right to complain except as he may obtain relief under Rule 72(B) or Rule 4.4(C)."[1]
4. W. Harvey & R. Townsend, Indiana Practice § 75.3 at 536 (1971) (as quoted in Board of Commissioners of Cass County v. Nevitt, 448 N.E.2d 333, 343 (Ind. App. 1983)).[2]
*771 Appellee Charmaine Johnson contends preferred venue does not lie in Hamilton County on two grounds: 1) Trustee is seeking a declaratory judgment regarding the validity of the trust, not the administrative instructions allowed by Ind. Code § 30-4-3-18 (Burns 1972)[3] and 2) T.R. 75 conflicts with and is superior to Ind. Code § 30-4-6-3 (Burns 1972).[4] Neither contention is supported by law.
The nature of Trustee's petition is critical because if it is a petition for instructions under § 30-4-3-18, another section of the trust code, § 30-4-6-3, places venue in Hamilton County. In his Petition to Docket Trust and To Obtain Instructions, Trustee asked the court for "instructions with respect to how to proceed with the Trust." Record at 3, 4. There are no Indiana cases that discuss whether a question concerning the validity of a purported revocation document is the kind of "reasonable doubt with respect to any matter relating to the administration of the trust" that entitles a trustee to instructions by the court under § 30-4-3-18.
The general rule is a trustee is entitled to instructions on such matters as the proper construction of the trust instrument, the extent of his powers and duties, the identity of the beneficiaries of the trust, the character and extent of the beneficiaries' interests, and the persons entitled to the income or to the trust property on the termination of the trust. Restatement (Second) of Trusts § 259 comment (A) (1959). In First Portland National Bank v. Rodique, 157 Me. 277, 172 A.2d 107 (1961), the Supreme Court of Maine noted the general rule, reviewed the policies favoring liberal application of a statute that allowed the court to instruct trustees, and decided a question regarding the validity of a will provision under the rule against perpetuities. See also In re Trust of Warner, 275 Minn. 174, 145 N.W.2d 542 (1966). Thus, the Restatement and First Portland National Bank show legitimate requests for instructions may result in trial court proceedings that are similar to proceedings in suits for declaratory judgments.
Indiana law recognizes the following principle:
"A trustee is not compelled to act at his peril in the administration of the trust. He need not act first and discover later whether his act was in breach of trust. He is entitled to the instructions of the court as protection."
3 A. Scott, The Law of Trusts, § 259 at 2214 (1967); See Messner v. DeMotte, 119 Ind. App. 273, 82 N.E.2d 900 (1948).
This principle is applicable to Trustee's conduct in filing the subject petition for instructions. In his petition, Trustee questions the validity of the revocation document and asks for court instruction as to how to proceed. Thus, Trustee seeks the opportunity to present to the court evidence pertaining to his reservations concerning the document's validity. Based upon this evidence he implicitly requests the court to order Trustee to either proceed with litigation seeking to invalidate the revocation or to terminate the trust and distribute its assets. In this manner, Trustee attempts to protect himself from any claim he has breached his fiduciary duties.
The Hamilton County petition, then, is not an action on the merits of the validity of the revocation. It is, instead, a request for the court to determine whether there is a genuine issue as to the validity of the revocation so as to authorize Trustee to proceed further. As such, Trustee's petition for instructions is an appropriate use *772 of § 30-4-3-18 and qualifies Hamilton County as a county of proper venue under the provisions of § 30-4-6-3.
In the instant case, both Lake and Hamilton Counties are counties of preferred venue under subdivisions (1) and (8), respectively, of T.R. 75(A). Preferred venue exists in Lake County because the defendant Charmaine Johnson resides there; preferred venue also exists in Hamilton County under T.R. 75(A)(8) and § 30-4-6-3 because the trust's records are kept there and Trustee resides there.
The contention that § 30-4-6-3 conflicts with T.R. 75, is without merit. T.R. 75(A)(8) specifically recognizes the existence of statutes that, like § 30-4-6-3, specify venue. Subsection (8) retains the "statutory" venue as an alternative venue, thereby avoiding any conflict. See Harvey & Townsend, supra § 75.11.
Because the plaintiff Trustee brought suit in a county (Hamilton) in which preferred venue lay, the defendant could not challenge the venue except as she could obtain relief under T.R. 76.
Forum Non Conveniens
The trial court erroneously relied on the forum non conveniens provisions of T.R. 4.4(C)[5] as a basis for transferring the cause to a county forum which it found more convenient for the parties and potential witnesses. T.R. 4.4(C) does not provide for intrastate transfers of venue. Rather, the purpose of T.R. 4.4(C) is to permit a cause to be litigated in another state, as opposed to another county, upon a showing that litigation of the cause in Indiana is so inconvenient that substantial injustice is likely to result. Killearn Properties, Inc. v. Lambright, 176 Ind. App. 684, 377 N.E.2d 417 (1978); 1 W. Harvey, Indiana Practice, Author's comments 4.4(C) at 313 (1969). Although T.R. 4.4(C) borrowed heavily from statutes authorizing transfer of a case from one venue to another within the same judicial system, the text of Rule 4.4(C) explicitly refers to states rather than counties for the consideration for transfer. See 1 W. Harvey, supra at 313. In fact, the entire subject matter of T.R. 4.4 is limited to issues of interstate concern.
Discretionary "Inherent" Power
The dissent argues the trial court has a discretionary "inherent" power to transfer a cause to a county of "preferred" venue. We disagree.
The sole focus of the opinions interpreting T.R. 75 has been on whether the county in which the suit was filed was a county of preferred venue. Once this court determined the initial filing was in a county of preferred venue, the question was decided and the denial of transfer was affirmed. See e.g. Duncan v. Rogers, 444 N.E.2d 1255 (Ind. App. 1983); Grove v. Thomas, 446 N.E.2d 641 (Ind. App. 1983) (holding that among the counties in which preferred venue lies, no preference is given to one county over another); Board of Commissioners of Cass County v. Nevitt, 448 N.E.2d 333 (Ind. App. 1983) (under the "plain language" of T.R. 75(A) the question of transfer is decided once it is found that the suit was brought in a county with preferred venue). If a discretionary power to transfer had existed, the appellate courts would have been obligated to determine whether the trial court judges had abused that discretion in failing to transfer cases among counties of preferred venue. No such analysis was made.
*773 In fact, in Duncan, such an analysis was rejected. In Duncan the appellants sought a transfer of venue from Henry to Pike County. They supported the motion with an affidavit which stated that most of the witnesses resided in Pike County and that only the plaintiff resided in Henry County. This court, in affirming the denial of transfer, found "no construction or interpretation of T.R. 75(A) is necessary. Preferred venue exists in Henry, Pike, or Monroe counties." 444 N.E.2d at 1257. The appellants, in the words of the court, had asked the court, "to apply a principle similar to forum non conveniens" which the court recognized as a permissive, not mandatory, doctrine.[6]Id. In declining to rewrite T.R. 75, the Duncan court held that the rule expressly allows a plaintiff, not the trial court, to choose among qualifying counties.
Thus, contrary to the dissenting opinion, caselaw does preclude a discretionary transfer from one preferred venue county to another, more convenient, preferred venue county. Furthermore, while neither statutes nor rules specifically preclude a discretionary transfer, it is more significant that neither the statutes nor the rules permit it. T.R. 1 provides the rules shall govern the procedure and practice in all courts. Under T.R. 75, venue is a matter of procedure. To permit a defendant to move the trial court for a discretionary transfer of venue from one preferred venue county to another is to endow the defendant with a right not provided by the rules. Procedural rules as distinguished from rules of local practice, are exclusively the prerogative of the supreme court. To the extent the dissent would affirm the trial court's decision based upon the dissent's recognition of a discretionary right invested in the trial court, the dissent is in conflict with the supreme court's supervisory power under art. 7, § 4 of the Indiana Constitution, Ind. Code 34-5-1-2 (1982), and T.R. 1.
Order reversed and cause remanded for further proceedings.
BUCHANAN, C.J., concurs.
SULLIVAN, J., dissents, with separate opinion.
SULLIVAN, Judge, dissenting.
I respectfully dissent.
The record before us does not demonstrate that Hamilton County is the eminently preferable venue in which to determine the matters in issue. Therefore, despite the fact that I believe such may well be true, I would give deference to the discretion of the trial court here in transferring the cause to a county which qualifies as a county of "preferred venue".
I agree with the caveat expressed in Duncan v. Rogers (1st Dist. 1983) Ind. App., 444 N.E.2d 1255, which correctly observed that we do not have the prerogative to require a transfer from one qualifying venue to another more convenient qualifying venue. I do not, however, agree that Trial Rule 75, or any other Rule, statute, or case precedent, precludes a discretionary transfer if a clearly more preferable venue exists.
The commonsense rationale which underlies the forum non conveniens doctrine as between the states is not inapplicable as between counties in the same state. Certainly it is generally less burdensome and less inefficient to require litigation in a different county within the same state than to require litigation in a foreign state. Nevertheless, our procedures should contemplate the occasional instance in which a venue different from that in which the case was originally filed is objectively and clearly preferable. I see no reason to preclude an orderly, efficient and equitable transfer of venue upon a properly filed motion, after determination by the trial court that a different venue is eminently more preferable, *774 and upon acceptance by an appropriate court in the receiving venue county.
I would affirm the discretionary decision made by the Hamilton Superior Court.
NOTES
[1] Indiana Rules of Procedure, Trial Rule 72(B) reads:
"(B) Trials and hearings Orders in chambers. All trials upon the merits shall be conducted in open court and so far as convenient in a regular courtroom in or outside the county seat. All other acts or proceedings may be done or conducted by a judge in chambers, without the attendance of the clerk or other court officials and at any place either within or without the circuit; but, no hearing other than one ex parte, shall be conducted outside the state without the consent of all parties affected thereby."
[2] Note the slightly changed version described in Grove v. Thomas, 446 N.E.2d 641, 642 (Ind. App. 1983): "[T]he defendant may not challenge the venue, except as he may obtain relief under Trial Rule 4.4(C) and 76."
[3] Ind. Code § 30-4-3-18 (Burns 1972) reads: "Other remedies of the trustee (a) If there is a reasonable doubt with respect to any matter relating to the administration of the trust, the trustee is entitled to be instructed by the court."
[4] Ind. Code § 30-4-6-3 (Burns 1972) in relevant part reads:
"(a) Unless the terms of the trust provide otherwise, venue in this state for matters arising under this article shall be exclusively in the county in which the principal place of administration of the trust is located. The principal place of administration of a trust is that usual place at which the records pertaining to the trust are kept or, if there is no such place, the trustee's residence... ."
[5] T.R. 4.4(C) provides in relevant part:
(C) More convenient forum. Jurisdiction under this rule is subject to the power of the court to order the litigation to be held elsewhere under such reasonable conditions as the court in its discretion may determine to be just.
In the exercise of that discretion the court may appropriately consider such factors as:
(1) Amendability to personal jurisdiction in this state and in any alternative forum of the parties to the action;
(2) Convenience to the parties and witnesses of the trial in this state in any alternative forum; or
.....
(4) Any other factors having substantial bearing upon the selection of a convenient, reasonable and fair place of trial.
[6] non conveniens permits a cause to be litigated in another jurisdiction upon a showing that litigation in the initiating forum is so inconvenient to the parties and witnesses that substantial injustice is likely to result. Transfer under [forum non conveniens] is not a matter of right, but is addressed to the trial court's discretion."
Duncan v. Rogers, 444 N.E.2d 1255, 1258 (Ind. App. 1983).
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COURT OF APPEALS
EIGHTH DISTRICT OF TEXAS
EL PASO, TEXAS
PEINADO FAMILY LIMITED
PARTNERSHIP D/B/A QUALITY
CRAFT HOMES AND KELLY
PEINADO, INDIVIDUALLY,
Appellants,
v.
ROBERT STEVENSON AND REID
STEVENSON,
Appellees.
§
§
§
§
§
§
No. 08-04-00260-CV
Appeal from the
County Court at Law No. 7
of El Paso County, Texas
(TC#2003-4849)
MEMORANDUM OPINION
Pending before the Court is the Appellants’ motion to dismiss this appeal pursuant to
Tex. R. App. P. 42.1(a)(1), which states:
(a) On Motion or By Agreement. The appellate court may dispose of an appeal as
follows:
(1) On Motion of Appellant. In accordance with a motion of appellant, the
court may dismiss the appeal . . . unless disposition would prevent a party from
seeking relief to which it would otherwise be entitled.
The Appellants have complied with the requirements of Rule 42.1(a)(1). Appellants
have requested that the Court grant their motion to dismiss the appeal pursuant to Texas
Rules of Appellate Procedure Rule 43.2(f) because the parties have entered into an agreement
to arbitrate the underlying action. Appellants have also requested that all costs of appeal be
assessed against the Appellants. Texas Rules of Appellate Procedure Rule 43.2(f) provides
that the appellate court may dismiss the appeal. The Court has considered this cause on the
Appellants’ motion and concludes the motion should be granted and the appeal be dismissed.
We therefore dismiss the appeal. The costs shall be borne by Appellants.
RICHARD BARAJAS, Chief Justice
October 21, 2004
Before Panel No. 2
Barajas, C.J., McClure, and Chew, JJ.
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NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted May 3, 2007*
Decided May 11, 2007
Before
Hon. RICHARD A. POSNER, Circuit Judge
Hon. MICHAEL S. KANNE, Circuit Judge
Hon. DIANE P. WOOD, Circuit Judge
No. 05-4573
UNITED STATES of AMERICA, Appeal from the United States District
Plaintiff-Appellee, Court for the Eastern District of Wisconsin
v. No. 04-CR-278
DANTE N. COLEMAN, Charles N. Clevert, Jr.,
Defendant-Appellant. Judge.
ORDER
In this direct criminal appeal, Dante Coleman argues that we should remand
for resentencing because, he says, the district court made mistakes that will result
in his serving more time in prison and on supervised release than the court
intended. Coleman also argues that his overall prison term, as pronounced, is
unreasonable. The government rejects the latter contention but concedes that
resentencing would be appropriate to remedy “possible errors” by the district court.
*
After an examination of the briefs and the record, we have concluded that
oral argument is unnecessary. Thus, the appeal is submitted on the briefs and the
record. See Fed. R. App. P. 34(a)(2).
No. 05-4573 Page 2
Police in Milwaukee, Wisconsin, arrested Coleman in November 2004 after a
car and foot chase. He was carrying a loaded gun and about 23 grams of crack
cocaine. Coleman told the police he planned to sell the crack. At the time, Coleman
was on probation for a 2000 state conviction, and Wisconsin officials revoked his
probation. He then pleaded guilty in federal court to possessing a firearm after a
felony conviction, 18 U.S.C. § 922(g)(1), possessing crack with intent to distribute,
21 U.S.C. § 841(a)(1), and carrying a firearm in relation to a drug trafficking crime,
18 U.S.C. § 924(c)(1).
The probation officer classified Coleman as a career offender, see U.S.S.G.
§ 4B1.1, because of prior felony convictions for fleeing police in a vehicle and
possession with intent to distribute cocaine. Based on that status the probation
officer calculated a guidelines imprisonment range of 322 to 387 months (including
a mandatory minimum of 60 months on the § 924(c)(1) count). At sentencing
Coleman did not object to the career-offender classification but did argue that his
prior convictions were not very serious and thus warranted a sentence below the
guidelines range. He also asked the district court to run his federal sentence
concurrently with the state revocation sentence. The court imposed a total of 322
months’ imprisonment to run “concurrent with the time that you are serving in the
State Court case.” The court also announced that it was imposing concurrent terms
of supervised release totaling five years but changed that to 10 years after the
probation officer interjected—incorrectly, it turns out—that the statutory minimum
on the drug count was 10 years.
On appeal Coleman observes that eight years, not ten, was the minimum
term of supervised release applicable to his drug conviction, see 21 U.S.C.
§ 841(b)(1)(B), and he argues that a remand is necessary so that the district court
can select an appropriate sentence based on a correct understanding of the
available penalty range. The government concurs, as do we. Although the district
court was free to select a term above the minimum, the court’s initial choice of five
years strongly suggests that it would not have imposed a 10-year term had it
received accurate information about the lowest available term.
Coleman also contends that the district court intended to make his federal
sentence fully concurrent with his undischarged state sentence but “mistakenly
made it partially concurrent by failing to reduce Mr. Coleman’s federal sentence by
the amount of time he had already served on his state sentence.” Coleman draws
this conclusion solely from the court’s agreement with trial counsel that a
“concurrent” sentence—not a “fully” concurrent sentence—was appropriate. This
sliver of record support seems to us an insubstantial basis for arguing that the
sentence pronounced was not what the district court intended, but the government
joins Coleman in advocating a remand so that the district court can “clarify its
intent.”
No. 05-4573 Page 3
As far as we can tell from the record before us, the confusion lies with the
parties and not the district court. Section 5G1.3(c) of the guidelines—which,
curiously, neither party cites—allows a district court to achieve a reasonable
punishment by running a new prison sentence “concurrently, partially concurrently,
or consecutively” to an undischarged term of imprisonment. U.S.S.G. § 5G1.3(c); see
United States v. Rivera, 327 F.3d 612, 615 (7th Cir. 2003); United States v. Johnson,
324 F.3d 875, 878 (7th Cir. 2003). When the undischarged sentence is for a
probation revocation (as it is here), the Sentencing Commission recommends that
the district court run the new sentence consecutively to the undischarged sentence,
U.S.S.G. § 5G1.3 cmt. n.3(C), so the sentence here—whatever the district court
intended—is outside the norm. Prior to United States v. Booker, 543 U.S. 220
(2005), the district court would not have enjoyed the discretion to “depart” below the
guidelines range and effectively give Coleman “credit” for the discharged portion of
his revocation sentence. See United States v. Johnson, 117 F.3d 1010, 1013 (7th Cir.
1997); cf. U.S.S.G. § 5G1.3(b); United States v. Ross, 219 F.3d 592, 594 (7th Cir.
2000). After Booker, a district court may do exactly that, but since even a partially
concurrent prison term would constitute a sentence below the range, we are
reluctant to give the district court’s reference to “concurrent” the broadest possible
reading instead of the narrowest. United States v. Ngatia, 477 F.3d 496, 501 (7th
Cir. 2007); United States v. Orozco-Vasquez, 469 F.3d 1101, 1107 (7th Cir. 2006);
United States v. Dean, 414 F.3d 725, 729 (7th Cir. 2005). Still, since we are
remanding anyway because of the error concerning supervised release, we will
accept the government’s concession and vacate the sentence in its entirety.
Coleman also contends that an overall prison term of 322 months is
unreasonable. We could decline to address this question, given our decision to
remand for resentencing, but we offer some observations now in the interest of
avoiding another appeal after the remand. See, e.g., United States v. Agee, 83 F.3d
882, 888 (7th Cir. 1996).
Coleman argues that his career-offender status overstates the seriousness of
his prior convictions and that the district court should not have deemed a sentence
within the guidelines range to be presumptively reasonable. The latter proposition
is correct: at the district court level, the guidelines merely give the court advice
about the appropriate sentence. See, e.g., United States v. Gama-Gonzalez, 469 F.3d
1109, 111 (7th Cir. 2006); United States v. Demaree, 459 F.3d 791, 794-95 (7th Cir.
2006). But the court never indicated that it viewed the guidelines range as
presumptively reasonable. In imposing a sentence within the guidelines range, the
court considered the factors listed in 18 U.S.C. § 3553(a), including Coleman’s
history of drug crimes and attempts to flee from police. After considering these
factors, the court had discretion to sentence Coleman below the guidelines range if
it believed his criminal history was overstated, but the court was not compelled to
do so. See United States v. Garner, 454 F.3d 743, 751 (7th Cir. 2006). The court
No. 05-4573 Page 4
instead decided that a sentence within the guidelines imprisonment range was
appropriate, which it was entitled to do. See Gama-Gonzalez, 469 F.3d at 111. On
remand, we expect that the Supreme Court’s decision in Rita v. United States, No.
05-0674, 177 F. App’x 357 (4th Cir. May 1, 2006), cert. granted, 127 S.Ct. 551 (U.S.
Nov. 3, 2006) (06-5754), will be available to guide the resentencing proceedings.
Finally, Coleman argues that his sentence is not reasonable because the
district court should not have followed the 100-to-1 sentencing ratio for crack versus
powder cocaine. But as Coleman concedes, this court has repeatedly noted that the
district court is not free to disregard the 100-to-1 sentencing ratio decided upon by
Congress. See, e.g., United States v. Miller, 450 F.3d 270, 275 (7th Cir. 2006).
We VACATE the sentences on all counts, and the case is REMANDED for
resentencing.
| {
"pile_set_name": "FreeLaw"
} |
Cite as 2016 Ark. App. 210
ARKANSAS COURT OF APPEALS
DIVISION III
CV-14-533
No.
DON DAVIS Opinion Delivered: April 13, 2016
APPELLANT
APPEAL FROM THE POPE
V. COUNTY CIRCUIT COURT
[NO. DR-2012-417]
CHERYL DAVIS
APPELLEE HONORABLE DENNIS CHARLES
SUTTERFIELD, JUDGE
AFFIRMED;
MOTION TO STRIKE DENIED
WAYMOND M. BROWN, Judge
In this divorce case, appellant Don Davis argues that the circuit court erred in
dividing his and appellee Cheryl Davis’s property and in failing to award him attorney’s fees.
We affirm the circuit court’s rulings. 1
I. Background
Don and Cheryl were divorced in 2014. During their nineteen-year marriage, they
owned a pawn shop, which they sold in 2007. After the sale of the pawn shop, Don did not
work outside the home. He drew Social Security and was apparently disabled.
Cheryl, who is fifteen years younger than Don, continued to work after the pawn
shop was sold. In 2007, she and her mother, Helen McCoy, purchased a business called
1
On certification, our supreme court ruled that the decree in this case was a final,
appealable order. Davis v. Davis, 2016 Ark. 64. The case was then remanded to our court
for a decision on the merits.
Cite as 2016 Ark. App. 210
Bethany’s Design Center for $180,000. Each of them paid $25,000 down, with the balance
of the purchase price to be paid in installments of $5,000 per month to the former owner,
Ms. Self. Later on, Cheryl and Helen invested another $12,500 apiece in the business. They
considered themselves equal partners in Bethany’s and both worked at the shop. Cheryl paid
herself $350 per week as wages, but she and Helen agreed that Helen’s wages would be
deferred to a later date. Helen worked at Bethany’s for four years.
Bethany’s generated sufficient revenue to pay expenses, repay Ms. Self, and repay
Cheryl’s and Helen’s capital investments. Nevertheless, according to Cheryl, the economy
was performing poorly and the business was expensive to operate. There was evidence the
company’s finances were buttressed by receiving $100,000 in insurance proceeds following
a 2009 fire and by Cheryl’s using her and Don’s credit card and line of credit for extra
revenue during the shop’s “slow months.”
At some point in 2012, Cheryl and Don separated, and in July 2012, Cheryl sued
Don for divorce. The court entered a temporary order giving Cheryl possession of Bethany’s
but prohibiting the disposal of marital property. Despite this order, Cheryl decided that
Bethany’s should close, and she began selling the store’s inventory at reduced prices in late
2012. 2 By early 2013, the business had sold approximately $220,000 worth of inventory for
$98,000. Upon consulting with an accountant, Cheryl used $67,000 of the sale proceeds to
pay Helen for her four years of deferred salary. Cheryl and Helen testified that they arrived
at the $67,000 figure by calculating the amount that Cheryl had been paid over the same
2
Don asked that Cheryl be held in contempt for violating the agreed temporary
order. The court refused to do so and instead ordered Cheryl to make Bethany’s financial
records available to Don.
2
Cite as 2016 Ark. App. 210
time period: approximately $1,400 per month for 48 months.
Following the sale, Bethany’s was left with about $5,000 worth of inventory and
some debt on Cheryl and Don’s credit card and line of credit. The remainder of the $98,000,
save a few hundred dollars, went toward Bethany’s final operating expenses.
After liquidating Bethany’s, Cheryl moved from Pope County to Eureka Springs. In
May 2013, she bought a business there with the help of a $45,000 loan from Helen. She
also signed a contract to buy a house, for which Helen loaned her $5,000 as earnest money.
A month later, in June 2013, a trial was held on the parties’ property-division issues.
Don asked for an unequal division of marital property in his favor, claiming that Cheryl had
dissipated marital assets by selling Bethany’s inventory for less than fifty percent of its value,
then paying $67,000 of the sale proceeds to Helen. Don also informed the court that Cheryl
had possibly acquired marital property in Eureka Springs, and he asked that a substantial part
of a large firearm collection be declared his separate, non-marital property.
Following the trial, the circuit court entered an order that essentially divided all
marital property equally. The court declined to make an unequal division of marital property
based on Don’s allegation that Cheryl had dissipated Bethany’s assets. The court found that
Bethany’s “did not do that well” and was a “failure,” plus the court credited Helen’s
testimony that the $67,000 she received from the proceeds of Bethany’s inventory was
compensation for her investment in and work at Bethany’s. However, the court found fault
with Cheryl’s making the $67,000 payment to Helen before paying off Bethany’s debts. The
decree therefore ordered Cheryl to pay two-thirds of the debt on her and Don’s credit card
and $15,000 on their line of credit.
3
Cite as 2016 Ark. App. 210
With regard to Cheryl’s Eureka Springs business and home, the court found that
there was no equity to divide in those properties because Cheryl had acquired them solely
with borrowed money. The court did, however, hold Cheryl fully responsible for the debt
on the properties. As for Don’s claim that part of the gun collection was his separate
property, the court noted Don’s testimony on this issue lacked credibility, and the court
ruled that all firearms proven by the evidence were marital property. 3 Finally, each party
was ordered to pay his or her own attorney’s fees. Don filed this appeal. 4
II. Standard of Review
We review divorce cases de novo. 5 However, we will not reverse the circuit court’s
findings of fact unless they are clearly erroneous. 6 Findings are clearly erroneous when the
reviewing court, on the entire evidence, is left with a firm conviction that a mistake has
been committed. 7 We give due deference to the circuit court’s superior position to
determine the credibility of the witnesses and the weight to be given their testimony. 8 We
3
The court did award Don one gun safe that Cheryl had given to him as a gift.
4
The court also ordered a sale of the parties’ marital home, with the proceeds divided
equally; ordered the parties to equally divide the remaining monthly payments owed to
them on the sale of rental property; ordered the remaining assets of Bethany’s to be sold
with the proceeds divided equally; and ruled that Don would receive foreign currency
worth $80,000 as his sole property.
5
Fields v. Fields, 2015 Ark. App. 143, 457 S.W.3d 301.
6
Id.
7
Webb v. Webb, 2014 Ark. App. 697, 450 S.W.3d 265.
8
Fields, supra.
4
Cite as 2016 Ark. App. 210
will not substitute our judgment on appeal as to what property interest each party should
have; we will decide only whether the court’s order is clearly wrong. 9
III. Division of Property
At the time a divorce decree is entered, the circuit court shall distribute all marital
property one-half to each party unless the court finds such a division to be inequitable. 10
There is a presumption that an equal division is fair and equitable. 11 A circuit court has
broad powers to distribute property in a divorce case, and it need not do so with
mathematical precision. 12 The purpose of our property-division statute is to enable the trial
court to make a division that is fair and equitable under the circumstances. 13 The court is
vested with a measure of flexibility in apportioning the total assets, and the critical inquiry
is how the total assets are divided. 14
A. Request for Unequal Property Division
Don argues first that the circuit court should have made an unequal division of marital
property in his favor because Cheryl fraudulently dissipated marital assets. He cites the fact
that Cheryl sold Bethany’s assets for less than half their value, paid Helen $67,000 from the
9
Id.
10
Ark. Code Ann. § 9-12-315(a)(1)(A) (Repl. 2015).
11
Webb, supra.
12
Id.
13
Barron v. Barron, 2015 Ark. App. 215.
14
Jones v. Jones, 2014 Ark. 96, 432 S.W.3d 36.
5
Cite as 2016 Ark. App. 210
sale proceeds, then received a $50,000 loan from Helen to buy a home and business in
Eureka Springs. Don correctly states that an unequal distribution of property or other
compensatory measure may be justified based on one party’s fraudulent transfer or
dissipation of marital assets. 15
Don begins by challenging the legitimacy of the $67,000 payment to Helen. We see
no basis for reversal on this point. The testimony demonstrated that Helen worked at
Bethany’s for four years with no salary and that both she and Cheryl agreed from the
beginning of their endeavor to defer her salary to a later date. Cheryl and Helen also testified
that the $67,000 figure was based on the same $350 per week that Cheryl had been paid
over a four-year period. Significantly, the trial judge found that Helen’s testimony on this
point was credible, and we defer to his superior position to determine a witness’s
credibility. 16 Under these circumstances, the evidence supports the court’s finding that the
$67,000 payment to Helen was legitimate compensation for her participation in the
Bethany’s enterprise.
Don argues next that Bethany’s was a successful business, and he takes issue with the
language in the decree that Bethany’s “did not do that well” and was “a failure.” While we
agree that characterizing the business as a failure may have been an overstatement, we do
not view each of the court’s findings in isolation. 17 Rather, we determine whether all factors
15
See Skokos v. Skokos, 332 Ark. 520, 968 S.W.2d 26 (1998); Freeman v. Freeman,
2013 Ark. App. 693, 430 S.W.3d 824.
16
Fields, supra.
17
See Boudreau v. Pierce, 2011 Ark. App. 457, 384 S.W.3d 664.
6
Cite as 2016 Ark. App. 210
considered in the aggregate support the court’s ruling. 18 In this case, there was evidence that
Bethany’s was operating in a difficult economic climate and that at least part of its ability to
meet expenses was facilitated by the $100,000 in fire-insurance proceeds and by Cheryl’s
use of her and Don’s credit card and line of credit.
For his final argument on this point, Don contends that other reasons justify an
unequal division of property in his favor. He cites Arkansas Code Annotated section 9-12-
315(a)(1)(A), which sets forth various factors that a court must take into account in making
an unequal distribution of marital property. These include the parties’ health, income, and
employability, among others. Don contends that because he is older than Cheryl, receives
social-security benefits, and is disabled, an unequal distribution in his favor was warranted.
As a threshold matter, Don did not develop this argument in circuit court nor obtain
a ruling on it. The argument is therefore waived on appeal. 19 In any event, we conclude
that the court’s overall division of marital property was equitable, especially in light of the
presumption in favor of equal distribution of marital assets.20
B. Eureka Springs Property
Don argues next that the circuit court erred in failing to grant him an interest in the
home and business that Cheryl purchased in Eureka Springs approximately one month
before trial. For the following reasons, we do not agree with Don that reversal is warranted.
18
Id.
19
See Colquitt v. Colquitt, 2013 Ark. App. 733, 431 S.W.3d 316.
20
Webb, supra.
7
Cite as 2016 Ark. App. 210
We observe at the outset that the Eureka Springs business and the real-estate contract
undisputedly qualified as marital property. Assets acquired after separation but prior to
divorce are marital property. 21 In particular, we have held that a real-estate contract, signed
before a divorce decree is entered, is an enforceable right that is classified as marital
property. 22 However, the evidence at trial was that Cheryl acquired the business and made
her down payment on the house with borrowed money. The circuit court therefore noted
that there was no divisible equity in either property. As a result, the court awarded the
properties to Cheryl but held her responsible for all of the indebtedness thereon.
On the record before us, we cannot say that the circuit court clearly erred in its
ruling. The proof, as developed at trial, does not reveal the existence of any equity in the
Eureka Springs properties. Consequently, the court recognized the impracticality of making
a division where there was nothing to divide. 23 Moreover, the court saddled Cheryl with
all of the debt on the properties. The critical inquiry is how the total assets are divided. 24
Applying this standard, there is no reversible error.
C. Gun Collection
Much of the controversy at trial involved a large gun collection that was valued at
$67,627. Don asked the court to award at least some of the guns to him as his separate
21
O’Neal v. O’Neal, 55 Ark. App. 57, 929 S.W.2d 725 (1996).
22
Page v. Anderson, 85 Ark. App. 538, 157 S.W.3d 575 (2004).
23
See Ark. Code Ann. § 9-12-315(a)(1)(A), which requires marital property to be
“distributed.”
24
Jones, supra.
8
Cite as 2016 Ark. App. 210
property. The court instead ruled that all of the guns in evidence were marital property,
except for one gun safe that Cheryl had given Don.
On appeal, Don argues that the circuit court clearly erred in failing to award him any
guns as his separate property. However, it is apparent from the record that the evidence on
this issue was in utter conflict. Don testified that he had received some of the guns as gifts
and that he had given his entire gun collection to his daughter Candace in 2010. His
testimony was somewhat corroborated by a family friend. 25 However, Don’s testimony
conflicted with his own trial exhibits, which indicated that he had given Candace some, but
far from all, of his guns.
According to Cheryl, Don brought home 156 guns in 2007 after the pawn shop
closed—a business in which she and Don were equal shareholders. She stated that she was
unaware that Don had given the firearms to anyone and that, when she left the marital
residence, the guns were still there as far as she knew. 26
It was Don’s burden to prove what guns were his separate property. 27 Further, the
conflicting proof on this issue was for the trial court to resolve. 28 The court expressly found
that Don’s testimony on this matter was not credible, and we defer to the court’s superior
25
Candace did not testify.
26
Cheryl testified that Don owned three to five guns when they got married, but
the evidence does not reveal anything further about the identity or disposition of those guns.
27
Johnson v. Johnson, 2011 Ark. App. 276, 378 S.W.3d 889.
28
Kuelbs v. Hill, 2010 Ark. App. 427, 379 S.W.3d 47.
9
Cite as 2016 Ark. App. 210
position to determine a witness’s credibility. 29 We therefore decline to hold that the trial
court’s decision to treat the guns as marital property was clearly erroneous.
IV. Attorney’s Fees
Don’s final argument is that the circuit court erred in ordering both parties to bear
their own attorney’s fees. He contends that the court should have awarded attorney’s fees
to him because Cheryl had the greater ability to pay. He cites his age, ill health, and limited
income as justification for a fee award in his favor. He also claims he is entitled to fees in
light of other matters that occurred during trial, along with Cheryl’s alleged “intentional”
dissipation of Bethany’s assets and “illusory” loans from Helen.
It is well established that the circuit court has the inherent power and discretion to
award attorney’s fees in a divorce case. 30 The trial court has the superior ability to make this
determination, and we will not reverse absent an abuse of discretion. 31
The court did not abuse its discretion here. We note initially that we have rejected
Don’s arguments regarding the sale of Bethany’s assets and Cheryl’s acquisition of the Eureka
Springs properties. We further observe that the parties’ marital property was evenly divided
by the divorce decree and each stands to benefit from the proceeds once the property is
sold. Cheryl was also given responsibility for most of the existing debt, and Don received
some foreign currency as his separate property, which the testimony showed had a value of
29
Fields, supra.
30
Guthrie v. Guthrie, 2015 Ark. App. 108, 455 S.W.3d 839.
31
Webb, supra.
10
Cite as 2016 Ark. App. 210
$80,000. The issue of attorney’s fees must be viewed in light of and in conjunction with
property-distribution issues. 32 As well, a court does not abuse its discretion simply by failing
to order the party having more income to pay the other party’s attorney’s fees. 33
Under these circumstances, we will not reverse the trial court’s ruling on this point. 34
Affirmed.
VIRDEN and HIXSON, JJ., agree.
Owings Law Firm, by: Tammy B. Gattis, for appellant.
Wood Law Firm, P.A., by: Russell A. Wood; and Robert S. Tschiemer, for appellee.
32
Id.
33
Id.
34
Don asks that we strike Cheryl’s supplemental abstract and addendum on the
ground that they are unnecessary and duplicative. We deny the motion to strike. However,
we note that we have not considered Cheryl’s supplemental abstract and addendum in
making our ruling.
11
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72 F.Supp.2d 398 (1999)
AT & T CORPORATION, Plaintiff,
v.
NEW YORK CITY HEALTH AND HOSPITALS CORPORATION, Defendant-Third Party Plaintiff,
v.
NEC Business Network Solutions, Inc., Third Party Defendant.
No. 99 Civ. 2575 (LAK).
United States District Court, S.D. New York.
November 10, 1999.
*399 Sung Teak Kim, Assistant Corporation Counsel, Michael D. Hess, Corporation Counsel of the City of New York, for Third Party Plaintiff.
Shalom D. Stone Walder, Sondak & Brogan, P.A., for Third Party Defendant.
MEMORANDUM OPINION
KAPLAN, District Judge.
This is an action by AT & T Corporation ("AT & T") to recover unpaid telephone bills totaling $27,000 from the New York City Health and Hospitals Corporation ("HHC"). Jurisdiction is based on the existence of a federal question.[1] HHC contends that the charges that AT & T seeks to recover were for long distance calls placed by unauthorized persons through the telecommunications system at Goldwater Memorial Hospital ("Goldwater"). It has filed a third party complaint against NEC Business Network Solutions, Inc. ("NEC"), which installed the Goldwater system. It alleges that NEC is liable to HHC for any sum owed by HHC to AT & T on the theory that the Goldwater system did not conform to the terms, provisions and specifications of the HHC-NEC contract, that NEC negligently designed and/or installed the system, and that the deficiencies permitted the placement of the calls in question. NEC now moves to dismiss the third party complaint for lack of subject matter jurisdiction.
Section 1367(a) of the Judicial Code[2] provides in relevant part that:
"in any civil action of which the district courts have original jurisdiction, the district courts shall have supplemental jurisdiction over all other claims that are so related to claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution. Such supplemental jurisdiction shall include claims that involve the joinder or intervention of additional parties."
Section 1367(c) then authorizes district courts to decline to exercise supplemental jurisdiction over claims under subsection (a) in enumerated circumstances, the most pertinent of which for purposes of this case is where the claim within the supplemental *400 jurisdiction "substantially predominates over the claim or claims over which the district court has original jurisdiction."[3] Section 1367(a) codifies the holding of United Mine Workers v. Gibbs[4] as to the scope of the district courts' judicial power.[5] Section 1367(c), on the other hand, limits the scope of the district courts' discretion to decline to exercise supplemental jurisdiction to the circumstances set forth in the statute.[6]
The question whether HHC's claim against NEC is within the Court's supplemental jurisdiction under § 1367(a) depends upon whether it derives from "a ... nucleus of operative fact" common to AT & T's claim against HHC and is "such that [HHC] would ordinarily be expected to try [both claims] in one judicial proceeding ..."[7] That standard arguably is not satisfied here. The claim asserted by AT & T against HHC is that long distance calls were made from HHC phones for which HHC has declined to pay. While the impetus for HHC's claim against NEC seems to be the same telephone calls as are the subject of AT & T's claim against HHC, the crux of the dispute between HHC and NEC is not whether the calls were made, not whether HHC has paid for them, but whether NEC appropriately designed and installed the telephone system and whether it breached its contract with HHC. But the question whether that somewhat attenuated relationship warrants the conclusion that both claims are within the Court's power need not be determined in this case.
It would be difficult to find a case more clearly illustrating circumstances in which the claim brought under the supplemental jurisdiction predominates over the claim within the Court's original jurisdiction. AT & T's claim against HHC is simplicity itself. Its records show that the calls were made. Non-payment of the bill appears to be conceded. The claim presumably will be resolved on summary judgment. HHC's claim against NEC, on the other hand, is infinitely more complex. It will require consideration of the contract for installation of a $3 million telecommunications system in a New York City hospital and the standards of care that govern the design and installation of such equipment. Those issues quite plainly predominate over those involved in the resolution of AT & T's claim against HHC.
In contending that the Court should hear its third party complaint, HHC relies principally on Fax Telecommunicaciones Inc. v. AT & T[8] and American Telephone and Telegraph Co. v. City of New York.[9] Neither compels that result.
The Circuit in Fax declined to upset a judgment on the merits that had been rendered in an action erroneously removed from state court in the absence of federal subject matter jurisdiction where (a) no jurisdictional objection had been made in the district court, and (b) the defendant had interposed a counterclaim over which the district court had original jurisdiction. While the case is of some modest aid to *401 HHC in that the panel relied upon the existence of the federal question counterclaim in support of its result, thus implicitly holding that both the counterclaim and the complaint arose from a common nucleus of operative fact and are within the federal judicial power, the principal focus of the decision was on the significance on appeal of defects in removal where some basis for federal jurisdiction existed at the time the judgment appealed from was rendered. Even more importantly, the Circuit had no occasion in Fax to consider whether the district court properly might have declined to exercise supplemental jurisdiction for the simple reason that the court below had proceeded to judgment in the absence of any jurisdictional objection.
AT & T v. City of New York is factually closer to this case. AT & T there sought to recover long distance changes for calls made from city prisons on Riker's Island which the City claimed were unauthorized. The City impleaded New York Telephone Company, claiming that it was liable to the City for any liability the City had to AT & T because the City had ordered a special blocking service on the Riker's Island telephones which, in theory, should have prevented the making of the calls. The district court granted summary judgment both for AT & T against the City and for the City against New York Telephone, and the Second Circuit disposed of the appeal without noting any jurisdictional problem. HHC therefore argues that this Court is bound to exercise supplemental jurisdiction over its third party complaint against NEC.
HHC's argument is mistaken. As far as the Second Circuit's opinion discloses, no jurisdictional objection was raised at any stage in the proceedings. While the Court of Appeals would have been obliged to raise sua sponte the question whether the district court had jurisdiction to hear the case,[10] it is far from clear that its failure to do so constituted a binding determination that jurisdiction existed. But there is no need ultimately to resolve that question. Even if the failure to raise a jurisdictional problem were a binding determination that the district court acted properly in deciding the merits of the case, it would be important to focus on the precise content of such a determination. It necessarily would have included a holding that the third party complaint was within the district court's power, i.e., that supplemental jurisdiction existed under 28 U.S.C. § 1367(a). So too it would have included a conclusion that the district court did not exceed the bounds of its permissible discretion by retaining the case. But it surely would not have included any judgment on the question whether the district court would have erred had it declined to consider the third party complaint on any of the grounds enumerated in 28 U.S.C. § 1367(c). Hence, even if AT & T were taken as holding that the third party complaint in that case was within the district court's power and that the district court was not obliged to decline to exercise supplemental jurisdiction, it certainly did not hold that a district court may not decline to exercise supplemental jurisdiction in these circumstances under Section 1367(c).[11]
*402 Accordingly, NEC's motion to dismiss the third party action for lack of subject matter jurisdiction is granted. Even assuming that the third party complaint is within the Court's supplemental jurisdiction, the Court, in the exercise of discretion, declines to entertain the third party complaint.
SO ORDERED.
NOTES
[1] Federal question jurisdiction allegedly exists because the defendant's liability, if any, arises under a tariff filed with the Federal Communications Commission. Cpt. ¶ 3. The existence of original jurisdiction over AT & T's claim is not disputed. See Fax Telecommunicaciones, Inc. v. AT & T, 138 F.3d 479, 488 (2d Cir.1998).
[2] 28 U.S.C. § 1367(a).
[3] Id. § 1367(c).
[4] 383 U.S. 715, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).
[5] IUE AFL-CIO Pension Fund v. Herrmann, 9 F.3d 1049, 1052 n. 2 (2d Cir.1993); Promisel v. First Am. Artificial Flowers, Inc., 943 F.2d 251, 254 (2d Cir.1991), cert. denied, 502 U.S. 1060, 112 S.Ct. 939, 117 L.Ed.2d 110 (1992); Harry Winston, Inc. v. Kerr, No. 99 Civ. 0290(LAK), 1999 WL 961786, *1 (S.D.N.Y. Oct. 20, 1999); Naftchi v. New York Univ., 14 F.Supp.2d 473, 492 & nn. 152-53 (S.D.N.Y. July 29, 1998); Smylis v. City of New York, 983 F.Supp. 478, 483 (S.D.N.Y.1997).
[6] E.g., Itar-Tass Russian News Agency v. Russian Kurier, Inc., 140 F.3d 442, 445-48 (2d Cir.1998); Harry Winston, Inc., 1999 WL 961786, *1 n.11; Naftchi, 14 F.Supp.2d at 492 n. 153.
[7] Promisel, 943 F.2d at 254 (quoting United Mine Workers, 383 U.S. at 725-26, 86 S.Ct. 1130) (internal quotation marks omitted).
[8] 138 F.3d 479 (2d Cir.1998).
[9] 83 F.3d 549 (2d Cir.1996).
[10] E.g., Fax Telecommunications Inc., 138 F.3d at 485.
[11] Klein v. London Star Ltd., 26 F.Supp.2d 689 (S.D.N.Y.1998), in which the court exercised supplemental jurisdiction over a state law discrimination claim in a case brought also under the Age Discrimination in Employment Act, despite a contention that the more complex damage issues raised on the state law claim rendered it predominant, is not to the contrary. To begin with, there is a policy in this Circuit favoring the exercise of supplemental jurisdiction in discrimination cases. E.g., Promisel, 943 F.2d 251. At least equally important, a refusal to exercise supplemental jurisdiction in Klein could have resulted in the plaintiff being forced to try the issue of liability both in federal and state court despite the exceptionally close relationship of those determinations, whereas the issues raised by the third party complaint in this case are quite dissimilar from those raised by the complaint.
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891 A.2d 1113 (2006)
391 Md. 81
STATE of Maryland, et al.
v.
Evelyn DETT.
No. 25, September Term, 2005.
Court of Appeals of Maryland.
February 7, 2006.
*1115 Glenn T. Marrow, Assistant Attorney General (J. Joseph Curran, Jr., Attorney General of Maryland, on brief), of Baltimore, for petitioners.
Randall J. Craig, Jr. (Craig & Henderson, L.L.C., on brief), of Baltimore, for respondent.
Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA, and GREENE, JJ.
WILNER, J.
The issue before us is whether, in an action under the Maryland Tort Claims Act (Md.Code, §§ 12-101 through 12-110 of the State Government Article), the State may be found liable for false imprisonment, negligence, or violation of the plaintiff's rights under Article 24 of the Maryland Declaration of Rights when (1) the plaintiff is arrested and brought to a State detention facility by a police officer in the mistaken belief that the plaintiff is the person against whom an arrest warrant has been issued, (2) the detention facility learns through its own investigation that the plaintiff is probably not the person named in the warrant or in an implementing commitment order issued by the local sheriff and there is no other legal basis for holding the plaintiff, and (3) the detention facility nonetheless continues to detain the plaintiff for a significant period of time. We shall answer that question in the affirmative.
BACKGROUND
At approximately 5:00 in the afternoon of Friday, March 7, 2003, respondent, Evelyn Yulonda Dett, was stopped for a traffic violation by Baltimore City Housing Authority police officer Darven Moore. A presumably routine background check by Officer Moore revealed the existence of an outstanding warrant for the arrest of Vanessa Hawkins "AKA Evelyn Dett." The warrant was issued by the Circuit Court for Baltimore City on July 31, 2002, for violation of probation (VOP). Although Ms. Dett protested that she was not Vanessa Hawkins, it is not clear, as there is no statement from Officer Moore in the record, if the officer made any further investigation to determine whether Ms. Dett was, in fact, the person named in the warrant.
The warrant, No. XXXXXXXXX, identified Ms. Hawkins as a black female born July 11, 1963, with a "SID" number of 381961. A SID (State Identification) number is a unique number directly linked to an individual's fingerprints. Because of that link, no two persons should have the same SID number; nor, if the proper procedures are followed, should a person ever have more than one SID number.[1] The warrant directed *1116 any law enforcement officer to apprehend Ms. Hawkins and commit her to the Baltimore City Jailnow known as the Baltimore City Detention Centerpending a hearing on the VOP charge, permitted her to post bail in the amount of $10,000, identified Tobi Thomas as the responsible Division of Parole and Probation agent, and gave a telephone number and address where that agent could be reached. How much of that information was known by Officer Moore is not clear.
Obviously in the belief that the person stopped was, in fact, the person named in the warrant, Officer Moore delivered Ms. Dett to the Baltimore City Central Booking and Intake Center (CBIC) at 5:50 p.m. CBIC is a facility operated by the Division of Pretrial Detention and Services of the Maryland Department of Public Safety and Correctional Services (DPSCS). Within the next hour, Ms. Dett was "booked," photographed, and fingerprinted. By 6:35 p.m., CBIC had received, or become aware of, a commitment order issued by the Baltimore City Sheriff to the Warden of the Baltimore City Detention Center, directing the warden to receive into his custody the body of Vanessa Hawkins, identified as a black female born July 11, 1963, with a SID number 381961, "committed to await further action of the Circuit Court for Baltimore City." Pursuant to that order, entries were made in the CBIC log, "DO NOT RLSE SUBJECT BOOKED ON CIRCUIT CT # XXXXXXXXX." Presumably in conformance with the commitment order, all of the CBIC records identify Ms. Dett as Vanessa Hawkins. The inmate file created by CBIC is in the name of Vanessa Hawkins.
At 6:44 p.m., Ms. Dett's fingerprints were sent to the Central Records unit which, within about a half hour, responded with a SID number of 2413966. That number, of course, was different from the SID number on both the warrant and the commitment order. The response, along with an "ID Completed Flag," was placed into the Vanessa Hawkins inmate record at 7:22 p.m. Ten minutes later, Ms. Dett was placed in a group cell at CBIC, where she remained until early the next morning, when she was transferred to the Detention Center.[2] At some point during the evening, the discrepancy in SID numbers was noted. Debora Driver, the Director of Central Records for CBIC, sent a "SID Problem Form" to the shift commander. The form stated as its subject, "SID PROBLEMS," noted the two SID numbers, and explained that "defendant has 2 SID # sCommitment has been entered into the system under 2413966. I contacted fingerprint who insisted that this is the correct #. I spoke to Ada who said that they could not do anything until Monday 3/10/03." Copies of that form were placed in both the inmate file and a "Sid Problem binder." At or about the same time, Ms. Driver prepared and filed a "Problem Paperwork Notice," again noting that "defendant has 2 SID # s," that the problem would keep her from being released, and asking "Please clarify with fingerprint the correct # to be used."
The record does not indicate who "Ada" was, but, in its brief in this Court, the State acknowledges that the person or persons contacted by Ms. Driver were "fingerprint technicians at the Criminal Justice Information System" (CJIS), also a unit *1117 and operation of DPSCS. They were, in other words, CJIS, and State, employees.
Prior to Ms. Dett's transfer to the Detention Center, CBIC became aware of other discrepancies, beyond the two SID numbers. An Offender Booking Information Report in the CBIC file shows a birth date of February 6, 1962, for the Vanessa Hawkins supposedly being held by CBICwhich, in fact, was Ms. Dett's actual birth datewhereas both the VOP warrant and the sheriff's commitment order show a birth date of July 11, 1963 for the Vanessa Hawkins who was the subject of the warrant and commitment order. At 6:19 a.m. on March 8, CBIC sent an inquiry to CJIS to identify the person with SID number 2413966, and the response came back "No exact matched record on file." CBIC immediately sent another request to CJIS to identify the person with SID number 381961.
At some point not later than 11:22 a.m., CJIS reported that SID number 381961 was that of Vanessa Ann Hawkins, alias Evelyn Y. Dett. The response also showed two Social Security numbers, neither of which matched that of Ms. Dett, and two dates of birth, one matching the date on the commitment order for Vanessa Hawkins and one being that of Ms. Dett. The response revealed as well an FBI number, fingerprint information, eight prior contacts that Vanessa Hawkins had with CBIC, and a height and weight for Vanessa Hawkins that were slightly, but not significantly, different from those of Ms. Dett. The prior CBIC contacts that were listed included the date and CBIC case number for each contact.
Despite these unexplained inconsistenciesthe different SID numbers, the nonmatching Social Security numbers, the different dates of birth, the discrepancy in height (two inches)and the additional information that could have led to some clarification (the probation officer's number, the FBI number, the prior CBIC contact information) no further effort was made over the weekend to investigate whether the person being held, Ms. Dett, was, in fact, the Vanessa Hawkins who was the subject of the warrant and commitment order. At some point on Monday, March 10, CBIC received a response from a Tracey Powell to the Problem Paperwork Notice sent by Ms. Driver on March 7. Ms. Powell stated that "these are two different people. Correct SID # 2413966 for Vanessa Hawkins DOB 2-6-1962. SID # 381961 belongs to Evelyn Dett who used Vanessa Hawkins as AKA. DOB 7-11-63." CBIC responded:
"[Y]ou still did not tell us which SID is correct for Vanessa Hawkins born 2-10-62 # 2413966 is that the correct SID # also the DOB on the release is for the inmate w/DOB of 7-11-63, but uses the DOB of 2-6-62. We need to have the lady fingerprinted again since the release had the DOB different from what is on the offender booking sheet."
The record does not reveal any response to that communication. Nothing more was done on March 10 to resolve the issue. CBIC had a photograph of Ms. Dett, which presumably was taken when she was booked on March 7. At some undefined point, either CBIC or the Detention Center received a copy of a photograph of the Vanessa Hawkins who was the subject of the warrant and commitment order and had the SID number 381961. The women depicted in the two photographs are somewhat similar but by no means identical in appearance.
At 10:27 a.m. on March 11, 2003, the Central Records Office of the DPSCS Division of Pretrial Detention and Services, which operates both CBIC and the Detention Center, sent a request to "Bonnie" in the Circuit Court for a "court seal + true *1118 test" for Vanessa Hawkins, SID XXXXXXXXX. Within an hour, the sheriff sent to the Warden of the Detention Center an order to release "Vanessa Hawkins" with SID number 2413966, noting "WRONG DEFENDANT." The record does not reveal the basis on which the sheriff reached that conclusion. Upon receipt of that directive, the Detention Center promptly commenced the process for releasing Ms. Dett. She was, in fact, released at 1:00 p.m. She had remained in detention for three full days and the better part of a fourth.
In April, 2003, Ms. Dett filed a claim with the State Treasurer under the Maryland Tort Claims Act. When that claim was rejected, in October, 2003, she filed this action in the Circuit Court for Baltimore City against the State, DPSCS, the DPSCS Division of Pretrial Detention and Services, CBIC, the Detention Center, and the DPSCS Division of Parole and Probation for false imprisonment, violation of her rights under Article 24 of the Declaration of Rights, and for failing to follow the proper processing procedures.
No answer was ever filed to the complaint or amended complaint. Rather, the State, for itself and the various State units, responded with a motion for summary judgment, asserting that they had legal justification to detain Dett by virtue of her arrest and the commitment order from the sheriff. They argued that, notwithstanding Ms. Dett's protest that she was not the Vanessa Hawkins who was the subject of the VOP warrant and commitment order, the defendants had no obligation to conduct any investigation to determine whether they were holding the right person, but that, in any event, they did conduct some kind of investigation and released her upon order of the sheriff to do so.
The motion was supported by an affidavit of Susan Murphy, an Assistant Warden of CBIC, to which various CBIC records pertaining to Ms. Dett's detention were attached as exhibits. Ms. Murphy contended that, because the Circuit Court offices were closed by the time Ms. Dett arrived at CBIC on Friday afternoon (March 7), she "could not be released until [CBIC] received a court order releasing her from custody" and that once the CBIC staff were "satisfied that Plaintiff was not the person who was the subject of the bench warrant issued by the Circuit Court for Baltimore City, they were able to secure an order from the Circuit Court authorizing her release." She did not explain, nor do the documents attached to her "Declaration" explain, what CBIC or the Detention Center did "to secure an order from the Circuit Court authorizing her release." Although she stated that, upon learning of the two SID numbers, Ms. Dett was re-fingerprinted, she did not state when that occurred, and there were no documents attached to her statement showing that a re-fingerprinting had occurred.
Ms. Dett responded that, upon her protest that she was not Vanessa Hawkins, she was advised that she would be released if her SID number did not match the one listed on the bench warrant, but that, instead of being released when it became clear that the SID numbers did not match, she was sent to the Detention Center and kept there until the afternoon of March 11. She argued that the defendants did not have the right to detain her, because she was not the person who was the subject of the warrant or the commitment order. The court was not impressed. Without a hearing and without any discovery having been taken, it granted the motion, entered summary judgment for the defendants, and subsequently denied a motion to alter or amend the judgment.
*1119 The Court of Special Appeals reversed. It concluded that the legal authority for the defendants to hold Dett pursuant to the warrant and commitment order depended on whether they had, and retained, a good faith reasonable belief that she was, in fact, the person whom the warrant directed them to detain. If, at any time, they ceased to have that reasonable belief, the court continued, they had a duty at that point to release her. On the record before it, the court found that there was a genuine dispute of material fact as to whether, at some point during the nearly four days of detention, the defendants no longer entertained a reasonable belief that Ms. Dett was the Vanessa Hawkins who was the subject of the warrant and commitment order and that, as a result, summary judgment was inappropriate. The court struck the judgment and remanded the case for further proceedings. Dett v. State, 161 Md.App. 429, 869 A.2d 420 (2005).
We granted certiorari to determine whether the Court of Special Appeals erred in holding (1) that there was a genuine dispute of fact as to whether the defendants lost legal justification to continue their detention of Ms. Dett, and (2) that they had an obligation to investigate whether Ms. Dett was, in fact, the person who was the subject of the warrant. We shall affirm the judgment of the intermediate appellate court.
DISCUSSION
The State acknowledges that Ms. Dett's actions are contingent, ultimately, on whether she was detained for any appreciable time without legal justification. Its position is that, where the detention is based on the execution of a facially valid arrest warrant, legal justification exists, even if the warrant is later determined to be invalid or the detainee is later determined to be innocent or not the person named in the warrant. When proceeding on the basis of a facially valid warrant, according to the State, there is no duty on the part of the detaining entity to investigate the nature or validity of the warrant. Contrariwise, the State argues that it had a mandatory legal duty to hold Ms. Dett until ordered otherwise by the court. At the very least, it posits, it had a duty to hold her until it was sure of her identity and that it acted reasonably in securing her release once it concluded she was not the person named in the warrant or commitment order.
Three claims were asserted in the amended complaintfalse imprisonment, violation of rights guaranteed by Article 24 of the Declaration of Rights, and an action captioned as being filed under the State Tort Claims Act. The Tort Claims Act does not create any independent substantive causes of action but rather, subject to the conditions and limitations stated therein, merely substitutes liability on the part of the State for liability that otherwise would exist on the part of covered State employees and officials. Little attention was given to that claim in either of the lower courts or, indeed, in the State's brief in this Court. At best, the averments in the count so captioned suggest a claim of negligence, which presupposes a duty, and, under the circumstances in this case, it can easily be dealt with in the context of the false imprisonment claim.
That is true as well with the claim under Article 24, which, like the false imprisonment claim, is also premised on a deprivation of liberty without legal justification. The State notes the existence of the Constitutional claim but presents its defense that there was legal justification for Ms. Dett's detention in the context of the false imprisonment claim and makes no separate, independent argument with respect *1120 to the Constitutional provision.[3] The Court of Special Appeals essentially treated the two claims together, as so shall we.
False imprisonment is a common law tort. We have defined it as the "deprivation of the liberty of another without his consent and without legal justification." Great Atl. & Pac. Tea Co. v. Paul, 256 Md. 643, 654, 261 A.2d 731, 738 (1970); Heron v. Strader, 361 Md. 258, 264, 761 A.2d 56, 59 (2000); Manikhi v. Mass Transit, 360 Md. 333, 365, 758 A.2d 95, 112 (2000). There is no dispute here that Ms. Dett was deprived of her liberty for nearly four days and that the deprivation, from its inception, was without her consent. The only issue, therefore, as to all three claims, is whether the deprivation, or any substantial part of it, was without legal justification. In that regard, we are mindful that the case was resolved in the trial court on summary judgment, which is appropriate only if, after viewing all of the evidence properly before the court in a light most favorable to Ms. Dett, it is clear that there is no genuine dispute of any material fact and that the defendants were entitled to judgment as a matter of law. de la Puente v. Frederick County, 386 Md. 505, 510, 873 A.2d 366, 369 (2005); Maryland Rule 2-501(f).
As noted, both CBIC and the Detention Center are units within the DPSCS Division of Pretrial Detention and Services. Maryland Code, § 5-201 of the Correctional Services Article (CS), which creates those units, specifies that the Division has "the same authority with regard to the custody of its inmates and the operation of the Baltimore City Detention Center as. . . the sheriffs have under this Code with regard to the detention of inmates committed to their custody and the operation of local correctional facilities." One of the specific duties assigned to the Commissioner of Pretrial Detention and Servicesthe head of the Divisionis to "keep safely any inmate committed or transferred to the custody of the Commissioner until the inmate is discharged in accordance with law," CS § 5-202(c)(2), which is equivalent to the statutory duty of managing officials of local correctional facilities in that regard, see CS § 11-103(a), and to the common law duty of sheriffs, when acting as jailors. See Harford County v. University, 318 Md. 525, 569 A.2d 649 (1990).
The State cites CS § 5-202 in support of its position that it had not just the legal justification, but the legal mandate, to hold Ms. Dett until ordered by the courtthe issuer of the warrant pursuant to which she was being heldto release her. It relies as well on Glover v. State, 143 Md. App. 313, 794 A.2d 735 (2002) for that proposition. Neither the statute nor Glover provide that support.
This Court has adhered to the view, first expressed in Great Atl. & Pac. Tea Co. v. Paul, supra, 256 Md. at 655, 261 A.2d at 738, that "[w]hatever technical distinction there may be between an `arrest' and a `detention' the test whether legal justification existed in a particular case has been judged by the principles applicable to the law of arrest." See also Ashton v. *1121 Brown, 339 Md. 70, 120, 660 A.2d 447, 472 (1995); Montgomery Ward v. Wilson, 339 Md. 701, 721, 664 A.2d 916, 926 (1995); Heron v. Strader, supra, 361 Md. at 264-65, 761 A.2d at 59. Because both an arrest and a detention involve a deprivation of liberty, it is reasonable to apply a single standard or set of standards to determine whether, from the perspective of tort law, either is legally justified.
It is important to keep in mind, however, that the act of arrest is ordinarily a momentary event. In Bouldin v. State, 276 Md. 511, 515-16, 350 A.2d 130, 133 (1976), we defined an arrest as "the taking, seizing, or detaining of the person of another (1) by touching or putting hands on him; (2) or by any act that indicates an intention to take him into custody and that subjects him to the actual control and will of the person making the arrest; or (3) by the consent of the person to be arrested." In State v. Evans, 352 Md. 496, 514-15, 723 A.2d 423, 431-32 (1999), we stressed the immediate physical nature of the encounter and held that whether the officer has any intent that the seizure lead to a prosecution has no bearing on whether an arrest has occurred. Once the physical requirements for an arrest have been met along with the intent to seize and detain, the arrest is complete, and, although the person may remain "under arrest," the arrest thereafter becomes a continued detention.
This becomes important because the legal justification for the arrest based on the identity of the arrestee can dissipate over time. The detaining authority may come into possession of information, not known at the time of arrest or not known at some earlier point in the detention, which, by establishing that the person being detained is not, in fact, the person authorized to be detained, may cause the legal justification relating to identity to disappear. The standards used to determine legal justification remain the same, but, in the course of a continuing detention, their application needs to be reexamined whenever changes in the factual underpinning of their application become known. That, indeed, is what this case is all about.
The general rules regarding when an arrest is regarded as "privileged" i.e., legally justifiable so as to protect the person making the arrest (or imposing the detention) from liability for false imprisonment, are set forth in Chapter 5, Title B of the Restatement (Second) of Torts. Section 125, dealing with the arrest of the wrong person under a warrant, provides:
"An arrest under a warrant is not privileged unless the person arrested
(a) is a person sufficiently named or otherwise described in the warrant and is, or is reasonably believed by the actor to be, the person intended, or
(b) although not such person, has knowingly caused the actor to believe him so."
Of particular relevance here is § 125(a), which contains two requirements for privilege: (1) that the warrant sufficiently name or identify the person to be arrested; and (2) that the person arrested either be that person or that the arresting officer reasonably believe the arrestee to be that person.
In Comment c. to § 125, the American Law Institute concludes that a person is sufficiently named if both the first name and surname given in the warrant "are phonetically closely similar to such a person's name." The warrant satisfied that requirement; it noted the first and last names of Vanessa Hawkins and, as an alias, Evelyn Dett. The first requirement was thus clearly met as to Officer Moore. The situation with respect to CBIC and the Detention Center is a bit more ambiguous. *1122 The commitment order, although referencing the warrant by number, named only Vanessa Hawkins as the person to be detained and said nothing about Evelyn Dett, even as an alias. To meet the first requirement, the State defendants must show that they, like Officer Moore, relied upon the warrant, for that is the only authority to detain someone named Evelyn Dett.
Comment d. to § 125 addresses the second requirement. It states that "if there are two persons to whom the name applies with complete accuracy or with substantially equal sufficiency [] the actor is privileged to arrest the one whom, after using due diligence, he reasonably believes to be the person intended." Comment f. expounds on this, noting that it is reasonable for the person charged with executing the warrant to rely on the name given in the warrant "unless he knows or is convinced beyond a reasonable doubt that a mistake has been made." Thus, the Comment continues, the actor is privileged to arrest the person to whom the name applies with complete accuracy even if the actor "may have some reason to suspect ... that the person, though accurately named, is not the person intended" but is not privileged to arrest a person, though accurately named, "if the actor knows by his own senses, or has information which leaves him no room reasonably to doubt, that a mistake has been made." An example given is a warrant for the arrest of XYZ for wife-beating and the arrestee, XYX, is an unmarried 12-year-old child.
Although some courts, particularly in older cases, have adopted a strict view that an officer who arrests the wrong person, even one with the same name or general description as the person named in the warrant, is liable even if he or she acts in good faith, most courts have applied principles similar to those set forth in § 125 of the Restatement and have adopted instead a reasonable belief test. See, in general, William B. Johnson, Liability for False Arrest Or Imprisonment Under Warrant As Affected By Mistake As To Identity Of Person Arrested, 39 A.L.R.4th 705 (1985). The majority, and to us the better reasoned, view is that, where the warrant sufficiently names or identifies the person to be arrested and the arresting officer, despite some evidence to the contrary, reasonably believes that the person arrested, bearing that name, is the person named in the warrant, the officer is not liable for false imprisonment, even if he or she, in fact, arrests the wrong person.[4]
*1123 We are not concerned here with the conduct of Officer Moore, but of CBIC and the Detention Center. CBIC received Ms. Dett pursuant to either the warrant or the sheriff's commitment order. The commitment order, as noted, directed the commitment of Vanessa Hawkins, SID No. 381961, date of birth July 11, 1963, and said nothing about Evelyn Dett, SID No. 2413966, date of birth February 6, 1962. Although the warrant noted that Vanessa Hawkins was also known as Evelyn Dett, it contained no identifying information beyond that contained on the commitment order and, indeed, identified the subject of the warrant with the same SID number and date of birth that was contained on the commitment order.
Whether or not required by law to do so, CBIC has adopted a routine procedure for identifying persons placed directly in its custody booking, photographing, fingerprinting, and obtaining from the fingerprints a SID number and Ms. Dett was subjected to that process. Within two hours after receiving custody of Ms. Dett, CBIC was aware of and had made note of a problem two SID numbers. It recognized and recorded the fact that the existence of those two numbers would keep her from being released. By 11:30 the next morning, March 8, the SID No. 381961 for Vanessa Hawkins had been verified and CBIC was aware that Vanessa Hawkins had eight prior contacts with CBIC.
Viewing the evidence and all reasonable inferences from the evidence in a light most favorable to Ms. Dett, it may fairly be inferred that CBIC had files with respect to those contacts, files from which a photograph, fingerprints, and other identifying information pertaining to Vanessa Hawkins would likely have been available. Ms. Dett could have been promptly refingerprinted to make certain that her prints were accurately recorded and resubmitted for confirmation of a SID number. It is not clear from this record that any of that was promptly done. Had CBIC simply obtained the photograph and fingerprints of Vanessa Hawkins inferably in its possession, it would have known without question that the person it was holding was not the person named in the warrant or the commitment order.
The Restatement standard that we have adopted provides that a detention is not privileged unless the person detained "is reasonably believed by the actor to be the person intended [to be detained]." From the evidence we have recounted, viewed in a light most favorable to Ms. Dett, there is no question but that a jury could reasonably find that, as early as midmorning on March 8, and certainly by March 10, CBIC, and thus DPSCS, could no longer reasonably believe that the person it was holding as Vanessa Hawkins was the person named in the warrant and commitment order. See Hayes v. Kelly, 625 So.2d 628 (La.App.1993), cert. denied, 625 So.2d 628 (La.1994), and cert. denied, 633 So.2d 171 (La.1994); Stalter v. Washington, supra, 151 Wash.2d 148, 86 P.3d 1159.
Relying on CS § 5-202(c)(2) and Glover v. State, supra, 143 Md.App. 313, 794 A.2d 735, the State nonetheless insists that it had both the right and a mandate to hold Ms. Dett until ordered by the court to release her. That is not the case.
Section 5-202(c)(2) directs the Commissioner to keep an inmate safely in *1124 custody "until the inmate is discharged in accordance with law." If the inmate being held is not the person ordered to be held, however, the law requires that person be discharged as soon as that fact becomes clear. The statute does not direct, and Constitutionally could not direct, the Commissioner to hold someone the Commissioner knows or reasonably believes is not the person authorized to be detained. As we indicated, CBIC and the Detention Center may have no common law or statutory duty to investigate whether a person committed to their custody is, in fact, the person authorized to be so committed, but once they become aware of facts that convince them that the person they are holding is not the person they are authorized by the warrant or commitment order to hold, they must, as promptly as reasonably possible, take the necessary steps, through the appropriate administrative structure, to release the person and notify the court or other agency that issued the warrant or other detention order (1) that they have done so, and (2) why.
In Glover, the plaintiff, James Glover, began serving a 30-day sentence at the Baltimore City Detention Center on October 4, 1996. The lawfulness of that detention was unchallenged. On October 18, 1996, the Baltimore City Sheriff filed a detainer, directing the warden of the Detention Center to hold James Glover, SID No. XXXXXXXXX, date of birth 8/13/58, until further action of the Circuit Court for Baltimore City pursuant to Bench Warrant No. XXXXXXXXX for failure to appear for trial on a charge of unauthorized use. It is not clear whether a copy of the warrant was sent to the Detention Center; there was no copy of it in the record.
Glover protested that he was not the James Glover wanted for unauthorized use, but the Detention Center, acting pursuant to the detainer/commitment order, continued to detain him until December 4, 1996, when it produced him in court on the unauthorized use charge. The court determined that the James Glover detained pursuant to the sheriff's detainer was not, in fact, the James Glover wanted for failure to appear on an unauthorized use charge and thus ordered his release. Glover then filed suit against the City and the State for negligence and a violation of Constitutional rights.
Glover did not dispute that he was, in fact, the person identified in the detainer the SID number stated in the detainer, XXXXXXXXX, was his SID number and therein lies the critical difference. Glover's complaint was that the warrant and commitment order were incorrect, that they named the wrong person. It is ordinarily not for the arresting officer or jailer to determine whether the warrant or detainer calling for the arrest or detention of a particular person is valid, was lawfully issued, or properly named the person ordered to be arrested. Those are issues for the court to resolve. The problem here is not the validity of the warrant or commitment order directing the detention of Vanessa Hawkins "AKA" Evelyn Dett; it is that the individual detained was not that person and there is competent evidence to show that CBIC and the Detention Center knew that to be the case and yet continued to detain her for a significant period of time. The Court of Special Appeals was correct in concluding that summary judgment was inappropriate.
JUDGMENT OF COURT OF SPECIAL APPEALS AFFIRMED, WITH COSTS.
NOTES
[1] Counsel for the State has suggested the possibility that, if a person has a SID number based on an earlier fingerprinting and a subsequent fingerprinting is not done correctly, a different SID number might result because the two prints would not match.
[2] There is some ambiguity as to whether she was transferred at 1:31 a.m., as the Court of Special Appeals supposed, or not until 6:23 a.m., which the actual record seems to indicate. The possible discrepancy is not important to this appeal.
[3] Article 24 of the Declaration of Rights is the State analogue to the due process clauses of the Fifth and Fourteenth Amendments. Baltimore Belt Railroad Co. v. Baltzell, 75 Md. 94, 99, 23 A. 74 (1891); Solvuca v. Ryan & Reilly Co., 131 Md. 265, 270, 101 A. 710, 712 (1917); Matter of Easton, 214 Md. 176, 187, 133 A.2d 441 (1957). It provides, in relevant part, that no person shall "be taken or imprisoned or disseized of his . . . liberties or privileges. . . or deprived of his life, liberty or property but by the judgment of his peers, or by the law of the land." Implicit in that provision, of course, is that, if there is legal justification for the deprivation of one's liberty, there is no violation of Article 24, as the deprivation would be in conformance with the law of the land.
[4] See Rodriguez v. United States, 54 F.3d 41 (1st Cir.1995); Schneider v. Kessler, 97 F.2d 542 (3rd Cir.1938); King v. Robertson, 227 Ala. 378, 150 So. 154 (1933); Montgomery v. City of Montgomery, 732 So.2d 305 (Ala.Civ. App.1999); Boies v. Raynor, 89 Ariz. 257, 361 P.2d 1 (1961); Walton v. Will, 66 Cal.App.2d 509, 152 P.2d 639, 641 (1944); Stewart v. Williams, 243 Ga. 580, 255 S.E.2d 699 (1979); Rodriguez v. Kraus, 275 Ga.App. 118, 619 S.E.2d 800 (2005); Blocker v. Clark, 126 Ga. 484, 54 S.E. 1022 (1906); Smith v. Sheriff of Cook County, 277 Ill.App.3d 335, 214 Ill. Dec. 20, 660 N.E.2d 211 (1995); Barnes v. Wilson, 450 N.E.2d 1030, 1033 (Ind.App. 1983); O'Neill v. Keeling, 227 Iowa 754, 288 N.W. 887, 889-890 (1939); Filer v. Smith, 96 Mich. 347, 55 N.W. 999 (1893); Boose v. City of Rochester, 71 A.D.2d 59, 421 N.Y.S.2d 740 (1979); Robinson v. City of Winston-Salem, 34 N.C.App. 401, 238 S.E.2d 628, 631 (1977); Golden v. City of Cleveland, 51 Ohio App.3d 39, 554 N.E.2d 148 (1989); State ex rel. Anderson v. Evatt, 63 Tenn.App. 322, 471 S.W.2d 949, 950-51 (1971); Mildon v. Bybee, 13 Utah 2d 400, 375 P.2d 458 (1962); Stalter v. Washington, 151 Wash.2d 148, 86 P.3d 1159 (2004); White v. Jansen, 81 Wash. 435, 142 P. 1140 (1914); Wallner v. Fidelity & Deposit Co., 253 Wis. 66, 33 N.W.2d 215 (1948).
For the contrary view, see Wolf v. Perryman, 82 Tex. 112, 17 S.W. 772 (1891) and Clark v. Heard, 538 F.Supp. 800 (S.D.Tex.1982) (holding that, under Texas law, the protection ordinarily allowed an officer who proceeds under a facially valid warrant does not apply to the arrest and detention of the wrong person and that such an arrest, even under a duly issued warrant, amounts to false imprisonment); Jordan v. C.I.T. Corporation, 302 Mass. 281, 19 N.E.2d 5 (1939).
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NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
STATE OF ARIZONA, Appellee,
v.
PHILIP STEVEN MATWYUK, Appellant.
No. 1 CA-CR 14-0202
FILED 5-26-2015
Appeal from the Superior Court in Mohave County
No. S8015CR201200754
The Honorable Steven F. Conn, Judge
AFFIRMED
COUNSEL
Arizona Attorney General’s Office, Phoenix
By Joseph T. Maziarz
Counsel for Appellee
Jeffrey A. James, Attorney at law, Flagstaff
By Jeffrey A. James
Counsel for Appellant
STATE v. MATWYUK
Decision of the Court
MEMORANDUM DECISION
Judge Jon W. Thompson delivered the decision of the Court, in which
Presiding Judge Andrew W. Gould and Judge Maurice Portley joined.
T H O M P S O N, Judge:
¶1 This case comes to us as an appeal under Anders v. California,
386 U.S. 738 (1967), and State v. Leon, 104 Ariz. 297, 451 P.2d 878 (1969).
Counsel for Philip Steven Matwyuk (defendant) has advised us that, after
searching the entire record, he has been unable to discover any arguable
questions of law and has filed a brief requesting this court conduct an
Anders review of the record. Defendant has been afforded an opportunity
to file a supplement brief in propria persona, but has not done so.
FACTS AND PROCEDURAL HISTORY
¶2 Defendant was indicted on two counts of attempted first
degree murder, one count of attempted first degree murder by domestic
violence, one count of burglary in the first degree, six counts of aggravated
assault, and two counts of aggravated assault by domestic violence.
Defendant pled not guilty to all charges and the matter proceeded to a jury
trial.
¶3 At trial, the state presented evidence of the following facts.
A.D. and defendant began a relationship in 2010 and lived at A.D.’s home
with her two children from a previous relationship. In May 2012, A.D. and
defendant ended their relationship, and defendant moved out of A.D.’s
house. After defendant moved out, A.D. had the locks on the house
changed and unplugged the garage door opener.
¶4 On the morning of June 2, 2012, A.D.’s next door neighbor
saw defendant walking back and forth around A.D.’s house. The neighbor
watched as defendant attempted to open the garage door, tapped on the
windows to try to remove the screens, and eventually walked around the
side of the house toward the backyard. Because the neighbor was aware
defendant no longer lived at the home, she picked up the phone to call the
police. Prior to placing the call, however, the neighbor heard screams
coming from A.D.’s house and she immediately dialed 911.
2
STATE v. MATWYUK
Decision of the Court
¶5 A.D.; her two-year old daughter; her friend (M.H.); her sister
(K.G.); K.G.’s two-year old son; and the children’s fifteen-year old
babysitter (M.J.H.) were asleep in the house. A.D. awoke to a tapping noise,
and minutes later, saw defendant enter her bedroom, where M.H. was also
sleeping, with a knife in his hands and a bandana wrapped around his face.
A.D. began screaming and ran from the room. As she fled, she noticed she
had been stabbed and was “covered in blood.”
¶6 M.H. awoke to discover he had been stabbed, was bleeding
profusely, and was having difficulty breathing. M.H. has a prosthetic leg,
which caused him to have limited mobility at times. Defendant was
standing near him, pointing a knife at him, and yelling that he would kill
M.H. if he did not leave A.D. M.H. stood up, but soon lost consciousness.
When M.H. regained consciousness he was lying on the floor of the
hallway. M.H. yelled for help and unsuccessfully tried to move from the
hallway until he eventually again lost consciousness.
¶7 K.G. heard her sister yelling, “He’s in here” and ran out of her
bedroom. When she saw defendant exiting the master bedroom, she tried
to run back into her room. Defendant knocked her down and while on top
of her attempted to stab her, stating “[y]ou’re going to die . . . .” K.G.’s son
was standing approximately a foot away and witnessed the altercation.
K.G. broke free from defendant’s grasp, and ran to the master bedroom to
assist M.H. When defendant approached K.G. again, she managed to knock
the knife out of his hands and eventually ran out the front door to get help.
¶8 M.J.H. awoke from sleeping on the couch with A.D.’s
daughter, and saw A.D. bleeding and defendant trying to stab K.G. M.J.H.
grabbed a phone to call 911. When defendant approached M.J.H. with the
knife, she threw the phone at his head. Defendant picked up the phone,
said “Oh, shit,” and ran out the back door of the house. M.J.H. grabbed the
young children and ran out of the front of the house to get help.
¶9 M.H. was hospitalized for ten days and remained
unconscious for two days. He received nine stab wounds to his chest, neck
and wrist. K.G. had wounds to both hands, her arm, her back, and her
breast. The cuts to her hands and arm required stitches. A.D. had stab
wounds to her left arm, under her right arm, her right hand and the back of
her head. A.D. also received stitches for her injuries.
¶10 During the ensuing police search, defendant called the police
from a pay phone at a truck stop. Defendant reported his location, and
police took him into custody. Defendant had blood on his jeans and shoes.
3
STATE v. MATWYUK
Decision of the Court
At the police department, the police advised defendant of his Miranda
rights, and defendant agreed to participate in an interview with a detective.
¶11 After initially denying that he was at A.D.’s house that
morning, the police confronted defendant with the next-door neighbor’s
eyewitness account placing him at the residence. Defendant then admitted
that he went to the house to pick up personal items he had left there.
Defendant stated that “he was let in the house” and went to A.D.’s bedroom
to try to reconcile with her. When defendant saw M.H. in bed, he became
extremely angry and grabbed a knife from the kitchen to scare M.H. and
get him to leave the house. Defendant claimed that after A.D. began
screaming, M.H. attacked him, and he had to fight M.H., A.D. and K.G. in
order to get away. After defendant left the house, he called his father and
told him that he thought he stabbed his girlfriend and asked that his father
hide him.
¶12 A jury convicted defendant of burglary in the first degree,
(count 4); attempted second degree murder as to M.H. (count 2); aggravated
assault as to M.H., (count 5) (causing serious physical injury); aggravated
assault as to M.H., (count 6) (by deadly weapon or dangerous instrument);
aggravated assault as to M.H. (count 12) (causing temporary but substantial
disfigurement or substantial loss of impairment of body organ); aggravated
assault by domestic violence as to A.D. (count 7) (by deadly weapon or
dangerous instrument); aggravated assault as to K.G. (count 8) (by deadly
weapon or dangerous instrument); disorderly conduct with a weapon as to
M.J.H. (count 9); misdemeanor assault as to A.D (count 10); and
misdemeanor assault as to K.G. (count 11). The jury also found three
aggravating factors: causing physical, emotional or financial harm to the
victim (counts 2, 4, 5, 6, 7, 8, 9, 12); the use or threatened use of a dangerous
instrument during the commission of offense (counts 2, 4, 5, 6, 7, 8, 12); and
the infliction or threatened infliction of serious physical injury (counts 2, 4,
5, 6, and 12). The court found defendant’s lack of prior felony convictions
to be a mitigating factor.
¶13 The trial court sentenced defendant to a mitigated term of
seven years in prison on count 4, an aggravated term of twelve years in
prison on count 2, a presumptive term of seven and one-half years in prison
on count 5, a presumptive term of seven and one-half years in prison on
count 6, and a presumptive term of six years in prison on count 12. The
court ordered counts 2, 5, 6, and 12 to run consecutively to count 4, and to
be served concurrently. The trial court also sentenced defendant to an
aggravated term of eight years in prison on count 7, to be served
consecutively to count 2; a mitigated term of seven years in prison on count
4
STATE v. MATWYUK
Decision of the Court
8, to be served consecutively to count 7; and a mitigated term of two years
in prison on count 9, to be served consecutively to count 8. On counts 10
and 11, the trial court sentenced defendant to six months in jail, with credit
for time served. The cout gave defendant 643 days of presentence
incarceration credit on count 4.
DISCUSSION
¶14 After reviewing the entire record for reversible error, we find
none. See Leon, 104 Ariz. at 300, 451 P.2d at 881. All of the proceedings were
conducted in compliance with the Arizona Rules of Criminal Procedure,
and the sentences imposed were within the statutory limits. Defendant was
present at all critical stages of the proceedings and was represented by
counsel. Furthermore, based on our review of the record before us,
substantial evidence supports the jury's verdicts.
¶15 Pursuant to State v. Shattuck, 140 Ariz. 582, 584-85, 684 P.2d
154, 156-57 (1984), defendant’s counsel’s obligations in this appeal are at an
end. Defendant has thirty days from the date of this decision to proceed, if
he desires, with a pro per motion for reconsideration or petition for review.
CONCLUSION
¶16 We affirm the convictions and sentences.
:ama
5
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Affirmed
in Part, Reversed and Remanded in Part, and Majority and Dissenting Opinions
filed November 3, 2009.
In The
Fourteenth Court of
Appeals
____________
NO. 14-07-01063-CV
____________
NANCY KESSLING, Appellant
V.
FRIENDSWOOD INDEPENDENT SCHOOL
DISTRICT AND PATRICIA HANKS, Appellees
On Appeal from the 56th
District Court
Galveston County, Texas
Trial Court Cause No. 06-CV-0884
M A J O R I T Y O P I N I O N
Nancy Kessling sued appellees, Friendswood
Independent School District (AF.I.S.D.@) and its
superintendent, Patricia Hanks, for various alleged violations of the Texas
Open Meetings Act (ATOMA@), Texas Public
Information Act (ATPIA@), and Texas
Education Code. In two issues on appeal, Kessling contends that the trial
court erred in (1) granting summary judgment against her TOMA and TPIA claims,
and (2) dismissing her Education Code claims for want of jurisdiction. In a
cross-appeal, appellees/cross-appellants contend that the trial court erred in
not awarding them attorney=s fees. We affirm in part and reverse and
remand in part.
I. Background
Kessling styles herself as a Apublic watchdog,@ having followed
the actions of the F.I.S.D. school board for over twenty years and Aroutinely@ using TPIA
requests to monitor its activities. Kessling asserts that she lives in the
area served by F.I.S.D., that she pays taxes to F.I.S.D., and that her children
attended F.I.S.D. schools. On August 9, 2006, she filed the present lawsuit,
seeking injunctions and declarations concerning alleged violations of the TOMA,
TPIA, and Education Code. Kessling=s original
petition named only superintendent Hanks as a defendant; FISD was added by
later amended petition. Specifically, in her third amended petition, the live
petition at the time of judgment,[1]
Kessling alleged that appellees violated the TOMA by (1) deliberating illegally
after adjournment, (2) failing to post proper notice of topics to be considered
in executive sessions, (3) discussing matters not on the agenda in executive
sessions, (4) permitting employees to attend executive sessions, and (5)
failing to keep proper minutes and electronic recordings of meetings. She
further alleged that appellees violated the TPIA by refusing to either provide
certain requested information or request an attorney general=s opinion, which
would authorize such refusal, and by untimely or otherwise inappropriately
fulfilling other requests. She also alleged that appellees violated the
Education Code by failing to follow certain accounting practices and procedures
and file certain related reports required under the code. Kessling sought
declaratory judgment regarding the alleged violations and requested mandamus
and injunctive relief regarding certain past violations and to prevent certain
of the violations from reoccurring.
In response to Kessling=s original
petition, styled APlaintiff=s Original
Application for Writ of Mandamus and Petition for Permanent Injunction,@ Hanks answered,
making general and special denials of the allegations, raising various
affirmative defenses, and requesting attorney=s fees under the
Education Code for the filing of a frivolous lawsuit. Hanks also filed special
exceptions, claiming that in the petition, Kessling failed to (1) give fair
notice of the claims asserted, (2) demonstrate standing regarding certain
claims, (3) identify specific acts claimed to be violations or that Kessling
was seeking to enjoin, and (4) state a cause of action.[2]
Although Kessling filed several supplemental petitions, the trial court granted
the special exceptions and ordered Kessling to replead within 30 days to cure
the pleading defects.
After Kessling filed a first amended
petition, which, inter alia, added F.I.S.D. as a defendant, and then a
second amended petition, appellees filed a combined motion for summary judgment
and plea to the jurisdiction. In the summary judgment portion of this
pleading, appellees contended that Kessling=s TOMA and TPIA
claims were moot as they related to actions in the past and requested an
impermissible advisory opinion as they related to actions in the future. In
regards to the TPIA claims, appellees additionally argued that Kessling failed
to follow the proper procedures for bringing an action for declaratory judgment
or injunctive relief under that act: specifically that she should have filed a
complaint with the district or county attorney for Galveston County, where
F.I.S.D. is located. In the plea to the jurisdiction portion of appellees= pleading,
appellees asserted that the trial court did not have jurisdiction over Kessling=s Education Code
claims because appellees had governmental immunity with regard to such claims.
Appellees further argued that Kessling lacked standing to raise the Education
Code claims because the code did not provide for a right of private action and
because Kessling failed to allege an injury which was distinct to her as
opposed to effecting the general public.
In her response to the motion and the
plea, Kessling maintained that her TOMA claims were not rendered moot by the
fact that alleged violations had occurred in the past and that it was thus not
improper for a court to declare that prior actions violated the TOMA. She
further argued that her allegations established a Apattern and
practice@ of TOMA
violations; thus, mandamus and injunctive relief would be appropriate to
prevent future violations. Regarding her TPIA claims, Kessling asserted that
according to established caselaw, the TPIA permits private citizens to bring
direct action against governmental bodies to enforce TPIA provisions. With
regard to appellees= plea to the jurisdiction, Kessling
asserted that she had standing and the trial court had jurisdiction over her
claims because members of the public have a right to seek (1) mandamus relief
to compel a public official to perform a ministerial duty, and (2) declaratory
relief against state officials who act without legal or statutory authority.
She argued that the duties at issue in her Education Code claims, namely
compliance with certain statutory accounting policies and procedures, were
ministerial acts requiring no discretion, and thus, governmental immunity was
not applicable. She further contended that permitting F.I.S.D. to avoid its Education
Code accounting duties would effectively stymie public monitoring of its
financial activities because under the TPIA, a government entity cannot be
required to create documents but can be required only to produce documents it
has already created. As discussed above, with the trial court=s permission,
Kessling subsequently filed her third amended petition.
The trial court granted the motion for
summary judgment and plea to the jurisdiction without specifying the bases
therefor. Appellees then moved for attorney=s fees. The trial
court thereafter filed another order, again stating that the summary judgment
motion and jurisdictional plea were granted and that all of Kessling=s claims were
dismissed with prejudice. Although the order does not mention appellees= motion for fees,
the trial court expressly denied that motion during an oral hearing.
II. Kessling=s Issues
As stated, in two issues, Kessling
contends that the trial court erred in granting summary judgment against her
TOMA and TPIA claims and in dismissing her Education Code claims for want of
jurisdiction.
A. Summary Judgment[3]
In her first issue, Kessling contends that
the trial court erred in granting summary judgment against her TOMA and TPIA
claims. She asserts that the trial court=s legal
conclusions were in error and that genuine issues of material fact exist
precluding summary judgment. We analyze the grant of a traditional motion for
summary judgment under well‑established standards of review. See
generally Tex. R. Civ. P. 166a; Nixon v. Mr. Prop. Mgmt. Co., Inc.,
690 S.W.2d 546, 548‑49 (Tex. 1985). The movant bears the burden to show
that there is no genuine issue of material fact and that it is entitled to
judgment as a matter of law. Tex. R. Civ. P. 166a(c). We review the motion
and any evidence de novo, taking as true all evidence favorable to the
nonmovant, and indulging every reasonable inference and resolving any doubts in
the nonmovant=s favor. Valence Operating Co. v. Dorsett, 164
S.W.3d 656, 661 (Tex. 2005).
1. TOMA Claims
The Texas Legislature enacted the TOMA in
1967 to ensure Athat the public has the opportunity to be
informed concerning the transactions of public business.@ Acker v. Tex.
Water Comm=n, 790 S.W.2d 299, 300 (Tex. 1990)
(quoting Act of May 23, 1967, 60th Leg., R.S., ch. 271, ' 7, 1967 Tex. Gen.
Laws 597, 598). Under the TOMA, all meetings of governmental bodies must be
kept open to the public unless the law expressly authorizes a closed session. See
Tex. Gov=t Code. ' 551.002. The
TOMA contains provisions governing how and when notices of meetings are to be
posted and what the contents of those notices must be. See id. '' 551.041-.043,
551.045, 551.047, 551.051-.052. The TOMA additionally imposes certain
requirements unique to closed sessions, including that a certified agenda or
electronic recording must be kept and that any vote or final action must occur
in an open meeting. See id. '' 551.102-.103.
Government Code section 551.142(a) provides that A[a]n interested
person . . . may bring an action by mandamus or injunction to stop, prevent, or
reverse a violation or threatened violation of [TOMA] by members of a
governmental body.@ As explained above, in the present
action, Kessling seeks a declaration concerning appellees= alleged prior
TOMA violations and a mandamus or injunction barring similar violations in the
future.
In their motion for summary judgment,
appellees argued that Kessling=s TOMA claims were moot to the extent that
they related to meetings in the past and requested an impermissible advisory
opinion to the extent that they related to future meetings. Both arguments
essentially question whether Kessling has raised a justiciable controversy.
The first argument asserts that claims concerning past meetings are moot, and
the latter argument questions whether claims concerning future meetings have
ripened. ATo constitute a justiciable controversy, there must
exist a real and substantial controversy involving genuine conflict of tangible
interests and not merely a theoretical dispute.@ Bonham State
Bank v. Beadle, 907 S.W.2d 465, 467 (Tex. 1995). Whether a justiciable
controversy exists, and thus whether claims have become moot on the one hand
and whether they have ripened on the other, is a threshold question that
implicates subject‑matter jurisdiction. See, e.g., Patterson v.
Planned Parenthood of Houston & Se. Tex., Inc., 971 S.W.2d 439, 442
(Tex. 1998) (discussing ripeness); City of Houston v. Clark, 252 S.W.3d
561, 568 (Tex. App.CHouston [14th Dist.] 2008, no pet.) (discussing
mootness). AA case becomes moot if a controversy ceases to exist
or the parties lack a legally cognizable interest in the outcome.@ Allstate Ins.
Co. v. Hallman, 159 S.W.3d 640, 642 (Tex. 2005). The doctrine of ripeness Aasks whether the
facts have developed sufficiently so that an injury has occurred or is likely
to occur, rather than being contingent or remote.@ Patterson,
971 S.W.2d at 442.
Appellees base their justiciability
arguments on the Austin Court of Appeals= analysis in Cornyn
v. City of Garland, 994 S.W.2d 258 (Tex. App.CAustin 1999, no
pet.). In Cornyn, the trial court denied by way of summary judgment the
complainant=s requests for a declaratory judgment that prior city
counsel meeting notices were deficient and a permanent injunction and writ of
mandamus requiring full TOMA compliance in the future. 994 S.W.2d at 266. The
Austin court affirmed, holding that the declaratory judgment claim was moot and
that the request for injunction and for writ of mandamus required an advisory
opinion (i.e., was not yet ripe for decision). Id. at 267.[4]
Other courts, however, including this one, have arrived at different
conclusions from those of the Cornyn court regarding the mootness of
prior TOMA violations and the ripeness of threatened future violations.
a. Future Meetings
For reasons which will become apparent, we
begin by addressing the claims concerning threatened future violations. In Harris
County Emergency Service District No. 1 v. Harris County Emergency Corps,
we upheld an injunction preventing the appellant governmental entity from
holding certain types of meetings in the future without proper notice. 999
S.W.2d 163, 171 (Tex. App.CHouston [14th Dist.] 1999, no pet.). As
authority, we cited section 551.142(a), which authorizes A[a]n interested
person . . . [to] bring an action by mandamus or injunction to stop, prevent,
or reverse a violation or threatened violation of the TOMA.@ Id.
(quoting 551.142(a)) (emphasis added). We looked to a pattern of past improper
meeting notices to support an injunction against holding future meetings
without proper notice.
To avoid the justiciability challenges,
Kessling is only required to plead sufficient facts to support jurisdiction. See
City of Waco v. Lopez, 259 S.W.3d 147, 150 (Tex. 2008). Kessling=s pleadings are
sufficient to make a claim under Harris County Emergency in that she
explicitly alleged a pattern and practice of certain kinds of TOMA violations
and requested injunctive and mandamus relief to prevent future violations of
the same nature. Consequently, the trial court erred in granting summary
judgment against Kessling=s claims concerning future meeting
notices.[5]
b. Past Meetings
We now turn to Kessling=s claims with
regards to past violations. In City of Farmers Branch v. Ramos, 235
S.W.3d 462 (Tex. App.CDallas 2007, no pet.), the Dallas Court of
Appeals also deviated from the Cornyn court=s conclusions. In
Ramos, the complainant alleged that the city council had violated the
TOMA on specific instances when it passed certain ordinances, and the city
countered that questions concerning such alleged violations were rendered moot
because the ordinances in question had been subsequently repealed. 235 S.W.3d
at 468-69. The court of appeals rejected the city=s position,
stating that: AIf a governmental body illegally deliberates and
decides an issue in closed session, repealing the action so that it can be
retaken in a later setting does not vindicate the very right protected by TOMA.
. . . >Our citizens are
entitled to more than a result. They are entitled not only to know what
government decides but to observe how and why every decision is reached.=@ Id. at 469-70
(quoting Acker v. Tex. Water Comm=n, 790 S.W.2d 299,
300 (Tex. 1990)). The court then concluded that the complainant=s request for a
declaration of TOMA violations, coupled with a potential remedy involving
production of certified agenda from the illegally closed meetings, established
that the issue was not moot. Id. at 470.
We agree with the Ramos court that
a TOMA violation is not rendered moot simply because it occurred in the past
but remains a live controversy insofar as it supports a future remedy.
Kessling=s claims of past
TOMA violations and threatened future violations are, in fact, inextricably
intertwined. The remedy that she requests based on past violations is the
prohibition (by mandamus or injunction) of future violations. She attempts to
prove the likelihood of those future violations by demonstrating a pattern and
practice of violations in the past. Thus, following Harris County Emergency
and Ramos, the controversy regarding past violations has not become
moot, and the controversy regarding future violations is ripe. Consequently,
the trial court erred in granting summary judgment against Kessling=s TOMA claims on
these bases. We sustain Kessling=s first issue. It
is important to note, however, that our resolution of this issue does not mean
that Kessling ultimately has valid TOMA claims or that she has demonstrated a
pattern and practice of TOMA violations. These questions were not raised by
appellees= motion. We hold only that Kessling has sufficiently
pleaded her TOMA claims.
2. TPIA Claims
In 1973, the Texas Legislature passed what
is now known as the TPIA. See Act of June 14, 1973, 63rd Leg., R.S.,
ch. 424, '' 1, 14(d), 1973 Tex. Gen. Laws 1112, 1118; City of
Garland v. Dallas Morning News, 22 S.W.3d 351, 355 (Tex. 2000). The
purpose of the TPIA is Ato provide public access >at all times to
complete information about the affairs of government and the official acts of
public officials and employees.=@ City of
Garland, 22 S.W.3d at 355-56 (quoting Tex. Gov=t Code ' 552.001). In
furtherance of this policy, a governmental body must promptly produce requested
public information. See Tex. Gov=t Code ' 552.221. The
TPIA defines Apublic information@ as information
that Aunder a law or
ordinance or in connection with the transaction of official business, is
collected, assembled, or maintained by a governmental body; or for a
governmental body and the governmental body owns the information or has a right
of access to it.@ Id. ' 552.021. The
TPIA also exempts certain categories of information from disclosure. See id.
'' 552.101‑.123.
In order to claim that particular information falls within an exemption, when
the issue has not been previously determined, a governmental body must request
an Attorney General=s opinion on the matter. See id.
' 552.301. If the
governmental body fails to do so, the information is presumed to be public. Id.
' 552.302.
As stated above, in her petition, Kessling
alleged that appellees had violated the TPIA by refusing to either provide
particular information or request an attorney general=s opinion on the
matter. She further charged that appellees had failed to timely or properly
provide other requested information. As relief, Kessling requested a
declaratory judgment that appellees had violated the TPIA, as well as
injunctive relief and a writ of mandamus requiring appellees to comply with
TPIA provisions and timely disclose the requested information. In their
motion, appellees raised two grounds for summary judgment on Kessling=s TPIA claims.
First, they argued that under TPIA section 552.3215, Kessling was not permitted
to file her claims seeking declaratory judgment and injunctive relief directly
with a court but first had to file a complaint with the local district attorney
or county attorney. Tex. Gov=t Code ' 552.3215.
Second, appellees argued, again based on the Cornyn case, that Kessling=s TPIA claims
regarding past requests had all become moot and that her claims regarding potential
future requests sought an impermissible advisory opinion. We will address each
ground in turn.
a. Section 552.3215
As a matter of statutory interpretation,
we consider the question of whether section 552.3215 prevents Kessling from
filing her declaratory judgment and injunctive claims directly with a court
under a de novo standard. City of Rockwall v. Hughes, 246 S.W.3d 621,
625 (Tex. 2008). When a statute=s language is
clear and unambiguous, we need not resort to rules of construction or other
extrinsic aids. Id. at 626. In enacting TPIA section 552.3215, the
Texas Legislature established a scheme through which TPIA complainants can file
a complaint with a district attorney or county attorney, who then must assess
whether a violation has occurred and determine whether to pursue the matter by
first notifying the governmental entity and, if not remedied, then filing an
action for declaratory judgment or injunctive relief. Tex. Gov=t Code ' 552.3215.
Subsection (a)(1) defines a A[c]omplainant@ as Aa person who
claims to be the victim of a violation of [the TPIA].@ Id. ' 552.3215(a)(1).
Subsection (b) states that A[a]n action for a declaratory judgment or
injunctive relief may be brought in accordance with this section against a
governmental body that violates [the TPIA].@ Id. ' 552.3215(b).
Subsection (c) permits a district or county attorney to bring the action in the
name of the state, and subsection (e) states that a Acomplainant may
file a complaint@ with the county or district attorney. Id.
' 552.3215(c),
(e). Other sections guide the district or county attorney=s decision-making
process, require notification to the governmental entity before suit can be
filed, and provide complainants with an additional opportunity to seek redress
with the Texas Attorney General should the local district or county attorney
decline to pursue the matter. Id. ' 552.3215(g), (h),
(i), (j).
Most significantly for our purposes, the
final subsection of the provision, subsection (k), states that A[a]n action
authorized by this section is in addition to any other civil, administrative,
or criminal action provided by this chapter or another law.@ Id. ' 552.3215(k).
Prior to enactment of section 552.3215, it was clear that TPIA requestors could
seek relief from a governmental entity=s refusal to
produce information by directly filing a declaratory judgment action under the
UDJA against the entity. See City of Garland, 22 S.W.3d at 357-58
(collecting cases where TPIA requestors have sued for declaratory judgment as
the sole remedy, as well as cases where requestors sought declaratory judgment
in addition to mandamus relief, and holding that the UDJA supports declaratory
judgment actions in the TPIA context); Dominguez v. Gilbert, 48 S.W.3d
789, 796 (Tex. App.CAustin 2001, no pet.) (holding TPIA
requestor had standing to seek declaratory judgment under the UDJA). Appellees
argue that the enactment of section 552.3215 eliminated this previously
available avenue for redress. However, given that nothing in section 552.3215
expressly or implicitly restricts the preexisting right of action, and given
that subsection (k) expressly states that an action authorized therein is Ain addition to@ any other type of
action available, we hold that section 552.3215 does not prevent a complainant
from directly filing a TPIA declaratory judgment claim.[6]
In effect, section 552.3215 gives a complainant an avenue for seeking redress
which does not require the complainant to incur the expense of filing a lawsuit
on his or her own behalf: a lawsuit undertaken by, and in the name of, the
state. See Tex. Gov=t Code ' 552.3215(c).
Nothing in section 552.3215 suggests that a complainant cannot file a lawsuit
in his or her own behalf, name, and expense. The trial court erred to the
extent it held otherwise.[7]
b. Justiciability
Next, we turn to appellees= justiciability
contentions, i.e., that Kessling=s TPIA claims
regarding past requests had all become moot and that her claims regarding
potential future requests were not yet ripe. As discussed above, A[t]o constitute a
justiciable controversy, there must exist a real and substantial controversy
involving genuine conflict of tangible interests and not merely a theoretical
dispute.@ Bonham State
Bank, 907 S.W.2d at 467. A case is considered moot when either a
controversy has ceased to exist or the parties lack a legally cognizable
interest, Hallman, 159 S.W.3d at 642, and a controversy does not ripen
until an injury has occurred or is likely to occur, Patterson, 971
S.W.2d at 442. We begin by noting that Kessling=s TPIA violation
claims can be grouped into two categories: (1) claims that certain requests
have gone unfulfilled, and (2) claims that although other requests have been
fulfilled, something improper occurred regarding how they were fulfilled.[8]
Claims that certain requests have gone
unfulfilled are neither moot nor unripe. Because there is a live controversy
regarding these claims, the trial court possesses subject matter jurisdiction
to resolve the controversy. See Patterson, 971 S.W.2d at 442. Although
in their appellate briefing, appellees further argue that (1) Kessling requested
an overbroad order, (2) Kessling failed to plead her claims with sufficient
specificity, and (3) FISD has not refused to provide any existing documents and
cannot be required to create documents to fulfill TPIA requests, appellees did
not raise these points as grounds for summary judgment below. Accordingly, we
cannot affirm the judgment on these bases. See Knott, 128 S.W.3d at 216. Summary judgment was improvidently
granted with regard to Kessling=s claims of unfulfilled TPIA requests.
Regarding her claims concerning requests
that were ultimately fulfilled, Kessling does not argue in her briefing to this
court that she is entitled to seek mandamus or injunctive relief, as she did in
connection with her TOMA claims, instructing appellees to follow the law in the
future. She neither argues that TPIA allows for such relief nor seeks any
other injunctive or other affirmative relief as her requests have been
fulfilled. Instead, with regard to her fulfilled requests, she appears to seek
only a declaration that violations have occurred in the past in connection with
those requests. In the absence of a request for injunctive or other
affirmative relief, a declaration that past violations have occurred would have
no impact on the rights of the parties. See Speer v. Presbyterian Children=s Home & Serv.
Agency, 847 S.W.2d 227, 229 (Tex. 1993) (citing McKie v. Bullock, 491
S.W.2d 659, 660 (Tex. 1973), for the proposition that Awhen the action
sought to be enjoined is accomplished and >suitable coercive
relief= becomes
impossible, it is improper to grant declaratory relief@); City of
Shoreacres v. Tex. Comm=n of Envtl.
Quality, 166 S.W.3d 825, 838-39 (Tex. App.CAustin 2005, no
pet.) (holding that party=s request for declaratory judgment did not
change the fact that no justiciable controversy existed because the court could
grant no relief having a practical legal effect on the controversy). Kessling=s claims regarding
fulfilled TPIA requests are therefore moot. Consequently, the trial court did
not err in dismissing these claims.[9]
In short, the trial court erred in
dismissing Kessling=s TOMA claims as well as her TPIA claims
regarding requests that have allegedly gone unfulfilled, but the court has not
been shown to have erred in dismissing Kessling=s TPIA claims
concerning requests which were ultimately fulfilled. Accordingly, we sustain
Kessling=s first issue in
part and overrule it in part.
B. Plea to Jurisdiction
In her second issue, Kessling contends
that the trial court erred in granting appellees= plea to the
jurisdiction and, thus, in dismissing her Education Code claims for want of
jurisdiction. We review a trial court=s grant of a plea
to the jurisdiction under a de novo standard. Lopez, 259 S.W.3d at
150. The focus of such review is on Awhether facts have
been alleged that affirmatively demonstrate jurisdiction in the trial court.@ Id. In
making this determination, we construe pleadings liberally in favor of the
plaintiff. Id. Furthermore, we may not assess the merit of the
plaintiff=s claims. County of Cameron v. Brown, 80
S.W.3d 549, 555 (Tex. 2002). If a fact question regarding jurisdiction exists,
the plea should not have been granted; however, if pleadings or evidence
affirmatively negate a jurisdictional fact, the plea may have been properly
granted even in the absence of an opportunity to amend. See Lopez, 259
S.W.3d at 150. When a plea to the jurisdiction challenges the plaintiff=s pleadings and
not the existence of jurisdictional facts, we assume the facts pleaded to be true.
See Westbrook v. Penley, 231 S.W.3d 389, 405 (Tex. 2007).
In her petition, Kessling claimed that
appellees violated the Education Code by failing to follow certain accounting
practices and failing to generate certain reports required under the code and
associated administrative rules. See Tex. Educ. Code '' 39.023, 44.002,
44.003, 44.007, 44.0071; 19 Tex. Admin. Code '' 61.1025 (2001,
2005) (Tex. Educ. Agency, Public Education Information Management System Data
and Reporting), 109.1 (1996, 2002) (Tex. Educ. Agency, Financial Accounting).
Kessling requested a declaratory judgment and injunctive and mandamus relief to
require appellees to adopt an appropriate accounting system which conforms to
the Education Code requirements. She further claimed that appellees= failure to
generate required accounting reports defeated her TPIA requests for such
reports because, under the TPIA, a governmental body can be required to release
only information in existence and cannot be forced to create the requested
information. See A&T Consultants, Inc. v. Sharp, 904 S.W.2d 668,
676 (Tex. 1995). In their plea, appellees asserted governmental immunity.
They also asserted that Kessling lacked standing because (1) the Education Code
does not provide for a private right of action on these accounting matters, and
(2) Kessling failed to allege a distinct injury.
We begin by addressing the standing
grounds in the plea to the jurisdiction. A party seeking affirmative relief
must have standing to invoke a court=s subject matter
jurisdiction. DaimlerChrysler Corp. v. Inman, 252 S.W.3d 299, 304 (Tex.
2008). AFor standing, a
plaintiff must be personally aggrieved; his alleged injury must be concrete and
particularized, actual or imminent, not hypothetical.@ Id. at
304-05. If the plaintiff does not allege real and personal injury to himself
or herself, it is irrelevant whether the defendant acted improperly. See id.
at 305.
Appellees are correct, and Kessling does not
dispute, that the Education Code does not contain any provision authorizing a
private right of action for complaints concerning a school district=s failure to
follow required accounting practices or generate required financial reports.
To the contrary, the provisions Kessling relies upon give oversight on these
matters to other governmental actors. See Tex. Educ. Code '' 39.023
(Commissioner of Education), 44.002 (State Board of Education), 44.003
(district superintendents), 44.007 (State Board), 44.0071 (Commissioner); 19
Tex. Admin. Code '' 61.1025 (Commissioner and groups
appointed by the Commissioner), 109.1 (Commissioner, State Board, and state
auditor).[10]
Kessling instead argues that she has standing
to compel, through mandamus, a public official to perform a ministerial duty. See
Blum v. Lanier, 997 S.W.2d 259, 263 (Tex. 1999).[11]
She further contends that she has standing to Aseek declaratory
relief against state officials who allegedly act without legal or statutory
authority.@ See Tex. Natural Res. Conservation Comm=n v. IT‑Davy, 74 S.W.3d 849,
855 (Tex. 2002). Such arguments, however, do not obviate the prerequisite for
standing of a particularized injury. See Inman, 252 S.W.3d at 304-05.
Indeed, the Texas Supreme Court has expressly noted that in order to have
standing for a declaratory judgment claim, a member of the public must allege Aa particularized
injury distinct from that suffered by the general public.@ Bland I.S.D. v.
Blue,
34 S.W.3d 547, 555-56 (Tex. 2000).[12]
Kessling contends that appellees= failure to follow
mandatory financial guidelines and prepare mandatory financial reports results
in her failure to: (1) get her TPIA requests for those reports fulfilled, and
(2) properly review FISD=s financial activities by making
productive TPIA requests. In other words, Kessling maintains that appellees= refusal to follow
the dictates of the Education Code defeats her right to access to information
under the TPIA. Kessling=s argument, however, is defeated by the
very statutes upon which she relies. As discussed above, under the Education
Code provisions, she has no private right of enforcement, see Texas
Education Code '' 39.023, 44.002, 44.003, 44.007, 44.0071;
under the TPIA, she has no right to require a governmental entity to create a
document that it does not already possess, see Sharp, 904 S.W.2d at
676. Because Kessling has no right to require appellees to meet the dictates
of the Education Code provisions either through the TPIA or the Education Code
itself, she does not have a particularized injury from the appellees= alleged failure
to do so. In short, she has no standing to make these claims. See Inman,
252 S.W.3d at 304-05. To the extent that Kessling wishes to complain generally
about the logic or fairness, as opposed to the constitutionality, of the
statutory schemes, she should address the Texas Legislature. The trial court
did not err in dismissing Kessling=s Education Code
claims for lack of standing. We overrule Kessling=s second issue.
III. Cross-Appeal for Attorney=s Fees
In the sole issue in their cross-appeal,
appellees/cross-appellants contend that the trial court erred in declining to
award them attorney=s fees either under the UDJA or the Education
Code. Under the UDJA, a trial court may award costs and reasonable and
necessary attorney=s fees as are equitable and just. Tex.
Civ. Prac. & Rem. Code ' 37.004. A court may conclude that it is
not equitable or just to award even reasonable and necessary fees. Bocquet
v. Herring, 972 S.W.2d 19, 21 (Tex. 1998). Under the Education Code, a
trial court may award attorney=s fees to a defendant if (1) the suit was
dismissed or judgment rendered in favor of the independent school district or
school district employee, and (2) the court finds that the suit was frivolous,
unreasonable, and without foundation. Tex. Educ. Code '' 11.161, 22.055.
We review the court=s refusal to award fees under either
statute under an abuse of discretion standard. Bocquet, 972 S.W.2d at
21 (UDJA); Loeffler v. Lytle I.S.D., 211 S.W.3d 331, 350 (Tex. App.CSan Antonio 2006,
pet. denied) (Education Code).
Because Kessling was wholly successful on
her appeal of the summary judgment against her TOMA claims and at least
partially successful on her TPIA claims, we will consider only her Education
Code claims in addressing appellees= cross-appeal.
While Kessling=s Education Code claims are ultimately meritless, we
cannot say that they were frivolous, unreasonable, and without foundation. The
arguments were novel and were grounded in statutory and case law, even though,
in the end, they were incorrect. Accordingly, the trial court did not abuse
its discretion in declining to award attorney=s fees under the
Education Code. See Tex. Educ. Code '' 11.161, 22.055.
Similarly, given that Kessling successfully appealed judgment against several
of her UDJA based claims, and the claims on which she was unsuccessful were
nonetheless not frivolous or without foundation in the law, we cannot say that
the trial court erred in refusing to find that a grant of attorney=s fees would be
equitable and just. Accordingly, the trial court did not abuse its discretion
in declining to award fees under the UDJA. We overrule appellees= sole cross-appeal
issue.
IV. Conclusion
In summary, the trial court erred in
granting summary judgment against Kessling=s TOMA claims and
against her claims of unfulfilled TPIA requests. The trial court properly
granted judgment against Kessling=s claims
concerning TPIA requests that have been met. The court properly dismissed her
Education Code claims for want of jurisdiction. The trial court did not abuse
its discretion in declining to award attorney=s fees to
appellees. We remand to the trial court for further consideration of Kessling=s TOMA claims and
her claims of unfulfilled TPIA requests.
/s/ Adele
Hedges
Chief
Justice
Panel consists of Chief Justice Hedges and Justices Yates and Frost.
(Frost, J. Dissenting)
[1] Kessling filed her third amended petition after
appellees= motion for summary judgment was filed and after the
deadline passed for amendment. The trial court expressly granted leave to file
the third amended petition during an oral hearing before final judgment was
entered. The third amended petition was therefore the live petition at the
time of judgment.
[2] In her special exceptions, Hanks provided eleven
paragraphs of detailed exceptions, challenging specific paragraphs of Kessling=s petition. The description in the text above is
intended solely as a brief synopsis of the assertions.
[3] For consistency=s
sake, we adopt the parties= labeling of
the TOMA and TPIA discussions as pertaining to the grant of summary judgment
and their labeling of the Education Code discussion as pertaining to the grant
of the plea to the jurisdiction. Such labeling is not intended to
substantively impact the analysis.
[4] Regarding past acts, the Austin Court also rejected
the complainant=s assertion of an exception to the mootness doctrine,
which would permit judicial review of acts that are capable of repetition but
evade review. Id. (quoting 551.142(a)); see also Williams v. Lara,
52 S.W.3d 171, 184-85 (Tex. 2001) (discussing the Acapable of repetition, yet evading review@ exception to the mootness doctrine). This mootness
exception is not raised in the present appeal.
[5] Appellees are misguided in their attempt to
discredit any precedential value of Harris County Emergency based on
factual and procedural distinctions between that case and the one currently
before us.
[6] There is, additionally, no indication in the
legislative history, cited by appellees or discovered by our research, that
section 552.3215 was intended to replace or extinguish any existing rights of
action. To the contrary, the legislative history is replete with comments akin
to subsection (k), i.e., that the newly created action is in addition to
any other available actions.
[7] We additionally note that even if appellees were
correct in their interpretation of section 552.3215, the section would still
not have been grounds for dismissing all of Kessling=s TPIA claims. Kessling additionally sought a writ of
mandamus, which is expressly permitted under TPIA section 552.321 when a
governmental entity refuses to request an attorney general=s opinion or to produce material previously determined
to be public information. Tex. Gov=t Code ' 552.321.
[8] Among her claims that certain TPIA requests have
gone unfulfilled, Kessling asserts that (1) on November 17, 2003, she requested
documents relating to September, October, and November board meetings, but she
did not receive coded payroll statements; (2) she has not received all of the
check registers that she requested on November 17, 2003; (3) FISD has failed to
respond to a February 23, 2005, request for APayment
of Bills@ and AFinancial
Reports@; (4) FISD has failed to provide a Alist of educators@
she requested on November 14, 2005; and (5) FISD failed to provide a signature
authority card for a bank account, also requested on November 14, 2005. Among
her claims regarding requests which were ultimately fulfilled, Kessling asserts
that FISD (1) failed to provide Aprompt
access@ to board agenda and meeting minutes as well as
banking documents she requested on February 28, 2004; (2) treated her
differently than district employees and members of the press by not providing
her Awithout charge and without request@ a board agenda book; (3) failed to make certain bank
statements available until Kessling made a second request; (4) admitted that ATax Collector Bank Statements@ had been omitted from the response to a prior
request; (5) produced AQuarterly Investment Reports@ untimely; and (6) failed to produce requested ALetters to Management,@ which Kessling subsequently obtained from another source.
[9] Obviously, we disagree with the dissent=s conclusion that Kessling briefed the issue of
whether the TPIA affords her the right to seek mandamus or injunctive relief
instructing appellees to follow the TPIA in the future. Even if her briefing
could be liberally construed as having raised the issue, she certainly does not
offer any argument or authority specifically on this issue. See Tex. R.
Civ. P. 38.1(i) (AThe brief must contain a clear and concise argument
for the contentions made, with appropriate citations to authority and to the
record.@).
For these reasons, we also
disagree with the dissent=s additional conclusion that the trial court erred in
granting summary judgment against Kessling=s
claims regarding fulfilled TPIA requests. The dissent appears to reach its
conclusion based on the majority=s
analysis of Kessling=s similar TOMA claims. However, it is far from clear
whether the TPIA and interpretive case law supports the dissent=s conclusion that this issue should be analyzed the
same as it is under the TOMA. We express no opinion as to whether a mandamus
or injunction requiring appellees to follow the TPIA in the future would be
proper under the law had such issue been briefed.
The dissent
suggests that we are addressing the merits of Kessling=s claims regarding fulfilled TPIA requests. To the contrary, as explained in the preceding text,
we find that those claims are moot and thus the trial court, and this court,
lacks subject-matter jurisdiction over those claims. See, e.g., Labrado v.
County of El Paso, 132 S.W.3d 581, 589 (Tex. App.CEl Paso 2004, no pet.).
[10] As appellees point out, other sections of the
Education Code also provide the Texas Education Agency (TEA), the Commissioner
of Education, and the State Board of Education with general oversight of school
districts= financial reporting. See Tex. Educ. Code '' 7.021(b)(13) (mandating the TEA Areview school district budgets, audit reports, and
other fiscal reports@); 7.055(b)(36) (requiring the commissioner to report
annually on Athe status of school district fiscal management@); 7.102 (requiring the State Board to adopt rules
concerning district budgets and audits of financial accounts).
[11] Kessling contends that having the reports required
by the Education Code prepared is a ministerial act by a public official.
Kessling acknowledges that the actual preparation of the reports may require an
accountant=s discretion but argues that having the reports
prepared is a ministerial not discretionary function because it is mandated by
the code.
[12] One exception to the rule requiring a Aparticularized injury@ applies when a taxpayer alleges an illegal expenditure of public
funds. Bland I.S.D., 34 S.W.3d at 556. Kessling does not rely upon
this exception in the present case.
| {
"pile_set_name": "FreeLaw"
} |
188 N.J. Super. 638 (1983)
458 A.2d 156
FRANK J. JARUSEWICZ AND MARY JARUSEWICZ, HIS WIFE, ET AL., PLAINTIFFS,
v.
JOHNS-MANVILLE PRODUCTS CORP., ET AL., DEFENDANTS AND THIRD-PARTY PLAINTIFFS,
v.
JERSEY CENTRAL POWER & LIGHT CO., THIRD-PARTY DEFENDANT.
Superior Court of New Jersey, Law Division Middlesex County.
Decided February 18, 1983.
*639 Alan M. Darnell for plaintiffs (Wilentz, Goldman & Spitzer, attorneys).
Philip V. Lago for defendant GAF (Hannoch, Weisman, Stern, Besser, Berkowitz & Kinney, attorneys).
Steven A. Weiner for defendant Johns-Manville (Budd, Larner, Kent, Gross, Picillo & Rosenbaum, attorneys).
*640 William R. Connelly for defendant Quigley Co. (Ravin, Davis & Sweet, attorneys).
Stephen J. Foley for defendant Porter-Hayden (Campbell, Foley, Lee, Murphy & Cernigliaro, attorneys).
James F. Hyland for defendant Pittsburgh Corning (Evans, Koelzer Marriott, Osborne & Kreizman, attorneys, and Henry R. Simon, attorney).
Peter W. Sachs for defendants A.P. Green Refractories and Metropolitan Refractories (Sachs and Sachs, attorneys).
Peter A. Piro for defendant Combustion Engineering (Haskins, Hack, Piro and O'Day, attorneys).
H. Frank Carpentier for defendant Flintkote Mines (Carton, Nary, Witt & Arvanitis, attorneys).
Brian J. Coyle for defendant Owens-Corning Fiberglas (Harwood, Lloyd, Ryan, Coyle & McBride, attorneys).
Linda P. Torres for defendant Keene Corp. (Lowenstein, Sandler, Brochin, Kohl, Fisher & Boylan, attorneys).
Gita F. Rothschild for defendant Owens-Illinois (McCarter & English, attorneys).
Thomas F. Tansey for defendant Nicolet (Morley, Cramer, Tansey, Haggerty & Fanning, attorneys).
George P. Moser, Jr. for defendant Armstrong World Industries (Moser, Roveto, McGough & vonSchaumburg, attorneys).
Steven E. Brawer for defendant Babcock & Wilcox (Rosenberg & Brawer, attorneys and Richard A. DeMichele, attorney).
Brian P. Sullivan for defendant Atlas Turner (Smith, Stratton, Wise & Heher, attorneys).
Barbara A. Schwab for defendant Philip Carey (Lamb, Chappell, Hartung, Gallipoli & Coughlin, attorneys).
Michael P. McGrath for defendant State Insulation (Enright, Porter & Lenney, attorneys).
*641 KEEFE, J.S.C.
The issues to be decided on this motion are: whether plaintiffs' amended complaint joining 16 additional defendants in this case violates the statute of limitations and, if so, whether plaintiffs correctly used the fictitious name practice permitted by R. 4:26-4 thereby avoiding application of the statute. For the reasons stated herein both questions are answered in the affirmative.
The 18 plaintiffs in this matter filed a complaint on September 19, 1980, alleging injuries resulting from exposure to asbestos products. Defendants named in that complaint were: "Johns-Manville Products Corporation; A.P. Green Refractories Co.; Metropolitan Refractories, Division of A.P. Green Refractories Co.; Quigley Co., subsidiary of Pfizer, Inc.; J.H. France Refractories Corp.; Eagle-Picher Industries, Inc.; Porter Hayden Co.; Madsen & Howell, Inc.; State Insulation Corp.; Insulation Materials Corp.; E & B Mill Supply Co.; Elizabeth Industrial, Division of Charles F. Guyon, Inc.; and John Does." (Emphasis supplied). In the first count of the complaint plaintiffs state that they were employed at Jersey Central Power & Light over a period of time from 1930 to the present, during which they "were required to and did work with asbestos, asbestos products and/or materials." Thereafter, and throughout the complaint plaintiffs alleged that defendants were "manufacturers, suppliers and/or distributors of the asbestos, asbestos products and/or materials" that they used in the course of their work. Plaintiffs' theory of recovery was expressed in terms of negligence, warranty, strict liability in tort and intentional misrepresentation of fact.
A third-party complaint was filed with leave of court by Johns-Manville on July 20, 1981. The third-party defendants named in that complaint were: Babcock & Wilcox; Forty Eight Insulation Co.; Combustion Engineering; Owens Corning Fiberglas Corp.; Owens Illinois Corp.; Celotex Corp., successor to Philip Carey Corp.; Atlas Turner Corp., successor to Atlas *642 Asbestos Co.; Southern Asbestos Corp.; Unarco Industries; Pittsburg Corning Corp.; Armstrong Cork & Seal Corp.; GAF Corp., successor in interest to Ruberoid; Nicolet Industries; Keene Corp., successor to Keene Building Products Corp.; Fiberboard Corp., and Garlock Corp. According to the certification of Johns-Manville's counsel filed in connection with the motion, the prospective third-party defendants were identified by various plaintiffs during the course of depositions which commenced about April 1981 and concluded shortly before the motion was made.
Plaintiffs' work histories at JCP & L spanned many years and in some cases several decades. Consequently, they testified that they could remember only some of the names of the products to which they were exposed. The identity of the third-party defendants was developed by the Johns-Manville attorney who used a "black book" containing photographs and product literature of various asbestos suppliers and manufacturers. Plaintiffs' recollections were "refreshed" as to product use and exposure when they were shown this literature for the first time.
By order dated August 12, 1981 plaintiffs were permitted to amend their complaint to add the 16 third-party defendants as direct defendants. The amended complaint was not filed until October 29, 1981.
Defendant GAF moved for summary judgment, contending that the plaintiffs' suit against it was barred by the statute of limitations. The remaining newly named defendants soon joined in the motion.
Interrogatories propounded by defendant Johns-Manville in the case asked each plaintiff to state the exact date upon which plaintiff became aware that his medical symptoms were caused by the alleged acts of Johns-Manville. In response to this question the earliest date given by any of the plaintiffs was September 21, 1978, and the latest date given was March 21, 1979. (Plaintiff Warren Rappleyea died on April 23, 1979. That date is, of course, critical with reference to the claim made for his wrongful death. N.J.S.A. 2A:31-1 et seq.)
*643 In view of these facts the moving defendants argued that since they were not joined as third-party defendants within two years of March 21, 1979 as to the personal injury claims, or two years of April 23, 1979 as to the death claim, the claims are time-barred. McGlone v. Corbi, 59 N.J. 86 (1971). They further argued that plaintiffs' cause of action was not saved by the use of "John Does" in the caption of the complaint since the requirements of R. 4:26-4 were not followed.
In reply plaintiffs argued that the cause of action does not accrue as to personal injury claims until the identity of the defendant is made known to plaintiffs, or, in the alternative, that their cause of action was saved by the use of the "John Does" procedure. With respect to the latter issue plaintiffs' argument is succinctly stated in one of their several briefs as follows: "Although a more artful pleading would have specifically labeled the John Doe defendants as fictitious names of manufacturers, suppliers, distributors, etc., of asbestos and/or asbestos products, there can be no doubt that the Complaint, taken as a whole, sets forth the substance of a cause of action against the John Doe defendants."
Plaintiffs' attempt to use the "discovery rule" as a basis for a determination that their cause of action as to any particular defendant does not accrue until that defendant's identity is known has not been decided in this State. The discovery doctrine provides that "in an appropriate case a cause of action will be held not to accrue until the injured party discovers or by an exercise of reasonable diligence and intelligence should have discovered, that he may have a basis for an actionable claim." Lopez v. Sawyer, 62 N.J. 267, 272 (1973). Knowledge of the existence of injury does not always trigger the accrual of the cause of action. At times the inquiry must focus upon fault as well as injury where the awareness of the fault is not self-evident in the injury. Lynch v. Rubacky, 85 N.J. 65, 72-73 (1981). Therefore, in the case under consideration it would not seem appropriate to trigger the accrual of the action until plaintiffs *644 were made aware that their pulmonary symptoms were caused by asbestos exposure. At that point in time there would be a nexus between injury and fault. Plaintiffs seek to extend the rule laid down in Lynch v. Rubacky, supra, by requiring an identification of the tortfeasor to be a part of the fault consideration. If plaintiffs' argument is adopted there would be differing accrual times in the same case where multiple tortfeasors are involved depending upon when a plaintiff learned of a particular tortfeasor's identity. No authority can be found in the case law of this State to support such a proposition. Authority to the contrary, however, is found in the concurring opinion of Justice Pashman in the case of Lawrence v. Bauer, 78 N.J. 371 (1979), in which he said:
The rule has never been applied in situations such as the present where plaintiffs know that they possess actionable claims but are ignorant of the precise identity of the person responsible for their injuries. One reason for this non-applicability is that such a plaintiff can prevent the limitations period from running by complying with R. 4:26-4 . .. The very purpose of this rule is to suspend the running of the statute of limitations until the actual identity of a defendant is discovered. [at 375]
The majority opinion in Lawrence v. Bauer was a per curiam adoption of the dissenting opinion of Judge Ard in the Appellate Division. In that opinion Judge Ard said:
It should be emphasized that this is not a case where plaintiffs did not know of their injury before being barred by the statute. Rather, they did not know who did it, and accordingly had a remedy provided by the New Jersey Rules of Court, R. 4:26-4.... [154 N.J. Super. 271 (App.Div. 1977), at 280]
Therefore, under the facts and law of this case, plaintiffs' claim against the movants is time-barred unless saved by the utilization of the procedure provided by R. 4:26-4. The rule in question in pertinent part states
In any action, ... if the defendant's true name is unknown to the plaintiff, process may issue against the defendant under a fictitious name, stating it to be fictitious and adding an appropriate description sufficient to identify him.
Plaintiffs concede that their complaint was not an "artful" pleading. They agree that an acceptable pleading would have stated that the "John Does" defendants represented "fictitious names of manufacturers, suppliers, distributors, etc., of asbestos and/or asbestos products." However, plaintiffs argue that the *645 complaint, "taken as a whole," satisfied the substantive requirements of the rule. In this respect they cite R. 4:5-7, which states:
Each allegation of a pleading shall be simple, concise and direct, and no technical forms of pleadings are required. All pleadings shall be liberally construed in the interest of justice.
Fictitious name practice was permitted in this jurisdiction as early as 1891 when the procedure was codified in statutory form. L. 1891, c. 253, at 477-478. Various recodifications took place up to the 1947 Constitution when the practice became a matter for court rule. A review of the various statutes indicates that the wording remained essentially the same over the years. L. 1898, c. 228, par. 42 at 566; L. 1903, c. 247, par. 43 at 546; R.S. 2:27-42; R.S. 2:32-13. In Karandontes v. Ferrell, 7 N.J. Misc. 807 (D.Ct. 1929), the only case found that interpreted the statutory procedure, the court held:
The legislature intended that the `description identifying or tending to identify such defendant' should serve the quite obvious purpose of identifying the defendant so that any reasonably intelligent person might know who was intended. [at 808]
Thus, it would appear that under early practice in this State the intention of the pleader as evidenced from a reading of the entire pleading was the test used to determine whether the fictitious name practice had been properly utilized. No technical form of pleading was required.
Farrell v. Votator Div. of Chemetron Corp., 62 N.J. 111 (1973), was the first case to address the fictitious name practice post 1947. In that case Justice Jacobs, writing for the court, said (at 119): "The liberalizing rules which the Supreme Court adopted contained nothing to suggest any purpose to narrow earlier practices with respect to fictitiously named defendants." Therefore, the rule stated in Karandontes v. Farrell, supra, is still viable.
The next case to address the use of fictitious name practice was Miletta v. Doe, 158 N.J. Super. 550 (Law Div. 1978). In that case the issue presented was whether plaintiff utilized the procedure permitted by R. 4:26-4 in her first and second amended *646 complaints. It is necessary to recite the facts of that case to understand the implication of the court's holding in the context of the matter now under consideration.
On August 1, 1974 plaintiff's decedent died, allegedly as a result of exposure to asbestos. On July 23, 1976 plaintiff filed a complaint naming as defendants "John Doe (a fictitious name representing one or more corporations and/or companies engaged in the business of manufacturing and/or distributing products containing asbestos)." On February 7, 1977 plaintiff filed the first amended complaint naming Brunswick Fabricators Inc. and four other defendants. The John Doe designation was not included in this pleading. On July 8, 1977 a second amended complaint was filed, and again there was no reference to a John Doe party in the pleading. On August 11, 1977 defendant Brunswick Fabricators filed a third-party complaint against Atlas Asbestos and Nicolet. Plaintiff filed a third amended complaint naming Atlas and Nicolet as direct defendants on November 22, 1977.
The court held that the amendment would relate back to the date on which the original complaint was filed only if Atlas and Nicolet were impleaded as third-party defendants within two years of the date of death (which was clearly not the case), or if the procedure permitted by R. 4:26-4 was followed. As to the use of the fictitious name procedure the court said: "Although plaintiff's original complaint named as defendant `John Doe' who was described with sufficiency, plaintiff's first and second amended complaints omitted any reference to `John Doe', substituting specifically named defendants for this fictitious name. Not until November of 1977 did plaintiff attempt to revive `John Doe' by naming him as defendant in her third amended complaint." Id. at 555. In other words, plaintiff's efforts to join Atlas and Nicolet as direct defendants failed because plaintiff did not express in her pleadings subsequent to the original complaint an intention to sue unknown suppliers and manufacturers of asbestos.
*647 The most recent case dealing with R. 4:26-4 is Lawrence v. Bauer Publishing & Printing Ltd., 78 N.J. 371 (1979). In that case the allegedly libelous article which formed the basis of plaintiff's suit was printed in the January 9, 1975 issue of defendant's newspaper. Defendant Hartnett was not joined as a party to the action until May 11, 1976. Since a one-year statute of limitations is applicable to such actions, plaintiff's claim for damages was time-barred. As indicated earlier in this present opinion, the court acknowledged that the fictitious name practice permitted by R. 4:26-4 was created for the purpose of suspending the running of the statute of limitations until the actual identity of defendant is discovered. However, plaintiff's use of the "John Doe" complaint was limited to its description of the "composer and writer" of the allegedly libelous article. There was no evidence in the pleading that the plaintiff intended the "John Doe" designation to apply to the "source" of the article as well.
This court concludes that a reading of the subject complaint on the whole leads reasonably to the conclusion that: (1) plaintiffs intended to invoke the use of the fictitious name practice against multiple unknown parties by using the designation "John Does" in the caption of the complaint. The use of the name "John Doe" in a pleading has been commonly accepted as an appropriate designation of a fictitious party. Likewise, there is no need for an endless designation of fictitious names where the pleader has no idea of the number of unknown parties who may have supplied asbestos to an employer over a span of two or three decades. The use of the plural "John Does" is sufficient. Indeed, movant GAF admits in its brief that it understood that plaintiffs had attempted to invoke the fictitious name practice "The present plaintiffs were clearly aware of R. 4:26-4 inasmuch as the captions of the complaint and amended complaint listed `John Does' as defendants." (2) The "John Does" designated in the caption are adequately described in the body of the complaint as all "manufacturers, suppliers and/or distributors of the asbestos, asbestos products and/or materials" *648 that plaintiffs used in the course of their employment at Jersey Central Power & Light between the years 1930 to the present time. No more definitive description was necessary or possible until the exact identity was determined during the course of depositions when various plaintiffs' memories were refreshed by the use of Johns-Manville's "black book." The pleading is clearly intended to apply to all "defendants" and judgment is sought against all "defendants."
Finally, movants argue that plaintiffs did not exercise "due diligence" in proceeding against them. They argue that the identity of some of the moving parties was known as early as April 1981 when the first series of depositions were taken in this case. However, it is clear that the depositions of all the plaintiffs were not completed until sometime in July 1981. It would seem logical for plaintiffs to wait until all product identification was completed to bring their motion to amend in order to simplify procedure. Three months is not an inordinate delay in time, and in any event movants can point to no particular prejudice caused by the delay itself. The lapse of time between plaintiffs' earliest exposure to asbestos and the date of manifestation of any asbestos-related diseases poses some problems for all defendants in terms of reconstructing the nature and amount of sales of such products to plaintiffs' employer. The passage of time naturally dulls some memories and results in the loss or destruction of records. That problem, however, is not related to the use of the fictitious name practice, but, rather, is proof of the need for it. There is certainly no suggestion that plaintiffs have been benefited by the delay. As stated by the Supreme Court in Farrell v. Votator Div. of Chemetron Corp., supra:
Justice impels strongly towards affording the plaintiffs their day in court on the merits of their claim; and the absence of prejudice, reliance or unjustifiable delay, strengthens the conclusion that this may fairly be done in the matter at hand `without any undue impairment of the two-year limitation or the considerations of repose which underlie it.' [Fernandi v.] Strully, supra, 35 N.J. [437] 451 [62 N.J. at 122-123]
Movants' motion for summary judgment on the amended complaint is denied.
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7 F.3d 232
NOTICE: Sixth Circuit Rule 24(c) 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 Sixth Circuit.Craig McKown BROCK, et al. Appellees,v.SYNTEX LABORATORIES, INC. Appellant.
Nos. 92-5740, 92-5766.
United States Court of Appeals, Sixth Circuit.
Oct. 1, 1993.
Before: KEITH and JONES, Circuit Judges; PECK, Senior Circuit Judge.*
1
The issue for decision in this appeal is that of subject matter jurisdiction. The narrow question presented is whether the district court correctly determined that the one-year time limitation for removal of diversity cases under 28 U.S.C. § (1988 & Supp.1993) is a jurisdictional bar. The district court held that it is. We agree and therefore affirm.
2
Plaintiffs initiated this litigation on November 29, 1979, with a products liability action against Syntex Laboratories, Inc. Jurisdiction was based on the diversity of the parties, and the plaintiffs sought damages in the amount of one million dollars. After dismissal of that action without prejudice under Rule 41 of the Federal Rules of Civil Procedure on September 17, 1980, a subsequent suit, nearly identical, was filed in Franklin County, Tennessee, Circuit Court on September 11, 1981. In that action, the damages sought were reduced to the then-pending jurisdictional limit for amount in controversy in diversity cases, $10,000.
3
The latter suit saw no activity, save for some limited discovery, until September 18, 1991, when a motion to amend was filed. Two months later, on November 21, 1991, the motion was granted and Syntex Corporation was added as an additional defendant. With that, the damage prayer increased from $10,000 to over $5 million.
4
On December 10, 1991, Defendants removed the action back to the U.S. district court on diversity grounds. Syntex Corporation moved for dismissal due to lack of in personam jurisdiction on January 28, 1992. Almost three months after defendant's notice of removal, on March 5, 1992, plaintiffs filed a motion to remand, on the ground that contrary to Section 1446(b), the action was not removed within one year of its September 11, 1981, commencement in state court. Also applicable is U.S.C. § 1447(c) which provides in relevant part, that:
5
A motion to remand the case on the basis of any defect in removal procedure must be made within 30 days after the filing of the notice of removal under § 1446(a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.
6
The district court considered whether or not the one-year limitation in Section 1446(b) was jurisdictional. The court also considered the corollary issue of whether, if it was not jurisdictional, waiver by the plaintiffs of any procedural objection had occurred. After analyzing the relevant case law and the legislative history, the district court concluded that the one-year period was, indeed, jurisdictional. It followed that the waiver issue need not be reached.
7
While it seems likely that Defendants may have engaged in a manipulation of the rules of pleading, the statutory language is unmistakably clear. The district court, in a thoughtful opinion, found that diversity jurisdiction of the court is determined by Congress, and courts are powerless to question the fairness of any limits imposed on that jurisdiction. We agree.
8
Accordingly, on the basis of the reasoning of the district court's opinion, we AFFIRM.
*
Hon. John W. Peck, Senior Circuit Judge, deceased September 7, 1993. Judge Peck participated in the oral argument but not the decision in this case
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705 S.E.2d 392 (2011)
Redale BARBOUR
v.
WELLS FARGO BANK, N.A., Merger to Wells Fargo Mortgage, Inc., and Purchaser, Fannie Mae, Brock & Scott, PLLC, Substitute Trustee.
No. 47P11-1.
Supreme Court of North Carolina.
January 31, 2011.
Redale Barbour, for Barbour, Redale.
ORDER
Upon consideration of the petition filed by Plaintiff on the 28th of January 2011 in this matter for a writ of mandamus, the following order was entered and is hereby certified to the Superior Court, Mecklenburg County:
"Denied by order of the Court in Conference this the 31st of January 2011."
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594 F.2d 854
Gurmankinv.Costanzo
No. 78-2214
United States Court of Appeals, Third Circuit
2/12/79
1
E.D.Pa.
DISMISSED
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926 F.Supp. 316 (1996)
Eyal KATZMAN, Plaintiff,
v.
Louis FREEH, Director, Federal Bureau of Investigation, Defendant.
No. 92-CV-6055 (JS).
United States District Court, E.D. New York.
May 15, 1996.
*317 Eyal Katzman, Kew Gardens, pro se.
United States Attorney's Office, Eastern District of New York, by Leslie Brodsky, Brooklyn, NY, for defendant.
MEMORANDUM AND ORDER
SEYBERT, District Judge:
This is an action brought by plaintiff Eyal Katzman, proceeding pro se, under the Freedom *318 of Information Act, 5 U.S.C. § 552 ["FOIA"], to compel the Federal Bureau of Investigation ["FBI"] to furnish certain information that was the subject of a prior administrative information request. Pending before the Court are three separate motions. First, plaintiff moves for "reconsideration" of Chief Magistrate Judge A. Simon Chrein's Memorandum and Order, dated February 3, 1995, denying plaintiff's motion to compel the FBI to answer certain interrogatories. Second, the defendant cross-moves for partial summary judgment with respect to all document requests made by plaintiff concerning an individual named Norman David Mayer. Last, plaintiff moves for appointment of counsel.
BACKGROUND
On December 23, 1992, plaintiff Eyal Katzman filed a complaint against the FBI under the FOIA seeking the release of documents pertaining to Norman David Mayer [the "Mayer Documents"].[1] Thereafter, on March 11, 1993, the FBI furnished the plaintiff with seven hundred and thirteen Mayer Documents. An additional three hundred and nine Mayer Documents were provided to the plaintiff on July 30, 1993, pursuant to the Supreme Court's decision in United States Department of Justice v. Landano, 508 U.S. 165, 113 S.Ct. 2014, 124 L.Ed.2d 84 (1993).[2]
On April 23, 1993, plaintiff filed a motion for an order compelling the FBI to produce a Vaughn index on the Mayer Documents. A Vaughn index is an itemized list of all the documents requested in a FOIA action, which either contains the disclosable document or sets forth a detailed explanation for the exemption claimed by the government as the basis for nondisclosure. See Vaughn v. Rosen, 484 F.2d 820 (D.C.Cir.1973), cert. denied, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974). The FBI voluntarily consented, and on or about September 15, 1993, a Vaughn index, including approximately 1,200 Mayer Documents, was filed.
On June 20, 1994, plaintiff was granted permission by this Court to amend his complaint to add a request for the release of FBI documents pertaining to himself. A Vaughn index on these documents has been filed with this Court and is not the subject of the present motions.
On March 30, 1994, plaintiff moved for an in camera inspection of the Mayer Documents that were withheld or redacted, to determine the propriety of exemptions cited by the FBI. On the same date, plaintiff also filed a discovery motion requesting a court order to compel the FBI to answer interrogatories posed by the plaintiff.
On June 20, 1994, this Court referred all pending motions to Chief Magistrate Judge Chrein for his disposition or recommendation. By Memorandum and Order dated February 3, 1995, Magistrate Judge Chrein granted plaintiff's motion for an in camera review of all but seven of the Mayer Documents withheld from plaintiff. Magistrate Chrein excluded the seven documents because *319 he found them to be within the statutory exemption regarding unwarranted invasions of personal privacy, 5 U.S.C. § 552(b)(7)(C). With respect to the plaintiff's motion to compel the defendant to answer his interrogatories, the Magistrate Judge determined that plaintiff's discovery motion would not be addressed by the court because plaintiff had not complied with Rule 6(a) of the Standing Orders of the Eastern District of New York.[3] Moreover, the Magistrate Judge stated that any motion seeking to compel the FBI to answer interrogatories relating to the contents of the Mayer Documents would be denied, "because such a request asks for precisely what the defendant is maintaining is exempt from disclosure to the plaintiff." Mem. and Order dated Feb. 3, 1995, at 11. Magistrate Judge Chrein preserved plaintiff's right to object to this order until a review of all the documents was completed and a final report was submitted.
On April 19, 1995, Magistrate Judge Chrein filed a Report and Recommendation in which he concluded that four documents previously withheld from plaintiff could be revealed. The Magistrate Judge also recommended that additional portions of two specific documents, that previously had been partially disclosed, could be made available to plaintiff without redaction. Lastly, the report explicitly provided that the plaintiff could appeal from any order adopting or modifying the Report and Recommendation.
Pursuant to Magistrate Judge Chrein's Report and Recommendation, the FBI released the specified documents to plaintiff on April 25, 1995. By order dated May 15, 1995, this Court adopted Magistrate Judge Chrein's Report and Recommendation without either party having objected to it.
On June 16, 1995, plaintiff filed the present motion for "reconsideration" of Magistrate Judge Chrein's February 3, 1995 Memorandum and Order insofar as it denied his motion for an order compelling the FBI to answer his interrogatories concerning the contents of various withheld documents. Defendant FBI has filed a cross-motion for partial summary judgment with respect to the Mayer Documents. According to the defendant, partial summary judgment is appropriate because the plaintiff has received all of the Mayer Documents to which he is entitled under the FOIA.
DISCUSSION
I. Plaintiff's Motion for Reconsideration of Chief Magistrate Judge Chrein's Memorandum and Order dated February 3, 1995
On June 16, 1995, plaintiff moved this Court to reconsider Chief Magistrate Judge Chrein's discovery order, as set forth in his Memorandum and Order dated February 3, 1995, which, among other things, denied plaintiff's discovery request for failure to comply with Rule 6(a) of the Standing Orders of the Eastern District. The plaintiff contends that he has since complied with this requirement by conferring with defendant's attorney, and now assails the merits of the Magistrate Judge's determination that he was not entitled to an order compelling the FBI to answer his interrogatories concerning the contents of certain documents that were withheld from him.
Even assuming that plaintiff's motion were timely, this Court expressly finds that plaintiff's motion must be denied in its entirety. Because plaintiff's interrogatories seek information that relates substantially to the contents of withheld documents, the Court concurs with Magistrate Judge Chrein's conclusion that the plaintiff has requested information that is exempt from disclosure. See Pollard v. FBI, 705 F.2d 1151, 1154 (9th Cir.1983) (Trial court did not abuse discretion by refusing to permit plaintiff to depose FBI agent in FOIA action because the questions were directed to the contents of exempted documents.); see also Military Audit Project v. Casey, 656 F.2d 724, 750-51 (D.C.Cir.1981); Goland v. CIA, 607 F.2d 339, 352 (D.C.Cir.1978), cert. denied, 445 U.S. 927, 100 S.Ct. 1312, 63 L.Ed.2d 759 (1980).
Generally, discovery in a FOIA action is extremely limited, and is permissible *320 only with regard to the scope of the agency's search, its indexing and classification procedures, and other related factual matters. See Church of Scientology v. IRS, 137 F.R.D. 201, 202 (D.Mass.1991); Murphy v. FBI, 490 F.Supp. 1134, 1136 (D.D.C.1980). Furthermore, curtailment of discovery is particularly appropriate where the court makes an in camera inspection. See Laborers' Int'l Union v. U.S. Dep't of Justice, 772 F.2d 919, 921 (D.C.Cir.1984). In the present case, the Mayer Documents have been subjected to two levels of review (i.e., a Vaughn index and an in camera review), and the documents that have been withheld or redacted have been deemed to be proper by this Court. Therefore, no further discovery on these matters is appropriate. Thus, plaintiff's motion for reconsideration of Magistrate Judge Chrein's Memorandum and Order dated February 3, 1995 is denied in its entirety.
II. Defendant's Cross-Motion for Partial Summary Judgment with respect to the Mayer Documents
In evaluating whether to grant a motion for summary judgment in a FOIA action, a district court must review the facts in a light most favorable to the requester of information. See Becker v. IRS, 34 F.3d 398, 405 (7th Cir.1994). The agency bears the burden to establish that the materials sought have not been improperly withheld. See United States Dep't of Justice v. Tax Analysts, 492 U.S. 136, 142 n. 3, 109 S.Ct. 2841, 2847 n. 3, 106 L.Ed.2d 112 (1989). Where, as in the instant case, the plaintiff alleges that the agency has improperly withheld documents through its failure to locate them, the agency's burden is to establish that it conducted an adequate search that failed to produce the requested records. See Perry v. Block, 684 F.2d 121, 127 (D.C.Cir.1982); Katzman v. CIA, 903 F.Supp. 434, 437 (E.D.N.Y.1995).
In the present case, the FBI is unable to meet its burden of proving that it conducted an adequate search because the FBI's own affidavits suggest that it may have conducted a search, using the wrong file number, for those Mayer Documents located at the New York field office. Specifically, Robert Moran, Special Agent for the FBI, testified in his first affidavit that "New York Field Office ["NYFO"] file 52-12826 is on special locate in the NYFO and will be processed and released to the plaintiff when located." In his second affidavit, however, Moran states that "[o]n February 16, 1994, the NYFO advised that main file 52-12926 has not been located and continues to be on special locate." This variance in the two file numbers referred to by the agent (12826 as opposed to 12926) supports an inference that the FBI has been searching for a different file number than that which pertains to the plaintiff's information request. Therefore, because a genuine issue of fact exists concerning whether the agency has conducted its search using the correct file number, defendant's motion for partial summary judgment must be denied.
The entry of partial summary judgment moreover is precluded because three outstanding documents may exist which have not yet been provided to the plaintiff. Specifically, the plaintiff has demonstrated that a diagram and a photograph of Norman Mayer's wounds were mentioned in a medical report released to the plaintiff. These items, however, were not attached to that report. In addition, a second medical report on Norman Mayer indicates that a toxicology report was conducted on him. Again, the referenced report has not been attached to the document released to the plaintiff. The defendant does not assert that these three documents are exempt from disclosure to the plaintiff; nevertheless, to date, they have not been released. Thus, until defendant releases these documents or demonstrates that they either are exempt from disclosure or cannot be located, defendant is not entitled to partial summary judgment.
III. Plaintiff's Application for Appointment of Counsel
Finally, plaintiff moves the Court for appointment of counsel pursuant to 28 U.S.C. § 1915(d).
Under 28 U.S.C. § 1915(d), a federal district court "may request an attorney to represent [an indigent person] unable to employ counsel." Id. In determining whether *321 to exercise such discretion, a court must first ascertain "whether the indigent's position [is] likely to be of substance." Cooper v. A. Sargenti Co., 877 F.2d 170, 172 (2d Cir.1989). If the claim meets this threshold requirement, the court should then consider other criteria. These secondary criteria include "[1] plaintiff's ability to obtain representation independently, [2] his ability to handle the case without assistance in the light of the required factual investigation, [3] the complexity of the legal issues, and [4] the need for expertly conducted cross-examination to test veracity." Id. Noting that volunteer lawyer time is a precious commodity that should not be allocated arbitrarily, the Second Circuit Court of Appeals requires district courts to scrutinize carefully requests for appointment of counsel, and not grant such applications indiscriminately. See id.
The Court has reviewed plaintiff's application and finds that the appointment of counsel is not warranted in this case. Although plaintiff's FOIA action is one of substance, plaintiff has manifestly demonstrated, through his submissions to the Court, that he is quite capable of handling this case without the assistance of counsel. Moreover, because a FOIA action is essentially resolved on the basis of documents, it will not be necessary to cross-examine any witnesses. Further, plaintiff has informed the Court that he is now completing his first year of law school, and consequently has access to legal materials and resources, as well as the input of law professors. Therefore, in light of plaintiff's demonstrated aptitude in litigating this action, plaintiff's application is denied.
CONCLUSION
For the foregoing reasons, the Court rules as follows:
(1) Plaintiff's motion for reconsideration of Chief Magistrate Judge Chrein's Memorandum and Order dated February 3, 1995 is DENIED in its entirety.
(2) Defendant's cross-motion for partial summary judgment with respect to the Mayer Documents is DENIED pending disclosure, or resolution, of the inconsistencies and omissions addressed by the Court herein.
(3) Plaintiff's application for appointment of counsel is DENIED.
SO ORDERED.
NOTES
[1] Norman David Mayer was shot to death by police on December 8, 1982, after holding the Washington Monument hostage for 10 hours and threatening to blow it up. Dressed in a helmet and jumpsuit, Mayer drove a van up to the entrance of the monument and told authorities that the van was loaded with 1,000 pounds of dynamite that could be detonated with a remote control device he was holding. During his ten-hour standoff with the police, Mayer demanded that a nationwide dialogue be held on the dangers of nuclear war. When Mayer left the monument and attempted to escape in his van, police officers fired on the van, killing Mayer. Although no explosives subsequently were discovered inside the van, police said that they fired on Mayer to prevent him from becoming a "moving time bomb." See Facts on File, Weekly World News Digest With Cumulative Index, Vol. 42, Pt. II (Dec. 10, 1982) (Annexed to Docket # 76).
[2] In Landano, the plaintiff filed a FOIA complaint with the FBI requesting information compiled in connection with the FBI's murder investigation that resulted in his conviction. In response, the FBI redacted some documents and withheld others, claiming that Exemption 7(D) exempted from disclosure documents that "could reasonably be expected to disclose" the identity of a "confidential source." 5 U.S.C. § 552(b)(7)(D). The Supreme Court rejected this contention, holding that the Government was not entitled to a presumption that all sources supplying information to the FBI in the course of a criminal investigation are confidential sources within the meaning of Exemption 7(D). The Court held, however, that certain narrowly defined circumstances could provide a basis for inferring confidentiality, depending on the nature of the crime investigated and the witness' relation to it.
[3] Rule 6(a) of the Standing Orders of the Eastern District of New York requires parties to discovery disputes to confer in good faith prior to seeking a judicial resolution.
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935 F.2d 1294
U.S.v.Miller*
NO. 90-3797
United States Court of Appeals,Eleventh Circuit.
MAY 29, 1991
1
Appeal From: M.D.Fla.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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67 Cal.App.2d 183 (1944)
I. M. WARD, Appellant,
v.
AUCTIONEERS ASSOCIATION OF SOUTHERN CALIFORNIA (a Corporation) et al., Respondents.
Civ. No. 14520.
California Court of Appeals. Second Dist., Div. Two.
Dec. 4, 1944.
Bertram H. Ross for Appellant.
Robert W. Kenny, Attorney General, and Max Radin as Amici Curiae on behalf of Appellant.
Charles J. Katz and Samuel W. Blum for Respondents.
WOOD (W. J.), J.
The nature of this action is indicated from the title given by plaintiff, "Complaint for Damages For Unlawful Monopoly under the Cartwright Act $100,000." Plaintiff has appealed from a judgment in favor of defendants after their demurrer to the amended complaint was sustained without leave to amend.
In his amended complaint plaintiff named as defendants Auctioneer Association of Southern California, a corporation, an association bearing the same name as the corporation, and the individual members of the association. He alleged that plaintiff was a licensed auctioneer; that plaintiff and defendants were engaged in the business of conducting auction sales, and that defendants owned and controlled 98 per cent of the auction business; that prior to March 15, 1943, the auction business was open and competitive and that plaintiff and defendants had free access to advise the public that they were engaged in the auction business and of the times and places of sales and merchandise to be sold; that beginning March 15, 1943, defendants conspired, confederated and combined to carry out restrictions in said trade, business and commerce, and in furtherance thereof formed Auctioneers Association of Southern California and excluded plaintiff therefrom; that for many years prior to the formation of the association all auctioneers had used as their method of advising the public of auction sales to be conducted by them and for soliciting auction business, the auction pages of the Sunday editions of the Los Angeles Times and the Los Angeles Examiner, and that prior to March 15, 1943, these newspapers had printed all auction advertising on the same pages; that in furtherance of the conspiracy defendants obtained agreements from the publishers to reserve all advertising space on said pages to the members of the association and that the newspapers thereafter refused to accept or print any advertising *185 of plaintiff on the pages referred to, although plaintiff had written contracts with the papers to do so. Plaintiff further alleged that the acts and conduct of defendants prevented competition in the auction business and that as a result he was damaged, for which he seeks a money judgment.
The Cartwright Act, which was enacted in 1907, is now a part of the Business and Profession Code and is to be found in the sections beginning with section 16700. Plaintiff asserts that the facts alleged in his complaint constitute a violation of section 16720 of the code. This section provides in part: "A trust is a combination of capital, skill or acts by two or more persons for any of the following purposes: (a) to create or carry out restrictions in trade or commerce." Subdivision "a" is followed by a number of other subdivisions containing statements of other purposes, all of which are declared to be illegal by the act.
Sections 16723 and 16724 of the Business and Professions Code are as follows: (16723) "No agreement, combination or association is unlawful or within the provisions of this chapter, the object and purpose of which are to conduct operations at a reasonable profit or to market at a reasonable profit those products which cannot otherwise be so marketed. (16724) It is not unlawful, or within the provisions of this chapter, for persons engaged in the business of selling or manufacturing commodities of a similar or like character, to employ, form, organize or own any interest in any association, firm or corporation which has as its object or purpose the transportation, marketing or delivery of such commodity."
[1] In sustaining the demurrer the trial court properly held that the Cartwright Act is so vague and uncertain in its description of what constitutes violations of the act that it is invalid under the Fourteenth Amendment to the Constitution of the United States. In Cline v. Frink Dairy Co., 274 U.S. 445 [47 S.Ct. 681, 71 L.Ed. 1146], the court reviewed the Colorado Anti-trust Statute, which is almost identical with the Cartwright Act of California. The Supreme Court of California, in the matter of In re Battelle, 207 Cal. 227, 251 [277 P. 725, 65 A.L.R. 1497], referred to the Colorado Anti-trust Statute as "a replica of the Cartwright Act." The Colorado statute, like the California statute, prohibits combinations of persons for the purpose of doing a number of listed acts similar to those prohibited by section 16720 of the *186 Business and Professions Code. The Colorado statute contains this provision: "And all such combinations are hereby declared to be against public policy, unlawful and void; provided that no agreement or association shall be deemed to be unlawful or within the provisions of this act, the object and purposes of which are to conduct operations at a reasonable profit or to market at reasonable profit those products which cannot otherwise be so marketed; provided further that it shall not be deemed to be unlawful, or within the provisions of this act, for persons, firms or corporations engaged in the business of selling or manufacturing commodities of a similar or like character to employ, form, organize or own an interest in any association, firm or corporation having as its object or purpose the transportation, marketing or delivering of such commodities; ..." Both the Colorado statute and the California statute contain provisions making violations criminal offenses.
In adjudging the Colorado statute unconstitutional in the case referred to, the Supreme Court of the United States held that the exception in the statute (almost identical with sections 16723 and 16724) "leaves the whole statute without a fixed standard of guilt in an adjudication affecting the liberty of the one accused." The court held that the principle of due process of law requiring reasonable certainty of description in fixing a standard for exacting obedience has application in civil as well as in criminal legislation. In concluding its opinion the court stated: "When to a decision whether a certain amount of profit in a complicated business is reasonable is added that of determining whether detailed restriction of particular anti-trust legislation will prevent a reasonable profit in the case of given commodity, we have an utterly impracticable standard for a jury's decision. A legislature must fix the standard more simply and more definitely before a person must conform or a jury can act. We conclude that the Anti-trust Statute of Colorado is void in that those who are prosecuted and convicted under it will be denied due process of law."
The decision in Cline v. Frink, supra, is controlling and on the authority of that decision it must be held that the Cartwright Act is unconstitutional. Plaintiff contends, however, that his action comes within the provisions of section 16720 and that sections 16723 and 16724 are separate and independent of section 16720. We find no merit in this *187 contention. Sections 16723 and 16724 unquestionably refer to all the subdivisions of section 16720. By their enactment the Legislature attempted to limit the various subdivisions of section 16720 but in doing so made the limitations so indefinite that no standard was left in the statute by which a court can determine the guilt or innocence of those accused of its violations. Section 16720 is not independent of or severable from the other two sections.
The judgment is affirmed.
Moore, P. J., and McComb, J., concurred.
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GORDON v. STATE
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GORDON v. STATE2019 OK CR 24Case Number: F-2018-624Decided: 10/03/2019BRYON LYND GORDON, Appellant v. THE STATE OF OKLAHOMA, Appellee.
Cite as: 2019 OK CR 24, __ __
SUMMARY OPINION
LUMPKIN, JUDGE:
¶1 Appellant, Bryon Lynd Gordon, was tried by jury and convicted of Count 1, Forcible Oral Sodomy, in violation of 21 O.S.Supp.2016, § 888,1 in the District Court of Bryan County Case Number CF-2017-64. The jury recommended as punishment ten years imprisonment. The trial court sentenced Appellant accordingly. It is from this judgment and sentence that Appellant appeals.
¶2 Appellant raises the following propositions of error in this appeal:
I. The trial court abused its discretion by ruling, without inquiry, that the alleged victim was competent to testify at jury trial violating the Sixth Amendment of the United States Constitution, Article 2, § 20 of the Oklahoma Constitution, and 12 O.S.2011, §§ 2601-2603.
II. The Magistrate abused its [sic] discretion by considering testimony from an alleged victim who was incompetent during preliminary hearing, in violation of the Sixth Amendment of the United States Constitution, Article 2, § 20 of the Oklahoma Constitution, and 12 O.S.2011, §§ 2601-2603.
III. The trial court abused its discretion when it allowed the admission of unreliable hearsay without exception and introduced without inquiring into the reliability of the hearsay statements, in violation of 21 O.S.Supp. 2013, § 2803.1.
IV. Because the testimony and statements of the alleged victim were inconsistent, incredible, and unbelievable, corroboration was required. The testimony was not adequately corroborated and therefor [sic] the evidence was insufficient to support the conviction.
V. Error occurred when the trial court failed to properly instruct the jury, in violation of Mr. Gordon's due process rights under the 14th Amendment to the United States Constitution and Art. II, § 7, of the Oklahoma Constitution.
VI. Mr. Gordon was prejudiced by Vicki Palmore's testimony vouching for the credibility of R.S.
VII. Mr. Gordon was denied his right to the effective assistance of counsel, in violation of the 6th and 14th Amendments to the United States Constitution and Art. II, §§ 7, 9, and 20, of the Oklahoma Constitution.
VIII. Cumulative errors deprived Mr. Gordon of a fair proceeding and a reliable outcome.
¶3 After thorough consideration of these propositions and the entire record before us on appeal including the original record, transcripts, and briefs of the parties, we have determined that under the law and the evidence no relief is warranted.
¶4 In Proposition One, Appellant contends the trial court committed an abuse of discretion by not making an inquiry regarding the victim's, R.S.'s, competency to testify.2 Prior to trial, Appellant requested the trial court to hold an in camera hearing to determine if R.S. was able to differentiate between truth and fiction. The trial court denied the motion, finding the preliminary hearing court determined that R.S. was a competent witness, either expressly or by virtue of the fact that the magistrate allowed R.S. to testify.
¶5 "Determination of a witness' competency to testify is a matter of discretion for the trial judge and that determination will not be disturbed unless the party asserting error shows a clear abuse of discretion." Gilson v. State, 2000 OK CR 14, ¶ 59, 8 P.3d 883, 906. An abuse of discretion has been defined as a clearly erroneous conclusion and judgment, one that is clearly against the logic and effect of the facts presented or, stated otherwise, any unreasonable or arbitrary action taken without proper consideration of the facts and law pertaining to the matter at issue. Neloms v. State, 2012 OK CR 7, ¶ 35, 274 P.3d 161,170 (internal citation and quotation marks omitted).
¶6 Reviewing the record, we find the trial court did not abuse its discretion in finding R.S. to be a competent witness. The Oklahoma Statutes provide, "[e]very person is competent to be a witness except as otherwise provided in this Code." 12 O.S.2011, § 2601. A witness must have "personal knowledge of the matter" about which he is testifying. 12 O.S.2011, § 2602. "Every witness shall be required to declare before testifying that the witness will testify truthfully, by oath or affirmation administered in a form calculated to awaken the witness's conscience and impress the witness's mind with the duty to do so." 12 O.S.2011, § 2603.
¶7 Although our cases have not addressed the competency of a witness with Down Syndrome, we have many that address the competency of child witnesses.3 "A child is a competent witness under 12 O.S.1991, § 2603, if he or she can distinguish truth from fiction, has taken an oath, and demonstrated that he or she has personal knowledge of the crime." Gilson, 2000 OK CR 14, ¶ 59, 8 P.3d at 906. See also Hawkins v. State, 1994 OK CR 83, ¶ 27, 891 P.2d 586, 594-95 (where five year old child indicated she knew right from wrong and promised she would only tell what was right and her personal knowledge of the crime was shown, trial court properly found her to be a competent witness); Dunham v. State, 1988 OK CR 211, ¶ 8, 762 P.2d 969, 972 (where four year old child acknowledged he would be punished for making up stories and his personal knowledge of the crime was shown, trial court properly found him competent as a witness despite some confusion on his part during trial).
¶8 The record shows that R.S. was competent to testify. The preliminary hearing magistrate administered the oath to R.S. and he swore to tell nothing but the truth. R.S. told the prosecutor he did not lie but only told the truth. He further told the prosecutor that when people tell lies, they go to Hell. R.S. demonstrated his personal knowledge of the crime when he testified how Appellant put his penis into R.S.'s mouth.
¶9 That R.S.'s testimony may have been inconsistent in some respects does not affect his competency as a witness but only goes to the weight and credibility of his testimony, which may properly be addressed on cross-examination. Gilson, 2000 OK CR 14, ¶ 60, 8 P.3d at 907. Defense counsel thoroughly cross-examined R.S.
¶10 R.S. similarly demonstrated his competence as a witness at trial. R.S. received the oath and swore to tell the truth. He demonstrated that he knew the difference between the truth and a lie. When asked by the prosecutor whether it would be okay if she told a lie that R.S. did something wrong, R.S. answered in the negative. R.S. established his personal knowledge of the crime when he testified that Appellant touched R.S.'s mouth with his penis and had his penis in R.S.'s mouth.
¶11 While there may have been inconsistencies in R.S.'s trial testimony, they were squarely before the jury and it was for the jury to decide R.S.'s credibility and the weight to give his testimony. Cf. Gray v. State, 1982 OK CR 137, ¶ 23, 650 P.2d 880, 885 (once a child has taken an oath and has personal knowledge of the matters at issue, "[i]t is then for the jury to decide the amount of credence to be afforded such testimony").
¶12 Although it was error for the trial court to deny the defense motion for a hearing on R.S.'s competence as a witness, we find the error was harmless. The above record demonstrates R.S. was a competent witness and further discussion in Proposition Three also supports our finding of harmlessness due to the trial court's failure to hold a hearing as requested by the defense. Proposition One is denied.
¶13 In Proposition Two, Appellant claims the preliminary hearing magistrate abused his discretion by considering testimony from an incompetent witness in making his bind over decision. Appellant did not file a motion to quash challenging the sufficiency of the evidence at preliminary hearing prior to entering his plea at formal arraignment. This Court has previously reviewed claims concerning irregularities at preliminary hearing where there was no motion to quash and a plea entered at formal arraignment for plain error, i.e., Burgess v. State, 2010 OK CR 25, ¶ 16, 243 P.3d 461, 464 and Primeaux v. State, 2004 OK CR 16, ¶ 18, 88 P.3d 893, 900. However, our jurisprudence on this matter leads us to conclude that these claims are waived and not subject to plain error review. See Berry v. State, 1992 OK CR 41, ¶ 9, 834 P.2d 1002, 1005 (where the appellant entered a plea at formal arraignment, he waived any irregularities which may have occurred at preliminary hearing); Money v. State, 1985 OK CR 46, ¶ 5, 700 P.2d 204, 206 (same); Crawford v. State, 1984 OK CR 89, ¶ 14, 688 P.2d 347, 350 (irregularities in bind over order waived where the appellant entered a plea at formal arraignment); and Hambrick v. State, 1975 OK CR 86, ¶ 11, 535 P.2d 703, 705 ("When a defendant, upon arraignment, pleads to the merits and enters on trial, he waives . . . any irregularities [in the preliminary examination]."). Cf. Thompson v. State, 2018 OK CR 5, ¶ 4, 419 P.3d 261, 262 (review of the trial court's denial of the appellant's motion to quash Supplemental Information waived where the appellant failed to timely assert that the evidence at preliminary hearing was insufficient before he entered his plea at formal arraignment); Brennan v. State, 1988 OK CR 297, ¶ 7, 766 P.2d 1385, 1387 (a plea on the merits operates as a waiver of preliminary hearing).
¶14 We now hold that where there is no motion to quash filed after preliminary hearing and the appellant enters a plea at formal arraignment, unless additional time in which to enter a plea or file motions is reserved by the defense or set by the magistrate to allow for the filing of additional motions, any irregularities in the preliminary hearing process are waived from appellate review. This procedure follows our historical precedent and ensures any challenges to the preliminary hearing are presented to the trial judge so the court can resolve all appropriate matters prior to trial. Therefore, Appellant's claim within this proposition is waived. To the extent that they are inconsistent with this rule, this Court's decisions in Burgess and Primeaux are overruled.
¶15 In Proposition Three, Appellant argues that hearsay was improperly admitted in the form of his mother Vicki Palmore's testimony about what R.S. told her initially regarding Appellant's abuse of him and of the video of R.S.'s forensic interview (State's Exhibit 2). He maintains this evidence was inadmissible since the State failed to provide the notice required by 12 O.S.Supp.2013, § 2803.1 and the trial court failed to hold the hearing required by that section.
¶16 Defense counsel objected to Palmore's testimony on the basis of hearsay. He objected to the video of the interview on the basis of violation of the statutory requirements of Section 2803.1. In this appeal, however, Appellant challenges Palmore's testimony on the basis of a violation of the statutory requirements of Section 2803.1. Thus, we review the claim regarding Palmore's testimony for plain error only. Hill v. State, 1995 OK CR 28, ¶ 26, 898 P.2d 155, 164. We use the plain error test found in Simpson v. State, 1994 OK CR 40, ¶¶ 2, 11, 23 30, 876 P.2d 690, 693-95, 698, 700-01. Under that test, we determine whether Appellant has shown an actual error, which is plain or obvious, and which affects his or her substantial rights. This Court will only correct plain error if the error seriously affects the fairness, integrity or public reputation of the judicial proceedings or otherwise represents a miscarriage of justice. Simpson, 1994 OK CR 40, ¶ 30, 876 P.2d at 701. See also Jackson v. State, 2016 OK CR 5, ¶ 4, 371 P.3d 1120, 1121; Levering v. State, 2013 OK CR 19, ¶ 6, 315 P.3d 392, 395; Hogan v. State, 2006 OK CR 19, ¶ 38, 139 P.3d 907, 923.
¶17 Appellate review of the claim regarding the video of R.S.'s forensic interview is for an abuse of discretion. Pullen v. State, 2016 OK CR 18, ¶ 10, 387 P.3d 922, 927. We utilize the definition of abuse of discretion found in Neloms, 2012 OK CR 7, ¶ 35, 274 P.3d at 170, and set forth in Proposition I.
¶18 Section 2803.1(A) allows the admission at trial of statements made by an incapacitated person regarding "any act of sexual contact performed with or on the . . . incapacitated person." It requires a hearing, outside the presence of the jury, for the trial court to determine if "the time, content and totality of circumstances surrounding the taking of the statement provide sufficient indicia of reliability so as to render it inherently trustworthy." Id. Section 2803.1(A)(1) provides that the trial court, in determining the trustworthiness of the statement, may consider, among other things, the spontaneity and consistent repetition of the statement, the declarant's mental state at the time of the statement, whether the terminology used is unexpected of an incapacitated person and whether lack of a motive to fabricate exists. Section 2803.1(B) requires that notice be given of the intention to use the statement at least ten days prior to trial in order for the adverse party to prepare to answer the statement.
¶19 This Court has determined that the list of permissive "factors" set forth in § 2803.1 is not exclusive. State v. Juarez, 2013 OK CR 6, ¶ 9, 299 P.3d 870, 873. Instead, the trial court is to determine whether the time, content and totality of circumstances surrounding the taking of the statement provide sufficient indicia of reliability so as to render it inherently trustworthy. Folks v. State, 2008 OK CR 29, ¶ 10, 207 P.3d 379, 382.
¶20 Error occurred in this case not only because the State failed to provide notice as required by Section 2803.1, but also because the trial court failed to hold the statutorily required hearing. Proponents of these statements must ensure that they give the statutorily mandated notice and trial courts must ensure that they hold the requisite hearing regarding these statements. The State concedes that omission of the notice and hearing constituted error but argues that these errors were harmless since the defense had constructive notice of the statements and since the statements bore sufficient indicia of reliability so as to render them inherently trustworthy and thus, the statements were properly admissible. While we agree these errors are harmless in the present case, practitioners and trial courts must follow the statutorily mandated requirements found in Section 2803.1.
¶21 This Court has held that the State's failure to provide actual notice as required by Section 2803.1 constitutes plain reversible error where the defendant did not have constructive notice of the hearsay statements. Spears v. State, 1991 OK CR 13, ¶¶ 5-7, 805 P.2d 681, 683, overruled by Simpson, 1994 OK CR 40, ¶ 9, 876 P.2d at 694 ("Spears is incorrect insofar as it precludes the possibility of harmless error under any circumstances."). We have similarly concluded that failure to comply with the hearing requirements set forth in § 2803.1 constitutes plain error. Simpson, 1994 OK CR 40, ¶ 2, 876 P.2d at 693; Kennedy v. State, 1992 OK CR 67, ¶ 17, 839 P.2d 667, 671. However, these types of errors are subject to harmless error analysis. Simpson, 1994 OK CR 40, ¶ 9, 876 P.2d at 694; Kennedy, 1992 OK CR 67, ¶ 17, 839 P.2d at 671.
¶22 In Simpson, we found that the trial court's error in omitting to hold the Section 2803.1 hearing was harmless "because we have no 'grave doubts' this failure had a 'substantial influence' on the outcome of the trial." Id., 1994 OK CR 40, ¶ 37, 876 P.2d at 702. In J.J.J. v. State, 1989 OK CR 77, ¶ 5, 782 P.2d 944, 945-946, this Court found that the trial court's failure to hold the Section 2803.1 hearing was harmless as follows: "Had the judge heard the same evidence in camera, there is no doubt that he would have made the same ruling."
¶23 Reviewing the record in the present case, we find that the omissions did not have a substantial influence on the outcome of the trial and thus conclude that the errors were harmless. The record affirmatively establishes that Appellant had constructive notice of the State's intention to introduce the challenged statements at trial and that the statements were inherently trustworthy.
¶24 Palmore testified at preliminary hearing that R.S. told her he and Appellant were having sex. Additionally, Palmore's name was included in the State's discovery response filed two weeks prior to trial. The response included the statement that Palmore would testify in accordance with the reports and interviews attached to the response. One report attached was that of Lieutenant Tony Krebbs who interviewed Palmore. His report stated that Palmore told him that R.S. told her he and Appellant had sex and Appellant put his penis in R.S.'s mouth. Thus, the defense had adequate, constructive notice of Palmore's complained of testimony.
¶25 The record further affords this Court the ability to determine the reliability of the hearsay statement. We conclude that had the trial court judge heard the same evidence at the statutory hearing, there is no doubt that the judge would have found the subject hearsay statement was admissible. When the statement is analyzed pursuant to the factors set forth in Section 2803.1, R.S.'s statement to Palmore was spontaneous, repeated and there was no evidence of any motive for R.S. to fabricate. Palmore merely asked R.S. what had happened and R.S. said that he and Appellant were having sex. The fact that R.S.'s statement was made in response to questioning does not preclude a finding of spontaneity in the statement. Cf. Folks, 2008 OK CR 29, ¶12, 207 P.3d at 382 (mere fact that a child victim's statements are made in response to questioning does not preclude a finding of spontaneity in the statements). R.S. repeated the statement during his forensic interview. He told the interviewer that he told his mother about what Appellant did to him. At preliminary hearing, R.S. acknowledged that he and Appellant had a relationship that involved sex and that he told Palmore about it. R.S. testified that Appellant had sex with him and put his penis in R.S.'s mouth. Concerning a motive to fabricate, the record belies any such motive. R.S. testified he liked living with his sister and her family and he liked going to the casino with Appellant. Given this evidence, had the trial court held the statutory hearing, the statement would have been found to be admissible.
¶26 We similarly find the failure to give notice and hold the hearing mandated by Section 2803.1 with regard to the video of R.S.'s forensic interview to be harmless. In the discovery responses previously addressed, Reanae Childers was listed as a witness who would testify that she forensically interviewed R.S. and would testify in conformance with the attached video of the interview. Childers testified at preliminary hearing and the video was admitted into evidence at the hearing. Defense counsel stipulated that the video was a true and accurate recording of the interview. Thus, the defense had adequate constructive notice of this evidence.
¶27 We also conclude that had the trial court viewed State's Exhibit 2 at a statutory hearing, there is no doubt that the trial court would have found the subject hearsay statements were admissible. Review of State's Exhibit 2 shows that R.S., while difficult to understand, had no trouble verbalizing what Appellant did to him. R.S. told Childers the Appellant made R.S. "suck Appellant's dick." He told Childers this happened at Choctaw Casino. R.S. stated he told his mom about what happened. Childers's questions to R.S. were open-ended and not leading.
¶28 As previously shown, at preliminary hearing R.S. acknowledged that he and Appellant had a relationship that involved sex and that he told Palmore about it. R.S.'s testimony was virtually identical to his statements on the video. R.S. testified Appellant had sex with R.S. When asked if Appellant put his penis inside R.S., he responded that Appellant put his penis in R.S.'s mouth. Later, R.S. responded affirmatively when asked if Appellant had his penis in R.S.'s mouth. R.S. testified he told Palmore about what Appellant did to him. He confirmed that he and Appellant were at Choctaw Casino when these things happened.
¶29 The record is devoid of evidence that R.S. had a motivation to lie. R.S. testified he liked living with his sister and her family and he liked going to the casino with Appellant. Childers testified she saw no evidence of coaching. While the record shows that R.S. had a limited vocabulary and struggled to understand some of the questions asked, R.S.'s testimony that Appellant placed his penis in R.S.'s mouth was crystal clear.
¶30 Considering the totality of the circumstances surrounding R.S.'s hearsay statements, we find that the statements had sufficient indicia of reliability so as to be considered inherently trustworthy and were properly admissible. Therefore, we conclude that the errors associated with omission of the statutory notice and hearing in the present case did not have a substantial influence on the outcome of the trial and were harmless. While the record in this case makes the errors harmless, trial courts need to follow strictly the requirements of the statute as to notice and hearing to ensure no error takes place. Proposition Three is denied.
¶31 In Proposition Four, Appellant challenges the sufficiency of the evidence supporting his conviction. He does not take issue with proof of the elements of the crime. He argues only that R.S.'s testimony was not corroborated and his testimony about the crime was contradictory and inconsistent.
¶32 This Court follows the standard for the determination of the sufficiency of the evidence which the United States Supreme Court set forth in Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 560 (1979). Easlick v. State, 2004 OK CR 21, ¶ 5, 90 P.3d 556, 559; Spuehler v. State, 1985 OK CR 132, ¶ 7, 709 P.2d 202, 203-04. Under this test, "the relevant question is 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, 443 U.S. at 319, 99 S. Ct. at 2789 (emphasis in original). A reviewing court must accept all reasons, inferences, and credibility choices that tend to support the verdict. Taylor v. State, 2011 OK CR 8, ¶ 13, 248 P.3d 362, 368.
¶33 The testimony of a non-consenting participant in sex crimes does not require corroboration. Martin v. State, 1987 OK CR 265, ¶ 6, 747 P.2d 316, 318. "A conviction may be sustained upon the uncorroborated testimony of the victim unless such testimony appears incredible or so unsubstantial as to make it unworthy of belief." Jones v. State, 1988 OK CR 281, ¶ 10, 765 P.2d 800, 802. Additionally, although R.S. was not a child based upon his chronological age, his cognition and ability to communicate were childlike as shown on State's Exhibit 2.
¶34 "A child victim's testimony does not require corroboration when it is lucid, clear, and unambiguous." Applegate v. State, 1995 OK CR 49, ¶ 16, 904 P.2d 130, 136. Although a child may give a slightly different story before trial, corroboration is not required when her testimony at trial is consistent. Id. Alleged inconsistencies must relate to the actual criminal act rather than related events. Ray v. State, 1988 OK CR 199, ¶ 8, 762 P.2d 274, 277. Ultimately, "even sharply conflicting testimony" does not trigger the need for corroboration. Gilmore v. State, 1993 OK CR 27, ¶ 12, 855 P.2d 143, 145.
¶35 Reviewing the record in the present case, we find that R.S.'s testimony did not require corroboration. His account was lucid, clear, and unambiguous. Although R.S.'s testimony was not perfect, his overarching description of the sexual act perpetrated by Appellant upon him remained consistent throughout his many statements. Since R.S.'s testimony was properly admitted, the jury was free to consider it in determining Appellant's guilt. Reviewing the evidence in the present case in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt. Proposition Four is denied.
¶36 In Proposition Five, Appellant claims the trial court should have instructed the jury with Instruction No. 9-20, OUJI-CR (2d) regarding the use of R.S.'s prior inconsistent statements as impeachment evidence. He mentions several statements which he characterizes as inconsistent, but fails to cite to the record where these statements can be found. Appellant claims R.S. denied at preliminary hearing that Appellant's penis was in R.S.'s mouth, so the jury should have been instructed that it could consider his denials as substantive evidence of Appellant's guilt or innocence. This denial is not identified by reference to the record.
¶37 Appellant's failure to cite to the record with regard to the above complained of inconsistencies, results in waiver of those issues from appellate review. Rule 3.5(A)(5), Rules of the Oklahoma Court of Criminal Appeals, Title 22, Ch. 18, App. (2018). See also Tryon v. State, 2018 OK CR 20, ¶ 57, 423 P.3d 617, 636 (appellant failed to cite to the record where the complained of photographs were admitted; thus the claim regarding the photographs was waived pursuant to Rule 3.5(A)(5)). We address the single inconsistency cited in the record, R.S.'s own admission that he previously stated the allegations against Appellant were not true.
¶38 Appellant lodged no objection to the jury instructions, nor did he request additional instructions. Thus, review of this claim is limited to plain error. Witherow v. State, 2017 OK CR 17, ¶ 3, 400 P.3d 902, 904. We utilize the definition of plain error review set forth in Simpson, 1994 OK CR 40, ¶¶ 2, 11, 23 30, 876 P.2d at 693-95, 698, 700-01. Jury "[i]nstructions are sufficient where they accurately state the applicable law." Runnels v. State, 2018 OK CR 27, ¶ 19, 426 P.3d 614, 619.
¶39 In the only cited portion of R.S.'s testimony, on cross-examination R.S. admitted he previously stated the allegations against Appellant did not occur. Consequently, the jury should have been instructed regarding the use of R.S.'s prior inconsistent statement. However, we find no plain error in the trial court's failure to instruct the jury as it did not affect Appellant's substantial rights.
¶40 The record demonstrates the jury was instructed that evidence included witness testimony, that the jury had all of the evidence proper for its determination and that the jury should rely on the evidence to reach its verdict. Thus, the jury was not precluded in any way from considering all of R.S.'s testimony or all the other testimony presented. Cf. Mitchell v. State, 2011 OK CR 26, ¶ 104, 270 P.3d 160, 184, overruled on other grounds by Nicholson v. State, 2018 OK CR 10, 421 P.3d 890 (no plain error due to trial court's failure to instruct the jury on impeachment of a witness by prior inconsistent statement where other instructions allowed the jury to fully consider all the evidence presented). Moreover, given the relatively light ten year sentence Appellant received, it is clear Appellant was not prejudiced by the omission of the subject jury instruction. Proposition Five is denied.
¶41 In Proposition Six, Appellant contends Palmore vouched for R.S.'s credibility. He argues Palmore affirmatively stated she believed R.S. was telling the truth about the allegations against Appellant. Appellant did not object to the testimony at issue; therefore, we review this claim for plain error. Taylor, 2011 OK CR 8, ¶ 57, 248 P.3d at 379. We utilize the definition of plain error review set forth in Simpson, 1994 OK CR 40, ¶¶ 2, 11, 23 30, 876 P.2d at 693-95, 698, 700-01.
¶42 "Evidence is impermissible vouching only if the jury could reasonably believe that a witness is indicating a personal belief in another witness's credibility, either through explicit personal assurances of the witness's veracity or by implicitly indicating that information not presented to the jury supports the witness's testimony." Simpson v. State, 2010 OK CR 6, ¶ 36, 230 P.3d 888, 901 (internal quotation omitted). Because Palmore explicitly testified she believed R.S. was telling the truth, this was error. However, we find no plain error in this isolated statement because it did not affect Appellant's substantial rights. Cf. Bench v. State, 2018 OK CR 31, ¶ 135, 431 P.3d 929, 966 (prosecutor's isolated reference to extra-record facts did not constitute plain error because the reference did not affect the appellant's substantial rights or prejudice him). See also Mitchell v. State, 2016 OK CR 21, ¶ 30, 387 P.3d 934, 945 (no plain error where the appellant failed to show any prejudice).
¶43 R.S.'s own admission, addressed in Proposition Five, showed that R.S. previously told others that the allegations against Appellant were untrue. Erik Smith, R.S.'s nephew, testified that R.S. told him the allegations against Appellant were not true. The jury observed R.S.'s demeanor and those of the other witnesses as they testified and was instructed that it determined the credibility of the witnesses. Additionally, the jury was instructed that it could consider a witness's bias in judging the witness's credibility. Clearly, Palmore's status as R.S.'s mother was a factor that the jury would consider in making its credibility determination. The record shows Appellant suffered no prejudice resulting from Palmore's testimony. Therefore, no plain error occurred. Proposition Six is denied.
¶44 In Proposition Seven, Appellant maintains that his counsel was ineffective. He argues counsel failed to do the following: to request Instruction No. 9-20, OUJI-CR (2d), to object to Palmore's testimony that R.S. was telling the truth about the allegations against Appellant, and to question R.S. regarding prior accusations of sexual assault against anyone besides Appellant.
¶45 This Court reviews ineffective assistance of counsel claims under the two-part test mandated by the United States Supreme Court in Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064, 80 L. Ed. 2d 674 (1984). Malone v. State, 2013 OK CR 1, ¶ 14, 293 P.3d 198, 206. "The Strickland test requires an appellant to show: (1) that counsel's performance was constitutionally deficient; and (2) that counsel's deficient performance prejudiced the defense." Id. To establish prejudice under Strickland, a defendant "must show there is a reasonable probability that the outcome of the trial would have been different but for counsel's unprofessional errors." Barnes v. State, 2017 OK CR 26, ¶ 17, 408 P.3d 209, 216. We found in Propositions V and VI that Appellant failed to show that plain and reversible error occurred. As a result, Appellant has not shown a reasonable probability that the outcome of the trial would have been different but for counsel's failures. Runnels, 2018 OK CR 27, ¶ 38, 426 P.3d at 623-24 (where no plain and reversible error occurred, no reasonable probability that the outcome of the trial would have been different but for counsel's failures was shown).
¶46 Appellant contends R.S. testified at preliminary hearing that he told others that someone besides Appellant did unwanted sexual things to him. However, the record shows Appellant's contention is not entirely borne out by the record. After R.S. gave Smith's name in response to defense counsel's question about whether someone besides Appellant did unwanted sexual things to him, R.S. explained that Smith yelled at Palmore and denied Smith did anything to him. R.S. denied three more times that anyone besides Appellant did unwanted sexual acts with him. Had defense counsel impeached R.S. with his statement about Smith, the State would have clarified the defense interpretation of R.S.'s statement since R.S. denied Smith did anything to him and explained that Smith yelled at R.S.'s mother. Given the lack of clarity in the preliminary hearing record regarding other allegations, counsel made the reasonable strategic decision not to pursue this line of questioning with R.S. See Lee v. State, 2018 OK CR 14, ¶ 14, 422 P.3d 782, 786 (where there is a reasonable basis for counsel's actions, trial strategy will not be second-guessed on appeal). We find counsel was not ineffective. Proposition Seven is denied.
¶47 In his last proposition, Appellant argues the cumulative effect of the errors in this case deprived him of a fair trial. Although we found four errors, the errors were harmless and did not affect Appellant's substantial rights. "Cumulative error does not require relief where the errors, considered together, do not affect the outcome of the proceedings." Bosse v. State, 2017 OK CR 19, ¶ 2, 406 P.3d 26, cert. denied, __ U.S. __, 138 S. Ct. 1264 (2018). Any errors found in this case did not require relief, and when considered cumulatively, do not require reversal or modification of the sentence. Proposition Eight is denied.
DECISION
¶48 The JUDGMENT and SENTENCE is AFFIRMED. Pursuant to Rule 3.15, Rules of the Oklahoma Court of Criminal Appeals, Title 22, Ch.18, App. (2018), the MANDATE is ORDERED issued upon the delivery and filing of this decision.
AN APPEAL FROM THE DISTRICT COURT OF BRYAN COUNTY
THE HONORABLE MARK R. CAMPBELL, DISTRICT JUDGE
APPEARANCES AT TRIAL
ROBERT RENNIE
RYAN RENNIE
118 N. CHICKASAW ST.
PAULS VALLEY, OK 73075
COUNSEL FOR DEFENDANT
WHITNEY KERR
ASST. DISTRICT ATTORNEY
117 N. THIRD STREET
DURANT, OK 74701
COUNSEL FOR THE STATE
APPEARANCES ON APPEAL
SARAH MACNIVEN
OKLA. INDIGENT DEFENSE
P.O. BOX 926
NORMAN, OK 73070
COUNSEL FOR APPELLANT
MIKE HUNTER
ATTORNEY GENERAL OF OKLAHOMA
JULIE PITTMAN
ASST. ATTORNEY GENERAL
313 N.E. 21ST ST.
OKLAHOMA CITY, OK 73105
COUNSEL FOR THE STATE
OPINION BY: LUMPKIN, J.
LEWIS, P.J.: Concur in Part Dissent in Part
KUEHN, V.P.J.: Concur in Part Dissent in Part
HUDSON, J.: Concur
ROWLAND, J.: Concur
FOOTNOTES
1 Appellant must serve 85% of his sentence in Count 1 before becoming eligible for consideration for parole. 21 O.S.Supp.2015, § 13.1. The trial court granted Appellant's demurrer to Count 2, Second Degree Rape, at the conclusion of the State's case.
2 R.S. has Down Syndrome.
3 Vicki Palmore testified at preliminary hearing that her son R.S. had the mental age of a five or six year old child.
LEWIS, PRESIDING JUDGE, CONCURS IN PART AND DISSENTS IN PART:
¶1 Concerning the Court's discussion in Proposition Two, I agree that Appellant waived his objection to the complainant's testimony at preliminary examination by failing to file a motion to quash before trial. The trial court later took Appellant's written objection to the complainant's competency under advisement, subject to a further objection when the complainant testified. Appellant never renewed his objection, waiving any error. The record clearly indicates the witness was competent, and any error was harmless. I respectfully dissent from the rest of the discussion, as the Court should either consistently follow the plain error doctrine of Simpson v. State, 1994 OK CR 40, 876 P.2d 690, or abandon it altogether.
¶2 In Simpson, the Court expansively defined an "error" as "a deviation from a legal rule." Id., 1994 OK CR 40, ¶ 10, 876 P.2d at 694. Serious errors or irregularities in preliminary criminal proceedings (involving the initial arrest, complaint, and preliminary examination) could conceivably deprive a defendant of substantial rights, see Okla. Const. art. 2, § 17, or even deprive the trial court of jurisdiction. Nicodemus v. District Court, 1970 OK CR 83, ¶ 5, 473 P.2d 312, 314 (lawful preliminary examination, or waiver, is necessary to trial court's jurisdiction). Deviations from the rules governing preliminary proceedings can be waived by a failure to timely object or file a motion to quash before the trial court. But such errors have theoretically remained subject to appellate correction when they seriously affect the fairness, integrity, or public reputation of criminal proceedings, or otherwise result in a miscarriage of justice. Simpson, 1994 OK CR 40, ¶ 30, 876 P.2d at 700-701.
¶3 Today the Court needlessly resurrects "the old, draconian rule barring an appellant from any possible relief because his attorney failed to preserve an error" by failing to file a motion to quash at arraignment. Simpson, 1994 OK CR 40, ¶ 30, 876 P.2d at 700. The modern workaround for such waivers is already well known: Appellate counsel can avoid such waivers on appeal simply by claiming that trial counsel's failure to preserve these now-unreviewable preliminary errors violated the defendant's Sixth Amendment right to effective assistance of counsel.
¶4 The Court is then constitutionally obliged to assess the underlying, unpreserved claims of error under at least one prong of the two-pronged test of Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 2064, 80 L.Ed.2d 674 (1984), a task which is conceptually intertwined with, and often indistinguishable from, plain error review. See, e.g., Vanderpool v. State, 2018 OK CR 39, ¶ 52, 434 P.3d 318, 329 (noting that counsel's failure to object was not prejudicial under Strickland because, in part, underlying allegations did not rise to level of "plain error").
¶5 I agree that defense counsel should be strongly encouraged to lodge all viable complaints about the preliminary proceedings with the trial court in the form of timely pre-trial demurrers, motions to quash, and motions to set aside. But the pursuit of this policy through maximalist rules of waiver; and the somewhat more laudable attempts to mitigate harsh waivers through the plain error doctrine, are largely superfluous. Our constitutional system guarantees reasonably effective assistance of counsel at every critical stage of a criminal prosecution, and this Court must enforce that guarantee whenever an attorney's omission results in procedural default of a serious legal error.
¶6 The Court could simplify direct appeals considerably by affording ordinary review on the legal merits of alleged errors preserved by timely objections, and reviewing any unpreserved allegations of error raised by appellate counsel under the Sixth Amendment rubric of ineffective assistance of trial counsel. Plain error review could then be relegated to a judicial fail-safe for the correction of substantial errors noticed in the first instance by the Court.
KUEHN, V.P.J., CONCUR IN PART AND DISSENT IN PART:
¶1 In Proposition II, the Majority overrules case law that applied plain-error review to certain types of unpreserved claims. I join Presiding Judge Lewis in concluding that plain-error review fairly balances the need for timely challenges against the possibility of manifest injustice. That review should not be lightly abandoned.
¶2 Simpson v. State, 1994 OK CR 40, 876 P.2d 690, provides a simple framework for appellate review of all unpreserved claims. Today the Majority creates a special sub-class of claims that are beyond Simpson's reach, but offers no rationale for the classification. Some unpreserved claims are, it seems, better than others. Which unpreserved claims will receive Simpson's plain-error review, which will simply be passed over, and what is the rational distinction for such different treatment?
¶3 The Majority finds "historical precedent" for a rule that claims of error confined to preliminary proceedings are beyond this Court's power to correct. This conclusion is the result of some very selective reading. Cases declaring "waiver" of such unpreserved claims, but still considering whether there is plain evidence of prejudice, are legion.1 Even cases the Majority cites in support of its rule employ this analysis.2 As Presiding Judge Lewis observes in his separate writing, antiquated and "draconian" rules of waiver -- like the one the Majority adopts here -- are exactly what Simpson sought to abrogate. Id., 1994 OK CR 40¶ 30, 876 P.2d at 700. The Court should not be inventing solutions to problems that don't exist.
¶4 In Proposition III, I agree with the Majority that failure to file a notice pleading and hold a reliability hearing as required by statute in this case was error, but I disagree with how the Court resolves the claim. Two witnesses testified about what the victim said to them in this case: the victim's mother and the forensic interviewer. As to the statement made to the mother, no reliability hearing was necessary. The victim said he "had sex with" Appellant, but his mother did not believe him. This brief statement, lacking any detail, was offered only to show why the victim's mother asked Appellant about the matter. It was not offered for the truth of the matter asserted, and was not hearsay. 12 O.S.2011, § 2801(A)(3). Therefore, there was no error in failing to hold a reliability hearing on the statement, nor was there harm in admitting it.
¶5 The detailed descriptions of sexual abuse made by the victim to the forensic interviewer, however, are a different story. Admission of this evidence absent a pretrial reliability hearing, as required by 21 O.S.Supp.2013, § 2803.1, should be reviewed for an abuse of discretion, as Appellant timely objected below on these grounds.3 See Neloms v. State, 2012 OK CR 7, ¶ 35, 274 P.3d 161, 170. This Court typically has scoured the record to determine whether the trial court would have found the hearsay admissible, if a proper hearing had been held. I think this practice of substituted judgment should stop, as it only encourages trial courts and prosecutors to continue to neglect the requirements of § 2803.1. The trial court is naturally in a better position to be the fact-finder, and § 2803.1 makes it the trial court's job, not this Court's. As I have stated before, "[b]ecause hearsay statements from a child victim can have a powerful effect on a jury, the Legislature directs trial courts to review that evidence in advance of its admission, giving both parties a chance to test it and argue for or against its reliability." Loya v. State, F-2017-65 (unpub. Aug. 23, 2018) (Kuehn, J., specially concurring). We should honor the intent of that statute, and halt our own review of the record to determine reliability.
¶6 Here, it was an abuse of discretion not to hold the mandatory hearing, and the evidence was inadmissible. However, relief is not warranted as there was ample evidence for the jury to convict Appellant and the error did not result in a miscarriage of justice. 20 O.S.2011, § 3001.1.4
FOOTNOTES
1 E.g., Jennings v. State, 92 Okl.Cr. 347, 351, 223 P.2d 562, 565 (1950) ("This court cannot consider questions that were not raised in the trial court as authorized by statute, unless fundamental error prejudicial to the substantial rights of appellant is apparent") (citations omitted); Franklin v. State, 17 Okl.Cr. 348, 188 P. 686, 687 (1920) ("Where the defendant fails to question the sufficiency of an information as authorized by the provisions of the code of criminal procedure, he in effect waives any and all defects, except such as are fundamental").
2 E.g., Money v. State, 1985 OK CR 46, ¶ 5, 700 P.2d 204, 206 (briefly mentioning waiver, after concluding that "it is not conceivable that the appellant was surprised or prejudiced" by the alleged error); Hambrick v. State, 1975 OK CR 86, ¶ 11, 535 P.2d 703, 705 (claim was denied for several reasons; one was "waiver," another was that the defendant "failed to show that he was prejudiced in any of his substantial rights").
3 The Majority outlines this procedure, but then seems to review the claim for harmlessness.
4 "No judgment shall be set aside or new trial granted by any appellate court of this state in any case, civil or criminal, on the ground of misdirection of the jury or for error in any matter of pleading or procedure, unless it is the opinion of the reviewing court that the error complained of has probably resulted in a miscarriage of justice, or constitutes a substantial violation of a constitutional or statutory right." 20 O.S.2011, § 3001.1.
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
1987 OK CR 265, 747 P.2d 316, MARTIN v. STATEDiscussed
1988 OK CR 199, 762 P.2d 274, RAY v. STATEDiscussed
1988 OK CR 211, 762 P.2d 969, DUNHAM v. STATEDiscussed
1988 OK CR 281, 765 P.2d 800, JONES v. STATEDiscussed
1988 OK CR 297, 766 P.2d 1385, BRENNAN v. STATEDiscussed
1989 OK CR 77, 782 P.2d 944, J.J.J. v. STATEDiscussed
1991 OK CR 13, 805 P.2d 681, SPEARS v. STATEDiscussed
1992 OK CR 41, 834 P.2d 1002, BERRY v. STATEDiscussed
1992 OK CR 67, 839 P.2d 667, KENNEDY v. STATEDiscussed at Length
1993 OK CR 27, 855 P.2d 143, GILMORE v. STATEDiscussed
1994 OK CR 40, 876 P.2d 690, SIMPSON v. STATEDiscussed at Length
1994 OK CR 83, 891 P.2d 586, HAWKINS v. STATEDiscussed
1995 OK CR 28, 898 P.2d 155, HILL v. STATEDiscussed
1995 OK CR 49, 904 P.2d 130, APPLEGATE v. STATEDiscussed
1920 OK CR 62, 188 P. 686, 17 Okl.Cr. 348, Franklin v StateCited
2004 OK CR 16, 88 P.3d 893, PRIMEAUX v. STATEDiscussed
2004 OK CR 21, 90 P.3d 556, EASLICK v. STATEDiscussed
2006 OK CR 19, 139 P.3d 907, HOGAN v. STATEDiscussed
2008 OK CR 29, 207 P.3d 379, FOLKS v. STATEDiscussed at Length
2010 OK CR 6, 230 P.3d 888, SIMPSON v. STATEDiscussed
2010 OK CR 25, 243 P.3d 461, BURGESS v. STATEDiscussed
2011 OK CR 8, 248 P.3d 362, TAYLOR v. STATEDiscussed at Length
2011 OK CR 26, 270 P.3d 160, MITCHELL v. STATEDiscussed
2012 OK CR 7, 274 P.3d 161, NELOMS v. STATEDiscussed at Length
2013 OK CR 1, 293 P.3d 198, MALONE v. STATEDiscussed
2013 OK CR 6, 299 P.3d 870, STATE v. JUAREZDiscussed
1975 OK CR 86, 535 P.2d 703, HAMBRICK v. STATEDiscussed at Length
2013 OK CR 19, 315 P.3d 392, LEVERING v. STATEDiscussed
2016 OK CR 5, 371 P.3d 1120, JACKSON v. STATEDiscussed
2016 OK CR 18, 387 P.3d 922, PULLEN v. STATEDiscussed
2016 OK CR 21, 387 P.3d 934, MITCHELL v. STATEDiscussed
2017 OK CR 17, 400 P.3d 902, WITHEROW v. STATEDiscussed
2017 OK CR 19, 406 P.3d 26, BOSSE v. STATEDiscussed
2017 OK CR 26, 408 P.3d 209, BARNES v. STATEDiscussed
2018 OK CR 5, 419 P.3d 261, THOMPSON v. STATEDiscussed
2018 OK CR 10, 421 P.3d 890, NICHOLSON v. STATEDiscussed
2018 OK CR 14, 422 P.3d 782, LEE v. STATEDiscussed
2018 OK CR 20, 423 P.3d 617, TRYON v. STATEDiscussed
2018 OK CR 27, 426 P.3d 614, RUNNELS v. STATEDiscussed at Length
2018 OK CR 31, 431 P.3d 929, BENCH v. STATEDiscussed
2018 OK CR 39, 434 P.3d 318, VANDERPOOL v. STATEDiscussed
1950 OK CR 131, 223 P.2d 562, 92 Okl.Cr. 347, JENNINGS v. STATECited
1982 OK CR 137, 650 P.2d 880, GRAY v. STATEDiscussed
1970 OK CR 83, 473 P.2d 312, NICODEMUS v. DISTRICT COURT OF OKLAHOMA COUNTYDiscussed
1984 OK CR 89, 688 P.2d 347, CRAWFORD v. STATEDiscussed
1985 OK CR 46, 700 P.2d 204, MONEY v. STATEDiscussed at Length
1985 OK CR 132, 709 P.2d 202, SPUEHLER v. STATEDiscussed
2000 OK CR 14, 8 P.3d 883, 71 OBJ 2063, Gilson v. StateDiscussed at Length
Title 12. Civil Procedure
CiteNameLevel
12 O.S. 2803.1, Statements by Certain Children Regarding Physical or Sexual Abuse - AdmissibilityCited
12 O.S. 2601, General Rule of CompetencyCited
12 O.S. 2602, Lack of Personal KnowledgeCited
12 O.S. 2603, Oath or AffirmationDiscussed
12 O.S. 2801, DefinitionsCited
Title 20. Courts
CiteNameLevel
20 O.S. 3001.1, Setting Aside Judgment on Ground of Misdirection of Jury or Error in Pleading or ProcedureDiscussed
Title 21. Crimes and Punishments
CiteNameLevel
21 O.S. 13.1, Required Service of Minimum Percentage of Sentence - Offenses SpecifiedCited
21 O.S. 888, 21 888, Forcible SodomyCited
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[Cite as State v. Vore, 2014-Ohio-1583.]
IN THE COURT OF APPEALS
TWELFTH APPELLATE DISTRICT OF OHIO
WARREN COUNTY
STATE OF OHIO, :
Plaintiff-Appellee, : CASE NO. CA2012-07-065
: OPINION
- vs - 4/14/2014
:
WILLIAM B. VORE, :
Defendant-Appellant. :
CRIMINAL APPEAL FROM WARREN COUNTY COURT OF COMMON PLEAS
Case No. 10CR27091
David P. Fornshell, Warren County Prosecuting Attorney, Michael Greer, 500 Justice Drive,
Lebanon, Ohio 45036, for plaintiff-appellee
Neal D. Schuett, 121 West High Street, Oxford, Ohio 45056, for defendant-appellant
HENDRICKSON, P.J.
{¶ 1} Defendant-appellant, William B. Vore, appeals from a Warren County Court of
Common Pleas decision resentencing him upon remand from this court to correct a
postrelease control sentencing error. For the reasons discussed below, we affirm.
{¶ 2} In December 2010, appellant was indicted for robbery in violation of R.C.
2911.02(A)(3), a felony of the third degree, and grand theft in violation of R.C. 2913.02(A)(1),
a felony of the fourth degree. The charges arose out of appellant's robbery of a Fifth Third
Warren CA2012-07-065
Bank in Warren County, Ohio. Appellant had given a bank teller a handwritten note, which
said: "This is a Robbery Give me All your 100s, 50s, 20s, Fast, no dye packs or alarms [sic]."
He then asked the teller, "Do you got it?" Although the teller did not observe appellant
holding a weapon, the teller nonetheless felt scared and believed she would be harmed if she
did not comply. The teller handed over $9,200, and appellant fled the bank.
{¶ 3} Following a three-day jury trial, appellant was convicted of both offenses. The
grand theft charge was merged with the robbery conviction for sentencing purposes, and on
August 30, 2011, appellant was sentenced to five years in prison. Appellant timely appealed
to this court, arguing the trial court erred by failing to give a lesser-included offense jury
instruction for the robbery charge, by admitting improper "other acts" evidence, by overruling
his motion to suppress eyewitness identifications, and by denying his motion for funds to
obtain an eyewitness identification expert. State v. Vore, 12th Dist. Warren No. CA2011-08-
093, 2012-Ohio-2431. We found no merit to appellant's assigned errors and affirmed his
conviction. However, we noticed and raised, sua sponte, an error in the trial court's
imposition of postrelease control. Id. at ¶ 70. We therefore reversed and remanded the case
to the trial court "for the limited purpose of permitting the trial court to employ the [postrelease
control] correction procedures of R.C. 2929.191." Id. at ¶ 76.
{¶ 4} On July 18, 2012, the trial court held a resentencing hearing in accordance with
our remand. At the hearing, appellant objected to the limited nature of the proceeding and
asked that he be given additional jail-time credit for time he spent in the Warren County Jail
1
while serving the remainder of a federal sentence, which ended May 17, 2011. The trial
court denied appellant's request, re-imposed a five-year prison term, and gave appellant jail-
1. Appellant had been serving a sentence at a federal penitentiary in Terre Haute, Indiana when he was
transferred into Warren County's temporary custody on March 11, 2011. Appellant's federal sentence expired
May 17, 2011.
-2-
Warren CA2012-07-065
time credit for 428 days. The trial court then advised appellant that he was subject to three
years of mandatory postrelease control upon his release from prison.
{¶ 5} Appellant appealed, raising three assignments of error.
{¶ 6} Assignment of Error No. 1:
{¶ 7} THE TRIAL COURT ERRED WHEN IT SENTENCED APPELLANT TO FIVE
YEARS IN PRISON FOR VIOLATING R.C. 2911.02.
{¶ 8} In his first assignment of error, appellant argues the trial court erred in
resentencing him to a five-year prison term as 2011 Am.Sub.H.B. No. 86 (H.B. 86), which
became effective on September 30, 2011, reduced the maximum sentence for third-degree
felonies to 36 months. Because appellant was resentenced on July 18, 2012, after the
effective date of H.B. 86, appellant contends he is entitled to the benefit of a reduced
sentence. The state, however, argues H.B. 86 is inapplicable to appellant as his sentence
was actually imposed on August 30, 2011.
{¶ 9} This court has addressed the issue presented by appellant in a similar case.
See State v. Clay, 12th Dist. Madison No. CA2011-12-016, 2012-Ohio-5011. In Clay, the
defendant was convicted of possession of criminal tools, vandalism, and robbery. Id. at ¶ 3.
He was sentenced on February 2, 2011 to a one-year prison term for possession of criminal
tools and a one-year prison term for vandalism, which were to run concurrent to each other,
but consecutive to a five-year prison term for the robbery conviction. Id. On appeal, we
found the offenses of robbery and possession of criminal tools allied offenses of similar
import, and we remanded the matter to the trial court with instructions to merge the offenses
at sentencing after the state elected which of the allied offenses to pursue. Id. at ¶ 4. Clay
was resentenced on November 4, 2011, at which time the state elected to pursue sentencing
on the robbery offense. Id. at ¶ 5. The trial court, believing H.B. 86 was applicable to the
defendant, resentenced Clay to a one-year prison term for vandalism, to run consecutively to
-3-
Warren CA2012-07-065
a 36-month prison term for the robbery conviction. Id. at ¶ 6. On appeal, we reversed the
trial court's decision, finding that Clay's sentence was "imposed" when the penalty was
originally pronounced on February 2, 2011. Id. at ¶ 16-17. The fact that we had reversed the
sentences and remanded the matter to correct an allied offense error did not negate the fact
that a penalty had been imposed prior to the effective date of H.B. 86. Id. at ¶ 18. We
reversed and remanded for the trial court to resentence Clay using the sentencing laws that
were in effect prior to the effective date of H.B. 86. Id. at ¶ 22.
{¶ 10} Here, a sentence was imposed on appellant on August 30, 2011, when the trial
court pronounced the five-year prison term. As a penalty had been imposed on appellant
prior to the effective date of H.B. 86, appellant was not entitled to the benefit of the less
stringent sentencing provisions. See R.C. 1.58(B); Clay at ¶ 16-18.
{¶ 11} Moreover, the July 18, 2012 resentencing hearing was held for the limited
purpose of properly advising appellant of his postrelease control obligations. Only that part of
appellant's sentence failing to properly impose the statutorily mandated postrelease control
was void and set aside by our holding in Vore, 2012-Ohio-2431 at ¶ 75-76. See State v.
Fischer, 128 Ohio St.3d 92, 2010-Ohio-6238, ¶ 26 (holding that "when a judge fails to impose
statutorily mandated postrelease control as part of a defendant's sentence, [only] that part of
the sentence is void and must be set aside"). In all other respects, appellant's sentence was
affirmed and, therefore, was not subject to review by the trial court on resentencing. See
State v. Schleiger, 12th Dist. Preble No. CA2011-11-012, 2013-Ohio-1110, ¶ 30.
{¶ 12} Accordingly, appellant's first assignment of error is overruled.
{¶ 13} Assignment of Error No. 2:
{¶ 14} THE TRIAL COURT ERRED WHEN IT SENTENCED APPELLANT TO
MANDATORY POST-RELEASE CONTROL FOR THREE YEARS.
{¶ 15} In his second assignment of error, appellant argues the trial court erred when it
-4-
Warren CA2012-07-065
determined that postrelease control was mandatory rather than optional. Appellant contends
postrelease control was optional as he did not cause or threaten to cause physical harm
during the robbery. The state, relying on the most current version of the postrelease control
statute, R.C. 2967.28, argues a three-year period of postrelease control is mandated by the
statute as robbery is an "offense of violence."
{¶ 16} At the outset, we note that the version of R.C. 2967.28 relied on by the state is
inapplicable to appellant as he was sentenced before March 22, 2013, the effective date of
the current postrelease control statute.2 The version of R.C. 2967.28 in effect at the time of
appellant's sentencing called for a mandatory term of postrelease control for first and
second-degree felonies, for felony sex offenses, and "for a felony of the third degree that is
not a felony sex offense and in the commission of which the offender caused or threatened to
cause physical harm to a person." (Emphasis added.) Former R.C. 2967.28(B). Pursuant to
this division of the statute:
[A] period of post-control required by this division for an offender
shall be of one of the following periods:
(1) For a felony of the first degree or for a felony sex
offense, five years;
(2) For a felony of the second degree that is not a felony
sex offense, three years;
(3) For a felony of the third degree that is not a felony sex
offense and in the commission of which the offender
caused or threatened physical harm to a person, three
years.
R.C. 2967.28(B). For felonies of the third, fourth, and fifth degree that are not subject to
2. The current version of R.C. 2967.28(B) provides that postrelease control is mandatory for first and second-
degree felonies, for a felony sex offense, and "for a felony of the third degree that is an offense of violence and is
not a felony sex offense." (Emphasis added.) For those third-degree felonies that constitute an "offense of
violence," postrelease control is mandatory for three years. R.C. 2967.28(B)(3). R.C. 2901.01(A)(9) defines an
"offense of violence" and it specifically provides that robbery in violation of R.C. 2911.02 constitutes an "offense
of violence." However, as discussed above, appellant was not sentenced under this version of the postrelease
control statute.
-5-
Warren CA2012-07-065
division (B)(1) through (3), a sentence to a prison term "shall include a requirement that the
offender be subject to a period of post-release control of up to three years" if the parole
board determines that a period of postrelease control is necessary for that offender. R.C.
2967.28(C).
{¶ 17} Appellant was convicted of third-degree felony robbery in violation of R.C.
2911.02(A)(3). The issue, therefore, is whether appellant, in the commission of the robbery,
caused or threatened to cause physical harm to the bank teller. "Physical harm to persons"
is defined as "any injury, illness or other physiological impairment, regardless of its gravity or
duration." R.C. 2901.01(A)(3). The term "physiological impairment" is not defined by statute.
As such, the term is accorded its common, ordinary, everyday meaning. State v. Martin, 12th
Dist. Brown No. CA99-09-026, 2000 WL 1145465, * 5 (Aug. 14, 2000); Sharp v. Union
Carbide Corp., 38 Ohio St.3d 69, 70 (1988). "Impair" means to "make worse" or "diminish in
quantity, value, excellence, or strength." Webster's Third New International Dictionary 1131
(1993). "Physiological" means "characteristic of or appropriate to an organism's healthy or
normal functioning." Id. at 1707. The term "physiological impairment" may, therefore, "be
defined as a damaging or lessening of a person's normal physical functioning." State v.
Roof, 1st Dist. Butler No. CA77-10-0110, 1978 WL 216430, * 1 (Nov. 8, 1978).
{¶ 18} After reviewing the record, we find sufficient facts for the trial court to conclude
appellant caused or threatened to cause physical harm to the bank teller, such that
mandatory postrelease control is required. The bank teller testified at trial that appellant's
handwritten note demanding money had a significant impact on her ability to physically
function. Specifically, the teller testified appellant's action of handing her the demand note
caused her to "freeze." The teller testified she was unable to act and did not "snap out of it"
until appellant then questioned her "you got it?" Once appellant questioned her, she grabbed
the money from her drawer and handed it over to appellant, who immediately left the bank.
-6-
Warren CA2012-07-065
The teller testified that after appellant left, she again "froze," and she did not "snap out of it"
the second time until a manager walked by and asked her if something was wrong. The
teller's testimony clearly established appellant's actions diminished or lessened her normal
physical functioning, at least for a short period of time. As any physiological impairment,
"regardless of its gravity or duration," is sufficient under R.C. 2901.01(A)(3), we conclude that
the evidence supports the trial court's finding that postrelease control was mandatory for a
period of three years.
{¶ 19} Appellant's second assignment of error is, therefore, overruled.
{¶ 20} Assignment of Error No. 3:
{¶ 21} THE TRIAL COURT ERRED WHEN IT DENIED APPELLANT'S REQUEST TO
AWARD JAIL-TIME CREDIT FOR THE TIME HE WAS IN CUSTODY.
{¶ 22} In his third assignment of error, appellant argues the trial court violated his
Equal Protection rights when it failed to award him jail-time credit for the full period of time he
was in the custody of Warren County. Appellant contends he was taken into custody by
Warren County on March 11, 2011 and held during the pendency of his robbery charges. He
argues this date should be used by the court in determining his jail-time credit, not the May
17, 2011 date, which marked the expiration of his federal sentence. Appellant asserts he is
entitled to an additional 67 days of jail-time credit. The state contends appellant's argument
is barred by the doctrine of res judicata. We agree with the state.
{¶ 23} The doctrine of res judicata provides that "a final judgment of conviction bars a
convicted defendant who was represented by counsel from raising and litigating in any
proceeding except an appeal from that judgment, any defense or any claimed lack of due
process that was raised or could have been raised by the defendant at the trial which
resulted in that judgment of conviction, or on an appeal from that judgment." State v.
Wagers, 12th Dist. Preble No. CA2011-08-007, 2012-Ohio-2258, ¶ 10, citing State v.
-7-
Warren CA2012-07-065
Szefcyk, 77 Ohio St.3d 93 (1996), syllabus. Here, appellant does not seek to challenge the
propriety or validity of the July 18, 2012 resentencing. Rather, he attempts to attack the date
the trial court used for calculating jail-time credit. The May 17, 2011 date was utilized by the
trial court at appellant's original sentencing hearing on August 30, 2011. As such, appellant
could have, and should have, raised the issue of the proper starting date for calculating jail-
time credit on his original appeal. Appellant's resentencing for postrelease control purposes
does not open the door for him to retry issues that were previously raised or could have been
previously raised on direct appeal. See Fischer, 2010-Ohio-6238 at ¶ 40; State v. Sprauer,
12th Dist. Warren No. CA2010-04-033, 2011-Ohio-48, ¶ 29 ("while the doctrine of res
judicata does not preclude review of a void sentence, res judicata still applies to other
aspects of the merits of a conviction, including the determination of guilt and the lawful
elements of the ensuing sentence").
{¶ 24} Appellant's third assignment of error is, therefore, overruled.
{¶ 25} Judgment affirmed.
PIPER and M. POWELL, JJ., concur.
-8-
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430 Pa. 134 (1968)
Layman
v.
Continental Assurance Company, Appellant.
Supreme Court of Pennsylvania.
Argued October 3, 1967.
May 21, 1968.
*135 Before BELL, C.J., JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.
William C. Walker, with him Dickie, McCamey & Chilcote, for appellant.
David M. Harrison, with him Harrison & Louik, for appellee.
OPINION BY MR. JUSTICE ROBERTS, May 21, 1968:
On September 1, 1963, the Continental Assurance Company delivered to Fred W. Layman a certificate of life insurance reciting that he was insured under the group policy issued by the company to the members of the American Welding Society. The insured died on January 22, 1964, leaving as his beneficiary the appellee, Leah Quay Layman. On April 13, 1964, approximately three months after Mr. Layman's death, the company mailed to Mrs. Layman a copy of her deceased husband's insurance application. It was the company's position that, since Mr. Layman had falsified information on this application, his widow could not recover under the policy. Mrs. Layman accordingly commenced this action.
*136 In its answer to appellee's complaint, appellant offered, as its sole defense, the fact that Mr. Layman had given the company false information in his application for insurance. Appellee then moved for judgment on the pleadings on the ground that, since a copy of her husband's application was not attached to the policy when issued, the company was precluded, by statute, from using this application as a defense. The statutes relied upon were the Act of May 17, 1921, P.L. 682, § 318, 40 P.S. § 441 and the Act of May 11, 1949, P.L. 1210, § 6, as amended, 40 P.S. § 532.6. After the lower court denied her motion, under authority of the Act of April 18, 1874, P.L. 64, § 1, 12 P.S. § 1097, Mrs. Layman appealed to this Court. We affirmed the denial. See Layman v. Continental Assurance Co., 416 Pa. 155, 205 A. 2d 93 (1964).
Our first decision in Layman resulted from our construction of the statutes relied upon below. Although both the Act of 1921 and the Act of 1949 contain provisions that a copy of the insurance application must be attached to the policy when issued, we held that the Act of 1921 does not apply to group insurance policies, and that the policy referred to in the Act of 1949 (which does apply to group policies) is the policy furnished to the group employer, in this case the American Welding Society. Since Layman himself received only a certificate showing him to be insured, and since the Act does not require the application to be attached to the certificate when issued, Mrs. Layman could not prevail.
Following her initial defeat before our Court, Mrs. Layman went to trial. She was there successful in preventing the company from using the application in evidence by invoking another, previously untried, provision of the Act of 1949. The relevant provision re-cites: "[N]o statement made by any person insured shall be used in any contest unless a copy of the instrument *137 containing the statement is or has been furnished to such person or to his beneficiary." Act of May 11, 1949, P.L. 1210, § 6, as amended, 40 P.S. § 532.6(3). The lower court construed the language as requiring that the instrument (in this case Mr. Layman's application) be furnished to the insured or beneficiary before the death of the insured. It therefore concluded that appellant waited too long to furnish Mrs. Layman with a copy of her husband's application, and hence could not use it at trial. The jury accordingly was directed to find a verdict in favor of appellee in the amount of the insurance certificate, $10,000 plus interest. Following the denial of appellant's motion for judgment n.o.v. and the entry of judgment, this appeal was taken.
Construction of the statutory language here at issue presents a case of first impression for this Court. Moreover, we have found but two other jurisdictions, Illinois and New York, which have faced such a provision. Each came to a different result. In construing language identical to that found in our Act of 1949, the Seventh Circuit Court of Appeals (applying Illinois law) held that the requirement of furnishing a copy of the application was satisfied even though the company waited until it filed its answer in court before making the application available to the plaintiff beneficiary. Coleman v. Aetna Life Ins. Co., 261 F. 2d 296 (7th Cir. 1958). However, New York, again construing identical language, has required that the company furnish the application before the insured's death. Robins v. John Hancock Mut. Life Ins. Co., 49 Misc. 2d 731, 268 N.Y.S. 2d 470 (S. Ct. 1966), rev'd on other grounds, 27 App. Div. 2d 188, 277 N.Y.S. 2d 706 (1967). In our view the New York rule is by far the more logical, and the one more in harmony with public policy.
Certainly not every false statement made by an insured in a policy application is made intentionally. *138 Thus clearly one of the main purposes behind the requirement that the company furnish the insured or his beneficiary with a copy of the completed application is to afford the parties involved an opportunity to correct any errors which might vitiate the policy. Such errors obviously cannot be corrected after the insured has died. This line of reasoning not only underlies the New York rule, see Robins v. John Hancock Mut. Life Ins. Co., supra,[1] but it also persuaded the lower court in the present case. Layman v. Continental Assurance Co., 115 Pitt. L.J. 146, 148 (C.P. 1967): "The insured cannot correct his statements after his death. It is obviously futile to then notify the beneficiary. The protective provisions of the statute would be nullified if we were to hold that defendant complied with the statute by attaching a copy of the application to its amended Answer." We too are similarly persuaded.
Appellant balks at requiring an insurance company to furnish a copy of the application before the insured's death because it somehow believes that such a rule would place the intolerable burden upon insurance carriers of having to send out new copies each time an insured changed his beneficiary. No such burden, however, need be borne by the company if it merely sends a copy to the insured himself. For the statutory mandate is satisfied so long as either the insured or his beneficiary receives the application. Furthermore, appellant assumes that the statute must permit furnishing of a copy after death because its language includes "beneficiary" as well as "insured." This assumption *139 apparently stems from the fact that the beneficiary has no right to alter an insured's application, and therefore could do nothing if a copy of the application was furnished to him (the beneficiary) before the insured's death. Of course, this argument totally overlooks the very real possibility that the beneficiary, when he realizes that his right to recover might be defeated by the insured's false statements, will promptly notify the insured and prevail upon the latter to correct these statements.
Finally, it is basic to the rules of statutory construction that a law should not be construed so as to result in the performance of a useless act. Yet that is precisely what would happen should we hold the statute satisfied if the company furnishes a copy of the application in its answer. For this is already required by Rule 1019 (h) of the Pennsylvania Rules of Civil Procedure. It is there provided: "A pleading shall state specifically whether any claim or defense set forth therein is based upon a writing. If so, the pleader shall attach a copy of the writing, or the material part thereof, . . ." (Emphasis supplied.) This rule, by use of the word "pleading" rather than "complaint," and more important by its specific reference to defenses based upon writings, quite clearly applies to answers such as the one filed by the insurance company in the present case. We can think of no clearer example of a defense based upon a writing than one which alleges nonliability because of false statements in an insurance application. Therefore, since the insurance company had to attach a copy of the application to its answer, appellant would have us read section 532.6(3) of the Insurance Law as requiring absolutely nothing not already required by the rules of civil procedure.[2]
*140 In our view, having failed to furnish either the insured or his beneficiary with a copy of the application before the insured's death, the company may not now defend this lawsuit on the basis of that application.
Judgment affirmed.
Mr. Chief Justice BELL concurs in the result.
Mr. Justice JONES dissents.
Mr. Justice MUSMANNO took no part in the consideration or decision of this case.
NOTES
[1] Robins received favorable comment in 18 Syracuse L. Rev. 297, 299 (1966), where the writer noted: "The purpose of attachment or delivery of the application or statement is to allow the insured to examine it and to correct any error therein. Hence, the court reasoned that delivery to the estate is inappropriate and fruitless, since it cannot assist in correction of error in the life-time of the insured."
[2] No such infirmity plagued the Seventh Circuit in Coleman, supra, since the Federal Rules of Civil Procedure have no provision similar to our Rule 1019(h). See 10 Fed. R.C.P.
Moreover, Rule 1019(h) became effective January 1, 1947, over two years before § 532.6(3) of the Insurance Law was enacted.
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537 U.S. 1095
STONEv.UNITED STATES.
No. 02-7376.
Supreme Court of United States.
December 16, 2002.
1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT.
2
C. A. 6th Cir. Certiorari denied. Reported below: 45 Fed. Appx. 339.
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816 F.2d 678
Unpublished DispositionNOTICE: Sixth Circuit Rule 24(c) 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 Sixth Circuit.George BONNELL, Petitioner-Appellant,v.COMMONWEALTH OF KENTUCKY and Boone County Jailer,Respondents-Appellees.
No. 86-6143.
United States Court of Appeals, Sixth Circuit.
April 10, 1987.
1
Before WELLFORD and NORRIS, Circuit Judges, and COHN, District Judge.*
ORDER
2
The petitioner moves for counsel on appeal from the district court's order denying his petition for a writ of habeas corpus. Pursuant to Rule 9(a), Rules of the Sixth Circuit, this appeal has been referred to a panel of the Court for consideration.
3
At the time he requested his writ, the petitioner was a prisoner in the Boone County, Kentucky jail. The petitioner argued that he had been improperly extradited from Ohio to face Kentucky charges. The case was referred to a magistrate, who entered a report recommending that the petition be denied for failure to exhaust state remedies.
4
The petitioner filed a document in response to the magistrate's report. This document argued that the primary issue concerned a detainer placed against him by Indiana authorities. Subsequently, the district court entered an order adopting the magistrate's report and denying the petition.
5
Before a federal writ of habeas corpus can be issued, a petitioner must exhaust his state remedies. Gully v. Kunzman, 592 F.2d 283, 286 (6th Cir.), cert. denied, 442 U.S. 924 (1979); Webster v. Frey, 665 F.2d 88, 89 (6th Cir.1981). Here the petitioner could have challenged any issues concerning his extradition in a motion in the criminal case pending in the Kentucky state courts. Similarly, he could have challenged the Indiana detainer by filing an action under the Interstate Agreement on Detainers as adopted by Kentucky statutes. K.R.S. 440.450. Therefore, the district court was correct to hold that the petitioner had failed to exhaust his state remedies.
6
The motion for counsel is denied. Upon an examination of the record and the petitioner's informal brief, we affirm the order of the district court under Rule 9(b), Rules of the Sixth Circuit, because the issues are not substantial and do not require oral argument.
*
The Honorable Avern Cohn, U.S. district Judge for the Eastern District of Michigan, sitting by designation
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720 F.2d 667
Smithv.City of Pittsburgh
82-5629, 83-5570
UNITED STATES COURT OF APPEALS Third Circuit
8/12/83
W.D.Pa., Weber, J.
AFFIRMED
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961 N.E.2d 68 (2012)
MINNICK,
v.
STATE.
No. 92A03-1106-CR-228.
Court of Appeals of Indiana.
January 3, 2012.
DARDEN, J.
Disposition of Case by Unpublished Memorandum Decision Affirmed.
BAKER, J., concurs.
BAILEY, J., concurs.
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209 B.R. 257 (1997)
In re Joseph A. BOTTONE, Debtor.
Shirley SMALL, Plaintiff,
v.
Joseph A. BOTTONE, Defendant.
Bankruptcy No. 95-45480-HJB, Adversary No. 96-4081.
United States Bankruptcy Court, D. Massachusetts.
June 9, 1997.
*258 Peter Stern, Springfield, MA, for Plaintiff.
Gerald Glasser, Springfield, MA, for Debtor.
David J. Noonan, Springfield, MA, Chapter 7 Trustee.
MEMORANDUM OF DECISION
HENRY J. BOROFF, Bankruptcy Judge.
Before the Court for determination is a "Motion for Summary Judgment" (the "Motion") filed by defendant and debtor Joseph A. Bottone (the "Debtor"), seeking judgment in his favor on all counts of this adversary proceeding filed by plaintiff Shirley Small (the "Plaintiff" or "Small"). By virtue of the adversary proceeding, Small requests that the Court deny the Debtor's discharge pursuant to 11 U.S.C. § 727(a)(2) and/or determine that Small's claim is not dischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) and (a)(6).
I. Facts
The following facts are not materially disputed.
*259 The Debtor was the president of Bottone Home Inspections, a division of Bottone Remodelers, Incorporated, and was in the business of conducting inspections for prospective home buyers. In July 1992, Small became interested in purchasing a house located in Somers, Connecticut (the "Somers Property"), and contracted with the Debtor to inspect the home. The Debtor conducted the inspection on July 14, 1992. He subsequently issued a written report (the "Report") which recited, in relevant part:
There are two different aged shingles on the roof; the older being over the addition at the rear of the garage. . . . All of the shingles are in good condition and free of any damage at this time. I also found that the ridge caps have been installed in the correct manner at the upper portion of the roof to seal these areas from moisture and are free of any cuts or openings. . . .
. . . .
I found the gutters and downspouts to be in good condition, securely fastened to the fascias and properly pitched to provide good drainage. . . .
Report at 1. In the Report, the Debtor further described the roof ventilation to be "good," id., and concluded that the house was "both structurally and mechanically sound," id. at 6.
Sometime after the Debtor reported his findings to her, Small purchased the Somers Property. However, Small subsequently complained of various flaws in the Report, as described in the following relevant parts of a January 15, 1993 demand letter sent by Plaintiff's former attorney to the Debtor in accordance with Mass. Gen. Laws Ann. ch. 93A, § 9 (West 1984 & Supp.1997):
In July of 1992 my clients were in the process of attempting to purchase [the Somers Property]. At that time you were hired to conduct a structural inspection of the premises. You represented to my clients that you were experienced, reliable, thorough and that your inspection would reflect these values. . . .
. . . .
Relying upon the results of your inspection my clients completed the purchase of the premises. A short time later, due to a persistent odor in the vicinity of the family room, [the Plaintiff] had occasion to have further inspection performed on the premises. It was determined that the family room was constructed with no ventilation in the crawl space foundation and that it was not built according to code. It was not even constructed according to standard building practices. There were no vents in the attic area of this room. The floor joists and wall structures were both soaking wet from moisture, as well as being totally infested with carpenter ants. The ceiling in this room had approximately two and ½ inches sag within three feet, as measured from the garage wall to the side of the first door. There were no drip edge on the trim and no end caps or down spouts on the gutter system. Headers and skylights were improperly installed and, in fact, the skylights were not manufactured for that purpose, but were sliding doors that had been boxed-in on the roof. There were numerous other problems not as amenable to visual inspection which were found when the room was opened up.
Effectively this room has to be torn down and rebuilt due to the damage caused by rot and infestation.
Demand Letter at 2.[1]
In May 1993, Small filed suit against Bottone Remodelers, Inc. in the Hampden Division *260 of the Commonwealth of Massachusetts Superior Court Department of the Trial Court (the "Massachusetts Superior Court") (the "State Court Action"), and amended the complaint in May 1994 to include the Debtor individually.[2] In her state court complaint, Small alleged that the Debtor knowingly and willfully misrepresented the condition of the Somers Property in his Report, and in so doing, violated M.G.L. ch. 93A.
On March 18, 1994, the Debtor executed a declaration of homestead, pursuant to M.G.L. ch. 188, § 1, on his principal residence located at 27 Stonegate Circle, Wilbraham, Massachusetts (the "Wilbraham Property") and owned jointly with his wife Deborah A. Bottone ("Mrs. Bottone"). The declaration of homestead was recorded in the Commonwealth of Massachusetts Hampden County Registry of Deeds (the "Hampden Registry") on March 24, 1994. On April 18, 1994, the Debtor conveyed all of his interest in the Wilbraham property to Mrs. Bottone by warranty deed recorded in the Hampden Registry on April 22, 1994. The deed also provided that Mrs. Bottone "declare[d] all rights of homestead in said premises under the provisions of Chapter 188, Section 1 of the General Laws of Massachusetts."
The Plaintiff eventually obtained a default judgment against the Debtor in the State Court Action, although the state court did not assess the damages owed to the Plaintiff.[3] On November 30, 1995, the Debtor filed a petition in this Court under Chapter 7 of the Bankruptcy Code. He listed the Wilbraham Property as his street address, but reported in Schedule A of his Schedules Of Assets and Liabilities that he did not own any interest in real property.
The Plaintiff commenced this adversary proceeding on March 11, 1996, seeking denial of the Debtor's discharge pursuant to 11 U.S.C. § 727(a)(2) and (a)(4). On July 11, 1996, she moved for leave to file an amended complaint, adding counts under § 523(a)(2)(A) and § 523(a)(2)(B). That motion was allowed by the Court on July 23, 1996.
The Debtor filed the instant Motion on November 4, 1996, seeking summary judgment in his favor. On November 21, 1996, the Plaintiff filed yet another amended complaint, this time listing counts under 11 U.S.C. §§ 727(a)(2), 523(a)(2)(A), and 523(a)(6), apparently intended to supersede the counts of the original complaint and the July 11, 1996 amendment.[4] After hearing the parties on the Motion, the Court took the matter under advisement. On March 24, 1997, former counsel for the Debtor filed a "Notice of Disappearance,"[5] and new counsel filed an "Appearance" on the Debtor's behalf.
*261 II. Analysis
Summary judgment should be granted where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Bankr.P. 7056; Fed.R.Civ.P. 56(c); Brzys v. Lubanski (In re Lubanski), 186 B.R. 160, 163-64 (Bankr.D.Mass.1995). The Court must resolve any disputed facts and inferences in favor of the party opposing summary judgment. Fleet Nat'l Bank v. H & D Entertainment, Inc., 96 F.3d 532, 537 (1st Cir.1996); Aero-Fastener, Inc. v. Sierracin Corp. (In re Aero-Fastener), 177 B.R. 120, 135 (Bankr.D.Mass.1994).
A. Section 727(a)(2)
Section 727(a)(2) of title 11, U.S.Code, provides that a debtor shall be granted a bankruptcy discharge unless:
(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be, transferred, removed, destroyed, mutilated, or concealed
(A) property of the debtor, within one year before the date of the filing of the petition; or
(B) property of the estate, after the date of the filing of the petition[.]
"The burden of persuasion rests with the party . . . opposing a discharge in bankruptcy under Bankruptcy Code § 727." Commerce Bank & Trust Co. v. Burgess (In re Burgess), 955 F.2d 134, 136 (1st Cir.1992).
1. Section 727(a)(2)(A)
The Debtor argues that Count I brought under § 727(a)(2) must fail because the April 1994 transfer of the Debtor's interest in the Wilbraham Property to Mrs. Bottone fell outside of the statutorily prescribed one year period set forth in § 727(a)(2)(A). The Debtor did not file an affidavit in support of his Motion. Attached to the Motion is only a certified copy of the April 18, 1994 deed from the Debtor and Mrs. Bottone, as grantors, to Mrs. Bottone, as grantee. At the hearing, counsel for the Debtor also filed a copy of the Debtor's declaration of homestead, dated March 18, 1994. While the absence of a supporting affidavit is often fatal to allowance of a motion for summary judgment or an opposition thereto, see, e.g., Aero-Fastener, 177 B.R. at 135, the Debtor argues in the Motion that even if the Plaintiff's allegations were all true, she could not prevail as a matter of law.
In her opposition, the Plaintiff argues that genuine issues of material fact exist with respect to the § 727(a)(2)(A) count, supported by the "doctrine of continuing concealment." The Plaintiff's affidavit presents no facts which relate in any way to the § 727(a)(2) issue. However, the deed conveying the Debtor's interest in the Wilbraham Property to Mrs. Bottone recites "no monetary consideration" for the subject transfer. Further, the Debtor admitted in his Answer to the Plaintiff's Amended Complaint that (a) he had previously testified under oath to owning the Wilbraham Property jointly with Mrs. Bottone for 28 years "until he transferred his interest to his wife, subsequent to the filing of [the] Plaintiff's action"; and (b) he continues to reside at the Wilbraham Property with Mrs. Bottone. Amended Complaint ¶¶ 5, 6; Answer to Amended Complaint ¶ 1.
With the slim record provided by the parties, the Court is presented with two issues to consider. First, if legal title to a debtor's asset is transferred prior to one (1) year before the filing of a bankruptcy petition, may the intentional concealment from creditors of a secret beneficial interest in that asset within the year prior to the filing of the petition serve as a basis for the denial of the debtor's discharge under § 727(a)(2)(A)? Second, if resolution of the foregoing question would not preclude a § 727(a)(2)(A) action as a matter of law, are the pleadings and submissions referenced above sufficient to demonstrate a genuine issue of material fact with respect to the Plaintiff's claim under § 727(a)(2)(A)?
*262 Section 727(a)(2)(A) "consists of two components: an act (i.e. a transfer or a concealment of property) and an improper intent (i.e., a subjective intent to hinder, delay, or defraud a creditor). The party seeking to bar discharge must prove that both of these components were present during the one year period before bankruptcy. . . ." Rosen v. Bezner, 996 F.2d 1527, 1531 (3d Cir.1993). In order to prevail on the Motion, the Debtor must establish that even if the facts are viewed in the light most favorable to the Plaintiff, he did not within one year prior to the filing of the petition in this case commit an act or have the type of intent described in § 727(a)(2)(A).
"Concealment" is "[a] withholding of something which one knows and which one, in duty, is bound to reveal. . . ." BLACK'S LAW DICTIONARY 289 (6th ed.1990). The Plaintiff urges the Court to rely on the "doctrine of continuous concealment" in order to relate the transfer of the Wilbraham Property effected more than one year prior to the filing of the petition to the relevant statutory period under § 727(a)(2)(A). Under the "doctrine of continuous concealment," a debtor may be denied a discharge, notwithstanding the time of the debtor's transfer or original concealment of his or her interest in property, if it is established that the debtor continued to conceal that interest from creditors during the year prior to the petition filing. Rosen, 996 F.2d at 1531-32.[6] "The doctrine does not negate the `act' requirement of § 727 but merely recognizes that a failure to reveal property previously concealed can, in some circumstances, properly be considered culpable conduct during the year before bankruptcy warranting a denial of discharge." Id. at 1531.
This Court must confess some lack of reverence for that "doctrine." The statute requires that both the relevant act and the intent must be found within the year before the filing of the petition. Therefore, concealment must be proved within the year prior to case commencement. Of course, actions and intentions at earlier periods are relevant as circumstantial evidence to support findings of concealment during the statutorily prescribed one year period. But proof of the existence of the relevant act and the intent within the statutorily prescribed year is not excused because either existed at an earlier time.
By elevating circumstantial evidence to doctrinal status, one runs the risk of becoming distracted from the task of establishing the essential elements of a case under § 727(a)(2)(A). And, to the extent that the continuing concealment doctrine inordinately focuses the inquiry on a time prior to the one year period, it flies in the face of another longstanding doctrine grounded in profound policy considerations. Objections to discharge "are narrowly construed in furtherance of the Bankruptcy Code's `fresh start' policy and the claimant must show that its claim comes squarely within an" objection enumerated in Bankruptcy Code § 727(a)(2). Century 21 Balfour Real Estate v. Menna (In re Menna), 16 F.3d 7, 9 (1st Cir.1994) (concerning exceptions to discharge under § 523(a)); see also Bajgar, 104 F.3d at 498 n. 1 (relating the policy stated in Menna to objections to discharge under § 727(a)(2)). The judicial creation of a doctrine which cannot be found in the Bankruptcy Code is hardly narrow construction. Nor is it necessary. As long as the concealment occurs *263 within the statutorily prescribed one-year period, the strict terms of § 727(a)(2)(A) are met. Evidence of an act of concealment and/or the intent to conceal occurring prior to the statutorily prescribed one year period is nothing more than one source of circumstantial evidence available to prove that the act of concealment and the intent to conceal occurred within the year prior to case commencement.
Of course, it can be very difficult to prove that a debtor has concealed a "secret" beneficial property interest after conveying legal title to property. As a result, courts have looked at the surrounding circumstances to determine whether there has been a concealment. In Kauffman, for instance, the court based its finding that the debtor concealed a secret property interest on the debtor's: (1) use of the property in question as collateral for several loans he undertook; (2) continued mortgage, tax, and insurance escrow payments on the property; and (3) personal financial statements, which listed the property as one of his assets. 675 F.2d at 128.[7]
Here, the Court has been hampered by the dearth of admitted or verified allegations upon which the Court can rely. Rule 56(c) of the Federal Rules of Civil Procedure, as made applicable by Fed. R. Bank. P. 7056, requires that summary judgment be granted on a demonstration by the moving party "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The Debtor, here the moving party, has demonstrated little. He submits only the deed transferring legal title to the Wilbraham Property more than a year prior to the filing and the declaration of homestead dated a month previous thereto. Those documents are insufficient to carry the Motion. The question for the purposes of § 727(a)(2)(A) is not whether or when or to whom or for what consideration the legal title to the Wilbraham Property was transferred. The issue before the Court is whether, after the transfer and within a year prior to the filing, the Debtor concealed a secret beneficial interest in the property. As the U.S. Court of Appeals for the Third Circuit stated in Rosen:
In a situation involving a transfer of title coupled with retention of the benefits of ownership, there may, indeed, be a concealment of property. Where this is the case, the concealment is present . . . because the transfer of title represents to the world that the debtor has transferred away all his interest in the property while in reality he has retained some secret interest a secret interest of which retention of the benefits of ownership may be evidence. A legally relevant concealment can exist, however, only if there is, in fact, some secret interest in the property retained by the debtor.
996 F.2d at 1532 (footnote omitted).
Similarly, evidence that the conveyance occurred at a time of creditor pressure and that the Debtor continued to live at the property post-transfer is insufficient for the Court to rule that, as matter of law, a beneficial interest in the property was retained by the Debtor. While transfer of the legal interest in the property may be "evidence tending to show that [the debtor] did retain a secret interest pursuant to an express or tacit agreement with his wife, such as a right to reconveyance on demand or a right to live in the house rent-free, . . . [the debtor] might be living there at his wife's sufferance and be subject to eviction at will." Id. at 1532. This Court is unwilling to rule that conveyances between spouses who live together always include the retention of a secret beneficial interest by the grantor. Therefore, genuine issues of material fact remain on both sides. See id. at 1532 n. 5 *264 ("While `retention of the benefits of ownership' on the part of the debtor may support an inference and a factual finding that the debtor retained a secret interest in the property, such an inference is inappropriate on a motion for summary judgment."); Benson, 180 B.R. at 31 (where debtor did not furnish court with material "from which it could conclude indisputably that [he] did not retain certain attributes of beneficial ownership following the alleged property transfers and within the one-year reach-back period of Section 727(a)(2)(A)," debtor's motion for summary judgment was denied); see also Hooper, 39 B.R. at 327 ("the bare proof of debtors continuing to live on the property that they transferred to their son, without more, is insufficient to constitute a `continuing concealment'").[8]
Finally, the Debtor argues that his recording of a declaration of homestead, prior to a money judgment being issued in the Plaintiff's state court tort action[9] (presumably shielding the equity in the property), requires that the Court rule that he could not have had the intent to hinder, delay, or defraud creditors when the Debtor conveyed his interest to Mrs. Bottone one month later. First, the Court notes again that attention is misfocussed on the wrong period and the wrong property interest. The Debtor's intent in conveying legal title to the property more than a year before the bankruptcy filing is not determinative of whether the Debtor intended to "hinder, delay or defraud a creditor . . . within a year before the date of the filing of the petition," although it may be relevant to that issue.
Second, this Court could not, in any event, make a summary judgment ruling with respect to the Debtor's intent in recording his declaration of homestead. Issues of intent can rarely be resolved on summary judgment. Further, the Debtor made no verified averment as to the value of the property or its equity, and, curiously, the Debtor does not explain why he conveyed the property to his wife one month after the declaration of homestead if he believed that the homestead fully protected the equity in the Wilbraham Property. Clearly, there are a myriad of genuine issues of material fact that surround the Debtor's intent during the period of his declaration of homestead and the subsequent transfer of the property.
2. Section 727(a)(2)(B)
The Debtor's Motion (and Plaintiff's Affidavit) ignore the appearance of § 727(a)(2)(B) in § 727(a)(2). Section 727(a)(2)(B) is focused on the postpetition period, i.e., on the property of the estate. The Debtor argued in the Motion and at the hearing that the only event which should be analyzed in connection with § 727(a)(2) was the 1994 transfer of the Debtor's legal title to the Wilbraham property. As the Court has rejected this contention, it is clear that the Court must also consider whether there was a concealment of a retained property interest after case commencement. Since the Debtor has not even addressed the issue, summary judgment in his favor is not possible.
B. Section 523(a)(2)(A)
11 U.S.C. § 523(a)(2)(A) provides that a debtor shall not be discharged from *265 any debt "for money, property, services, or an extension, renewal, or refinancing of credit, to the extent obtained by . . . false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's or an insider's financial condition."
In the Motion, the Debtor states as follows:
[The Debtor's] corporation . . . obtained money from Plaintiff Small for providing home inspection services, and . . . [the] Debtor (or his corporation) would have receive [sic] the same fee whether or not the ultimate inspection report contained false statements. . . . Under these circumstances, it cannot be said that [the] Debtor (or his corporation) obtained money by use of the alleged false report since the money was to be paid regardless of the truthfulness of the inspection report.
Motion at 2. In essence, the Debtor is arguing that the alleged fraud here does not "squarely fit" into § 523(a)(2)(A) because the Debtor did not use false pretenses, a false representation, or actual fraud in order to obtain a "debt" for money, property, or services.
Following the Debtor's argument, the only misrepresentations that would lead to debts being declared nondischargeable under § 523(a)(2)(A) would be those employed to induce a creditor to either loan money or property to a debtor, or to provide services in advance of payment therefor. Debts constituting injuries arising from the debtors' fraudulent acts in providing goods or services could not be excepted from discharge under § 523(a)(2)(A).
However, this argument must be rejected, based on a recent First Circuit decision. In Printy v. Dean Witter Reynolds, 110 F.3d 853, 857 (1st Cir.1997), that debtor argued that a debt based on a judgment against him for fraudulent conduct could not be excepted from discharge under § 523(a)(6), only § 523(a)(2)(A). As with the case at hand, Printy did not involve fraud in connection with the obtaining of credit. Faced with the argument that only § 523(a)(2)(A) could apply, the First Circuit held that "sections 523(a)(2)(A) and (a)(6) are not mutually exclusive." Id. at 858. Implicit in the First Circuit's reasoning was that the reverse could be true; namely, that a claim based on fraud other than in connection with a credit transaction could be brought under § 523(a)(2)(A). Numerous other courts have recognized that similar debts based on fraud can be excepted from discharge under § 523(a)(2)(A). See, e.g., Lee-Benner v. Gergely (In re Gergely), 110 F.3d 1448, 1453 (9th Cir.1997); Stokes v. Ferris (In re Stokes), 150 B.R. 388, 391 (W.D.Tex.1992), aff'd, 995 F.2d 76 (5th Cir.1993); Casey v. Transport Life Ins. Co. (In re Dorsey), 162 B.R. 150, 155-56 (Bankr.N.D.Ill.1993); Corsi v. Berman (In re Berman), 154 B.R. 991, 1001-03 (Bankr.S.D.Fla.1993); Goins v. Day (In re Day), 137 B.R. 335, 340 (Bankr. W.D.Mo.1992); Bear, Stearns & Co. v. Powell (In re Powell), 95 B.R. 236, 239 (Bankr. S.D.Fla.), aff'd, 108 B.R. 343 (S.D.Fla.1989), aff'd, 914 F.2d 268 (11th Cir.1990). Accordingly, allowance of the Motion relative to the § 523(a)(2)(A) count would not be appropriate.
C. Section 523(a)(6)
Under 11 U.S.C. § 523(a)(6), any debt "for willful and malicious injury by the debtor to another entity or to the property of another entity" is excepted from discharge. In the First Circuit's recent Printy decision, the First Circuit adopted this Court's definition of the term "willful and malicious" under § 523(a)(6) to mean "an act intentionally committed, without just cause or excuse, in conscious disregard of one's duty and that necessarily produces an injury." 110 F.3d at 859 (adopted from Lubanski, 186 B.R. at 165, in turn constituting a compilation of various decisions of the bankruptcy courts of this District). However, the Printy court refined the definition, noting that the Debtor must act "`either with the intent to cause the harm complained of, or in circumstances in which the harm was certain or almost certain to result from the debtor's act."' Printy, 110 F.3d at 859 (quoting 4 Collier on Bankruptcy ¶ 523.12[2], at 523-89 (15th ed. rev.1996)).
At the hearing on the Motion, then-counsel for the Debtor argued that even with the facts viewed in the light most favorable to the Plaintiff, the Debtor's behavior was, at *266 most, reckless, not malicious. Hearing Transcript at 6-7. However, the Court disagrees. The facts set forth in the Plaintiff's affidavit (viewed with a bias to the Plaintiff) may support findings that (1) the Debtor intentionally made misrepresentations regarding the condition of the Somers property in his inspection report; (2) in conscious disregard of his duties as an inspector; (3) which misrepresentations induced the Plaintiff to buy the house; and (4) the injury suffered by the Plaintiff was "almost certain to result from the debtor's" misrepresentations. If proven at trial, those facts might fit within the standard espoused in Printy. In any event, there are, at the very least, genuine issues of material fact precluding the granting of summary judgment to the Debtor under the § 523(a)(6) count.
III. Conclusion
For the foregoing reasons, the Court denies the Motion with respect to all three counts of the Plaintiff's complaint, brought under §§ 727(a)(2)(A), 523(a)(2)(A) and 523(a)(6).
A separate order shall enter in conformity herewith.
NOTES
[1] Under Chapter 93A, § 2:
(a) Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.
(b) It is the intent of the legislature that in construing paragraph (a) of this section in actions brought under sections four, nine and eleven, the courts will be guided by the interpretations given by the Federal Trade Commission and the Federal Courts to section 5(a)(1) of the Federal Trade Commission Act (15 U.S.C. § 45(a)(1)), as from time to time amended.
Mass. Gen. Laws Ann. ch. 93A, § 2 (West 1984).
Section 9(1) of Chapter 93A provides that a consumer "who has been injured by another person's use or employment of any method, act or practice declared to be unlawful by section two or any rule or regulation issued thereunder . . . may bring an action. . . ." Section 9(3) of Chapter 93A requires that, at least thirty days prior to the filing of an action, a claimant under the chapter deliver a written demand for relief to the respondent "identifying the claimant and reasonably describing the unfair or deceptive act or practice relied upon and the injury suffered." If the claimant prevails in a civil action under § 9(3),
recovery shall be in the amount of actual damages or twenty-five dollars, whichever is greater; or up to three but not less than two times such amount if the court finds that the use or employment of the act or practice was a willful or knowing violation of said section two or that the refusal to grant relief upon demand was made in bad faith with knowledge or reason to know that the act or practice complained of violated said section two.
Id. § 9(3).
[2] Neither party has alleged whether the Debtor responded to the demand letter, or stated the contents of any such response.
[3] The pleadings before the Court do not reveal the date of the default judgment.
[4] The Plaintiff's November 21, 1996 amended complaint does not comply with Federal Rule of Civil Procedure ("FRCP") 15(a), made applicable to adversary proceedings under Federal Rule of Bankruptcy Procedure 7015. Under FRCP 15(a), a party may amend a pleading of the type to which a response is permitted as a matter of course at any time prior to service of a responsive pleading by the other party. After that time, amendment of such a pleading is allowed only by leave of the court or by written consent of the adverse party. However, at the hearing on the Motion, the Debtor's counsel assented to the addition of the § 523(a)(6) count. Therefore, this Court will treat the complaint as properly amended, so that the § 523(a)(6) count is before the Court. The § 523(a)(2)(B) and § 727(a)(4) counts raised in earlier versions of the complaint are deemed to have been waived.
[5] Although "disappearance" may have been the stated goal, "withdrawal" is the better term and more consistent with well-recognized laws of physics.
[6] See also Thibodeaux v. Olivier (In re Olivier), 819 F.2d 550, 554-55 (5th Cir.1987); Friedell v. Kauffman (In re Kauffman), 675 F.2d 127, 128 (7th Cir.1981) (under substantively identical provision of the Bankruptcy Act of 1898); Marine Midland Bank v. Portnoy (In re Portnoy), 201 B.R. 685, 695-96 (Bankr.S.D.N.Y.1996); Peerless Insurance Co. v. Benson (In re Benson), 180 B.R. 28, 31 (Bankr.D.Conn.1995); Congress Talcott Corp. v. Sicari (In re Sicari), 187 B.R. 861, 875 (Bankr.S.D.N.Y.1994); Cullen Center Bank & Trust v. Lightfoot (In re Lightfoot), 152 B.R. 141, 146 (Bankr.S.D.Tex.1993); Patton v. Hooper (In re Hooper), 39 B.R. 324, 327 (Bankr.N.D.Ohio 1984). The continuous concealment doctrine is well-recognized in this District. See Shamban v. O'Brien (In re O'Brien), 190 B.R. 1, 4 (Bankr. D.Mass.1995); Pelham Plate Glass, Inc. v. Charette (In re Charette), 148 B.R. 94, 96 (Bankr. D.Mass.1992); Nelson v. Peters (In re Peters), 106 B.R. 1, 4-5 (Bankr.D.Mass.1989); Cahillane v. MacDonald (In re MacDonald), 101 B.R. 836, 844 (Bankr.D.Mass.1989), rev'd, 114 B.R. 326, 334-35 (D.Mass.1990); see also Green v. Toy, 171 F.2d 979, 979 (1st Cir.1949) (under Bankruptcy Act of 1898).
[7] See also Olivier, 819 F.2d at 551 (debtors continued to live in and maintain house, paid property insurance, and did not pay rent to transferee); Sicari, 187 B.R. at 877 (where subject real estate was rental property, a lease was drawn up on debtor's letterhead and referred to him and his wife as the landlords; for approximately two years after property was transferred, debtor still instructed that rent checks be payable to himself); Lightfoot, 152 B.R. at 145 (where asset at issue was a sailboat which debtor transferred to his wife, court noted that "no one sails the boat without the debtor at the helm"); Charette, 148 B.R. at 96 (after transferring legal title to daughter-in-law, debtors continued to pay mortgage payments and taxes, mowed the lawn, and kept the utility bills in their names).
[8] The Debtor argues that the transfer to Mrs. Bottone was not "concealed" because it was disclosed to the Plaintiff at a prepetition deposition, in addition to having been recorded in the Hampden Registry. However, "[w]hat is critical under the concealment provision of § 727(a) is whether there is concealment of property, not whether there is concealment of a transfer." Rosen, 996 F.2d at 1532; see also Kauffman, 675 F.2d at 128 (concealment does not mean "literally concealed"); Portnoy, 201 B.R. at 696 ("the relevant inquiry for establishing a concealment under section 727(a)(2) is whether the debtor concealed his property and not whether the debtor concealed a previous transfer made outside the one year period before bankruptcy"); Charette, 148 B.R. at 96. But see MacDonald, 114 B.R. at 334-35 (U.S. District Court for the District of Massachusetts held that where debtor's control of corporation and his father's ownership of the corporation's stock were fully revealed, there was no concealment, and thus reversed the bankruptcy court's denial of the debtor's discharge); Bartlett Bank & Trust Co. v. Wolmer (In re Wolmer), 57 B.R. 128, 132 (Bankr.N.D.Ill. 1986) (awarding discharge despite a § 727(a)(2)(A) challenge because "the transaction [was] revealed at the first meeting of creditors").
[9] See In re Miller, 113 B.R. 98, 103-04 (Bankr. D.Mass.1990).
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51 F.3d 286
NOTICE: Although citation of unpublished opinions remains unfavored, unpublished opinions may now be cited if the opinion has persuasive value on a material issue, and a copy is attached to the citing document or, if cited in oral argument, copies are furnished to the Court and all parties. See General Order of November 29, 1993, suspending 10th Cir. Rule 36.3 until December 31, 1995, or further order.
Randy KAILEY, Plaintiff-Appellant,v.Robert R. GALLAGHER, Jr., William Sylvester, Paul King,Bryan Bevis, David Vela, Rebecca Tyc, and John Doe I, JamesMakespeace, Steven Gayle, Gale Norton, Linda K. Baker, BenGriego, Dennis Houghnon, and John Doe II, Glenn Gaylord,Steve Weeder, Defendants-Appellees.
No. 94-1291.
United States Court of Appeals, Tenth Circuit.
March 31, 1995.
ORDER AND JUDGMENT1
Before TACHA, LOGAN, and KELLY, Circuit Judges.
1
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); 10th Cir. R. 34.1.9. The case is therefore ordered submitted without oral argument.
2
This appeal is from an order of the district court dismissing pro se petitioner's civil rights complaint brought pursuant to 42 U.S.C.1983. Based upon a recommendation by the magistrate judge, the district court dismissed petitioner's complaint with prejudice, in part because many of the defendants are entitled to immunity and other defendants were not acting under color of state law. The district court further found that petitioner had failed to state a claim for violation of his constitutional rights. Petitioner appeals on the grounds that the district court erred in dismissing his complaint with prejudice and without leave to amend. Petitioner further alleges that the district court erred in refusing to recuse in this case. We affirm.
3
The events giving rise to this civil rights complaint relate to the investigation of the deaths of three prisoners at the Limon Correctional Facility in Limon, Colorado in 1992. Petitioner was called as a witness in the trials of the defendants in the criminal actions relating to those deaths. Petitioner alleges that because of his involvement in that action, he is in fear for his safety in the correctional facility. In response to his fears, prison officials segregated petitioner from the general population of the prison. In October 1993, petitioner signed a Waiver of Protective Custody.
4
Petitioner sought recusal of the magistrate judge and the district judge in the proceedings below. We have reviewed the record and the complaint in this case de novo, as we must in reviewing the grant of a motion for summary judgment. We agree with the district court that petitioner has failed to allege any violation of his constitutional rights. We further agree that some of the defendants are immune, others do not act under color of state law, and others were not involved in the violations alleged. Having reviewed the record, we cannot say that the district court abused its discretion in denying the motions for recusal or in denying the motions for leave to amend and other related motions. We therefore AFFIRM the dismissal by the district court for substantially the reasons stated by the magistrate judge and adopted by the district court.
5
The mandate shall issue forthwith.
1
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 the court's General Order filed November 29, 1993. 151 F.R.D. 470
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149 F.2d 601 (1945)
RICE
v.
UNITED STATES.
No. 3051.
Circuit Court of Appeals, Tenth Circuit.
May 15, 1945.
*602 H. A. Kiker, of Santa Fe, N. M. (Manuel A. Sanchez, of Santa Fe, N. M., and George R. Craig and Allen Tonkin, both of Albuquerque, N. M., on the brief), for appellant.
Howard F. Houk, U. S. Atty., of Santa Fe, N. M. (Fred E. Strine, Sp. Asst. to Atty. Gen., on the brief, for appellee.
Before BRATTON, HUXMAN, and MURRAH, Circuit Judges.
BRATTON, Circuit Judge.
C. T. Rice, Parquay Royalty Company, Inc., Parquay Operating, Inc., and Federated Acceptance Corporation were indicted in twenty-six counts. Counts one to twenty-one, inclusive, each charged the use of the mails in furtherance of a scheme to defraud, in violation of section 315 of the Criminal Code, 18 U.S.C.A. § 338; and counts twenty-two to twenty-six, inclusive, each charged the use of the mails to defraud fraud in the sale of securities, in violation of section 17 of the Securities Act, 15 U.S. C.A. § 77q.
Rice owned two patents, one relating to a revolving top building and the other to a controlled parking system. Both were adaptable for use in the operation of grocery stores. The scheme laid in the indictment was that the three corporations would be organized; that Rice would manage and control them; that one of them would acquire from him the exclusive rights in the patents in certain states; that the three corporations would constitute an integrated grocery system, constructing and operating revolving top grocery stores with the controlled parking system; that capital stock of the corporations would be sold to the public; and that money would be obtained in the sale of such stock by false and fraudulent pretenses, representations, and promises in respect to the enterprise. The false and fraudulent representations charged in the indictment concerned the number of stores which would be constructed, the volume of business being done, the financial condition of the integrated system, the profit being earned by one store in operation, the dividends which had been and would be paid, and an offer made by a grocery chain of national scope to purchase the exclusive rights under the patents for a very large sum. Omitting reference to the other defendants, Rice was found guilty on nine counts; and from the sentence imposed, he appealed.
The action of the court in admitting in evidence a letter written by H. C. Donohoe and Guy Bailey is challenged. Rice was in charge of the sale of the stock issued by the corporations, and Donohoe and Bailey, among others, were engaged in the selling of the stock under his direction. Donohoe's services terminated by a letter of resignation, and Bailey's services were also terminated. Donohoe testified in the case as a witness for the Government. Bailey was not present at the trial and did not testify. The letter of resignation was introduced in evidence in connection with the cross examination of Donohoe. No reference was made in the cross examination to the letter in question. The letter was introduced at the conclusion of the cross examination. It was written after the services of Donohoe and Bailey were terminated and at a time when they were no longer connected in any manner with the integrated business of the corporations. It was stated in the letter that its purpose was to make a record of the reasons which prompted Donohoe and Bailey to sever their connections with the organization after several weeks of conferences and discussions; that their action in severing their connections with the organization could not be considered as hasty or premature for the reason that the points at issue between Rice and them had been discussed on numerous occasions; that certain misrepresentations *603 made by Rice were the origin of sharp differences between them; and it listed the misrepresentations. They were his statement that the store at Roswell, New Mexico, did a business of ten thousand dollars on its opening day; his statement that construction of a store at Clovis, New Mexico, would begin at a certain time; his statement that more than four hundred thousand automobiles had used the parking lot connected with the store at Roswell, or an average of more than twenty-two hundred per day; his statement that Parquay had notes in excess of one hundred and forty thousand dollars representing balances due by stockholders on their stock purchases; the statement in a folder that Parquay had grown to five hundred thousand dollars in combined assets; and the statement on the face of the folder that Parquay was America's fastest growing grocery system. The letter reviewed discussions had between Rice and Donohoe and Bailey concerning the number of stores to be started, the existence of an operating deficit at the time Rice was making certain statements, and the establishment of offices in Albuquerque, New Mexico, at the expenditure of several thousand dollars. It stated that Donohoe and Bailey desired to make it a matter of record that they wanted no part in it, as they realized that those things would never pay dividends to Parquay stockholders. It made reference to "medicine show" methods of raising capital; asserted that the records when stripped of all ballyhoo and conversation would reveal the fact that changes were necessary if the business was ever to be operated on a profitable basis; and concluded by saying that if their action would serve to bring Rice to the full realization of his vital responsibility to those who had invested in Parquay, they would gladly stand the loss of his kind feelings, the loss of months of hard work, and the loss of their connection with Parquay.
The gist of the offense charged in the first twenty-one counts in the indictment is the use of the mails in furtherance of a scheme to defraud, and the gist of the offense charged in the remaining counts is the use of the mails to defraud in the sale of securities. Rosenberg v. United States, 10 Cir., 120 F.2d 935; Mitchell v. United States, 10 Cir., 142 F.2d 480. But an intent to defraud is an essential element of the offenses. Durland v. United States, 161 U.S. 306, 16 S.Ct. 508, 40 L.Ed. 709; United States v. Young, 232 U.S. 155, 34 S.Ct. 303, 58 L.Ed. 548; Hawley v. United States, 10 Cir., 133 F.2d 966; Estep v. United States, 10 Cir., 140 F.2d 40.
Fraudulent intent, as an element of crime, is often not susceptible of proof by direct evidence. More frequently than otherwise, it must be inferred from a series of acts, occurrences, and circumstances. Many circumstances developed at the trial of a case of this kind may indicate the intent and may in their totality justify the conclusion that the scheme from its beginning was tainted with a fraudulent purpose. Accordingly, in some circumstances a letter or telegram to the accused, or to another and brought to his attention, or a verbal statement made to him, calling attention to misrepresentations made or wrongful practices employed by stock salesmen or others connected with the organization or enterprise is admissible in evidence for the purpose of bringing home to him knowledge of such misrepresentations or practices and therefore bearing upon the question of intent. Lathrop v. United States, 9 Cir., 2 F.2d 497; Osborne v. United States, 9 Cir., 17 F.2d 246, certiorari denied, 274 U.S. 751, 47 S.Ct. 765, 71 L.Ed. 1332; Rice v. United States, 2 Cir., 35 F.2d 689, certiorari denied, 281 U.S. 730, 50 S.Ct. 246, 74 L.Ed. 1146.
But this letter was not of that kind. It did not purport to inform Rice of statements made or methods used by agents in the sale of stock. It charged that Rice himself had made certain misstatements and misrepresentations. Neither did it purport to bring to him information in respect of policies, methods, or conditions which indicated a lack of good faith in the integrated enterprise. It did criticize certain policies and conditions, but they were policies and conditions promulgated and carried out by Rice himself, or under his direction. They were policies and conditions with which he was familiar. But the letter carried strong inferences that the business was farcial and not conducted in good faith. The admission of the letter fails to find support in the law of evidence. Marshall v. United States, 2 Cir., 197 F. 511, certiorari denied, 226 U.S. 607, 33 S.Ct. 112, 57 L.Ed. 379; People v. Fitzgerald, 156 N.Y. 253, 50 N.E. 846; State v. Shedoudy, 45 N.M. 516, 118 P.2d 280.
It is not every error committed in the trial of a criminal case which requires reversal of the judgment. A conviction will not be disturbed on appeal where from a careful examination of the *604 whole record it is apparent that the error was not prejudicial and did not deprive the accused of a substantial right. Berger v. United States, 295 U.S. 78, 55 S.Ct. 629, 79 L.Ed. 1314; Baish v. United States, 10 Cir., 90 F.2d 988; Batson v. United States, 10 Cir., 137 F.2d 288. A minor or technical error in the admission of evidence does not warrant the granting of a new trial where the guilt of the accused is so conclusively established by other evidence that the error may be deemed to be harmless. It is only where it fairly appears that an error may have affected in a substantial degree the rights of the accused or contributed to a miscarriage of justice that the ordering of a new trial is justified. Sandquist v. United States, 10 Cir., 115 F.2d 510. But where it appears that within the range of reasonable possibility the error may have affected the verdict, the appellant is not required to show that it in fact did so. Little v. United States, 10 Cir., 73 F.2d 861, 96 A.L.R. 889.
Immediately upon the admission of the letter in evidence, the court instructed the jury in respect to the purpose for which it could be considered. After allowing an exception, the court further instructed the jury. The letter was then read to the jury, and straightway the court gave an additional instruction. Then following a motion to strike the letter and instruct the jury to disregard it, the jury were excluded from the court room. And immediately after the jury were recalled, the court gave still a further instruction, all relating specifically to the letter and the purpose for which it could be taken into consideration. The instructions included the language, "you must determine whether the facts set forth therein, and the statements, are not to be considered as calling to the attention of Mr. Rice individually, and also as an officer of the Parquay Company, the conditions related therein * * * I want to admonish you, the statements in the letter are not to be considered by you as statements of fact at all; they are merely calling to the attention of Mr. Rice individually what this man contended was the fact, giving him notice, putting him upon notice of what he contended the situation might be * * * the court wants to admonish you all again to receive the contents of the letter with care * * * it may be considered by you for the mere purpose of notice only (to) the defendant Rice, and then unless you finally believe beyond a reasonable doubt from other facts one or more of the statements therein contained are substantiated then you are to ignore the letter and the whole of its contents * * *." Instead of the admission of the letter being a mere incident occurring in the course of the trial which it is fairly apparent had no substantial effect upon the final action of the jury in reaching their verdict, the evidence was emphasized, stressed, and given prominence. The jury may well have understood that it had peculiar significance and was entitled to extraordinary weight. And they may have believed that while it could be considered only as notice to Rice, still if the statements contained in it were substantiated in some degree by other evidence, the verdict could be rested in substantial part upon it. Taking into consideration the contents of the letter, its source, and the circumstances attending its introduction in evidence, it cannot be said that the error was harmless.
Other contentions are advanced but a careful examination of them indicates that they lack merit and need not be discussed.
The judgment is reversed and the cause remanded.
| {
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} |
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[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 10-12073
________________________
D.C. Docket No. 2:05-cv-02357-SLB-RRA
CHRISTOPHER EUGENE BROOKS,
Petitioner - Appellant,
versus
COMMISSIONER, ALABAMA DEPARTMENT OF CORRECTIONS,
ATTORNEY GENERAL OF THE STATE OF ALABAMA,
Respondents - Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Alabama
________________________
(June 27, 2013)
Before BARKETT, HULL and MARCUS, Circuit Judges.
MARCUS, Circuit Judge:
Petitioner Christopher Brooks was convicted of murdering a female
acquaintance in the course of a rape, robbery, and burglary and was sentenced to
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death in Alabama state court. The issue presented by this appeal is whether
Brooks’s direct appellate counsel rendered ineffective assistance by inadequately
litigating his trial counsel’s ineffective assistance at the penalty phase of his trial.
Trial counsel presented only one witness -- Brooks’s mother -- in mitigation.
Brooks says that trial counsel should have sought out and presented more
mitigation evidence: in particular, witnesses testifying to his good character,
evidence of his moderate alcoholism, and the fact that he was intoxicated on the
night of the crime. He faults his direct appellate counsel for two alleged
deficiencies. First, his direct appellate counsel raised the ineffectiveness-of-trial-
counsel claim with regard to the failure to introduce good-character evidence, but
she did not seek out and failed to present any character witnesses herself. This
meant that Brooks was unable to show that his trial counsel’s decision not to
present character witnesses prejudiced him at trial. Second, his direct appellate
counsel did not even raise the claim that his trial counsel should have discovered
and presented evidence of his alcoholism and intoxication on the night of the
murder.
The district court denied Brooks’s 28 U.S.C. § 2254 petition, finding that the
Alabama Court of Criminal Appeals reasonably applied Strickland v. Washington,
466 U.S. 668 (1984), in rejecting this claim. The Court of Criminal Appeals held,
in relevant part, that Brooks’s trial counsel’s failings did not prejudice him during
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the penalty phase because there was no reasonable probability that the balance of
aggravating and mitigating factors, even including all of the mitigating evidence
Brooks now says should have been presented, would have weighed in favor of life
imprisonment rather than death. Consequently, his appellate counsel could not
have prejudiced Brooks during his direct appeal. After thorough review, we
conclude that this determination was reasonable and, therefore, affirm.
I.
A.
In 1993, Brooks was convicted of murder during the course of a rape,
robbery, and burglary, see Ala. Code § 13A-5-40(a)(2)-(4), for killing Jo
Campbell. The Alabama Court of Criminal Appeals summarized the underlying
facts of the case:
The evidence at trial showed that the appellant and the victim
met while working as counselors at a camp in New York state. On
December 31, 1992, the victim’s body was found under the bed in the
bedroom of her apartment in Birmingham, Alabama. She had been
bludgeoned to death, and she was naked from the waist down.
On the night before the victim’s body was found, a co-worker
of the victim’s saw the appellant enter the restaurant where they
worked and saw the victim talking to the appellant. Later that night,
the victim spoke with another friend by telephone; that friend heard a
male voice in the background and the victim told her friend that a
friend was sleeping on her living room floor.
A DNA analysis was performed on semen found in the victim’s
vagina. The results were compared with the appellant’s blood. There
was testimony that the odds of finding another person with the same
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DNA as the appellant’s and as found in the semen taken from the
victim’s body would be 1 in 69,349,000 among white persons . . . . A
latent print of the appellant’s palm was found on the victim’s left
ankle. A bloody fingerprint matching the appellant’s was found on a
doorknob in the victim’s bedroom, as were two other matching latent
fingerprints. The appellant’s thumbprints were also found on a note in
the victim’s apartment.
The evidence further showed that the appellant was seen
driving the victim’s car on the night of December 31 and that he told a
witness that he “had to fuck that girl to get that car.” The car was
found in Columbus, Georgia, where the appellant resided. Inside the
car was a package of photographs with the name “Brooks, C.” on the
package. When the appellant was arrested, he had in his possession
the victim’s car keys and her Shell Oil Company credit card, which he
had used on several occasions. He had also cashed the victim’s
paycheck and one of her personal checks. Several items were missing
from the victim’s apartment and the evidence showed that the
appellant had pawned these items at various pawnshops in Columbus.
Brooks v. State, 695 So. 2d 176, 178-79 (Ala. Crim. App. 1996) (“Brooks I”)
(footnote omitted). “The record also reflects that after searching Brooks’s
apartment, the police recovered the keys to the victim’s automobile; pawn tickets;
the victim’s AT&T answering machine; and receipts from purchases that had been
made with the victim’s Shell Oil Company credit card.” Ex parte Brooks, 695 So.
2d 184, 187 (Ala. 1997) (“Brooks II”).
At trial, the state also established several other facts. Another man, Robert
Leeper, a friend of Brooks who had traveled with him to Birmingham, was with
Brooks and the victim at the time. The police officer who found Campbell’s body
testified that he found both a portion of a baseball bat and a barbell with one end
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broken off in the apartment. Dr. Gary Simmons, the medical examiner who had
performed the victim’s autopsy, also testified. He said that the cause of death was
blunt force trauma to the head and neck. In addition, his examination revealed an
abrasion on the victim’s vagina. The prosecution’s theory of the case was that
Brooks, not Leeper, committed the murder, since the evidence demonstrated that
he had intercourse with Campbell and his bloody fingerprint was found on the
doorknob. The jury convicted Brooks of three counts of capital murder for killing
the victim during the course of a rape, during the course of a robbery, and during
the course of a burglary. Brooks v. State, 929 So. 2d 491, 494 (Ala. Crim. App.
2005) (“Brooks III”).
At the penalty phase of the trial, the state put on several witnesses to
establish the aggravating circumstance that the murder was especially heinous,
atrocious, or cruel. See Ala. Code § 13A-5-49(8). The main witness was Simmons,
who returned to the stand to describe the severe injuries to Campbell’s body. In
addition, the state admitted into evidence photographs of those injuries. Campbell
had several lacerations and bruises to her face, extensive fractures at the base of
her skull, evidence of internal bleeding into her lungs, contusions to the brain,
hemorrhaging in the eye, injuries to the neck either from blunt force trauma or
strangulation, a broken nose, a fractured jawbone, and several missing teeth, some
of which had lodged in her windpipe. In Simmons’s opinion, the injuries resulted
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from being struck five to eight times with a heavy blunt object. Simmons also
testified that the hemorrhaging and brain swelling indicated that the victim was
alive throughout at least part of the attack, and that she could have lived for
anywhere from five minutes up to several hours after the attack, although he could
not know whether or for how long she remained conscious.
Brooks’s trial counsel put on only one witness in mitigation, Brooks’s
mother, Norma Silva. Her testimony consisted mostly of basic, biographical
information, including the fact that Brooks was twenty at the time of the murder,
that Brooks’s father had no role in raising him, and that he had only one prior
criminal conviction, a petty larceny misdemeanor.1
1
The entirety of the testimony is reproduced below:
Q: Give us your name, please, ma’am.
A: Norma Silva.
Q: Where do you live?
A: Eastern part of Tennessee.
Q: Are you related to Christopher Brooks?
A: Yes, sir, I am.
Q: What is the nature of that relationship?
A: I am his mother.
Q: When was Chris born?
A: 12/13/72.
6
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In closing argument, defense counsel argued that there was enough residual
doubt so that, even though the jury had convicted Brooks, it should not recommend
Q: Where was that, please, ma’am?
A: Watertown, New York.
Q: When was the last time that you and Chris saw his father?
A: When he was two months old.
Q: How old was Chris at the end of December of this year -- of 1992, I’m sorry?
A: Twenty.
Q: Just turned twenty?
A: I believe so, yes.
Q: Has Chris ever had any prior convictions until today --
A: Yes, sir.
Q: -- with the law? What was that, please, ma’am?
A: That was petty larceny, misdemeanor.
Q: When was that?
A: Back in ’90.
Q: How old was he, if you recall, at that time?
A: Eighteen.
Q: And where was that?
A: That was in Watertown, New York.
Q: Did y’all live up there at that time?
A: Yes.
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sentencing him to death. As counsel put it, “[W]e can’t come back in a month or
six years, ten years, when you read about an electrocution in the paper and say, ‘I
lie awake at night and I wonder what happened.’ It will be too late.” Counsel
repeatedly stressed that no one could definitively know what had occurred on the
night of the murder. Finally, he emphasized that Brooks had no serious criminal
history, which was a mitigating circumstance that favored sentencing Brooks to
life imprisonment.
The jury recommended the death sentence by a vote of eleven to one.
Brooks III, 929 So. 2d at 494. The trial court found two aggravating circumstances
applied: first, the commission of the murder occurred during the course of a rape,
robbery, burglary, or kidnapping, Ala. Code § 13A-5-49(4); and, second, the crime
was especially heinous, atrocious, or cruel compared to other capital offenses, Ala.
Code § 13A-5-49(8). As for mitigating circumstances, the trial court found, based
in part on Silva’s testimony, that: Brooks had no significant history of prior
criminal activity, Ala. Code § 13A-5-51(1); and he was only twenty at the time of
the crime, Ala. Code § 13A-5-51(7). The court found no nonstatutory mitigating
circumstances. The trial court weighed the aggravating and mitigating
circumstances, found that the former outweighed the latter, and sentenced Brooks
to death.
B.
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A new lawyer -- Virginia Vinson -- was appointed to replace trial counsel.
Vinson is the attorney whose alleged ineffectiveness is the subject of the current
appeal. Vinson moved for a new trial, in part based on trial counsel’s
ineffectiveness at adequately investigating and presenting mitigating character
evidence. She did not, however, argue that trial counsel was ineffective for failing
to present evidence regarding Brooks’s intoxication and alcoholism.
The trial court conducted an evidentiary hearing at which Brooks, his trial
counsel, Kenneth Gomany and James Scott Boudreaux, and the prosecutor, Roger
Brown, testified. Both Gomany and Boudreaux were experienced lawyers who had
tried capital cases before Brooks’s trial. Gomany and Boudreaux testified that they
did not hire an investigator or a psychologist to help develop mitigation evidence
but instead conducted their own investigation. Based on his interactions with
Brooks, Gomany saw no signs that Brooks suffered from psychological or
psychiatric conditions, and neither attorney uncovered any significant mitigating
circumstances. Brooks had pointed out possible character witnesses during trial,
but Boudreaux believed that “interject[ing] character as an issue . . . would make
the proceedings ludicrous,” since the horrific nature of the crime could not be
countered by character witnesses, and bringing in character evidence would have
opened the door to cross-examination on Brooks’s prior criminal history.
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Boudreaux also explained the decision not to present character witnesses as
part of an informal deal struck after the guilt phase of the trial. The prosecutor
agreed to forego putting on “some very damaging potential testimony by the
victim’s family” as long as Brooks’s trial counsel did not introduce evidence of his
good character. Boudreaux believed that victim-impact testimony from Campbell’s
family, who were present “in mass during the trial, crying, sniffling, filling the
courtroom with themselves and their supporters,” would have “drive[n] even more
nails into the coffin in this case.” Brown, who also testified, confirmed that he
agreed that he wouldn’t “go into any of the what a wonderful person Ms. Campbell
was unless the defense puts somebody on the witness stand to sob and talk about
how wonderful the defendant is.”
Based on this testimony, the trial court found that Gomany and Boudreaux
were not ineffective. The Alabama Court of Criminal Appeals affirmed Brooks’s
conviction and sentence. Brooks I, 695 So. 2d at 184. As for trial counsel’s alleged
ineffectiveness, the Court of Criminal Appeals held that Brooks failed to satisfy
either prong of Strickland v. Washington’s test, in particular noting that “the
appellant did not inform the trial court at the hearing on his motion for new trial of
who these witnesses were and what they would testify to.” Brooks I, 695 So. 2d at
181.
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The Alabama Supreme Court affirmed the Court of Criminal Appeals’s
decision, rejecting the ineffectiveness-of-trial-counsel claim on essentially the
same rationale. See Brooks II, 695 So. 2d at 192. The United States Supreme Court
subsequently denied Brooks’s petition for certiorari. Brooks v. Alabama, 522 U.S.
893 (1997).
C.
Brooks obtained new counsel for his Rule 32 petition, which he filed in
September 1998. His petition raised several claims that his direct appellate counsel
(Vinson) had ineffectively litigated his direct appeal. Two of those claims are the
subject of this appeal. First, Vinson failed to adequately investigate and present the
claim that trial counsel was ineffective during the penalty phase. Vinson raised trial
counsel’s ineffectiveness based on the failure to put on character witnesses, but she
did not seek out and present character witnesses herself. Second, Vinson failed to
even raise the claim that trial counsel was ineffective for not offering Brooks’s
alcoholism and intoxication during the murder as a mitigating circumstance.
1.
As part of his Rule 32 petition, Brooks presented testimony from several
witnesses whom his trial counsel could have called during the penalty phase of his
trial. Roy Harbor, whose daughter had dated Brooks in the summer of 1992,
testified that Brooks was “very well mannered, . . . mature, and very outgoing, a
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nice kid.” He had never known Brooks to be violent. Shirley Harbor, Roy Harbor’s
wife, was also deposed and said that Brooks was “very polite,” never misbehaved
or acted violently, and treated her daughter “very well.” The other four witnesses --
Rosemary Brooks, the defendant’s aunt; Ronald Brooks, the defendant’s uncle;
Norma Silva, Brooks’s mother; and Edgar Silva, Brooks’s stepfather -- all had the
same impression of Brooks’s character: in his youth, Brooks had been nice, mild-
mannered, polite, and nonviolent.
Edgar Silva was the only one to express a concern regarding Brooks’s
character: “[T]he only thing I could really think that I didn’t like about him, he
liked to drink sometimes.” Nonetheless, he also remembered Brooks as nonviolent
and “even-tempered” as a child, not becoming provoked even when another child
pushed or kicked him.
2.
The same court and judge that presided over Brooks’s trial also presided
over his Rule 32 proceedings. At two evidentiary hearings, Brooks put on an expert
witness, Dr. William Beidleman, to testify to his alcoholism and the fact that he
was intoxicated on the night of the crime. Based on interviews with Brooks, a
number of tests, and his review of documentary materials, including Brooks’s past
arrests for alcohol-related offenses, Beidleman opined that Brooks exhibited
symptoms of alcoholism. Brooks scored 12 on the Michigan Alcoholism Screening
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Test, which classified him as a moderate alcoholic. In conversations with
Beidleman, Brooks had recounted that he began drinking heavily in the sixth or
seventh grade; that his drinking increased to the point where he drank every day by
the age of eighteen; and that he had experienced three to four alcohol-related
blackouts by that time.
As for the events of December 30, 1992, Beidleman had reviewed additional
evidence, including police records of their interview with Leeper and a statement
taken from Angela Turman, an acquaintance of Brooks and Leeper. Leeper said
that the two men had gone to Birmingham, that he had gotten drunk, and that he
and Brooks returned to Campbell’s apartment, where Leeper fell asleep and did not
awake or hear anything during the night. Leeper never stated expressly that Brooks
was drunk, although he did say that he and Brooks drank a case of Michelob beer.
Turman told police that Brooks had told her that he and Leeper both had gotten
drunk, returned to the apartment, and passed out. In his interview with Beidleman,
Brooks claimed that he had consensual sex with Campbell on the night of her
murder. There is no indication that Brooks expressly told Beidleman that he was
intoxicated on the night of the offense. Nevertheless, Beidleman opined that, based
on all the evidence, Brooks “was indeed acutely intoxicated” at the time of the
murder. On cross-examination, Beidleman admitted that much of his evidence
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came from Brooks’s own statements or those of individuals who received their
information from Brooks.
The state rebutted Beidleman’s testimony with its own expert, Dr. Glenn
King. King explained that Campbell’s murderer had engaged in “goal-directed
behaviors” -- he attempted to wipe down part of the apartment, concealed the body,
and stole things from the victim. He conceded that Brooks could have been
intoxicated, but opined that Brooks remained able to form the intent to kill. King
also testified that the state had administered the Wechsler Adult Intelligence Scale
to Brooks, and that Brooks was of average intelligence, almost exactly at the 50th
percentile.
3.
The Alabama trial court denied Brooks’s Rule 32 petition. It rejected his
ineffective-assistance-of-direct-appellate-counsel claims on Strickland’s
performance prong because Brooks had failed to demonstrate trial counsel’s
ineffectiveness during the penalty phase. Alternatively, the court also held that
Brooks had failed to satisfy Strickland’s prejudice prong.
On appeal, the Alabama Court of Criminal Appeals affirmed, beginning with
its finding that trial counsel performed competently. Brooks III, 929 So. 2d at 511.
Moreover, on the issue of whether trial counsel prejudiced Brooks, the Court of
Criminal Appeals concluded:
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In reviewing Brooks’s claim of prejudice under Strickland we
have independently reweighed the aggravating circumstances that
were found in this case against the alleged mitigating circumstances
that were not presented at trial. We, like the circuit court, are
confident that death was the appropriate sentence in this case and that
any of the alleged mitigating evidence that was not presented at trial
but that was presented at the Rule 32 proceedings would not have
[a]ffected the result.
Id. at 512 (citation omitted). Although the court did not expressly extend this
analysis to direct appellate counsel, the implicit conclusion must have been that, if
trial counsel performed competently and did not prejudice Brooks, then there was
no way that appellate counsel’s failings in litigating the ineffectiveness-of-trial-
counsel claim could have prejudiced Brooks during his direct appeal. Thus, the
Court of Criminal Appeals denied Brooks’s Strickland claim.
Since the Alabama Supreme Court denied certiorari review of this case,
Brooks III is the controlling state-court decision that we review pursuant to 28
U.S.C. § 2254. See Newland v. Hall, 527 F.3d 1162, 1199 (11th Cir. 2008).
D.
Brooks petitioned for a writ of habeas corpus from the United States District
Court for the Northern District of Alabama in 2005. The district court denied
Brooks’s § 2254 petition. As for direct appellate counsel’s failure to claim that trial
counsel was ineffective in not offering intoxication as a mitigating circumstance,
the district court determined that the state courts’ rejection of this claim was
15
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reasonable since competent trial counsel could have differed regarding whether to
present evidence of Brooks’s intoxication.
As for direct appellate counsel’s failure to develop additional good-character
mitigating evidence, the district court found the state court’s decision was “not
unreasonable” because there was no evidence that the failure to present character
witnesses resulted in prejudice to Brooks during the penalty phase of his trial. We
subsequently granted Brooks a certificate of appealability (“COA”) “only with
respect to Petitioner’s claim that his trial counsel were ineffective in developing
and presenting mitigating evidence during the penalty phase of his trial and that his
appellate counsel were ineffective in presenting this issue on appeal.”
II.
A.
We review de novo the district court’s denial of habeas relief pursuant to 28
U.S.C. § 2254. Wellons v. Warden, 695 F.3d 1202, 1206 (11th Cir. 2012). The
district court’s legal conclusions, and its resolution of mixed questions of law and
fact, also receive de novo review. Id. Since Brooks’s habeas petition was filed after
April 24, 1996, the effective date of the Antiterrorism and Effective Death Penalty
Act of 1996 (“AEDPA”), Pub. L. No. 104-132, 110 Stat. 1214, the following
provision governs his challenge:
An application for a writ of habeas corpus on behalf of a person in
custody pursuant to the judgment of a State court shall not be granted
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with respect to any claim that was adjudicated on the merits in State
court proceedings unless the adjudication of the claim --
(1) resulted in a decision that was contrary to, or involved an
unreasonable application of, clearly established Federal law, as
determined by the Supreme Court of the United States; or
(2) resulted in a decision that was based on an unreasonable
determination of the facts in light of the evidence presented in
the State court proceeding.
28 U.S.C. § 2254(d).
“Under AEDPA, our review of a final state habeas decision is greatly
circumscribed and is highly deferential to the state courts.” Hill v. Humphrey, 662
F.3d 1335, 1343 (11th Cir. 2011) (en banc) (internal quotation marks omitted). The
application of § 2254(d)(1)’s language is well-settled:
Under the “contrary to” clause, a federal habeas court may grant the
writ if the state court arrives at a conclusion opposite to that reached
by this Court on a question of law or if the state court decides a case
differently than this Court has on a set of materially indistinguishable
facts. Under the “unreasonable application” clause, a federal habeas
court may grant the writ if the state court identifies the correct
governing legal principle from this Court’s decisions but unreasonably
applies that principle to the facts of the prisoner’s case.
Williams v. Taylor, 529 U.S. 362, 412-13 (2000).
“Claims of ineffective assistance of appellate counsel are governed by the
same standards applied to trial counsel under Strickland.” Philmore v. McNeil, 575
F.3d 1251, 1264 (11th Cir. 2009) (per curiam) (citing Heath v. Jones, 941 F.2d
1126, 1130 (11th Cir. 1991)); see also Smith v. Robbins, 528 U.S. 259, 285 (2000).
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Under the first prong, Brooks must show that his direct appellate counsel’s
performance “fell below an objective standard of reasonableness.” Strickland, 466
U.S. at 688. Under Strickland’s second prong, Brooks must show that there “is a
reasonable probability that, but for counsel’s unprofessional errors, the result of the
proceeding would have been different.” Id. at 694. “A reasonable probability is a
probability sufficient to undermine confidence in the outcome.” Id. This inquiry
requires us to consider “the merits of the omitted claim,” Philmore, 575 F.3d at
1264-65, and we will find counsel’s performance prejudicial if “the neglected
claim would have a reasonable probability of success on appeal,” Heath, 941 F.2d
at 1132. When, as here, the claim concerns the failure to present mitigating
evidence, “we reweigh the evidence in aggravation against the totality of available
mitigating evidence,” Wiggins v. Smith, 539 U.S. 510, 534 (2003), to determine
whether the petitioner suffered prejudice.
Both prongs of the Strickland inquiry present mixed questions of law and
fact and therefore receive de novo review upon appeal. Cade v. Haley, 222 F.3d
1298, 1302 (11th Cir. 2000). However, our review of Brooks’s Strickland claims is
also subject to AEDPA deference. Thus, we do not merely evaluate whether, under
Strickland’s prejudice prong, there was a reasonable probability that the result of
Brooks’s proceeding would have been different. To grant relief, we must conclude
that no reasonable jurist could decide otherwise. If fairminded jurists could
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disagree about the correctness of the state court’s decision, then the state court’s
application of Strickland was not unreasonable, and AEDPA precludes the grant of
habeas relief. Evans v. Sec’y, Dep’t of Corrs., 703 F.3d 1316, 1326-27 (11th Cir.
2013) (en banc); cf. Harrington v. Richter, 131 S. Ct. 770, 786 (2011).
There is no dispute that the Alabama courts correctly identified the relevant
Supreme Court law: Strickland v. Washington. See Brooks III, 929 So. 2d at 497.
Therefore, Brooks must show that the Alabama Court of Criminal Appeals’s
decision was an unreasonable application of Strickland. This he cannot do.
B.
The essence of Brooks’s claim is that his direct appellate counsel
ineffectively presented or neglected to present two winning ineffective-assistance-
of-trial-counsel arguments during his direct appeal: first, that his trial counsel did
not prepare and put on character witnesses as mitigating evidence; and, second,
that his trial counsel did not discover and put on mitigating evidence that Brooks
was an alcoholic who was intoxicated on the night of the offense.
We begin and end our analysis with Strickland’s prejudice prong. Because
we must reweigh the totality of the aggravating and mitigating evidence to
determine whether Brooks suffered prejudice, Wiggins, 539 U.S. at 534, we
evaluate his two ineffectiveness claims -- concerning good-character evidence and
intoxication evidence -- together. Since Brooks has failed to establish prejudice, we
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need not, and do not address direct appellate counsel’s performance. See
Strickland, 466 U.S. at 697; Holladay v. Haley, 209 F.3d 1243, 1248 (11th Cir.
2000) (“[T]he court need not address the performance prong if the defendant
cannot meet the prejudice prong, or vice versa.” (citation omitted)).
In the Rule 32 collateral appeal, the Alabama Court of Criminal Appeals
concluded that, even if all of Brooks’s additional mitigating evidence had been
presented during the penalty phase, there was not a reasonable probability that it
would have altered the outcome of Brooks’s trial. See Brooks III, 929 So. 2d at
512. In other words, the state court determined that Brooks’s trial counsel’s
performance did not prejudice him. If Brooks’s trial counsel did not prejudice him,
then it necessarily followed that he suffered no prejudice to his direct appeal, since
he never could have succeeded in establishing trial counsel’s ineffectiveness. Since
the state court’s resolution of this claim hinged on whether Brooks suffered
prejudice at the penalty phase, the question we must answer under AEDPA’s
deferential standard is this: could a reasonable jurist conclude that there was not a
reasonable probability that the totality of Brooks’s mitigating evidence would have
altered the outcome of the penalty phase? The answer to this question is yes, and,
therefore, the Alabama Court of Criminal Appeals’s determination that he suffered
no prejudice was reasonable.
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The totality of the new mitigating evidence Brooks presented in his Rule 32
proceeding consisted of the following. Regarding Brooks’s good character, six
witnesses testified to their impression that, as a child and as a young man, Brooks
was nice, polite, and nonviolent. Four of Brooks’s family members -- his mother,
his stepfather, his aunt, and his uncle -- said that, during Brooks’s childhood, he
had been nice, was a good athlete and a people person, and did not get into fights.
An ex-girlfriend’s parents also remembered Brooks as “very well mannered, . . .
mature, and very outgoing, a nice kid,” and said that he had treated their daughter
“very well” and was never violent. As for the evidence of alcoholism and
intoxication, Brooks presented an expert witness, Dr. Beidleman, who testified that
Brooks was a moderate alcoholic and that, in Beidleman’s opinion, Brooks had
been “acutely intoxicated” at the time of the murder.
A reasonable jurist could conclude that evidence that Brooks had been a
nice, polite, and nonviolent person would not sway a jury from its recommendation
of death, especially in light of the aggravating circumstances in the case that
directly and powerfully contradicted any generic impression of Brooks’s good
nature. The trial court found two aggravating circumstances: first, the commission
of the murder occurred during the course of a rape, robbery, burglary, or
kidnapping; and, second, the crime was especially heinous, atrocious, or cruel
compared to other capital offenses. The evidence adduced in the guilt phase, and
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the jury’s verdict in finding Brooks guilty on all three counts of capital murder,
clearly established the first aggravating circumstance. See Brooks III, 929 So. 2d at
494.
The state’s presentation of medical and blood spatter experts during the
penalty-phase proceeding established the second circumstance in gruesome detail.
The state admitted into evidence photographs of the victim’s injuries, which Dr.
Simmons, the medical examiner, explained at length. The evidence indicated that
the victim was killed by five to eight blows from a heavy object, which resulted in
broken bones or fractures to her skull, jawbone, and nose, internal bleeding in her
lungs, brain contusions, and neck injuries either from blunt force trauma or
strangulation, among other injuries. The hemorrhaging indicated that the victim
was alive during part of the attack, and, based on the swelling of the brain,
Simmons believed that the victim could have lived for anywhere from five minutes
up to several hours after the attack.
In light of the extensive evidence regarding the horrific nature of this crime,
it was reasonable for the Alabama Court of Criminal Appeals to conclude that the
penalty-phase outcome would not be affected by Brooks’s acquaintances’ and
relatives’ impression of him as a nice and polite young man -- an impression that
the evidence of this murder squarely contradicted. Indeed, a reasonable jurist could
conclude that the horrific facts of the murder would have completely eviscerated
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the effect of Brooks’s character witnesses. In a similar case, Dill v. Allen, a
petitioner claimed that his trial counsel was ineffective in failing to present
character witnesses -- mostly family members -- who would have testified to his
nonviolent nature, his care for his family, and his good nature. See 488 F.3d 1344,
1360 (11th Cir. 2007). Yet, faced with evidence that merely showed “petitioner’s
good character and stability,” the panel in Dill could not find that the state court
unreasonably determined that Dill had not suffered prejudice. Id. at 1362. The
panel characterized his mitigating evidence as “weak” and was “unpersuaded by
his argument that such testimony would have surmounted the three aggravating
factors found by the trial court.” Id. at 1363 (footnote omitted).
Indeed, this case is more clear-cut than Dill: had Brooks’s attorneys
introduced additional mitigating evidence, particularly in an attempt to establish
his good character, then the prosecution would have come forward with victim-
impact evidence that would have further added to the state’s already formidable
case. The effect of this additional aggravating evidence could have been damaging
to Brooks; at the very least, the state court reasonably could have so found. In
weighing the totality of the aggravating circumstances against the totality of the
mitigating circumstances, then, we recognize that Brooks’s good-character
evidence would not have been all-upside and no-downside. The presentation of
Brooks’s character witnesses would have resulted directly in the prosecution’s
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presentation of additional evidence weighing in favor of death. Given these
circumstances, it was even more reasonable for the Alabama Court of Criminal
Appeals to conclude that Brooks had suffered no prejudice from trial counsel’s
decision not to pursue the mitigation strategy he now believes would have been
best.2
Nor would the evidence of alcoholism and Brooks’s intoxication on the
night of the offense necessarily have compelled a reasonable jurist to conclude that
the failure to present that evidence in mitigation prejudiced Brooks. As we’ve
already explained, Brooks faced a formidable obstacle in the two aggravating
factors presented by the state. To obtain relief now, he must demonstrate that being
nice and polite, while on the other hand suffering from alcoholism and being
intoxicated on the night of the offense, outweighs the brutal nature of the victim’s
death and the fact that he raped her and fled with many of her possessions.
Yet Brooks’s best presentation of the alcoholism and intoxication evidence
was hardly compelling and, in fact, was called into substantial question by both the
2
Brooks places great weight on the fact that both sides appear to have misunderstood the law on
victim-impact evidence, and that a “strategic decision is unreasonable if it is based on a failure to
understand the law.” Hardwick v. Crosby, 320 F.3d 1127, 1163 (11th Cir. 2003). It is true that
both the prosecutor and defense counsel seemed uncertain about the limits of Payne v.
Tennessee, 501 U.S. 808 (1991), and whether victim-impact evidence was permissible only to
rebut mitigation evidence of the defendant’s good character. However, while the failure to
understand Payne may be relevant to Strickland’s performance prong, what matters for the
prejudice prong is the end result of that misunderstanding. And the result, in this case, was that
the prosecution actually withheld victim-impact evidence it could have presented during the
penalty phase, and which it would have presented had Brooks’s counsel offered all of the
additional mitigating evidence that is the subject of this appeal.
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evidence at trial and the state’s rebuttal expert. The most that the jury and
sentencing judge could have gleaned from Dr. Beidleman’s testimony was that
Brooks was a moderate alcoholic, and that he was intoxicated on the night of the
murder. Moreover, Beidleman did not even testify that Brooks was so intoxicated
that he was entirely incapable of forming the necessary intent to render him
culpable. Rather, Beidleman opined that Brooks’s “ability to plan and think
rationally was profoundly impaired, if his alcohol intoxication and ingestion is
accurate as we’ve described. . . . [H]e would have [had] difficulty engaging in goal
directed behavior,” and would have exhibited “impulsivity, poor planning, poor
judgment, and poor cognitive organization, poor thinking skills.”
In fact, there were strong reasons not to credit Beidleman’s account. For one
thing, he admitted on cross-examination that most of his information came from
Brooks himself or from people who received their information from Brooks. More
importantly, the extrinsic evidence presented during the guilt phase and during the
penalty phase directly contradicted Beidleman’s opinion that Brooks had been so
intoxicated that he could not engage in goal-directed behavior. In his interview
with Beidleman, Brooks admitted to having had sexual intercourse with the victim,
which the physical evidence confirmed. Furthermore, the evidence presented
during the guilt phase indicated that Brooks had the presence of mind to steal the
victim’s car, her credit card, personal checks, and a paycheck. See Brooks I, 695
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So. 2d at 179. Brooks also had taken several personal items from Campbell’s
apartment and pawned them, id., and a search of his apartment turned up
Campbell’s answering machine, the keys to her car, and receipts of purchases
made with her credit card, Brooks II, 695 So. 2d at 187.
In addition, had Brooks offered Beidleman as an expert witness, the state
would have rebutted that presentation with its own expert, Dr. King. King would
have given the jury further reason to doubt Beidleman’s depiction of Brooks. As
King recounted, the trial testimony had shown that the victim’s body had been
hidden underneath the bed, the bed had been made, and some of the blood at the
scene had been wiped down -- all of which indicated an effort to eliminate or
conceal evidence of the crime. When Brooks was arrested by the police, he gave a
twenty-two-page statement recounting the night of Campbell’s murder. These
circumstances led King to conclude that, “if [Brooks] were intoxicated at the time
of the offense, which I think is a possibility, it certainly did not rise to the level
where it impaired his memory to such an extent that he could not recall what took
place,” and that Brooks retained “the ability to form an intent” and engage in goal-
directed behavior. King’s testimony would also have added a new fact to the
weight of evidence in aggravation: the state had administered an intelligence test to
Brooks, which revealed that he was of average intelligence. As panels of this Court
have suggested before, a petitioner’s “average to above-average intelligence” could
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undercut the rest of his mitigation case. See Suggs v. McNeil, 609 F.3d 1218, 1231
(11th Cir. 2010); Grayson v. Thompson, 257 F.3d 1194, 1227 (11th Cir. 2001).
Indeed, we have repeatedly stressed that evidence of intoxication or
alcoholism is a double-edged sword that itself could harm a petitioner’s case. See
Housel v. Head, 238 F.3d 1289, 1296 (11th Cir. 2001). A panel of this Court has
gone as far as saying that a “history of excessive alcohol and drug use” is not even
“evidence in mitigation of the death penalty,” and that “admission of some of this
evidence might have been harmful to [petitioner’s] case.” Waldrop v. Jones, 77
F.3d 1308, 1313 (11th Cir. 1996); see also Suggs, 609 F.3d at 1231 (“As we have
repeatedly recognized, evidence of drug and alcohol use is often a two-edged
sword that provides an independent basis for moral judgment by the jury.” (internal
quotation marks and citations omitted)). In this case in particular, the evidence of
alcoholism or intoxication might well have seemed inconsistent with trial counsel’s
penalty-phase argument, which focused on any residual doubt that the jury had
regarding Brooks’s guilt. While an intoxication-mitigation strategy attempts to
lessen the defendant’s culpability for an act he concededly committed, a residual-
doubt strategy depends on the defendant maintaining his innocence. See Hubbard v
Haley, 317 F.3d 1245, 1260-61 (11th Cir. 2003). That Brooks’s intoxication
evidence could have blunted the force of his residual-doubt argument is merely
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another way in which the new mitigating evidence could have hurt Brooks as
easily as it could have helped him.
In contrast to this case, past petitioners who have overcome AEDPA
deference on a Strickland claim have made far more compelling showings that
their lawyers missed powerful mitigating evidence. In Porter v. McCollum, for
example, defense counsel failed to conduct a thorough investigation of the
petitioner’s background and did not uncover the following mitigation evidence:
Porter served heroically in two of the most critical and horrific battles of the
Korean War; he struggled to readjust to normal life upon returning from the
conflict; he suffered from physical abuse as a child; and he had a brain
abnormality, difficulty reading and writing, and limited schooling. 558 U.S. 30, 41
(2009).3 The Supreme Court found the Florida Supreme Court’s finding that Porter
suffered no prejudice to be unreasonable; “the relevance of Porter’s extensive
combat experience [wa]s not only that he served honorably under extreme hardship
and gruesome conditions, but also that the jury might [have] f[ound] mitigating the
intense stress and mental and emotional toll that combat took on Porter.” Id. at 43-
44. In Wiggins, the petitioner showed that his trial counsel had missed evidence of
severe physical and sexual abuse that he suffered at the hands of his mother and
3
Porter postdates the state-court decision in this case, and therefore could not in any event be the
basis to reverse the state court’s decision. See Williams, 529 U.S. at 412 (“clearly established
Federal law” under AEDPA consists of the holdings of the Supreme Court’s “decisions as of the
time of the relevant state-court decision”). We cite it merely to confirm the reasonableness of the
Alabama Court of Criminal Appeals’s application of Strickland in this case.
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later his foster parents. See 539 U.S. at 516-17 (Wiggins’s mother left the children
home alone for days, forcing them to beg for food and to eat paint chips and
garbage; she beat the children and had sex with men while the children slept in the
same bed; in one incident, she forced Wiggins to touch a hot stove burner,
resulting in hospitalization; Wiggins’s foster father and siblings molested and
raped him). The Court found this mitigating evidence to be “powerful,” id. at 534,
and noted that it “contained little of the double edge we have found to justify
limited investigation in other cases,” id. at 535. Finally, in Collier v. Turpin, a case
that Brooks cites as a comparison, the petitioner presented much more substantial
evidence of good character, including evidence based on specific acts rather than
more generalized impressions. See 177 F.3d 1184, 1200 n.20 (11th Cir. 1999)
(Collier worked from an early age to support himself, his aunt, and his uncle; he
was in the army, then returned home to take care of his aunt while she was dying
of cancer; he was a devoted husband and father and worked hard to provide for his
family; shortly before committing his crime, he lost his job; Collier heroically
attempted to save the life of a motorist who had gotten into an accident).
In sum, Brooks has not met his burden of showing that the balance of
aggravating and mitigating factors would lead all reasonable jurists to conclude
that he suffered prejudice during the penalty phase of his trial. On one side of the
balance, the state presented extensive aggravating evidence during the penalty
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phase of Brooks’s trial, and it would have presented both additional victim-impact
evidence and Dr. King’s testimony. On the other side of the balance, Brooks could
have presented six witnesses, who would have said that he was nice, polite, and
nonviolent as a young man; and Dr. Beidleman, who would have testified that
Brooks was a moderate alcoholic and was intoxicated on the night of the offense.
In light of the strength of the state’s aggravating evidence, a reasonable jurist could
conclude that there was no reasonable probability that Brooks’s best possible
mitigation presentation would have altered the outcome of his penalty phase
proceeding. It logically follows that a reasonable jurist could conclude that Brooks
suffered no prejudice during his direct appeal on account of direct appellate
counsel’s alleged failings in arguing this ineffectiveness-of-trial-counsel claim.
Consequently, we affirm the district court’s denial of habeas relief.
AFFIRMED.
30
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} |
679 N.E.2d 414 (1997)
287 Ill. App.3d 942
223 Ill.Dec. 229
BENOY MOTOR SALES, INC., a corporation, Borg Pontiac-GMC, Inc., a corporation, Conlon-Collins Ford, Inc., a corporation, Fraher Ford Sales, a corporation, Lynn Chevrolet-Buick, Inc., a corporation, Norem Buick Co., Inc., a corporation, Sawicki Chevrolet-Cadillac, Inc., a corporation, S.P. Bradley Motor Company, a corporation, Suburban Buick Company, a corporation, and Wolf Chevrolet Sales, Inc., a corporation, Plaintiffs-Appellants,
v.
UNIVERSAL UNDERWRITERS INSURANCE COMPANY, a corporation, Defendant-Appellee.
1-96-0536.
Appellate Court of Illinois, First District, Fourth Division.
April 10, 1997.
Rehearing Denied May 12, 1997.
*415 Law Offices of Patrick A. Murphy (Patrick A. Murphy, Robert R. Dlugajczyk, of counsel), Chicago, for plaintiffs-appellants.
Robert J. Bates, Jr., Kathleen H. Jensen, Bates, Meckler, Bulger & Tilson, Chicago, for defendant-appellee.
John S. Vishneski, III, David J. Poirier, Keck, Mahin & Cate, Chicago, Eugene R. Anderson, Michael R. Magaril, Michael S. Gurland, (Todd D. Robichaud, Anderson, Kill, Olick & Oshinsky, P.C., New York City, Amy R. Bach, of counsel, San Francisco, CA), for Amicus Curiae United Policyholders.
Presiding Justice WOLFSON delivered the opinion of the court:
Our national desire to clean up polluted sites has produced a side industry that, in turn, creates a fertile ground for litigation the resolving of coverage disputes between insured polluters and their insurance companies. This is one of those cases.
The plaintiffs are 10 automobile dealerships (Dealerships). They sought a declaratory judgment that would require Universal Underwriters Insurance Company (Universal) to defend and indemnify them against various claims brought first by the Illinois Environmental Protection Agency (IEPA), then by the United States Environmental Protection Agency (USEPA), concerning the same polluted site. The IEPA filed a lawsuit. The USEPA did not.
The trial court partially granted and partially denied the Dealerships' motion for summary judgment. That denial creates the major issues on appeal.
The trial court found the actions brought against the dealerships were separate and distinct. That meant Universal would not be responsible for any defense costs related to the USEPA administrative claim. It also led the trial court to separate consideration of "source removal" of the pollution from the soil and cleanup of the groundwater. Those decisions and other matters determined by the trial court lead us to reverse and remand *416 this cause to the trial court for further proceedings.
The plaintiffs are 10 automobile dealerships. They are Benoy Motor Sales, Inc. (Benoy); Borg Pontiac-GMC, Inc. (Borg); Conlon-Collins Ford, Inc. (Conlon); Fraher Ford Sales (Fraher); Lynn Chevrolet-Buick, Inc. (Lynn); Norem Buick Co., Inc. (Norem); Sawicki Chevrolet-Cadillac, Inc. (Sawicki); S.P. Bradley Motor Company (S.P. Bradley); Suburban Buick Company (Suburban); and Wolf Chevrolet Sales, Inc. (Wolf). Universal Underwriters Insurance Company is the defendant.
The Dealerships were solicited for their used crank case oil. Other than Lenz Oil, the record does not state who solicited the Dealerships' oil. The Dealerships sold some of this used oil to Lenz Oil.
Sometime between 1977 and 1985, the Dealerships purchased broad coverage insurance policies from Universal. The policies were called "Unicover" policies. The policies were an amalgam of separate policy types, such as general liability, fire, crime, property, and uninsured motorist policies. The policies included one or two types of umbrella coverage protecting the business or an individual.
Universal issued to the dealerships three types of Unicover policies. One policy was used generally between 1975 and 1980 (Unicover), a second between 1980 and 1982 (Unicover II), and a third after 1982 (Unicover III).
In 1985 the IEPA filed suit in Du Page County seeking recovery for any costs incurred because of the alleged release of hazardous substances at the Lenz Oil facility. The IEPA identified the Dealerships as potentially responsible parties (PRPs) but did not name them as parties in the lawsuit. In the fall of 1987, the IEPA sent notices to the Dealerships informing them that they were PRPs. This was the Dealerships' first notice of the problem.
In November 1987, Universal wrote the Dealerships. In its letters, Universal reserved its right "to deny coverage, to commence a declaratory judgment action, or to condition its defense obligation on a later judicial determination of its obligation" in this matter.
On March 24, 1988, the IEPA amended its complaint and named the Dealerships as defendants in the suit. On March 30, 1988, several of the Dealerships, while denying fault, joined a Partial Consent Decree. The Decree provided that the named Dealerships reimburse Illinois for costs expended in immediate removal activity at the Lenz Oil site.
The Decree covered "Source Removal" at the site but did not cover "Groundwater Costs." The Decree defined "Source Removal" as including all costs except "Groundwater Costs." "Groundwater Costs" included all costs associated with a program of groundwater remediation at the site, including costs to develop a groundwater monitoring plan, implementation of this plan, and remedial action for groundwater contamination.
On April 22, 1988, Universal filed an action for declaratory relief in Cook County. Universal asked the trial court to determine its rights in regard to its possible duties to defend and indemnify the Dealerships. Universal claimed that it owed no duties to the Dealerships in regard to any costs they incurred relating to the clean up of the Lenz Oil site. This action was dismissed for want of prosecution on April 14, 1989. Universal did not reinstate it.
In September 1989, the USEPA and the IEPA joined with certain of the Dealerships in an Administrative Order. The Order required a Remedial Investigation and Feasibility Study (RI/FS) to determine how to clean up the groundwater at the Lenz Oil site.
On June 29, 1990, the Dealerships filed a complaint for declaratory judgment. The Dealerships sought a determination that the policies they had purchased from Universal covered all costs and payments relating to the clean up of the Lenz Oil site.
On October 5, 1995, the trial court entered a memorandum and judgment order. The trial court separated the issues concerning source removal at the Lenz Oil site from those concerning cleaning groundwater under the surface. The trial court determined *417 that Universal had a duty to defend against and indemnify the Dealerships for matters relating to source removal, the subject of the Du Page County consent decree. The trial court found that Universal was not responsible for costs covering any period where a particular Dealership did not have an active policy and apportioned the damages accordingly.
The trial court found that no suit had been filed in relationship to the groundwater phase of the cleanup and that the Dealerships had incurred no liability for those costs. The trial court held Universal had no duty to defend and no present duty to indemnify the Dealerships in regard to the groundwater clean up, since "the plaintiffs have not yet incurred any liability for groundwater contamination."
The Dealerships appeal. There is no cross-appeal.
DECISION
Our review of the trial court's rulings on the Dealerships' motion for summary judgment is de novo. Outboard Marine v. Liberty Mutual Insurance Co., 154 Ill.2d 90, 102, 180 Ill.Dec. 691, 607 N.E.2d 1204 (1992).
1. The duty to defend the Dealerships in the USEPA administrative proceeding.
First, we address the trial court's determination that this case involves two separate proceedingsthe IEPA lawsuit and the USEPA's administrative action.
The trial court held: "The proceeding brought by the federal government is not a continuation of the Illinois lawsuit but is a separate enforcement action." Then, applying Lapham-Hickey Steel Corporation v. Protection Mutual Insurance Co., 166 Ill.2d 520, 211 Ill.Dec. 459, 655 N.E.2d 842 (1995) retroactively, the trial court held that since no USEPA lawsuit was filed against the Dealerships for cleanup of the groundwater there was no duty to defend the USEPA claim or pay defense costs related to that claim.
We agree that Lapham-Hickey's requirement of a lawsuit to trigger the insurance company's duty to defend is to be applied retroactively. See Fruit of the Loom, Inc. v. Travelers Indemnity Co., 284 Ill. App.3d 485, 496, 219 Ill.Dec. 770, 672 N.E.2d 278 (1996); Forest Preserve District of Du Page County v. Pacific Indemnity Co., 279 Ill.App.3d 728, 734, 216 Ill.Dec. 245, 665 N.E.2d 305 (1996).
Where we part company with the trial court is in its determination that we are dealing with two separate and distinct enforcement actions. We find one continuing action. For that reason, Lapham-Hickey does not apply.
The three Unicover umbrella policies at issue in this case provide broad coverage for property damage "caused by an occurrence." The trial court correctly found the policies required Universal to defend and indemnify the Dealerships for certain costs relating to settlement of the IEPA's Du Page County lawsuit. That finding has not been challenged on appeal by Universal. It becomes the law of the case. See Wolfe v. Industrial Comm'n, 138 Ill.App.3d 680, 686, 93 Ill.Dec. 179, 486 N.E.2d 280 (1985). Whether Universal had notice of the settlement before it was entered into, a fact the record does not address, does not matter.
The lawsuit that Universal had a duty to defend was directed at the polluted soil and the tainted groundwater. It made no distinction between the two. It was the same "occurrence." The consent decree covered only the soil. Groundwater cleanup issues were expressly reserved for future action. That did not extinguish Universal's duty to defend. Once triggered, that duty was continuing, and it did not go away just because Universal chose to ignore it. See Associated Indemnity v. Insurance Company of North America, 68 Ill.App.3d 807, 821, 25 Ill.Dec. 258, 386 N.E.2d 529 (1979).
In fact, in one of the more puzzling aspects of this case, Universal filed a complaint for declaratory judgment on April 22, 1988, seeking a determination that it owed no duty to defend or indemnify because of claims arising from the pollution at the Lenz site.
Universal's complaint attached the IEPA's Du Page County complaint against the Dealerships, but makes no mention of the consent decree. The decree had been signed on *418 March 30, 1988-22 days before Universal filed its complaint. Universal did not pursue its declaratory judgment action. It was dismissed for want of prosecution on April 14, 1989. That was the end of it. This case began when the Dealerships filed their lawsuit on June 29, 1990.
We find that Universal's breach of its duty to defend the IEPA's Du Page County lawsuit is equally applicable to the USEPA's administrative action. (We note, in passing, that the IEPA joined in the administrative order.) Universal is responsible, then, for any of the Dealerships' defense costs associated with the USEPA's claim, whether they result from surface soil cleanup or groundwater cleanup. The Dealerships should be given an opportunity to describe the legal services rendered and the amounts charged as a result of paying for the defense of both the IEPA and USEPA claims.
2. The extent of Universal's liability with regard to the IEPA's lawsuit and the consent decree.
The trial court found that Universal is obligated to pay to each dealer only that part of the settlement amount and defense costs which relate to shipments of oil that occurred while an insurance policy was in effect. Shipments made during gaps in coverage would not be included in the recovery.
We do not agree. True, there were gaps in coverage. But these policies anticipated the continuing nature of pollution damage. The Unicover III policy, for instance, said: "All injury arising out of continuous or repeated exposure to substantially the same general conditions will be considered as arising out of one occurrence."
Environmental pollution does not stop and start in discrete time periods. When pollutants are released or discharged the damage is immediate. There is a continuing process. If we were to pour black ink into white milk we could not find a time when the coloring process did not occur.
"Under this theory, property damage is deemed to have `occurred' continuously for a fixed period, and every insurer on the risk at any time during the trigger period is jointly and severally liable to the extent of their policy limits[.]" U.S. Gypsum Co. v. Admiral Insurance Co., 268 Ill.App.3d 598, 644, 205 Ill.Dec. 619, 643 N.E.2d 1226 (1994).
A continuous exposure of pollutants is the kind of occurrence envisioned by third-party liability policies. See United States Fidelity & Guaranty Co. v. Wilkin Insulation Co., 144 Ill.2d 64, 76, 161 Ill.Dec. 280, 578 N.E.2d 926 (1991).
We believe the analogy to Zurich Insurance Co. v. Raymark Industries, Inc., 118 Ill.2d 23, 112 Ill.Dec. 684, 514 N.E.2d 150 (1987), is apt. Zurich dealt with bodily injury incurred by people inhaling asbestos fibers. The Supreme Court said:
"`Bodily injury' takes place at or shortly after the time a claimant was exposed to asbestos and continues throughout a claimant's exposure to asbestos. Thus, an insurer that was on the risk during the time the claimant was exposed to asbestos must provide coverage." Zurich, 118 Ill.2d at 47, 112 Ill.Dec. 684, 514 N.E.2d 150.
We remand this part of the case to the trial court for reassessment of the amount Universal is to pay each dealer as a result of the settlement with IEPA. Coverage should not be excluded for any dealer insured by Universal while the pollution process was occurring.
3. Defense and Indemnity costs with regard to the administrative order obtained by the USEPA.
The trial court held that as of October 5, 1995, "the plaintiffs have not yet incurred any liability for groundwater contamination," citing Outboard Marine Corporation, 154 Ill.2d 90, 180 Ill.Dec. 691, 607 N.E.2d 1204. The Dealerships' complaint seeking a declaratory judgment regarding the duty to indemnify due to the USEPA claim was dismissed with leave to reinstate.
We conclude that the complaint should not have been dismissed. The Dealerships incurred substantial expenses for remedial and feasibility studies at the Lenz site. Those are not defense costs. Those expenses are damages incurred as a result of a the Dealerships' response to a government-ordered *419 cleanup. The word "damages," in this environmental setting, should be given a broad reading that brings the payments within policy coverage. Outboard Marine, 154 Ill.2d at 116-17, 180 Ill.Dec. 691, 607 N.E.2d 1204.
True, in this kind of case the final extent of the Dealerships' damages may not be known until some time in the future. But the purpose of this kind of declaratory judgment action is to determine the legal rights and obligations of the parties to the contract. Bank of Chicago-Garfield Ridge v. Park National Bank, 237 Ill.App.3d 1085, 1096, 179 Ill.Dec. 240, 606 N.E.2d 72 (1992). That can be done now.
We therefore reverse the dismissal of the indemnity action related to the USEPA claim and remand for consideration consistent with the views expressed in this opinion.
CONCLUSIONS
The trial court's order denying in part the Plaintiffs' renewed motion for summary judgment is reversed and remanded for proceedings consistent with this opinion. The trial court's order dismissing with leave to reinstate that part of the Plaintiffs' amended complaint for declaratory judgment regarding the duty to indemnify for the USEPA claim is reversed and remanded for proceedings consistent with this opinion.
REVERSED AND REMANDED WITH DIRECTIONS.
McNAMARA and BURKE, JJ., concur.
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323 F.2d 380
Joseph J. DUPKUNIS, Appellant,v.Anthony J. CELEBREZZE, Secretary of Health, Education and Welfare, United States of America.
No. 14260.
United States Court of Appeals Third Circuit.
Argued May 7, 1963.
Decided October 9, 1963.
W. J. Krencewicz, Shenandoah, Pa., for appellant.
David J. McCarthy, Jr., Dept. of Justice, Washington, D. C. (Joseph D. Guilfoyle, Acting Asst. Atty. Gen., Drew J. T. O'Keefe, U. S. Atty., Morton Hollander, Attorney, Department of Justice, Washington, D. C., on the brief), for appellee.
Before McLAUGHLIN and FORMAN, Circuit Judges, and COOLAHAN, District Judge.
McLAUGHLIN, Circuit Judge.
1
The appeal here is from the decision of the district court holding that there was substantial evidence to support the final determination by the Secretary of Health, Education and Welfare that claimant-appellant (claimant) was not entitled to disability benefits under the Social Security Act, 42 U.S.C.A. § 401 et seq.
2
Claimant's application to establish a period of disability under Section 216(i) of the Act, 42 U.S.C.A. § 416(i), was filed on December 23, 1959. His application for disability benefits under Section 223, 42 U.S.C.A. § 423, was filed on September 14, 1960. In both applications the alleged disability impairment was stated to be anthracosilicosis and the date upon which claimant became unable to work was May 16, 1959. The applications were denied initially and upon reconsideration. A hearing was held at claimant's request on August 11, 1961.
3
The evidence established the following facts: Claimant is a 52 year old man with a sixth grade education. For 29 years he worked inside anthracite coal mines cutting coal with hand tools and explosives, and timbering. In 1953 he left the mines and went to work for Bethlehem Steel Company. After a few months, however, he was laid off and returned to work in the mines until May 20, 1955 when he left upon the advice of his doctor and again obtained employment with Bethlehem Steel.
4
In September of 1957 claimant was laid off at Bethlehem Steel because of lack of work. While employed by Bethlehem he had lost no time because of illness. However, since his lay-off in 1957 he has sought no other work.1 Claimant said in a 1960 interview with a Bureau field representative that after his lay-off in 1957 he felt he was able to do light work, but at the time of the interview, three years later, he felt unable to do any work. In explanation to the hearing examiner claimant stated "I didn't look because there was no place to look for it as far as that goes."
5
He applied for and received unemployment insurance in 1957, which continued until his eligibility ran out in 1959. On May 16, 1959 he was found to be totally disabled due to anthracosilicosis by the Pennsylvania Bureau of Workmen's Compensation and was awarded compensation.2
6
The medical evidence before the hearing examiner3 disclosed that claimant had two impairing conditions: anthracosilicosis and a lumbosacral sprain.4 The area of disagreement involved the degree of severity and extent of impairment found by claimant's private physician and those of the other doctors. In determining the extent of claimant's physical impairment, as he was required to do,5 the hearing examiner acknowledged that the evidence showed that claimant had some musculo-skeletal and pulmonary impairments. He concluded, however, that "although the claimant's condition of anthracosilicosis has no doubt resulted in some shortness of breath and other complaints, pulmonary function studies, chest X-rays, and exercise tolerance testing did not show such a loss of respiratory function as would continuously prevent the claimant from engaging in any substantial gainful activity." In reference to the impairment of claimant's musculoskeletal system (back condition and alleged arthritis of hands, fingers and left arm) the hearing examiner found that the complaints "were not in keeping with the objective medical findings of record, such as X-rays and clinical findings delineating loss or restriction of motion of the various joints." The examiner concluded that although these impairments prevent claimant from performing heavy labor they had not so affected his remaining capacity for "weight-bearing, walking, standing, sitting, stooping, grasping, lifting, reaching and bending" so as to continuously prevent him from engaging in any substantial gainful activity.
7
We have carefully examined the medical reports in the record and find no need to detail them here. The examiner's findings as to the severity of claimant's impairments are based upon his evaluation of the contradictory medical evidence and are soundly supported by the great preponderance of the evidence.
8
With respect to the second aspect of the test for disability, we find that there is substantial evidence to support the Secretary's determination that claimant's impairments did not result in his inability to engage in any substantial gainful activity. It is well settled that in order for a claimant to sustain the general burden of proof of his disability required by the Act he need not establish a complete absence of any opportunity for substantial gainful employment.6 The claimant's statutory obligation is said to be judged in a "practical way" in the context of the Act and the manner in which, of necessity, it must be administered with informality and in great volume.7 It is clear, however, that he must at least demonstrate that he is unable to do his former work.
9
There is no question that claimant cannot follow his former occupation as a coal miner. However, we do not believe that he has shown an inability to do work of the character he performed at Bethlehem Steel.
10
Claimant's work experience with Bethlehem Steel appears to have been quite varied for he states that he did "25, 50 different kinds of jobs there." Initially, in 1953 his work involved manual cleaning jobs that were designed for him to "get acquainted with the place." He then moved on to work as a "swing grinder," a job that involved swinging a large grinding wheel along the steel in order to remove the cracks. Finally, claimant was put on the radiac machines and saws which were used for cutting steel. In this job, the steel was brought to his machine and placed in it by means of an overhead crane and claimant then cut it to the requisite size. The cut pieces were removed by either crane or helper, so that claimant's duties were restricted to "setting up" the saws and then sitting and cutting the lengths as the steel was brought to him. The record indicates that claimant's work at Bethlehem Steel when he returned there in 1955 consisted primarily of operating these saws.
11
Claimant testified at the hearing that his breathing did not interfere with his work at Bethlehem Steel at the time he was laid off in September 1957. He contended, however, that between that date and May 16, 1959, when he became disabled, both his back and respiratory conditions became worse so that he could no longer perform such work.
12
The difficulty we find with his position is that the objective medical evidence does not confirm his testimony of subjective ailments. The examiner's findings with respect to the severity of his impairments, noted above, considered against the background of work experience which claimant has had lead us to conclude that claimant has not sustained his burden of proving that, at the very least, his former type of employment was no longer open to him.
13
The judgment of the district court will be affirmed.
Notes:
1
This factor may be of some significance on the question of whether claimant has met his burden of proving disability. See e. g., Adams v. Flemming, 276 F.2d 901, 904, footnote 3 (2 Cir., 1960); Gotshaw v. Ribicoff, 307 F.2d 840, 845 (4 Cir., 1962)
2
This determination by a state agency is, of course, not binding on the Secretary
3
The decision of the hearing examiner became the final decision of the Secretary when the Appeals Council denied claimant's request for review on December 1, 1961. See Goldman v. Folsom, 246 F.2d 776, 778 (3 Cir., 1957)
4
Claimant attributes his back condition to a "back injury" he suffered when he was caught in a mine fall in 1945
5
"`The test for disability consists principally of two parts: (1) a determination of the extent of the physical or mental impairment and (2) a determination whether that impairment results in an inability to engage in any substantial gainful activity'." Hodgson v. Celebrezze, 312 F.2d 260, 263 (3 Cir., 1963); see also Farley v. Celebrezze, 315 F.2d 704 (3 Cir. 1963); Klimaszewski v. Flemming, 176 F.Supp. 927 (D.C.E.D.Pa. 1959)
6
See, e. g., Hodgson v. Celebrezze, supra; Jarvis v. Ribicoff, 312 F.2d 707, 710 (6 Cir., 1963); Butler v. Flemming, 288 F. 2d 591, 595 (5 Cir., 1961)
7
Butler v. Flemming, supra
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951 F.2d 365
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.Paul Melvin WATSON, Defendant-Appellant.
No. 89-50568.
United States Court of Appeals, Ninth Circuit.
Submitted Nov. 4, 1991.*Decided Dec. 20, 1991.
Before FARRIS, PREGERSON and DAVID R. THOMPSON, Circuit Judges.
1
MEMORANDUM**
2
Paul Watson was found guilty in a bench trial of six counts of unarmed and armed robbery in violation of 18 U.S.C. §§ 2113(a) and 2113(a)(d), and three counts of using a firearm during the commission of a violent crime in violation of 18 U.S.C. § 924(c). On each of the six counts of robbery, Watson received a sentence of 262 months, to run concurrently. This sentence reflects enhancement because of the defendant's undisputed status as a "career offender" under the Sentencing Guidelines. Sentencing Guidelines § 4B1.1, implementing 28 U.S.C. § 994(h). Watson received a five year consecutive sentence on each firearm count, raising his total period of incarceration to 442 months, or thirty-six years and ten months. The five year consecutive firearm sentence is mandatory. 18 U.S.C. § 923(c).
3
Watson appeals the imposition of the firearm sentences on top of the already enhanced underlying sentence. We have jurisdiction under 28 U.S.C. § 1291. We review de novo the district court's application of the Sentencing Guidelines. United States v. Lawrence, 916 F.2d 553, 554 (9th Cir.1990). We affirm.
DISCUSSION
4
Watson urges this court to read the Sentencing Guidelines as requiring first the imposition of the 15 year firearm sentence, and then the imposition of sufficient additional time for the robbery counts to raise the total time of imprisonment to the level established by the Guideline for the robbery count only. In short, Watson hopes we will "interpret the Sentencing Guidelines to require that the consecutive sentence is a part of the total Career Offender sentence and not in addition to that sentence...." Blue Brief, at page 11 (emphasis added).
5
The Sentencing Guidelines are harsh. But in this case, they are also unambiguous. The commentary to § 2K2.4, which governs the use of firearms in relation to crimes of violence, states that a term of imprisonment under 18 U.S.C. § 924(c) must "run consecutively to any other term of imprisonment." Commentary, § 2K2.4 (emphasis added). See also § 3D1.1 and commentary. Section 5G1.2, governing sentencing on multiple counts, states that "the sentence to be imposed-on a count for which the statute mandates a consecutive sentence shall be determined and imposed independently." § 5G1.2(a). Commentary to that section specifically considers a mandatory sentence under 18 U.S.C. § 924(c). "Counts for which a statute mandates a consecutive sentence, such as counts charging the use of a firearm in a violent crime (18 U.S.C. § 924(c)) are treated separately. The sentence imposed on such a count is the sentence indicated for the particular offense of conviction. That sentence then runs consecutively to the sentences imposed on the other counts." Commentary, § 5G1.2.
6
There is no room here for Watson's argument that the firearm sentence should be a part of the Career Offender sentence. Therefore, the district court judgment is AFFIRMED.
*
The panel unanimously found this case suitable for decision without oral argument. Fed.R.App.P. 34(a) and Ninth Circuit Rule 34-4
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
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109 Pa. Commonwealth Ct. 498 (1987)
531 A.2d 582
Howard D. Karloff, Petitioner
v.
Commonwealth of Pennsylvania, Unemployment Compensation Board of Review, Respondent.
No. 764 C.D. 1986.
Commonwealth Court of Pennsylvania.
September 24, 1987.
Submitted on briefs March 4, 1987.
*499 To judges MACPHAIL and BARRY, and Senior Judge NARICK, sitting as a panel of three.
J. Raymond Munholland, for petitioner.
Jonathan Zorach, Assistant Counsel, with him, Clifford F. Blaze, Deputy Chief Counsel, for respondent.
OPINION BY SENIOR JUDGE NARICK, September 24, 1987:
This is an appeal by Howard D. Karloff (Claimant) from an order of the Unemployment Compensation Board of Review (Board) affirming a referee's decision denying benefits pursuant to Section 402(b) of the Unemployment Compensation Law (Act), Act of December 5, 1936, Second Ex. Sess., P.L. (1937) 2897, as amended, 43 P.S. §802(b).[1] We reverse.
Claimant was employed by Best Brands, Inc. (Employer) as a national sales manager and vice-president. At the time of his separation from employment on July *500 26, 1985, Claimant was a salaried employee with an income of $40,000 per year.
The facts surrounding Claimant's termination from his employment are not in dispute. Testifying at the hearing before the referee were Claimant and a witness for Employer, Herb Collins (Collins), president of Employer.[2] Although the testimony of record consists of only six pages, it is necessary to discuss it at length.
The testimony of record indicates that Claimant, during the course of his employment, had a continuing personality conflict with an executive vice-president of the company, Isaac Perry (Perry). Claimant testified that this continuing personality conflict with Perry culminated to a point whereby on July 26, 1985, after one particular argument, he was left with no choice but to terminate his employment. Collins testified as follows:
Mr. Karloff has been having continuing personality conflicts with one individual with one individual [sic] who is a corporate officer and stockholder in the company . . . Perry. . . . His conflicts always started on marketing decisions . . . It got to a point where the argument on the day in question got so hot, so brutal that it could have become without a doubt a fist fight and I think Howard's [Claimant's] decision was rather than have a fist fight he would just quit and I think it could have been considered a force out. I'm forcing you out. You go ahead and quit rather than be fired . . .
See Notes of Testimony from September 9, 1985 at p. 4. Collins agreed with the Claimant that on several occasions Perry indicated he would like to force Claimant out of the company. See N.T. of September 9, 1985 at *501 p. 4. Although Collins admitted Perry had no authority to hire or fire employees, the testimony of Collins and Claimant revealed that Perry had advised several employees, including Claimant, that he ran the company. See N.T. of September 9, 1985 at p. 5.
Claimant further testified that although he was advised by Collins that he answered to Collins only, Perry constantly intervened. Claimant stated that he appealed to Collins, regarding this problem, but it was an uncontrollable situation. As his reasons for quitting, Claimant testified that "it became a health situation mentally that I couldn't live with . . . between the constant fighting and the arguments that were going on there. I wasn't able to get my work done". Collins corroborated Claimant by stating "It's just not a healthy situation and I totally agree with him". See N.T. from September 9, 1985, p. 5. Collins also confirmed that he tried, without success, to eliminate Perry's position from the company, and that he also had problems with Perry. See N.T. of September 9, 1985 at pp. 5-6.
The referee in concluding that Claimant did not have a necessitous and compelling reason for terminating his employment made the following pertinent findings of fact:
2. Claimant voluntarily terminated his employment as a result of a verbal confrontation with the Executive Vice President of the Corporation on his last day of work.
3. Claimant had been having a personality clash with the Executive Vice President of the Corporation over a marketing decision.
4. Claimant was not terminated by the President of the Corporation and continuing work would have been available.
5. Claimant did not have a definite offer of employment elsewhere at the time of leaving.
*502 6. Claimant is able and available for work. Claimant appealed and the Board affirmed the referee. Hence, this appeal by Claimant.
The issues presented for our consideration by Claimant are: (1) whether the Board disregarded competent evidence in finding that Claimant terminated his employment only because of a personality clash and verbal confrontation with the executive vice-president, and (2) whether Claimant established that his voluntary termination was for cause of a necessitous and compelling nature.
Our scope of review is limited to a determination of whether there has been a constitutional violation or an error of law and whether the findings of fact are supported by substantial evidence. Section 704 of the Administrative Agency Law, 2 Pa. C. S. §704; Kirkwood v. Unemployment Compensation Board of Review, 106 Pa. Commonwealth Ct. 92, 525 A.2d 841 (1987). Whether an employee does have cause of a necessitous and compelling nature for quitting is a legal conclusion subject to review by this Court. See, e.g., McNeil v. Unemployment Compensation Board of Review, 51 Pa. Commonwealth Ct. 315, 414 A.2d 727 (1980).
A claimant becoming unemployed because of a voluntary termination assumes the burden of showing that such termination was for cause of a necessitous and compelling nature. Taylor v. Unemployment Compensation Board of Review, 474 Pa. 351, 378 A.2d 829 (1977). Good cause for terminating employment which is of a necessitous and compelling nature results from circumstances which produce pressure to terminate employment that is both real and substantial, and which would compel a reasonable person under the circumstances to act in the same manner. Taylor at 358-59, 378 A.2d at 832-33.
*503 Thus, we must determine whether the referee's findings which were affirmed by the Board that Claimant did not have cause of a necessitous and compelling nature for terminating his employment were supported by substantial evidence. Mere personality differences between an employee and a supervisor will not give rise to a cause of a necessitous and compelling nature for terminating employment. Penkola v. Unemployment Compensation Board of Review, 32 Pa. Commonwealth Ct. 326, 379 A.2d 890 (1977). However, an employee who voluntarily terminates employment due to a personality conflict with another employee which renders working conditions intolerable will constitute cause of a necessitous and compelling nature for terminating employment. Sabella v. Unemployment Compensation Board of Review, 52 Pa. Commonwealth Ct. 258, 415 A.2d 722 (1980). Repeated and deliberate interference with an employee's duties by one who is not claimant's supervisor or by one for whom claimant is not required to perform job duties can constitute cause of a necessitous nature for voluntarily leaving work. Wasko v. Unemployment Compensation Board of Review, 88 Pa. Commonwealth Ct. 16, 488 A.2d 388 (1985).
In Sabella, the claimant was employed as an administrator by the Redevelopment Authority of Sharon when a clerical employee was hired to work under claimant's direction. Problems arose when this employee refused to accept supervision from claimant or perform assigned work. Claimant discussed the situation with her supervisor who in turn spoke with the mayor of the city. The supervisor reported back to claimant that the mayor would not allow discharge of this clerical employee because he was fearful of a discrimination suit, but suggested that claimant move her office to another building. It was determined that it was not feasible for claimant to move her office. Finding the working *504 conditions intolerable, she resigned. This Court awarded benefits finding that claimant had a cause of a necessitous and compelling nature for terminating her employment and that claimant had made reasonable efforts to maintain the employment relationship.
In Wasko, claimant was employed by the Borough of Wheatland and was under the supervision and control of the members of council. The mayor of Wheatland continuously and without authority would interfere with claimant's work and would request claimant to do additional work for the mayor which was not part of claimant's job duties. The members of council attempted to put a stop to the mayor's interference but were unsuccessful. For this reason, the claimant voluntarily terminated her employment. This Court, in reversing the order of the Board, awarded benefits and concluded that claimant did have cause of a necessitous and compelling nature for terminating her employment.
In the case at hand, the evidence of record discloses that Claimant, for an extended period of time, had been having trouble with Perry to a point where there was constant arguing and he was unable to get his work done. The record also reveals that Collins was aware of this situation but that it was an uncontrollable situation. For this reason, Claimant was left with no alternative but to terminate his employment. Accordingly, based upon Wasko and Sabella, we conclude that Claimant did have cause of a necessitous and compelling nature for terminating his employment.
Therefore, for the reasons set forth herein, the order of the Board is reversed.
ORDER
AND NOW, this 24th day of September, 1987, the order of the Unemployment Compensation Board of Review at Decision No. B-246988 is reversed.
NOTES
[1] Section 402(b) of the Act provides in pertinent part: "An employe shall be ineligible for compensation for any week (b) in which his unemployment is due to voluntarily leaving work without cause of a necessitous and compelling nature, . . ."
[2] Collins testified by telephone rather than in person at the hearing before the referee.
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Reversed and Remanded, and Opinion Filed November 25, 2013.
S
Court of Appeals
In The
Fifth District of Texas at Dallas
No. 05-12-00864-CV
THE SHOPS AT LEGACY (INLAND) LIMITED PARTNERSHIP, Appellant
V.
FINE AUTOGRAPHS & MEMORABILIA RETAIL STORES INC., Appellee
On Appeal from the 366th Judicial District Court
Collin County, Texas
Trial Court Cause No. 366-02102-2010
OPINION
Before Justices Moseley, Lang, and Richter 1
Opinion by Justice Lang
The Shops at Legacy (Inland) Limited Partnership appeals the trial court’s order and final
judgment, which granted Fine Autographs & Memorabilia Retails Stores, Inc.’s motion for
sanctions and dismissed The Shops at Legacy’s cause of action with prejudice. In five issues,
The Shops at Legacy raise two arguments: (1) there was “no evidence or legally insufficient
evidence” to support the trial court’s conclusions that it filed multiple false pleadings, made
material misrepresentations to the trial court, violated the rules governing organization of
pleadings, and made incomplete discovery responses or engaged in the concealment of evidence;
and (2) the trial court erred when it assessed “death penalty” sanctions because the dismissal of
The Shops at Legacy’s cause of action with prejudice was an excessive sanction.
1
The Hon. Martin Richter, Justice, Assigned
We conclude the trial court erred when it dismissed The Shops and Legacy’s cause of
action with prejudice because the record does not show the trial court considered and analyzed
the availability of lesser sanctions and whether such sanctions would fully promote compliance.
The trial court’s order and final judgment are reversed and this case is remanded for further
proceedings consistent with this opinion.
I. FACTUAL AND PROCEDURAL BACKGROUND
The Shops at Legacy filed suit against Fine Autographs for breach of a shopping center
lease agreement. On the date of trial, The Shops at Legacy requested a continuance, which the
trial court denied. Then, The Shops at Legacy orally moved for a nonsuit without prejudice. The
record on appeal does not contain a written order on The Shops at Legacy’s motion for nonsuit.
Fine Autographs filed a motion for sanctions, alleging discovery abuse by The Shops at
Legacy. After a hearing, the trial court granted the motion and dismissed The Shops at Legacy’s
cause of action with prejudice.
II. “DEATH PENALTY” SANCTIONS
In issue five, The Shops at Legacy argue the trial court erred when it assessed “death
penalty” sanctions because the dismissal of The Shops at Legacy’s cause of action with prejudice
was an excessive sanction. The Shops at Legacy argues there is no justification for the trial
court’s imposition of “death penalty” sanctions. Also, The Shops at Legacy contends that Fine
Autographs obtained a reasonable result when The Shops at Legacy nonsuited the case. Fine
Autographs responds, stating the trial court’s rendition of the order and final judgment of
dismissal with prejudice was the only appropriate sanction. Fine Autographs argues the pattern
of misconduct by The Shops at Legacy justified a presumption that its claims lacked merit.
Further, Fine Autographs maintains that counsel for The Shops at Legacy failed to propose
–2–
alternative sanctions when asked to do so by Fine Autographs. In addition, Fine Autographs
argues The Shops at Legacy sought a nonsuit in an attempt to escape punishment.
A. Standard of Review
An appellate court reviews a trial court’s order imposing sanctions for an abuse of
discretion. See Low v. Henry, 221 S.W.3d 609, 614 (Tex. 2007); Tex. Integrated Conveyor Sys.,
Inc. v. Innovative Conveyor Concepts, Inc., 300 S.W.3d 348, 384 (Tex. App.—Dallas 2009, pet.
denied). A trial court abuses its discretion if it acted without reference to any guiding rules and
principles to the extent the act was arbitrary or unreasonable. Am. Flood Research, Inc. v. Jones,
192 S.W.3d 581, 583 (Tex. 2006) (per curiam); Cire v. Cummings, 134 S.W.3d 835, 838–39
(Tex. 2004); Tex. Integrated, 300 S.W.3d at 384. An appellate court reviews the entire record to
determine whether the imposition of sanctions constitutes an abuse of discretion. Am. Flood
Research, 192 S.W.3d at 583; Tex. Integrated, 300 S.W.3d at 384.
B. Applicable Law
Discovery sanctions are authorized by Texas Rule of Civil Procedure 215.2. See TEX. R.
CIV. P. 215.2; Tex. Integrated, 300 S.W.3d at 384. If a trial court finds a party is abusing the
discovery process in seeking, making, or resisting discovery, then the trial court may, after notice
and hearing, impose any appropriate sanction authorized by rule 215.2(b)(1)–(5) and (8). TEX. R.
CIV. P. 215.3; Tex. Integrated, 300 S.W.3d at 384. Among the sanctions available under rule
215.2 are orders “striking out pleadings or parts thereof,” “dismissing with or without prejudice
the actions or proceedings or any part thereof,” and “rendering a judgment by default against the
disobedient party.” TEX. R. CIV. P. 215.2(b)(5). These sanctions, that adjudicate a claim and
preclude presentation of the merits of the case, are often referred to as “death penalty” sanctions.
Gunn v. Fuqua, 397 S.W.3d 358, 366 (Tex. App.—Dallas 2013, pet. filed); see generally Cire,
134 S.W.3d at 840–41; see also TransAmerican Natural Gas Corp. v. Powell, 811 S.W.2d 913,
–3–
918 (Tex. 1991) (“When a trial court strikes a party's pleadings and dismisses its action or
renders a default judgment against it for abuse of the discovery process, the court adjudicates the
party's claims without regard to their merits but based instead upon the parties' conduct of
discovery.”); Perez v. Murff, 972 S.W.2d 78, 81 (Tex. App.—Texarkana 1998, pet. denied) (any
sanctions which are “case determinative” constitute “death penalty” sanctions).
Discovery sanctions serve three purposes: (1) to secure the parties’ compliance with the
discovery rules; (2) to deter other litigants from violating the discovery rules; and (3) to punish
parties who violate the discovery rules. Tex. Integrated, 300 S.W.3d at 384; Jones v. Am. Flood
Research, Inc., 218 S.W.3d 929, 932 (Tex. App.—Dallas 2007, no pet.). Although the choice of
sanction is left to the sound discretion of the trial judge, the sanctions imposed must be just. See
TEX. R. CIV. P. 215.2; TransAmerican, 811 S.W.2d at 916; Tex. Integrated, 300 S.W.3d at 384;
Jones, 218 S.W.3d at 932.
When determining whether a trial court’s imposition of sanctions was just, an appellate
court considers the following two standards: (1) whether there is a “direct relationship” between
the abusive conduct and the sanction imposed; and (2) whether the sanction is excessive. See
TransAmerican, 811 S.W.2d at 917; Tex. Integrated, 300 S.W.3d at 384. “A sanction imposed
for discovery abuse should be no more severe than necessary to satisfy its legitimate purposes. It
follows that a court must consider the availability of less stringent sanctions and whether such
lesser sanctions would fully promote compliance.” TransAmerican, 811 S.W.2d at 917; Tex.
Integrated, 300 S.W.3d at 384; Jones, 218 S.W.3d at 932. Under this standard, the trial court
need not test the effectiveness of each available lesser sanction by actually imposing the lesser
sanction on the party before issuing the death penalty. Cire, 134 S.W.3d at 840. Rather, the trial
court must analyze the available sanctions and offer a reasoned explanation as to the
appropriateness of the sanction imposed. Cire, 134 S.W.3d at 840. “Death penalty” sanctions
–4–
are harsh and may be imposed as an initial sanction only in the most egregious and exceptional
cases “when they are clearly justified and it is fully apparent that no lesser sanctions would
promote compliance with the rules.” GTE Commc’ns Sys. Corp. v. Tanner, 856 S.W.2d 725, 729
(Tex. 1993).
Although the Texas Supreme Court recommended that trial courts make findings of fact
before imposing “death penalty” sanctions, it expressly declined to require such findings.
TransAmerican, 811 S.W.2d at 919 n.9; see also Fletcher v. Blair, 874 S.W.2d 83, 85 (Tex.
App.—Austin 1994, writ denied). Nevertheless, the record must include some explanation to
justify the granting of “death penalty” sanctions. Fletcher, 874 S.W.2d at 86.
C. Application of the Law to the Facts
At the close of the hearing on Fine Autographs’ motion for sanctions, the trial court
stated the following:
Well, gentlemen, it appears that there are some issues in this lawsuit that made
everyone question the ethics and the responsibilities that we all owe our clients
and to the judiciary and to the court system by the other side, not by [Fine
Autographs], but I think that some of this looks suspicious when actually there’s
probably some honest mistakes that were made by some people, a large company
like The Shops at Legacy and the different people. We’ve heard that there are
different people there that handle different things, so I can see how some of these
things might have gotten a little haywire as far as the missing document from the
lease, as far as the checks not being produced.
Obviously, any lawyer that takes a case wants full cooperation from their client,
and without full cooperation, it’s hard to defend a case or prosecute a case. As
seasoned lawyers, we all know that. I think [counsel for The Shops at Legacy]
was trying to work with what he had and didn’t always get what he needed from
his client.
The Court finds that most of the discovery abuse in this case and from the
standpoint of the missing guarantee agreement was not [counsel for The Shops at
Legacy’s] fault. The documents that were not produced timely, those also were
the obligation of the client to produce those after [counsel for The Shops at
Legacy] said that he needed those documents and those weren’t produced. So I
believe most of the wrongdoing in this case is attributable to The Shops at
Legacy, the Plaintiff in this case. The Court is going to grant the sanctions
against The Shops at Legacy and order that this case be dismissed with prejudice
–5–
and order that [The Shops at Legacy] reimburse [Fine Autographs] for the
expenses of the discovery abuse of having them get ready for trial that weekend
when they thought they were going to trial in good faith. The Court orders that
[Fine Autographs] be reimbursed reasonable and necessary attorney’s fees in the
amount of $31,000, and the case is dismissed for abuse of discovery.
The trial court’s order and final judgment expressly adopted and incorporated “its
findings and conclusions reached and announced at the conclusion of the hearing” with the
exception that the trial court found that “the award of attorney’s fees in addition to [the] sanction
of dismissal with prejudice would be potentially duplicative as a sanction and therefore[,]
den[ied] [Fine Autograph’s] request for attorney’s fees.” The trial court also made, in relevant
part, the following conclusions 2 supporting its imposition of death penalty sanctions: (1) “this
death penalty sanction is necessary because of the extreme and exceptional facts presented in this
case, which clearly justifies this sanction”; (2) “this death penalty sanction is necessary because
of the extreme and exceptional facts presented in this case”; (3) “it is fully apparent that no lesser
sanctions would promote compliance with the Texas Rules of Civil Procedure and Local Rules
of Collin County”; (4) “the [trial court] has considered other lesser sanctions (including fines,
monetary payment, etc.) and finds [emphasis omitted] that such sanctions would be ineffective to
deter [The Shops at Legacy’s] conduct”; (5) “failing to dismiss [The Shops at Legacy’s] claims
with prejudice would permit gross and egregious abuse of the judicial process, and would permit
[The Shops at Legacy] to re-file its claims and effectively benefit from its own repeated and
intentional misconduct”; and (6) “these sanction[s] bear a direct relationship to [The Shops at
Legacy’s] conduct, [] these sanctions are not excessive . . . and [] [The Shops at Legacy’s]
conduct justif[ies] a presumption that [The Shops at Legacy’s] claims lack merit or that sufficient
proof could not be presented to permit recovery.”
2
Although the trial court’s order and final judgment refer to these as findings of fact, we note that they do not recite facts, but state conclusions.
–6–
Although the trial court’s order and final judgment states “lesser sanctions” were
considered, “no lesser sanctions would promote compliance,” and the facts of this case warrant
“death penalty” sanctions, the reporter’s record of the hearing does not show that the trial court
analyzed any available sanctions that were less stringent. See Cire, 134 S.W.3d at 840 (trial
court must analyze available sanctions); Tex. Integrated, 300 S.W.3d at 384; see also Kugle v.
DaimlerChrysler Corp., 88 S.W.3d 355, 368 (Tex. App.—San Antonio 2002, pet. denied)
(although trial court’s conclusions of law recite that lesser sanctions inappropriate, record does
not reflect that trial court considered lesser sanctions or why lesser sanctions would be
ineffective).
Fine Autographs argues that the testimony it elicited from counsel for The Shops at
Legacy “is perilously close to a concession of the relief granted by the trial court.” Specifically,
Fine Autographs asked counsel for The Shops at Legacy “Do you know of any way [the trial
court] can prevent you from getting the benefit of all the discovery abuse that you engaged in in
this case except to dismiss your case with prejudice? If you do, please tell me what it is because
I do not know.” Counsel for The Shops at Legacy responded “No.” Later, Fine Autographs
asked him “Assume with me the Court thinks there has been misconduct. I’m asking you now
this question: Can you give the Judge any alternative to dismissing this case with prejudice?”
Counsel for The Shops at Legacy responded “Yes. I think there are other things―if he thinks
that I committed misconduct that there are other things that he can use.”
In support of this argument, Fine Autographs cites In re Department of Family and
Protective Services, 273 S.W.3d 637, 646 (Tex. 2009) (orig. proceeding) and Tittizer v. Union
Gas Corp., 171 S.W.3d 857, 862 (Tex. 2005). These cases address the “invited error doctrine,”
which prohibits a party from complaining on appeal that the trial court took a specific action that
the complaining party requested. In re Dep’t of Family Servs., 273 S.W.3d at 646; Tittizer, 171
–7–
S.W.3d at 862. That doctrine is not applicable to the facts of this case. While a trial court may
consider the lesser sanctions proposed by a party, Fine Autographs does not cite us to any
authority, nor do we find any authority, requiring the party alleged to have committed discovery
abuse to propose the lesser sanctions to be considered by the trial court. See generally Response
Time, Inc. v. Sterling Commerce (N. Am.), Inc., 95 S.W.3d 656, 662 (Tex. App.—Dallas 2002,
no pet.) (noting trial court considered lesser sanctions including those proposed by appellant).
Without considering the merits of the allegedly sanctionable actions, we conclude the
trial court erred when it assessed “death penalty” sanctions against The Shops at Legacy because
the record does not show the trial court considered and analyzed the availability of less stringent
sanctions and whether such sanctions would fully promote compliance. See Tex. Integrated, 300
S.W.3d at 385. In light of this conclusion, we need not consider The Shops at Legacy’s
remaining issues. Issue five is decided in favor of The Shops at Legacy.
III. CONCLUSION
The trial court erred when it dismissed The Shops and Legacy’s cause of action with
prejudice.
The trial court’s order and final judgment are reversed and this case is remanded for
further proceedings consistent with this opinion.
/Douglas S. Lang/
DOUGLAS S. LANG
120864F.P05 JUSTICE
–8–
S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
THE SHOPS AT LEGACY (INLAND) On Appeal from the 366th Judicial District
LIMITED PARTNERSHIP, Appellant Court, Collin County, Texas
Trial Court Cause No. 366-02102-2010.
No. 05-12-00864-CV V. Opinion delivered by Justice Lang. Justices
Moseley and Richter participating.
FINE AUTOGRAPHS & MEMORABILIA
RETAIL STORES INC., Appellee
In accordance with this Court’s opinion of this date, the judgment of the trial court is
REVERSED and this cause is REMANDED to the trial court for further proceedings consistent
with this opinion.
It is ORDERED that appellant THE SHOPS AT LEGACY (INLAND) LIMITED
PARTNERSHIP recover its costs of this appeal from appellee FINE AUTOGRAPHS &
MEMORABILIA RETAIL STORES INC.
Judgment entered this 25th day of November, 2013.
/Douglas S. Lang/
DOUGLAS S. LANG
JUSTICE
–9–
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544 F.2d 524
Sterlingv.Moore
No. 76-1388
United States Court of Appeals, Seventh Circuit
11/29/76
1
N.D.Ill.
GRANTED AND AFFIRMED
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} |
655 S.E.2d 838 (2007)
W. Duke KIMBRELL
v.
Diane C. ROBERTS.
No. 516P07.
Supreme Court of North Carolina.
December 6, 2007.
Bruce M. Simpson, Charlotte, for Roberts.
Douglas P. Arthurs, Gastonia, Adam H. Charnes, Tonya R. Deem, James J. Hefferan, Jr., Winston-Salem, Deborah L. Fletcher, Charlotte, for Kimbrell.
Prior report: ___ N.C.App. ___, 650 S.E.2d 444.
ORDER
Upon consideration of the petition filed on the 23rd day of October 2007 by Defendant in this matter for discretionary review of the decision of the North Carolina Court of Appeals pursuant to G.S. 7A-31, the following order was entered and is hereby certified to the North Carolina Court of Appeals:
"Denied by order of the Court in conference, this the 6th day of December 2007."
| {
"pile_set_name": "FreeLaw"
} |
Opinions of the United
2002 Decisions States Court of Appeals
for the Third Circuit
6-11-2002
Smith v. Mensinger
Precedential or Non-Precedential: Precedential
Docket No. 99-1382
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2002
Recommended Citation
"Smith v. Mensinger" (2002). 2002 Decisions. Paper 343.
http://digitalcommons.law.villanova.edu/thirdcircuit_2002/343
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
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PRECEDENTIAL
Filed June 11, 2002
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 99-1382
CARL M. SMITH,
Appellant
v.
ROBIN MENSINGER; DAVID NOVITSKY; JEROME
PAULUKONIS; MARY CANINO; PAUL BURGARD; MARTIN
DRAGOVICH, JEFFREY YURKIEWICZ, PAUL
ANDROSHICK, BERNARD MCCOLE, JAMES ZUBRIS, and
RAYMOND JONES
Appeal from the United States District Court
for the Eastern District of Pennsylvania
Civil No. 97-CV-03613
District Judge: Hon. Eduardo C. Robreno
Argued: July 31, 2001
Before: BECKER, Chief Judge, and McKEE and
WEIS, Circuit Judges.
(Opinion filed: June 11, 2002)
DEENA J. SCHNEIDER, ESQ. (Argued)
MATTHEW B. HOLMWOOD, ESQ.
Schnader Harrison Segal &
Lewis LLP
1600 Market Street, Suite 3600
Philadelphia, PA 19103-7286
Attorneys for Appellant
CALVIN R. KOONS, ESQ. (Argued)
JOHN G. KNORR, III, ESQ.
Office of Attorney General
Appellate Litigation Section
15th Floor, Strawberry Square
Harrisburg, PA 17120
Attorneys for Appellees
OPINION OF THE COURT
McKEE, Circuit Judge.
Carl M. Smith, an inmate at the Pennsylvania State
Correctional Facility at Frackville ("SCI-Frackville") filed this
civil rights action under 42 U.S.C. S 1983 alleging that
certain corrections officers and prison employees denied
him due process of law and/or violated his Eighth
Amendment right to be free from cruel and unusual
punishment. The district court dismissed Smith’s due
process claims against some of the defendants under FED.
R. CIV. P. 12(b)(6), but Smith was allowed to proceed on his
Eighth Amendment claims. The court subsequently granted
summary judgment against Smith and in favor of the
defendants on all of Smith’s claims. For the reasons that
follow, we will reverse in part and affirm in part, and
remand for further proceedings consistent with this
opinion.
I. Background
A. The Misconduct Reports
Sometime during the morning of June 3, 1995,
Corrections Officer Robin Mensinger issued a misconduct
report citing Smith with refusing to obey an order to return
to his cell after cell cleanup, and for using foul language
towards a corrections officer. Later that afternoon,
Mensinger cited Smith in a second misconduct report for
allegedly punching her in the eye. That evening, Sergeant
Paulukonis issued a third misconduct report against Smith.
That report cited Smith for assaulting corrections officers
2
as they were escorting him to the Restricted Housing Unit
("RHU").
Smith denies that he assaulted Mensinger or struggled
with other corrections officers later that evening. He admits
that he did not return to his cell when Mensinger requested
him to, but claims that he only refused because his cell
was still wet. According to Smith, Mensinger was drunk
and out of control when she issued the first misconduct
report. He claims that as he was leaving his cell during an
organized prisoner movement later that day, he heard a
whistle blow and looked up to see Mensinger pointing at
him. A few seconds later, Corrections Officers Jones and
Yoder purportedly arrived on the cell block. Smith claims
that Mensinger told the corrections officers that Smith had
punched her in the eye. Smith maintains that Yoder then
handcuffed him behind his back, and walked him to a
bench where Smith was ordered to sit down. According to
Smith, other corrections officers (including Androshick,
Zubris and McCole) entered the area a few minutes later.
The officers then purportedly grabbed Smith by both arms
and followed Corrections Officer Novitsky to the Unit
Manager’s Office. There, Smith claims that Yurkiewicz and
Jones joined the group and Yoder left.
Once inside the Unit Manager’s Office, the officers
allegedly rammed Smith’s head into walls and cabinets and
knocked him to the floor. He claims that while he was on
the floor, Yurkiewicz kicked and punched him, and
Novitsky "pulled him to his feet, pushed him against the
wall, punched him in the stomach, and choked him with
both hands. . . ." Brief for Appellant at 15. Smith alleges
that Paulukonis saw the beating, but did nothing to
intervene or restore order.
Smith further alleges that after the beating in the Unit
Manager’s office, two or three guards took him to the RHU
where Yurkiewicz placed him face-down on a bench,
tightened the handcuffs as much as possible, and hit him
on the back of the head while verbally threatening him and
showering him with racial epithets.
B. Smith’s Injuries
Smith alleges that his head was bleeding and the beating
also resulted in pain in his ribs, ears, and right eye. His
3
ribs were purportedly red and bruised and remained sore
for a couple of weeks after the beating. Smith was seen by
the medical staff each of the following two days, but
according to the medical records, he was treated only for
chronic asthma. In his deposition, Smith stated that a
doctor gave him ice for his ribs and told him to keep a wet
towel against them the day after the incident. However, a
report prepared by the defendants’ medical expert states
that an examination of Smith soon after the incident failed
to disclose any wounds, marks, or bruises near his rib cage
or anywhere else.
C. The Aftermath of the June 3, 1995 Incident
On June 4, 1995, Pennsylvania State Trooper Leo Luciani
interviewed Smith regarding Smith’s alleged attack of
Mensinger. During that interview Luciani purportedly
showed Smith a photograph of Mensinger that Smith
claims supports his claim that he never hit her in the face.
Nevertheless, the Commonwealth filed a criminal complaint
against Smith based upon Mensinger’s allegation, and
Luciani testified for the prosecution at the preliminary
hearing on those charges. The charges included assault,
assault by a prisoner, and retaliation for past official action.
The Commonwealth subsequently added the charge of
disorderly conduct, and Smith eventually pled nolo
contendere to that charge. The trial court then granted the
Commonwealth’s request to nol pros the remaining charges.
Meanwhile, a hearing on the three misconduct reports
was scheduled at SCI-Frackville, and Smith completed a
"Request for Representation" form listing two inmates he
wanted to call as witnesses at that hearing. He claims that
those two inmates would have testified that he did not
strike Mensinger as she had charged. When Smith arrived
at the hearing, Hearing Officer Mary Canino informed him
that his witnesses were not available and that the hearing
would be delayed until that afternoon.1 However, the
_________________________________________________________________
1. Smith contends that his witnesses were not available because they
were waiting for their own hearings on misconduct notices which "the
drunk and outer [sic] control" Mensinger had also issued to them on
June 3, 1995. App. at 61.
4
hearing did not proceed that afternoon, and Smith was
transferred to the State Correctional Institution at Mahoney
("SCI-Mahoney") the next day.
Smith’s misconduct hearing reconvened at SCI-Mahoney
a few days later. However, since Smith’s witnesses
remained at SCI-Frackville, Canino offered to continue the
hearing to afford Smith an opportunity to submit written
statements from his witnesses. Smith refused the offer
because he did not trust that prison officials would obtain
accurate statements. Rather than submit those statements,
Smith sought a continuance in order to attempt to recover
the allegedly exculpatory photograph that Trooper Luciani
had shown him. Canino denied Smith’s request for a
continuance, and Smith’s hearing on the misconduct
reports proceeded without his witnesses.
Canino credited the testimony against Smith, and found
Smith guilty of the conduct charged in all three misconduct
reports. He received seven months disciplinary confinement
for assaulting Mensinger and for resisting the officers who
were escorting him to the RHU. Canino also ordered that
Smith’s prison account be assessed for "medical and other
expenses" to pay for contact lenses for Officer Mensinger
even though no evidence of any such expenses had been
produced at the hearing. App. at 63. Accordingly, $165.00
was deducted from Smith’s inmate account. Smith
challenged that action by filing a grievance in which he
complained that there was insufficient evidence to debit his
account to buy Mensinger lenses. He also unsuccessfully
appealed to the Program Review Committee, and to
Superintendent Dragovich.
II. Procedural History
On May 23, 1997, Smith filed the instant pro se civil
rights action under 42 U.S.C. S 1983 against Corrections
Officers Mensinger, Novitsky, and Paulukonis; as well as
Hearing Officer Canino, and Business Manager Burgard.
The defendants were each sued individually and in their
official capacity. Smith later joined Corrections Officers
Yurkiewicz, Androshick, McCole, Zubris, and Jones as well
as Superintendent Dragovich.
5
Smith claimed that several corrections officers used
excessive force during the June 3 incident, and that they
thereafter falsified reports regarding that incident in order
to cover up their use of excessive force. Smith also claimed
that Canino violated his due process rights by improperly
assessing his inmate account, and that Burgard and
Dragovich did not adequately investigate his grievance on
appeal.
Although the district court granted Smith’s request to
amend his Complaint to join Dragovich as a defendant, the
court later dismissed the claim against Dragovich as well as
Smith’s claim against unknown defendant, "John Doe."
Mensinger, Paulukonis, Canino, and Burgard thereafter
moved to dismiss Smith’s claims against them pursuant to
FED. R. CIV. P. 12(b)(6). The district court granted that
motion. In an unreported opinion, Smith v. Luciani, Nos.
CIV.A. 97-3037, CIV.A. 97-3613, 1998 WL 151803 (E.D. Pa.
March 31, 1998) (hereinafter "Smith I"), the district court
explained that since Smith did not have a liberty interest in
remaining in the general prison population, he could not
establish a due process claim based upon being placed in
disciplinary custody. The court also dismissed Smith’s
claim against Mensinger based in part upon its belief that
the claim constituted an improper collateral attack on
Smith’s disorderly conduct conviction.
The district court allowed Smith to proceed against the
remaining corrections officers on his Eighth Amendment
claim, but later granted defendants’ motion for summary
judgment, dismissing that claim, as well. In a second
unreported opinion, Smith v. Mensinger, No. CIV.A. 97-
3613, 1999 WL 178539 (E.D. Pa. March 31, 1999)
(hereinafter "Smith II"), the court concluded that Smith
could not prevail under the Eighth Amendment because the
minimal nature of his injuries established that any force
that may have been used against him must have been de
minimis and therefore insufficient to constitute an Eighth
Amendment violation. The court also concluded that
whatever force the corrections officers had used was
justified by Smith’s assault of Mensinger, and the fact that
he struggled with the other corrections officers. The court
did note that Smith denied assaulting Mensinger and
6
struggling with corrections officers. However, the court
refused to credit that denial because Smith offered nothing
to support it, and the hearing officer had found him guilty
of the charged misconduct. This appeal followed. 2
III. Discussion
Smith argues the district court erred in dismissing both
his due process claim, and his Eighth Amendment claim. In
addressing Smith’s challenge to the dismissal of his Eighth
Amendment claim, we must first decide if he can prevail
despite the de minimis nature of his injuries. If we decide
that he can, we must then decide if a corrections officer
(Paulukonis) can be found liable under the Eighth
Amendment "merely" because he failed to intervene in the
beating allegedly administered by his fellow corrections
officers.3
A. Standard of Review
In reviewing a grant of summary judgment, we must view
the facts in the light most favorable to the non-moving
party. See Brooks v. Kyler, 204 F.3d 102, 105 n.5 (3d Cir.
2000). Summary judgment is appropriate only if "there is
no genuine issue as to any material fact and . . . the
moving party is entitled to a judgment as a matter of law."
Fed. R. Civ. P. 56(c).
_________________________________________________________________
2. The parties have since successfully mediated the claims arising from
the debit of Smith’s account. Accordingly, they are not before us.
3. Smith alleges that he was beaten on June 3, 1995, and he filed suit
May 23, 1997. The Prison Litigation Reform Act ("PLRA") became effective
on April 26, 1996, before Smith sued. The PLRA requires that inmates
exhaust claims challenging prison conditions before filing suit under
S 1983. See Ghana v. Holland, 226 F.3d 175, (3d Cir. 2000). Smith’s
Eighth Amendment claim is subject to that requirement. See Booth v.
Churner, 532 U.S. 731, 741 (2001). However, exhaustion is an
affirmative defense which can be waived if not properly preserved by a
defendant. See Ray v. Kertes, 285 F.3d 287 (3d. Cir. 2002). Defendants
here have not raised any issues relating to exhaustion. Accordingly, even
assuming that any such issue exists here, it has clearly been waived and
we therefore need not address whether Smith has properly exhausted
under the PLRA.
7
A motion to dismiss under Fed. R. Civ. P. 12(b)(6), on the
other hand, should not be granted unless it appears that
the plaintiff can prove no set of facts that would entitle
him/her to relief. See Conley v. Gibson, 355 U.S. 41, 45-6
(1957). In undertaking that analysis, we must construe
complaints of pro se litigants liberally. See Zilich v. Lucht,
981 F.2d 694, 694 (3d Cir. 1992). The issue of an officer’s
duty to intervene presents a question of law, which we
review de novo. See Holland v. New Jersey Dep’t of
Corrections, 246 F.3d 267, 281 (3d Cir. 2001) (stating that
questions of law are reviewed de novo).
We will first address Smith’s Eighth Amendment claims
and then examine his due process claim.
B. The Eighth Amendment Claim Based Upon
Excessive Force
The district court correctly noted that prison guards who
maliciously and sadistically use force against an inmate
violate "contemporary standards of decency even if the
resulting injuries are not significant." Smith II, 1999 WL
178539, at *3 (internal quotations omitted). However, after
noting that Smith could establish an Eighth Amendment
violation even absent evidence of serious physical injuries,
the district court then focused exclusively on the severity of
Smith’s injuries in denying his claim. The court stated:
Even assuming that plaintiff could show that
defendants acted with the requisite state of mind, the
Court concludes that the alleged wrongdoing by
defendants was not objectively harmful enough to
establish a constitutional violation. Initially, the Court
notes that the injuries suffered by plaintiff were
relatively minor.
. . . .
Additionally, accepting as true plaintiff ’s version of
the facts, including being handcuffed, punched, kicked,
and thrown into cabinets and walls, and given the
slight injuries suffered by plaintiff, the Court finds that
the incident between plaintiff and defendants involved
a de minimis use of force that was not repugnant to
the conscience of mankind.
8
Id. at *4. Thus, although the court acknowledged that the
absence of severe injuries did not preclude Smith’s Eighth
Amendment claim as a matter of law, the court concluded
that the evidentiary value of the absence of injuries was too
compelling to ignore. See id. Citing Smith’s alleged attack
on Mensinger, the court also noted that "the record shows
that defendants reasonably perceived plaintiff to be a threat
and the need for application of force was apparent." Id. at
*5.
We begin our analysis of that ruling with the Supreme
Court’s decision in Hudson v. McMillan, 503 U.S. 1 (1992).
There, an inmate sued prison guards under S 1983 alleging
that they had used excessive force in violation of the Eighth
Amendment’s prohibition against cruel and unusual
punishment even though he had not suffered serious
injuries during the alleged assault. The Court therefore had
to decide "whether the use of excessive physical force
against a prisoner may constitute cruel and unusual
punishment when the inmate does not suffer serious
injury." Hudson, 503 U.S. at 4 (emphasis added). The Court
"answer[ed] that question in the affirmative." Id.
We applied the teachings of Hudson in Brooks v. Kyler,
204 F.3d 102 (3d Cir. 2000). There, an inmate sued four
prison guards under S 1983 alleging that they had beaten
him in violation of the Eighth Amendment. Although the
undisputed medical evidence showed that the plaintiff
suffered only a few scratches on his neck and hands, he
testified that he was repeatedly punched in the head,
stomped about the back and neck, slammed into a cell
wall, choked, threatened, and nearly rendered unconscious.
All of this was allegedly done while he was handcuffed. See
Brooks, 204 F.3d at 104. In reviewing the claim, we noted
that it was "apparent that the type of vicious, prolonged
attack alleged by Brooks would have resulted in far greater
injuries than those which he indisputably sustained." Id. at
105. Nonetheless, we reversed the district court’s grant of
summary judgment, stating: "[a]ccepting Brooks’s
allegations as true, as we must, a jury could find that the
defendants acted not merely in good-faith to maintain or
restore discipline, but rather out of malice for the very
purpose of causing harm." Id. at 109.
9
The district court dismissed Smith’s claims before we
decided Brooks. Accordingly, the court did not have the
benefit of that analysis when, in denying Smith’s claims
here, it focused almost exclusively on "the lack of a serious
physical injury. . . ." Smith II, 1999 WL 178539, at *4,
quoting Eppers v. Dragovich, No. 95-7673, 1996 WL
420830, at * 4 (E.D. Pa. July 24, 1996). It is now clear that
the district court erred in focusing so narrowly on the
absence of serious injuries in deciding if Smith could
establish a claim based upon excessive force. As we clearly
stated in Brooks, the Eighth Amendment analysis must be
driven by the extent of the force and the circumstances in
which it is applied; not by the resulting injuries.
Requiring objective or independent proof of minor or
significant injury, would ignore this teaching and place
protection from injury, instead of protection from
wanton force, at the hub of the Eighth Amendment.
Brooks, 204 F.3d at 108, citing Moore v. Holbrook, 2 F.3d
697, 700 (6th Cir. 1993).
Nevertheless, it is true that the Eighth Amendment does
not protect an inmate against an objectively de minimis use
of force. See Hudson, 503 U.S. at 9-10. Rather, as noted
above, the pivotal inquiry in reviewing an inmate’sS 1983
claim for excessive force is "whether force was applied in a
good-faith effort to maintain or restore discipline, or
maliciously and sadistically to cause harm." Brooks, 204
F.3d at 106, citing Hudson, 503 U.S. at 7. However, injuries
are only one of several factors that a court must consider
in answering that question.
In determining whether a correctional officer has used
excessive force in violation of the Eighth Amendment,
courts look to several factors including: (1) the need for
the application of force; (2) the relationship between
the need and the amount of force that was used; (3)
the extent of the injury inflicted; (4) the extent of the
threat to the safety of staff and inmates, as reasonably
perceived by responsible officials on the basis of facts
known to them; and (5) any efforts made to temper the
severity of the forceful response.
10
Brooks, 204 F.3d at 106, citing Hudson , 503 U.S. at 7.
Therefore, de minimis injuries do not necessarily establish
de minimis force.
If we were to adopt the District Court’s reasoning, a
prisoner could constitutionally be attacked for the sole
purpose of causing pain as long as the blows were
inflicted in a manner that resulted in visible (or
palpable or diagnosable) injuries that were de minimis.
Brooks, 204 F.3d at 108.
We do not, of course, suggest that a fact finder could not
consider the de minimis nature of injuries along with all of
the other circumstances in concluding that the force that
was employed could not have risen to the level required for
an Eighth Amendment violation. A properly instructed fact
finder could, after considering all of the evidence, conclude
that Smith’s injuries were so minor that the defendants’
account of the incident is more credible than Smith’s,
and/or that the force used was not of constitutional
dimension. That may have been exactly what the district
court did here. However, that is an issue of fact to be
resolved by the fact finder based upon the totality of the
evidence; it is not an issue of law a court can decide.4
Punching and kicking someone who is handcuffed behind
his back and under the control of at least six prison guards
as he is being thrown into cabinets and walls is"repugnant
to the conscience of mankind," absent the extraordinary
circumstances necessary to justify that kind of force.
Hudson, 503 U.S. at 10. Smith alleges he was the victim of
an unprovoked and unjustified beating. The district court
dismissed his Eighth Amendment claims, noting that"the
record shows that defendants reasonably perceived plaintiff
to be a threat and the need for the application of force was
_________________________________________________________________
4. In Brooks, we noted that when courts focus on the extent of the
injury, it is important to recognize that "an inmate who is proceeding pro
se, is in a decidedly difficult position from which to generate ‘record
evidence’ on his behalf . . . [u]nder these circumstances, his affidavits
. . . are about the best that can be expected from him [at summary
judgment phase of] the proceedings." Brooks, 204 F.3d at 108 n.7
(emphasis added), quoting Norman v. Taylor, 25 F.3d 1259, 1265 (4th
Cir. 1994) (Hall, J., dissenting).
11
apparent." Smith II, 1999 WL 178539, at *5. The court
reached that conclusion in part because it found that
Smith had created a disturbance by "allegedly punching
C.O. Mensinger twice in the eye," as well as"continually
struggling with the defendants . . . ." Id . (emphasis added).
However, Smith alleges that he was handcuffed behind his
back during the "disturbance," and he maintains he did not
hit Mensinger or struggle with the guards as they punched
and kicked him, and rammed his head into the wall. If we
accept Smith’s version of the facts as true, as we must,
there was simply no justification for the defendants’
conduct, and the district court’s ruling to the contrary can
not stand.5
Defendants argue that we should nevertheless affirm the
grant of summary judgment in favor of Officers Androshick,
McCole, Zubris, and Jones because Smith concedes that he
is not sure that they participated in the beating at all.
However, the fact that Smith has acknowledged that he
could not see those defendants during the beating neither
negates their involvement nor their liability as a matter of
law. Smith testified: "Officer Yurkiewicz, Zubris,
Androshick, McCole, Jones, all of them was in back of me
and they were pushing my head, right, into the cabinets in
the wall, cabinets and walls. And then after that, I was
knocked to the floor." App. at 166 (emphasis added). He
further testified: ". . . the full force of all the guards [was]
_________________________________________________________________
5. The district court was also concerned about the potential for an
escalating confrontation with other inmates because"other prisoners on
the cell block were not locked in their cells and were being let out into
the yard." Smith II, 1999 WL 178539, at *5. However, Smith alleges that
the beating occurred out of sight of the other inmates. Moreover, even if
others could see what was occurring, the reasonableness of the force
used would still be an issue of fact for a jury, not an issue of law for the
court. As we noted in Brooks, "while . . . application of some force may
have been needed" to maintain order, "[the plaintiff] was shackled at the
time [of the beating] so that the extent of his threat to staff would not
have been great." Brooks, 204 F.3d at 106.
Furthermore, even assuming that other inmates could see Smith, it is
difficult to understand how beating a handcuffed inmate in the presence
of other inmates in the manner Smith alleges could reasonably be
calculated to reduce tension and restore order inside a prison.
12
behind me, they rammed my head into the cabinet and into
the wall . . . No, I didn’t say he [Yurkiewicz] did. I said all
of them." Id. at 168 (emphasis added). That testimony is
sufficient to create a genuine issue of material fact as to
each of those defendants. See Brooks, 204 F.3d at 109.
Moreover, it is undisputed that all of the named officers
were in the vicinity at some point when Smith alleges he
was beaten. The extent of each officer’s participation is thus
a classic factual dispute to be resolved by the fact finder.
Accordingly, we will vacate the judgment in favor of
defendants Novitsky, Yurkiewicz, Androshick, McCole,
Zubris, and Jones and remand the matter for further
proceedings.
C. Officer Paulukonis’ Duty to Intervene
As noted earlier, Smith does not allege that Paulukonis
took part in the beating. Rather, Smith claims that
Paulukonis can be liable under the Eighth Amendment if he
failed to intervene. We agree. We hold that a corrections
officer’s failure to intervene in a beating can be the basis of
liability for an Eighth Amendment violation underS 1983 if
the corrections officer had a reasonable opportunity to
intervene and simply refused to do so. Furthermore, we
hold that a corrections officer can not escape liability by
relying upon his inferior or non-supervisory rank vis-a-vis
the other officers.
Courts have held that a police officer has a duty to take
reasonable steps to protect a victim from another officer’s
use of excessive force, even if the excessive force is
employed by a superior. "If a police officer, whether
supervisory or not, fails or refuses to intervene when a
constitutional violation such as an unprovoked beating
takes place in his presence, the officer is directly liable
under Section 1983." Byrd v. Clark, 783 F.2d 1002, 1007
(11th Cir. 1986); accord Putman v. Gerloff, 639 F.2d 415,
423 (8th Cir. 1981); Byrd v. Brishke, 466 F.2d 6, 11 (7th
Cir. 1972). However, an officer is only liable if there is a
realistic and reasonable opportunity to intervene. See Clark,
783 F.2d at 1007 (instructing the district court upon
remand to determine whether the officer was in a position
13
to intervene); Brishke, 466 F.2d at 11 (liability for failure to
intervene exists only if the beating occurred in the officer’s
presence or was otherwise within his knowledge); Putman,
639 F.2d at 423-24 (liability exists only if the non-
intervening officer saw the beating or had time to reach the
offending officer).
In Baker v. Monroe Township, 50 F.3d 1186 (3d. Cir.
1995), we held that a police officer who was the senior
officer involved in executing a search warrant could be
liable in a suit under S 1983 even though he did not
personally use excessive force, nor direct anyone else to. We
concluded that "there [was] sufficient evidence to permit an
inference that [the officer] knew of and acquiesced in the
treatment the [plaintiffs] were receiving at the hands of the
other officers acting under his supervision." Baker, 50 F.3d
at 1193. The specific circumstances in Baker required us to
determine if the plaintiff had shown that the senior officer
had "actual knowledge and acquiescence." Id. at 1194,
quoting Rode v. Dellarciprete, 845 F.2d 1195, 1207 (3d Cir.
1988). Although the specific context of our analysis only
involved an officer’s liability for the actions of police officers
under his supervision, we do not interpret Baker as
suggesting that liability for failure to intervene is solely
limited to supervisors or officers who outrank their
offending colleagues.
The duty to uphold the law does not turn upon an
officer’s rank. It is neither affected by, nor proportional to,
a non-intervening officer’s relationship to an offending
colleague. The approving silence emanating from the officer
who stands by and watches as others unleash an
unjustified assault contributes to the actual use of
excessive force, and we cannot ignore the tacit support
such silence lends to those who are actually striking the
blows. Such silence is an endorsement of the constitutional
violation resulting from the illegal use of force. 6 It is
incompatible with the restrictions imposed under the
_________________________________________________________________
6. The message that emanates from such silence was vocalized in
Hudson where the supervisor allegedly stood by and told officers who
were beating an inmate "not to have too much fun." Hudson, 503 U.S.
at 4.
14
Eighth Amendment, and is therefore unacceptable. We will
not immunize such conduct by suggesting that an officer
can silently contribute to such a constitutional violation
and escape responsibility for it. The restriction on cruel and
unusual punishment contained in the Eighth Amendment
reaches non-intervention just as readily as it reaches the
more demonstrable brutality of those who unjustifiably and
excessively employ fists, boots or clubs.
Although our case law refers to police officers, not
corrections officers, this does not change our analysis.7
Both are law enforcement officers, both are sworn to uphold
the law, and both are authorized to use force (even deadly
force) toward that end. We are, of course, aware of the
obvious security concerns inside the close confines of a
prison. However, that is simply one factor that must be
considered in determining if a particular application of force
is reasonable. It does not suggest a different Eighth
Amendment inquiry for corrections officers as opposed to
police officers. The law does not allow either to condone or
cover up the use of excessive force. Similarly, neither can
escape liability by turning either a blind eye or deaf ear to
the illegal conduct of their colleagues.
Therefore, "if [Smith] can show at trial that an officer
attacked him while [Paulukonis] ignored a realistic
opportunity to intervene, he can recover." Miller v. Smith,
220 F.3d 491, 495 (7th Cir. 2000). Moreover, neither rank
nor supervisory status is a factor in assessing whether
Paulukonis had "a realistic opportunity to intervene." Id.8
_________________________________________________________________
7. We have, however, held that a corrections officer’s acquiescence can
result in liability under S 1983 in a very different context than we are
confronted with here. See Curtis v. Everette, 489 F.2d 516 (3rd Cir.
1973).
8. Although it is clear that Paulokonis’ junior rank and lack of
supervisory status does not immunize him from liability for failing to
intervene, we do not suggest that a fact finder could not conclude that
the conduct of a supervisor who fails to intervene is even more
reprehensible and blameworthy than that of a more junior officer. The
fact that rank does not shield one from liability does not mean that a
fact finder must ignore the even greater dereliction of duty that occurs
when a supervisor tolerates the kind of misconduct that is alleged here.
15
There is some evidence that Paulukonis witnessed the
beating that his fellow officers allegedly administered to
Smith. Smith alleges that Paulukonis stated in his
misconduct report that "[t]he minimum amount of force
was used to place inmate Smith onto the floor." App. at
329. This appears to be based upon first-hand observations
Paulukonis made while standing at the door of the Unit
Manager’s office during the incident. Smith further testified
that the door of the office remained open throughout the
incident and that Paulukonis saw the beating. A fact finder
could conclude that Paulukonis knew that his fellow
officers were using excessive force against Smith, had an
opportunity to intervene, but refused to do so. Accordingly,
the district court erred in dismissing Smith’s Eighth
Amendment claim against Paulukonis.
D. Smith’s Due Process Claim
In a separate opinion, the district court also held that
Smith could not establish a due process claim under Griffin
v. Vaughn, 112 F.3d 703 (3d Cir. 1997). See Smith I, 1998
WL 151803, at *5. The district court reasoned that Smith
"was subjected to seven months disciplinary time, a period
of time half of that implicated in Griffin." Id. The court
reasoned that, even assuming that the misconduct reports
were issued to cover up the use of excessive force, the
disciplinary sanction still did not constitute a due process
violation as it did not rise to the level of an"atypical and
significant hardship in relation to the ordinary incidents of
prison life." Id., quoting Griffin , 112 F.3d at 706.
Smith argues that the district court misinterpreted the
basis of his due process claim. Smith does not claim that
the seven months disciplinary sanction was a violation of a
liberty interest and therefore a denial of due process.
Rather, Smith claims that Mensinger issued a misconduct
report to retaliate against Smith for his conduct toward
Mensinger and to cover up a beating. Thus, Smith claims
that the misconduct report was not intended to enforce
prison regulations at all, and it was therefore improper to
impose a disciplinary sanction.9 However, even assuming
_________________________________________________________________
9. As noted earlier, we will interpret Smith’s pro se complaint liberally.
See Zilich, 981 F.2d at 694.
16
that the district court did misconstrue the crux of Smith’s
due process claim, it is nevertheless evident that the court’s
rejection of that claim was correct.
In Sandin v. Conner, 515 U.S. 472 (1995), an inmate had
been charged with multiple disciplinary infractions, but the
inmate’s request to produce certain witnesses at his
hearing was refused by the hearing committee because the
witnesses were unavailable. The committee found the
inmate guilty of the charged misconduct and sentenced him
to 30 days in segregated confinement. Thereafter, he
brought a S 1983 suit claiming that the hearing did not
satisfy the requirements of due process. See Sandin, 515
U.S. at 475-76. The Court disagreed. The Court held that
confinement in administrative or punitive segregation will
rarely be sufficient, without more, to establish the kind of
"atypical" deprivation of prison life necessary to implicate a
liberty interest. Therefore, the Court found that the
inmate’s segregated confinement was not a denial of due
process. See id. at 486.
Prison disciplinary proceedings may, however, constitute
a denial of due process in the context of a civil rights action
under S 1983 when they are instituted for the sole purpose
of retaliating against an inmate for his/her exercise of a
constitutional right. In Allah v. Seiverling, 229 F.3d 220 (3d
Cir. 2000), we stated:
Sandin instructs that placement in administrative
confinement will generally not create a liberty interest.
Retaliation may be actionable, however, even when the
retaliatory action does not involve a liberty interest.
[G]overnment actions, which standing alone do not
violate the Constitution, may nonetheless be
constitutional torts if motivated in substantial part by
a desire to punish an individual for exercise of a
constitutional right.
Seiverling, 229 F.3d at 224 (internal citations and quotation
marks omitted).
We have previously held that falsifying misconduct
reports in retaliation for an inmate’s resort to legal process
is a violation of the First Amendment guarantee of access to
the courts. See Millhouse v. Carlson, 652 F.2d 371, 374 (3d
17
Cir. 1981). In Millhouse, the inmate alleged that prison
officials retaliated against him by fabricating misconduct
charges in response to his civil rights suit against the
prison officials. We concluded that "[s]uch allegations, if
proven at trial, would establish an infringement of
Millhouse’s first amendment right of access to the courts."
Millhouse, 652 F.2d at 374.
Although Millhouse also involved an allegation that prison
officials fabricated misconduct charges, that case is
distinguishable from Smith’s because the conduct in
Millhouse implicated a constitutional right--the First
Amendment right to access to the courts. Smith’s purported
liberty deprivation, on the other hand, implicates no
constitutional right and therefore can not overcome the
hurdle erected by the holding in Sandin. See Sandin, 515
U.S. at 486. Under Sandin, an administrative sentence of
disciplinary confinement, by itself, is not sufficient to create
a liberty interest, and Smith does not claim that another
constitutional right (such as access to the courts) was
violated. Accordingly, we hold that the district court
correctly dismissed Smith’s due process claim.
In dismissing the claims, the district court correctly
relied upon the analysis of the Court of Appeals for the
Second Circuit in Freeman v. Rideout, 808 F. 2d 949 (2d
Cir. 1986). In Freeman, an inmate brought a due process
claim against prison authorities under S 1983 alleging that
the prison officials’ use of falsified evidence and bogus
misconduct reports resulted in his being unconstitutionally
confined in punitive segregation for 30 days. See Freeman,
808 F.2d at 951. The plaintiff was awarded damages
following a trial, but the award was reversed on appeal. The
court of appeals concluded that, with respect to the
misconduct hearing, due process is satisfied where an
inmate is afforded an opportunity to be heard and to defend
against the allegedly falsified evidence and groundless
misconduct reports. Thus, so long as certain procedural
requirements are satisfied, mere allegations of falsified
evidence or misconduct reports, without more, are not
enough to state a due process claim. See id. at 953.
Smith argues that "there is more" to his claim However,
he must clear two hurdles to overcome the district court’s
18
reliance on Freeman. First, it is now clear that the sanction
Smith challenges (seven months disciplinary confinement)
does not, on its own, violate a protected liberty interest as
defined in Sandin. Therefore, he can not establish that the
defendants’ conduct denied him substantive due process by
infringing upon a liberty interest. Second, he was afforded
a hearing and therefore had the opportunity to confront
and challenge the allegedly perjured testimony offered in
support of the misconduct reports. Under Freeman , that is
all he was entitled to.
Smith cites several cases in arguing that the district
court erred in relying upon Freeman. However, the cases he
cites are either distinguishable, or were decided before
Sandin, and are therefore of little precedential value.10 We
_________________________________________________________________
10. The cases Smith cites in support of his argument are distinguishable
in that they allege the deprivation of a constitutional right or liberty
interest apart from, or in conjunction with, the inmate’s segregation from
the greater prison population. See, e.g., Seiverling, 229 F.3d at 225
(administrative segregation in retaliation for filing law suits violated
inmate’s access to the courts); Millhouse, 652 F.2d at 374 (same); Grillo
v. Coughlin, 31 F.3d 53 (2d Cir. 1994) (the hearing itself did not comport
with due process because the fact finder was given falsified documents
that differed from the copies the inmate received); Franco v. Kelly, 854
F.2d 584 (2d Cir. 1988) (inmate alleged that misconduct reports were
fabricated in retaliation for his cooperation with an investigation by the
state’s Inspector General, thus implicating his right to petition the
government for redress of grievances); Cale v. Johnson, 861 F.2d 943
(6th Cir. 1988) (allegations that prison officials fabricated misconduct
charge in retaliation for inmate’s complaint about food was actionable as
a Bivens suit); Sprouse v. Babcock, 870 F.2d 450 (8th Cir. 1989) (false
misconduct charges constituted retaliation for filing lawsuits and
therefore stated a claim under S 1983 because it implicated access to the
courts); Harbury v. Deutch, 233 F.3d 596 (D.C. Cir. 2000) (allegations of
false statements designed to forestall a Bivens action stated a claim for
denial of access to the courts).
Rhodes v. Robinson, 612 F.2d 766 (3d Cir. 1979) and Black v. Lane, 22
F.3d 1395 (7th Cir. 1994) are the only two cases cited by Smith that
appear to support Smith’s claims. However, both Rhodes and Black were
decided before Sandin.
Although Smith alleges that he was cited in the misconduct reports to
cover up the defendants’ own improper conduct, his complaint does not
19
suggest a retaliatory motive that would implicate a constitutional right
such as access to the courts. Accordingly, accepting Smith’s allegations
as true, he claims only that defendants’ conduct was improper and in
bad faith, not that it denied him the due process that must form the
basis of his S 1983 claims.
11. In affirming the dismissal of the due process claims we do not
suggest that we agree with the district court’s conclusion that Smith is
improperly attempting to collaterally attack his state court conviction for
disorderly conduct. He pled nolo contendere to that charge, and that plea
does not bar his due process claims here. See Thomas v. Roach, 165
F.3d 137, 144-45 (2d Cir. 1999); see also FED. R. EVID. 410.
therefore find that the district court did not err in
dismissing Smith’s due process claims.
IV. Conclusion
Accordingly, we will affirm the district court’s dismissal of
Smith’s due process claims.11 However, we hold that the
district court erred in dismissing Smith’s claims under the
Eighth Amendment. Consequently, we vacate the entry of
summary judgment in favor of defendants Novitsky,
Yurkiewicz, Androshick, McCole, Zubris, and Jones. We
also hold that corrections officers have a duty to intervene
when other officers use excessive force irrespective of the
rank of the offending officers. Accordingly, we will also
reverse the dismissal of Smith’s Eighth Amendment claim
against Paulukonis.
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
20
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116 Mich. App. 552 (1982)
323 N.W.2d 480
HAMMERMEISTER
v.
RIVERSIDE INSURANCE COMPANY
Docket No. 56665.
Michigan Court of Appeals.
Decided May 21, 1982.
Charfoos, Christensen, Gilbert & Archer, P.C. (by John N. Marwick), for plaintiff.
Harvey, Kruse, Westen & Milan, P.C. (by Gary A. Maximiuk), for defendant.
Before: BRONSON, P.J., and MAHER and J.R. ERNST,[*] JJ.
PER CURIAM.
Appellant appeals by leave granted from an order entered in the Oakland County Circuit Court granting appellee's motion for summary judgment on the basis that appellant had improperly offset appellee's Social Security retirement benefits from wage-loss benefits due her under MCL 500.3107; MSA 24.13107. The trial court found that there existed no genuine issue as to any material fact. GCR 1963, 117.2(3).
This suit arose out of a March 25, 1979, automobile accident. At the time of the accident, appellee was 65 years of age and was collecting old-age Social Security benefits.
When appellant refused to discontinue setting off Social Security benefits from the wage-loss benefits it was paying, appellee instituted this suit. *554 Count II, the only one relevant to this dispute, averred that appellant had wrongfully refused to pay appellee certain no-fault insurance benefits. Appellant apparently filed an answer to this complaint, although it does not appear in the lower court file. Appellant contends that in respect to Count II, it asserted the following defenses (appellee does not contest the accuracy of appellant's claim):
"1. The failure of the plaintiff to provide reasonable proof of the fact and of the amount of the loss sustained as required by MCL 500.3124;
"2. The failure of the plaintiff to make any showing that the wage loss she seeks to recover is for work that she `would have performed during the first three years after the date of the accident' as required by MCL 500.3107;
"3. The failure of the plaintiff to provide any proof to support her claim for wage losses required by the contract of insurance;
"4. The wording of MCL 500.3109 which provides for a setoff of any benefit provided under the laws of any state or the federal government."[1]
We agree with appellant that summary judgment was improperly granted in this case. Considering first the propriety of an insurer setting off old-age Social Security benefits against wage-loss benefits, we agree with the panel of this Court which decided Jarosz v Detroit Automobile Inter-Ins Exchange, 109 Mich App 86; 310 NW2d 903 (1981). There, this Court stressed that the purpose behind MCL 500.3109(1); MSA 24.13109(1) was the *555 complete and effective coordination of benefits under Michigan's no-fault act with benefits provided under all other laws of the state and federal government. The Jarosz holding stands for the proposition that a no-fault insurer may reduce work-loss benefits by Social Security retirement benefits to the extent that the Social Security benefits would have been reduced had the insured continued to work.
On the facts before us, we cannot resolve the question of whether appellant is entitled to set off Social Security benefits against wage-loss benefits payable under the no-fault act. Indeed, we cannot even determine if appellant is liable to appellee for wage-loses benefits. By her own admission, appellee last worked on December 24, 1978. If the period between December 24 and the time of the accident can be deemed a term of "temporary" unemployment pursuant to MCL 500.3107a; MSA 24.13107(1), then appellant would be liable for wage-loss benefits. However, if appellee was fully retired as of December 24, 1978, appellant is not liable to her for wage-loss benefits. Assuming appellee was not fully retired, appellant might be entitled to a setoff in accordance with Jarosz (fn 1 in Jarosz gives an illustrative example as to how the setoff should be computed).
Apart from the setoff defense raised by appellant, other defenses were asserted which might well relieve it of any liability to appellee.[2] Neither the pleadings nor the factual posture of the case was such that appellee was entitled to judgment as *556 a matter of law or because no genuine issue existed as to any material fact.
Appellee asserts, however, that appellant either waived or is estopped from asserting any defenses relating to the computation and proof of wage loss because it paid the wage-loss claims minus the Social Security setoff. As authority, plaintiff cites Johnston v Manhattan Fire & Marine Ins Co, 294 Mich 550, 556; 293 NW 747 (1940), which states:
"As we have previously held, the insurer may waive its right to have proof of loss furnished within the time limited `by acts and conduct manifesting an intent and purpose not to claim the supposed advantage, or by so neglecting and failing to act as to induce a belief that it was the intention and purpose to waive.' Struble v National Liberty Ins Co, 252 Mich 566 [233 NW 417 (1930)]."
Given the current factual posture of this case, we believe plaintiff's reliance on Johnston is misplaced. In Johnston, following a bench trial, the insurer was found to have waived its rights to require a proper proof of loss. This determination came only after a consideration of the circumstances which related to the belated proof of loss. Such a determination of the intent and conduct of the insurer cannot be made by reference to the pleadings in this case. The mere fact that the insurer paid some wage-loss benefits is insufficient by itself for us to hold that, in the event the insured filed suit objecting to the amount of benefits paid, the insurer is precluded from asserting that it owes the insured nothing at all. An insurer might rationally conclude it is better to pay something on a suspect claim than to litigate the matter in the hope of paying nothing at all, yet *557 take the position that it has no liability to the insured where the insured files suit.
There may be more to appellee's waiver and estoppel arguments than appears on the current record. If so, appellee may present such evidence as it has on these claims to establish the same at trial.
Reversed and remanded. Costs to abide the final outcome of this case.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] This case was transferred from Wayne to Oakland County on June 17, 1980. It is possible that when the transfer occurred, certain relevant documents were misplaced. For purposes of this appeal, we assume the accuracy of appellant's claim that it filed an answer and the substance of this answer.
[2] Our opinion proceeds on the assumption that appellant really did answer appellee's complaint in the manner alleged in its brief on appeal. Given that this is only an assumption, we do not foreclose appellee from establishing on remand that no answer was ever filed or that the defenses asserted were not those claimed to have been raised by appellee.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 16-3965, 17-2451
_____________
IN RE: NEW JERSEY TAX SALES CERTIFICATES ANTITRUST LITIGATION
ARLENE M. DAVIES,
Appellant
______________
On Appeal from the United States District Court
for the District of New Jersey
(District Court No. 3-12-cv-01893)
District Judge: The Honorable Michael A. Shipp
______________
No. 16-3965 Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
July 13, 2017
No. 17-2451 Submitted Pursuant to Third Circuit L.A.R. 34.1(a)
Aug. 1, 2018
______________
Before: McKEE, AMBRO, and ROTH, Circuit Judges.
(Opinion Filed: September 6, 2018)
_______________________
OPINION*
_______________________
*
This disposition is not an opinion of the full court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
McKEE, Circuit Judge.
In these associated appeals, Objector-Appellant Arlene Davies challenges several
decisions of the District Court in relation to settlements in an underlying antitrust class
action concerning New Jersey tax sale certificates.1 Davies challenges the District
Court’s order granting final approval of those settlements.2 She also appeals the District
Court’s order imposing an appeal bond.3 For the reasons that follow, we will affirm.
I. Class Settlement
Davies argues that the District Court abused its discretion by approving a $9.59
million cash compensation settlement in a class action lawsuit.4 She asserts that the
settlement amount is not “fair, reasonable, and adequate,” as required under Rule 23(e)(2)
1
The underlying class action involves an alleged eleven-year statewide conspiracy
to rig tax lien auctions in New Jersey. As part of the State’s statutory scheme to regulate
the existence and sale of tax liens for unpaid property taxes, N.J.S.A. 54:5-1 to -137, New
Jersey tax lien auctions occur when a State resident fails to pay property taxes and the
municipality in which the property lies auctions the lien to prospective buyers pursuant to
N.J.S.A. 54:5-19. The auction process is designed to be competitive, with bidding
opening at an initial interest rate of 18 percent (representing the interest that the defaulted
property owner must pay on the tax debt), which decreases with each successive bid. The
underlying class action in this matter involved a claim that bidders colluded to keep
interest rates higher than they would otherwise have been in competitive auctions.
2
Davies’s appeal of the settlement approval and certification orders is listed as
Case No. 16-3965. References to the filings in that case, including the appendix, will use
the prefix “Settlement” so as to distinguish from filings in the associated case, Case No.
17-2451.
3
Davies’s appeal of the order imposing an appeal bond is listed as Case No. 17-
2451. References to the filings in that case, including the appendix, will use the prefix
“Bond” so as to distinguish from filings in the associated case, Case No. 16-3965.
4
We note that the parties dispute whether Davies has standing to appeal. For
purposes of this opinion, we will assume arguendo that Davies has standing. See Diggs v.
Penn. Pub. Util. Comm’n, 180 F.2d 623, 626 (3d Cir. 1950).
2
of the Federal Rules of Civil Procedure. She also claims that the structure of the
settlement itself is unfair due to its distribution terms, which she says precludes approval.
We review each of her arguments in turn.
A. Fairness of the Settlement
A class action settlement is “left to the sound discretion of the district court,” and
we accord great deference to the District Court’s factual findings.5 Accordingly, we
review class settlements and certifications for an abuse of discretion.6 An abuse of
discretion occurs when a “district court’s decision rests upon a clearly erroneous finding
of fact, an errant conclusion of law, or an improper application of law to fact.”7
A class action may not be settled under Federal Rule of Civil Procedure
23(e) unless the proposed settlement is “fair, reasonable and adequate.”8 To determine
whether a class action settlement meets these standards, courts in this circuit employ the
test set forth in Girsh v. Jepson,9 which requires consideration of the following factors:
(1) the complexity, expense, and likely duration of the litigation; (2) the reaction of the
class to the settlement; (3) the stage of the proceedings and the amount of discovery
completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6)
the risks of maintaining the class action through trial; (7) the ability of the defendants to
5
Girsh v. Jepson, 521 F.2d 153, 156 (3d Cir. 1975).
6
In re Gen. Motors Corp. Pick-Up Truck Fuel Tank Prod. Liab. Litig., 55 F.3d
768, 782-83 (3d Cir. 1995) [hereinafter In re GMC].
7
Id. at 783 (quotation marks omitted) (citing Int’l Union UAW v. Mack Trucks,
Inc., 820 F.2d 91, 95 (3d Cir. 1987).
8
Fed. R. Civ. P. 23(e).
9
521 F.2d at 157.
3
withstand a greater judgment; (8) the range of reasonableness of the settlement fund in
light of the best possible recovery; and (9) the range of reasonableness of the settlement
fund to a possible recovery in light of all the attendant risks of litigation.10 A court may
approve a settlement even if it does not find that each of these factors weighs in favor of
approval.11
Where negotiations were conducted “at arms’ length by experienced counsel after
adequate discovery, . . . there is a presumption that the results of the process adequately
vindicate the interests of the absentees.”12 However, in cases such as this, where
approval for settlement and class certification are sought simultaneously, “we require
district courts to be ‘even more scrupulous than usual’ when examining the fairness of the
proposed settlement.”13 This is intended to “ensure that class counsel has engaged in
sustained advocacy throughout the course of the proceedings, particularly in settlement
negotiations, and has protected the interests of all members.”14
Here, the District Court concluded that all but one of the aforementioned Girsh
factors weighed in favor of approving the settlement.15 Most relevant to this appeal, the
District Court determined that the precise damages achieved by a winning verdict were
10
Id.
11
See Halley v. Honeywell Int’l, Inc., 861 F.3d 481, 489-90, 491 (3d Cir. 2017)
(affirming settlement approval where some factors did not weigh in favor of settlement).
12
In re GMC, 55 F.3d at 796.
13
In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 534 (3d Cir. 2004)
(quoting In re GMC, 55 F.3d at 805).
14
Id.
15
The District Court determined that only the eighth Girsh factor, the ability of the
defendants to withstand a greater judgment, weighed against settlement approval.
4
“not possible to predict,” but that the “significant risks of establishing liability, damages,
and maintaining a class action” nevertheless placed the proposed $9.59 million settlement
“within the range of reasonableness.”16
Davies disagrees. She claims that, in approving the settlement, the District Court
incorrectly assessed both the “relative strength of the case” and the eighth Girsh factor,
the range of reasonableness of the settlement in light of the best possible recovery.17
1. Relative strength of the case
The fourth and fifth Girsh factors “survey the possible risks of litigation in order
to balance the likelihood of success and the potential damage award if the case were
taken to trial against the benefits of an immediate settlement.”18
Davies claims that the District Court underestimated the relative strength of the
case by affording too little weight to the direct evidence. She specifically cites the guilty
pleas of several defendants and representatives of the defendant companies in connection
to the alleged bid-rigging conspiracy and complains that these guilty pleas contradict the
District Court’s assessment of the strength of the case. She contends that the court’s
findings are also undermined by the allegations in Plaintiffs’ First Amended Complaint
and the court’s own observation at the motion-to-dismiss stage that those allegations
16
Settlement App. 45-46. In addition to the Girsh analysis, the District Court
found that other considerations weighed in favor of approving the proposed settlements,
including the ability of class members to opt out and the fact that experienced counsel
engaged in arm’s-length negotiations.
17
Davies’s Settlement Br. 21.
18
In re Prudential Ins. Co. Am. Sales Practice Litig. Agent Actions, 148 F.3d 283,
319 (3d Cir. 1998); see Girsh, 521 F.2d at 157.
5
“provide the necessary facts and circumstantial evidence needed to establish” a broader
statewide conspiracy.19 Finally, she disagrees with the District Court’s “undue emphasis”
on the generic litigation risks inherent in any class action and with the court’s supposition
that antitrust class actions are difficult to prove.20
There is no error. Although they are somewhat helpful to Plaintiffs’ claims of
liability as to specific defendants, the guilty pleas do not define the scope of any bid-
rigging. They do not identify specific auctions that the defendants rigged or the degree to
which the rigging affected the eventual interest rate on any given lien.21 Moreover, only
fifteen of the fifty defendants entered guilty pleas, and several defendants were acquitted
of criminal charges pertaining to the alleged scheme. Without more detailed evidence as
to the specific auctions that were affected by these defendants’ criminal activity, or the
extent of the impact, we cannot say that the District Court abused its discretion in
acknowledging the limited value of these criminal pleas in the overall context of this
complex antitrust class action.
Davies’s reliance upon the allegations in the First Amended Complaint is also
misplaced. Allegations are not evidence. Nor are they transformed into evidence by a
19
Davies’s Settlement Br. 30 (alteration omitted) (quoting Settlement App. 1218
(Oct. 31, 2014 Mem. Op. on Defendants’ Motion to Dismiss the First Amended
Complaint)).
20
Id. at 31.
21
Indeed, only three of the guilty pleas even refer to illegal bid-rigging activity in
the first two years of the class period, which began in 1998. See Settlement App. 1615
(describing information in guilty plea of Robert W. Stein); Settlement App. 1620
(describing information in guilty plea of Crusader Servicing Corp.); Settlement App.
1624 (describing information in guilty plea of Robert U. Del Vecchio, Sr.).
6
court’s conclusion that they are sufficient to survive a challenge under Federal Rule of
Civil Procedure 12(b)(6). Rule 12(b)(6) “does not impose a probability requirement” for
inferring, as in this case, the existence of an illegal agreement between the defendants.22
It “simply calls for enough facts to raise a reasonable expectation that discovery will
reveal evidence” of Plaintiffs’ claim, not a conclusion that such evidence has already
been revealed.23 Accordingly, Davies cannot support her high estimation of the strength
of Plaintiffs’ case by pointing to the District Court’s appraisal of their allegations at the
motion-to-dismiss stage.
Finally, we find no abuse of discretion in the District Court’s discussion of the
litigation risks. Though Davies argues that the court emphasized the risks inherent in any
general class action or in an antitrust class action, she supplies no authority for her
position. Davies’s Settlement Br. 31. The District Court, in contrast, supported its
conclusion that antitrust actions such as this are “complex . . . to prosecute.”24 Its
observation was reasonable in light of the elements Plaintiffs must demonstrate to
establish their claim under § 1 of the Sherman Act, e.g., that the defendants engaged (1)
in a concerted action that (2) produced anticompetitive effects within the relevant product
and geographic markets, (3) was illegal, and (4) injured the class as a proximate result.25,
22
Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 556 (2007).
23
Id (emphasis added).
24
Settlement App. 40 (citing In re Ins. Brokerage Antitrust Litig., 282 F.R.D. 92,
102 (D.N.J. 2012)).
25
In re Ins. Brokerage Antitrust Litig., 579 F.3d 241, 267 (3d Cir. 2009).
7
26
The court had already observed that not all of the auctions were rigged. Moreover, for
those auctions that were rigged, the resulting interest rates on Plaintiffs’ liens may not
have been different absent the conspiracy.27 Davies supplies no authority for the
proposition it would be easy to establish Plaintiffs’ likely interest rate absent the
conspiracy28 or for the proposition that the duty to undertake such an inquiry should be
lightly weighed. We find the District Court’s reliance upon such factors to have been
26
Davies asserts that Plaintiffs would not be required to conduct an auction-by-
auction analysis and that they would only need to show that Defendants agreed to rig
auctions. While that may be true for purposes of demonstrating that Defendants engaged
in concerted action, see W. Penn. Allegheny Health Sys., Inc. v. UPMC, 627 F.3d 85, 99
(3d Cir. 2010) (“A plaintiff may plead an agreement [in violation of § 1 of the Sherman
Act] by alleging . . . circumstantial evidence . . . .”), Plaintiffs are still required to show
that Defendants’ antitrust scheme was the proximate cause of Plaintiffs’ injury. In re Ins.
Brokerage Antitrust Litig., 579 F.3d at 267. That requires an analysis of each auction.
27
Davies criticizes this determination as lacking any evidentiary basis and as
amounting to nothing more than blind acceptance of Class Counsel’s “[c]onclusory
[a]llegations” regarding the scope of the conspiracy. Davies’s Settlement Br. 24. She
also argues that this determination cannot be reconciled with the court’s findings upon
certifying the class, because the class definition was fashioned from the First Amended
Complaint’s allegations of a widespread conspiracy.
Davies once more relies incorrectly on the evidentiary value of the allegations in
the First Amended Complaint. These allegations may reflect a good-faith appraisal of
Plaintiffs’ best case regarding the scope of the conspiracy, but they do not establish that
the conspiracy existed at such breadth or that the theory would not shift as more evidence
was obtained. Furthermore, Davies’s argument improperly assumes that because the
District Court accepted the likely “statewide” character of the conspiracy for purposes of
defining the class, the court cannot find that any auctions were free from rigging.
Davies’s Settlement Br. 29. She provides no support for this supposition.
28
During the final settlement approval hearing held on April 25, 2016, the District
Court learned that ascertaining the extent of the injury would require Plaintiffs to (1)
create a database of all tax liens sold during class period, showing how many bids were
made for each; (2) siphon out liens purchased by non-defendants; and (3) obtain lien data
from the start of the class period to establish how a market free of collusion would look.
Class Counsel claimed that such efforts would easily amount to millions of dollars in
expert fees and data costs.
8
reasonable.29
2. Range of reasonableness of the settlement
The eighth and ninth Girsh factors focus on the range of reasonableness of a
settlement in light of both the best possible recovery and the risk the parties would face if
the case went to trial.30 “In order to assess the reasonableness of a proposed settlement
seeking monetary relief, ‘the present value of the damages plaintiffs would likely recover
if successful, appropriately discounted for the risk of not prevailing, should be compared
with the amount of the proposed settlement.’”31
Davies asserts, as a preliminary matter, that Class Counsel presented “no
evidence” of the class’s damages or the factors bearing thereupon that permit rational
evaluation of the settlement amount.32 She claims that the District Court therefore abused
its discretion by accepting the conclusory allegations of counsel regarding the scope of
the conspiracy.
Davies misapprehends the evidentiary requirements for the evaluation of proposed
class settlements. Though the court “cannot substitute the parties’ assurances or
conclusory statements for its independent analysis of the settlement terms” in approving a
settlement,33 admissible evidence is not required.34 Rather, the settlement evaluation
29
Cf. In re Prudential, 148 F.3d 283, 318 (3d Cir. 1998).
30
Id. at 322; Girsh, 521 F.2d at 157.
31
In re Prudential, 148 F.3d at 322 (quoting In re GMC, 55 F.3d at 806).
32
Davies’s Settlement Br. 24-25.
33
In re Pet Food Prod. Liab. Litig., 629 F.3d 333, 350-51 (3d Cir. 2010).
34
See In re Prudential, 148 F.3d at 319 (“The parties must have an ‘adequate
appreciation of the merits of the case before negotiating.’” (quoting In re GMC, 55 F.3d
9
involves only “two types of evidence: a substantive inquiry into the terms of the
settlement relative to the likely rewards of litigation[] and a procedural inquiry into the
negotiation process.”35 The former requires a judge to “apprise[] himself [or herself] of
all facts necessary for an intelligent and objective opinion of the probabilities of ultimate
success should the claim be litigated.”36 However, “all” does not mean “all” in this
context; in evaluating a settlement reached in hopes of avoiding trial, a judge is not
required to conduct a mini-trial.37
Here, the court pointed to a substantial amount of both direct and circumstantial
evidence Class Counsel identified in support of the finding that only some auctions were
rigged. Specifically, the court emphasized the “bid books” Class Counsel obtained from
various defendants outlining details about the bid-rigging conspiracy. The court learned
that, after comparing these books with information provided by early-settling defendants,
Class Counsel was able to identify only fifty auctions that were allegedly rigged. The
at 813)); 2 McLaughlin on Class Actions § 6:8 (14th ed.) (settling parties are required to
provide the court with: (i) sufficient factual background to the matter to provide comfort
that the court is making an informed decision, including any analyses of that information
they deem appropriate; (ii) a procedural history of each case; (iii) the arguments of the
settling parties regarding the underlying legal claims, and a frank evaluation of the
strengths and weaknesses of the respective positions; (iv) any Memoranda of
Understanding; (v) the settlement agreement and a description of its key terms, including
the scope of the class releases and all benefits to class members; and (vi) an affidavit
from class counsel affirming why they support the settlement and believe it to be in the
best interest of class members).
35
In re GMC, 55 F.3d at 796 (citations omitted).
36
Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v.
Anderson, 390 U.S. 414, 424 (1968) (dealing with the compromise of claims in
bankruptcy).
37
Weinberger v. Kendrick, 698 F.2d 61, 74 (2d Cir. 1982).
10
court also learned that Plaintiffs had received additional financial information from the
settling defendants that set out their financial condition. Much of this information
indicated the amount of liens their conduct likely affected and corroborated the figures
contained in filings in the criminal proceedings against some defendants. And as noted
above, several defendants had been acquitted of criminal charges relating to the alleged
conspiracy, and most had not been criminally charged at all. The court had also been
informed that Plaintiffs had amassed nearly 30,000 pages of documents from Defendants;
that Class Counsel had expended more than 7,000 hours on achieving the settlement; and
that proving each defendant’s liability and the specific effect on individual auctions
would be a “very, very complicated” task.38
The court clearly possessed sufficient information to evaluate the reasonableness
of the settlement and to “detail the exceptional weakness of [P]laintiffs’ case.”39 Indeed,
the court emphasized the class members’ difficult burden of showing that a particular tax
lien was the subject of a conspiracy and the price at which the lien would have sold
absent the conspiracy. The court also highlighted both Defendants’ intent to oppose class
certification and move for summary judgment, and the complexities inherent in
prosecuting a case that sounds in antitrust and that involves a settlement class of
thousands. Accordingly, the court’s conclusion that the settlement was reasonable in
light of the attendant risks of litigation is amply supported by this record.
38
Settlement App. 2612.
39
Davies’s Settlement Reply Br. 4.
11
Davies nevertheless claims that the strength of the case did not justify the
settlement because it constituted a mere 2.5 percent of the best possible recovery, which
she posited to be $400 million,40 a figure the court “accept[ed]” in its approval order.41
However, Davies’s calculation is based upon a mischaracterization of the scope of the
alleged bid-rigging conspiracy. Namely, it is founded not upon the value of Plaintiffs’
overall tax liens, but upon Plaintiffs’ statement in the First Amended Complaint that New
Jersey’s 566 municipalities auction up to $200 million in delinquent tax obligations in
total every year.42 The calculation also presumes that the full $200 million in tax sale
certificates would, in the case of a best possible recovery, have been bought at an 18
percent interest rate (the initial interest rate set for a given tax sale bid), such that there
would have been only a single bid per lien. Davies’s calculation of the best possible
recovery is necessarily overbroad, as it pertains to the specifics of the alleged bid-rigging
scheme in this case, and it is more than unrealistic, as it concerns the structure of New
40
Davies arrived at this calculation by determining that one year’s interest at 18%
(the initial interest rate set for a given tax sale bid) on $200 million in tax sale certificates
amounts to $36 million, which nears $400 million when extrapolated over the class
period of 1998–2009. This figure does not include treble damages or pre-judgment
interest, which a district court is not required to consider in assessing the fairness of a
proposed settlement. Sullivan v. DB Investments, Inc., 667 F.3d 273, 325 (3d Cir. 2011)
(en banc).
41
Settlement App. 46 (“[A]ccepting Ms. Davies’s calculations[,] the Court
evaluates the reasonableness of the settlement fund in light of a best possible recovery of
$400 million.”).
42
The $200 million figure is the high end of Plaintiffs’ $100-200 million
estimation of the total tax sale certificate revenue earned by all New Jersey
municipalities from all auctions and all bidders, regardless of whether they include the
defendants in this case or the liens of the proposed class members.
12
Jersey’s tax sale certificate auctions.
More critically, Davies provides no authority for her claim that a settlement cannot
be reasonable if it constitutes a certain percentage of the best possible recovery. In fact,
we have said that an “evaluating court must . . . guard against demanding too large a
settlement” since, “after all, settlement is a compromise, a yielding of the highest hopes
in exchange for certainty and resolution.”43 In recognition that “the outcome of litigation
is always uncertain and inevitably time-consuming and expensive, courts have long held
that a cash settlement providing only a fraction of the potential recovery does not render a
settlement inadequate or unfair.”44 Given our conclusion that the District Court did not
err in evaluating the complexity of this action, the risks of trying to maintain class
certification and of establishing damages and liability, the court did not abuse its
discretion in approving the settlement as within the range of reasonableness.45
3. Other Girsh factors
Under the third Girsh factor, courts inquire into the type and amount of discovery
the parties have undertaken.46 Davies emphasizes that settlement was reached in this case
prior to formal discovery and claims that the court abused its discretion in accepting
Class Counsel’s undetailed account of its informal discovery.
43
In re GMC, 55 F.3d at 806.
44
2 McLaughlin on Class Actions § 6:16.
45
Settlement App. 41 (noting that, out of thousands of class members, only three
opted out of the settlement and two objected to it, thus satisfying the second Girsh factor
of the class’s reaction); see In re Pet Food, 629 F.3d at 351 (holding that an
overwhelmingly positive response from the class satisfies the second Girsh factor).
46
In re Prudential, 148 F.3d at 319; Girsh, 521 F.2d at 157.
13
As noted above, Class Counsel provided the District Court with copious
information regarding the amount of informal discovery obtained. Furthermore,
Plaintiffs began obtaining discovery from some defendants as early as 2012, and
continued requesting and receiving discovery until at least the middle of 2014.47 We thus
find no error in the court’s conclusion that this factor weighed in favor of settlement.48
B. Potential Unequal Treatment of Class Members
Next, Davies argues that even if the cash portion of the settlement is fair,
reasonable and adequate, the structure of the settlement is not. She specifically points to
the fact that plaintiffs with outstanding tax liens will receive a redemption discount in
addition to the cash settlement. Davies argues that this amounts to disparate treatment of
class members, thus precluding approval of the settlement. However, we have held that
allocation settlements may indeed differ among class members based on the extent of
47
See McAlarnen v. Swift Transp. Co., Inc., No. 09-1737, 2010 WL 365823, *7
(E.D. Pa. Jan. 29, 2010) (finding that third Girsh factor weighed in favor of settlement
where “[s]ubstantial briefing and research on the issues ha[d] taken place”).
48
We also reject Davies’s argument that the District Court abused its discretion in
assessing the second and seventh Girsh factors, which respectively inquire into the
class’s reaction to the settlement and the ability of the defendants to withstand a greater
judgment. Girsh, 521 F.2d at 157. Davies generally asserts that the court “should [have]
accorded little weight” to the second factor, but the court properly observed that, of an
estimated class of thousands of members, only two individuals objected to the settlement,
including Davies. Similarly, though the court found the seventh factor to weigh against
settlement, Davies passingly complains that it should have afforded this factor more
weight “[i]n light of its other errors.” Settlement App. 33. That is not the standard for an
abuse of discretion, and Davies supplies no support for her supposition that error in
evaluating one Girsh factor should automatically endanger a finding under the other
Girsh factors. In any event, as we have already explained, we disagree that there was any
error in the Girsh analyses that the court performed and that Davies now challenges.
14
their damage.49 And here we find it reasonable that the negotiated settlement treats class
members who still maintain outstanding tax liens differently than those without tax liens
of relief.50 While this may mean that certain persons may receive greater settlement
benefits than others, such allocation is reasonable, and the District Court’s approval was
not an abuse of discretion.
II. Rule 7 Appeal Bond
Under Federal Rule of Appellate Procedure 7, a “district court may require an
appellant to file a bond or provide other security in any form and amount necessary to
ensure payments of costs on appeal.” We review an order to impose an appeal bond
under Rule 7 for an abuse of discretion.51 However, we apply a de novo standard in
determining costs allowable for an appeal bond, which is a legal question.52
Davies argues that imposition of an appeal bond constituted error. She claims that
the court improperly included administrative expenses within its calculation of “costs on
49
Sullivan v. DB Inv., Inc., 667 F.3d at 328 (“Courts generally consider plans of
allocation that reimburse class members based on the type and extent of their injuries to
be reasonable, and we are mindful that district courts have broad supervisory powers over
the administration of class action settlements to allocate the proceeds among the claiming
class members equitably.” (internal quotation marks and citations omitted) (citing McCoy
v. Health Net, Inc., 569 F. Supp. 2d 448, 469 (D.N.J. 2008); In re Corel Corp., Inc. Sec.
Litig., 293 F. Supp. 2d 484 493 (E.D. Pa. 2003)).
50
This argument is bolstered by the fact that the redemption discounts are
independent from the settlement funds available to all class members and were not shown
to have affected those funds, regardless of whether a person had an outstanding tax lien.
51
See Fed. R. App. P. 7, 1979 advisory committee’s note (“The amended rule
would leave the question of the need for a bond for costs and its amount in the discretion
of the court.”); Adsani v. Miller, 139 F.3d 67, 71, 79 (2d Cir. 1998).
52
In re Target Corp. Customer Data Sec. Breach Litig., 847 F.3d 608, 614 (8th
Cir. 2017); Adsani, 139 F.3d at 71.
15
appeal” under Rule 7.53 She further contends that even if an appeal bond was authorized,
the amount was unreasonable because the only costs for which she should be liable are
taxable against her under Rule 39. She additionally states that such a large amount,
particularly when inclusive of administrative costs, is only appropriate when serial
objectors pursue meritless appeals.
Davis provides no binding authority for her claims.54 Moreover, although we have
not yet formally held that administrative expenses may be included in Rule 7 appeal
bonds, we have previously permitted their inclusion.55 Thus, we find no abuse of
discretion in the court’s inclusion of administrative expenses in Davies’s appeal bond.
We also note that though Plaintiffs requested an appeal bond of at least $61,845,
the District Court found their request excessive and only ordered a $10,000 bond. The
District Court reasoned, and we agree, that the amount of the bond did not foreclose
53
Davies’s Bond Br. 17-18.
54
Davies incorrectly states that there is unanimity from our sister circuit courts of
appeals in determining that Rule 7 bonds cannot include administrative expenses, and
cites to both non-precedential, out-of-circuit opinions as well as out-of-circuit opinions
that address separate issues such as attorney’s fees. See Davies’s Bond Br. at 17–18
(quoting In re Target Corp. Customer Data Sec. Breach Litig., 847 F.3d 608 (8th Cir.
2017); Allen v. J.P. Morgan Chase Bank, NA, No. 15-3425, 2015 WL 12714382 (7th Cir.
Dec. 4, 2015); Tennille v. W. Union Co., 774 F.3d 1249 (10th Cir. 2014); Int’l Floor
Crafts, Inc. v. Dziemit, 420 Fed. App’x 6 (1st Cir. 2011); Adsani, 139 F.3d at 67; Azizian
v. Federated Dep’t Stores, Inc., 499 F.3d 950 (9th Cir. 2007); Vaughn v. Am. Honda
Motor Co., 507 F.3d 295 (5th Cir. 2007); In re Cardizem CD Antitrust Litig., 391 F.3d
812 (6th Cir. 2004); Pedraza v. United Guar. Corp., 313 F.3d 1323 (11th Cir. 2002); In
re Am. President Lines, Inc., 779 F.2d 714 (D.C. Cir. 1985)). While several of our sister
circuits have stated that Rule 7 cannot include administrative bonds, it is incorrect to state
that there is unanimity. See In re Nutella, 589 F. App’x 53, 61 (3d Cir. 2014) (affirming
imposition of appeal bond including administrative costs).
55
See In re Nutella, 589 F. App’x at 61.
16
Davies’s ability to appeal the class settlement decision while still providing some security
to the Plaintiffs of the original class action. Given the District Court’s vast reduction of
the bond request and its analysis of both the costs incurred by Plaintiffs as well as
Davies’s ability to pay, we discern no abuse of discretion in its determination to order a
$10,000 appeal bond under Rule 7.
III.
For the reasons set forth above, we affirm the judgment of the District Court.
17
| {
"pile_set_name": "FreeLaw"
} |
271 F.Supp.2d 1196 (2003)
CHEVRON U.S.A., INC., Plaintiff,
v.
James E. LUTZ, Defendant.
No. C01-3616 MHP.
United States District Court, N.D. California.
July 10, 2003.
*1197 Robert C. Phelps, Pillsbury Winthrop LLP, San Francisco, CA, for Plaintiff.
Peter L. Simon, Beyers Costin & Case, Santa Rosa, CA, for Defendant.
MEMORANDUM AND ORDER
re Defendant's Motion for Partial Summary Judgment
PATEL, Chief Judge.
Plaintiff Chevron U.S.A., Inc., ("Chevron") brought this action for termination of defendant James Lutz's franchise under the Petroleum Marketing Practices Act ("PMPA"), 15 U.S.C. § 2801 et seq., on grounds that defendant James Lutz ("Lutz") failed to maintain records required by the franchise lease agreement and failed to comply with state and federal *1198 tax laws in violation of the lease agreement and the PMPA. Now before the court is defendant's motion for partial summary judgment on the issue of his intent to file incorrect tax returns. Having considered the arguments presented, and for the reasons set forth below, the court rules as follows.
BACKGROUND
For the past 34 years, James Lutz has operated the Chevron station at 1440 East Washington Boulevard in Petaluma, California (the "service station") as a franchisee for Chevron. James Lutz Dec. ¶ 2. James Lutz's son, Dan Lutz, is employed as manager of the service station. Dan Lutz Dec. ¶ 2. Tim Lutz, James Lutz's eldest son, works as an certified public accountant for an accounting firm in San Jose, California. Tim Lutz Dec. ¶ 2. For the past twenty years, Tim Lutz has prepared tax returns for the service station as well as his father's personal tax returns. Tim Lutz Dec. ¶ 4.
Throughout the time he has run the service station, James Lutz has operated under written lease agreements with Chevron. James Lutz Dep. at 48:11-14. On April 6, 2001, Lutz entered into a three year lease of the station from Chevron consisting of a Dealer Lease ("lease agreement"), Dealer Supply contract and related agreements (collectively "dealer agreements"). Dealer Agreements, Snyder Dec., Exh. A; James Lutz Dep. at 74:19-17:14; Joint Statement of Undisputed Facts ("JUF") ¶ 3.
The previous lease agreement, signed in 1998, provided that Chevron would remodel the service station to add a convenience store and additional gasoline dispensers. JUF ¶ 12. The renovation took approximately four months and was completed on July 6, 1998. Id. ¶ 13. After the station reopened, Chevron allowed Lutz to operate at discounted rents until January 1, 1999. Rent Invoices, Toliver Dec., Exh B. After January 1, 1999, Lutz was required to pay a rent based on a percentage of the greater of the fuel sold during that month or 125% of the fuel sold during the same calendar month the previous year. Reconstruction Agreement, Snyder Exh. C ¶ 7. Under this rent structure, the station became less profitable for the Lutz family. Dan Lutz Dep. at 63:23-64:25. In early 1999, Dan Lutz complained to Chevron about this rent structure and the resulting increase in monthly rent. Dan Lutz Dep. at 46:4-52:14.
The service station currently has two Electronic Point of Sale ("EPOS") cash registers. JUF ¶ 15. The EPOS registers transmit sales information at the service station to Chevron. JUF ¶ 16. Lutz also keeps a personal computer in an office at the service station which he uses to track sales. JUF ¶ 17. Lutz maintains that there has been a history of problems with the computer system since the installation of the EPOS terminals in approximately 1992. James Lutz Dec. ¶ 5; Dan Lutz Dec. ¶ 5. In particular, the Lutzes believe that computer has at times consistently generated inaccurate data for certain sales figures. James Lutz Dec. ¶ 5; Dan Lutz Dec. ¶ 5. For example, the computers might generate accurate figures for total gas sales, but inaccurate figures for total sales. The Lutzes stated that there has been confusion in the business over which of the computer-generated figures are trustworthy. James Lutz Dec. ¶ 5; Dan Lutz Dec. ¶ 5.
Lutz maintains that in 1999, he experienced some difficulties with the computer in their service station, after which Dan and Tim Lutz decided that the computer was calculating the total sales figure incorrectly, although the total sales tax figure remained reliable. Dan Lutz Dec. ¶ 6; Tim Lutz Dec. ¶¶ 8-9. In preparing the taxes for the service station, rather than *1199 use the total sales figure which the computer generated, Tim Lutz calculated the total sales by dividing the total sales tax figure generated by the EPOS system by the sales tax rate. Tim Lutz Dec. ¶ 10.
On June 26, 2001, Everett Harry, an outside accountant retained by Chevron to conduct routine audits of several northern California service stations, visited the Service Station to review Lutz's records. Harry Dec.¶¶ 2, 4. Harry examined records stored both at the Service Station and at Lutz's home, made copies of some of the records, and left Dan Lutz with a list of additional documents he required to complete the audit. Id. ¶ 5. Upon reviewing the records provided, Harry discovered that the Lutz's tax records indicated total sales of approximately half a million dollars less than the figure indicated by data reported to Chevron by the EPOS terminal over the years 1999 and 2000.[1]Id. ¶ 7. In discussing additional document requests with Dan and Tim Lutz in July 2001, Harry also notified both the brothers of the discrepancies his review had revealed. Id. ¶¶ 6, 9; JUF ¶ 8. Tim Lutz provided some supplemental information on July 15, 2001. Id. ¶ 10.
On August 9, 2001, Tim Lutz sent Harry two pages of prepared computer spreadsheets, uncorroborated by business records, with a note stating, "Hope this helps. The difference appears to be in nontaxable sales." Id. ¶ 13. Neither the unsupported spreadsheets nor other documents subsequently received from the Lutzes completely explained to Harry the discrepancies which he had discovered. Id. ¶¶ 13-15. Harry reported to Chevron that in the two-year period he had audited, the total sales reflected on Chevron EPOS invoices were $523,028 greater those shown on the service station sales tax and income tax return. Harry Report to T.S. Toliver, Harry Dec., Exh A. Based on the contents of Harry's report, Chevron issued a Notice of Termination to Lutz on September 19, 2001. Toliver Dec. ¶ 10 & Exh A.
Shortly after the Chevron audit, Timothy Lutz filed amended 1999 tax returns for both the Lutz partnership and for James Lutz's personal income. Tim Lutz Dec. ¶ 17; 1999 Amended Return, Snyder Dec., Exh. I & J. He also corrected the 2000 returns which he had prepared at the time of the audit but not yet filed. Tim Lutz Dec. ¶ 17. No government agency has taken action against Lutz based on the handling of his 1999 income tax returns. James Lutz Dec. ¶ 18.
LEGAL STANDARD
I. Summary Judgment
Summary judgment shall be granted when there is no genuine issue of material fact and the movant is entitled to judgment as a matter of law. See Fed.R.Civ.P. 56(c). The moving party bears the initial burden of identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. The burden then shifts to the nonmoving party to "go beyond the pleadings, and by her own affidavits, or by the `depositions, answers to interrogatories, and admissions on file,' designate `specific facts showing that there is a genuine issue for trial.'" Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) (citations omitted). A dispute about a material fact is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The moving *1200 party discharges its burden by showing that the nonmoving party has not disclosed the existence of any "significant probative evidence tending to support the complaint." First Nat'l Bank v. Cities Serv. Co., 391 U.S. 253, 290, 88 S.Ct. 1575, 20 L.Ed.2d 569 (1968). The court does not make credibility determinations in considering a motion for summary judgment. See Anderson, 477 U.S. at 249, 106 S.Ct. 2505.
Questions involving a person's state of mind are generally factual issues inappropriate for resolution by summary judgment. Braxton-Secret v. A. H. Robins Co., 769 F.2d 528, 531 (9th Cir.1985). Where the defendant's intent is at issue, summary judgment is appropriate only if all reasonable inferences defeat the plaintiff's claims. White v. Roper, 901 F.2d 1501, 1505 (9th Cir.1990). Even where the basic facts are undisputed, summary judgment should not be granted where competing inferences may reasonably be drawn from those facts. Braxton-Secret, 769 F.2d at 531. Where the dispute centers on the legal effect of undisputed facts, however, the matter may properly be decided on summary judgment. Fonda v. Gray, 707 F.2d 435, 438 (9th Cir.1983).
II. The PMPA
The PMPA prohibits a franchisor of gasoline retail establishments from terminating a franchise agreement prior to the conclusion of the franchise term except in the circumstances set forth in 15 U.S.C. section 2802(b)(2). 15 U.S.C. § 2802(a). Among other grounds, section 2802(b)(2) allows termination of a franchise agreement when a franchisee breaches a provision of the franchise agreement which is "both reasonable and of material significance to the franchise relationship," 15 U.S.C. § 2802(b)(2)(A), or upon "the occurrence of an event which is relevant to the franchise relationship and as a result of which termination of the franchise or nonrenewal of the franchise relationship is reasonable." 15 U.S.C. § 2802(b)(2)(C).
Section 2802(c) sets forth a nonexhaustive list of occurrences which qualify as "events relevant to the franchise" upon which termination is "reasonable" under section 2802(b)(2)(C). Should an event listed in 2802(c) occur, the franchise may be terminated without further inquiry into whether the violation is serious enough to warrant termination. Atlantic Richfield Co. v. Guerami, 820 F.2d 280, 283 (9th Cir.1987). Included on that list and relevant to the present action are "fraud or criminal misconduct by the franchisee relevant to the operation of the marketing premises," 15 U.S.C. § 2802(c)(1), and "knowing failure of the franchisee to comply with Federal, State, or local laws or regulations relevant to the operation of the marketing premises," 15 U.S.C. § 2802(c)(11). The PMPA defines "failure" for purposes of the statute so as not to include "any failure which is only technical or unimportant to the franchise relationship." 15 U.S.C. § 2801(13)(A).
The Ninth Circuit has recognized that the chief purpose of the PMPA is to remedy the disparities in bargaining power between franchisees and franchisors in order to protect the franchisee's reasonable expectation of continuing the franchise relationship. Unocal Corp. v. Kaabipour, 177 F.3d 755, 762 (9th Cir.1999), cert. denied, 528 U.S. 1061, 120 S.Ct. 614, 145 L.Ed.2d 509 (1999). Where no competing interest presents itself, the statute should be construed liberally to protect the franchisees. Id. at 765.
DISCUSSION
In his motion for summary judgment, Lutz argues that in order to terminate the franchise relationship based on Lutz's submission of incorrect tax returns, Chevron must prove that he knowingly filed false *1201 tax returns. Lutz maintains that based on the evidence presented, no reasonable jury could find that he intended to submit incorrect tax returns, thereby failing to comply with state and federal law. Before turning to the evidence of Lutz's intent to file false tax returns, the court first addresses whether Chevron need prove intent to succeed in its action for termination.
I. Intent Showing Required for Termination
Chevron maintains that defendant's filing of false income tax returns warrants termination as a violation of both the dealer agreement under section 2802(b)(2)(A) and as an event relevant to the franchise relationship under section 2802(b)(2)(C).[2] The provisions of the lease agreement that Chevron maintains were violated closely track the language of the relevant sections of 2802(c). Following the wording of section 2802(c)(1), the lease agreement provides for termination upon "[u]nlawful, fraudulent or deceptive acts or practices or criminal misconduct by Dealer relevant to the operation of the Premises ...." Lease Agreement, Snyder Dec., Exh. A ("Lease Agreement") ¶ 7(b)(8). For Lutz's understatement of income to qualify as fraudulent under these terms, he must have knowingly and intentionally misrepresented his true income. See Bradford v. Comm'r of Internal Revenue, 796 F.2d 303, 307 (9th Cir.1986) (defining fraud under 26 U.S.C. § 6653 as intentional wrongdoing with the specific intent to avoid a tax); Black's Law Dictionary 670 (7th ed.1999) (defining fraud as a "knowing misrepresentation of the truth or concealment of a material fact").
The lease agreement also provides for termination if the franchisee "knowingly fails to comply with Federal state or local laws or regulations relevant to the use or operation of the [station,]" Lease Agreement ¶ 7(b)(4). This term is in all material ways equivalent to subsection 2802(c)(11). The text of these provisions clearly states that a failure to comply with the law must be knowing in order to warrant termination.
Chevron also points to paragraph 2(c) of the lease agreement, which states that "Dealer shall ... (10) comply with all applicable Federal state and local laws and regulation relevant to the use or operation of the Premises ...." Lease Agreement ¶ 2(c)(10). This articulation of Lutz's obligations goes so far as to include unknowing and unintentional violations of the law.
Under the PMPA, however, violation of a contractual term of the lease agreement may only result in termination of the franchise where the provision violated is "reasonable and of material significance to the franchise relationship." 15 U.S.C. § 2802(b)(2)(A). Congress addressed violations of law as a grounds for franchise termination directly in section 2811(c)(11) and determined that only knowing violations would be "relevant to the franchise relationship" and a "reasonable" ground for termination. 15 U.S.C. §§ 2802(b)(2)(C), 2802(c). Allowing Chevron to expand the statutory grounds for termination simply by writing stricter terms into its contracts would frustrate the PMPA's purpose of protecting the franchisee from uneven bargaining power and would transform Congress's explicit judgments on the proper grounds for termination *1202 into a list of suggestions for fair franchise agreements. This the court declines to do. Insofar as paragraph 2(c)(10) of the contract conflicts directly with statutory grounds for termination set forth in section 2911(c)(11) by allowing termination based on unknowing and unintentional violations of the law, the court finds that the provision of the lease agreement is not "reasonable and of material significance to the franchise." An unknowing failure to comply with federal, state or local laws or regulations is not grounds for termination under the PMPA.
All of the provisions of the lease agreement and the PMPA under which Chevron claims termination is proper require that the franchisee engage in fraud or other knowing violation of the law. Chevron therefore must prove that Lutz knowingly understated his income on his 1999 tax returns in order to prevail in this action.
II. Imputation of Intent of Lutz's Sons to Lutz
Lutz argues that Chevron cannot survive summary judgment on the grounds stated in the complaint by providing only evidence that Tim or Dan Lutz intended to file false tax returns, but must submit evidence to support a finding that James Lutz himself knowingly filed false tax returns. Lutz rests this argument on the assertion that the provisions of the PMPA under which Chevron seeks termination require intent on the franchisee alone and do not contemplate vicarious intent. Chevron does not dispute that the text of both the lease and the PMPA call for termination only upon knowing misconduct by the dealer.[3] Rather, they argue that the intent may be imputed under agency law because James Lutz's sons are his agents with respect to the financial management of the service station.
Agency law provides that a principal may be held civilly liable under tort law or other civil causes of action for the fraud of an agent acting with apparent authority. American Soc. of Mech. Eng'rs, Inc. v. Hydrolevel Corp., 456 U.S. 556, 565, 102 S.Ct. 1935, 72 L.Ed.2d 330 (1982). Where civil liability requires fraudulent intent, the fraudulent intent of the agent will suffice. United States ex rel. Rosales v. San Francisco Housing Authority, 173 F.Supp.2d 987, 1003 (N.D.Cal.2001) (Legge, J.). The present action, however, does not concern a tortious act or other form of civil liability, such as breach of contract. Chevron does not point to any cases in which a court has found a breach of contract rested solely on the agency relationship between one of the signatories and a third party.[4]
*1203 California law provides that "a principal is responsible to third persons ... for [his agent's] willful omission to fulfill the obligations of his principal." Cal. Civ.Code § 2338. Whether a particular obligation set forth in a contract may be breached by an agent of one of the signatories depends on the nature of contractual provision at issue. Accordingly, an examination of whether Lutz's sons can breach the relevant duties imposed under the contract must begin with the contract itself.
The provisions of both the lease agreement and the PMPA can be distinguished into two types: those that place requirements on the operation of the franchise and those that place personal requirements on the dealer. The former category includes such obligations as requiring the franchisee to pay its monthly rents, Lease Agreement ¶ 7(b)(3); 15 U.S.C. § 2802(c)(8), and to close the premises for no more than seven consecutive days, 15 U.S.C. § 2802(c)(9)(A). These terms do not refer to personal obligations of the dealer, but instead require the dealer to maintain certain standards for the operation of the business, presumably in order to maintain quality and uniformity. If these standards are not met, the dealer has failed his obligation under the lease agreement whether the dealer or his employees are directly responsible, unless the breach was beyond his "reasonable control." 15 U.S.C. § 2801(13)(B); see also O'Shea v. Amoco Oil Co., CCH Bus. Franchise Guide ¶ 9152 (D.N.J.1988) (finding service station franchisee breached provision requiring twenty-four hour operation even if station had closed due to "employee misconduct").
Both the lease agreement and the PMPA, however, also contain requirements which are undoubtedly personal to the franchisee, and which ensure that the dealer remains fit to carry out the franchise relationship. For example, termination is warranted if the dealer dies or becomes physically or mentally unable to provide for the continued operation of the station. Lease Agreement ¶¶ 7(b)(9), 7(b)(12); 15 U.S.C. § 2802(c)(3). Both the PMPA and the lease agreement also impose character requirements on dealers, Toliver Dec. ¶ 13, providing for termination if the dealer commits fraud or is convicted of a felony involving moral turpitude. Lease Agreement ¶¶ 7(b)(8), 7(b)(11); 15 U.S.C. §§ 2802(c)(1), 2802(c)(12). Allowing termination upon fraud or conviction of a felony involving moral turpitude recognizes that a "[g]ood faith belief of the franchisor that the franchisee is untrustworthy or engages in fraudulent practices undermines the entire franchise relationship." See Humboldt Oil Co. v. Exxon, Co., 695 F.2d 386, 388-89 (9th Cir.1982).
An agent of the dealer cannot fail to fulfill those obligations which pertain to the dealer personally rather than the operation of the franchise. The independent fraudulent actions of a dealer's employee do not reflect directly on the dealer's integrity and trustworthiness, and therefore do not undermine the franchise relationship in the same manner as fraudulent acts by the dealer himself.[5] Employee misconduct *1204 about which the employer was unaware can be addressed through means less drastic than terminating the franchise, such as dismissal of the offending employee. Construing the provisions of the PMPA in favor of protecting franchisees from termination, the court finds that neither the contract nor the statute calls for termination simply because a dealer's employees have engaged in fraud or knowingly violated federal, state or local law. Accordingly, Chevron must show that James Lutz himself intentionally violated federal, state, or local law in order to warrant termination of the franchise.
III. Evidence of Intent to File Incorrect Tax Returns
The court finally turns to evidence that James Lutz intended to violate federal and state income tax laws. Because direct evidence of fraudulent intent is rarely available, courts have recognized various types of circumstantial evidence which support a finding of intent to violate tax laws. Bradford v. Comm'r of Internal Revenue, 796 F.2d 303, 307 (9th Cir.1986). These badges of fraud include: (1) understatement of income, (2) inadequate records, (3) failure to file tax returns, (4) implausible or inconsistent explanations of behavior, (5) concealing assets, and (6) failure to cooperate with tax authorities. Id. Chevron argues that the evidence shows that Lutz understated income by filing the false tax returns and kept insufficient records for the auditor to determine the service station's gross profit. Chevron also maintains that the explanations offered by Tim and Dan Lutz that they began calculating the gross sales from the sales tax because the computer generated figure for total sales was not accurate are implausible.
A. Understatement of Income
As Chevron correctly states, the consistent and substantial understatement of income can itself constitute evidence of fraud. Laurins v. Comm'r of Internal Revenue, 889 F.2d 910, 913 (9th Cir.1989); Ruark v. Comm'r of Internal Revenue, 449 F.2d 311, 313 (9th Cir.1971) ("Gross understatement of income may in itself be a basis for a finding of fraud"). Courts have generally found an understatement of income to be itself evidence of fraud only where a sustained pattern of understatement exists over several years. See Laurins v. Comm'r of Internal Revenue, 889 F.2d 910 (9th Cir.1989) (upholding finding of fraud based on consistent underreporting of large sums over three years by a former tax litigation attorney); Ruark (upholding fraud finding where taxpayer had declared approximately 1% of her income over a four year period); cf. Loftin & Woodard, Inc. v. United States, 577 F.2d 1206 (5th Cir.1978) (noting that "two years in succession do not a pattern make.... The mere understatement of income, standing alone, is not enough [to prove fraud].").
The calculation technique employed by Tim Lutz caused significant understatement of income on the income tax returns for James Lutz and the Lutz partnership. On the returns for the partnership, Lutz initially understated the total sales and gross profit of the service station by more than $200,000. 1999 Partnership Return & 1999 Amended Partnership Return, Snyder Dec., Exh. I & J. This constituted an understatement of total sales by approximately 2-3%, but an understatement of gross profit by 23%. The calculation resulted in Lutz reporting only 54% of his *1205 actual taxable personal income $142,495 rather than $262,713. 1999 Amended Personal Return, Snyder Dec., Exh. J. Although significant in its amount, this understatement of income occurred in a single year only. The following year, after the Chevron audit, Tim Lutz filed income tax returns that are not alleged to be inaccurate and also filed amended returns for the 1999 year. While the understatement of income might provide evidence of fraud when offered with other facts, it does not rise to the level of gross or sustained understatement which alone would support a finding of fraud.
Chevron also asserts that Lutz underpaid his state sales taxes. Lutz maintains that errors in calculating nontaxable sales resulted in him overpaying sales through the first quarter of 1999, and afterwards in him underpaying income tax while paying correct sales taxes. Lutz provides no evidence of this other than Tim Lutz's assertion that this occurred. Tim Lutz Dec. ¶ 7. However, Tim Lutz's assertions in his declaration as to how he calculated the sales tax payments for the second quarter of 1999 and afterwards, id. ¶ 10, directly contradict his own detailed deposition testimony as to how he performed the same calculation. Tim Lutz Dep. at 65:14-67:19. Tim Lutz's deposition testimony, supported by the monthly sales reports and tax worksheets, indicates that by subtracting nontaxable sales from an incorrect "gross sales" figure that actually included only taxable sales, Tim Lutz essentially deducted nontaxable sales twice. This resulted in him understating taxable sales by about 0.1% and therefore underpaying the state sales tax by a similar amount, or approximately $155 per quarter.[6]Id.; Second Quarter 1999 Sales Tax Return, Snyder Dec., Exh. L. The court does not find this understatement significant enough to constitute fraud whether considered alone or together with the income tax return errors.
B. Inadequate Records
Chevron asserts that the Lutzes have failed to keep adequate business records. The outside auditor, Everett Harry, indicates that at the time he made his report available, the Lutzes had still not provided business records which adequately explained discrepancies and had not turned over specific documents, such as annual financial statements. Harry Dec. ¶ 15; Harry Dec., Exh A. Chevron maintains that the Lutzes' records are inadequate because no business records (as opposed to accountant's spreadsheets) "explain" discrepancies between Chevron records and the reported income.
Chevron's allegations do not go to the adequacy of Lutz's records, but rather to the plausibility of Lutz's explanation. The Lutzes acknowledge that they miscalculated gross sales for a certain period. Chevron does not specify what further explanation is required to account for the discrepancies between figures. Chevron also fails to point to any piece of factual information regarding the finances of the service station which cannot be determined from the records presently available. Chevron has therefore failed to make a showing that service station kept inadequate records.
C. Implausible or Inconsistent Explanations of Behavior
Chevron relies heavily on the implausibility of the Lutzes explanation for why *1206 Lutz understated his income on the 1999 returns. Chevron first notes the improbability that James Lutz, inexpert though he may be in the area of taxes, failed to notice that his personal income tax return listed his income as $142,495, only 54% of the correct figure of $262,713. 1999 Amended Personal Return, Snyder Dec., Exh. J. This argument simply amounts to a restatement of Chevron's position on the first indicia of fraud, that Lutz's understatement of income itself is so significant as to constitute evidence of intent to violate tax laws. As such, it does not gain additional weight by Chevron's reframing it to address a different factor in the test.
Chevron also points to several problems in the explanation of how the miscalculations of total sales could be an innocent mistake on the part of Tim and Dan Lutz, including: (1) Tim Lutz, an experienced CPA, made basic errors in calculating total sales; (2) the Lutzes asserted the computer was generating incorrect sales information while using the same system for years; (3) Tim Lutz changed from using computer generated total sales data to calculating total sales at the same time as the profitability of the station dropped; and (4) Tim Lutz's assertions that he properly calculated sales taxes beginning with the second quarter of 1999 is inconsistent with his deposition testimony and the worksheets for the sales tax calculation which suggest he underpaid the state sales tax.
While Lutz takes issue with the inferences drawn from the facts presented by Chevron, he does not undermine the factual basis for Chevron's argument nor present a persuasive reason why a jury could not draw the inference that his sons' explanation for the inaccuracies is implausible. The question before the court, however, is not the intent of Dan or Tim Lutz, but of James Lutz, the sole franchisee. Chevron has offered no additional evidence suggesting implausibility to James Lutz's explanation that his sons mishandled the sales figures and that he did not notice the irregularities in the tax returns.
D. Other Badges of Fraud
None of the other badges of fraud are present in this action. Far from failing to cooperate with the tax authorities, it is uncontested that Tim Lutz filed amended 1999 returns as soon as the error was discovered through the Chevron audit and corrected the 2000 returns before they were filed. Tim Lutz Dec. ¶ 17. Nor are there any allegations that James Lutz has ever failed to file tax returns or concealed assets, or that any other financial irregularities or allegations of wrongdoing arose during the thirty-four years he has maintained the dealership.
E. Conclusion on Fraudulent Intent
The only evidence Chevron offers on fraudulent intent on the part of James Lutz is a single occasion in his thirty-four years of operating the service station on which he filed tax returns listing only about half of his actual personal income. Such an isolated understatement of income alone is insufficient to support a finding of fraudulent intent. Loftin & Woodard, 577 F.2d at 1239. From the facts before the court, no reasonable jury could infer that James Lutz intended to violate federal and state law by under-reporting income on his 1999 tax returns.
CONCLUSION
For the foregoing reasons, the court GRANTS defendant's motion for partial summary judgment on the issue of intent.
IT IS SO ORDERED.
NOTES
[1] Chevron's records indicate that the Service Station gross sales totaled $8,335,204, in 1999 and $10,029,108 in 2000. Harry Report to Chevron Manager T.S. Toliver, Harry Dec., Exh A at 11. The discrepancies discovered by Harry fall short of Chevron's data by 2.4% in 1999 and by 3.2% in 2000.
[2] Chevron also claims that by failing to maintain records required by the Dealer Agreements, Lutz has failed to comply with provisions of the franchise agreement which are "both reasonable and of material significance to the franchise relationship," 15 U.S.C. § 2802(b)(2)(A). Compl. ¶¶ 17, 18, 27(a). Because the issue of intent on which Lutz seeks summary judgment does not arise in the allegation of insufficient record-keeping, the court does not address this statutory ground for termination in this order.
[3] As discussed ante, both the Dealer Lease and the PMPA allows termination when the dealer, or franchisee, engages in fraud or knowingly fails to comply with federal, state or local law. Lease Agreement, Snyder Dec., Exh A ¶¶ 7(b)(4), 7(b)(8). The Dealer Lease designates the Dealer as James Lutz. Id. ¶ 1. In other provisions for termination in the Dealer Lease, the term "Dealer" is used to mean the individual signatory to the contract. For example, termination is warranted upon prolonged physical or mental disability of Dealer which prevents Dealer from providing for proper operation of the premises, id. ¶ (7)(b)(9); upon Dealer's conviction for a felony involving moral turpitude, id. ¶ (7)(b)(11); or in the event of Dealer's death, id. ¶ (7)(b)(12). The termination provisions of the PMPA employ the term franchisee, which is defined as a retailer or distributor. 15 U.S.C. § 2801(4). A retailer is in turn described as "any person" who purchases motor fuel for sale to the general public. 15 U.S.C. § 2801(7). The PMPA contains provisions similar to those in the lease for termination upon prolonged disability of the franchisee and conviction of the franchisee of a felony involving moral turpitude. 15 U.S.C. §§ 2802(c)(3), 2802(c)(12).
[4] Chevron does cite O'Shea v. Amoco Oil Co., CCH Bus. Franchise Guide ¶ 9152 (D.N.J. 1988), in which the court made reference to the agency relationship in finding that a dealer breached a provision of his lease agreement requiring twenty-four hour operation, even if the station had closed due to "employee misconduct." The provision at issue in O'Shea did not govern only the actions of the dealer himself, but required simply that the station operate twenty-four hours per day. Even without invoking agency law, O'Shea was in breach of this provision when the station closed regardless of who was responsible for the closure, unless the failure to abide by terms of the provision was "beyond the reasonable control of the franchisee." 15 U.S.C. § 2801(13)(B).
[5] When a dealer supervises operation of the franchise so loosely as to allow employees to conduct business fraudulently without his knowledge, a franchisor may have grounds for termination on other grounds. Chevron has not presented this argument here, however, but has advanced its claim for termination based only on the argument that any fraudulent intent on the part of Lutz's sons may be imputed to him.
[6] According to Chevron, Tim Lutz improperly deducted $2587 in nontaxable sales from the "total sales" figure of $2,300,333, even though the "total sales" figure actually constituted only taxable sales. Taxed at the prevailing rate of 6%, the tax on this amount is $155, or about 0.1% of the $137,779 that Lutz should have paid for the quarter. See Second Quarter 1999 Sales Tax Return, Snyder Dec., Exh. L.
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In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
_________________________
No. 06-12-00103-CV
______________________________
THE STATE OF TEXAS FOR THE
BEST INTEREST AND PROTECTION OF L.T.
On Appeal from the County Court at Law #2
Hunt County, Texas
Trial Court No. M-10428
Before Morriss, C.J., Carter and Moseley, JJ.
Opinion by Justice Moseley
OPINION
L.T. appeals a trial court’s order authorizing the administration of psychoactive drugs.
She contends that the trial court’s temporary commitment order was not supported by sufficient
evidence and, therefore, the order authorizing administration of psychoactive medication is
likewise invalid.
The trial court may enter an order authorizing the administration of psychoactive
medication if it finds by clear and convincing evidence, among other things, that the patient is
under an order for temporary or extended mental health services. See TEX. HEALTH & SAFETY
CODE ANN. § 574.106 (West 2010). L.T.’s limited argument is set forth below:
The court in this case ordered the admiration [sic] of psychoactive medications
based on the existence of the order for impatient [sic] mental health services and
that “all the requirements of § 574.106 proven at the hearing.”
A patient’s success on the challenge of an order to administer
psychoactive medication depends on her success in her challenge of the order for
temporary inpatient mental health services.
Accordingly, T.L. [sic] asserts that the trial court erred in ordering
temporary inpatient mental health services as argued above and therefore erred in
the order to administer psychoactive medication.
In a related appeal, our cause number 06-12-00099-CV,1 this Court affirmed the trial
court’s temporary commitment order concluding that such order was supported by legally and
factually sufficient evidence. Having concluded that the trial court’s commitment order is valid,
we overrule L.T.’s contention and affirm the trial court’s order authorizing the administration of
psychoactive medication.
1
The facts pertaining to the order authorizing administration of psychoactive drugs are contained in our opinion in
cause number 06-12-00099-CV.
2
We affirm the trial court’s judgment. Due to the nature of this accelerated appeal, we
direct that this cause be submitted immediately.
Bailey C. Moseley
Justice
Date Submitted: November 19, 2012
Date Decided: November 20, 2012
3
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 07a0250p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
Plaintiff-Appellee, -
UNITED STATES OF AMERICA,
-
-
-
No. 05-6742
v.
,
>
GERALD RAYBORN, -
Defendant-Appellant. -
-
-
-
N
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 04-20177—J. Daniel Breen, District Judge.
Argued: April 17, 2007
Decided and Filed: July 2, 2007
Before: MARTIN and DAUGHTREY, Circuit Judges; SCHWARZER, District Judge.*
_________________
COUNSEL
ARGUED: K. Jayaraman, Memphis, Tennessee, for Appellant. Kevin P. Whitmore, ASSISTANT
UNITED STATES ATTORNEY, Memphis, Tennessee, for Appellee. ON BRIEF: K. Jayaraman,
Memphis, Tennessee, for Appellant. Kevin P. Whitmore, ASSISTANT UNITED STATES
ATTORNEY, Memphis, Tennessee, for Appellee.
_________________
OPINION
_________________
BOYCE F. MARTIN, JR., Circuit Judge. Defendant Gerald Rayborn was charged with one
count of conspiracy to commit mail fraud, wire fraud, and money laundering in violation of
18 U.S.C. § 371, two counts of aiding and abetting mail fraud in violation of 18 U.S.C. §§ 1341 and
2, and money laundering in violation of 18 U.S.C. § 1957. Following a jury trial, he was convicted
on all counts, and now brings this appeal. For the reasons below, we AFFIRM Rayborn’s
conviction.
*
The Honorable William W Schwarzer, United States District Judge for the Northern District of California,
sitting by designation.
1
No. 05-6742 United States v. Rayborn Page 2
I. BACKGROUND
Gerald Rayborn was a pastor at the Mt. Sinai Missionary Baptist Church in Memphis,
Tennessee. He had hired Larry Bullock, a Certified Public Accountant (CPA), to be his personal
accountant as well as the church’s accountant. In 1999, Bullock began preparing tax returns for
Rayborn and his wife, Bonnie Rayborn. The Rayborns claimed at trial that they had never prepared
their tax returns and they did not understand how to prepare them. Further, according to Ms.
Rayborn’s trial testimony, neither she nor her husband read their tax forms before signing them.
In 2002, after living at 102 Armstrong in the Whitehaven area of Shelby County for thirty
years, Gerald and Bonnie Rayborn entered the housing market to find a new home. Apparently, they
had originally decided to remodel their old home, but while they were in Bullock’s office working
on their taxes, Bullock suggested that they instead purchase a new home. Bullock introduced the
Rayborns to Marion Brown, a mortgage broker who was coincidentally in Bullock’s office at the
time. Brown referred real estate agent Vinnie Flynn to them. The Rayborns told Flynn that they
desired a home that had several bedrooms and a fishing pond, and were looking to spend about
$475,000. Flynn eventually located a home that the Rayborns liked, and the parties negotiated a sale
price of $525,000. The closing date was set for April 29, 2002.
Rayborn, with the assistance of Brown, applied for a mortgage loan through Wells Fargo
Mortgage. A document verifying Rayborn’s income and employment and signed by Bullock was
included in the loan package. Wells Fargo also required Rayborn to include copies of his 2000 and
2001 federal tax returns so it could calculate Rayborn’s average monthly income, which, in turn,
would determine his loan eligibility. All loan materials received by Wells Fargo were sent via
Federal Express. The Rayborns’ 2000 and 2001 tax returns listed their adjusted gross income (AGI)
as $84,274 and $103,206, respectively. Wells Fargo calculated an average monthly income of
$6,788. After Rayborn agreed to pay off some personal consumer loans, Wells Fargo approved the
mortgage loan. The home purchase was completed on May 20, 2002. On that date, Rayborn signed
a promissory note for $498,750.00, which required monthly payments of $3,318.20. Also on May
20, 2002, Wells Fargo wired most of that amount on Rayborn’s behalf to the closing agent. Rayborn
was required to re-sign the documents that were part of his original loan package.
Four months later, on August 29, 2002, the Rayborns, through their mortgage broker, applied
to Wells Fargo for a refinancing loan. Rayborn re-submitted copies of the 2000 and 2001 tax returns
used to obtain the original loan. Wells Fargo originally denied the loan due to Rayborn’s excessive
obligations and insufficient income. In response, Rayborn submitted a lease to Wells Fargo that
indicated he was leasing his former residence to one “Stacey Johnson” for $1,300 a month. The
lease appears to be signed by Gerald Rayborn and Johnson, who is in fact Rayborn’s daughter.
Wells Fargo was unaware of the relationship between Rayborn and Johnson. With this increase in
income, along with Rayborn’s agreement to pay off several credit cards, Wells Fargo approved the
refinancing loan. On October 7, 2002, Rayborn signed another promissory agreement, this time for
$486,000.00. This promissory note also contains Bonnie Rayborn’s signature. Wells Fargo wired
$483,171.08 to the closing agent. These funds were used to pay off the original mortgage with
Wells Fargo.
Although Wells Fargo believed that the 2000 and 2001 tax returns it received were the same
tax returns that the Rayborns had submitted to the IRS, they were not. The tax returns that were
submitted to the IRS provided that in 2000 and 2001, the Rayborns actually had an AGI of $7,462
and $20,634, respectively. Such income would make a the financing of a $525,000 home far beyond
their means.
With respect to the lease submitted to Wells Fargo, Stacy Johnson testified at Rayborn’s trial
that she never paid $1,300 a month to her father, and had never signed, nor even seen, the lease. The
No. 05-6742 United States v. Rayborn Page 3
lease document itself contained some suspicious inconsistencies. While Johnson’s first name is
spelled S-T-A-C-Y, the signature on the lease reads S-T-A-C-E-Y. In addition, at the top of the
lease it correctly states the home address to be “102 Armstrong,” but farther down it misstates the
address as “108 Armstrong.”
Charlotte Ware, a forensic document examiner for the United States Postal Inspection
Service, examined the signatures on the tax returns filed with the IRS and Wells Fargo. According
to Ware’s testimony at Rayborn’s trial, she concluded that Rayborn signed his name on the 2001
return filed with the IRS and the 2001 return submitted to Wells Fargo, and that Rayborn probably
signed his name on the 2000 Wells Fargo return. In addition, she testified that Bullock probably
signed Bonnie Rayborn’s name to the 2001 IRS tax return. Bonnie Rayborn testified that she did
not sign her name to the 2001 IRS return or the 2000 Wells Fargo return (her signature was not on
the 2000 Wells Fargo return). Ms. Rayborn also identified Gerald Rayborn’s signature on the 2000
Wells Fargo return, and testified that the IRS returns, but not the Wells Fargo returns, were
consistent with her husband’s income during that time period. She testified that she was unaware
of the Wells Fargo returns, and had never authorized Bullock, or anyone else, to send tax returns to
Wells Fargo on her behalf.
On April 7, 2004, a federal grand jury returned an indictment against Gerald Rayborn,
charging him with one count of conspiracy to commit mail fraud, wire fraud, and money laundering
in violation of 18 U.S.C. § 371, two counts of aiding and abetting mail fraud in violation of 18
U.S.C. §§ 1341 and 2, and money laundering in violation of 18 U.S.C. § 1957. On July 18, 2005,
the jury convicted Rayborn of all four counts. He was sentenced to nine months’ imprisonment
followed by three years’ supervised release. He now appeals his conviction.1
II. ANALYSIS
A. Sufficiency of the Evidence for Conviction Under 18 U.S.C. § 1957
After the defense rested, it renewed its motion for acquittal as a matter of law. The court
denied this motion for the first three counts, but deferred its ruling on the fourth count (money
laundering). The district court ultimately decided, after looking over the indictment, that there was
enough evidence to send all four counts to the jury. On appeal, Rayborn contends 2the evidence
presented at his trial was insufficient to sustain his conviction for money laundering.
There are five required elements that the jury had to find in order to convict Rayborn of
violating 18 U.S.C. § 1957: (1) Rayborn was engaged in a monetary transaction; (2) Rayborn knew
that the transaction involved criminally derived property; (3) the property was greater than $10,000;
(4) the property was derived from a violation of 18 U.S.C. § 1341 (mail fraud); and (5) the
transaction occurred in the United States. The only issue raised on appeal is whether the second
element — that the transaction involved “criminally derived property” — is satisfied. Section 1957
provides that “the term ‘criminally derived property’ means any property constituting, or derived
from, proceeds obtained from a criminal offense.” 18 U.S.C. § 1957(f)(2). This means that “the
1
Larry Bullock was indicted along with Rayborn and tried separately. Bullock was charged with one count of
conspiracy to commit mail fraud, wire fraud, and money laundering in violation of 18 U.S.C. § 371, and two counts of
aiding and abetting mail fraud in violation of 18 U.S.C. §§ 1341 and 2. On June 9, 2005, the jury convicted Bullock of
all three counts. He was sentenced to three months’ imprisonment, three months’ home confinement, and three years’
supervised release. Bonnie Rayborn was also charged with her husband and Bullock, but later dismissed from the
indictment.
2
The money laundering count against Rayborn pertained to the original loan, issued on May 20, 2002.
No. 05-6742 United States v. Rayborn Page 4
funds must represent proceeds from some form of activity that constitutes a felony.” United States
v. Prince, 214 F.3d 740, 747 (6th Cir. 2000).
In Prince, the underlying felony from which the proceeds were derived was wire fraud. Id.
In order to sustain conviction, the government had to prove that the proceeds of the wire fraud were
then used to commit the money laundering offense. Id. at 748. See United States v. Butler, 211 F.3d
826, 829 (4th Cir. 2000) (“Congress did not fashion the money laundering statute to create a new
source of criminal liability for every fraudulent monetary transaction. Rather, both the plain
language of § 1957 and the legislative history behind it suggest that Congress targeted only those
transactions occurring after proceeds have been obtained from the underlying unlawful activity.”
(emphasis added and internal quotation marks and citations omitted)). Additionally, the government
did not need to prove that Prince had physical possession of the property in order to prove that the
money constituted “proceeds.” Prince, 214 F.3d at 748.
The government’s theory of the case is that Rayborn committed his underlying felony, mail
fraud, by sending fraudulent documents to Wells Fargo in order to procure a loan. As a result of that
criminal offense he received proceeds—the $498,750 loan. Then, subsequent to obtaining these
criminally derived proceeds, the money was transferred by Wells Fargo to the closing agent in order
to facilitate the purchase of the home. This constituted “laundering” through the commission of a
monetary transaction with the ill-begotten funds. See Butler, 211 F.3d at 829.
Rayborn argues that his conviction cannot stand because he never obtained these funds or
exercised control over them until after Wells Fargo transferred the funds (the alleged monetary
transaction). According to his brief, “[u]nder no possible reading of Prince, or any logical reasoning
whatever, could the defendant be said to have been in control of the funds prior to the time Wells
Fargo wired them to the closing attorney.” Appellant’s Br. at 32. We disagree. The first step in the
scheme was the commission of the underlying offense of mail fraud, which occurred when Rayborn
sent fraudulent tax documents and other loan application materials to Wells Fargo. After receiving
these documents, Wells Fargo approved a loan in the amount of $498,750, which constituted the
proceeds of the predicate offense. At that moment, those proceeds belonged to Rayborn; the fact
that proceeds were never in Rayborn’s physical possession, or even in a personal bank account, is
of no moment. Prince, 214 F.3d at 748. After all, Rayborn signed documents directing Wells Fargo
to transfer the funds to the closing agent. Thus, he exercised control over the proceeds of the mail
fraud. See United States v. Savage, 67 F.3d 1435, 1443 (9th Cir. 1995) (finding that for purposes
of § 1957, where proceeds derived from mail fraud were deposited into accounts, it was irrelevant
that these accounts were not in defendant’s name, since defendant exercised control over the
accounts). This subsequent transaction, which ultimately resulted in the acquisition of title to the
home, constituted the “laundering” of the proceeds of the mail fraud. For these reasons, there was
sufficient evidence to sustain Rayborn’s money laundering conviction.
B. Bullock’s Alleged Statement to Ms. Rayborn
According to Ms. Rayborn, when the Rayborns and Bullock were at the federal building to
be processed after the indictment was issued, Bullock was pacing back and forth and said to her,
“Ms. Rayborn, I’m sorry I got y’all down here.” Outside the presence of the jury, defense counsel
questioned her about this hearsay statement and moved to have it admitted under Fed. R. Evid.
804(b)(3) as a statement against penal interest by an unavailable witness. The government objected.
Rayborn argues that Bullock was “basically [ ] saying he’s sorry he got them down here, that it’s
his fault and goes to that point.” Appellant’s Br. at 16. The district court held that the statement was
inadmissible. This ruling is reviewed for abuse of discretion. United States v. Hilliard, 11 F.3d 618,
619 (6th Cir. 1993).
No. 05-6742 United States v. Rayborn Page 5
Even if we were to hold that the district court abused its discretion by refusing to admit the
statement, we are convinced that such error would be harmless. “The harmless error standard calls
for reversal when the appellate court lacks a fair assurance that the outcome of a trial was not
affected by evidentiary error. We shall, therefore, reverse the lower court only if we are firmly
convinced that a mistake has been made.” McCombs v. Meijer, Inc., 395 F.3d 346, 358 (6th Cir.
2005) (citations and quotation marks omitted).
First, there was substantial evidence presented at trial—in testimonial and documentary
form—establishing Rayborn’s guilt. And while it is true that the nature of Rayborn’s defense was
that he was ignorant and misinformed by his accountant, he had ample opportunity to present
evidence in support of this defense. This evidence included testimony by Ms. Rayborn, and as the
guilty verdict demonstrates, the jury did not find her testimony credible. Thus, it is quite likely that
the jury would not have believed her in this instance either. Furthermore, the jury could have found
that she had been kept in the dark, but that Rayborn himself had not been so misinformed. Such a
finding would be supported by testimony that Rayborn had signed fraudulent documents, and
evidence indicating that he was more deeply involved with the family finances than Ms. Rayborn
(for example, the fact he paid off personal debts in order to secure both loans). Finally, Bullock’s
alleged statement is quite vague, and is by no means a slam dunk admission of guilt. The jury could
have found that it was not necessarily any more exculpatory than the other evidence that Rayborn
presented at trial. Based on our review of the trial record, we cannot say that we are “firmly
convinced that a mistake has been made.” Id. at 358. Therefore, any error was harmless and does
not warrant a new trial.
C. Jury Instruction Regarding Rayborn’s Knowledge of the Contents of the Tax Returns
The government requested that the district court give the following instruction to the jury:
If you find beyond a reasonable doubt that the defendant signed the tax return, that
is evidence from which you may but are not required to find or infer that the
defendant had knowledge of the contents of the return.
The government argued that this instruction was derived from Internal Revenue Code § 6064.
However, as defense counsel pointed out to the district court, this section actually states: “The fact
that an individual’s name is signed to a return, statement, or other document shall be prima facie
evidence for all purposes that the return, statement, or other document was actually signed by him.”
26 U.S.C. § 6064 (emphasis added). The statute does not refer to the signer’s knowledge of the
contents of the return. The district court agreed with defense counsel that the language of the statute
is different than the language of the government’s proposed instruction. Nevertheless, it ruled that
it would give the instruction, explaining that “because what they say is it provides simply a
permissible inference and that it doesn’t draw away, it doesn’t defeat in this case the defendant’s
position that he relied on a tax professional’s advice as a defense, which in some respects I think is
what Mr. Rayborn is arguing in this case.” Rayborn argues that although he never disputed signing
the forms, he based his defense on the theory that he did not know the contents of the forms, and this
instruction impermissibly allowed the jury to infer his knowledge, “which would be both practically
dispositive of the issue of guilt and directly contrary to the good-faith defense.” Appellant’s Br. at
43. We review the jury instructions given by a district court for abuse of discretion. Prince, 214
F.3d at 761.
In a similar case, our sister circuit held the district court erred in instructing the jury that a
tax return signed by the defendant created a rebuttable presumption that the defendant signed the
return and had knowledge of its contents. United States v. Trevino, 419 F.3d 896, 902 (9th Cir.
2005). The Ninth Circuit found that § 6064, upon which this instruction was based, did not support
this presumption. Id. But even if we were to hold that the district court erred by adopting the
No. 05-6742 United States v. Rayborn Page 6
government’s proposed instruction, which in no way reflected the actual language of § 6064, this
error does not require a new trial. The instruction in Trevino, which the Ninth Circuit found was a
harmless error, was far more damning, as it told that jury that the defendant’s signature created a
rebuttable presumption of her knowledge. Here, on the other hand, the jury was simply informed
if they found beyond a reasonable doubt that Rayborn had signed the returns, it may make such a
finding or inference. Further, we have little doubt that even without the instruction, the jury would
have, on its own, made the logical leap that Rayborn’s signature indicated that he may have had
knowledge of the contents. See United States v. Wainwright, 413 F.2d 796, 802 (10th Cir. 1969).
In fact, this instruction may have been helpful to Rayborn, as it informed the jury that they were “not
required to find or infer that [Rayborn] had knowledge of the contents of the return.” (Emphasis
added.) Therefore, we find that this error was harmless.
D. Jury Instruction Regarding Deliberate Ignorance
Defense counsel also objected to the proposed jury instruction on deliberate ignorance,3
arguing that the issue before the jury was whether Rayborn knew that the returns he signed were not
the ones submitted to the IRS, and that there was no evidence that Rayborn deliberately avoided
obtaining knowledge of the returns’ contents. The district court overruled this objection, noting that
“I think there certainly is at least inferentially, if not directly, . . . some indication here that
Mr. Rayborn could have or may have ignored some probability, high probability that the, because
again, as [defense counsel] indicated, I don’t think there has been any dispute here that the defendant
signed both sets of tax returns.” In his brief, Rayborn argues that the deliberate ignorance theory
“has no place in a case of this nature,” because the crimes he allegedly committed were specific
intent crimes. Rayborn contends:
[i]f, in fact, the defendant was a coconspirator with Bullock, who prepared the
returns, then the defendant necessarily had to sign the returns with actual knowledge
of their fraudulent content. On the other hand, if the defendant relied in good faith
on Bullock to prepare the loan documents properly, then he must have had no
knowledge that the contents were fraudulent.
Appellant’s Br. at 46.
In support of his argument, Rayborn cites United States v. Mendoza-Medina, where the Fifth
Circuit held that the district court’s giving of an deliberate ignorance instruction was in error
because the evidence indicated that the defendant either knew about or did not know about the drugs
in his vehicle, foreclosing the possibility of deliberate ignorance. 346 F.3d 121, 134 (5th Cir. 2003).
However, Mendoza-Medina also explained that “in some cases evidence of actual knowledge can
be interpreted as evidence of a subjective awareness of a high probability of the existence of illegal
conduct.” Id. (citing United States v. Lara-Velasquez, 919 F.2d 946, 952 (5th Cir. 1990)). Given
the facts presented at Rayborn’s trial, even under Mendoza-Medina, a deliberate ignorance
instruction may have been proper here. Therefore, we are inclined to agree with the district court
that the evidence presented in this case supported a deliberate ignorance instruction.
3
This instruction, which was modeled after Section 2.09 of the Sixth Circuit Pattern Instructions, provided, in
pertinent part:
But to find this, you must be convinced beyond a reasonable doubt that the defendant was aware of
a high probability that the tax returns he signed for the years 2000 and 2001, which were submitted
to support his application for a mortgage and the application to refinance the loan, were false, and that
the defendant deliberately closed his eyes to what was obvious. Carelessness or negligence or
foolishness on his part is not the same as knowledge and is not — this, of course, is all for you to
decide.
No. 05-6742 United States v. Rayborn Page 7
Even assuming arguendo that the instruction was given in error, “a legally-erroneous jury
charge will not justify reversal of a conviction if its probable effect on the verdict was
inconsequential.” United States v. Carney, 387 F.3d 436, 449 (6th Cir. 2004). This Court has
explained that even when it is unsupported by evidence, a deliberate ignorance instruction that
properly states the law is harmless error. United States v. Mari, 47 F.3d 782, 786 (6th Cir. 1995)
(citing Griffin v. United States, 502 U.S. 46, 55-56 (1991)). This Court will not overturn a jury’s
verdict so long as sufficient evidence supports one of the grounds for conviction. Id. Here, any
error was undoubtedly harmless. First, Rayborn has not argued that the instruction misstated the law
on deliberate ignorance. Further, Rayborn does not claim that the district court failed to properly
instruct the jury that they must find beyond a reasonable doubt that Rayborn committed all elements
of the crimes alleged. See United States v. Hoffman, 913 F.2d 44, 46-47 (6th Cir. 1990). Because
the jury was properly instructed on the elements for these specific intent crimes, and if, as Rayborn
contends, the evidence could have only supported a finding that he either knew about or did not
know about the falsity of the contents of the forms, the jury must have concluded that Rayborn had
actual knowledge of the forms’ contents. See Mari, 47 F.3d at 785. “To conclude otherwise, i.e.,
that the jury actually convicted on the basis of deliberate ignorance even though insufficient
evidence supported that theory, we would have to assume that the jury ignored the jury instructions.”
Id. In addition, the instructions cautioned the jury that evidence of negligence or foolishness was
insufficient. See id. (explaining that Section 2.09 of the Sixth Circuit Pattern Instructions forecloses
the possibility of causing the jury to convict on the basis of negligence). Finally, the government
presented substantial evidence indicating that Rayborn had actual knowledge of the inaccurate
information submitted to Wells Fargo. See Mendoza-Medina, 346 F.3d at 134-35 (“[A]n error in
giving the deliberate ignorance instruction is harmless where there is substantial evidence of actual
knowledge.” (citations and quotation marks omitted)). Thus, any error in giving a deliberate
ignorance instruction was entirely harmless.
E. District Court’s Failure to Give a “Good-Faith Defense” Instruction
Finally, Rayborn argues that the district court erred by refusing to instruct the jury on the
good-faith defense to fraud, found in Section 10.04 of the Sixth Circuit Pattern Instructions.
Rayborn’s defense was that he relied in good faith on Bullock, his accountant, to properly prepare
the loan documents. He contends that he never realized the 2000 and 2001 tax returns prepared for
Wells Fargo were incorrect, and that he never engaged in fraudulent conduct. “[W]e have held that
it is error to fail to instruct on the defendant’s theory of the case.” United States v. McGuire, 744
F.2d 1197, 1201 (6th Cir. 1984). Rayborn argues that given the “numerous examples of evidence”
of his good-faith reliance on Bullock, his right to a fair trial was severely prejudiced.
Unfortunately for Rayborn, however, he failed to ask for a good-faith instruction at trial. As
such, we will only review his claim for plain error. Wood, 364 F.3d at 708. “An error is plain when
it is obvious, affects substantial rights, and seriously affects the fairness or integrity of judicial
proceedings.” United States v. Lopez-Medina, 461 F.3d 724, 739 (6th Cir. 2006). “Moreover, an
improper jury instruction will rarely justify reversal of a criminal conviction when no objection has
been made at trial, . . . and an omitted or incomplete instruction is even less likely to justify reversal,
since such an instruction is not as prejudicial as a misstatement of the law.” United States v. Hook,
781 F.2d 1166, 1172-73 (citing Henderson v. Kibbe, 431 U.S. 145, 154-55 (1977)).
Here, the district court did not commit plain error. First, the prosecution presented a great
deal of evidence against Rayborn, including the fraudulent tax returns and expert testimony
concluding that Rayborn signed them, a lease containing Rayborn’s signature and a forged signature
of his daughter, and the simple fact that Rayborn procured a mortgage loan well beyond his means.
Second, Rayborn had the opportunity to present evidence that he relied entirely on Bullock. The
failure to instruct the jury on the good-faith defense did not affect Rayborn’s substantial rights, or
No. 05-6742 United States v. Rayborn Page 8
the fairness of the trial. Lopez-Medina, 461 F.3d at 739. Accordingly, there was no plain error that
justifies a new trial.
For the reasons above, Rayborn’s conviction is AFFIRMED.
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IN THE SUPREME COURT OF PENNSYLVANIA
EASTERN DISTRICT
F. EARL REED III, : No. 142 EM 2018
:
Petitioner :
:
:
v. :
:
:
TONETTE PRAY, :
:
Respondent :
ORDER
PER CURIAM
AND NOW, this 14th day of February, 2019, the Petition for Leave to File Petition
for Allowance of Appeal Nunc Pro Tunc is DENIED.
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3 N.Y.3d 686 (2004)
LEONARD J. LEVENSON et al., Respondents,
v.
JONATHAN LIPPMAN et al., Appellants.
Court of Appeals of the State of New York.
Submitted August 16, 2004.
Decided September 2, 2004.
Motion by City of New York for leave to appear amicus curiae on the appeal herein granted to the extent that the proposed brief is accepted as filed. Nineteen additional copies of the brief may be filed and two additional copies served within 10 days.
Chief Judge KAYE taking no part.
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840 F.2d 10Unpublished Disposition
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.Vincent Lee FOREMAN, Sr., Plaintiff-Appellant,v.Edward MURRAY, James Smith, James Snodgrass, H.E. Norman,Defendants-Appellees.
No. 87-7739.
United States Court of Appeals, Fourth Circuit.
Submitted Dec. 28, 1987.Decided Feb. 17, 1988.
Vincent Lee Foreman, Sr., appellant pro se.
Before WIDENER, SPROUSE, and ERVIN, Circuit Judges.
PER CURIAM:
1
Vincent Foreman appeals the district court's dismissal of this 42 U.S.C. Sec. 1983 action for failure to pay the assessed filing fee. Finding that the district court properly complied with the procedures approved in Evans v. Croom, 650 F.2d 521 (4th Cir.1981), cert. denied, 454 U.S. 1153 (1982), and did not abuse its discretion in dismissing the action without prejudice, we affirm the district court's order. We dispense with oral argument because the dispositive issues recently have been decided authoritatively.
2
AFFIRMED.
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524 F.2d 238
McBridev.Reed
75-2227
UNITED STATES COURT OF APPEALS Fifth Circuit
11/18/75
1
N.D.Miss.
AFFIRMED
2
---------------
*** Opinion contains citation(s) or special notations.
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951 A.2d 704 (2008)
109 Conn.App. 346
Thomas W. CORNACCHIA et al.
v.
ENVIRONMENTAL PROTECTION COMMISSION OF the TOWN OF DARIEN.
No. 27661.
Appellate Court of Connecticut.
Argued May 1, 2008.
Decided July 29, 2008.
*706 Robert F. Maslan, Jr., Darien, with whom was Amy J. Boland, for the appellants (plaintiffs).
Ira W. Bloom, with whom was Mario F. Coppola, Westport, for the appellee (defendant).
BISHOP, GRUENDEL and BEACH, Js.
GRUENDEL, J.
This appeal concerns the denial of an application for a permit to conduct regulated activity in an upland review area.[1] The plaintiffs, Thomas W. Cornacchia and *707 Nancy Cornacchia, appeal from the judgment of the trial court dismissing their appeal from the decision of the defendant, the environmental protection commission of the town of Darien (commission), denying in part and approving in part the plaintiffs' application for a permit to conduct regulated activities on their property. The plaintiffs claim that the court improperly dismissed their appeal because the commission improperly concluded that the proposed activities would have a significant impact on the wetlands and watercourses despite the fact that the record lacked substantial evidence to support this conclusion.[2] We reverse the judgment of the trial court.
The record reveals the following relevant facts and procedural history. The size of the plaintiffs' property is approximately 1.38 acres. The property contains a single-family, two story home, an asphalt driveway and a stone terrace, which extends from the rear of the house. An inland watercourse known as Stony Brook flows along the rear, easterly boundary of the property, and the portion of the plaintiffs' rear lawn located adjacent to Stony Brook is classified as a wetlands area because of the soil type.[3] The rear lawn, from where the wetland soil ends, extending in the direction of the house, is a nonwetland, upland review area. The plaintiffs sought to construct an in-ground swimming pool and related features[4] in the upland review area of their property, as well as a riparian buffer within the wetland area along the shore of Stony Brook. Because the activity associated with both the construction of the pool and the riparian buffer is defined in the Darien inland wetlands and watercourses regulations as a "regulated activity" for which a permit is required, the plaintiffs filed an application with the commission seeking such a permit.[5] After publishing notice of and holding a public hearing on the matter of the permit, the commission granted that part of the plaintiffs' application that sought to create a riparian buffer along the shore of Stony Brook and denied that part of the plaintiffs' application that sought to build an in-ground swimming pool and related features in the upland review area.
*708 The plaintiffs appealed to the Superior Court from that part of the commission's decision denying them a permit to construct the in-ground swimming pool and related features. The court dismissed the appeal, finding, inter alia, that there was "significant evidence in the record to support the [commission's] decision to deny the permit based on the proposed construction's significant impact on the wetland areas." This appeal followed. Additional facts will be set forth as necessary.
"[I]n an appeal from a decision of an inland wetlands commission, a trial court must search the record of the hearings before that commission to determine if there is an adequate basis for its decision. . . . Even if the agency's reasons for denying an application are merely speculative, the reviewing court must search the record for reasons to support the agency's decision . . . and, upon finding such, uphold that decision regardless of the language used by the agency in stating its reasons for the denial." (Citation omitted; internal quotation marks omitted.) Manatuck Associates v. Conservation Commission, 28 Conn.App. 780, 784, 614 A.2d 449 (1992).
Although the reviewing court must sustain the agency's determination if an examination of the record discloses evidence that supports any one of the reasons given, "[t]he evidence . . . to support any such reason must be substantial; [t]he credibility of witnesses and the determination of factual issues are matters within the province of the administrative agency. . . . This so-called substantial evidence rule is similar to the sufficiency of the evidence standard applied in judicial review of jury verdicts, and evidence is sufficient to sustain an agency finding if it affords a substantial basis of fact from which the fact in issue can be reasonably inferred. . . . The reviewing court must take into account [that there is] contradictory evidence in the record . . . but the possibility of drawing two inconsistent conclusions from the evidence does not prevent an administrative agency's finding from being supported by substantial evidence. . . . Evidence of general environmental impacts, mere speculation, or general concerns do not qualify as substantial evidence." (Internal quotation marks omitted.) Toll Bros., Inc. v. Inland Wetlands Commission, 101 Conn.App. 597, 600, 922 A.2d 268 (2007).
"The [Inland Wetlands and Watercourses Act] is contained in . . . §§ [22a-28] through 22a-45, inclusive. Under the act the [commissioner of environmental protection] is charged with the responsibility of protecting inland wetlands and watercourses by . . . regulating activity which might have an adverse environmental impact on such natural resources." (Internal quotation marks omitted.) River Bend Associates, Inc. v. Conservation & Inland Wetlands Commission, 269 Conn. 57, 71, 848 A.2d 395 (2004). "The designated wetlands agency of each municipality is expressly authorized to promulgate regulations that are necessary to protect the wetlands and watercourses within its territorial limits. General Statutes 22a-42(c)." (Internal quotation marks omitted.) Mario v. Fairfield, 217 Conn. 164, 168-69, 585 A.2d 87 (1991). In considering an application to engage in a regulated activity, it is the impact on the regulated area that is pertinent, not the environmental impact in general. River Bend Associates, Inc. v. Conservation & Inland Wetlands Commission, supra, at 72, 848 A.2d 395.
In order to protect the wetlands and watercourses, local agencies are authorized not only to regulate activities occurring within the wetlands and watercourses, *709 but also are authorized to promulgate regulations for activities within areas around wetlands and watercourses if those regulations are "in accordance with the provisions of the inland wetlands regulations adopted by such agency related to the application for, and approval of, activities to be conducted in wetlands or watercourses," and "apply only to those activities which are likely to impact or affect wetlands or watercourses." General Statutes § 22a-42a(f). An impact on the wetlands or watercourses that is speculative or not adverse is an insufficient ground for denial of a wetlands application. River Bend Associates, Inc. v. Conservation & Inland Wetlands Commission, supra, 269 Conn. at 79 n. 28, 848 A.2d 395.
In denying, in part, the plaintiffs' application, the commission made several findings. It found that "these structures pose a substantial intrusion into the wetland setback area by encroaching 43' (more than 80%) into the 50' setback. The proposed construction introduces a new, intense use directly adjacent to the wetlands and introduces risks, including but not limited to the use and dispersion of chemicals adjacent to the wetlands for the treatment of the pool and the cleaning of the pool structure; substantial displacement of soil in the protected area; and loss of lawn area regarded as an important component of the buffer." Furthermore, the commission considered the testimony of the plaintiffs' expert, Michael Fishman, a certified professional wetland scientist and wildlife biologist, regarding the use of infiltrators to compensate for the loss in filtration and percolation posed by the construction activity. It concluded that although it recognized and appreciated that such technology might prove to mitigate soil displacement as well as loss in filtration and percolation and other intrusions into the wetland buffer, it rejected the technology and found that "[i]nfiltrators that are inundated with groundwater during wet seasons would not, in the [c]ommission's view, offset the impacts posed by the construction." In addition, the commission found that the proposed construction "would put additional pressure on the resource's capacity to facilitate drainage and serve as flood control," "poses potential damage from erosion, flooding and pollution, and subsequent impairment of economic and aesthetic values of downstream neighbor's properties," and "poses a threat to water quality by proposing an increase of impervious surface area to 17%." Furthermore, the commission found that "the construction does propose such an impact that would limit future options that would benefit the wetlands, its long-term productivity, and [flood plain] area." It also found that "the construction poses an irretrievable commitment of the wetland setback area which serves to protect and buffer the wetlands and Stony Brook." Moreover, the commission found that "there is no `hardship' or necessity, to justify the proposed [in-ground] pool's extreme proximity and significant potential for impact to the wetlands."
Upon reviewing the commission's findings, the court dismissed the plaintiffs' appeal because it determined, inter alia, that there was "significant evidence" in the record to support the commission's denial of the application for a permit to conduct regulated activity in the upland review area on the basis of the proposed activities significant impact on the wetlands. Specifically, the court found that the record revealed "substantial support" for the commission's determinations that the proposed construction significantly would impact the wetlands because it would result in an increase of impermeable surface area on property already plagued by flood problems *710 and would have an adverse impact on the water quality. In making these determinations the court relied on testimony from the public hearing on the permit, as well as a letter from a commission staff member, Nancy H. Sarner, to the plaintiffs' attorney.
A review of the record reveals that the plaintiffs' expert, Fishman, provided the commission with an environmental impact report, a drainage report and additional information regarding the application as requested by the commission. In addition, a public hearing was held at which Fishman testified about the various reports he had prepared and responded to questions posed by the commission and the adjacent property owners. Fishman's reports and testimony indicated that there would not be a likely adverse impact on the wetlands and watercourses from the construction of the in-ground swimming pool and related features in the upland review area.[6]
The public also was invited to voice concerns and ask questions during the public hearing on the application. Several property owners adjacent to the plaintiffs' property voiced a general concern about flooding in the area. Mostly, the adjacent property owners were concerned about the flooding that already plagued the area and how it could be remediated. They did not express concerns with the construction of the pool itself. One neighbor was concerned that the pool would displace wetland soil that serves to absorb excess water and would thereby decrease the soil's ability to assist with flood control.[7] Another neighbor was concerned with flooding in the area and inquired about the frequency with which the pool would need to be drained and how that might affect flooding in the wetlands and watercourses. In response, Fishman explained that there is no scheduled frequency for draining pools and that it is advisable to keep them full unless the pool requires maintenance. Further, he explained that if the proposed pool had to be drained, the protocol would be to discontinue the use of chemicals for one week prior to draining it, in which time the chlorine and chemicals will dissipate, and that a tarp would be used to drain the water so as to prevent soil erosion. Additionally, he explained that the wetland soil would absorb a majority of the water before it would reach the watercourses. Alternatively, Fishman testified that if the proposed pool required draining, the water could be pumped into a truck and carried away.
*711 The record also contains a letter from Sarner expressing a concern about the impact on drainage and water quality due to the increase in impervious surface area from the construction of the pool, and requesting an updated calculation on the proposed impervious surface area that included the pool and related features. Fishman provided this information to Sarner and indicated that the construction of the pool would be well outside the 100 year flood plain and would therefore not interfere with the flood plain's storage capacity and that the increase in impervious surface area would not have any significant impact on the peak rate of runoff.
The court and the commission refer to the Sarner letter and the neighbors' testimony at the public hearing to support the commission's determination to deny in part the plaintiffs' application. Specifically, the commission found that water quality has been shown to become impacted as the size of the impervious area on a property increases and that there was a risk that chemicals would be dispersed in the upland review area. Our review of the record indicates that there is no evidence to support the finding that an impact on water quality could result from the construction of the pool and that there is no evidence to support the finding that an adverse impact on the wetlands and watercourses was likely to result from a risk of chemicals being dispersed in the upland review area. The Sarner letter and the testimony of the neighbors are, instead, unsubstantiated concerns about possible impacts to the wetlands and the watercourses. In contrast, the commission was presented with evidence from Fishman that no significant impact to the wetlands or watercourses would occur from the construction activities in the upland area. Although the commission is the arbiter of the credibility of witnesses and was, therefore, not bound to accept Fishman's testimony and reports; Toll Bros., Inc. v. Inland Wetlands Commission, supra, 101 Conn. App. at 600, 922 A.2d 268; the conclusions he provided were the only factually based conclusions before the commission substantiated by evidence in the record. Therefore, without his testimony and reports there would be no substantial evidence before the commission regarding any actual impacts to the wetlands and watercourses from the proposed construction. Because concerns and potential impacts are not substantial evidence of a likely adverse impact on the wetlands and watercourses, the Sarner letter and the concerns of the plaintiffs' neighbors were insufficient evidence to support the commission's denial of the plaintiffs' application. See id. ("[e]vidence of general environmental impacts, mere speculation, or general concerns do not qualify as substantial evidence" [internal quotation marks omitted]).
Additionally, although the commission found that the construction posed "a potential [for] damage from erosion, flooding and pollution, and subsequent impairment of economic and aesthetic values of downstream neighbors' properties," a finding of potential generalized impacts is insufficient to support a denial of an application for a permit to conduct a regulated activity. The commission must make a determination that the activity will have a likely adverse impact on the wetlands and watercourses and that finding must be supported by substantial evidence in the record. See River Bend Associates, Inc. v. Conservation & Inland Wetlands Commission, supra, 269 Conn. at 74, 79 n. 28, 848 A.2d 395.
Because we must uphold the commission's decision if an examination of the record discloses evidence that supports any one of the reasons given, we next *712 address the remainder of the commission's findings. We conclude that the remainder of the commission's findings concern potential impacts to the wetlands and watercourses and potential impacts to the upland review area rather than findings of likely adverse impacts on the wetlands or watercourses. Such findings are insufficient to deny an application for a permit to conduct a regulated activity.
In accordance with the commission's regulations, the area of the plaintiffs' property that is within fifty feet of the wetlands and watercourses, referred to by the commission as the "buffer," "set back area," "protected area" and "regulated area," is not a protected or regulated area[8] but rather an upland review area where certain activities may be regulated because of the activities' likely impact or effect on the nearby wetlands and watercourses. See General Statutes § 22a-42a(f); see also Queach Corp. v. Inland Wetlands Commission, 258 Conn. 178, 199, 779 A.2d 134 (2001) ("[T]he upland review process does not forbid activity based solely on proximity to wetlands. Rather, the upland review process merely provides a basis for determining whether activities will have an adverse impact on the adjacent wetland or watercourse, and if necessary, regulating them."). In order for the commission to deny the plaintiffs an application for a permit to conduct regulated activity in the upland review area, it must determine that the proposed activity will have a likely adverse impact on a wetland or watercourse, and such a determination must be supported by substantial evidence in the record. See River Bend Associates, Inc. v. Conservation & Inland Wetlands Commission, supra, 269 Conn. at 74, 848 A.2d 395 ("[t]he sine qua non of review of inland wetlands applications is a determination whether the proposed activity will cause an adverse impact to a wetland or watercourse") and 79 n. 28, 848 A.2d 395.
The commission found that the construction would pose a substantial intrusion into the upland area, would introduce a new and intense use and risks adjacent to the wetlands, and would cause substantial displacement of soil and loss of lawn in the upland area. It failed to make any findings regarding whether these potential intrusions on the upland review area would have a likely adverse impact on the wetlands and watercourses, nor is there any evidence in the record to support a likely adverse impact on the wetlands and watercourses from these potential intrusions.[9] The commission also found that although the infiltrators might prove to mitigate soil displacement as well as loss in filtration and percolation in the upland review area, it rejected the technology and found that, in its view, the infiltrators would not offset the impacts posed by the construction. Again, the only impacts the commission had identified were those on the upland review area. Impacts on the upland review area are not sufficient to deny an application for a permit to conduct a regulated activity. Finally, the commission found that "the construction would pose such an impact that would limit future options that would benefit the wetlands, its longterm productivity and [flood plain] area" without articulating what impact *713 it posed to the wetlands, and found that the construction "poses an irretrievable commitment of the wetland setback area" without articulating how the commitment of the wetland setback area would impact the wetlands and Stony Brook. Moreover, the commission determined that the proposed activities presented a "significant potential for impact to the wetlands." A finding that there is a significant potential for an impact to the wetlands is insufficient to deny an application for a permit to conduct a regulated activity. The impact on the wetlands and watercourses must be adverse and must be likely. See River Bend Associates, Inc. v. Conservation & Inland Wetlands Commission, supra, 269 Conn. at 74, 79 n. 28, 848 A.2d 395.
Because the commission's findings regarding potential impacts to the wetlands and watercourses and potential impacts on the upland review area were not sufficient to deny the plaintiffs' application and because there is no evidence in the record to support a likely adverse impact on the wetlands and watercourses as a result of the proposed construction in the upland area, the commission abused its discretion when it denied that part of the plaintiffs' application for a permit to construct an inground swimming pool and related features. The court should have sustained the plaintiffs' appeal.
"[N]ormally, [w]hen agency action is overturned . . . because of invalid or insufficient findings, we have held that a court must ordinarily remand the matter under consideration to the agency for further consideration. . . . A direct order to the commission is therefore legally unwarranted and the case must be remanded to the commission for further consideration of any conditions that should be attached to the issuance of the permit as supported by evidence in the present record. . . . An exception to that rule, however, exists when it appears as a matter of law that there is only one single conclusion that the [agency] could reasonably reach, [and therefore] the trial court can direct the agency to take the action on remand." (Internal quotation marks omitted.) Toll Bros., Inc. v. Inland Wetlands Commission, supra, 101 Conn.App. at 602, 922 A.2d 268.
After a full hearing on the matter in which evidence that was requested was provided, the record fails to reflect any evidence that would show that the construction of the in-ground swimming pool and related features would have a likely adverse impact on the wetlands and watercourses. Because the commission may deny an application for a permit to conduct a regulated activity only on the basis of a likely adverse impact on the wetlands and watercourses, without any evidence in the record to support such a finding in this case, the commission should have granted the part of the plaintiffs' application seeking permission to construct an in-ground swimming pool and related features. In addition, on the state of the current record, there is no evidence of even a minimal intrusion on the wetlands and watercourses. As such, there are no conditions or modifications that the commission could require, and we are convinced that, as a matter of law, there is only one single conclusion that the commission reasonably could have reached. The case, therefore, must be remanded to the trial court with direction to render judgment sustaining the plaintiffs' appeal and directing the commission to grant the part of the plaintiffs' application that sought a permit to construct an in-ground swimming pool and related features. Cf. Executive Television Corp. v. Zoning Board of Appeals, 138 Conn. 452, 457, 85 A.2d 904 (1952) ("Having established that there was no *714 basis upon which the defendant could have determined that the safety of the public would be unduly imperiled, the plaintiff had met the full burden imposed upon it. . . . The appeal should have been sustained, and, since upon the record before the court the only reasonable conclusion is that the plaintiff was entitled to receive a certification of approval, the defendant should have been directed to issue it.").
The judgment is reversed and the case is remanded to the trial court with direction to render judgment sustaining the plaintiffs' appeal and directing the commission to grant that part of the plaintiffs' application for a permit to construct an inground swimming pool, spa, pool housestorage shed and surrounding terrace.
In this opinion the other judges concurred.
NOTES
[1] "An upland review area is a nonwetland or nonwatercourse area in which nonwatercourse area in which an inland wetland commission may regulate activities that are likely to affect or to impact wetlands or watercourses. . . . See Department of Environmental Protection, Guidelines for Upland Review Area Regulations Under Connecticut's Inland Wetlands & Watercourses Act (1997)." (Internal quotation marks omitted.) Prestige Builders, LLC v. Inland Wetlands Commission, 79 Conn.App. 710, 712 n. 3, 831 A.2d 290 (2003), cert. denied, 269 Conn. 909, 852 A.2d 739 (2004).
[2] The plaintiffs also claim that the commission improperly concluded that the proposed activities would pose a significant impact on the wetlands and watercourses despite expert testimony that established that the proposed activities would not have such an impact, and the commission failed to articulate a basis for rejecting the expert testimony. Because we reverse on other grounds, we need not reach this claim.
[3] This section of lawn is classified as a wetlands area because the soil is poorly drained. See § 2.1(jj) of the Darien inland wetlands and watercourses regulations.
[4] Specifically, the permit sought permission to build an in-ground swimming pool, spa, pool house-storage shed and surrounding terrace.
[5] Section 6.1 of the Darien inland wetlands and watercourses regulations provides that any person who engages in a "regulated activity" must first obtain a permit for such activity from the commission.
Section 2.1(y) provides in relevant part: "`Regulated activity' means any operation within or use of a wetland or watercourse (or activity removed from a wetland or watercourse which affects a wetland or watercourse) involving removal or deposition of material; or any obstruction, construction, alteration or pollution of such wetlands or watercourses, but shall not include the specified activities in Section 4 of these regulations.
In addition, regulated activities shall include: "1. grading, filing, excavation, or any other earth disturbing activities; or removal or deposition of any material; or removal of any existing vegetation within fifty feet of wetlands or watercourses."
[6] Specifically, Fishman's report indicated that there would be a "slight, but insignificant increase in runoff from the pool terrace and pool house roof," and that any runoff would be absorbed by the pool, lawn and restored riparian corridor. The proposed plan would improve the functional value of the wetland soils, and "will filter runoff better for better water quality." In addition, "[s]ince the proposed pool, terrace, and pool shed will have minimal impacts at most, this proposed project will result in a net improvement of ecological conditions on the site." Furthermore, the report indicates that "[t]he proposed development activities on the parcel pose minimal impacts that are confined to upland areas immediately adjacent to the existing house and driveway, minimizing the area of proposed use and maximizing its distance from the truly valuable resource on the property, Stony Brook," and that "[t]he proposed activities will have little or no direct or indirect impact on wetlands on the site and no adverse impact to Stony Brook." Moreover, the report indicates that "[a]s proposed, the development activities on this site will result in no long term or permanent adverse impacts to the regulated wetland area" and that "this project will not have significant net adverse impacts to wetlands or other natural resources on the property."
[7] Fishman's report indicated that no wetland soil would be disturbed or displaced during construction of the pool in the upland area.
[8] In accordance with. § 2.1(z) of the Darien inland wetlands and watercourses regulations, regulated area means any inland wetland or watercourse, as defined in these regulations. The area where the plaintiffs proposed to build is not a wetland or watercourse. As such, it is not a regulated area.
[9] In fact, the only evidence before the commission regarding actual impacts on the wetlands and watercourses was the evidence from Fishman that the construction would not have a likely adverse impact on the wetlands and watercourses. See footnote 6.
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92 F.3d 1181
NOTICE: Fourth Circuit Local Rule 36(c) 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.Clint A. RAMSEY, Plaintiff-Appellant,v.TOYOTA MOTOR SALES, U.S.A., INCORPORATED; Central AtlanticToyota Distributors, Incorporated; RobertSkelton; Randy Pflughaupt; SteveNiven, Jr., Defendants-Appellees.
No. 95-3141.
United States Court of Appeals, Fourth Circuit.
Submitted July 23, 1996.Decided July 30, 1996.
Clint A. Ramsey, Appellant Pro Se.
Richard Jeffrey Magid, WHITEFORD, TAYLOR & PRESTON, Baltimore, Maryland, for Appellees.
Before WIDENER, NIEMEYER, and MICHAEL, Circuit Judges.
PER CURIAM:
1
Appellant appeals from the district court's order granting summary judgment to the Defendants in an employment discrimination suit. We have reviewed the record and the district court's opinion and find no reversible error. Accordingly, we affirm on the reasoning of the district court. Ramsey v. Toyota Motor Sales, No. CA-94-1552-CCB (D.Md. Nov. 7, 1995). Additionally, we deny the Appellees' motion to strike the Appellant's memorandum in opposition to Appellees' informal brief. 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
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14-4713-cv
Doal v. CIA
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 A SUMMARY ORDER MUST SERVE A COPY
OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 21st day of August, two thousand fifteen.
PRESENT: GUIDO CALABRESI,
REENA RAGGI,
RICHARD C. WESLEY,
Circuit Judges.
----------------------------------------------------------------------
JEANETTE DOAL,
Plaintiff-Appellant,
v. No. 14-4713-cv
CENTRAL INTELLIGENCE AGENCY,
DEPARTMENT OF JUSTICE,
Defendants-Appellees.*
----------------------------------------------------------------------
FOR APPELLANT: Jeanette Doal, pro se, New York, New York.
*
Because the district court dismissed plaintiff’s complaint sua sponte before either
defendant was served or had appeared, appellees have informed the court that they do not
intend to participate in this appeal.
1
Appeal from a judgment of the United States District Court for the Southern
District of New York (Laura Taylor Swain, Judge).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment entered on December 1, 2014, is AFFIRMED.
Jeanette Doal appeals pro se from the district court’s sua sponte dismissal of her
complaint charging the Central Intelligence Agency and Department of Justice with
constitutional and human rights violations as a result of her being placed under
surveillance by persons associated with the United States government as well as the
terrorist group al Qaeda. We assume the parties’ familiarity with the facts and record of
prior proceedings, which we reference only as necessary to explain our decision to
affirm.
District courts may dismiss a complaint sua sponte even where, as here, the
plaintiff has paid the required filing fee, if the claim “lacks an arguable basis either in law
or in fact.” Neitzke v. Williams, 490 U.S. 319, 325 (1989); see Fitzgerald v. First E.
Seventh St. Tenants Corp., 221 F.3d 362, 364 (2d Cir. 2000); Pillay v. INS, 45 F.3d 14,
17 (2d Cir. 1995).
Although we have yet to decide whether a district court’s sua sponte dismissal of a
complaint pursuant to its inherent authority is reviewed de novo or for abuse of
discretion, the district court’s decision here “easily passes muster under the more rigorous
de novo review.” Fitzgerald v. First E. Seventh St. Tenants Corp., 221 F.3d at 364 n.2.
A review of the pleadings confirms the district court’s conclusion that Doal’s allegations
2
lack rationality, so as to warrant sua sponte dismissal. Further, the district court
properly denied Doal an opportunity to amend her complaint. Doal’s submissions to
this Court merely reiterate her allegations in the district court, demonstrating that any
amendment would have been futile. See Cuoco v. Moritsugu, 222 F.3d 99, 112 (2d Cir.
2000).
We have considered Doal’s remaining arguments and conclude that they are
without merit. We therefore AFFIRM the judgment of the district court.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, Clerk of Court
3
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689 So.2d 951 (1997)
Ex parte Colon Lavon GUTHRIE.
(Re Lavon Guthrie, alias Colon Lavon Guthrie v. State).
1951747.
Supreme Court of Alabama.
March 14, 1997.
*952 Donald R. Hamlin, Pell City, and Edwin M. Van Dall, Jr., Pell City, for Petitioner.
Bill Pryor, Atty. Gen., and Michael B. Billingsley, Asst. Atty. Gen., for Respondent.
KENNEDY, Justice.
Colon Lavon Guthrie was convicted in 1989 of capital murder for the death of Rayford Howard, and he was sentenced to death. The evidence indicated that on February 25, 1988, Colon Lavon Guthrie and an accomplice robbed Howard's Store in St. Clair County. During the robbery, Guthrie killed Rayford Howard, the store's proprietor, by shooting him in the chest with a sawed-off shotgun. The Court of Criminal Appeals reversed Guthrie's conviction and sentence, because of improper arguments made by the State's prosecutor. Guthrie v. State, 616 So.2d 914 (Ala.Crim.App.1993) ("Guthrie I"). After a second trial, a jury again convicted Guthrie of capital murder, and he was again sentenced to death. On February 9, 1996, the Court of Criminal Appeals affirmed Guthrie's conviction, but remanded the case for a new sentencing hearing, holding that a presentence report considered by the trial court in its sentencing was insufficient. Guthrie v. State, 689 So.2d 935 (Ala.Crim.App.1996) ("Guthrie II"). On return from remand, the Court of Criminal Appeals, on May 10, 1996, affirmed Guthrie's death sentence, with opinion ("Guthrie III"). This certiorari review follows that affirmance. A detailed review of the facts of this case may be found in Guthrie I and Guthrie II.
In his certiorari petition and brief, Guthrie argues that the trial court erred in allowing the jury to hear evidence of a collateral crime. The evidence at issue indicated that a robbery and a murder were committed in Colbert County that were similar to the robbery and murder of Howard and that that robbery and murder occurred within eight hours after Howard was murdered. Guthrie argued this issue before the Court of Criminal Appeals in both Guthrie I and Guthrie II. In Guthrie II, the Court of Criminal Appeals noted that Guthrie had previously argued this issue in Guthrie I, and, relying upon its reasoning in that case, it found no merit in Guthrie's argument.
We agree with the Court of Criminal Appeals that the trial court did not err in allowing the jury to hear this evidence. In its discussion of this issue in Guthrie I, the Court of Criminal Appeals thoroughly addressed the law of collateral evidence and its application to this case. The court noted that, in general, evidence of collateral crimes is not admissible, but that such evidence is admissible when it is relevant for any purpose other than showing the defendant's guilt "`through the medium of bad character,'" quoting C. Gamble, McElroy's Alabama Evidence § 69.0[1](1) (3d ed.1977). While finding that the State's evidence of the Colbert County crime did not "fit neatly within the identity exception to the general prohibition of collateral evidence," the court found the evidence admissible "because it was material and logically relevant to prove the identity of the person or persons who committed the instant murder-robbery." 616 So.2d at 922. The court found a "`clear connection between the [Colbert County] offense and the one charged so that it may be logically inferred that if [the] defendant is guilty of one he must be guilty of the other.'" 616 So.2d at 923. (Citation omitted.) The court noted:
*953 "In this case, the evidence tended to show that both the Colbert County and the instant murder-robberies occurred on February 25, 1988, within eight hours of each other. The site of each crime was a small convenience store and gas station located near a small town. Both victims were killed by shotgun blasts. Both victims' bodies were found behind the counter at the stores. Both victims were apparently alone, except for their assailant or assailants, at the time of the murders. Currency (not coins) from the register and the victim's wallet was taken in each case. We recognize that these facts alone do not necessarily set the two crimes apart from other murders committed during the robbery of convenience store/gas stations. However, the facts in this case offer two distinctive `marks' connecting the offensesthe participation of the codefendant Harvey Lee Windsor and the distinctive Ford Mustang that had been stolen from a convenience store near the trailer belonging to the appellant's sister two days before the murder-robberies. Moreover, the connection of these two offenses is firmly cemented by the constant intertwining of the two `marks' on February 24 and throughout the afternoon and evening of February 25."
616 So.2d at 923-24.
The Court of Criminal Appeals noted that the testimony of several witnesses linked Guthrie, along with the codefendant Windsor and the Ford Mustang automobile, to both the Rayford Howard robbery-murder and the Colbert County robbery-murder. In the interest of brevity, that court's entire discussion of the collateral evidence issue will not be set out here. However, we hold that that court correctly found no error on this issue. The evidence of the Colbert County robbery-murder was probative as to the identity of the person who committed the robbery and murder of Rayford Howard, which was, as the Court of Criminal Appeals noted, the central issue of this case. The trial court properly allowed the jury to consider the evidence regarding the Colbert County crimes.
We also find no merit in Guthrie's contention that the imposition and affirmance of his death sentence violate Art. I, § 1, of the Alabama Constitution of 1901. That section states, in part, that "all men ... are endowed by their Creator with certain inalienable rights; that among these are life, liberty and the pursuit of happiness." Guthrie maintains that that section guarantees an inalienable right to life and bars the imposition of the death sentence in his case. However, the right to life proclaimed in that section of the Constitution does not prohibit the State from establishing that certain criminal acts are so heinous as to warrant the forfeiture of the convicted defendant's life. We find no conflict between that section of the Constitution and the imposition of the death penalty in this case.
We have thoroughly reviewed the record before us in regard to all issues Guthrie has raised, and we have reviewed it for plain error not raised. We conclude that the Court of Criminal Appeals correctly ruled on the issues raised before that court. Furthermore, we have found no plain error. Therefore, the judgment of the Court of Criminal Appeals affirming Guthrie's conviction and sentence is affirmed.
AFFIRMED.
HOOPER, C.J., and MADDOX, SHORES, HOUSTON, COOK, BUTTS, and SEE, JJ., concur.
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NOTE: This order is nonprecedential
United States Court of AppeaIs
for the FederaI Circuit
TESSERA, INC.,
Appellant,
V.
INTERNATIONAL TRADE COMMISSION,
Appellee,
and
ELPIDA MEMORY, INC. and ELPIDA MEMORY
(USA) INC.,
Intervenors,
and
SMART MODULAR TECHNOLOGIES, INC.,
Interven,or,
and
ACER, INC., ACER AMERICA CORPORATION,
NANYA TECHNOLOGY CORPORATION, NANYA
TECHNOLOGY CORPORATION U.S.A.,
and POWERCHIP SEMICONDUCTOR
CORPORATION (n0w known as P0werchip Tech-
nol0gy C0rp0rati0n),
Interven0rs,
and
RAMAXEL TECHNOLOGY, LTD.,
Interven0r,
TESSERA INC V. ITC 2
and
K]NGSTON TECHNOLOGY COMPANY, INC.,
Intervenor.
2010-1176
On appeal from the United States International Trade
Con1mission in Investigation No. 337-TA-630.
ON MOTION
Before LOURIE, Circuit Judge.
0 R D E R
Tessera, Inc. moves for leave to file a reply brief not to
exceed 12,000 words The intervenors oppose. Tessera
replies.
Upon consideration thereof
IT ls 0RDERED THAT:
The motion is granted in part; Tessera's reply brief,
not to exceed 10,000 words, is due within 14 days of the
date of filing of this order.
FoR THE CoURT
AUG 5 wm /3/Jan H0rba1y
Date J an Horba1y
Clerk
cc: Morgan Chu, Esq.
G. Hopkins Guy, IIl, Esq.
Larry L. shacz@r, I1, ESq. va c0uR§,l,lF§lJ,EALSmR
THE FEDERAL ClRCUlT
AUG 05 2010
JANHORBALY
0LERK
3
S
Panyin A. Hughes, Esq.
Michael R. Levinson, Esq.
Joseph V. Colaianni, Esq.
Jonathan M. James, Esq.
TESSERA INC V. ITC
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172 B.R. 237 (1994)
In re NATIONAL MAGAZINE PUBLISHING CO., fka Mall Network Publications, Inc., Debtor.
Bankruptcy No. 94-10859.
United States Bankruptcy Court, N.D. Ohio, Eastern Division.
September 14, 1994.
*238 *239 M. Colette Gibbons, Cleveland, OH, for debtor.
Saul Eisen, Trustee, Cleveland, OH.
MEMORANDUM OF OPINION AND ORDER
RANDOLPH BAXTER, Bankruptcy Judge.
Kahn, Kleinman, Yanowitz & Arnson, Co., L.P.A. (KKY & A) seeks an order altering or amending this Court's Judgment Entry of August 1, 1994, 170 B.R. 329. Specifically, KKY & A requests that the Court amend its findings to reflect that the retainer paid by Debtor to KKY & A was a classic retainer, not property of the estate, and therefore subject to review only under § 329, not § 330.
Bankruptcy Rule 7052 incorporates Fed.R.Civ.P. 52. Therein the Code provides that "the court may amend its findings or make additional findings and may amend the judgment accordingly." Similarly, Bankruptcy Rule 9023 incorporates Fed.R.Civ.P. 59(a) which provides "the court may open the judgment . . ., take additional testimony, amend findings of fact and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment." The purpose of a motion to amend findings is to correct manifest errors of law or fact. Clark v. Nix, 578 F.Supp. 1515, 1516 (S.D.Iowa 1984); Fed.R.Civ.P. 52(b). It is not intended to provide a litigant with a rehearing. Heikkila v. Barber, 164 F.Supp. 587, 592 (N.D.Cal.1958); David v. Mathews, 450 F.Supp. 308, 318 (E.D.Cal.1978); Evans, Inc. v. Tiffany & Co., 416 F.Supp. 224, 244 (N.D.Ill.1976).
KKY & A's motion does not present the Court with any additional evidence and does not submit any new arguments. KKY & A is merely asking the Court to change its findings with respect to the nature of the retainer at issue.
The term "retainer" is not defined in the Bankruptcy Code. As set forth in this Court's August 1, 1994 Opinion and Order, Black's Law Dictionary defines the term as:
The act of withholding what one has in one's own hands by virtue of some right. Act of the client in employing his attorney or counsel, and also denotes the fee which the client pays when he retains the attorney to act for him, and thereby prevents the attorney from acting for his adversary. Term can mean a fee not only for the rendition of professional services when requested, but also for the attorney taking the case, making himself available to handle it, and refusing employment by plaintiff's *240 adversary; or it can mean solely the compensation for services to be performed in a specific case.
Black's Law Dict. (1979 ed.).
The term "retainer" does not have a definite meaning. Id.; Louisiana State Bar Assoc. v. Tucker, 560 So.2d 435 (1989). The term "retainer" is used in reference to many different fee arrangements. Id. One must look to the terms of the agreement between the attorney and the client in order to decipher the nature of the fee arrangement. Louisiana State Bar Assoc. v. Tucker, supra.
Many names have been applied to retainers, e.g., "classic," "security," "general," "prepaid," and "nonrefundable." The name, however, does not determine the substantive terms of the arrangement between the parties. As in any contract, the court may look beyond any label applied by the parties when construing or interpreting the contract. State ex rel. Powers v. Capital Endowment Co., 129 O.S. 654, 196 N.E. 643 (1935), app. dismissed, 296 U.S. 546, 56 S.Ct. 174, 80 L.Ed. 387 (1935); Cimorelli v. New York Cent. R. Co., 148 F.2d 575 (6th Cir. 1965).
KKY & A argues that its retainer agreement with the Debtor was earned when paid and is nonrefundable and point to a March 1, 1994 letter from KKY & A to the Debtor in support thereof. Public policy, however, weighs against nonrefundable retainers because they inappropriately compromise the right to sever the fiduciary services relationship with the lawyer. In re Cooperman, 83 N.Y.2d 465, 611 N.Y.S.2d 465, 633 N.E.2d 1069 (1994). Further, a true earned upon receipt retainer is one paid to a lawyer in exchange for the promise to represent the client. In re Hathaway Ranch Partnership, 116 B.R. 208 (Bankr.C.D.Cal.1990). The consideration cannot include future services if the retainer is truly earned upon receipt. Id.
Further, in Bain v. Weiffenbach, 590 So.2d 544 (1991), the Court stated that a nonrefundable retainer evidences an intention that the money be the lawyer's regardless of what happened thereafter even though it was anticipated that the money would ultimately be applied to the complete fee for legal services. Such a retainer belongs to the attorney and is not subject to a refund whether or not the lawyer actually has to perform the legal services contemplated. Id. It is intended to compensate the lawyer for being available but not for specific services and part is intended as a present payment for legal services to be performed in the future. Id. By comparison, a prepaid fee is understood as belonging to the client. Id.
Thus, although nonrefundable retainers have limited acceptance by courts, to be "earned upon receipt" the consideration must pass at the time the agreement is entered.
The term "classic" retainer has been used with some consistency among the courts. A classic retainer is generally viewed as a fee paid to secure an attorney's availability over a given period of time. In re Mondie Forge Co., 154 B.R. 232 (Bankr. N.D.Ohio 1993); In re McDonald Bros. Constr., Inc., 114 B.R. 989 (Bankr.N.D.Ill. 1990); Baranowski v. State Bar of Calif., 24 Cal.3d 153, 593 P.2d 613, 154 Cal.Rptr. 752 (1979). As such, a classic retainer may be paid in addition to an hourly charge retainer, prepaid security retainer, or other type of retainer. See, Jacobs v. Holston, 70 Ohio App.2d 55, 434 N.E.2d 738 (1980); Bain v. Weiffenbach, supra.
KKY & A points to a March 1, 1994 letter that accompanied the petition in support of its contention that it entered into a classic retainer agreement with the Debtor. As noted in this Court's Opinion of August 1, 1994, the contents of that letter do not reflect language characteristic of a classic retainer.
First, merely stating that a retainer is fully earned upon receipt and nonrefundable does not satisfy the requirements of a classic retainer. Although a classic retainer is nonrefundable, it is nonrefundable as a result of the fees being fully earned upon receipt. The consideration, therefore, is the present promise of the attorney to represent the client on a given matter. The consideration being exchanged at the time the agreement *241 is entered, the fee is earned upon receipt and consequently nonrefundable. With respect to a classic retainer agreement, hourly charges should be of no effect. A classic retainer is not paid for the purpose of applying the same towards hourly work.[1] The March 1, 1994 letter contains reference to hourly charges and KKY & A's efforts to keep costs down. This reflects that hourly charges for services are a component of the agreement between KKY & A and the Debtor. This is inconsistent with a classic retainer agreement.
Secondly, a classic retainer agreement is an agreement entered into by both the client and the attorney. Notwithstanding KKY & A's argument that such an agreement is not governed by the statute of frauds and, therefore, is not required to be in writing, the agreement and its terms must be proven nonetheless. Here, KKY & A's evidence of a classic retainer agreement is insufficient to sustain its burden of proof. Nonrefundable retainers are disfavored in law. Any such retainer will be closely scrutinized by the court. The March 1, 1994 letter is not signed by the Debtor and is self-serving to KKY & A. The July 1, 1994 letter, although from the Debtor, is not compelling in light of the circumstances surrounding its submission to the Court. The July 1, 1994 letter was clearly prepared in response to a request by KKY & A after the hearing on this matter. The letter was not prepared at the time the alleged classic retainer agreement was entered. To substantiate a nonrefundable retainer, including classic retainers, in this Court, a written document prepared at the time the retainer agreement was actually entered into between the attorney and client, and signed by the client, must be submitted to the Court, containing terms consistent with those of a classic retainer.
Accordingly, the Motion to Alter or Amend is denied.
IT IS SO ORDERED.
NOTES
[1] A retainer agreement that provides for the payment of hourly charges may, however, coexist with a classic retainer. See, Jacobs v. Holston, supra.
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918 F.Supp. 1250 (1996)
UNITED CAPITOL INSURANCE COMPANY, Plaintiff,
v.
SPECIAL TRUCKS, INC., Defendant.
No. 1:95-CV-148.
United States District Court, N.D. Indiana, Fort Wayne Division.
January 30, 1996.
*1251 *1252 Catherine C. Ediger, G. Martin Cole, Rothberg, Gallmeyer, Fruechtenicht and Logan, Fort Wayne, IN, Robert B. Lueck, Kristin L. Jenny, Boornazian, Jensen and Garthe, Walnut Creek, CA, for plaintiff.
Thomas M. Shoaff, Jeffrey A. Townsend, Baker and Daniels, Fort Wayne, IN, for defendant.
MEMORANDUM OF DECISION AND ORDER
WILLIAM C. LEE, District Judge.
This case is before the Court on cross-motions for summary judgment. Plaintiff United Capitol Insurance Company ("United Capitol") filed a Declaratory Judgment action on May 19, 1995, and Defendant Special Trucks, Inc. ("Special Trucks") filed an Answer on June 30, 1995. On October 6, 1995, Plaintiff filed a Motion for Summary Judgment. Defendant filed its Motion for Summary Judgment on October 10, 1995. Defendant also filed, on December 12, 1995, a Motion for Leave to File Amended Answer With Counterclaim. For the following reasons, plaintiff's Motion for Summary Judgment is GRANTED in part and DENIED in part, and defendant's Motion for Summary Judgment is GRANTED in part and DENIED in part. Defendant's Motion for Leave to File Amended Answer with Counterclaim is DENIED.
FACTUAL BACKGROUND
Considering the complex nature of the issues raised in this summary judgment action and the contentious manner in which they are being debated, the underlying facts in this case are actually straightforward and, for the most part, undisputed. Defendant Special Trucks, an Indiana corporation, contracted with Calavar Corporation ("Calavar"), a Texas corporation, to build a truck chassis (including chassis, driveline and cab) onto which Calavar would add an "aerial boom." The truck would then be used by Pacific Utility Equipment Company ("Pacific *1253 Utility") for servicing power lines and equipment in Oregon. Special Trucks completed the chassis and shipped the finished truck to Calavar. Calavar completed the addition of the aerial boom assembly. Pacific Utility took delivery of the vehicle in Texas and intended to drive it to Oregon. Somewhere near Albany, Oregon, the truck crashed and was severely damaged. Pacific Utility sued Calavar and Special Trucks in U.S. District Court in Oregon, alleging that the crash was the result of defects in the work of Special Trucks and Calavar. Pacific Utility argued at trial that the crash was the result of a wheel which broke, causing the truck to veer out of control. A jury found for the plaintiff and awarded damages of $457,310.00.[1] Prior to trial, Special Trucks and Calavar entered into an agreement whereby United Capitol, on behalf of Special Trucks, paid Calavar $43,020.00 to settle any indemnity claims Calavar might have against Special Trucks.
At the time of the accident, Special Trucks was covered by a commercial general liability policy. The insurer, United Capitol, tendered a defense on behalf of Special Trucks pursuant to a reservation of rights. At some point (Special Trucks claims it was during the trial), United Capitol informed Special Trucks that it was denying coverage pursuant to certain exclusionary language in the policy. United Capitol maintains that approximately $288,900.60 in damages are covered by the policy and $168,409.40 in damages are not covered. In addition, United Capitol claims that it is entitled to recover from Special Trucks the $43,020.00 it paid in settlement to Calavar. The current Declaratory Judgment action was filed to determine the coverage and damages issues.
SUMMARY JUDGMENT STANDARD
Summary judgment is proper "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). However, Rule 56(c) is not a requirement that the moving party negate his opponent's claim. Fitzpatrick v. Catholic Bishop of Chicago, 916 F.2d 1254, 1256 (7th Cir. 1990). Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery, against a party "who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and in which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). The standard for granting summary judgment mirrors the directed verdict standard under Rule 50(a), which requires the court to grant a directed verdict where there can be but one reasonable conclusion. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). A scintilla of evidence in support of the non-moving party's position is not sufficient to successfully oppose summary judgment; "there must be evidence on which the jury could reasonably find for the plaintiff." Id. at 252, 106 S.Ct. at 2512; In re Matter of Wildman, 859 F.2d 553, 557 (7th Cir.1988); Klein v. Ryan, 847 F.2d 368, 374 (7th Cir.1988); Valentine v. Joliet Township High Sch. Dist. No. 204, 802 F.2d 981, 986 (7th Cir.1986). No genuine issue for trial exists "where the record as a whole could not lead a rational trier of fact to find for the nonmoving party." Juarez v. Ameritech Mobile Communications, Inc., 957 F.2d 317, 322 (7th Cir.1992) (quoting Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986)).
Initially, Rule 56 requires the moving party to inform the court of the basis for the motion, and to identify those portions of the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which demonstrate the absence of a genuine issue of material fact." Celotex, 477 U.S. at 323, 106 S.Ct. at 2553. The non-moving party may oppose the motion with any of the evidentiary materials listed in Rule 56(c), but reliance on the pleadings *1254 alone is not sufficient to withstand summary judgment. Goka v. Bobbitt, 862 F.2d 646, 649 (7th Cir.1988); Guenin v. Sendra Corp., 700 F.Supp. 973, 974 (N.D.Ind.1988); Posey v. Skyline Corp., 702 F.2d 102, 105 (7th Cir.), cert. denied, 464 U.S. 960, 104 S.Ct. 392, 78 L.Ed.2d 336 (1983). In ruling on a summary judgment motion the court accepts as true the non-moving party's evidence, draws all legitimate inferences in favor of the non-moving party, and does not weigh the evidence or the credibility of witnesses. Anderson, 477 U.S. at 249-251, 106 S.Ct. at 2511. However, "[i]t is a gratuitous cruelty to parties and their witnesses to put them through the emotional ordeal of a trial when the outcome is foreordained" and in such cases summary judgment is appropriate. Mason v. Continental Illinois Nat'l Bank, 704 F.2d 361, 367 (7th Cir.1983).
Substantive law determines which facts are material; that is, which facts might affect the outcome of the suit under the governing law. Anderson, 477 U.S. at 248, 106 S.Ct. at 2510. Irrelevant or unnecessary facts do not preclude summary judgment even when they are in dispute. Id. The issue of fact must be genuine. Fed.R.Civ.P. 56(c), (e). To establish a genuine issue of fact, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita, 475 U.S. at 586, 106 S.Ct. at 1356; First Nat'l Bank of Cicero v. Lewco Sec. Corp., 860 F.2d 1407, 1411 (7th Cir. 1988). The non-moving party must come forward with specific facts showing that there is a genuine issue for trial. Id. A summary judgment determination is essentially an inquiry as to "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-252, 106 S.Ct. at 2512.
DISCUSSION
The CGL policy that Special Trucks purchased from United Capitol is a standard form policy and contains language presently found in many such policies. The dispute in this suit involves only a few of the policy provisions. The policy states that the insurer "will pay those sums that the insured becomes legally obligated to pay as damages because of `bodily injury' or `property damage' included within the `products-completed operations hazard' to which this insurance applies." Policy, Section I, 1.a. The policy then states in Section I, 2.h. that the coverage does not apply to "`[p]roperty damage' to `your product' arising out of it or any part of it." The policy contains another exclusion in Section I, 2.i., which states that the insurance coverage does not apply to "`[p]roperty damage' to `your work' arising out of it or any part of it and included in the `products-completed operations hazard.' This exclusion does not apply if the damaged work or the work out of which the damage arises was performed on your behalf by a subcontractor."
Also very relevant to this case is the language in the policy's "Definitions" section. The policy at issue here contains the following definitions:
"`Products-completed operations hazard' includes all `bodily injury' and `property damage' occurring away from premises you own or rent and arising out of `your product' or `your work....'" Section V, 11.a.
"`Property damage' means: Physical injury to tangible property, including all resulting loss of use of that property. All such loss of use shall be deemed to occur at the time of the physical injury that caused it...." Section V, 12.a.
"`Your product' means: Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by you...." Section V, 15.a.
"`Your work' means: Work or operations performed by you or on your behalf; and materials, parts or equipment furnished in connection with such work or operations." Section V, 16.a. and b.
Indiana has certain well-established rules regarding the interpretation of insurance contracts. "Under Indiana law, the interpretation of an insurance policy presents a question of law to be decided by the court." Cincinnati Ins. Co. v. Flanders *1255 Electric Motor Service, Inc., 40 F.3d 146, 151 (7th Cir.1994) (citing Tate v. Secura Ins., 587 N.E.2d 665, 668 (Ind.1992)). "The insured has the initial burden of proving coverage under an insurance policy ... [and] if an insurer relies on an exclusion within a policy to deny coverage, the insurer must establish that the exclusion applies." Id. (citing Southbend Escan Corp. v. Federal Ins. Co., 647 F.Supp. 962, 966 (N.D.Ind.1986)). Clear and unambiguous language in an insurance policy must be given its plain and ordinary meaning. Id. (citing Fidelity & Guar. Ins. Underwriters v. Everett I. Brown Co., 25 F.3d 484, 486 (7th Cir.1994)). "An unambiguous provision in an insurance policy must be enforced, even if it results in a limitation of the insurer's liability." Id. (citing Interstate Auction, Inc. v. Central Nat'l. Ins. Group, Inc., 448 N.E.2d 1094, 1098 (Ind.App.1983)). "However, where the language of an insurance policy is ambiguous, in that it is susceptible to more than one reasonable interpretation, the court must construe the language in favor of the insured." Id. (citing Alexander v. Erie Ins. Exchange, 982 F.2d 1153, 1157 (7th Cir.1993)). At the same time, "a court cannot create an ambiguity where none exists; `if no ambiguity exists the policy will not be interpreted to provide greater coverage than the parties bargained for....'" Id. (quoting Alexander, 982 F.2d at 1157). Also "the mere existence of a controversy as to the meaning of an insurance contract does not establish an ambiguity." Seymour Manufacturing Co., Inc. v. Commercial Union Ins. Co., 648 N.E.2d 1214, 1218 (Ind.App. 1995) (citing Harden v. Monroe Guaranty Ins. Co., 626 N.E.2d 814, 817 (Ind.App.1993), trans. denied).
Coverage Issue
Simply stated, the coverage issue breaks down to this: United Capitol argues that the truck built by its insured is a "product" as that term is used in the policy. As such, no amount of damage to the product itself would be covered by insurance since the exclusion in Section I, 2.h. specifically precludes coverage for "`[p]roperty damage' to `your product' arising out of it or any part of it." Thus, argues United Capitol, any damages incurred by Special Trucks which relate to the truck chassis itself (including, as will be discussed later, incidental damages and loss of use damages "flowing" from the non-covered truck chassis) are not covered by insurance based on the plain language of the policy. Plaintiff's Memorandum in Support of Motion for Summary Judgment, p. 4.
Special Trucks argues that the construction of the truck fits equally well under the definition of "your work" as defined in Section V, 16.a. and b. Special Trucks states that since the wheel that broke and caused the accident was purchased from a third-party vendor, that third party vendor constituted a subcontractor. Therefore, argues Special Trucks, the exception to exclusion 2.i. is brought into play and coverage will lie. Defendant's Brief in Support of Motion for Summary Judgment, p. 3.
The policy at issue defines "product" as "[a]ny goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by you...." Section V, 15.a. The court was unable to locate any Indiana or Seventh Circuit case law dealing with the definition of "product" as that term is used in CGL insurance policies, and, in fact, neither party in this case cites any case that specifically defines the term. The Ninth Circuit offers some assistance in the case of Hydro Systems, Inc. v. Continental Ins. Co., 929 F.2d 472 (9th Cir.1991), wherein the court wrote:
Several courts have examined the meaning of the term "product" as it relates to product hazard exceptions. The majority of courts "define `products' as goods or services which the insured deals in as his stock or trade." CPS Chem. Co. Inc. v. Continental Ins. Co., 199 N.J.Super. 558, 489 A.2d 1265, 1270 (1984) (holding that "industrial wastes" were not products under a products hazard exception because they were "not intended for consumption, sale or use by others ..."); see also Paxton-Mitchell Co. v. Royal Indemn. Co., 279 Or. 607, 569 P.2d 581, 587 (1977) (interpreting "product" in the absence of a contractual definition as referring to those things in which the insured "trades or deals"). 929 F.2d at 475.
*1256 The Ninth Circuit referred to this as a "common sense definition of the term `product.'" Id. In addition, the policy at issue in the Hydro Systems case contained exactly the same definition of "product" as is found in the United Capitol policy. Clearly, the truck that was manufactured by Special Trucks was intended for "sale or use by others" and constituted "goods or services" of the kind in which Special Trucks deals.
Special Trucks cites several cases wherein courts have used the terms "work" and "product" interchangeably when dealing with the interpretation of insurance policies. Special Trucks seems to argue that these cases establish that the terms are synonymous and therefore the separate exclusionary provisions at issue can be applied interchangeably. It is true that the cases cited by Special Trucks use the terms "work," "work product," and "product" interchangeably when discussing policy exclusions similar (in some cases identical) to the exclusions in the present case. However, the courts in those cases simply refer to the "product" exclusion and the "work" exclusion collectively while explaining why they do or do not preclude coverage based on the facts of each specific case. None of the cases expressly hold that the two exclusions are essentially one, or that the presence of both in an insurance policy creates an ambiguity.
For example, Special Trucks cites the case of Honeycomb Systems, Inc. v. Admiral Ins. Co., 567 F.Supp. 1400, 1408 (D.Maine 1983). Again, policy language virtually identical to that found in this case was involved in the Honeycomb case. There, the insurer was arguing that the "work performed" and "product" exclusions encompassed all the damages incurred in the case and precluded any coverage. The court, in explaining the insurer's position, stated that: "[Insurer's] contention is that the plain terms of [the] exclusions ... encompass all aspects of the damages claimed by [owner], since it is undisputed that the 22-foot dryer is [insured's] `product' or `work performed by or on behalf of [insured]." Id. (Italics added). The fact that most distinguishes Honeycomb from the present case is that the insured in Honeycomb both manufactured the product and installed it. So, while the court refers to the manufacture and installation of the dryer into owner's paper machine as both "product" and "work," it never directly addressed the issue of whether the dryer constituted one or the other, since the parties apparently were not disputing that specific issue.
United Capitol, in responding to Special Truck's contention that the truck in question could just as well fall under the "work performed" exclusion as the "product" exclusion, relies heavily on the widely cited case of Indiana Insurance Co. v. DeZutti, 408 N.E.2d 1275 (Ind.1980). In that case, the insured contractor constructed a home which was later severely damaged because the footings supporting it (which had been installed by a subcontractor) had been improperly installed. The policy contained exclusionary language virtually identical to the "work" and "product" language found in the United Capitol policy. The Indiana Supreme Court held that the entire house constituted the insured's "product" for purposes of determining the scope of coverage. Surely, United Capitol argues, if the Indiana Supreme Court deems the construction of a house a "product" rather than "work" for purposes of interpreting a CGL policy, then the manufacture of a truck cannot be characterized any differently.
While United Capitol does not seem to quote this sentence anywhere in its three briefs, the Indiana Supreme Court in DeZutti stated its interpretation of the terms "work" and "product." The court wrote that "the term `work' refers to the negligent or incorrect manner in which the job was done, whereas `product' means that the item made or sold is somehow defective or deficient in itself." 408 N.E.2d at 1280. By this definition, it appears that the manufacture of a truck chassis for sale to a customer would fall more accurately within the definition of "product" rather than "work."
Special Trucks makes a gallant effort in its briefs to pigeonhole its manufacture of the truck into the admittedly broad policy definition of "your work" in order to attempt to *1257 invoke full coverage.[2] However, as stated earlier, it is the duty of this court to give clear and unambiguous language in an insurance policy its plain and ordinary meaning. Cincinnati Ins. Co., 40 F.3d at 151. Further, "a court cannot create an ambiguity where none exists...." Id. Also, the "mere existence of a controversy as to the meaning of an insurance contract does not establish an ambiguity." Seymour Mfg. Co., 648 N.E.2d at 1218 (Ind.App.1995). The court finds that the truck in issue in this case constitutes a "product" as that term is used in the policy.
Damages Issue
1. Property Damage and Loss of Use
As previously stated, the language in the CGL policy in this case is extremely common in virtually all such policies currently sold. The "your product" and "your work" exclusions "are commonly referred to as business risk exclusions." Home Indemnity Co. v. Wil-Freds, Inc., 235 Ill.App.3d 971, 175 Ill. Dec. 884, 887, 601 N.E.2d 281, 284 (1992). Such exclusions are designed to preclude coverage for risks that can be most easily avoided by the insured company itself. As one very frequently quoted commentator explained:
The risk intended to be insured is the possibility that the goods, products or work of the insured, once relinquished or completed, will cause bodily injury or damage to property other than to the product or completed work itself, and for which the insured may be found liable. The coverage is for tort liability for physical damages to others and not for contractual liability of the insured for economic loss because the product or completed work is not that for which the damaged person bargained. Indiana Insurance Co. v. DeZutti, 408 N.E.2d 1275 (Ind.1980) (quoting Henderson, Insurance Protection for Products Liability & Completed Operations What Every Lawyer Should Know, 50 Neb.L.Rev. 415, 441 (1971)).
It has also been frequently noted that the rationale behind the types of exclusions at issue in this case is that liability insurance is not intended to act as a warranty or to serve as a performance bond. DeZutti, 408 N.E.2d at 1279; Wil-Freds, 601 N.E.2d at 285. "The stated intent of the CGL policy form is to exclude coverage for contractors' `business risks' while protecting contractors against consequential damages." Franco, Insurance Coverage for Faulty Workmanship Claims Under Commercial General Liability Policies, 30 Tort & Ins.L.J. 785 (Spring 1995). As author Franco further explains:
In sum, poor performance is a cost of doing business; it is not a part of the insurance objective of shifting risk. A contractor's poor performance is outside the scope of CGL coverage. Franco at 786-787 (citing Vari-Builders, Inc. v. U.S. Fidelity & Guar. Co., 523 A.2d 549, 552 (Del.Supr.Ct.1986)). The risk of replacing and repairing defective materials or poor workmanship has generally been considered a commercial risk that is not passed on to the liability insurer. Rather liability coverage comes into play when the insured's defective materials or work cause injury to property other than the insured's own work or products.... CGL policies are not intended to cover the replacement or repair of contractors' work. Id. at 787.
The parties in the present case do not dispute the fact that Special Trucks must absorb the cost of repairing its product. They do, however, vehemently argue about how much it actually cost to repair the chassis. According to Special Trucks, the total *1258 cost of repair was $37,763.63. See October 9, 1995 affidavit of Special Trucks co-president Michael Baum, ¶ 13. However, Special Trucks argues that only $29,436.50 should be excluded from coverage, as that is the actual amount it cost Special Trucks to repair its chassis as a result of the accident. Special Trucks states that additional expenses of $8,327.13 were incurred in repairing the chassis, bringing the total to $37,763.63, but that these expenses are not excluded from coverage since they consisted of purchasing replacements for parts of the truck which were not damaged in the accident. Rather, these parts were removed from the truck before it was shipped to Special Trucks for repair. See October 9, 1995 affidavit of Micheal Baum, ¶¶ 12 and 13. Special Trucks in its briefs states that said parts were stolen off the truck. Defendant's Reply Brief in Support of Motion for Summary Judgment at p. 11. Consequently, Special Trucks argues that the additional $8,327.13 in repair costs were not the result of the faulty product. United Capitol presents no evidence whatsoever to refute Special Truck's assertion that $8,327.13 in parts were removed from the truck at some point following the accident.
Not surprisingly, United Capitol takes a much different approach to deciding which expenses are covered and which are not. United Capitol takes the position that damages should be apportioned between covered items and non-covered items, according to a "cogent, logical formula." Plaintiff's Memorandum in Support of Motion for Summary Judgment at p. 15. In a subsequent brief, after having this apportionment argument challenged by Special Trucks on the basis that United Capitol cited absolutely no authority for it, United cited the case of Vari Builders, Inc. v. United States Fidelity and Guaranty Co., 523 A.2d 549 (Del. Supr.Ct.1986). Reply to the Opposition of Special Trucks, Inc. to Plaintiff United Capitol's Motion for Summary Judgment at p. 4. United Capitol states that "Vari Builders involved a situation where incidental damages ... were apportioned between those incurred as a result of non-covered damages and those incurred as a consequence of covered damages. The court approved the apportionment." Id. However, a careful reading of Vari Builders reveals no such holding. In that case, a homebuilder was sued by homeowners after their home and personal property were damaged due to the builder's faulty workmanship. Plaintiffs sued to recover for the damage to their home, and for consequential damages such as storage and relocation expenses. The court held that the business risk exclusion or product exclusion precluded coverage for damage to any part of the house since that constituted damage to the work of the insured. The court reasoned that since the damage to the house was not damage covered under the insurance policy, all consequential damages related to that non-covered item were also not covered. Consequently, the court ruled that no coverage existed for any of the damages claimed in the case. It requires a leap of faith to interpret the holding as approving an apportionment of damages between covered and non-covered items. The holding in Vari Builders implies that had the damage to the house itself been covered under the policy, then the consequential damage related to that covered item might also be covered. However, the court does not even mention the concept of apportionment.
United Capitol admits that "there is no Indiana authority addressing the issue of apportionment of incidental damages or loss of use damages between covered and non-covered property damage." Id. at p. 6. United Capitol goes on to argue that "... Special Trucks has offered no Indiana authority disallowing such an apportionment." Id. Special Trucks counters that "[i]t is difficult ... to find cases directly in conflict with a proposition that has never before been propounded." Defendant's Reply Brief at p. 11.
United Capitol states that the parties stipulated at the underlying trial of this matter that "the cost of repair to the entire mobile aerial lift vehicle was $152,942.00.... $51,717.00 of the total repair figure is attributable to the chassis, and $101,225.00 to the boom. Thus, the ratio of the repair cost is 66% for the boom, and 33% for the chassis." Plaintiff's Memorandum in Support of Motion for Summary Judgment at p. 14. Special Trucks argues that "[i]f United Capitol had argued for some type of apportionment *1259 in good faith, it would have compared the amount of the stipulated property damage ($287,310) with the actual cost of repair ($29,436.50) for a ratio of 90/10, not United Capitol's suggested 66/34." Brief in Opposition to Motion for Summary Judgment at p. 7. United Capitol stated during oral argument that the repair figure of $51,717.00 was the retail figure, i.e., the amount Calavar Corporation billed its client for repair of the chassis. But United Capitol does not argue that the cost of repair, and therefore the amount that should be excluded from coverage, is $51,717.00. Instead, United Capitol goes one giant step further in its argument. United Capitol argues that its 66%/34% ratio should be applied to the total property damage award in the underlying case. That would mean that Special Trucks would be responsible for just over $97,000.00 of the total property damage award of $287,310.00, despite the fact that the actual cost of repair was just over $37,000.00. The court disagrees with United Capitol's assertion that such an apportionment represents a "cogent, logical formula." Instead, it appears that United Capitol is attempting to pass along much of its own responsibility to pay the jury award, a responsibility imposed upon it by the terms of its policy. Special Trucks cannot and should not be penalized for United Capitol's failure to convince the jury in the underlying case that the property damage award should be less than $287,310.00.
Since the parties do not dispute that Special Trucks has no insurance coverage for the cost of repairing the chassis, the duty of the court on this issue is to determine what that amount is. It is the responsibility of Special Trucks to repair its damaged product and make it whole. Special Trucks affirmatively states that the cost of repair was $37,763.63. That amount is properly excluded from coverage. While it is true that the $8,327.13 in lost or stolen parts is not an amount that can be said to have directly resulted from the accident (that is to say, it is not the result of any faulty workmanship of Special Trucks), that fact does not in and of itself mean that the amount should be covered by the United Capitol policy.[3] On the contrary, the express language of the policy would clearly exclude this sum. The policy expressly states that it does not apply to "`[p]roperty damage' to `your product' arising out of it or any part of it." The missing or stolen parts are clearly damage to the product of Special Trucks. As such, it is clearly not "property damage ... to which this insurance applies." Policy, Section I, 1.a. As discussed previously, the type of CGL policy at issue here is designed to provide coverage to an insured for damages sustained by third parties as a result of the faulty workmanship of the insured.
Essentially, Special Trucks is arguing that the additional repair amount is not the company's fault and that it would be unfair to assess that amount against the company. That may be true, but it is equally true that charging that amount to United Capitol would be just as unfair, since it is not the type of loss intended to be covered by the policy. The proper remedy for Special Trucks is to recover the $8,327.13 from the thieves who stole the parts or the party responsible for allowing the parts to be removed.[4]
For the foregoing reasons, the court finds that the amount of repair to the product of Special Trucks is $37,763.63 and that amount is properly excluded from coverage.
As to the loss of use damages, both parties stipulated that this amounted to $142,815.00. Again, United Capitol argues that its 66%/34% apportionment theory should be applied, and again the court finds this argument unpersuasive. The policy expressly defines "property damage" as *1260 "[p]hysical injury to tangible property, including all loss of use of that property." Policy, Section V, 11.a. (italics added). Thus, loss of use damages are clearly covered in the subject policy and by the facts of this case. In fact, United Capitol is not arguing that such damages are excluded. Rather, the company is arguing that, like incidental damages (discussed below), loss of use damage should be apportioned according to that loss of use that is attributable to a covered item (the aerial boom) and that portion that is attributable to a non-covered item (the chassis). Since there is no way to determine a proper apportionment ratio, United Capitol again urges the court to apply its "cogent, logical" figure of 66%/34%. This would make Special Trucks responsible for over $48,000.00 in loss of use damages damages that are expressly covered pursuant to the terms of the policy.
On the issue of loss of use damages, Special Trucks cites several cases wherein courts in other jurisdictions have addressed such damages in light of "work product exclusions" of the type at issue in the present case.[5] Special Trucks relies primarily on the case of Honeycomb Systems, Inc. v. Admiral Ins. Co., 567 F.Supp. 1400 (D.Maine 1983). In that case, the insured built a 22-foot dryer which was installed in a larger machine owned and operated by Scott, a paper company. When the dryer failed, the paper company sued the insured. Insured later brought a declaratory judgment action against its insurer, Admiral. The insurance policy contain exclusions similar to the ones in the present case. Admiral argued that since the only physical damage sustained was to the dryer itself, the exclusions applied and there was consequently no coverage for any damages. The court rejected Admiral's contention and held that coverage did apply for loss of use damages. The court held that "a significant element of the damages sued upon here is for loss of use of the paper machine, a product owned by Scott, not by Honeycomb. In other words, in its loss of use claim Honeycomb seeks recovery of damages to Scott resulting from a breakdown of Honeycomb's product; Honeycomb is not seeking damages to its own product, the dryer. The claim for loss of use of the paper machine is therefore not barred by the [exclusionary language]." Id. at 1408. Several other cases applied the same reasoning when determining that loss of use damages are not excluded by policy language similar to that present in this case. See W.E. O'Neil Construction Co. v. National Union Fire Ins. Co. of Pittsburgh, 721 F.Supp. 984 (N.D.Ill.1989); Todd Shipyards Corp. v. Turbine Service, Inc., 674 F.2d 401 (5th Cir.1982). None of the cases cited by the parties discussed the concept of apportionment of loss of use damages.
For the foregoing reasons, the court holds that the loss of use damages in this case, in the stipulated amount of $142,815.00, are covered, in their entirety, by the subject policy and should not be apportioned.
2. Consequential Damages
Utilizing a variation of its apportionment theory, United Capitol turns next to the consequential damages the figure of $27,185.00. United Capitol argues that consequential damages that flow from the covered item (the aerial boom) are themselves covered, while damages flowing from the non-covered item (the chassis) are not covered. The incidental damages are listed as items "A" through "L" in Exhibit G of plaintiff's Memorandum in Support of its Motion for Summary Judgment. United Capitol argues that the covered consequential damage items include the following:
1. Item "A", the bill for services of the local fire department in responding to the accident scene ($520.00);
2. Item "D", the bill from the Oregon State Highway Division for services at the accident scene and for damages to a highway fence ($531.23);
3. Item "G", the bill from Gray's International for loading the boom assembly onto a flatbed for shipment to Calavar in Waco, Texas ($560.00);
*1261 4. Item "H", the bill from GF Motor Freight for shipping component parts of the damaged boom to Texas ($1,022.19);
5. Item "I", the bill from W.T.B., Inc., for shipping the entire boom from Oregon to Texas ($2,385.00).
These five items amount to a total of $5,018.00 in covered consequential damages.
Consequential damages which United Capitol argues are not covered include the following:
1. Item "B", the cost of a Pacific Utility crane to move the damaged unit at the accident scene ($350.00). This expense is not covered, according to United Capitol, because the "towing or moving of the vehicle was directly caused by the inability of the chassis to perform its transportation function due to damage." Memorandum in Support of Motion for Summary Judgment at p. 19.
2. Item "C", a tow bill "for moving the unit, likewise necessitated due to damage to the chassis" ($5,791.00); Id.
3. Item "E", "... charges for inspection of the engine, clearly chassis related, and having no relationship to the boom assembly" ($158.00); Id.
4. Item "F", the bill for "shipment of the tire and rim parts of the chassis following the tire blowout in California" ($499.00); Id.
5. Item "J", "an invoice from Wagner Towing for transporting the damaged chassis from Oregon to Fort Wayne for repair" ($2,450.00); Id.
6. Item "K", an invoice for loading the damaged chassis onto a flatbed truck for transport back to Special Trucks ($168.00); Id.
7. Item "L", the cost of transporting a new unit from the Calavar plant in Waco, Texas, to the accident site in Albany, Oregon ($12,751.00); Id.
These items, which United Capitol argues are not covered, total $22,167.00. United Capitol states that "Allocation of incidental damages is consistent with the plain meaning and purpose of exclusion [2.h.], which is to provide coverage only for the risk of harm to persons or to other property, and not for the business expense to be borne by the insured for repairing or replacing its own faulty product." That point is well established. See DeZutti, 408 N.E.2d 1275 (Ind.1980). The court agrees with United Capitol's position that damages, including consequential damages, related to the repair of the Special Trucks chassis are excluded from coverage, while others may be covered. See Oscar W. Larson Co. v. United Capitol Ins. Co., 845 F.Supp. 445 (W.D.Mich.1993); Todd Shipyards Corp. v. Turbine Service, Inc., 674 F.2d 401 (5th Cir.1982). However, the court is of the opinion that United Capitol's assessment of which of the amounts listed above actually constitute a portion of the cost of repair is not altogether accurate.
Both parties cite the Todd Shipyards case as supporting their respective position regarding coverage of consequential damages. In that case, the faulty work product was a turbine on a ship which, when it failed, resulted in loss of use and consequential damages. The court held that the insurance companies were "liable for those damages attributable to the [ship's] `down time', such as damages for loss of use of the vessel, general expenses from the master's accounts, and pilotage, wharfage, tug, repatriation and recrewing expenses. However, [the insurers] are not liable for any costs incurred in repairing and replacing the work product of their insureds, including the cost of inspecting, crating, shipping, and reinstalling the LP turbine." 674 F.2d at 423.
The reasoning in the Todd Shipyards case is in keeping with the very purpose and policy behind a CGL policy which, as has been discussed, is not intended to provide coverage for business risks such as those relating to the replacement or repair of the insured's own product. Thus, in the present case, the consequential damages that are directly related to the process of repairing the damaged chassis are not property damage intended to be covered by Special Trucks' CGL policy, while all other consequential damages would be covered. The task is to categorize the consequential damages properly.
United Capitol is correct that the five items of consequential damages which it claims are covered do indeed fall within the *1262 policy terms since they are clearly not related to the repair of the chassis. However, the court disagrees with United Capitol's characterization of several of the seven items which it claims are excluded from coverage. For example, United Capitol claims that the $350.00 cost of a Pacific Utility crane to move the damaged unit is not covered because it "was directly caused by the inability of the chassis to perform its transportation function due to damage." What United Capitol is attempting to argue with regard to this item and several others, is that expenses that would not have been incurred but for the damage to the chassis are not covered. Put another way, any expense that could be said to flow from the damage to the chassis is not covered since the chassis itself is not covered. This reasoning sweeps too broadly and ignores the intended purpose of the CGL policy. If all consequential damages that flowed from the "inability of the chassis to perform" were not covered, as United Capitol asserts, then it would be reasonable to claim that the bill for the fire department (for example) would not be covered because the fire department would never have had to respond but for "the inability of the chassis to perform its ... function."
The proper procedure when categorizing each item of consequential damage is to employ an approach similar to that in the Todd Shipyards case, so as not to violate the intended purpose of the policy. In doing so, it is clear that the $350.00 expense for the Pacific Utility crane to assist in clearing the damaged vehicle from the accident scene is not a cost incurred in repairing the chassis and thus would not be excluded from coverage. Likewise, the bill of $5,791.00 for towing the wrecked vehicle from the accident site to a Pacific Utility yard in Portland, Oregon, is not a repair cost and would not be excluded from coverage. Charges of inspection of the engine, in the amount of $158.00, are related to the repair of the chassis and would be excluded from coverage. The $499.00 cost of shipping the tire and rim portion of the chassis following a blowout in California is clearly a cost associated with damage to the insured's own product and would be excluded from coverage. The expense of $2,450.00 for transporting the chassis from Oregon back to Special Trucks is part of the cost of repair and is excluded from coverage. Also, the invoice of $168.00 for loading the chassis onto a flatbed truck for transport back to Special Trucks is likewise part of the cost of repair and is therefore excluded from coverage.
In contrast, the sum of $12,751.00 for costs associated with transportation of the new unit from the Calavar site in Waco, Texas, to the accident site in Albany, Oregon, is clearly not related to the cost of repair of the chassis and therefore would not be excluded from coverage.
In summary, items "A", "B", "C", "D", "G", "H", "I", and "L" are not costs of repairing the insured's own product and therefore are covered by the CGL policy. Items "E", "F", "J" and "K" are associated with the cost of repairing the chassis and therefore would not be covered by the policy.
3. Settlement Payment
Finally, the parties also debate whether the $43,020.00 paid to Calavar in the settlement agreement is a covered item. United Capitol argues that this amount is not covered because it does not constitute "property damage" as defined in the policy. Special Trucks argues that since United Capitol knew that Calavar would have indemnity rights against Special Trucks if the accident was found to have been caused by a faulty wheel (which of course it was), and since it was United Capitol's idea to settle with Calavar as a tactical matter to prevent Calavar from appearing in court and placing all the blame for the accident on Special Trucks, the settlement amount is properly a cost incurred by United Capitol in its defense of its insured.
The settlement payment of $43,020.00 is comprised of both damages sustained by Calavar and Calavar's attorney fees. The damage amounts total $18,424.40 and include such items as costs to "inspect and repair cylinders ... 70 hours labor to disassemble and reassemble after repairs," "mark up on CAB repairs passed on to Pacific Utility at cost," "non-destruct testing upper parts," "freight on inspection parts," and "inspect and test ring gear." Also included in this *1263 amount is $1,689.75 in travel expenses incurred by two Calavar representatives who travelled to assess the damage to the unit. Plaintiff's Memorandum in Support of Motion for Summary Judgment, Exh. C. United Capitol argues that these damages are actually purely economic in nature since they were incurred after Calavar accepted the damaged unit as a trade-in from Pacific Utility and provided Pacific Utility with a replacement unit. Therefore, argues United Capitol, the damage is not damage Calavar sustained as a result of the negligence of Special Trucks. That is to say, Calavar did not sustain damage to its unit as a result of the accident since it did not own the unit at the time of the accident. This would be true if Calavar were simply a third party who happened to come along and offer to purchase the damaged unit from Pacific Utility, then turn around and make a claim for damages against the party responsible for damaging the unit in the first place. But that is simply not the case. Calavar was not an arm's length third party purchaser, but rather, a co-defendant with a valid indemnification claim against Special Trucks (even according to United Capitol's own counsel in the underlying action). This is a very different scenario from the one United Capitol urges the court to accept. By the very description of the damages as contained in Plaintiff's Exh. C, it is clear that Calavar sustained property damage of the sort intended to be covered by a CGL policy property damage sustained by Calavar as a result of the faulty workmanship of Special Trucks. The $1,689.75 in travel expenses would be considered covered consequential damages sustained by Calavar, just as many of the consequential damages suffered by Pacific Utility were covered, as discussed previously.
The parties agree that the only damages excluded from coverage under the express language of the policy are damages to the insured's own product. The damages sustained by Calavar clearly are not damage to the Special Trucks chassis. Therefore, they would be covered unless expressly excluded. United Capitol has the burden of proving that an exclusion applies and precludes coverage. Cincinnati Ins. Co. v. Flanders Electric Motor Service, Inc., 40 F.3d 146 (7th Cir.1994). However, United Capitol does not point to any exclusion in the policy that applies to the settlement funds in question.
The remainder of the settlement amount, $24,595.60, was allocated to Calavar's attorney fees. Plaintiff's Memorandum in Support of Motion for Summary Judgment, Exh. C. In Oregon, where the underlying trial took place, an indemnitor would be liable not only for damages assessed against an indemnitee, but also for the indemnitee's reasonable costs of defense. The Oregon Supreme Court held that "[t]he rule in most jurisdictions, regardless of whether indemnity is based upon an implied or an express agreement, is that when a claim is made against an indemnitee for which he is entitled to indemnification, the indemnitor is liable for any reasonable expenses incurred by the indemnitee in defending against such claim, regardless of whether the indemnitee is ultimately held not liable. We so hold." St. Paul Fire & Marine Ins. Co. v. Crosetti Bros., Inc., 256 Or. 576, 475 P.2d 69, 70 (1970) (citations omitted). United Capitol assumed the defense of its insured, Special Trucks, as it was required to do pursuant to the terms of the policy. United Capitol also assumed the defense of Calavar, apparently based largely on its concern about Calavar's indemnity rights against Special Trucks. Defendant's Brief in Opposition to Plaintiff's Motion for Summary Judgment, Affidavit of Michael Baum, ¶ 3. United Capitol has not sought to recover the attorney fees and costs it incurred as a result of defending its insured, and the company cites no authority to support its position that it has a right to recover any of the costs incurred in defending co-defendant Calavar. United Capitol also cites no authority to support its proposition that it is entitled to recover what amounts to a portion of the cost of defense of the underlying lawsuit filed against its insured. As a result, Special Trucks is entitled to summary judgment in its favor on the issue of coverage for the $43,020.00 paid to Calavar pursuant to the settlement agreement.
*1264 Defendant's Motion to Amend Answer
Special Trucks filed its Motion for Leave to File Amended Answer with Counterclaim on December 12, 1995. The court finds that this motion is untimely and is therefore denied. The parties in this suit signed a pretrial schedule on July 13, 1995, and the court approved the agreement, which was filed of record in this cause. The schedule expressly stated that Defendant had until October 1, 1995 to add additional parties and/or amend the pleadings. Furthermore, the court believes that this Order is dispositive of the issues in this case. Defendant, then, must pursue any claims against Plaintiff in a separate action. The court hereby takes judicial notice that just such a separate action was indeed filed by Special Trucks on January 23, 1996, in cause number 1:96-CV-32.
CONCLUSION
For the foregoing reasons, Plaintiff's motion for summary judgment on the issue of the applicability of the policy's "product" exclusion is GRANTED; Defendant's motion for summary judgment on the issue of the applicability of the "work" exclusion is DENIED; Defendant's motion for summary judgment on the issue of coverage for loss of use damages is GRANTED; both Plaintiff's and Defendant's motions for summary judgment on the issue of consequential damages are GRANTED in part and DENIED in part; and Defendant's motion for summary judgment on the issue of coverage of the settlement payment is GRANTED; Finally, for the reasons discussed above, Defendant's Motion for Leave to File Amended Answer with Counterclaim is DENIED.[6]
NOTES
[1] The jury awarded a lump-sum verdict. However, the parties hereto have stipulated that the damages break down to the following categories and amounts: 1) property damage of $287,310.00; 2) incidental damages of $27,185.00; and 3) loss of use damages of $142,815.00.
[2] Assuming for the sake of argument that the production of the truck was considered "work" rather than "product" for coverage purposes, Special Trucks would still have to establish that FTC Inc., the company that sold Special Trucks the wheels for the truck in question, was a subcontractor in the project with Calavar rather than simply a vendor of parts. Only then would the exception to exclusion 2.i. come into play. The argument presented by Special Trucks on that issue was not convincing. Furthermore, Special Trucks would have to establish that what FTC did in providing the wheels constituted "work performed" by that company in order for the exception to be invoked. In light of the court's discussion regarding the meaning of the terms "product" and "work," it is extremely doubtful that Special Trucks could successfully argue that what FTC did constituted the performance of work, as opposed to providing a product.
[3] Of course, it could be argued that the lost or stolen parts were an indirect result of the faulty workmanship of Special Trucks. That is, but for the faulty workmanship, the truck might not have been in a position where parts could be so easily lost or stolen. Using that logic, the additional $8,327.13 would clearly be the responsibility of Special Trucks.
[4] For example, if Special Trucks had had the damaged truck impounded at some commercial lot and the loss or theft occurred at that lot, then Special Trucks would, subject to the terms of any bailment agreement, have to seek recovery from the bailee. It could not seek to recover the amount pursuant to its CGL policy.
[5] The parties acknowledge at various points in their briefs that there is very little case law in the Seventh Circuit addressing the issues raised in this case. The court also found this to be the case. Nonetheless, the cases from other jurisdictions discussed herein are instructional and are helpful in understanding this court's analysis.
[6] In this case, even more than most, the words GRANTED and DENIED translate directly into amounts of money. For purposes of edification, the liability amounts break down like this: Special Trucks is liable for the cost of repair of its product, which amounts to $37,763.63, while United Capitol is liable for the remainder of the property damage awarded by the jury in the underlying case a total of $249,546.37; Special Trucks is liable for consequential damages totaling $3,275.00 and United Capitol is liable for consequential damages totaling $23,910.42; United Capitol is liable for loss of use damages of $142,815.00; and United Capitol is not entitled to reimbursement of the $43,020.00 paid in settlement to Calavar.
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949 A.2d 1082 (2008)
LEWIS
v.
GINGUE.
No. 08-032.
Supreme Court of Vermont.
March 7, 2008.
Appeal disposed of without published opinion or memorandum decision. Denied.
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642 F.Supp. 936 (1986)
The COCA-COLA COMPANY, Plaintiff,
v.
The PROCTER & GAMBLE COMPANY, Defendant.
No. C-1-86-0615.
United States District Court, S.D. Ohio, W.D.
August 27, 1986.
*937 Jacob K. Stein, Cincinnati, Ohio, for plaintiff.
Thomas S. Calder, Cincinnati, Ohio, for defendant.
ORDER
HERMAN JACOB WEBER, District Judge.
This matter is before the Court upon defendant Procter & Gamble Company's ("P & G") Motion to Dismiss the Complaint (doc. no. 9).
Plaintiff The Coca-Cola Company ("Coca-Cola") filed a Complaint in this Court on July 3, 1986 asserting that commercials broadcast nationwide by P & G are false and misleading advertising because P & G asserts it uniquely uses only the "heart" of the orange in making its orange juice, Citrus Hill Select. Coca-Cola alleges that by virtue of defendant's false and misleading advertising concerning the "heart of the orange" message, its Minute Maid orange juice product is suffering and will continue to suffer irreparable injury for which Coca-Cola has no adequate remedy at law.
Coca-Cola in its prayer for relief, requests that P & G be preliminarily and permanently enjoined from broadcasting the contested television commercials and that defendant be preliminarily and permanently enjoined from claiming, directly or indirectly, in connection with its advertising, promotion or sale of Citrus Hill Select Orange Juice, that 1) Citrus Hill Select is different from and more select than other orange juices; 2) Citrus Hill Select Orange Juice is more select because it uses only the "heart" or the cubed interior portion of the orange; 3) the "heart" of the orange is fresher, sweeter and/or better tasting than the rest of the orange; 4) that defendant discards portions of the orange that other manufacturers use in the manufacture of the orange juice; and (5) that Citrus Hill Select, because of its use of the "heart" of the orange, is fresher, sweeter or better tasting than other competing brands.
Coca-Cola contends that P & G's advertisements are a false description and representation of goods in interstate commerce in violation of § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a). There is no claim made of product confusion.
P & G maintains in its Motion to Dismiss that in the absence of a claim of product confusion, plaintiff cannot obtain an injunction under § 43(a). This argument is based on the holding by the United States Court of Appeals for the Sixth Circuit in Federal-Mogul-Bower Bearings, Inc. v. Azoff, 313 F.2d 405 (6th Cir.1963).
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a) (1976), provides:
Any person who shall ... use in connection with any goods or services ... a false designation of origin, or any false description or representations including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce ... shall be liable to a civil action by any person doing business in the locality falsely indicated as *938 that of origin or in the region in which said locality is situated, or by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.
The Sixth Circuit in Azoff stated as follows:
As observed by appellant, the Lanham Act does not provide a right of action for trade-mark infringement generally; it leaves to the state courts, administering the state laws, and to the diversity cases, those cases for common law trade-mark infringement that do not arise out of deceptive and misleading use of such marks in interstate and foreign commerce. But it does provide a right of action to persons engaged in interstate and foreign commerce, against deceptive and misleading use of common law trademarks, and against deceptive and misleading use of words, names, symbols, or devices, or any combination thereof, which have been adopted by a manufacturer or merchant to identify his goods and distinguish them from those manufactured by others, where such misleading use is carried on, in the channels of interstate and foreign commerce, which is subject to regulation by Congress.
Id. at 409.
The Sixth Circuit in Azoff at 409 also cited with approval and quoted extensively the Massachusetts District Court in Samson Crane Co. v. Union National Sales, Inc., 87 F.Supp. 218, 222 (D.Mass.1949), aff'd per curiam, 180 F.2d 896 (1st Cir. 1950). That quote reads as follows:
The intent of Congress in passing the Act is set forth in the final paragraph of Section 1127. Only one phrase of that paragraph fails to use the word `mark'. And that phrase (`to protect persons engaged in such commerce against unfair competition') must in such a context be construed to refer not to any competitive practice which in the broad meaning of the words might be called unfair, but to that `unfair competition' which has been closely associated with the misuse of trade-marks, i.e., the passing off of one's goods as those of a competitor. It is clear, both from this statement of the intent and from a reading of the Act as a whole, that the primary purpose of the Act was to eliminate deceitful practices in interstate commerce involving the misuse of trade-marks, but along with this it sought to eliminate other forms of misrepresentations which are of the same general character even though they do not involve any use of what can technically be called a trade-mark. The languaqe of Section 43(a) is broad enough to include practices of this latter class. But the section should be construed to include only such false descriptions or representations as are of substantially the same economic nature as those which involve infringement or other improper use of trade-marks. It should not be interpreted so as to bring within its scope any kind of undesirable business practice which involves deception, when such practices are outside the field of the trade-mark laws.
More recent decisions of the Sixth Circuit Court of Appeals reaffirm the Court's position as set forth in Azoff. The Court related in Frisch's Restaurants, Inc. v. Elby's Big Boy of Steubenville, Inc., 670 F.2d 642, 647 (6th Cir.1982), that the district court properly held that the standard of proof needed to prevail in a § 43(a) action for injunctive relief was a showing of "likelihood of confusion." In the 1985 decision of Frisch's Restaurants, Inc. v. Shoney's Inc., 759 F.2d 1261, 1264 (6th Cir.1985), the court reiterated that equitable relief, such as a preliminary injunction, is available to a Lanham Act plaintiff upon demonstrating, at a minimum, a likelihood of confusion among consumers as to the origin of the goods and services provided by defendant resulting from the defendant's use of the disputed mark, as well as irreparable harm to the plaintiff's interests. See also, Kwik-Site Corp. v. Clear View Manufacturing Co., 758 F.2d 167, 179 (6th Cir.1985).
While this Court acknowledges that other Circuits have recognized a cause of action for false advertisement under § 43(a) *939 of the Lanham Act, the Sixth Circuit does not recognize such a cause of action absent the element of "a likelihood of confusion among consumers." The federal courts are courts of limited jurisdiction. The Sixth Circuit Court of Appeals has guarded this principle through its decision in Azoff and subsequent decisions by restricting § 43(a) to what Congress intended the Act to remedy, passing-off of one's goods for another's. This Court applauds the restrictive view of the federal court's jurisdiction adopted by the Sixth Circuit in its above-mentioned cases and the policy is enthusiastically followed here.
Coca-Cola refers this Court to Elby's Big Boy of Steubenville, Inc., contending that the Sixth Circuit has recognized the broader view expressed by other circuits under § 43(a). The Sixth Circuit, however, at page 646 of the decision, refers to Chevron Chemical Co. v. Voluntary Purchasing Groups, Inc., 659 F.2d 695, 702 (5th Cir. 1981), only for the proposition that, 1) it has been "suggested" by the Fifth Circuit Court of Appeals that § 43(a) of the Lanham Act created a sui generis federal statutory cause of action for false representation and 2) the Fifth Circuit concluded that § 43(a) prescribes not only what has been considered false advertising but also what had been differentiated as unfair competition. The Sixth Circuit Court of Appeals never embraced the Fifth Circuit's holding and overruled Azoff. Further, Frisch's did not involve a false advertising claim, but rather the likelihood of confusion in a passing off situation. As previously mentioned, the Sixth Circuit Court of Appeals held in the case that the standard of proof needed to prevail in a § 43(a) action for injunctive relief was a showing of "likelihood of confusion."
This case is identical to American Consumers, Inc. v. Kroger Co., 416 F.Supp. 1210 (E.D.Tenn.1976). Thus, as stated in that case and based upon Azoff, "section 43(a) of the Lanham Act is limited in scope and intent to merchandising practices equivalent to the misuse of trade-marks, that is the passing or `palming-off' of one's goods as those of a competitor." Id. 1213.
This case is not identical to the case of Wildlife Internationale, Inc. v. Clements, 591 F.Supp. 1542 (S.D.Ohio 1984), in which the district court was confronted with a complaint which alleged causes of action for trademark infringement and unfair competition under § 43(a) of the Lanham Act, as well as Ohio Rev.Code § 4165.01 et seq., and Ohio common law. The case did not involve solely a § 43(a) cause of action.
The Court also notes that the law encourages alternative dispute resolution and arbitration. In this case, the three television networks denied Coca-Cola's challenge to the advertisements. The National Advertising Division of the Council of Better Business Bureaus, Inc. also found the advertisements not misleading. By careful design, the federal courts are courts of limited jurisdiction leaving to the state courts the responsibility to determine most legal disputes.
Section 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), applies only to merchandising practices, equivalent to the misuse of trademarks and palming off of one's goods for another's, in which confusion or likelihood of confusion is an element. Consequently, as Coca-Cola's only claim before this Court fails to contain this essential element, defendant Procter & Gamble's Motion to Dismiss must be GRANTED.
IT IS SO ORDERED.
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83 Cal.App.3d 143 (1978)
147 Cal. Rptr. 710
In re the Marriage of BEVERLY MAE and MARSTON BARNES, JR.
BEVERLY MAE BARNES, Appellant,
v.
ELEANOR BARNES, Respondent.
Docket No. 41908.
Court of Appeals of California, First District, Division Four.
July 26, 1978.
*145 COUNSEL
Harland & Gromala and David C. Moore for Appellant.
Sapper, Stone & Hanson and Sam L. Stone for Respondent.
OPINION
RATTIGAN, J.
Probate Code section 205 provides that a surviving spouse is personally liable for the debts of his or her deceased spouse *146 which are chargeable against their community property.[1] This appeal involves problems presented when a decedent's former wife invoked the statute, to collect unpaid spousal support due her under a judgment which had dissolved their marriage, by obtaining a writ of execution on the judgment and having it levied on the community property of the decedent and his second wife.
In or before 1969, Marston Barnes (hereinafter Marston) brought an action for the dissolution of his marriage to Beverly Mae Barnes (Beverly). A judgment of dissolution, entered in 1969, ordered him to make monthly payments of money to Beverly as spousal support. He subsequently married Eleanor Barnes (Eleanor). He died on November 25, 1976, leaving Eleanor as his surviving spouse. The events next recited occurred in 1977.
On January 19, Beverly filed in the dissolution action a declaration entitled "Declaration In Support Of Motion For Issuance Of Writ Of Execution" (italics added) and a memorandum of points and authorities. In the declaration, she alleged the substance of the 1969 judgment and as follows: As of the date of Marston's death, he owed her more than $9,000 in back spousal support payments pursuant to the judgment. When he died, he had left Eleanor in possession and control of his and her (Eleanor's) community property assets. Eleanor had not since "filed any *147 proceeding" to have these assets "administered under Division 3 (commencing with Section 300) of the Probate Code." Beverly requested in the declaration that a writ of execution be issued in the amount due her. The memorandum cited Probate Code section 205, subdivisions (a) and (c), as the basis for the writ. (See fn. 1, ante.)
Despite the reference in the caption of the declaration to a "motion" by Beverly for the requested writ of execution, she did not notice a "motion" as such. She did not serve Eleanor with the declaration, the memorandum, or any notice of her application for the writ. The clerk of the court nevertheless issued the writ when the documents were filed in his office on January 19, and they did not reach the attention of the court at that time.[2]
On January 20, a constable levied the writ of execution on an automobile in Eleanor's possession. On January 28, she filed in the dissolution action a "Claim Of Exemption" in which she asserted that the automobile was exempt from execution pursuant to section 690.50 of the Code of Civil Procedure, and notice of a motion by her (Eleanor) for an order quashing the writ upon the stated ground that she was "not a judgment debtor" of Beverly nor "a party to any action" involving Beverly; and a declaration in support of the motion to quash.
Beverly filed a declaration in opposition to Eleanor's claim of exemption, notice of a motion for its determination, and opposition to Eleanor's motion to quash.
These matters were heard together on February 14. The record does not indicate that the court received any further evidence on Eleanor's motion to quash, nor that it acted upon any of the pending matters except that motion. In a memorandum decision ("Ruling ...") deciding it, filed on February 17, the judge observed that the writ of execution had been issued "not based upon any court order that it issue but merely the ministerial act of the clerk." (See the text at fn. 2, ante.) He continued as follows:
"... [T]he writ of execution ... must be quashed pending proceedings to establish the liability as the liability of the surviving spouse. Probate Code § 205 is a relatively new code section and clearly provides for the personal liability of the surviving spouse under conditions such as exist *148 here (where there has been no administration of [the] decedent's estate). However ..., prior to levying, action should be brought against the surviving spouse to establish the debt as a judgment debt. While the section itself makes no reference to such action, CCP § 353.5 would appear to contemplate the bringing of an action in order to establish the debt;[[3]] and it would appear ... proper that some proceeding be brought to establish the liability, even though ... [Probate Code section 205] ... makes reference to the fact that the surviving spouse is personally liable. The motion to quash is granted." (Italics added.)
On February 25, the court made a formal order in which it again stated that Eleanor's motion was granted, quashed and recalled the writ of execution, and vacated the levy made on January 20.
On March 10, Beverly applied to the court for an order requiring Eleanor to appear and show cause why a writ of execution should not issue as originally requested. He declined to sign it in the absence of the separate "action" or "proceeding" which he had deemed necessary as stated in the memorandum decision of February 17 (quoted ante).[4]
After her application for the order to show cause had been denied on March 10, Beverly filed a notice of appeal. The notice states that the appeal is taken from the February 17 "Ruling," which is not appealable. (Code Civ. Proc., § 904.1; 6 Witkin, Cal. Procedure (2d ed. 1971) Appeal [hereinafter cited as "6 Witkin" only], §§ 62 [p. 4077], 69 [p. 4083].) The order entered on February 25 is appealable as an order quashing a writ of execution. (Stegge v. Wilkerson (1961) 189 Cal. App.2d 1, 4 [10 Cal. Rptr. 867]; see Lovret v. Seyfarth (1972) 22 Cal. App.3d 841, 853 [101 Cal. Rptr. 143].) Construing the notice accordingly, we treat the appeal as having been taken from the formal order. (Rule 1(a), Cal. Rules of Court; Luz v. Lopes (1960) 55 Cal.2d 54, 59-60 [10 Cal. Rptr. 161, 358 P.2d 289]; 6 Witkin, § 336, pp. 4313-4315.) We may nevertheless examine the "Ruling" to ascertain the reasons for the order. (6 Witkin, § 231, pp. 4221-4222.)
*149 Although our jurisdiction to consider the appeal has thus been established, we have also encountered facts which relate to the necessity of doing so. Beverly has now filed a separate action against Eleanor to enforce the personal liability of the latter, on the 1969 judgment, pursuant to Probate Code section 205. Beverly alleged in that action that no probate proceeding had been commenced for the administration of Marston's estate. Eleanor subsequently commenced such proceeding, and Beverly filed a creditor's claim in it for unpaid spousal support due her under the 1969 judgment.[5]
These events demonstrate that Beverly has effectively abandoned the objective of enforcing the 1969 judgment by execution upon it in the dissolution action, and they give us cause to dismiss the appeal as moot. (6 Witkin, § 462, p. 4418.) We nevertheless recognize that Probate Code section 205 has been recently enacted as part of a major legislative program reforming the law of community property in general. (See Kahn & Frimmer [various titles], 49 State Bar J. 517; 50 State Bar J. 42; 50 State Bar J. 260.) This appeal presents procedural problems attending the enforcement of the new statute in a recurrent factual situation, and other courts will be required to resolve them if we do not. We therefore decline to treat the appeal as moot, and proceed on its merits. (Johnson v. Hamilton (1975) 15 Cal.3d 461, 465 [125 Cal. Rptr. 129, 541 P.2d 881]; Montalvo v. Madera Unified Sch. Dist. Bd. of Education (1971) 21 Cal. App.3d 323, 329 [98 Cal. Rptr. 593].)
The parties apparently agree that Marston's court-ordered obligation to Beverly for spousal support is a "debt" which is "chargeable against the community property" of his marriage to Eleanor within the meaning of Probate Code section 205, subdivision (a). This is true except for any noncommingled earnings of Eleanor after the marriage. (See Civ. Code, § 5120; Weinberg v. Weinberg (1967) 67 Cal.2d 557, 562-563 [63 Cal. Rptr. 13, 432 P.2d 709].)
The parties also agree that no probate proceeding for the administration of Marston's estate was commenced before or during the procedural sequence described above. (1) This meant that subdivision (b) of Probate Code section 205 had no application at any time pertinent to the appeal, and that subdivision (c) accordingly entitled Beverly to enforce the 1969 judgment against Eleanor "in the same manner" as she (Beverly) might have enforced it against Marston if he were alive. The "same *150 manner," in this case, unmistakably includes enforcing the judgment by writ of execution. (Civ. Code, § 4380.)[6] Subdivision (c) thus expands the availability of the writ in any case involving a money judgment, a deceased judgment debtor whose estate is not under administration, and a surviving spouse. (See Code Civ. Proc., § 686;[7]Stanley v. Westover (1928) 93 Cal. App. 97, 101 [269 P. 468]; Bank of America v. Katz (1941) 45 Cal. App.2d 138, 139-140 [113 P.2d 759].)
(2) However, Eleanor's personal liability under Probate Code section 205 is limited to the net value of the "chargeable" community property as determined pursuant to the formulary provisions appearing in the last sentence of subdivision (a) of the statute. It may be limited further, or eliminated, by any "defenses, counterclaims, or setoffs" which are available to her as provided in its subdivision (c). These contingencies qualified Beverly's entitlement to a writ of execution as a matter of right, and a broadside writ should not have been issued without a judicial inquiry into the extent of Eleanor's personal liability (if any) and the prospect of her asserting "defenses, counterclaims, or setoffs" against it.
The trial court apparently perceived the necessity of such inquiry, but concluded in its memorandum decision (1) that Beverly was required to resort to a separate action for the purpose and (2) that she was otherwise not entitled to a writ of execution. (3) A separate action was not necessary "to establish the debt as a judgment debt," as the court put it, because this was made clear by the record in the dissolution action and by Beverly's uncontradicted declaration. Code of Civil Procedure section 353.5 does not support the court's first conclusion because it is limited by its terms to an "action" brought against a surviving spouse on a "cause of action" which has not been reduced to judgment. (See fn. 3 and the accompanying text, ante.) Probate Code section 205 supports neither conclusion because it does not require or refer to its enforcement by a separate action against a surviving spouse reached by it, and because its subdivision (c) clearly imports that a judgment creditor is entitled to a *151 writ of execution against the surviving spouse in an appropriate case. We therefore disagree with both conclusions.
The necessary inquiry could have been conducted upon Beverly's application for the writ of execution in the dissolution action. Had it occurred in the full dimensions indicated, the trial court might have determined that the circumstances permitted a writ to issue for an appropriate amount. (See Code Civ. Proc., §§ 682, 682.1.) The amount would be measured, not by the sum claimed to be due Beverly under the 1969 judgment, but by the net value of the community property in Eleanor's possession. (See Prob. Code, § 205, subd. (a).) The court might have reached the alternative determinations that the circumstances permitted no writ at all, or that a separate action was in fact required for whatever valid reason Eleanor was able to show. (See id., subd. (c).)
The trial court did not reach the threshold of the requisite inquiry, in the first instance, because Beverly's attorney did not apprehend its necessity when he presented her application to the clerk. Neither did the clerk, who issued the writ ministerially. (See the text at fn. 2, ante.) The application should have been presented to the court for the exercise of judicial discretion at that time. (See Civ. Code, § 4380 [quoted in fn. 6, ante]; Messenger v. Messenger (1956) 46 Cal.2d 619, 630 [297 P.2d 988]; Wyshak v. Wyshak (1977) 70 Cal. App.3d 384, 390-391 [138 Cal. Rptr. 811]; 6 Witkin, Summary of Cal. Law (8th ed. 1974) Husband and Wife, § 172, p. 5042; 5 Witkin, Cal. Procedure, op. cit. supra, Enforcement of Judgment, § 69, pp. 3443-3444.)
We may assume that the court would have exercised its discretion, in the first instance, by denying Beverly's ex parte application and requiring that she apply for the writ of execution by formal motion made upon notice to Eleanor. (See Messenger v. Messenger, supra, 46 Cal.2d 619 at p. 630; Bryan v. Bryan (1967) 255 Cal. App.2d 833, 841 [63 Cal. Rptr. 612].) It follows that Beverly should have proceeded by noticed motion at the outset. Probate Code section 205 presents an affected surviving spouse with unusual circumstances. They are not quite covered by the conventional remedies of a third party claim or a motion to quash. (See Code Civ. Proc., §§ 689-689.5; 5 Witkin, Cal. Procedure, op. cit. supra, Enforcement of Judgment, §§ 104-108 [pp. 3469-3476], 85-87 [pp. 3454-3455].) Nothing in the statute commands the conclusion that the surviving spouse should suffer an actual levy before having notice of a creditor's intentions.
*152 The trial court had an opportunity to conduct the necessary inquiry when the pertinent issues finally reached it on Eleanor's motion to quash. The inquiry was not conducted because of the court's erroneous view that Beverly was required to resort to a separate action. The court was nevertheless warranted in quashing the writ because the clerk had improvidently issued it without any judicial discretion having been exercised. (See 5 Witkin, Cal. Procedure, op. cit. supra, Enforcement of Judgment, § 85, p. 3454.) We may affirm the order for that reason. (See 6 Witkin, § 226, pp. 4215-4216.)
The trial court had still another opportunity to set the appropriate inquiry in motion when Beverly finally applied to it for an order to show cause on March 10, but this application was denied. (See fn. 4, ante.) That denial is not reviewable on the present appeal because it was made after the order quashing the writ was entered. (6 Witkin, § 220, pp. 4210-4211.)
The order quashing the writ of execution is affirmed.
Caldecott, P.J., and Paik, J.,[*] concurred.
NOTES
[1] As pertinent, the statute provides:
"205. (a) ... [U]pon the death of a married person, the surviving spouse is personally liable for the debts of the deceased spouse chargeable against the community property by the provisions of Title 8 (commencing with Section 5100) of Part 5 of Division 4 of the Civil Code, unless the interests of both spouses in the community property are administered under Division 3 (commencing with Section 300). The personal liability shall not exceed the value at the date of death, less the amount of any liens and encumbrances, of the interest of the surviving spouse in the community property immediately prior to the death which is not exempt from execution plus the interest of the deceased spouse passing to the surviving spouse without administration.
"(b) If proceedings are commenced in this state for the administration of the estate of the deceased spouse and notice to creditors has been given by the personal representative, any action upon the liability of the surviving spouse pursuant to subdivision (a) shall be barred to the same extent as provided for claims under Article 1 (commencing with Section 700) of Chapter 12 of Division 3 except as to the following: (1) Creditors who had commenced judicial proceedings for the enforcement of the debts and had served the surviving spouse with process prior to the date of the last publication of the notice to creditors. (2) Creditors who secure the acknowledgment in writing of the liability of the surviving spouse for the debts. (3) Creditors who file a timely claim in the proceedings.
"(c) Except as provided by subdivision (b), any debt described in subdivision (a) may be enforced against the surviving spouse in the same manner as it could have been enforced against the deceased spouse if the deceased spouse had not died. In any action based upon the debt, the surviving spouse may assert any defenses, counterclaims, or setoffs which would have been available to the deceased spouse if the deceased spouse had not died."
[2] As will appear, the court later commented on the fact that the clerk had issued the writ on his own. The parties also agreed, at oral argument, that this occurred.
[3] Code of Civil Procedure section 353.5 provides: "If a person against whom an action may be brought dies before the expiration of the statute of limitations for the commencement of an action and the cause of action survives, an action against the surviving spouse of the person which is brought pursuant to Section 205 of the Probate Code may be commenced within four months after the death of the person or before the expiration of the statute of limitations which would have been applicable to the cause of action against the person if the person had not died, whichever occurs later."
[4] The judge's refusal to sign the proposed order, and his reasons, were indicated in this notation made on its face by the clerk: "Judge won't sign. Not a proper order. See Ruling of 2/17. Writ of execution matter should be a separate case # [sic] and proceeding."
[5] These events were made known to us in the briefs and in subsequent correspondence with counsel. They are not disputed.
[6] Civil Code section 4380 provides: "Any judgment, order, or decree of the court made or entered pursuant to this part may be enforced by the court by execution, the appointment of a receiver, contempt, or by such other order or orders as the court in its discretion may from time to time deem necessary." (Italics added.) Because the reference to "this part" is to part 5 of the Civil Code, it reaches a "judgment, order, or decree" for spousal support entered pursuant to section 4801, subdivision (a), thereof.
[7] "686. Notwithstanding the death of a party after the judgment, execution thereon may be issued, or it may be enforced, as follows: 1. In case of the death of the judgment creditor, upon the application of his executor or administrator, or successor in interest; 2. In case of the death of the judgment debtor, if the judgment be for the recovery of real or personal property, or the enforcement of a lien thereon." (Italics added.)
[*] Assigned by the Chairperson of the Judicial Council.
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J-S31015-16
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
COMMONWEALTH OF PENNSYLVANIA IN THE SUPERIOR COURT OF
PENNSYLVANIA
Appellee
v.
WARREN D. ANDERSON
Appellant No. 372 MDA 2015
Appeal from the Judgment of Sentence January 27, 2015
In the Court of Common Pleas of Dauphin County
Criminal Division at No(s): CP-22-CR-0003367-2013
BEFORE: SHOGAN, J., OTT, J., and STRASSBURGER, J.*
CONCURRING MEMORANDUM BY OTT, J.: FILED JULY 18, 2016
I join the majority decision in this matter but write separately to note
additional reasoning supporting the decision.
The Majority cites Commonwealth v. Romero, ___ A.3d. ___, 2016
PA Super 87 (Pa. Super. 2016) (filed 4/19/2016) for the proposition that
where the authorities1 have a reasonable belief that the subject of an arrest
warrant lives within a given premises, they can enter the home and arrest
the suspect without a search warrant. However, that statement does not
define “reasonable belief.” I believe we should clarify the rule and follow the
guidance of the 3rd Circuit Court of Appeals in United States v. Vasquez-
____________________________________________
*
Retired Senior Judge assigned to the Superior Court.
1
The authorities in Romero were probation officers.
J-S31015-16
Algarin, ___ F.3d ___, 2016 WL 1730540 (3 rd Cir.) (filed 5/2/2016) and
define reasonable belief as probable cause.2 In Vasquez-Algarin, Judge
Krause has provided a thorough history of the issue and the standard
applied as well as sound reasoning why “reasonable belief” should be
interpreted as probable cause. While I direct interested parties to the entire
decision, I quote two passages.
Although the language of Payton and the Supreme Court's other
Fourth Amendment decisions provides [sic] strong support for
interpreting reasonable belief as a probable cause standard, it is
the nature of the privacy interests at stake that solidifies our
conclusion. Without question, the home takes pride of place in
our constitutional jurisprudence. As the Supreme Court has
reiterated on numerous occasions, “when it comes to the Fourth
Amendment, the home is first among equals. At the
Amendment's ‘very core’ stands ‘the right of a man to retreat
into his own home and there be free from unreasonable
governmental intrusion.’ ” Florida v. Jardines, ___ U.S. ___,
___, 133 S.Ct. 1409, 1414, 185 L.Ed.2d 495 (2013) (quoting
Silverman v. United States, 365 U.S. 505, 511, 81 S.Ct. 679,
5 L.Ed.2d 734 (1961)). Indeed, such intrusion is “the chief evil
against which the wording of the Fourth Amendment is directed.”
Payton, 445 U.S. at 585.
The vaunted place of the home in our constitutional privacy
jurisprudence was central to the Supreme Court's analysis in
____________________________________________
2
[I]t is well-settled that this Court is not bound by the decisions of federal
courts, other than the United States Supreme Court, or the decisions of
other states' courts. We recognize that we are not bound by these cases;
however, we may use them for guidance to the degree we find them useful
and not incompatible with Pennsylvania law.
Commonwealth v. Reed, 107 A.3d 137, 143 (Pa. Super. 2014) (citations
omitted).
-2-
J-S31015-16
Payton and Steagald. See, e.g., Payton, 445 U.S. at 585-90;
Steagald, 451 U.S. at 220, 222. These cases together provide
insight that neither case provides alone—insight that leads
inexorably to the conclusion that the Circuit-created two-prong
test is workable only if governed by a robust reasonableness
standard akin to probable cause, and that anything less would
defeat the “stringent ... protection” the home is due. United
States v. Martinez-Fuerte, 428 U.S. 543, 561, 96 S.Ct. 3074,
49 L.Ed.2d 1116 (1976) (private homes are “ordinarily afforded
the most stringent Fourth Amendment protection”).
U.S. v. Vasquez-Algarin, ___ F.3d ___, at *8 -*9.3
Additionally,
Given this precedent and the constitutional principles at stake,
law enforcement armed with only an arrest warrant may not
force entry into a home based on anything less than probable
cause to believe an arrestee resides at and is then present within
the residence. A laxer standard would effect an end-run around
the stringent baseline protection established in Steagald and
render all private homes—the most sacred of Fourth Amendment
spaces—susceptible to search by dint of mere suspicion or
uncorroborated information and without the benefit of any
judicial determination. Such intrusions are “the chief evil against
which the wording of the Fourth Amendment is directed.”
Payton, 445 U.S. at 585. We therefore join those Courts of
Appeals that have held that reasonable belief in the Payton
context “embodies the same standard of reasonableness
inherent in probable cause.” Gorman, 314 F.3d at 1111; accord
Barrera, 464 F.3d at 501.
Id. at 10.4
____________________________________________
3
Complete interior citations are: Payton v. New York, 445 U.S. 573, 100
S.Ct. 1371, 63 L.Ed.2d 639 (1980); Steagald v. United States, 451 U.S.
204, 101 S.Ct. 1642, 68 L.Ed.2d 38 (1981).
4
Complete interior citations are: United States v. Gorman, 314 F.3d 1105
(9th Cir. 2002); United States v. Barrera, 464 F.3d 496 (5th Cir. 2006).
-3-
J-S31015-16
In the instant matter, the record supports that the authorities, based
on information contained in the “warrant packet” and independently
developed at the scene, possessed probable cause to believe Ramos lived at
2308 Orange Street. Further, they possessed probable cause, based upon
the information that Ramos’s mode of transportation was a bicycle and a
bicycle was found at the rear of 2308 Orange Street, that he was present at
the time the authorities attempted to execute the arrest warrant.
Accordingly, I believe that facts presented in this case meet the standard as
set forth in United States v. Vasquez-Algarin, supra.
Judge Strassburger joins the concurring memorandum.
-4-
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IN THE UNITED STATES DISTRICT
COURT FOR THE DISTRICT OF
COLUMBIA
ESTATE OF ESTHER KLIEMAN, et al., )
Plaintiffs, ) Civil Action No. 04-1173(PLF)(JMF)
)
v. )
)
THE PALESTINIAN AUTHORITY et. al. )
Defendants. )
)
LETTER OF REQUEST FOR INTERNATIONAL JUDICIAL ASSISTANCE
PURSUANT TO THE HAGUE CONVENTION OF 18 MARCH 1970 ON THE
TAKING OF EVIDENCE ABROAD IN CIVIL OR COMMERCIAL MATTERS
From:
United States Magistrate Judge John M. Facciola
The United States District Court for the District of Columbia
333 Constitution Avenue, N. W.
Washington, D. C. 20001
United States of America
To:
The Directorate of Courts
Legal Assistance to Foreign Countries
22 Kanfei Nesharim
POB 34142
Jerusalem 95464
Israel
In conformity with Article 3 of the Convention, the undersigned applicant has the
honor to submit the following request:
The United States District Court for the District of Columbia presents its
compliments to the Directorate of Courts of the State of Israel and requests assistance in
obtaining evidence to be used in proceedings before this Court in the above-captioned
matter.
1252712.1
Plaintiffs in the above-captioned matter are the Estate of Esther Klieman by and
through its Administrator, Aaron Kesner of 4840 W. Foster, Skokie, IL 60077 USA,
Nachman Klieman of Halamish 359, D.N. Modi’in 71945, Israel, Ruanne Klieman of
Halamish 359, D.N. Modi’in 71945, Israel, Dov Klieman of Kiryat Netafim, D.N.
Ephraim 44815, Israel, Yosef Klieman of Nahaliel 101A, D.N. Modiin 71938 Israel, and
the Estate of Gavriel Klieman by and through its Administrator, Nachman Klieman of
Halamish 359, D.N. Modi’in 71945, Israel. Plaintiffs are represented by attorneys
Richard D. Heideman, Noel J. Nudelman and Tracy Reichman Kalik of Heideman
Nudelman & Kalik, P.C.,1146 19th Street, N.W., 5th Floor, Washington, D.C. 20036,
USA and Steven R. Perles and Edward MacAllister of The Perles Law Firm, P.C, 1146
19th Street, N.W. , 5th Floor, Washington, D.C. 20036, USA. Plaintiffs are also
represented in Israel by attorneys Mordechai Haller 80 Nahar Hayarden St. Beit Shemesh
99624 and Michael Deborin Olitzur St. no. 4 P.O.B 68077 Jerusalem 91680. Defendants
are the Palestinian Authority and the Palestine Liberation Organization. Defendants are
represented by Richard Hibey, Mark Rochon and Chas McAleer, Miller & Chevalier
Chartered, 655 Fifteenth St., N.W., Suite 900, Washington, D.C. 20005, USA.
The above-captioned matter is a civil suit brought by plaintiffs pursuant to US
Federal counterterrorism statutes, Antiterrorism Act of 1991, 18 U.S.C. §§2331 et seq.,
and supplemental causes of action by the Estate, survivors and heirs of Esther Klieman
who the plaintiffs allege was murdered by the alleged terrorist acts of the defendants by
machine-gun fire on March 24, 2002 near Neve Tzuf, Israel, for damages allegedly
directly and proximately caused by the defendants to plaintiffs, and each of them, by
reason of alleged acts of unlawful international terrorism, as defined in 18 U.S.C. §2331,
1252712.1
2
and by reason of related alleged unlawful tortious behavior and conduct. Defendants
deny that they are liable to Plaintiffs for the injuries they have alleged.
The assistance requested of the State of Israel consists of the following: to
permit and cause Yitzhak Ya’akoboff located c/o Israeli National Police Headquarters,
Kiryat Menachem Begin, Kiryat HaMemshala, Jerusalem, to appear at the David
Citadel Hotel in Jersualem on [ ], beginning at 9:30 a.m. to be deposed by counsel for
the Plaintiffs and Defendants. This deposition shall be a de bene esse deposition of
Yitzhak Ya’akoboff. As such, testimony will be elicited under oath and by oral
examination by counsel for the Plaintiffs. Counsel for the Defendants
will also have an opportunity to cross examine Yitzhak Ya’akoboff. The subject-matter
of the de bene esse deposition will be (a) the facts and circumstances surrounding the
murder of Esther Klieman, including, but not limited to, the Mr. Ya’akoboff ‘s
investigation into the murder of Esther Klieman; and (b) the actual statements made by
or obtained from Tamer Rimawi and/or any of the other convicted prisoners who
perpetrated the murder of Esther Klieman, made to Mr. Ya’akoboff while acting in his
official capacity as an investigating Israeli police officer; and (c) other facts and
information related to the allegations asserted by the Plaintiffs in the above captioned
civil action. Yitzhak Ya’akoboff shall be deposed under oath and according to the
United States Federal Rules of Civil Procedure.
It is requested that: (1) the parties’ counsel or their designees, interpreters, and a
stenographer be permitted to be present during the examination; (2) there be excluded
from the examination, if permitted under Israeli law, all persons other than those
described directly above, except those as required under applicable Israeli law; (3) a
1252712.1
3
stenographer be permitted to record verbatim the oral examination of the aforementioned
witnesses; and (4) a videographer be permitted to record on video the oral examination of the
aforementioned witnesses.
The assistance of the State of Israel is further requested to compel the concerned state
agencies to produce to counsel for the parties, at least fourteen (14) days prior to the
depositions, the following documents:
1. Copies of all files, memoranda, notes, and other documents relating to
Tamer Rimawi or the shooting of Esther Klieman that Yitzhak Ya’akoboff had and/or
reviewed as of the time that he conducted any interrogation of Tamer Rimawi;
2. Copies of all files, memoranda, notes, and other documents relating to
Tamer Rimawi or the shooting of Esther Klieman that Yitzhak Ya’akoboff had and/or
reviewed as of the time that he drafted any statements or reports regarding any interrogation
of Tamer Rimawi;
3. From the ISA, full and authentic copies (in hard copy and in electronic
format) of any files, records, reports, notes, papers, summaries and/or recordings (by video
or audio technology), relating to the interrogation of the Tamer Rimawi, including any use
of physical coercion;
5. From the Attorney General, full and authentic copies (in hard copy and in
electronic format) of all complaints, grievances, charges, and/or protests filed by Tamer
Rimawi with the Attorney General regarding his mistreatment during interrogation.
This Court further requests that the copies requested in Request # 1-3 above, be
produced at the office of the Directorate of Courts at 22 Kanfei Nesharim Street, Jerusalem,
1252712.1
6
Israel, where they will be collected for delivery to the parties by a representative of the
parties.
Yitzhak Ya’akoboff was an Israeli police investigator who interviewed Tamer
Rimawi about his admitted involvement in the murder of Esther Klieman. As such, the
evidence obtained will aid in the prosecution of this case because it may assist plaintiffs in
proving the circumstances of Esther Klieman’s murder on March 24, 2002 near Neve Tzuf,
Israel and the support allegedly provided by the PA/PLO and its affiliated parties for and to
the Al Aqsa Martyrs Brigades.
Pursuant to Article 10 of the Convention, in executing this Letter of Request the
Israeli authorities are respectfully requested to apply the appropriate measures of compulsion
in the instances and to the same extent as are provided by Israeli law for the
execution of orders issued by Israeli authorities or of requests made by parties in internal
proceedings.
Accordingly, it is hereby requested that, in the interest of justice, you cause by your
expedited and proper process such orders to be entered as Israeli law permits directing that
Yitzhak Ya’akoboff appear for de bene esse deposition at the David Citadel Hotel on [ ],
beginning at 9:30 a.m. to be deposed by counsel for plaintiffs and defendants.
Plaintiffs and/or their counsel, upon whose application this Letter of Request has been
issued, shall pay all costs incurred in executing these requests. Notice that this request has
been executed, that the above-referenced documents are available, and that
the above-referenced individuals will be available for deposition, may be made to Richard D.
Heideman, Heideman Nudelman & Kalik, P.C., 1146 19th Street, N.W., Fifth Floor,
Washington, DC 20036, USA Telephone (202) 463-1818, Telefax (202) 463-2999, Email
1252712.1
6
[email protected].
The Court expresses its appreciation to the Directorate of Courts in the State of
Israel for its courtesy and assistance in this matter and states that it shall be ready and
willing to assist the courts of Israel in a similar manner when required.
JOHN M. FACCIOLA
UNITED STATES MAGISTRATE JUDGE
1252712.1
6
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Order filed August 11,
2011
In The
Eleventh
Court of Appeals
__________
No. 11-10-00007-CV
__________
LINDA
S. NEIDERT, Appellant
V.
SUSAN J.
COLLIER AND JOHN P. SEARLS, Appellees
On
Appeal from the 70th District Court
Ector
County, Texas
Trial
Court Cause No. A-125,758
O
R D E R
Linda S. Neidert filed a notice of appeal from a judgment entered in
this case in favor of the plaintiffs, Susan J. Collier and John P. Searls.
After submission of this case, it became apparent to this court that the judgment was not a final, appealable judgment.
Consequently, we abate the appeal pursuant to Tex.
R. App. P. 27.2 to permit the trial court to render a final judgment.
Except
for “a few mostly statutory exceptions,” this court’s jurisdiction is limited
to appeals from final judgments. Lehmann v. Har-Con Corp., 39 S.W.3d
191, 195 (Tex. 2001). We determine whether a judgment is a final, appealable
judgment based on the language in the judgment and the record of the case. Id.
A judgment is final and appealable if it disposes of all parties and all claims
in the case. Id.
In
their petition, the plaintiffs sought declaratory relief, asserted a cause of
action for breach of contract, requested damages for the breach of contract
claim, and sought attorney’s fees. The plaintiffs filed a Motion for Summary
Judgment as to Liability “on their declaratory judgment causes of action.” The
plaintiffs did not seek summary judgment on their breach of contract claim. The
judgment from which Neidert appeals is entitled “FINAL JUDGMENT,” but it does
not dispose of all parties and all claims. In the judgment, the trial court
granted the “Plaintiffs’ Motion for Summary Judgment as to Liability” regarding
declaratory relief and also awarded attorney’s fees. Nothing in the record
shows that the breach of contract claim has been disposed of or severed.
We
hold that, although the judgment may purport to be final, it is not; it does
not dispose of all parties and all claims. Because the trial court has not
disposed of all the claims before it, we do not have jurisdiction to entertain
an appeal at this time. We abate the appeal pursuant to Rule 27.2 so that the
trial court may render a final judgment. The trial court is instructed to do
so on or before August 18, 2011, and the court reporter and district clerk are
ordered to file any supplemental records relating to the entry of a final
judgment within seven days after entry of such judgment by the trial court.
The
appeal is abated.
PER
CURIAM
August 11, 2011
Panel consists of: Wright, C.J.,
McCall, J., and Hill, J.[1]
[1]John G. Hill, Former Justice, Court of Appeals, 2nd
District of Texas at Fort Worth, sitting by assignment.
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COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-03-475-CR
JEREMY
W. KUTA APPELLANT
V.
THE
STATE OF TEXAS STATE
------------
FROM
THE 297TH DISTRICT COURT OF TARRANT COUNTY
------------
MEMORANDUM OPINION1
------------
Appellant
Jeremy W. Kuta appeals his conviction for aggravated sexual assault of a child
under fourteen years of age. Appellant entered an open plea of guilty to that
offense, and the trial court assessed his punishment at fifty years’
confinement. In one issue, Appellant challenges the voluntariness of his
guilty plea. We will affirm.
I. FACTUAL AND PROCEDURAL BACKGROUND
The
State alleged in nine counts that Appellant engaged in aggravated sexual conduct
and indecency by fondling, contact, and exposure with A.S., who was seven and
turned eight years old over the period of the charged conduct. On February
24, 2003, Appellant pleaded guilty to count one and judicially confessed to
penetrating A.S.’s sexual organ with his sexual organ. The trial court
accepted Appellant’s guilty plea, finding that it was freely and voluntarily
made and that Appellant was competent to stand trial. The court took
judicial notice of Appellant’s written judicial confession and recessed the
proceedings until the presentence investigation report (“PSI”) had been
completed.
On
November 6, 2003, following the completion of the PSI, the trial court held a
punishment hearing. Both the State and defense counsel stated that they
had received and reviewed the PSI and had no comments or corrections concerning
its contents. The State then rested, informing the court that it had no
additional evidence to present the court, and Appellant likewise rested.
After
each side presented a closing argument, the trial court stated that it had
accepted Appellant’s guilty plea and determined that it was voluntarily and
freely made. The court also determined that Appellant was competent to
stand trial. The court indicated that it had taken judicial notice of
Appellant’s judicial confession and found Appellant guilty of aggravated
sexual assault as charged in count one in the indictment. Further, upon
consideration of all the circumstances in the case, the court sentenced
Appellant to fifty years’ confinement.
II. VOLUNTARINESS OF GUILTY PLEA
In
his sole issue, Appellant complains that his plea was involuntary.
Appellant concedes that he is not attacking whether he was competent, but he
argues that his “mental status, quite apart from the issue of competence,
rendered his plea involuntary.” He directs us to the PSI and argues that
“his severe mental disorders and maladaptive functioning [as shown in the PSI]
made it impossible for him to make a voluntary and knowing plea.” The
State characterizes Appellant’s issue on appeal as a novel attack and responds
that Appellant has failed to overcome the prima facie showing on the record that
he entered a knowing and voluntary plea. We agree with the State.
It
is well settled that a guilty plea must be freely, knowingly, and voluntarily
made. Brady v. United States, 397 U.S. 742, 748, 90 S. Ct. 1463, 1468-69
(1970); Mitschke v. State, 129 S.W.3d 130, 132 (Tex. Crim. App. 2004). In
considering the voluntariness of a guilty plea, the court should examine the
record as a whole. Martinez v. State, 981 S.W.2d 195, 197 (Tex. Crim.
App. 1998). The admonitions required by article 26.13(a) apply in guilty
pleas for felony offenses and may be made orally or in writing. Tex. Code Crim. Proc. Ann. art. 26.13
(Vernon 1989 & Supp. 2004); State v. Jimenez, 987 S.W.2d 886, 888
(Tex. Crim. App. 1999). When the record reflects that a defendant was
properly admonished, it presents a prima facie showing that the guilty plea was
knowing and voluntary. Martinez, 981 S.W.2d at 197; Ribelin v. State,
1 S.W.3d 882, 884 (Tex. App.—Fort Worth 1999, pet. ref’d). The burden
then shifts to the defendant to show that his or her plea was not
voluntary. Martinez, 981 S.W.2d at 197; Ribelin, 1 S.W.3d at
884.
Here,
the record indicates that, before accepting Appellant’s guilty plea, the trial
court questioned Appellant about the rights and protections he was waiving by
pleading guilty. Appellant acknowledged that he had been warned and
admonished in writing as to the range of punishment, as well as the
constitutional rights that he would be waiving by pleading guilty, such as the
waiver of his right to a jury trial. Appellant stated that he had had an
opportunity to discuss these rights with his attorney and that he understood
these rights. Appellant admitted that he had signed a judicial confession,
and he informed the court that he understood the significance of his judicial
confession.
The
court also admonished Appellant about Texas’s sex-offender registration
program, and inquired as to whether Appellant had discussed that particular
consequence of his conviction with his attorney. Appellant told the court
that he had discussed the registration program with his attorney and that he had
had a chance to discuss the other written admonishments with his attorney.
The
court then asked,
[U]nderstanding
the rights you have, knowing the range of punishment, the State’s
recommendation or the lack of any recommendation in this case, this would be an
open plea, you may plead either guilty or not guilty to the offense of
aggravated sexual assault of a child as charged in count number one of the
indictment. What is your plea in this case?
Appellant
responded, “Guilty.”
Appellant
then stated that he was pleading guilty for no other reason than that he was
guilty, and he agreed that he was making a free and voluntary plea.
Further, Appellant’s trial counsel informed the court that his client was
competent to stand trial.
At
the sentencing hearing, the court again stated that Appellant was competent to
stand trial and that it had determined appellant’s plea was voluntarily and
freely made. Following those proceedings, Appellant made no attempt to
withdraw his guilty plea, and he did not file a motion for new trial challenging
the voluntariness of his plea. We conclude that the record reflects that
Appellant was properly admonished, thus presenting a prima facie showing that
his guilty plea was knowingly and voluntarily made. See Martinez,
981 S.W.2d at 197; Ribelin, 1 S.W.3d at 884.
To
establish that his plea was not voluntary, Appellant contends that the fact that
his trial counsel requested and obtained a court-appointed psychological
evaluation shows that counsel questioned his mental status. See Martinez,
981 S.W.2d at 197; Ribelin, 1 S.W.3d at 884. But the record
indicates that at the time of the hearings on Appellant’s guilty plea and
sentencing, Appellant was clear, lucid, and otherwise mentally competent. See
Morales v. State, 587 S.W.2d 418, 419-20 (Tex. Crim. App. 1979). Appellant
did not offer any evidence by the court-appointed psychologist to support his
claim that his mental state prevented him from making an intelligent, knowing,
and voluntary plea. Further, that Appellant’s attorney requested a
psychological evaluation is not evidence in itself that Appellant was legally
incompetent and therefore unable to enter a knowing and voluntary plea of
guilty. See id. at 420.
Appellant
also directs us to the PSI, which indicates that he had a physically,
emotionally, and sexually abusive upbringing and a history of mental health
issues. In his brief, Appellant argues that, due to the condition of his
mental health, his ability to process incoming information was greatly impaired,
and his ability to provide reliable information was also greatly impaired.
He summarizes, “Appellant may have been competent to stand trial, but, [A]ppellant
contends, that does not show he was capable of giving a knowing and voluntary
plea.”
As
the State argues in its brief, Appellant is essentially asking this court to
exclude “mentally disturbed,” but otherwise legally competent, persons from
being able to plead guilty. See Tex. Code Crim. Proc. Ann. art. 46.02,
§ 1A(a) (Vernon Supp. 2004) (providing legal competency standard). Appellant
has not cited any statute or case law to support such a broad exclusion of
admittedly competent individuals from participating in the criminal justice
system. We agree with the State that Appellant’s concession that he was
properly admonished, his trial counsel’s opinion that he was competent, the
trial court’s determination that Appellant was competent, and the absence of
any evidence to the contrary in this appeal, forecloses his claim that his plea
was involuntary due to his alleged “severe mental disorders and maladaptive
functioning.” See id.; see also 43 George E. Dix
& Robert O. Dawson, Texas Practice: Criminal Practice & Procedure § 34.63, at 363 (2d ed. 2001)
(stating that defense counsel’s opinion regarding the defendant’s competency
“is probably the best indication of the defendant’s mental competency
available to the trial court in a guilty plea proceeding”).
Upon
our careful examination of the record, we hold that Appellant has not rebutted
the prima facie showing that his plea was knowing and voluntary. See
Martinez, 981 S.W.2d at 197; Ribelin, 1 S.W.3d at 884. We
therefore overrule Appellant’s sole issue.
III. CONCLUSION
Having
overruled Appellant’s sole issue, we affirm the trial court’s judgment.
ANNE
GARDNER
JUSTICE
PANEL
B: HOLMAN, GARDNER, and WALKER, JJ.
DO
NOT PUBLISH
Tex. R. App. P. 47.2(b)
DELIVERED:
May 6, 2004
NOTES
1.
See Tex. R. App. P. 47.4.
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166 F.3d 1206
82 A.F.T.R.2d 98-6784
Larry L. Stulerv.Internal Revenue Service, Deon Stewart
NO. 98-1441
United States Court of Appeals,Third Circuit.
September 24, 1998
1
Appeal From: E.D.Pa.
2
Affirmed.
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7 F.3d 241
U.S.v.One 1987 Cadillac*
NO. 92-8219
United States Court of Appeals,Eleventh Circuit.
Oct 12, 1993
1
Appeal From: N.DGa.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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311 F.Supp.2d 757 (2004)
UNITED STATES of America
v.
Criss Ervin DUNCAN.
No. 3:03 CR 0057-2 AS.
United States District Court, N.D. Indiana, South Bend Division.
March 26, 2004.
*758 *759 John C Hamilton, Hamilton Law Firm, South Bend, IN, for Defendant.
Criss Duncan, Shipshewanna, IN, pro se.
Lesley J. Miller Lowery, William T Grimmer, U.S. Attorney's Office-SB/IN, South Bend, IN, for Plaintiff.
SENTENCING MEMORANDUM
ALLEN SHARP, Judge.
I. Procedural History
The Defendant, CHRIS ERVIN DUNCAN, was charged in a two-count Indictment returned by a grand jury in this district on June 12, 2003. On October 9, 2003, the Defendant was charged in a six-count Superceding Indictment. The Defendant proceeded to a jury trial which commenced on December 1, 2003, and on December 8, 2003, the jury returned a verdict of guilty to counts 3s, 4s, 5s, and 6s.
Count 3s charges the Defendant with a violation of 18 U.S.C. § 2113(a) and (d), Knowingly by Force, Violence and Intimidation Taking from the Person of Another Money Belonging to and in the Care, Custody and Control of a Bank; Count 4s charges the Defendant a violation of 18 U.S.C. § 924(c), Knowingly Using and Carrying a Firearm During and in Relation to a Crime of Violence; Count 5s charges the Defendant with a violation of 18 U.S.C. § 844(i) and 2, Malicious Damage by Fire to a Vehicle, and 18 U.S.C. § 2, Aiding and Abetting; and Count 6s charges the Defendant with a violation of 18 U.S.C. § 922(g)(1) and 924(a)(2), Unlawful Transport of Firearms, Etc. and Penalties for Firearms.
Because the offense occurred after November 1, 1987, the Sentencing Reform Act of 1984 and the United States Sentencing Commission Guidelines (Guidelines), as *760 amended October 27, 2003, apply to this sentencing, pursuant to Miller v. Florida, 482 U.S. 423, 107 S.Ct. 2446, 96 L.Ed.2d 351 (1987). However, because the offense conduct took place before October 27, 2003, the effective date for the current Guidelines, a comparison has been made between the relevant Guidelines and this Court has determined that the Guidelines in effect at the time the offense was committed produces the least onerous sentence. Therefore, the 2002 edition, effective April 30, 2003, is employed in this case.
II. The Presentence Report
The Defendant, defense counsel, and the Government have reviewed the presentence report, as has the Court. The Government reported no objections to the presentence report. The Defendant objected to numerous paragraphs, including paragraphs describing the offense conduct. The Court will address each of these objections herein. All other paragraphs of the presentence report not specifically addressed in this Memorandum are adopted by the Court as findings of fact and statements of reason for imposition of sentence in this case. Specifically, the Court adopts paragraphs 8 through 20 describing the offense conduct, and paragraphs 21 through 22 describing relevant conduct as the factual basis for this sentence, except those facts to which the Defendant objects. On all disputed facts, the Court will make a specific factual finding.
III. The Plea Agreement
There is no plea agreement in this case as the Defendant went to trial.
IV. Facts Relevant to Sentencing
Before determining the Defendant's offense level, the Court must first resolve the factual disputes. The burden is on the Government to establish the facts relevant to the sentencing factors by a preponderance of the evidence. U.S.S.G. § 6A1.3, commentary. It is a lower evidentiary standard than at trial, and the Court may consider evidence that was not admissible at trial under the Federal Rules of Evidence, as long as the evidence has sufficient indicia of reliability to support its probable accuracy. Id. Only if a sentencing factor increases the Defendant's sentence above the statutory maximum does it have to be presented to a jury and established beyond a reasonable doubt. See, Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000).
The most significant factual dispute is over whether the assault style rifle carried by the Defendant during the bank robbery should be categorized as a "machine gun" as recommended by the presentence report in paragraphs 10 and 18. The mandatory minimum sentence for a semi-automatic rifle is ten (10) years. The mandatory minimum for a machinegun is thirty (30) years. The Defendant states that no actual proof was established at the trial that the guns were in fact machineguns.
The Government points to the testimony of Ralph Berkey Jr., who testified at the trial that the semi-automatic assault weapons that Duncan and Berkey carried into the Bank had been altered to make them fully automatic. Gov.'s Mem. in Supp.; Trial Transcript, Berkey Testimony, page 25. Berkey testified that the weapons could fire single shots or multiple shots with one pull of the trigger. Id. In addition, Larry Joe Ellis testified that he had worked on several of the assault rifles to make them fully automatic for Berkey. Gov.'s Mem. in Supp.; Ellis Testimony at pp. 17-18.
Ellis also testified that after the robbery, when Duncan and Berkey left the black Mazda at his house with weapons in it, he "pulled the pins apart, took the bolts out and put different bolts in" because two of the guns were registered in his name. *761 Id. at pp. 23-24. The bolts are what converted the guns from semi-automatic to fully automatic. Id. at p. 18, 23-24. Ellis testified that the guns in the back of the Black Mazda had been made fully automatic about two to four months prior to the Leesburg robbery, and were still fully automatic when he found them in the back of Mazda after the robbery until he changed the bolts. Id. at pp. 23-24.
18 U.S.C. § 921 defines machinegun by referencing the National Firearms Act, 26 U.S.C. 5845(b), which defines machinegun as follows: "The term `machinegun' means any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger."
In summary, the Court heard the testimony of two witnesses that the semi-automatic assault rifles carried by Duncan and Berkey to rob the National City Bank had been altered to make them fully automatic. Berkey testified that these guns could fire multiple shots with a single pull of the trigger. The Court found Berkey to be a credible witness. Even though he did not use the word "machinegun," his testimony described a weapon that fits the definition of "machinegun" in the statute.
Based on this testimony, the Court finds that the weapons carried into the Bank by the Defendant and Berkey were altered assault rifles that would qualify as machine guns for purposes of sentencing. The Court would have no difficulty making this same finding even if the evidentiary standard were much higher than the required preponderance.
The Defendant also objects to the statement that he was "involved in illegally altering the assault rifle's trigger mechanism which made the weapons fully automatic with the ability to fire 100 rounds." PSI ¶ 18; Addendum at IV(A). He claims that the evidence made it clear that Ellis and Berkey were responsible for the attempt to alter the guns. Id. The Defendant also claims that their efforts were unsuccessful. Id. Whether the Defendant was "involved in" altering the guns, or simply carried one into the Bank in connection with the robbery is irrelevant. Similarly, his argument that their attempts to alter the guns was unsuccessful is irrelevant, based on the statutory definition of machinegun, because the guns were "designed to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger." The statute does not require success. See, United States v. McGiffen, 267 F.3d 581, 590 (7th Cir.2001)(affirming enhancement for machinegun where weapon was designed to shoot in fully automatic mode, even if not fully operational) (citations omitted).
The Defendant also objected to a statement about the number of customers present in the bank at the time of the robbery. This does not appear to have any bearing on the Defendant's sentence, but the Government responded with evidence that there was at least one other customer in the bank. The Court, therefore, finds that the Government has met its burden on this issue as well.
The Defendant objected to a statement about a photograph found in Berkey's truck, claiming that the statement should not be included because the photograph was not entered into evidence at the trial. However, as already noted, the Federal Rules of Evidence do not apply at sentencing, and the Court can consider the photograph even if not entered into evidence. However, as with the previous issue, it does not affect the Defendant's sentence.
The Defendant's next objection is to paragraphs 15, 19 and 25, relating to the amount of money taken from the bank. The Bank initially calculated the loss amount at $43,744. He notes, correctly, *762 that approximately $46,000 was recovered in his possession and in his girlfriend's apartment. The Government presented this money into evidence at the trial. However, according to the Government, this money has not been returned to the Bank yet, therefore, the Bank has received little or no restitution to date. The Bank is entitled to full restitution, but it can only recover once. Right now, that money remains in evidence. Eventually, it will be returned to its rightful owner, at which time the Defendant's obligation to make restitution will be fulfilled.
However, the Court notes that the amount of money recovered is only relevant on the issue of restitution. Even though the money was fully recovered, the Defendant intended to take the full amount. Therefore, the full $43,744 is used for purposes of calculating the Defendant's offense level pursuant to U.S.S.G. § 2B3.1.
The Defendant also objected to paragraph 20, claiming that it put him in a false light. Paragraph 20 states, "a search of a black Mazda truck belonging to Criss Duncan also produced several assault type weapons and a camouflage type vest" and that "one of the rifles had Berkey's blood on it." The Defendant claims that Ellis testified at trial that he moved guns and other material into Criss Duncan's Mazda truck before it was searched.
The Government disagrees with that assertion, and has ordered a transcript of the testimony before sentencing. According to the Government, Ellis testified that the weapons were in the Mazda when it was brought to Ellis after the bank robbery and that Duncan was with Berkey when he asked Ellis to take care of the stuff in Duncan's Mazda. After examining the transcript of Ellis' testimony, the Court finds that it supports the Government's version of the facts on this issue. The Government has met its burden to establish that the guns were in the Defendant's Mazda truck when it was left with Ellis.
V. The Defendant's Offense Level
The Defendant has made several objections to the way the Probation Officer calculated his base offense level and enhancements. Calculating the Defendant's base offense level is a complicated process in this case because he was convicted on four separate counts. Calculating his base offense level and enhancements depends on how those counts are characterized. The burden of proof is on the Government, again by a preponderance of the evidence, to establish what his base offense level should be, and whether a certain enhancement applies.
Count 3s is based on the bank robbery, Count 4s is based on his carrying a weapon during the bank robbery, and Count 5s is based on the burning of the getaway vehicle as part of the Defendant's efforts to escape detection for the robbery. Count 6s is based on the discovery of seven firearms in the Defendant's home when it was searched approximately four days after the robbery, and three firearms discovered in the Defendant's Mazda truck. PSI Addendum, at VIII(B).
A. Counts 3s and 5s
First, the Probation Officer recommends grouping Counts 3s and 5s. Grouping is appropriate where the counts involve the same victim and two or more acts or transactions connected by a common criminal objective, or common scheme or plan. U.S.S.G. § 3D1.2(b). Here, the burning of the vehicle was part of the Defendant's plan to avoid detection for the bank robbery, and therefore qualifies for grouping.
The Guideline for a violation of 18 U.S.C. § 2113(a) and (d) is found in U.S.S.G. § 2B3.1, which provides for a base offense level of twenty (20). A two (2) level enhancement is added pursuant to *763 § 2B3.1(b)(1) for taking the property of a financial institution, and an additional one (1) level under § 2B3.1(b)(7) because the loss amount was greater than $10,000. This gives him a subtotal offense level of twenty-three (23).
The presentence report also recommends a three (3) level enhancement under U.S.S.G. § 3A1.2(a) because the case involved an official victim, and a two (2) level enhancement for Obstruction of Justice under U.S.S.G. § 3C1.2, because the Defendant committed reckless endangerment during his flight. The Defendant points out that both of these enhancements are based on the same facts, and claims that adding them both is impermissible double counting.
Resolving this issue involves a brief review of the facts. After the robbery, the Defendant and Berkey escaped in a maroon van. PSI at ¶ 12. This van was next seen burning in a wooded area several miles from the bank. Id. at ¶ 13. Town Marshall David Hobbs heard about the robbery, and left in his vehicle hoping to intercept the maroon van. Id. at ¶ 22. He stopped at an intersection with his lights on and got out of his vehicle to ask the Defendant if he had seen the maroon van. Id. By this time, the Defendant and Berkey had changed vehicles and were no longer in the getaway vehicle. Nevertheless, Berkey raised up from the floor where he was hiding and began firing an assault rifle at Hobbs. Id.
The Government admits that both enhancements cannot be applied for the same conduct, shooting at Hobbs, citing United States v. Swoape, 31 F.3d 482, 483 (7th Cir.1994). However, the Government points to other conduct that might support the reckless endangerment enhancement, for example, the arson of the van, and the fact that another witness was in the area when Berkey started shooting.
The Court agrees that basing an enhancement for reckless endangerment and for an official victim based on Berkey's shooting at Officer Hobbs during the escape raises serious double jeopardy concerns. However, if Officer Hobbs is removed from the calculation, the evidence supporting an Obstruction of Justice enhancement for reckless endangerment is weak. The Court finds that it is not sufficient to support an additional enhancement, and will apply only the enhancement for an official victim pursuant to § 3A1.2(a) for the Defendant's part in shooting at Officer Hobbs. This makes his final adjusted offense level on Counts 3s and 5s a twenty-six (26).
B. Count 6s
The Guideline for Count 6s, a violation of 18 U.S.C. § 922(g) is found in U.S.S.G. § 2K2.1. According to the presentence report, the Defendant's base offense level on this count should be twenty-six (26) because he has two previous felony convictions for a crime of violence. One was a conviction for Voluntary Manslaughter in 1983, the second a conviction in Colorado for Driving Under the Influence in 1999. The Defendant agrees that the Voluntary Manslaughter conviction qualifies as a crime of violence, but he challenges the use of a DUI as a crime of violence.
Both parties discuss a Seventh Circuit case, United States v. Rutherford, 54 F.3d 370 (7th Cir.1995), in which the Court held that felony Driving Under the Influence qualifies as a crime of violence under the "otherwise" clause of the statute. U.S.S.G. § 4B1.2(1) defines "crime of violence" as any offense under federal or state law, punishable by imprisonment for a term exceeding one year, that ... (ii) is burglary of a dwelling, arson, or extortion, involves the use of explosives, or otherwise involves conduct that presents a serious *764 potential risk of physical injury to another." The Seventh Circuit reasoned that the dangers of drunk driving are well-known and well documented, and therefore satisfy the "serious risk" standard of the "otherwise" clause. Rutherford, 54 F.3d at 376-77.
However, the Seventh Circuit noted that this holding would not turn every drunk driving conviction into a crime of violence under § 4B1.2 because most drunk driving offenses are not punishable by more than one year of imprisonment. Id. at 377, n. 17. Therefore, the first question before the Court is the statutory scheme under which the Defendant was convicted for drunk driving, either for the 1993 conviction in Elkhart, Indiana, or for the 1999 conviction in Colorado.
The Presentence Report states that the 1993 offense was filed as a felony, but he was sentenced to exactly one year. The Report does not state that he was convicted of a felony, and his sentence does not meet the "exceeding one year" standard. The Presentence Report also includes a conviction from Colorado in 1999 for Driving While Intoxicated, but he was only given a sentence of thirty (30) days in jail. Without further information about the statute that Defendant was sentenced under, the Court cannot find that either of these offenses qualifies as a felony crime of violence.
The Guideline for Count 6s, a violation of 18 U.S.C. § 922(g) is found in U.S.S.G. § 2K2.1(a)(3), for a firearm described in 18 U.S.C. § 921(a)(30), and one previous felony conviction for a crime of violence, which establishes a base offense level of twenty-two (22). The PSR recommends a four (4) level enhancement under § 2K2.1(b)(1)(B) based on the number of weapons involved on this Count. Seven (7) weapons were found in the Defendant's home, and three (3) more in his vehicle, for a total of ten (10) weapons.
The PSR also recommends a four (4) level enhancement pursuant to § 2K2.1(b)(5), because the Defendant used or possessed any firearm or ammunition in connection with another felony offense. The Defendant objects to this enhancement because the Government has not established that the weapons in this count were used in connection with another felony offense. The government agrees with the Defendant that none of the firearms seized from the Defendant's house were in anyway connected to the assault on Hobbs. PSI Addendum at ¶ VIII(B). However, the Government does claim that the weapons in Duncan's Mazda were used in connection with the bank robbery, and to shoot at Officer Hobbs.
The Court has studied the Superceding Indictment for Count 6s, and can find nothing in it to support the Defendant's claim that Count 6s was based exclusively on the guns found in Defendant's house. It charges him with being a felon in possession. However, the basis for Count 6s, Felon in Possession, cannot be the same as the basis for 4s, Knowingly Use and Carry a Firearm During and in Relation to a Crime of Violence. The three guns found in the Defendant's Mazda appear to be the same weapons that were used to rob the Bank, and therefore provide the basis for Count 4s. Those guns cannot be included again in Count 6s because of double jeopardy considerations. That leaves the seven (7) guns found in the Defendant's house to form the basis for Count 6s.
The Government has suggested that the Defendant was accountable for the gun that was used to fire at Hobbs, and based on ballistic reports, it appears that the gun used to fire at Hobbs has not been located. See, PSR ¶ 22. It is possible, however, that Berkey used the same gun for the robbery and to shoot at Hobbs. It is a stretch to add this unrecovered gun in as an additional gun for Count 6s based in *765 this evidence, and then use it as a basis for an enhancement under § 2K2.1(b)(5). Therefore, the Court will use only the seven (7) guns found at the Defendant's home as the basis for this count.
Seven (7) guns requires the addition of two (2) levels pursuant to 2K2.1(b)(1)(A), giving the Defendant an adjusted offense level of twenty-four (24). An additional enhancement for using these guns (the ones found in the Defendant's house) in connection with another felony offense is not supported by the evidence.
3. Multiple-Count Adjustment
The Court must also make a multiple-count adjustment under § 3D1.4 for Counts 3s, 5s, and 6s. The Court must count as one unit the most serious count, Count 3s and 5s with an adjusted offense level of twenty-six (26). Count 6s, with an adjusted offense level of twenty-four (24), also counts as one unit pursuant to § 3D1.4(a), for a total of two (2) units, which requires the addition of two (2) offense levels to the highest offense level. The result of these calculations is that the Defendant has an adjusted offense level of twenty-eight (28) on these three counts.
4. Count 4s
This Count must be calculated separately because it carries a mandatory minimum sentence that must be served consecutive to any other sentence he receives. Based on the Court's factual finding that the firearm used to commit this offense was a machinegun, the mandatory minimum sentence on this count is thirty (30) years, pursuant to 18 U.S.C. § 924(c)(B)(ii), On this count, the Guideline sentence is the statutory minimum. U.S.S.G. § 2K2.4(b).
5. Criminal History
The Defendant has a total of five (5) criminal history points: three (3) for a Voluntary Manslaughter conviction in 1983, under § 4A1.1(a); one (1) for a conviction in 1993 for Driving While Intoxicated, under § 4A1.1(c); and one (1) for a conviction for Driving While Intoxicated in 1999, also under § 4A1.1(c). The PSR recommends finding that the Defendant is a career offender based on the Manslaughter conviction and one of the Driving While Intoxicated convictions. The Court has already ruled on that issue, and for the reasons given above, does not find this Defendant to have two previous felony convictions for crimes of violence. A criminal history score of five (5) places him in criminal history category III.
V. The Defendant's Sentence
With a total offense level of twenty-eight (28) and a criminal history of III, the applicable Guideline range for imprisonment on Counts 3s, 5s and 6s is 97-121 months. The Guideline Range on Count 4s is a mandatory minimum of thirty years, or 360 months, for a total combined sentencing range on all counts of 457-481 months. Because the applicable guideline range is in Zone D, the Defendant is not eligible for probation.
In my thirty plus years as a federal judge, because of the mandatory thirty years for using a machinegun, this is without a doubt the longest sentence this Court has given for a bank robbery. A sentence at the low end of the range still places him in federal custody for almost forty years, and seems more than adequate. The Defendant is hereby sentenced to a single term of imprisonment of 457 months, to be followed by a single term of three (3) years of supervised release as required by 21 U.S.C. § 841 and U.S.S.G. § 5D1.2(b). The conditions of supervised release shall include the fifteen (15) standard conditions as listed under U.S.S.G. § 5D1.3(c) as well as the additional conditions listed on pages 27-28 of the pre-sentence report.
This sentence is to commence immediately. The Defendant shall receive jail *766 credit time for time served since his incarceration on this offense. The court finds that this sentence sufficiently punishes this Defendant for his criminal conduct and therefore satisfies the purposes of sentencing as set forth in 18 U.S.C. § 3553(a).
VI. Fines, Restitution, Fees
The applicable fine range under U.S.S.G. § 5E1.2(c)(3) is from $20,000 to $200,000. Based on the Defendant's financial information, the court imposes no fine. The court must and does assess a special assessment fee of $400.00.
Restitution is mandatory in this case under 18 U.S.C. § 3663, which requires the court to order restitution without consideration of the defendant's economic circumstances. 18 U.S.C. § 3663. Therefore, the Court orders this Defendant to pay restitution in the amount of $43,744. As noted above, a total of $46,000 was recovered and presented as evidence at this Defendant's trial. That money should be returned to the victim, offsetting the Defendant's obligation to make restitution. However, at the time of sentencing, the Bank has not yet been reimbursed for its losses, so restitution must be ordered. Payments must be forwarded to the United States District Court Clerk's Office at 204 South Main Street, South Bend, Indiana, 46601, for payment to the victim, National City Bank in Leesburg, Indiana.
The clerk shall prepare judgment. The clerk shall also provide a copy of this Sentencing Memorandum to the United States Probation Department for forwarding to the United States Sentencing Commission. The Defendant is hereby notified that he has a right to appeal this sentence and must file a notice of appeal within ten days of this order.
IT IS SO ORDERED.
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755 F.Supp. 232 (1991)
UNITED STATES of America, Plaintiff,
v.
Ramon GARCIA-HERNANDEZ, Defendant.
No. 90-30003.
United States District Court, C.D. Illinois, Springfield Division.
January 30, 1991.
Robert J. Eggers, Asst. U.S. Atty., Springfield, Ill., for plaintiff.
Jay Elmore, Springfield, Ill., for defendant.
OPINION
RICHARD MILLS, District Judge:
Petition for writ of audita querela.
As uncommon as it is, audita querela is a common law writ allowing a judgment defendant to obtain relief from the consequences of the judgment based on a defense or discharge arising after the rendition of judgment that cannot otherwise be raised. See Black's Law Dictionary 131 (6th ed. 1990).
Petitioner pled guilty to having transported an illegal alien on February 3, 1990, in violation of 8 U.S.C. § 1324(a)(1)(B). He was sentenced to five years probation.
Subsequently, Petitioner filed this petition seeking relief from his felony conviction so that he may be eligible for amnesty under the Immigration Reform and Control Act of 1986 (IRCA).[1] Petitioner represents that but for his felony conviction, he would be eligible for legalization.[2] He further *233 contends that his felony conviction has produced "disproportionate and inequitable consequences."
The appropriateness of using the common law writ of audita querela to relieve the consequences of a criminal conviction was first addressed in United States v. Kimberlin, 675 F.2d 866 (7th Cir.1982). In that case, the Seventh Circuit stated:
The writ of audita querela is an old common law procedure for obtaining relief from a judgment. Rule 60(b) of the Federal Rules of Civil Procedure, in creating a procedure for relief from a final judgment in a federal civil case, expressly abolished the writ of audita querela, but we cannot conclude from this that the writ is unavailable in a federal criminal case. Morgan v. United States, [346 U.S. 502, 74 S.Ct. 247, 98 L.Ed. 248 (1954)], held that the abolition by Rule 60(b) of coram nobis was limited to civil proceedings; and we assume the same result would be reached if a criminal defendant could show that relief from a judgment by means of audita querela was necessary to plug a gap in the system of federal post conviction remedies. We own to some doubt, however, that such a gap exists, given the availability of section 2255 for defendants in federal custody and coram nobis for defendants no longer in federal custody. Moreover, even if there were such a gap, it is very doubtful that audita querela would be the means to fill it. Our research has failed to discover any criminal case in which this writ has ever been asked for, let alone issued; it appears to be primarily a remedy of judgment debtors.
Kimberlin, 675 F.2d at 869 (citation omitted). Kimberlin is not only the first opinion to address the applicability of the writ of audita querela to criminal cases, it is the last time the issue has been addressed in a published decision in the Seventh Circuit.
Petitioner supports his petition with district court cases decided outside of the Seventh Circuit subsequent to Kimberlin. All of these cases involve the vacation of valid criminal convictions in order to allow the petitioners to qualify for naturalization under the amnesty provision of IRCA.
United States v. Salgado, 692 F.Supp. 1265 (E.D.Wash.1988) was the first case to grant relief from a criminal judgment under audita querela. Salgado had entered the country lawfully in 1943 as a seasonal worker. In subsequent years he regularly returned to this country during harvest season. He married a United States citizen in 1947 and became a permanent resident the following year, but never applied for naturalization. In 1964, Salgado pled guilty to failing to pay the transfer tax on a small quantity of marijuana, served eighteen months, and was ordered deported. He was told by prison authorities that he could not re-enter the country for two years.
Salgado self-deported and re-entered the country in 1964 using the green card which had never been taken from him.[3] During the next fifteen years, he worked for a California rancher and was inspected by various INS agents, and took vacations to Mexico and re-entered this country without incident.
In 1984, Salgado applied for social security benefits. A routine investigation revealed that he had been deported and that the INS considered him to be in the country illegally. Salgado and his wife then visited Mexico. While there, Salgado contacted the United States' Embassy to seek clarification of his status and was told that his green card was valid and he was a lawful permanent resident. In the meantime, Salgado's wife filed an I-130 petition for immediate relative status on his behalf. The normal investigation performed before granting such status revealed that he was in the country illegally and led to his arrest *234 and to deportation proceedings against him.
The court found that although no single factor in the case warranted the relief sought,
under the totality of the circumstances, it would be a gross injustice to allow this man, who has ... been a model resident for forty-five years save for a single period of unlawful conduct, to effectively serve a life sentence, and for his family to be deprived of benefits from a fund he has paid into throughout his working life.
Salgado, 692 F.Supp. at 1268. The court went on to determine that relief was not available under Fed.R.Civ.P. 60(b) because that rule applies only to civil cases; relief was unavailable under coram nobis because there was no new evidence or theory to serve as a defense to his conviction.
The court then considered whether audita querela applied to the situation where refusal to grant relief would deny him the benefit of a newly created right (the amnesty provisions) to which he would otherwise be entitled. It found only one published decision that "lends credence to that supposition." And that decision was United States v. Kimberlin!![4] Except for his 1964 conviction, Salgado met the requirements for the newly created right to amnesty.
In granting Salgado relief under audita querela, the court indicated that "When ... all counsel and the court can unanimously agree on the equities, and on the right result, it is a fairly safe wager that justice would be served by reaching that result." Salgado, 692 F.Supp. at 1271. Salgado's conviction was therefore vacated.[5]
Relief from a criminal conviction by means of a writ of audita querela was next allowed in United States v. Ghebreziabher, 701 F.Supp. 115 (E.D.La.1988). The petitioner in that case had pled guilty in 1987 to three misdemeanor counts of food stamp trafficking. His application for amnesty under IRCA was subsequently denied because he had three misdemeanor convictions. The court discussed the granting of audita querela relief in a similar situation in Salgado, and based on the determination that "[c]onviction of two counts with the same sentence would serve the interests of justice and not in any way prejudice the United States" used a writ of audita querela to vacate petitioner's guilty plea to count 1 of the indictment. Ghebreziabher, 701 F.Supp. at 117.
In United States v. Grajeda-Perez, 727 F.Supp. 1374 (E.D.Wash.1989), the petitioner also sought relief from a criminal conviction by means of a writ of audita querela. Petitioner was adjudged guilty on July 8, 1988, of being an alien in possession of a firearm in violation of 18 U.S.C. § 922(g). He had served the imposed term of imprisonment and sought to have his conviction set aside in order to be eligible for naturalization under IRCA. The court held that a writ of coram nobis was inappropriate because petitioner was not contesting the validity of his conviction. A writ of audita querela was considered inappropriate since petitioner was seeking relief not from the consequences of the judgment, but vacation of the judgment itself. The court, however, found that the All Writs Act, 28 U.S.C. § 1651(a), gave the courts "wide latitude to construct any remedy necessary" to do justice. The court then issued a "writ for relief from judgment" vacating petitioner's conviction.
*235 This Court must disagree with United States v. Salgado, 692 F.Supp. 1265 (E.D. Wash.1988), United States v. Ghebreziabher, 701 F.Supp. 115 (E.D.La.1988), and United States v. Grajeda-Perez, 727 F.Supp. 1374 (E.D.Wash.1989).
Salgado is founded on a highly questionable interpretation of United States v. Kimberlin, 675 F.2d 866 (7th Cir.1982). Kimberlin indicates only that Fed.R.Civ.P. 60(b) does not necessarily eliminate the availability of writs of audita querela in criminal cases, although the court was unaware of any case in which such relief had been sought or granted in a criminal case. The Kimberlin court suggested such relief might be appropriate if there was a gap in the existing post-conviction remedies, which the court doubted. The court further stated that "even if there were such a gap, it is very doubtful that audita querela would be the means to fill it." Kimberlin, 675 F.2d at 869.
The "gap" in the available post-conviction remedies that Salgado, Ghebreziabher and Grajeda-Perez have all addressed is the court's lack of a means to "remedy" a totally valid conviction (i.e., a conviction that is in no way legally defective) when the court dislikes the collateral effect of the conviction under IRCA. The only possible inequity in these cases is the harsh consequences criminal convictions have under laws passed by Congress.
We do not believe Kimberlin intended to leave open the writ of audita querela as a means for the courts to circumvent the application of laws they considered inequitable. Rather, we agree with the statement of United States Court of Appeals for the District of Columbia the only other Circuit Court to have addressed this issue and we hold that "The only circumstance, if any, in which the writ [of audita querela] could furnish a basis for vacating a criminal conviction would be if the defendant raised a legal objection not cognizable under the existing scheme of postconviction remedies." United States v. Ayala, 894 F.2d 425, 426 (D.C.Cir.1990) (emphasis ours).
Ergo, Petitioner's petition for a writ of audita querela is DENIED.
NOTES
[1] Although Petitioner's pleadings state that he sought amnesty under 8 U.S.C. § 1255(a) ("Adjustment of status of nonimmigrant inspected and admitted or paroled into United States"), it appears that Petitioner actually applied for amnesty under 8 U.S.C. § 1160 ("Special agricultural workers"). The analysis of whether a writ of audita querela should issue to enable a petitioner to qualify for amnesty under IRCA is the same regardless of whether amnesty is sought under § 1160 or § 1255(a).
[2] The Government has filed a response to Defendant's motion which includes affidavits of two INS investigators who represent that they were told by INS officials that Defendant's amnesty application was turned down for reasons other than his conviction in this case. By statute, only Defendant or his representative may be told the reason why his application was denied.
[3] The Salgado court implies that the government was remiss in not confiscating Salgado's green card. However, the court does not discuss whether this card was physically obtainable. It could, for example, have been in another person's possession while he was in jail and undergoing deportation hearings.
[4] The Salgado court quoted from the same section of Kimberlin that is provided earlier in this opinion; the quote in Salgado ends, however, immediately before the sentence "We own to some doubt...."
[5] Even if this Court agreed with the reasoning of Salgado, it does not automatically follow that the writ of audita querela should be granted in this case. In Salgado, the writ of audita querela was issued to vacate a 1964 conviction that made Salgado ineligible for the "newly created" right of amnesty under the Immigration Reform and Control Act of 1986. The Salgado court felt that the newly created rights under IRCA could be considered "some matter of defense or discharge arising since [the rendition of judgment] which could not be taken advantage of otherwise." Salgado, 692 F.Supp. at 1269 (quoting Black's Law Dictionary (5th ed.)). In this case, the offense was committed well after the amnesty provision went into effect.
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278 F.3d 890
In re LOS GATOS LODGE INC., Debtor.Mohamed Poonja, Appellant,v.Alleghany Properties, Appellee.
No. 00-16916.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted December 6, 2001.
Filed January 17, 2002.
Seymour J. Abrahams, San Jose, California, for the appellant.
Jeffrey B. Gardner, Saxon, Barry, Gardner & Kincannon, APC, Newport Beach, California, for the appellee.
Appeal from the United States District Court for the Northern District of California, James Ware, District Judge, Presiding. D.C. No. CV-99-21128-JW.
Before: MELVIN BRUNETTI, ANDREW J. KLEINFELD and SIDNEY R. THOMAS, Circuit Judges.
OPINION
THOMAS, Circuit Judge:
1
In this appeal, we consider whether a bankruptcy trustee may surcharge a creditor for necessary expenses in preserving property pursuant to 11 U.S.C. § 506(c) after the creditor's secured claim has been disallowed. We conclude that such a surcharge is improper and affirm the judgment of the district court.
2
* Dr. Norman E. and Jean P. McFate owned and operated the Los Gatos Lodge and the real property on which it was located. The McFates borrowed $6.25 million from Sacramento Savings Bank ("Sacramento Savings"). The loan was secured by: (1) a deed of trust against the real property on which the Los Gatos Lodge was located; (2) an assignment of the rents, issues, and profits of the real property; and (3) a security agreement that granted Sacramento Savings "a security interest in certain furniture, fixtures, equipment, appliances and replacement parts located at the Los Gatos Lodge."
3
The McFates subsequently transferred ownership of the real property to a family trust of which they were the trustees. They also transferred ownership of the Los Gatos Lodge building and business, including related personal property, to Los Gatos Lodge, Inc., a corporation owned by them or their family trust. The family trust leased the real property to Los Gatos Lodge, Inc.
4
The McFates defaulted on the loan from Sacramento Savings. Both the McFates and Los Gatos Lodge, Inc., filed Chapter 11 petitions. However, the cases were not consolidated. Appellant Mohamed Poonja ("the trustee") was appointed as trustee in Los Gatos Lodge, Inc.'s case.
5
In Los Gatos Lodge, Inc.'s case, Sacramento Savings filed a proof of secured claim and an amended proof of secured claim. These proofs of claim referenced Sacramento Savings' security interest in the personal property located at the Los Gatos Lodge. They also stated that the consideration for the claimed debt consisted of "[a]ny claim of ownership by the Debtor with respect to" the real property at issue and the loan documents.
6
Sacramento Savings then sought relief from the automatic stay in order to foreclose on its collateral. Pursuant to a stipulation of the parties, the bankruptcy court granted the request in June 1993, but with the proviso that the foreclosure sale could occur no sooner than September 2, 1993. From June 1993 until six days after the foreclosure sale, the trustee operated and managed the Los Gatos Lodge. He oversaw matters such as personnel supervision, issues with the National Labor Relations Board, accounting, termite fumigation, and marketing. On October 6, 1993, the foreclosure sale occurred at which Sacramento Savings bid $200,000 for the personal property in the Los Gatos Lodge.
7
Both bankruptcy cases were converted from Chapter 11 to Chapter 7 in late 1993, and the respective trustees were reappointed to administer the Chapter 7 estates. Throughout this time and thereafter, the trustee and Sacramento Savings disputed between themselves what effect, if any, the McFates' transfer of ownership of the Los Gatos Lodge and the personal property within it to Los Gatos Lodge, Inc. had on the security agreement with Sacramento Savings. The trustee asserted that Los Gatos Lodge, Inc. had replaced much of the personal property after becoming the owner and that Sacramento Savings had never perfected a security interest in this replacement property. Sacramento Savings took the position that it had a valid security interest in all personal property described by the security agreement, regardless of whether it was owned by Los Gatos Lodge, Inc. or the McFates or had been replaced by Los Gatos Lodge, Inc.
8
In May 1994, the trustee and Sacramento Savings negotiated a settlement to this dispute. Pursuant to this settlement, Sacramento Savings purchased from the estate all of the items potentially subject to the security agreement, described as:
9
The bankruptcy estate's interest, if any, in all of the other personal property of Debtor located at the Lodge or in the Debtor's or Trustee's possession, custody or control, including, but not limited to, all furniture, fixtures, appliances, equipment....
10
Sacramento Savings also bought other items that it conceded were not subject to the security agreement, including a van, the Los Gatos Lodge's liquor license, its inventory and cash on hand, and its business name and goodwill. In total, Sacramento Savings paid $138,054.39, of which $80,000 was allocated to the personal property. Neither party made any admissions of liability, and the settlement expressly preserved the trustee's right to seek to surcharge collateral under 11 U.S.C. § 506(c), as well as all of Sacramento Savings' defenses to any § 506(c) action.
11
The trustee filed a motion seeking approval from the bankruptcy court for this settlement. In the motion, the trustee explained the parties' positions with respect to the personal property at the Los Gatos Lodge, and stated that "[t]he facts raise many difficult questions of law concerning the security interest of [Sacramento Savings]." He further stated that he sought approval of the settlement so that he "c[ould] save the substantial attorneys fees and costs that will be necessary for litigation regarding ownership of and security interests in various assets of the debtor." The bankruptcy court approved the settlement.
12
Approximately two years after the settlement had been approved, the trustee filed an objection to Sacramento Savings' proofs of claim, stating that "[t]he basis for the objection is that the claims were released by a stipulation." Attached to the objection was a letter from counsel for Alleghany Properties, Inc. ("Alleghany"), which, as successor-in-interest to Sacramento Savings, was now the concerned party. The letter states that Alleghany "confirms that Sacramento Savings released its Proofs of Claim against the bankruptcy estate." Upon receiving the objection, the bankruptcy court disallowed the claims in their entirety on September 19, 1996.
13
In March 1999, the trustee filed a motion pursuant to 11 U.S.C. § 506(c), which the bankruptcy court converted into an adversary proceeding, to surcharge collateral and recover the value of his services for the four months that he operated the Los Gatos Lodge. He filed an identical motion in both Los Gatos Lodge, Inc.'s bankruptcy and the McFates' individual bankruptcy.
14
The bankruptcy court issued a written decision in September 1999, ruling in favor of the trustee and awarding him $80,861.37. It denied without prejudice his request to recover the attorneys' fees incurred in bringing the motion.
15
Alleghany then appealed to the district court, which reversed, holding that Sacramento Savings had not held an "allowed secured claim" as required under § 506. The trustee now appeals.1 "We review de novo the decision of a district court which has acted as an appellate court in reviewing a bankruptcy court's decision on appeal." Lundell v. Anchor Constr. Specialists, Inc., 223 F.3d 1035, 1039 (9th Cir.2000). We review the bankruptcy court's factual findings for clear error and its conclusions of law de novo. Id.
II
16
Under the Bankruptcy Code, a bankruptcy trustee may recover from the holder of an allowed secured claim reasonable and necessary expenses incurred by the trustee in the preservation of the secured collateral. The relevant section, 11 U.S.C. § 506(c), provides:
17
The trustee may recover from property securing an allowed secured claim the reasonable, necessary costs and expenses of preserving, or disposing of, such property to the extent of any benefit to the holder of such claim.
18
Section 506(c) had its origins in the equitable principle that where a court has custody of property, administration and preservation expenses are a dominant charge against the property. Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 9, 120 S.Ct. 1942, 147 L.Ed.2d 1 (2000).
19
To recover under § 506(c), a trustee must establish that the claim associated with the relevant collateral is both "allowed" and "secured." Bear v. Coben (In re Golden Plan of Cal., Inc.), 829 F.2d 705, 712 (9th Cir.1986). Further, the trustee must establish the extent to which the claim is to be treated as secured by establishing the value of the collateral. See Assocs. Commercial Corp. v. Rash, 520 U.S. 953, 960, 117 S.Ct. 1879, 138 L.Ed.2d 148 (1997); see also 4 Lawrence P. King, Collier on Bankruptcy ¶ 506.03 (15th ed.2001). Finally, the costs and expenses for which recovery is sought must be incurred for the benefit of the secured creditor and be reasonable and necessary. Cent. Bank of Mont. v. Cascade Hydraulics & Util. Serv., Inc. (In re Cascade Hydraulics & Util. Serv., Inc.), 815 F.2d 546, 548 (9th Cir.1987).
20
When the trustee initiated the § 506(c) proceeding, there was no "allowed secured claim" that pertained to the property because the bankruptcy court had formally disallowed the secured claim at the trustee's request. That, at first blush, would seem fatal to a § 506(c) recovery. However, the trustee argues that the secured claim was "deemed allowed" pursuant to 11 U.S.C. § 502(a) at the time the preservation expenses were incurred; thus, a § 506(c) recovery would be proper.
21
Section 502(a) provides that "[a] claim of interest, proof of which is filed under section 501 of this title, is deemed allowed, unless a party in interest ... objects." As we explained in Lundell:
22
Section 501 of Title 11 of the United States Code allows creditors a means to present their claims against a debtor to the bankruptcy court by filing a proof of claim. See 11 U.S.C. § 501. Whether such a claim for which a proper proof has been filed is "allowable" is a matter for determination pursuant to 11 U.S.C. § 502 and the procedural rules governing the bankruptcy courts. These rules and our case law have put in a place a general procedure to allocate the burdens of proof and persuasion in determining whether a claim is allowable.
23
A proof of claim is deemed allowed unless a party in interest objects under 11 U.S.C. § 502(a) and constitutes "prima facie evidence of the validity and amount of the claim" pursuant to Bankruptcy Rule 3001(f). See also Fed. R. Bankr.P. 3007. The filing of an objection to a proof of claim "creates a dispute which is a contested matter" within the meaning of Bankruptcy Rule 9014 and must be resolved after notice and opportunity for hearing upon a motion for relief. See Adv. Comm. Notes to Fed. R. Bankr.P. 9014.
24
223 F.3d at 1039.
25
Thus, although a claim is "deemed allowed" if no party in interest objects, such a determination is not final until the conclusion of the case. Proofs of claims themselves are not final judgments giving rise to res judicata, but the bankruptcy court's allowance or disallowance of a proof of claim is a final judgment. Siegel v. Fed. Home Loan Mortgage Corp., 143 F.3d 525, 529-30 (9th Cir.1998).
26
Thus, if the trustee had initiated the § 506(c) proceeding before the claim had been disallowed, as is the usual practice, then he could have legitimately alleged that the claim was an "allowed secured claim" under the section. However, he first successfully obtained a disallowance of the claim, then filed an action alleging that it was an "allowed secured claim" under § 506(c). At that point, the bankruptcy court's order disallowing the claim was res judicata as to whether the claim was "allowed" or "disallowed." Siegel, 143 F.3d at 530. In short, in order to be eligible for a § 506(c) surcharge, the claim must be an "allowed secured claim" at the time the § 506(c) action is filed. Because it was not in this instance, the trustee cannot recover under § 506(c) as a matter of law.
27
Given that this conclusion is determinative of the outcome, we need not address the other objections raised by the parties.
28
The judgment of the district court is affirmed.
29
AFFIRMED.
Notes:
1
He appeals only from the district court's ruling in Los Gatos Lodge, Inc.'s case
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294 S.C. 132 (1987)
363 S.E.2d 110
Sandra S. McLAURIN, Respondent
v.
Daniel K. McLAURIN, Appellant.
1050
Court of Appeals of South Carolina.
Heard October 20, 1987.
Decided November 23, 1987.
James W. Corley, Columbia, for appellant.
William R. Applegate, West Columbia, for respondent.
Heard Oct. 20, 1987.
Decided Nov. 23, 1987.
*133 BELL, Judge:
Sandra S. McLaurin brought this action against her then husband, Daniel K. McLaurin, for a divorce on the ground of adultery. Daniel neither admitted nor denied committing adultery in his answer. The family court granted Sandra a divorce on the ground of adultery. Daniel appeals. We affirm.
The parties were married on August 18, 1961. At the time of their separation, they were residing in Lexington County. In late March or early April of 1986, Daniel's employer sent him to work on a job in Spartanburg. Shortly thereafter, while he was home one weekend, Sandra found a lady's telephone number in his billfold. She questioned Daniel, who admitted to an adulterous relationship. On April 26, 1986, Daniel left the marital home. The parties have not lived together since.
On June 2, 1986, Sandra and a friend, Emma Pauline McConnell, went to the home of one Peggy Jones in Taylors, South Carolina, in order to serve the divorce papers on Daniel. When they got there, Emma McConnell went to the door while Sandra stayed in the truck. Peggy Jones answered the door. She was wearing a "little flimsy gown" and a robe. When Daniel soon thereafter came to the door, he was fully clothed. Emma McConnell testified that she saw no one else there.
The issues raised on appeal are: (1) whether the evidence was sufficient to warrant a finding of adultery; and (2) whether the family court erred in awarding alimony and attorney's fees where the ground for divorce was not proven. Daniel concedes that the second issue hinges on the first.
To obtain a divorce on the ground of adultery in South Carolina, the proof of the alleged adultery "must be clear and positive, and the infidelity must be established by a clear preponderance of the evidence. The proof must be sufficiently definite to identify the time and place of the offense, and the circumstances under which it was committed." Brown v. Brown, 215 S.C. 502, 512-513, 56 S.E. (2d) 330, 335 (1949). However, as adultery, by its very nature, is an activity which takes place in private, it may be proved by circumstantial evidence. Loftis v. Loftis, 284 S.C. 216, 325 *134 S.E. (2d) 73 (Ct. App. 1985); accord Brown v. Brown, supra; Miller v. Miller, 280 S.C. 314, 313 S.E. (2d) 288 (1984). Although a divorce on the ground of adultery should be denied, "if after due consideration of all the evidence proof of guilt is inconclusive ...," Odom v. Odom, 248 S.C. 144, 146, 149 S.E. (2d) 353, 354 (1966), insufficiency in any particular respect "should not be allowed to defeat a divorce where the court is fully convinced adultery has been committed and a party has had full opportunity to defend or refute the charge." Loftis v. Loftis, at 218, 325 S.E. (2d) at 74.
In Brown v. Brown, the Supreme Court set forth the rule which requires corroboration of "all the material allegations of the complaint necessary to sustain a decree of divorce...." 215 S.C. at 512, 56 S.E. (2d) at 335. The Court went on to say: "There is no definite rule as to the degree of corroboration required, but each case must be decided according to its own facts and circumstances." Id. The Court then explained: "Since the main reason for the rule is to prevent collusion between the parties, the rule is not generally deemed inflexible; and may be relaxed when it is evident that collusion does not exist." Id.; see also McLaughlin v. McLaughlin, 244 S.C. 265, 136 S.E. (2d) 537 (1964); Harvley v. Harvley, 279 S.C. 572, 310 S.E. (2d) 161 (Ct. App. 1983).
Daniel argues that Sandra failed to introduce enough evidence to support the divorce on the ground of adultery.[1] She proved to the satisfaction of the family court, however, that Daniel admitted the adultery to her. This is not a collusive suit; Daniel vigorously contests the adultery. In these circumstances, no corroboration is required to support Daniel's uncontradicted admission against his own interest. Harvely v. Harvely, supra. That admission by itself is evidence from which a finding of adultery may be made.
*135 Although no corroboration is necessary, Daniel's presence alone with Peggy in her house while she was "comfortably" dressed, provides some corroboration for his admission. His presence in her home, without more, would not support a finding of adultery. Fox v. Fox, 277 S.C. 400, 288 S.E. (2d) 390 (1982); Fulton v. Fulton, 293 S.C. 146, 359 S.E. (2d) 88 (Ct. App. 1987). The family court may, however, consider the incident as some evidence that Daniel and Peggy had the opportunity and disposition to commit the offense. Hartley v. Hartley, 292 S.C. 245, 246-249, 355 S.E. (2d) 869, 871 (Ct. App. 1987).
We therefore hold that the family court's finding of adultery is supported by sufficient evidence. Our decision of the first issue makes it unnecessary to reach Daniel's other issue.
SHAW and CURETON, JJ., concur.
NOTES
[1] At trial Daniel was questioned about his alleged adultery. He refused to respond, asserting his privilege against self incrimination under the Fifth Amendment to the United States Constitution. Sandra argues that the court may make an inference from this silence that Daniel committed the alleged adulterous act. This combined with other evidence, she asserts, will support a finding of adultery. Because we think there is sufficient evidence to support the allegation without considering Daniel's refusal to testify, we do not decide what, if any, inference may be drawn from a witness's invocation of the privilege against self incrimination in a civil case.
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784 F.2d 902
54 USLW 2536
James FRENCH, Plaintiff-Appellant,v.MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., a corporation,Defendant-Appellee.R. James FRENCH, Plaintiff-Appellee,v.MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., a corporation,Defendant- Appellant.
Nos. 85-1653, 85-1702.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted Nov. 12, 1985.Decided March 6, 1986.
Robert Charles Friese, Anthony B. Levin, Shartsis, Friese & Ginsburg, San Francisco, Cal., for plaintiff-appellant.
W. Reece Bader, William Riley, Anne Bookin, Orrick, Herrington & Sutcliffe, San Francisco, Cal., for defendant-appellee.
Appeal from the United States District Court for the Northern District of California.
Before GOODWIN, NELSON and CANBY, Circuit Judges.
NELSON, Circuit Judge:
1
This appeal stems from a decision rendered by a duly constituted Arbitration Panel ("Panel") of the Pacific Stock Exchange ("PSE"), holding Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill Lynch") liable to R. James French ("French"), for negligent misrepresentation in connection with French's sale of option contracts to a Merrill Lynch broker. The Panel awarded French compensatory damages of $52,925.00, interest on that award, and consequential damages of $275,000.00 resulting from lost profits. The district court confirmed the Panel's award of compensatory damages and interest but struck the award of consequential damages. Both parties now appeal to this court.
2
We affirm the district court's confirmation of the compensatory damages award and its assessment of interest, but reverse its vacation of the consequential damages award.
FACTUAL BACKGROUND
3
On July 28, 1982, as a "marketmaker" on the options floor of the PSE, French was engaged in the trading of Heublein call options. Heublein had been a rumored takeover candidate for several months, during which time there had been periodic bursts of activity in the stock and options. At approximately 9:30 a.m., William Grebitus, a floor broker for Merrill Lynch, began to purchase a "size" or large order of Heublein call options. French asked Grebitus at least twice whether the order was an "opening" or a "closing".1 Grebitus wrongly informed French and other traders that the order was a closing when in fact it was an opening. French subsequently sold short, in two separate trades, a large quantity of the options to Grebitus.
4
Only minutes after the subject trades, the Exchange suspended all trading in Heublein securities. Merrill Lynch then disclosed that the Grebitus order had actually been an opening rather than a closing. Before trading resumed the following day, R.J. Reynolds Industries, Inc. announced an offer for the majority of Heublein's outstanding common stock, causing the price of the stock and options to increase. In satisfying Merrill Lynch's orders, French suffered an out-of-pocket loss of about $53,000, and thereafter, lost profits he could have made by trading the $53,000.
5
On November 3, 1982, French filed a complaint in federal court, charging Merrill Lynch with misrepresenting the nature of its purchase order in violation of various federal and state laws. He sought rescission of the subject trades, punitive damages, attorney's fees and costs, and compensatory damages in the sum of $69,050.00, plus interest. Merrill Lynch moved to stay the proceedings and compel arbitration, relying on the PSE Constitution and Rules, which provide for arbitration of "[a]ny dispute, claim or controversy between members ... at the request of [either] party." PSE Rule XII, Sec. 1(a) Pac. Stock Exchg. Guide (CCH) p 5300 (emphasis added).
6
On January 14, 1983, before the motion was heard, the parties stipulated "that the claims set forth in the complaint on file [with the district court] shall be submitted to arbitration pursuant to the constitution and rules of the [PSE]." The parties then executed a Uniform Submission Agreement ("Submission Agreement") wherein they explicitly acknowledged their decision to submit to arbitration the "matter in controversy, as set forth in [an] attached statement of claim ... in accordance with the Constitution [and] ... Rules ... of the [PSE]." Merrill Lynch stated in writing that it had executed the Submission Agreement "with the understanding that the statement of claim to be attached ... would be the Complaint ... [then] on file with the District Court," and added that if that "understanding [were] erroneous, [it] reserve[d] the right to revoke the signing of the Submission Agreement until such time as [it] ... ha[d] an opportunity to review [the] claim and ... prepare[ ] a response thereto."
7
Two days before the scheduled hearing date, French gave notice that he intended to seek those consequential damages stemming from his loss of available trading capital during the months following the subject trades. Merrill Lynch urged the Panel to strike the consequential damages claim and to preclude French from submitting any evidence on the claim. Nevertheless, the Panel allowed French to amend his prayer pursuant to Section 27 of PSE Rule XII, and to present evidence on the consequential damages claim. It continued the hearing for thirty days and allowed Merrill Lynch further opportunity to depose witnesses and discover documents.
8
At the conclusion of the arbitration, on July 27, 1984, the Panel found Merrill Lynch liable for negligent misrepresentation. It awarded French compensatory damages of $52,925; interest on that amount, calculated at the broker-call rate, to accrue from August 1, 1982 through the date of payment; and consequential damages of $275,000.
9
On November 1, 1984, the district court heard argument on French's motion to confirm under 9 U.S.C. Sec. 9, and Merrill Lynch's motion to vacate or modify under 9 U.S.C. Secs. 10 and 11. Merrill Lynch contested the arbitrability of French's consequential damages and interest claims, and while conceding the arbitrability of its compensatory damages claim, took issue with the Panel's conclusion of law with respect to that claim (i.e., its finding of liability). Judge Vukasin issued an order, January 14, 1985, confirming the award of compensatory damages and interest, and vacating the award of consequential damages as beyond the scope of the matter submitted to arbitration. French timely appealed the order to vacate, and Merrill Lynch timely cross-appealed the order to confirm. French asks this court to award attorney's fees pursuant to Fed.R.App.P. 38 for the costs he incurred in responding to the cross-appeal.
ISSUES
10
I. Is the district court's order a final judgment pursuant to 28 U.S.C. Sec. 1291, over which this court has appellate jurisdiction?
11
II. Was the district court correct in confirming the Panel's compensatory award, based as it was on a finding that Merrill Lynch's misrepresentation was a material fact upon which French could reasonably rely?
12
III. Was the district court correct in holding that the Panel did not exceed its powers by awarding French interest on his damage award at the broker call-rate, to accrue from August 1, 1982 through the first day of the month in which the damages are paid?
13
IV. Was the district court correct in vacating the award of consequential damages on the ground that it was beyond the scope of the matters the parties agreed to submit to arbitration?
14
V. Should French be awarded attorney's fees incurred in responding to Merrill Lynch's cross-appeal because that appeal is frivolous?
DISCUSSION
I. Jurisdiction
15
Both parties urge us to hold that 28 U.S.C. Sec. 1291 does not require dismissal of this case and that we can and should determine the validity of the district court's order. We agree. Pursuant to Sec. 1291, this court has jurisdiction over appeals from "final" decisions of the district court. We have just such a decision here. While the district court might have determined, in a trial of its own, whether French was deserving of consequential damages, see Sentry Life Ins. Co. v. Borad, 759 F.2d 695, 697 (9th Cir.1985), close examination of the record reveals that French never asserted the right to try the issue in the event that the district court held it non-arbitrable. Accordingly, we view Judge Vukasin's order as disposing of all the issues put before him by the parties. We consider the judgment "an attempt to dispose of all claims in the action," Squaxin Island Tribe v. State of Washington, 781 F.2d 715, 719 (9th Cir.1986),2 and proceed to consider its validity.3
II. Compensatory Damages
16
Under California law, negligent misrepresentation is a form of "deceit," see Cal.Civ.Code Secs. 1709 and 1710 (West 1985), liability for which is predicated upon the misstatement of a material fact. See Gonsalves v. Hodgson, 38 Cal.2d 91, 100-01, 237 P.2d 656, 662 (1951). Merrill Lynch contends that the Panel's compensatory award must be overturned because open/close information is not a material fact upon which French could have reasonably relied in making the subject transactions.
17
We review the Panel's award mindful that confirmation is required even in the face of "erroneous findings of fact or misinterpretations of law."4 American Postal Workers Union, AFL-CIO v. United States Postal Service, 682 F.2d 1280, 1285 (9th Cir.1982), cert. denied, 459 U.S. 1200, 103 S.Ct. 1183, 75 L.Ed.2d 431 (1983); see Carpenters' Local Union No. 1478 v. Stevens, 743 F.2d 1271, 1275 (9th Cir.1984) (arbitrator's factual determinations and legal conclusions should receive deferential review), cert. denied, --- U.S. ----, 105 S.Ct. 2018, 85 L.Ed.2d 300 (1985); George Day Construction Co. v. United Brotherhood of Carpenters, 722 F.2d 1471, 1477 (9th Cir.1984) (award must be enforced "notwithstanding the erroneousness of any factual findings or legal conclusions ..."); Broadway Cab Cooperative v. Teamsters & Chauffeurs Local, 710 F.2d 1379, 1382 (9th Cir.1983) (arbitrator's factual determinations and legal conclusions accorded deference); Coast Trading Co. v. Pacific Molasses Co., 681 F.2d 1195, 1198 (9th Cir.1982) ("The rule is, though the 'arbitrators' view of the law might be open to serious question, ... [an award] which is within the terms of the submission, will not be set aside by a court for error either in law or fact'....") (quoting San Martine Compania De Navegacion, S.A. v. Saguenay Terminals Ltd., 293 F.2d 796, 800 (9th Cir.1961)). It is not even enough that the Panel may have failed to understand or apply the law. See Thompson v. Tega-Rand Int'l, 740 F.2d 762, 763 (9th Cir.1984); see also 9 U.S.C. Secs. 10 and 11 (expressly stating appropriate grounds for vacation and modification of award). An arbitrator's decision must be upheld unless it is "completely irrational," Swift Industries v. Botany Industries, 466 F.2d 1125, 1131 (3d Cir.1972), or it constitutes a "manifest disregard of the law." George Day Construction Co., 722 F.2d at 1477.
18
No such irrationality or disregard is evident here. California defines a legally "material fact ... [as one that] 'would be likely to affect the conduct of a reasonable man with reference to the transaction in question.' " Wood v. Kalbaugh, 39 Cal.App.3d 926, 930, 114 Cal.Rptr. 673, 676 (1974) (quoting Costello v. Roer, 77 Cal.App.2d 174, 178, 175 P.2d 65, 68 (1946)).5 The Panel's determination of materiality is adequately supported by the record. First, French testified that an opening order establishes a position and increases risk and, conversely, that a closing order decreases the position and reduces risk. He further testified that such information is particularly significant when considering a large order in a volatile market affected by takeover rumors. Second, a number of expert witnesses, including other marketmakers, testified that Merrill Lynch's misrepresentation was material in that context. Finally, several other traders besides French asked Merrill Lynch whether its order was an opening or closing, and at least three of them attempted to rescind their trades upon learning of the misrepresentation.
19
Merrill Lynch's reliance upon several "uncontroverted facts" suggesting that open/close information is immaterial, go to the general materiality of that information, and do not take account of the special circumstances existing on the morning of July 22, 1982.6 The Panel "recognized that the open/close information [is] not always material, but felt that it was [material] in the particular circumstances on that day." Nor does French's stipulation that he cannot discern what a customer is thinking when the latter places an opening order to buy call options belie the Panel's determination of materiality. Information about a customer's intentions may be material even where it does not provide absolute certainty as to those intentions. In sum, the Panel's award of compensatory damages is not "completely irrational," and should be upheld.
III. Interest Award
20
Merrill Lynch contends that the Panel's award of interest on the compensatory damages--to be calculated at the broker call rate, and to run from August 1, 1982 until the first day of the month in which the damages are paid--was improper.
21
Inasmuch as Merrill Lynch's liability is founded on a violation of California law, we should look to that law first in assessing the Panel's award of interest. Section 3287(a) of the California Civil Code (West 1970) provides for the recovery of interest where "damages [are] certain, or capable of being made certain by calculation, and the right to recover ... is vested ... upon a particular day." Here, French's right to recover was vested no later than the date upon which he filed his complaint. Further, his actual damages were capable of being made certain by calculation. By Merrill Lynch's own admission, they equaled the sum he had to pay to cover his short sale of the Heublein options. The fact that liability is contested does not make the sum of damages uncertain within the meaning of the statute. See Bott v. American Hydrocarbon Corp., 458 F.2d 229, 232 (5th Cir.1972). Thus, Merrill Lynch is wrong in arguing that California law limits the availability of interest to circumstances not present here.7
22
Merrill Lynch further contends that the broker-call rate of interest, ranging from 10% to 12.5%, "far exceeds the applicable prejudgment legal rate of 7% per annum." See Cal. Const. Art. 15 Sec. 1 (providing for cap of 7%), cited in Davis & Cox v. Summa Corp., 751 F.2d 1507, 1522 (9th Cir.1985). While Merrill Lynch makes no mention of a limitation on post-judgment interest, California law provides for a maximum of 10% per annum. Accordingly, if the Panel meant to provide for pre- and postjudgment interest qua interest, it should have limited the rates of recovery to 7% and 10% respectively.
23
It is possible, though, that the Panel's award of interest at the broker-call rate was meant as an award of consequential damages--i.e., as a substitute for lost profits apart from, and in addition to, the consequential damages award so labeled. Because an award of consequential damages was within the power of the Panel (see infra Sec. IV), we affirm the confirmation of the whole interest award.8
IV. Consequential Damages
24
The district court held that the award of consequential damages exceeded the panel's scope of authority as defined by agreement of the parties. This court reviews de novo that determination of arbitrability. See Mediterranean Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 1462-63 (9th Cir.1983).
25
"[A] party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960). Thus, an arbitrator's powers are delimited by the agreement of the parties themselves. Any award not drawn from that agreement is invalid. See Mediterranean Enterprises, 708 F.2d at 1465 (decision beyond ambit of arbitration agreement not given effect by court); Coast Trading Co. v. Pacific Molasses Co., 681 F.2d 1195, 1198 (9th Cir.1982) (vacating award where relief granted exceeded authority given arbitrators by consent of parties in submission agreement). However, "any doubts concerning the scope of [that agreement] should be resolved in favor of arbitration." Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 941, 74 L.Ed.2d 765 (1983); see also Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., --- U.S. ----, 105 S.Ct. 3346, 3353, 87 L.Ed.2d 444 (1985) (citing Moses H. Cone with approval while holding antitrust claims arbitrable under governing arbitration agreement). In this Circuit, an otherwise valid arbitration award will not be vacated " 'unless it may be said with positive assurance that the [agreement] is not susceptible of an interpretation that covers the [award].' " Local Joint Exec. Bd. v. Royal Center, Inc., 754 F.2d 835, 838 (9th Cir.1985) (quoting Marchese v. Shearson Hayden Stone, Inc., 734 F.2d 414, 419 (9th Cir.1984)). The purported agreement between French and Merrill Lynch is susceptible of an interpretation that covers the Panel's power to arbitrate the issue of consequential damages. Accordingly, the district court's determination of non-arbitrability was incorrect.
26
Merrill Lynch contends that the parties' agreement to arbitrate precluded the Panel's consideration of any damages not specifically pleaded in French's original complaint. On January 14, 1983, the parties stipulated to the submission of those "claims set forth in the complaint...." (emphasis added). The Submission Agreement and February 4, 1983 letter from Merrill Lynch to French also provided for the submission of their "matter in controversy, as set forth in the [complaint]...." (emphasis added).
27
But the parties did not merely submit to arbitration the claims set forth in the complaint. They submitted those claims "in accordance with," (emphasis added), and "pursuant to," (emphasis added), "the constitution and rules of the [PSE]." The PSE Rules incorporated into the parties' agreement confer upon PSE arbitrators the right to allow amendments to the pleading upon such terms and conditions as the arbitrators direct. See Rule XII, Sec. 27, PSE Guide (CCH) p 5350. Thus, the agreement to arbitrate, as reflected in both the stipulation and the Submission Agreement, is susceptible of an interpretation that would permit (at the discretion of the Panel) amendment of French's complaint.9 Insofar as an award of consequential damages required French's amendment,10 the district court should have determined that the amendment was proper. We reverse its decision to the contrary. Further, we find that the award was neither "completely irrational" nor a "manifest disregard of the law." Under Section 3333 of the California Civil Code (West 1970), damages may be awarded for lost profits. Cf. Natural Soda Products Co. v. City of Los Angeles, 23 Cal.2d 193, 199-200, 143 P.2d 12, 17 (1943) (award of damages for loss of profits depends upon whether there is satisfactory basis for estimating what probable earnings would have been without tort), cert. denied, 321 U.S. 793, 64 S.Ct. 790, 88 L.Ed. 1082 (1944). Therefore, we reinstate the Panel's award of consequential damages.
V. Attorney's Fees
28
French's request for attorney's fees pursuant to Fed.R.App.P. 38 is denied. Though ultimately unpersuasive, Merrill Lynch's argument that the interest award should have been vacated or modified was not "frivolous". Nor was that part of Merrill Lynch's cross-appeal contesting the Panel's compensatory award so "frivolous" as to warrant a sanction in the form of attorney's fees. Cf. Thompson v. Tega-Rand Int'l, 740 F.2d 762, 764 (9th Cir.1984). This court has held that an appeal is frivolous only "if the result is obvious, or the arguments of error are wholly without merit." DeWitt v. Western Pacific Railroad Co., 719 F.2d 1448, 1451 (9th Cir.1983) (emphasis added). Here, French's stipulation of fact with respect to the meaning of open/close information at least calls into question the rationality of the arbitrator's decision, even if it does not render that decision "completely irrational."
CONCLUSION
29
Thus, we affirm the district court's confirmation of the compensatory damages award and assessment of interest and reverse the district court's vacation of the consequential damages award.
30
AFFIRMED IN PART, REVERSED IN PART AND REMANDED with instructions that the Panel's award be reinstated in full.
1
When a buyer purchases options in order to establish a position or add to his previous purchase, his order is designated an "opening". When, on the other hand, a buyer purchases options in order to cover a short sale (i.e., a sale of options the seller did not own), his order is designated a "closing"; he is, in effect, balancing or "closing" his books
2
The district court's failure to record its judgment in a separate document, as required by Fed.R.Civ.P. 58, does not deprive us of jurisdiction. The judgment was recorded in the clerk's docket and neither party objected to the taking of the appeal in the absence of a separate judgment. See Bankers Trust Co. v. Mallis, 435 U.S. 381, 384, 387-88, 98 S.Ct. 1117, 1119, 1121, 55 L.Ed.2d 357 (1978) (separate-judgment requirement not "a categorical imperative" and may be waived)
3
It is also worth noting that even if the case came to us after the district court held a trial on the issue of consequential damages, our review of the Panel's decision would be de novo. See Mediterranean Enterprises, Inc. v. Ssangyong Corp., 708 F.2d 1458, 1462-63 (9th Cir.1983). That is, the district court's resolution of the issues would be accorded no special deference in this court. Thus, "we find that no practical benefits would accrue from a dismissal for lack of appellate jurisdiction." Squaxin Island Tribe, at 719
4
The Panel characterizes as a factual finding its conclusion that Merrill Lynch's misrepresentation of the order as a closing transaction was material to French's trading decision. That characterization accords with Jorgensen v. Beach 'N' Bay Realty, Inc., 125 Cal.App.3d 155, 160-61, 177 Cal.Rptr. 882, 886 (1981), wherein the California Court of Appeal determined that the issue of materiality should have been put before a jury. In the federal context, the question of materiality is a mixed question of law and fact, but involves "assessments peculiarly within the province of the trier of fact." Toombs v. Leone, 777 F.2d 465, 469 (9th Cir.1985) (quoting Arrington v. Merrill Lynch, Pierce, Fenner & Smith, 651 F.2d 615, 619 (9th Cir.1981)). Whether the Panel's determination of materiality is characterized as a conclusion of law or a finding of fact is inconsequential here. In either case, the review accorded that determination is deferential
5
Materiality is similarly defined under federal law. See TSC Industries v. Northway, Inc., 426 U.S. 438, 449, 96 S.Ct. 2126, 2132, 48 L.Ed.2d 757 (1976) (fact is material if its existence or nonexistence is matter to which reasonable person would attach importance in determining choice of action in transaction); SEC v. Seaboard Corp., 677 F.2d 1301, 1306 (9th Cir.1982) (same)
6
Merrill Lynch points particularly to the following "uncontroverted facts": (1) open/close information has not been intended to be anything but a bookkeeping entry used for clearing purposes; (2) marketmakers do not routinely ask for open/close information on option exchanges; (3) option exchanges do not have a rule requiring that open/close information be disclosed; (4) there is no formal record of any prior attempt to rescind a trade on the basis of a mistake in open/close information; and (5) the number of errors made with respect to open/close information renders any consideration of the factor by marketmakers unreasonable
7
Perhaps its argument is based on the belief that Cal.Civ.Code Sec. 3287(a) (West 1970) applies only to actions in contract. That belief, however, is belied by the case law. See, e.g., Western Union Tel. Co. v. Lange, 248 Fed. 656, 664 (9th Cir.1918) (senders of telegram negligently delayed in transmission entitled to recover interest from telegraph company), rev'd on other grounds, 253 U.S. 101, 40 S.Ct. 460, 64 L.Ed. 803 (1920); Orme v. State ex rel. Dep't of Water Resources, 83 Cal.App.3d 178, 186, 147 Cal.Rptr. 735, 740 (1978) (assessment of interest in condemnation action involving loss of rice crops); Levy-Zentner Co. v. Southern Pacific Transportation Co., 74 Cal.App.3d 762, 797-98, 142 Cal.Rptr. 1, 24 (1977) (pre-judgment interest available in tort actions)
8
This court need not decide what the Panel actually intended. It must confirm the Panel's decision insofar as it is not "completely irrational" and does not constitute a "manifest disregard of the law." See supra Sec. II. Thus, we adopt that interpretation of the Panel's interest award most consistent with confirmation. Cf. George Day Construction Co., 722 F.2d at 1477 (award should be enforced "even if the basis for decision is ambiguous")
9
Merrill Lynch also points to the portion of its February 4, 1983 letter wherein it "reserve[d] the right to revoke the signing of the Submission Agreement," as clear evidence of its understanding that the complaint could not be amended. Yet the right of revocation makes no less plausible the interpretation of the parties' agreement proffered above. Merrill Lynch did not, even by its reservation, explicitly preclude the possibility of amendment. Its right of revocation might be viewed as having precluded French only from changing his complaint absent the Panel's permission to amend. Further, even if the February 4 letter is susceptible of a reading that would have allowed revocation of the Submission Agreement in the event of French's amendment, Merrill Lynch never attempted such a revocation. Either it did not believe that the letter evidenced such a right to revoke, or it deliberately waived that right
10
Even if the parties' agreement to arbitrate (as reflected in their stipulation and Submission Agreement) precluded amendment, French would still prevail. PSE Rule XII, Sec. 1(a) provides:
Any dispute, claim or controversy between parties who are members, member organizations or associated persons arising in connection with the securities business of such parties shall, at the request of any such party, be submitted for arbitration in accordance with this Rule.
Pac. Stock Exchg. Guide (CCH) p 5300 (emphasis added). French's amendment of the complaint can be viewed as his own request to have the consequential damages claim arbitrated. The amendment certainly put Merrill Lynch on notice that French intended to recover such damages, and PSE Rule XII contains no formal requirements for making an arbitration request. Thus, French was entitled to have his consequential damages claim heard by the Panel, if for no other reason, because he implicitly requested arbitration of that claim.
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857 F.2d 1470Unpublished Disposition
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.Ellis WHEBY; Juanita Wheby, Plaintiffs-Appellants,v.The MARYLAND CASUALTY COMPANY, Defendant-Appellee.
No. 88-3940.
United States Court of Appeals, Fourth Circuit.
Argued: June 21, 1988.Decided: Sept. 6, 1988.
Warren Ashby Thornhill, III (Thornhill, Kennedy & Vaughan, on brief), for appellants.
John Andrew Smith (Kay, Casto & Chaney, on brief), for appellee.
Before JAMES DICKSON PHILLIPS and ERVIN, Circuit Judges, and BUTZNER, Senior Circuit Judge.
PER CURIAM:
1
Plaintiffs Ellis Wheby and Juanita Wheby appeal from the judgment entered below for defendant The Maryland Casualty Company (Casualty) following a jury verdict finding that the Whebys had committed arson. The Whebys contend that the trial court's instructions presented the wrong standard of proof to the jury. Finding no error, we affirm.
2
The Whebys owned a small grocery store which was completely destroyed by fire on March 23, 1985. Their insurance claim for destruction of the building and its contents totaled $72,056. Casualty refused to pay because it believed the cause of the fire was arson. The Whebys filed the underlying action.
3
At trial, Casualty introduced evidence that the Whebys had been unable to find a willing buyer for the store, that profits were minimal, that the fire was incendiary in origin and that the Whebys had ample opportunity to torch the building. The Whebys denied arson and offered an expert witness who testified the fire was not incendiary.
4
At the charge conference, the parties' attorneys disagreed as to the standard of proof applicable to Casualty's affirmative defense of arson. Counsel for the Whebys argued that arson had to be proved by clear and satisfactory evidence. The lower court agreed with Casualty and instructed the jury that arson need only be established by a preponderance of the evidence.
5
The jury returned a verdict in favor of Casualty and the Whebys appeal.
6
This court is required to affirm the lower court's judgment if the instructions "taken as a whole, fairly and adequately state the pertinent legal principles." Chavis v. Finnliness Ltd., O/Y, 576 F.2d 1072 (4th Cir.1978). Using this standard, we do not agree with the Whebys' characterization of the instructions as erroneous.
7
The Whebys argue that under West Virginia law, clear and satisfactory evidence is the proper standard for an arson defense. They claim two West Virginia cases, Morgan v. Insurance Company of North America, 146 W.Va. 868, 122 S.E.2d 838 (1961), and Hayseeds, Inc. v. State Farm Fire & Casualty Co., --- W.Va. ----, 352 S.E.2d 73 (1986), demonstrate that this rule is controlling. In Morgan, the trial court directed a verdict for the plaintiff on an action pursuant to a fire policy where arson was a defense. The Supreme Court of Appeals of West Virginia held the question of incendiarism should have been left for the jury. In discussing the standard of proof, the court found that "[w]hile proof of a defense [incendiarism] involves proof of a crime, it need be only by a preponderance of the evidence, rather than beyond a reasonable doubt as in criminal cases." Id. at 841. Citing C.J.S. the court wrote:
8
By the weight of authority, however, such a defense need not be proved beyond a reasonable doubt, a preponderance of the evidence being sufficient. The proof, however, should be clear and satisfactory, taking into consideration the presumption of innocence in such cases, which the evidence must be sufficient to overcome.
9
46 C.J.S. Insurance Sec. 1359, at 567.
10
In Hayseeds, the jury found against the defendant who argued arson as an affirmative defense. There, the trial judge instructed the jury to use a preponderance of the evidence standard and went on to say the proof should be clear and satisfactory. On appeal, the instructions were upheld.
11
The Whebys argue this language in Morgan and Hayseeds indicates that clear and satisfactory, or as they would have it, clear and convincing evidence is the proper standard for the arson defense. However, the emphasis in each of the passages cited by the Whebys is that a preponderance of the evidence is sufficient. As quoted above, in Morgan, the West Virginia court expressly designated the preponderance standard before citing the C.J.S. passage that mentions the clear and satisfactory phrase. The court in Hayseeds held that the trial judge's reference to clear and satisfactory was "by no means a model instruction," but taken in the context of the entire instructions, did not constitute reversible error.
12
Considering the entire instructions given in the instant case, we find that the language used by the district court below adequately stated the proper legal principles. The language regarding clear and satisfactory evidence was merely an attempt to describe the quality of evidence necessary to prove arson by a preponderance.1 The lower court eliminated this language because of its close proximity to the legal term of art "clear and convincing" evidence.
13
Finding no error in these instructions as a whole, we affirm.
14
AFFIRMED.
1
The Whebys also argued on appeal that the district court abused its discretion in refusing to certify the question of standard of proof to the West Virginia Supreme Court of Appeals. The use of certification "in a given case rests in the sound discretion of the federal court." Lehman Brothers v. Schein, 416 U.S. 386, 94 S.Ct. 1741, 1744, 40 L.Ed.2d 215 (1974). Based on the above-cited guidance in the case law of West Virginia regarding the proper standard of proof, we find no abuse of discretion and no merit in this argument of the Whebys
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DENY and Opinion Filed April 24, 2014.
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-14-00252-CV
IN RE TAILWIND SPORTS CORP. AND LANCE ARMSTRONG, Relators
Original Proceeding from the 116th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DC-13-01564
MEMORANDUM OPINION
Before Justices FitzGerald, Francis, and Lewis
Opinion by Justice FitzGerald
Relators file this petition for writ of mandamus requesting that the Court direct the trial
court to vacate its February 25, 2014 order and instead stay the pending arbitration. The facts
and issues are well known to the parties, so we need not recount them herein. Based on the
record before us, we conclude relators have not shown they are entitled to the relief requested.
See TEX. R. APP. P. 52.8(a); Walker v. Packer, 827 S.W.2d 833, 839–40 (Tex. 1992) (orig.
proceeding). Accordingly, we DENY relators’ petition for writ of mandamus.
140252F.P05 /Kerry P. FitzGerald/
KERRY P. FITZGERALD
JUSTICE
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563 N.W.2d 302 (1997)
In the MATTER OF THE NORTHERN STATES POWER COMPANY APPLICATION FOR CERTIFICATE OF SITE COMPATIBILITY FOR THE GOODHUE COUNTY INDEPENDENT SPENT NUCLEAR FUEL STORAGE FACILITY.
Nos. C1-96-2189, C8-96-2190.
Court of Appeals of Minnesota.
May 13, 1997.
*304 Lenor A. Scheffler, Joseph M. Paiement, Welch, for Relator Prairie Island Indian Community.
Hubert H. Humphrey, III, State Attorney General, Alan R. Mitchell, Assistant Attorney General, St. Paul, for Respondent Minnesota Environmental Quality Board.
Peter A. Koller, Michael J. Ahern, Moss & Barnett, Minneapolis; and Michael C. Connelly, Minneapolis, for Respondent Northern States Power Company.
Considered and decided by CRIPPEN, P.J., and PETERSON and MARTIN J. MANSUR, JJ.[*]
OPINION
CRIPPEN, Judge.
Acting under a 1994 statute, respondent Northern States Power Company requested *305 that the Minnesota Environmental Quality Board issue a Certificate of Site Compatibility for a proposed Goodhue County dry cask storage facility. Challenging the denial of this request, relator Prairie Island Indian Community disputes the board's reliance on risks associated with the transportation and handling of the spent fuel, contending that the board should compare the sites independent of this consideration. We affirm.
FACTS
Northern States Power Company has a spent fuel storage problem at its Prairie Island nuclear power plant in Goodhue County. The company needs to move nuclear fuel assemblies[1] from on-site cooling pools into more permanent storage until the United States government opens an interim or permanent storage facility. It is scientifically feasible to store the spent fuel assemblies in dry casks.[2]
In 1989, the company first proposed building a Prairie Island facility to hold 48 dry casks.[3] It sought a certificate of need from the Minnesota Public Utilities Commission pursuant to Minn.Stat. § 216B.243 (1990). In 1992, after relator opposed the expanded use of the Prairie Island site, the commission authorized the company to use 17 casks. When relator and others appealed this decision,[4] we reversed, holding that the commission lacked authority to issue a certificate of need because dry cask storage is permanent for purposes of a Minnesota law requiring legislative approval of a "permanent" radioactive waste storage facility. In re Independent Spent Fuel Storage Installation, 501 N.W.2d 638, 648 (Minn.App.1993), review denied (Minn. July 15, 1993).
In 1994, the Minnesota legislature enacted statutes recognizing that all other administrative prerequisites had been met and authorizing Northern States to store some spent nuclear fuel in dry casks at its existing Prairie Island facility. 1994 Minn. Laws ch. 641, arts. 1, 6 (codified at Minn.Stat. §§ 116C.77-.80 (1996)). The legislation authorized immediate use of five casks and allowed the company to use four additional casks on Prairie Island upon a determination that it (1) has filed a license application with the U.S. Nuclear Regulatory Commission for a separate dry cask storage facility elsewhere in Goodhue County, (2) "is continuing a good faith effort to implement the [other Goodhue County] site," and (3) has arranged for the use of an additional 100 megawatts of wind power.[5] Minn.Stat. § 116C.771(a), (b).
After enactment of the 1994 legislation, the company began the process of selecting a separate Goodhue County site for a new dry cask storage facility. It fulfilled its license application and wind power obligations, and it eventually identified two possible sites in Florence Township for the storage facility.
In July 1995, Northern States submitted an application to the Environmental Quality Board under Minn.Stat. § 116C.80, subds. 2, 3, seeking a Certificate of Site Compatibility for the second Goodhue County site. The statute provides that prior to the construction of a separate dry cask storage facility, the company must obtain a certificate from the board that "the site for the facility is comparable to the independent spent fuel storage facility site located on Prairie Island." Id., subd. 2. It also requires that the board adopt "those procedures, considerations, and rules it determines are necessary *306 to designate a site for a dry cask storage facility." Id., subd. 3.
In October 1996, the board ended the alternative siting process by denying the company's compatibility certificate application. The board concluded that the proposed sites were not comparable to the Prairie Island site solely because of the increased transportation and handling risks associated with moving the casks from the cooling pools on Prairie Island. The board's order also formally requested the company to withdraw its federal license application and authorized the board to seek suspension of those licensing proceedings.
Northern States also requested the board to determine that it had complied with the section 116C.771(b) prerequisites for authorizing the use of four additional casks at Prairie Island. In an order dated the same day as the comparability decision, the board concluded that the company had complied with the statutory mandates, including the "good faith effort" requirement respecting implementation of the proposed alternative site plan. The board premised its good faith finding on the company's cooperation with the board's informational requests, its attendance at public meetings of the Site Advisory Task Force, and its prompt payment of assessments to reimburse the board's application processing costs.
Relator Prairie Island Indian Community challenges both orders on appeal but dwells almost singularly on the proposition that the board erred by halting implementation of the Goodhue County siting process. Specifically, relator contends that the board based its compatibility decision not on the deficiencies of the physical "site for the facility" as required by section 116C.80, but instead on transportation and handling risks. The board made findings on radiological health, flooding, accidental release, and sabotage and terroristic security considerations, and observed that these considerations posed no greater risks at the alternative site. But the board concluded that the increased transportation and handling risks associated with moving the casks to the proposed site "will always make another Goodhue County site not comparable to the Prairie Island facility."
The parties do not dispute that relator has standing to appeal both orders.[6]
ISSUE
Did 1994 Prairie Island legislation call for making an alternate site comparability decision without considering risks associated with transporting and handling nuclear waste?
ANALYSIS
By statute, an appellate court may reverse or remand an administrative agency's decision if it exceeds statutory authority, contains other errors of law, or is arbitrary or capricious. Minn.Stat. § 14.69 (1996). The party appealing an agency decision has the burden of proving that the agency decision violates a provision of Minn.Stat. § 14.69. Markwardt v. State, Water Resources Bd., 254 N.W.2d 371, 374 (Minn. 1977).
1. Site Comparability
Relator does not dispute any findings of the board or the factual accuracy of its ultimate conclusion that transportation and handling risks will "always" exceed other considerations. The board made extensive findings on the risks associated with transporting and handling the spent fuel between Prairie Island and the alternate Goodhue County site.
Regarding handling risks, the board found that shipment to the proposed site would raise additional hazards not encountered with the Prairie Island facility because "that facility is located immediately adjacent to" the nuclear plant. The board found that workers *307 involved in transferring the spent fuel into shipping casks, loading these casks onto a train, transporting them by rail, removing them from the train, and transferring the spent fuel into storage casks could encounter a cancer incidence rate "as high as 18 cancers per 1,000 if one worker were to be involved with 48 casks," which is a "relatively high risk."
Regarding transportation, the board first found that although more than 2,500 shipments of spent nuclear fuel have occurred throughout the United States without any adverse radiological consequences to the public, "railway accidents are not uncommon" and experts have observed that there is "always a chance" that nuclear fuel transportation accidents will occur. It also noted that "full-scale destructive testing has not been completed on spent fuel transportation containers." The board identified such potential risks as increased radiation exposure and increased non-radiation accidents that could affect both workers and the general public. As a result, the board concluded that the transportation of the spent nuclear fuel to a second site and the additional handling required by such a transfer will "always" destroy the comparability of an alternate Goodhue County site to the Prairie Island facility.
On appeal, relator simply contends that the board could not consider the transportation and handling risks as a matter of law or, if the board could consider such risks, that it could not use them to trump all other considerations.
On matters of statutory interpretation, the reviewing court generally is not bound by the determination of an administrative agency. Arvig Tel. Co. v. Northwestern Bell Tel. Co., 270 N.W.2d 111, 114 (Minn. 1978). But we should defer to the agency's expertise if a statutory interpretation is complicated and technical in nature. See In re Proposal by U.S. WEST Communications, Inc., 558 N.W.2d 777, 779 (Minn.App.1997) (stating that "the usual deference" to an agency decision does not apply where a court addresses "a relatively uncomplicated statutory interpretation"). A reviewing court will deem an agency decision arbitrary and capricious "if the agency relied on factors which the legislature had not intended it to consider." Trout Unlimited, Inc. v. Minnesota Dep't of Agric., 528 N.W.2d 903, 907 (Minn. App.1995), review denied (Minn. Apr. 27, 1995).
All parties acknowledge that the legislature did not directly address the inclusion or exclusion of transportation and handling risks. The parties view this silence oppositely; relator views it as the absence of authority to consider these risks, while respondents construe it as a failure to prohibit such consideration.
We begin examining this issue of statutory interpretation by observing that Minn.Stat. § 116C.80, subds. 2, 3 (1996), speaks in terms of comparing one "site" with another. While the study of a site might normally dwell on the characteristics of the place, it is evident that a reviewing authority could not properly examine the selection of a storage facility site without considering the consequences of operating the facility at that site, and its review of those consequences necessarily includes the transportation of the nuclear waste to that facility. The issue is no different, we conclude, than the feasibility study for a commercial or industrial site, which would have to consider traffic problems created by a business operation on the site, including those related to deliveries of goods or merchandise.
Relator contends that we must assume that the legislature foreclosed the board's consideration of transportation risks because it anticipated dry cask storage at a site other than Prairie Island. See Minn.Stat. § 116C.777 (1996) ("The spent fuel contents of dry casks located on Prairie Island must be moved immediately upon the availability of another site for storage of the spent fuel that is not located on Prairie Island."). On the contrary, the legislature contemplated the continued presence of dry casks at Prairie Island by authorizing the immediate storage of spent fuel assemblies in at least five dry casks at the Prairie Island facility and the potential use of up to 12 additional *308 casks.[7] Minn.Stat. § 116C.771(a)-(c) (1996). Thus, the legislature expressly authorized some dry cask storage at Prairie Island and provided conditions for the expanded use of casks.
Moreover, although section 116C.777 shows the general legislative will for ultimately moving the dry casks off of Prairie Island, the legislature expressly conditioned this movement upon the "availability" of a comparable site within Goodhue County. Minn.Stat. § 116C.777. That is, the legislature required that the location and the operation of the proposed facility in Goodhue County be comparable to leaving the casks at Prairie Island. Rather than define the mandate of section 116C.80 for a comparability determination, section 116C.777 merely begs for interpretation of the comparability issue.
Ultimately, relator's case rests entirely on its view of legislative silence, namely, that the legislature did not direct the board to consider transportation risk. Because the legislature specifically delegated the comparability issue to the board and did not prohibit the board from considering transportation risks, we conclude that it necessarily foresaw the board's consideration of all factors bearing on comparability. Minn.Stat. § 116C.80, subds. 2, 3. And the legislative history, which demonstrates legislative awareness of transportation risks, suggests that the legislature, through its silence, intended to defer to the board's judgment on this issue. See Hearing on H.F. No. 2140/S.F. No. 1706 Before the House Conference Committee (Apr. 26, 1994) (discussing the risks of transporting nuclear waste). Although the statute does not mandate the consideration of the health, flooding, and safety concerns, it anticipates these factors as well as the transportation and handling risks. We find inescapable the conclusion that the legislature's decision not to prohibit assessment of transportation and handling risks demonstrates that the board was within its prerogative to evaluate these risks in determining the comparability of siting the facility in Goodhue County.
In addition, given that our construction of the statute matches the board's interpretation, it is appropriate to recognize some deference to the board in this case. The legislature authorized this agency to implement and to construe the 1994 legislation. See Minn. Stat. § 116C.80, subd. 3 (requiring the board to adopt "those procedures, considerations, and rules it determines are necessary to designate a site for a dry cask storage facility and to issue a certificate of site comparability"). We conclude that the 1994 legislation does not present the kind of uncomplicated statutory interpretation that we should decide without some deference.
Finally, we observe that relator's grievance is not with the arbitrariness or capriciousness of the board, but with the legislature's failure to enact the law that relator desired, namely, one that requires the board to consider the comparability of the Goodhue County site independent of the transportation and handling risks. In other words, this court's 1993 Prairie Island decision denied the power company the opportunity to engage in any dry cask storage on Prairie Island unless it secured legislative authorization for that action; the company successfully obtained legislation that now serves to permit its use of nine casks at its nuclear power plant site.
2. Other Issues
Relator also alleges that the board exceeded its authority by directing Northern States to withdraw its federal license application and authorizing the board's request for suspension of the application proceedings. On appeal, the board argues that this issue has become moot because the U.S. Nuclear Regulatory Commission already has granted Northern States' request to suspend its license application pending this appeal. If an event occurs during the pendency of an appeal that "makes a decision on the merits unnecessary or an award of effective relief impossible," we will dismiss the appeal as moot. In re Welfare of A.M.P., 507 N.W.2d 616, 621 (Minn.App.1993). Because this issue became moot when the federal commission *309 suspended the application pending this appeal, we need not address it.
Finally, relator contends that the board erroneously found that Northern States is continuing to make a good faith effort to implement the proposed site because the company stopped making any such effort when the board ended the alternate siting process. This argument depends entirely upon whether the board erred or whether the power company had some opportunity to implement the site despite the board's decision. We decide that no error occurred and that Northern States could not move casks to another site without a certificate of compatibility.
DECISION
Because the 1994 legislation does not preclude the consideration of risks associated with transporting and handling spent nuclear fuel between the Prairie Island power plant and a new site for a dry cask storage facility in Goodhue County, the board's decision that the proposed site would not be comparable to the Prairie Island facility is neither erroneous nor arbitrary and capricious.
Affirmed.
NOTES
[*] Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
[1] Spent fuel assemblies are the rods removed from nuclear reactor units.
[2] A dry cask is a large, sealed canister that holds up to 40 spent fuel assemblies.
[3] A dry cask storage facility, by law, is categorized as a permanent storage facility. In re Independent Spent Fuel Storage Installation, 501 N.W.2d 638, 648 (Minn.App.1993), review denied (Minn. July 15, 1993). Notwithstanding this legal description, a dry cask facility represents a temporary solution because the U.S. government ultimately will move the spent fuel to a federal storage installation or geological repository. Id. at 640-41.
[4] Relator, the Minnesota Public Interest Research Group, and the Prairie Island Coalition Against Nuclear Storage filed petitions for a writ of certiorari, and we granted amicus status to the Prairie Island Religious Task Force and certain state legislators.
[5] The statute also provided for an additional eight casks at Prairie Island upon the satisfaction of certain additional criteria. Minn.Stat. § 116C.771(c) (1996).
[6] The 1994 legislation required the governor, on behalf of the state, and Northern States to enter into an agreement binding the parties to the terms of section 116C.771, among other things, and expressly granted relator Prairie Island Indian Community standing to enforce this agreement as an intended third-party beneficiary. Minn.Stat. § 116C.773 (1996). Thus, relator has standing on the good faith issue pursuant to statutory right. Relator also has standing on the comparability issue because the rights of relator's members are at stake and the board premised its finding of good faith on Northern States' satisfaction of the underlying agreement's terms.
[7] Northern States could use the additional 12 casks on the occurrence of certain conditions under subsection (b), which allowed four additional casks, and subsection (c), which authorized eight additional casks. Minn.Stat. § 116C.771(b), (c) (1996).
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FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT April 5, 2019
_________________________________
Elisabeth A. Shumaker
Clerk of Court
JAMES BEDFORD ALFORD,
Plaintiff - Appellant,
v. No. 18-2075
(D.C. No. 1:16-CV-00800-KBM)
COMMISSIONER, SSA, (D. N.M.)
Defendant - Appellee.
_________________________________
ORDER AND JUDGMENT*
_________________________________
Before HOLMES, BACHARACH, and PHILLIPS, Circuit Judges.
_________________________________
James Bedford Alford, appearing pro se, sued the Commissioner for negligence
and other alleged misconduct in denying his applications in 2012 for disability insurance
benefits (DIB) and supplemental security income (SSI) and awarding him benefits based
on his 2015 applications. The district court dismissed his claims on various grounds,
including lack of jurisdiction, and Alford appealed. Exercising jurisdiction under
42 U.S.C. § 405(g) and 28 U.S.C. § 1291, we affirm.
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist in 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. 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.
BACKGROUND
Alford first applied for DIB and SSI on August 3, 2012, alleging he became
disabled on April 15, 2009. The Commissioner denied his applications at the initial level
in January 2013. Alford did not administratively appeal this decision.
Alford returned to work for several years following the denial of his
2012 applications, but stopped working in 2015 because of his physical impairments. In
September 2015, he applied again for DIB and SSI, alleging disability beginning on
June 1, 2015. In September 2015, the Commissioner approved Alford’s SSI application
at the initial level, but denied his DIB application on the ground that he became disabled
after the last date he was insured.
Alford administratively appealed the denial of his DIB application, and the
Appeals Council reversed this decision in April 2017, concluding updated information
showed his date last insured was after his claimed disability onset date. As a result, the
Appeals Council concluded Alford was entitled to DIB benefits beginning on June 1,
2015, the date of disability onset he claimed in his application.
In July 2016, while his administrative appeal of the DIB denial was pending,
Alford filed this pro se action against the Social Security Administration (SSA) and, later,
one of its employees. In his initial and amended complaints, he sought monetary relief
for the SSA’s and the employee’s alleged negligence, operation under false pretenses,
deceptive practices, breach of contract, and breach of trust in connection with his
2012 and 2015 applications. In later filings, he also challenged the SSA’s favorable
2
decision on his 2015 DIB application, alleging he was entitled to additional benefits
based on a disability onset date of May 18, 2012 or earlier.1
In October 2016, the district court dismissed Alford’s amended complaint without
prejudice, holding Alford had not met his burden of alleging facts establishing the court’s
jurisdiction to decide his claims. Specifically, the court held it was not apparent from
Alford’s allegations that he had exhausted administrative remedies with respect to his tort
claims, as required by the Federal Tort Claims Act, and, to the extent he asserted a claim
for denial of benefits, that he had received a final decision as required for judicial review
under the Social Security Act. The district court granted Alford’s motion for
reconsideration and reopened the case in July 2017 after learning the Appeals Council
had issued its April 2017 final decision on Alford’s administrative appeal.
Alford filed a series of motions following the case’s reopening in which he sought,
among other things, amendment of the disability onset date in the Commissioner’s DIB
decision and a favorable ruling on his damages claims against the agency.2 The district
1
Alford at times asserted a disability onset date in May of 2010 in the district
court. In his reply brief in this appeal, Alford asserted, apparently for the first time,
that his disability onset date should be reset to April 15, 2009, the onset date he
alleged in his 2012 applications.
2
Alford also requested that the district court issue a waiver that would allow
him to receive social security retirement benefits early as a result of his disability.
Alford has not challenged the district court’s denial of this motion on appeal and so
we do not address this issue. See Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir.
2007) (“[T]he omission of an issue in an opening brief generally forfeits appellate
consideration of that issue.”).
3
court denied Alford’s motions and dismissed the case for lack of subject-matter
jurisdiction.3 This appeal followed.
DISCUSSION
A. Standard of Review
We review the district court’s dismissal for lack of subject matter jurisdiction de
novo. Niemi v. Lasshofer, 770 F.3d 1331, 1344 (10th Cir. 2014). Because Alford is
acting pro se, we construe his filings liberally, but do not act as his advocate. Garrett
v. Selby Connor Maddux & Janer, 425 F.3d 836, 840 (10th Cir. 2005).
B. Subject Matter Jurisdiction
“Federal courts are courts of limited jurisdiction; they must have a statutory basis
for their jurisdiction.” Dutcher v. Matheson, 733 F.3d 980, 984 (10th Cir. 2013) (internal
quotation marks omitted). “[W]e presume no jurisdiction exists absent an adequate
showing by the party invoking federal jurisdiction.” Id. at 985 (internal quotation marks
omitted).
1. Challenge to the 2015 benefits decision
Alford’s challenge to the disability onset date and DIB benefits awarded in the
Commissioner’s 2015 decision is subject to section 405(g) of the Social Security Act.
It provides that an individual may obtain judicial review of “any final decision of the
Commissioner of Social Security made after a hearing to which he was a party.”
3
The district court also denied Alford’s challenge to the disability onset date in
the 2015 decision on the merits, but we need not reach this alternative ground to decide
this appeal.
4
42 U.S.C. § 405(g). But as the district court held, this provision does not allow
judicial review of agency decisions that are favorable to the claimant. See Jones v.
Califano, 576 F.2d 12, 18 (2d Cir. 1978) (“Section 405(g) assumes as a condition for
judicial review that the determination by the Secretary after a § 405(b) hearing will be
adverse to the claimant of benefits. It makes no provision for judicial review of a
determination favorable to the complainant.”); 42 U.S.C. § 405(b)(1) (stating the hearing
that is a prerequisite to judicial review is only available with respect to decisions that are
“in whole or in part unfavorable”).4 Alford received a fully favorable decision on his
2015 application for DIB benefits because the Commissioner awarded him benefits,
and did so based on the June 1, 2015 disability onset date he asserted in his
application. He therefore lacked standing under section 405(g) to challenge this
decision, and the district court correctly held it lacked jurisdiction over this claim.5
4
Further evidence of the limited scope of section 405(g)’s judicial review
provision is found in Senate and House reports that the provision was added to provide a
remedy “in the event [an individual’s] claim for benefits is denied by the Board.” Social
Security Act Amendments of 1939, S. Rep. No. 76-734, at 52 (1939) (emphasis added);
Social Security Act Amendments of 1939, H.R. Rep. No. 76-728, at 43 (1939) (emphasis
added) (both available at https://www.ssa.gov/history/pdf/Downey%20PDFs/
Social%20Security%20Amendments%20of%201939.pdf).
5
In addition, “[a]s a matter of practice and prudence,” the Supreme Court and
other federal courts “have generally declined to consider cases at the request of a
prevailing party, even when the Constitution allowed [them] to do so.” Camreta v.
Greene, 563 U.S. 692, 703-04 (2011); see id. at 702-704 (discussing this judicial policy).
This is because “[a] party who receives all that he has sought generally is not aggrieved
by the judgment affording the relief” and therefore should not be allowed to appeal from
it. Deposit Guar. Nat. Bank v. Roper, 445 U.S. 326, 333-34 (1980); see Camreta,
563 U.S. at 703-04. Thus, prudential standing provides an additional basis for finding
Alford lacked standing to appeal his favorable benefits determination.
5
On appeal, Alford does not dispute that judicial review of favorable decisions
is not allowed under section 405(g). Instead, he suggests he did not in fact receive a
favorable decision on his 2015 application. But he contends the decision was not
favorable only because it adopted the June 1, 2015 disability onset date he asserted in
his applications instead of the 2012 (or earlier) date he now seeks to impose through
this action. A favorable decision on an application for disability insurance benefits
does not become unfavorable merely because a claimant wishes to improve on it.
2. Challenge to 2012 benefits decision
To the extent Alford seeks to challenge the Commissioner’s denial of his
applications for DIB and SSI in 2012, he also lacks statutory standing to pursue this
claim. Under section 405(g), a claimant may only seek review of a final decision of
the Commissioner made after a hearing. See 42 U.S.C. § 405(g). To obtain a final
decision, a claimant must exhaust administrative remedies as provided in the SSA’s
regulations. See, e.g., Sims v. Apfel, 530 U.S. 103, 106-07 (2000); see also
20 C.F.R. § 404.900(a) (setting out four-step administrative review process required
to obtain a final decision for purposes of judicial review); Weinberger v. Salfi,
422 U.S. 749, 763-64 (1975) (holding existence of a final decision made after a
hearing is central to the grant of subject matter jurisdiction under § 405(g)). Here, it
is undisputed Alford did not seek reconsideration or request a hearing before an
administrative law judge as required to exhaust his administrative remedies after the
Commissioner denied his 2012 applications. He also does not argue that any
exception to the exhaustion requirement applies here. See Heckler v. Ringer,
6
466 U.S. 602, 617-619 (1984) (discussing exceptions to exhaustion doctrine).
Accordingly, the district court lacked jurisdiction to hear a claim challenging these
decisions.
Alford apparently contends his failure to exhaust administrative remedies
regarding his 2012 claim should be excused because the SSA never told him it had
denied the claim. But Alford’s argument is inadequate because it is conclusory and
unsupported by evidence or legal authority. See, e.g., Nixon v. City & Cty. of Denver,
784 F.3d 1364, 1369-70 (10th Cir. 2015) (“A brief must contain an argument consisting
of more than a generalized assertion of error, with citations to supporting authority”
(internal quotation marks omitted)); Garrett, 425 F.3d at 841 (holding issues are
inadequately briefed if they are supported by “conclusory allegations with no
citations to the record or any legal authority”). “[W]e routinely have declined to
consider arguments that are not raised, or are inadequately presented, in an appellant’s
opening brief.” Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007). As a result,
we do not consider this contention.
3. Negligence and other claims
The district court dismissed Alford’s tort claims for lack of subject matter
jurisdiction, because Alford’s complaint did not allege that he had timely presented his
tort claims to the SSA as required by the Federal Torts Claim Act, and dismissed his
claims for breaches of contract, duty and trust on the ground that they are not cognizable
under the Social Security Act. Alford reiterates these claims in his briefs in conclusory
fashion, but does not address the district court’s holding that it lacked jurisdiction to
7
consider them. As a result, Alford failed “to explain to us why the district court’s
decision was wrong,” which is “[t]he first task of an appellant.” Nixon, 784 F.3d at 1366.
An appellant who fails in this task waives any argument for reversing the district court’s
decision. See, e.g., id. at 1368 (arguments “not adequately developed in a party’s brief”
are waived); Garrett, 425 F.3d at 841 (same). Accordingly, we conclude Alford has
waived any challenge to the district court’s dismissal of his tort and related claims for
lack of jurisdiction.
CONCLUSION
For the reasons stated above, we affirm the district court’s order dismissing this
matter for lack of subject-matter jurisdiction. We deny Alford’s “Motion to Compel” as
moot.
Entered for the Court
Gregory A. Phillips
Circuit Judge
8
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396 N.W.2d 705 (1986)
In re CONSERVATORSHIP OF W.R.L. and C.A.L., formerly known as W.R.R. and C.A.R., Minor Conservatees.
No. C7-86-1207.
Court of Appeals of Minnesota.
December 2, 1986.
*706 Timothy A. Olcott, New Ulm, for appellant Somesen, Dempsey & Schade.
Considered and decided by POPOVICH, C.J., and PARKER and HUSPENI, JJ., with oral argument waived.
OPINION
PARKER, Judge.
The law firm engaged by the minor conservatees' guardian appeals from a trial court order disallowing a claim for attorney's fees in a proceeding to terminate the parental rights of the conservatees' father. Appellant contends that Minn.Stat. § 525.703 (1984) allows payment from the conservatees' estate. We affirm.
FACTS
W.R.L. and C.A.L., both minors, are subject to a conservatorship, with the State Bank and Trust Company of New Ulm acting as conservator. A.R.L., the minor conservatees' mother, petitioned the Brown County Juvenile Court in 1982 to terminate the parental rights of R.R., the children's natural father, following his 1979 conviction of first-degree criminal sexual conduct for sexually abusing W.R.L. Although R.R. contested the action, the court terminated his parental rights in early 1984. Appellant law firm represented the conservatees' mother in this action.
In terminating R.R.'s parental rights, the trial court, in its findings of fact and conclusions of law, determined that (1) R.R. is unfit to be a parent; (2) the abuse permanently, psychologically and physically damaged W.R.L.; (3) no current father-son relationship exists between the children and R.R.; (4) there is no possibility for such a relationship; and (5) continued association could permanently harm W.R.L.'s physical and mental health.
When A.R.L. found she was unable to pay the $3,744.55 in attorney's fees, she petitioned the court to permit payment from the conservatees' estate. The trial court denied this request as well as appellant's subsequent motion for a new trial or an amended order and findings.
In a memorandum accompanying the July 8, 1986, order, the court pointed out that it addressed the question of who would pay attorney's fees in its January 3, 1982, order authorizing the law firm to proceed with the case:
It is obvious to the court that discussion was had as to who is going to pay and that Mrs. L. * * * was going to pay for her attorney to handle the matter as opposed to having the County Attorney handle it.
Appellant contends that because A.R.L.'s financial condition has changed since 1982, Minn.Stat. § 525.703 (Supp.1985) permits an award of attorney's fees from the minor conservatees' funds. Neither the letter from the law firm to the trial court nor the 1982 order is included in the trial court file. No transcripts were included with this appeal. The conserved estate amounted to $27,561.62 on December 31, 1985.
ISSUE
Did the trial court abuse its discretion in refusing to order payment of attorney's fees from the minor conservatees' estate?
DISCUSSION
Appellant argues that Minn.Stat. § 525.703, subd. 2 (Supp.1985), authorizes the court to order attorney's fees to be paid by the minor conservatees' estate in this situation. *707 This statute provides in relevant part:
Subd. 2. Lawyer or health professional. In proceedings under sections 525.54 to 525.702 a lawyer or health professional rendering necessary services with regard to the appointment of a guardian or conservator, the administration of the ward's or conservatee's estate or personal affairs or the restoration of his capacity, shall be entitled to reasonable compensation from the estate of the ward or conservatee or from the county * * * if the ward or conservatee is indigent. When the court determines that other necessary services have been provided for the benefit of the ward or conservatee by a lawyer or health professional, the court may order reasonable fees to be paid from the estate of the ward or conservatee * * *.
Id. (emphasis added).
The statute makes it clear that allowance of fees in cases such as this is left to the probate court's discretion to determine what services are necessary. The statute does not require fees for necessary services to be paid from the assets of the estate, other than for specified purposes.
Appellant relies on In Re Soltis' Estate, 177 Minn. 571, 225 N.W. 896 (1929), and In Re Kaplan's Guardianship; Collins v. Marquette Trust Co., 187 Minn. 514, 246 N.W. 5 (1932), to support the proposition that the court was required to authorize payment of attorney's fees from conservatorship funds. Appellant incorrectly relied on these cases. Collins permitted use of an incompetent ward's funds for attorney's fees incurred in an action for restoration of capacity of the incompetent. Collins, 187 Minn. 514, 517, 246 N.W. 5, 6. In Soltis' Estate the court held that a mother may be compensated from her minor children's estate for their support when her own estate is not sufficient to support them and herself adequately. Soltis, 177 Minn. 571, 574, 225 Minn. 896, 897.
The distinguishing factor between those cases and this is that both Collins and Soltis uphold a trial court's discretion to authorize payment. The question of whether the attorney's fees were for necessary services is a fact question. A probate court's determination of factual questions will not be set aside unless clearly erroneous. Minn.R.Civ.P. 52.01. In Re Conservatorships of T.L.R., C.A.R., D.M.R., 375 N.W.2d 54, 58 (Minn.Ct.App.1985).
The trial court made no finding that the fees were "necessary." On the contrary, it found that the children's mother agreed to pay for "her attorney to handle the matter as opposed to having the County Attorney handle it. It was on this basis that the Court signed the order authorizing it." We do not find any clear error in this determination.
Finally, Minn.Stat. § 525.703 cannot be read in isolation, but must be considered in relation to Minn.Stat. § 525.56, subd. 4(1) (1984), which provides:
Nothing herein contained shall release parents from obligations imposed by law for the support, maintenance and education of their children. The guardian or conservator has no duty to pay for these requirements out of his own funds. Wherever possible and appropriate, the guardian or conservator should meet these requirements through governmental benefits or services to which the ward or conservatee is entitled, rather than from the ward's or conservatee's estate. * * *
Id. (emphasis added).
We believe the purpose of this language is to safeguard the conservatees' estate from depletion. The court's order is in keeping with this purpose.
DECISION
When the guardian of minor conservatees has agreed to be responsible for attorney's fees in an action to terminate parental rights, the probate court did not abuse its discretion in disallowing payment of the fees from conservatees' estate.
Affirmed.
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Court of Appeals, First District ©Ffl«SJSO»J ESS J3(J U.S. POSTAGE » PITNEY BOWES
301 Fannin Street
Houston, Texas 77002-2066 srmwm texas
PEttAMMROR ZIP 77002
02 m
PRW&fE.USE 0001372104 JAN' 12 2015
CASE NO. 01-14-00792-CV
EUGENIA WOODARD
115 ARBOR ST #2
BAYTOW
1 NIXIE. • 773 7E 1009 >00 2/07/15
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UCL..J. vER ABLE AS ADDRESSED
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Order issued January 12,2015
In The
Court of Appeals;
For The
Jfttsft Sfctrict of %tm%
NO. 01-14-00792-CV
EUGENIA WOODARD, Appellant
V.
FORTRESS INSURANCE COMPANY, DR. RONNIE ELMORE, D.D.S.,
Appellee
On Appeal from 215th District Court
Harris County, Texas
Trial Court Cause No. 2014-09985
MEMORANDUM ORDER
OF REFERRAL TO MEDIATION
The Court determines that it is appropriate to refer this appeal for resolution
by mediation. See Tex. Civ. Prac, & Rem. Code Ann. §§154.021, .154.022(a),
154.023 (Vernon 2005). Accordingly, the Court orders that this appeal be referred
to mediation unless any party to the appeal, files an objection with the Clerk of this
Court within ten days after receiving this order. See id. § 154.022(b), ,
The parties shall choose a qualified mediator and agree on a reasonable fee
for the mediator's services.' See id, §§154.052,154.654(a) (Vernon 2005). When
the parties notify the Clerk of this Court of the name of the mediator, that person
shall be deemed appointed by the Court. See id, § 154.051 (Vernon 2005). The
parties should provide the mediator with a completed "Notification to Mediator"
and the "Appointment and Fee Report—Mediation" form. These documents can
be downloaded from the forms page of the Court's website at
http://www.lstcoa.courts.state,tx.us.
The Court sets the following deadlines:
• No later than 15 days from the date that this order is issued, the
parties shall file with the Clerk of this Court a completed "Parties'
Notification to Court of Mediator." This document can be
downloaded from the forms page of the Court's website at
http://www. 1stcoa.courts.state.tx.us.
• No later than 45 days from the date that this order is issued, the
parties shall conduct the mediation.
ii
The Court does not recommend mediators. Mediation information is
available from the Dispute Resolution Center of Harris County ((713) 755-
8274 and htto://www.co.harris.tx.us/DRC\ the Fort Bend Dispute
/Resolution Center ((281) 342-5000), the Alternate Dispute Resolution
Section of the State Bar of Texas (http://www.texasadr.ofg/). and other
••' groups. The parties are n6t required to use a mediator recommended or
listed by these groups.
No later than two dtays frorfii the conclusion of me hiediatidh,
the parties and the mediator shall advise the Clerk of this Court in :.
writing whether the partiesdid of dM not settle; me uhdeflyirig'dispute,
and the mediator shall file with the Clerk of this CourJ a completed
'^pointmeht and Fee'RepOrt---Mediatibn'' fbrrh. This docunient can
be downloaded from the forms page of the Court's website at
http://www. 1stcoa.courts.state.tx.us.
All parties, or their representative with full settlement authority, shall attend
the mediation with their counsel. The mediator shall ^encourage and assist the
parties in reaching a settlement of their dispute, but may not compel or coerce the
parties to enter into a settlement agreement. See id. § 154.053(a) (Vernon 2005).
All communications relating to the mediation are confidential and not subject to
disclosure, except as set forth by law. See id, § 154.073 (Vernon 2005). The Clerk
of this Court, however, will file this order, any objection to this order, and the
completed "Parties' Notification to Court of Mediator" and "Appointment and Fee
Report—Mediation" forms with the other documents filed in this appeal that are
available for public inspection.
Unless expressly authorized by the disclosing party, the mediator may not
disclose to either party information given in confidence by the other and shall at all
times maintain confidentiality with respect to communications relating to the
subject matter of the dispute. See id; %154.d53(b);. Unless the parties agree
otherwise, all matters, including the conductand demeanor of theparties and their
counsel during the settlement process/are confidential and may never be disclosed
to anyone, including; this Court. iSee id. § 154.053(c).
The Court will consider the agreed fee for the mediator's services to be
reasonable and tax that fee as a cost of the appeal unless the parties agree to
another method of payment. See id. § 154.054.
Nothing in this order modifies the timetables in the Texas Rules of Appellate
Procedure regarding the appellate record and briefs.
Isi Laura Carter Higlev
Justice Laura Carter Higley
Acting Individually
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790 F.2d 888
Perryv.Cabral
86-7052
United States Court of Appeals,Fourth Circuit.
5/21/86
1
E.D.Va.
AFFIRMED
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122 B.R. 568 (1990)
In re CENTRAL MEDICAL CENTER, INC., Debtor.
Bankruptcy No. 88-00715-BSS.
United States Bankruptcy Court, E.D. Missouri, E.D.
December 13, 1990.
*569 Kimball R. McMullin, Daniel E. Claggett, St. Louis, Mo., for Boatmen's Nat. Bank of St. Louis.
Steven M. Wallace, East St. Louis, Ill.
Richard G. Hughes, St. Louis, Mo., for debtor.
John A. Christy, Atlanta, Ga.
David P. Aplington, St. Louis, Mo.
MEMORANDUM OPINION AND ORDER
BARRY S. SCHERMER, Bankruptcy Judge.
INTRODUCTION
This case involves issues arising from a confirmation hearing of the First Amended and Restated Plan of Reorganization (the "Plan") filed by a group of six persons (the "Proponents")[1]. During a hearing on November 29, 1990, the parties, by agreement, presented only their arguments on all questions of law relating to plan confirmation except for those under Section 1129(a)(11). As requested by all parties in interest, the court reserved a hearing on evidence and testimony regarding this section pending the outcome of this Opinion. The objections raised by a committee of bondholders (the "Committee"), Central Medical Center, Inc. (the "Debtor"), and Boatmen's National Bank of St. Louis as Indenture Trustee ("Boatmen's"), present the following three issues:
1. Whether the Debtor and the Committee have standing to object to the Plan;
2. Whether the Plan impermissibly discriminates against the bondholders in violation of Sections 1123(a)(4) and 1229(a)(1) of the Bankruptcy Code; and
3. Whether a bond reserve fund is property of the estate, thus enabling the Proponents to utilize the fund for purposes other than that for which the fund was originally intended.
JURISDICTION
This Court has jurisdiction over the subject matter of the proceeding pursuant to 28 U.S.C. §§ 151, 157, 1334, and Local Rule 29 of the United States District Court for the Eastern District of Missouri. The parties have stipulated that this is a "core proceeding" which this Court may hear and enter appropriate judgments pursuant to 28 U.S.C. § 157(b)(2)(L).
DISCUSSION
I. Standing of the Debtor and the Committee
A. Standing of the Debtor
The Proponents argue that the Debtor lacks standing to object to the Plan. They cite In re Johns-Manville Corp., 68 B.R. 618 (Bankr.S.D.N.Y.1986) and In re Fondiller, 707 F.2d 441 (9th Cir.1983), for the proposition that a party has standing to object only to that part of a plan which affects its interests. The Debtor has objected to the Plan, alleging that it unfairly discriminates against Class 7 unsecured trade creditors and precludes Class 4 creditors from making their election pursuant to Section 1111(b). The Proponents argue that because the Debtor is not a creditor in any class, its interests are unaffected by the Plan. In addition, because the claim-holders have voted in both number and dollar amount to accept the Plan, the Proponents argue that the Debtor is really protecting the interests of its management and employees, who aren't parties in interest.[2] Thus, they claim that the Debtor does not have standing to raise objections to provisions that do not affect it.
The Debtor has proffered two reasons why it has standing to object to the Plan. First, the Debtor asserts that if the Court were to adopt the Proponents' position, no *570 debtor would ever have standing to object to a plan of reorganization proposed by another party. The Debtor argues that because it filed for Chapter 11 protection, it has an undeniable right to participate fully in the complete bankruptcy process. Objecting to various provisions of a proposed plan of reorganization is but one facet of that participation. Second, while admitting that Manville supports the Proponents' position, the Debtor argues that the test employed by Judge Lifland is derived from the test for standing on appeal. Thus, it is not a principle that is fully applicable to bankruptcy proceedings. Additionally, the Debtor claims that Manville may have been driven more by facts than law as the debtor's present situation necessitated a rapid, expeditious confirmation process.
This Court is quite certain that the Debtor has standing to object to any and all provisions of the Plan. Section 1109(b) states: "A party in interest, including the debtor, . . . may raise and may appear and be heard on any issue in a case under this chapter". The language of this statute therefore tends to negate the Proponents' assertion that this Court should determine the Debtor's standing on an issue-by-issue basis. The Proponents' argument also fails to account for the fact that any plan of reorganization by definition intimately affects the rights of the respective debtor. This is illustrated in the language of Section 1141(a), which clearly states that the provisions of a confirmed plan are binding upon the debtor. Additionally, common sense dictates that the Debtor should have standing to object to the Plan. The Debtor in the instant case is a business with an obligation to pay its creditors. The Proponents' Plan seeks to govern completely the means by which this is done. Given this fact, it is only just that the Debtor be given every opportunity to comment on a document (and generally participate in the process) that so intimately affects both its future and its rights. Finally, in the Johns-Manville case, supra, upon which the Proponents rely, Judge Lifland considered the objections to confirmation raised by all parties. In that case, he stated:
[I]n order to ensure that the interest of all parties in this proceeding have been protected, and because an objection by objection standing evaluation would be wasteful and counterproductive, this court has considered all the objections raised, regardless of the standing of the proponent. 68 B.R. at 624.
Furthermore, neither Johns-Manville nor Fondiller, supra, the other case upon which the Proponents rely, involved the issue of whether a debtor has standing to object to a plan. Thus, this Court concludes that the Debtor has standing and therefore a right to be heard on all issues relating to confirmation of the Plan.
B. Standing of the Committee
The Proponents also contend that the Committee lacks standing to object to the Plan. They argue that because the bondholders voted to accept the Plan, the Committee cannot act contrary to the wishes of the bondholders that it represents. Thus, the Proponents urge this Court to disregard the Committee's objections to the Plan. Additionally, because the bondholders have overwhelmingly voted to accept the Plan, the Proponents argue that the Committee is estopped from asserting a position that is inconsistent with that vote. Finally, the Proponents state that the Committee has a fiduciary duty to represent the interests of its constituents. In re Microboard Processing, Inc., 95 B.R. 283, 285 (Bankr.D.Conn.1989); Bohack Corp. v. Gulf & Western Industries, Inc., 607 F.2d 258, 262 n. 4 (2nd Cir.1979); Matter of Baldwin-United Corp., 45 B.R. 375, 376 (Bankr.S.D.Ohio 1983). Advocating a position contrary to that of its constituents, the Proponents argue, is a breach of that duty.
The Committee agrees that it has a fiduciary duty to the class it represents. However, it believes that part of this duty includes a duty to advise its constituents. Thus, the Committee argues that in raising its objections to the Plan, it fulfills the basic duty with which it is charged. In addition, the Committee contends that by raising its standing arguments, the Proponents' *571 are merely seeking to prevent this Court from hearing all issues related to Section 1129(a)(1).
This Court believes the Committee has standing to object to the Plan for three reasons. First, as was the case with the Debtor, the specific language of Section 1109(b) supports Committee standing. Second, while a majority of bondholders voted to accept the Plan pursuant to Section 1126(a), this Court does not ascribe to the view that because a committee's constituents have voted for pecuniary treatment under a plan, therefore they have waived their right (and thus the committee's right) to raise objections relating to Section 1129(a). In voting to accept the Plan, individual bondholders merely voted to accept the pecuniary treatment accorded them under the Plan. This does not mean that the Committee waived its rights to object to the means of implementing that treatment. Thus, in voting to accept a plan, the only provisions of Section 1129(a) under which a committee has waived its objection is subsection (a)(8), which governs plan modification and class acceptance. Finally, this Court believes that as part of upholding its fiduciary responsibility to its constituents, a committee has both a duty and an obligation to raise objections to any provision of a plan it deems violative of Section 1129(a). For example, an individual class constituent may ratify the economic treatment it receives under a given plan of reorganization. However, the plan may violate one of the subsections of Section 1129(a). This Court believes that in such a case, a committee has a duty to object to the Plan. Thus, for these three reasons this Court concludes that the Committee has standing to raise its objections to the Proponents' Plan pursuant to Section 1129(a).
II. The Bond Fund as Property of the Estate
Section 601 of the Indenture of Mortgage and Deed of Trust ("Trust Indenture") created a Bond Fund, which consists of an Interest Account, a Principal Account, and a Redemption Account. Regarding the allocation and use of the proceeds of each account, Section 603 of the Trust Indenture states:
Except as provided in Sections 602(g), 606 and 907 hereof, moneys in the Bond Fund shall be expended solely as follows: (a) moneys in the Principal Account to pay principal of the Bonds as the same mature and become due; (b) moneys in the Interest Account to pay interest on the Bonds as the same becomes due; (c) moneys in the Redemption Account to pay principal of, premium, if any, and accrued interest on the Bonds as the same become due upon redemption prior to maturity.
Section 607 of the Trust Indenture established a "Debt Service Reserve Fund" (the "Fund"), which consists of an "Institution Account" and a "Bond Proceeds Account". Moneys from these two accounts were to be used to make up deficiencies in the Principal Account and Interest Account. Finally, regarding the administration of the Trust Indenture, Section 701 of the Trust Indenture provides, in pertinent part:
All moneys deposited with or paid to the Trustee for account of the Bond Fund, . . . under any provision of this Indenture, and all moneys deposited with or paid to any Paying Agent under any provision of this Indenture shall be held by the Trustee or paying Agent in trust and shall be applied only in accordance with the provisions of this Indenture and the Agreement, and, until used or applied as herein provided, shall constitute part of the Trust Estate and be subject to the lien, terms and provisions hereof. . . .
Article III, paragraph 4.3(d) of the Plan provides that all moneys in the Fund shall be used to cover costs and expenses related to modification of the loan documents and Bond Documents and the payment of Class 1 and Class 2 claims as may be approved and allowed by this Court.[3] In addition, *572 the Plan states that $300,000 is to be disbursed from the Fund to the reorganized Debtor to provide working capital for hospital operations.
Boatmen's has proffered several arguments in its objection to the Plan's proposed use of the Fund. However, Boatmen's main argument is that the Plan violates Section 1129(a)(1) in that it does not comply with all applicable provisions of the Bankruptcy Code. Boatmen's divides this argument into two components. First, it asserts that all money in the Fund is being held for the benefit of the bondholders and is not "property of the estate", as that term is defined in Section 541(a)(1). Boatmen's claims that while courts have construed this Section broadly, Section 541(a) may not be utilized to divest effectively a party of its rightful property. See In re Butts, 46 B.R. 292 (Bankr.N.D.1985). In addition, the debtor may succeed to no greater interest than it had prior to its filing for title 11 protection. In re Baquet, 61 B.R. 495 (Bankr.D.Mont.1986); Moody v. Amoco Oil Co., 734 F.2d 1200, 1213 (7th Cir.1984). Because the Trust Indenture gave the Debtor no legal or equitable rights in the Fund, it is not property of the estate under Section 541(a). Having concluded that the Fund is not property of the estate, Boatmen's next argues that disposition of the Fund is governed solely by the Trust Indenture rather than the Bankruptcy Code. In order to use the Fund as contemplated in the Plan, Section 1102 of the Indenture requires the consent of holders of not less than 51% of the aggregate principal amount of the bonds outstanding. Because the Proponents have made no showing of such approval of an amendment,[4] Boatmen's argues that this Court may not confirm the Plan.
In response to Boatmen's argument, the Proponents first argue that the broad interpretation of Section 541(a)(1) dictates that the Fund is property of the Debtor's estate. This Section provides that "property of the estate" includes all legal or equitable interests of the debtor. Under Section 607(c) of the Indenture, if the Debtor refinances or otherwise retires all of the bonds, the balance of the Fund is returned to the Debtor. Thus, relying on In re Brown, 734 F.2d 119 (2nd Cir.1984), the Proponents argue that the Debtor's reversionary interest is an equitable interest in the Fund that makes it property of the Debtor's estate. See also In re Greer Stump Plumbing, Inc., 9 B.R. 181 (Bankr.Ariz.1981); Segal v. Rochelle, 382 U.S. 375, 86 S.Ct. 511, 15 L.Ed.2d 428 (1966).
Second, the Proponents argue that the terms of the Plan rather than the Trust Indenture govern the bondholder's acceptance of their treatment under the Plan. The Proponents contend that when the bondholders voted to accept the Plan, the Indenture was modified to become consistent with the treatment under the Plan. Specifically, it is Section 1126 of the Bankruptcy Code, rather than the original debt instrument, which permits the amendment of the terms of Trust Indenture. In addition, Section 1141(a) expressly provides that upon confirmation, all non-voting shareholders are bound by the plan. Thus, the Proponents argue that both by the terms of the Plan and by operation of law, the Committee, by virtue of the bondholders' vote, has agreed to the treatment afforded them by the Plan. Finally, pursuant to Sections 1123, 1126, 1129, 1141, and 1142, the Proponents argue that this Court may confirm and implement a plan that has been accepted and by its terms requires "modification of any indenture or similar instrument". Section 1123(a)(5)(F). They assert that,
[a]cceptance of a plan by an impaired class in accordance with Section 1126 constitutes a de jure amendment to underlying documents to make them consistent with the treatment under the Plan.
*573 Proponents' Brief at 9.
Thus, the Proponents argue that if underlying documents could be modified only in accordance with their terms, Sections 1126 and 1142 would be rendered meaningless and Section 1129(b) cramdown would be eliminated from the Code. In short, the Proponents ask this Court to find that the language of the Bankruptcy Code controls and supplants the applicable Trust Indenture provisions.
Section 541(a) of the Bankruptcy Code states that property of the estate includes "all legal or equitable interests of the debtor in property as of the commencement of the case". As this language indicates, the scope of this Section is very broad. See United States v. Whiting Pools, Inc., 462 U.S. 198, 103 S.Ct. 2309, 76 L.Ed.2d 515 (1983); In re Graham, 726 F.2d 1268, 1270 (8th Cir.1984); In re Titan Energy, Inc., 837 F.2d 325, 329 (8th Cir. 1988). However, the breadth of this language is not limitless. In Whiting Pools, the Supreme Court stated that Congress did not intend to include within this definition property of another in which the debtor holds only a "minor interest such as a lien or bare legal title". 462 U.S. at 204 n. 8, 103 S.Ct. at 2313 n. 8. Courts also have held that Congress did not intend Section 541 "to enlarge a debtor's rights against others beyond those existing at the commencement of the case". In re N.S. Garrott & Sons, 772 F.2d 462, 466 (8th Cir. 1985). Thus, a debtor may not use Section 541(a) to divest another of property to which they rightfully have title. In re Butts, 46 B.R. 292, 297 (Bankr.D.N.D. 1985).
Given that the bond indebtedness had not been completely satisfied as of the date of the Debtor's filing for Chapter 11 protection,[5] this Court agrees with the Proponents' assertion that, pursuant to section 607 of the Trust Indenture, the Debtor had a reversionary interest in the Fund as of the commencement of the case. Section 541(d) states that property in which the debtor holds a legal but not equitable interest becomes property of the estate only to the extent of such interest. In re B.I. Financial Services Group, Inc., 854 F.2d 351, 354 (9th Cir.1988). Thus, as of the commencement of its case, the Debtor held only a reversionary interest in the Fund. The Plan seeks to use the proceeds of the Fund for administrative expenses and working capital. Had the Debtor not filed for bankruptcy relief, it would not have had access to the Fund until all of its bond indebtedness had been satisfied. In short, through the bankruptcy process the Proponents seek to expand the estate's reversionary interest to a present possessory interest in the entire Fund. Thus, the Plan seeks to expand the estate's interest in the Fund from that which the Debtor held at the instant before the filing of this case. Because the Plan violates Section 541(a) due to its improper expansion of the estate's interest in the Fund, this Court must conclude that it fails to satisfy Section 1129(a).
The Plan also violates this section in that it baldly seeks to divest the bondholders of property which is rightfully theirs. Section 701 of the Trust Indenture provides, in pertinent part:
All moneys deposited with or paid to the Trustee for account of the . . . Debt Service Reserve Fund . . . and all moneys deposited with or paid to any Paying Agent under any provision of this Indenture shall be held by the Trustee or Paying Agent in trust and shall be applied only in accordance with the provisions of the Indenture and the Agreement, and, until used or applied as here provided, shall constitute part of the Trust Estate and be subject to the lien, terms and provisions hereof. (emphasis added).
Thus, the language of the Indenture makes it quite clear that the proceeds of the Fund were to be held in trust and as part of the Trust Estate for the bondholders' benefit. This Court can scarcely imagine a case in *574 which funds were more specifically held and earmarked for a given class of claimants. The Proponents have failed to show, by clear and convincing evidence, that the proceeds of the Fund are property of the estate. First Nat'l Bank of Clinton v. Julian, 383 F.2d 329, 339 (8th Cir.1967); In re Dolphin Titan Int'l, Inc., 93 B.R. 508, 512 (Bankr.S.D.Tex.1988) (citing Bank of Clinton). Because the Plan seeks to expand the Debtor's interest in the Fund and, in complete contravention of the terms of the Trust Indenture, to divert proceeds of the Fund from its intended beneficiaries to a completely new class of creditors, this Court cannot authorize, condone, or allow the Plan's proposed use of the Fund. To do otherwise would constitute "bad law and worse logic".[6]Carter Baron Drilling v. Excel Energy Corp., 76 B.R. 172, 174 (D.Colo.1987) (quoting Stone v. Hole, 75 Colo. 115, 116, 223 P. 1085 (1924)).
III. Discrimination Under The Plan
The Plan proposes to divide all creditors into seven classes. Class 4 consists of the secured claims of those persons holding bonds issued by the Health and Education Facilities Authority of the State of Missouri and secured by the Debtor's hospital facility. Any deficiency arising from these claims becomes a Class 7 claim. Class 7 consists of unsecured creditors and is composed primarily of trade creditors and any Class 4 deficiency claims. Each of these two classes has voted to accept the Plan. In order to satisfy the Debtor's indebtedness to the bondholders, the Plan establishes a mandatory redemption schedule under which a given number of bonds are randomly selected by the trustee to be redeemed each year. Redemption of the bonds is scheduled to take place between 1997 and 2011. Interest will accrue at 6% per annum from the date of confirmation through December 1, 1992, and will be paid on a contingent cash flow basis.[7] After this date, interest will be payable monthly at a rate of seven percent, and will increase to eight percent within three years.
The Debtor claims that this aspect of the Plan unfairly discriminates between bondholders in violation of Section 1123(a)(4) because under such a lottery system those bondholders who are chosen first will receive an interest rate different from those bondholders chosen to be paid later. Additionally and relatedly, those first receiving payment enjoy a greater present value of their claim than those paid later. Because under the mandatory redemption system bondholders receive different amounts of money, the Debtor contends that the Plan fails to provide the bondholders with equal treatment under Section 1123(a)(4). Thus, the Plan is rendered unconfirmable under Section 1129(a)(1).
In contrast to the Debtor's position, the Proponents argue that "same treatment" under Section 1123(a)(4) simply means that all members of a class must be subjected to the same procedure. Here, the Plan affords all bondholders the opportunity to participate in the same random lottery system. The fact that some may ultimately receive more money than others is merely a consequence of a system that was applied equally to all members of that class. Thus, by placing all class members within the same system, the Plan complies with Section 1123(a)(4) and therefore does not violate Section 1129(a)(1).
Section 1123(a)(4) provides:
(a) Notwithstanding any otherwise applicable nonbankruptcy law, a plan shall
(4) provide the same treatment for each claim or interest of a particular class, unless the holder of a particular claim or interest agrees to a less favorable treatment of such particular claim or interest;
In other words, unless otherwise consented to, a plan of reorganization must treat all *575 members of the same class equally. The parties have presented the issue of whether Section 1123(a)(4) requires a plan to subject class members to the same process for claim satisfaction, or whether that process must yield the same pecuniary result for each class member. This Court chooses the former interpretation. The Debtor argues that the Plan's "lottery" system unfairly discriminates between class members because it yields differing financial results. However, this is directed merely to the consequences of the process, something which bondholders should have contemplated when they initially voted for the Plan. If the bondholders did not favor the treatment afforded them, they should have voted against the Plan from the outset. The Plan subjects each member of the class to the same process for claim payment. In other words, the Plan subjects all members of the same class to the same means of claim determination. This Court holds that this is sufficient to satisfy the requirements of Section 1123(a)(4). Thus, in this respect the Plan does not violate Section 1129(a)(1).
CONCLUSION
Both the Debtor and the Committee have standing to raise objections to the Plan. Regarding those objections, the Plan utilizes the Fund in violation of section 541(a) (and therefore Section 1129(a)(1)) in that it seeks to enlarge the estate's interest in the Fund and seeks to divest the bondholders of property which is rightfully theirs. However, the Plan's mandatory bond redemption system, which on a yearly basis provides for random selection of bonds for repayment, does not violate section 1123(a)(4). Accordingly, it is
ORDERED that Confirmation of the First Amended and Restated Plan of Reorganization is DENIED;
IT IS FURTHER ORDERED that the parties shall appear before this Court on Wednesday, December 19 at 9:00 a.m. for additional proceedings.
NOTES
[1] The Proponents include C. Randall Faires, Donald M. Sather, Herb Fischer, Theron T. Chapman, Morton J. Kent, and W.L. Carey.
[2] The Debtor is a not-for-profit Missouri corporation.
[3] Class 1 consists of all administrative claims allowed under 11 U.S.C. § 503, including but not limited to compensation and reimbursement claims allowed under 11 U.S.C. § 330 and claims by professionals employed pursuant to 11 U.S.C. § 327. Class 2 is comprised of all allowed claims entitled to priority under 11 U.S.C. §§ 507(a)(3), (4), (5), and (6). The Debtor has represented that no Class 2 claims exist.
[4] In contrast to the terms of the Trust Indenture, which require the approval of at least 51% of the bondholders, Section 1126(c) requires approval of a plan by inter alia, "more than one-half in number of the allowed claims . . . that have accepted or rejected such plan". (emphasis added).
[5] The Debtor had approximately $22,000,000 of bond indebtedness at the time of the filing of this Chapter 11 case.
[6] While it recognizes the hardship which this decision may impose upon the implementation of the Plan, this Court refuses to rule contrary to law and logic simply to achieve a given result.
[7] The Plan contemplates the issuance of non-negotiable promissory notes to Class 4 claimants in the amount of the unpaid, accrued interest. The Proponents project that the reorganized Debtor will never pay any of the contingent interest under these notes.
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426 F.2d 633
James E. RIVERSv.UNION CARBIDE CORPORATION, Appellant.
No. 17423.
United States Court of Appeals, Third Circuit.
Argued January 19, 1970.
Decided April 30, 1970.
Timothy J. Mahoney, Krusen, Evans & Byrne, Philadelphia, Pa. (E. Alfred Smith, Philadelphia, Pa., on the brief), for appellant.
Charles F. Love, Freedman, Borowsky & Lorry, Philadelphia, Pa., for appellee.
Before FORMAN, SEITZ, and ADAMS, Circuit Judges.
OPINION OF THE COURT
FORMAN, Circuit Judge.
1
This is an appeal from a judgment of the United States District Court for the Eastern District of Pennsylvania entered pursuant to a jury verdict in favor of James E. Rivers, appellee, and against Union Carbide Corporation,1 appellant, in the amount of $6,000. The action was instituted in admiralty under the Jones Act, 46 U.S.C.A. § 688, for damages resulting from a fall by Mr. Rivers, allegedly caused by the negligence of Union Carbide, and the unseaworthiness of its vessel, the SS R. E. Wilson. The jury returned a verdict in the form of answers to interrogatories, finding that Union Carbide's vessel was not unseaworthy, Union Carbide was negligent and Mr. Rivers was contributorily negligent. There were no post-trial motions. The only issues raised by this appeal revolve around hospital records offered in evidence by Union Carbide and rejected by the District Judge.
2
At trial the following facts were elicited on direct and cross-examination from Mr. Rivers who was the only witness in his behalf to testify to the facts leading up to the accident: that he reported for work late in the afternoon of June 30, 1964, and was ordered by Mr. Finley R. Parker, the Ship's Steward, whom he met at the gangway, to return for duty the next morning, July 1st; that he left the shipyard in the company of Mr. Parker and other members of the crew stopping off for a couple of drinks; that he then invited Mr. Parker to his home for some food at which time no drinks were served; that they then proceeded to Mr. Parker's lodgings where he stated he had only one drink and that next morning, July 1, Mr. Rivers had his daughter drive him, Mr. Parker and the other crewmen to the shipyard where they boarded the vessel at 8 a. m. Mr. Rivers asserted that he first understood the ship would sail July 2 but learned soon after he was on board that it would sail in the afternoon of July 1st. He realized that he was without his gear which he asked Mr. Parker for permission to fetch from his house. When his request was denied he applied to the Master of the vessel who granted it. Upon his return to the ship he found that he had been discharged. He talked about this with Mr. Parker in the galley who remained adamant in his decision that his employment had been terminated. Mr. Rivers then decided to go ashore and discuss the problem with his union representative. He testified that
3
"just as I stepped out of the galley, over into the pantry, there came this water, and simultaneously, which means that my feet and the water came into contact, and I went up and struck this shoulder and my head, one side and I became dazed."
4
As he was falling he noticed a pantryman with "apparently a pitcher or a bucket."
5
As a result of the accident Mr. Rivers suffered a dislocation of the right shoulder and a fracture of its greater tuberosity. He remained in the hospital from July 1 to July 13 when he was discharged. He was declared to be fit for duty on October 27, 1964. Mr. Rivers denied that he was acutely intoxicated at the time he was admitted to the hospital and asserted that he did not give the hospital officials any information then for he was too dazed. He recalled, however, that on the following morning (July 2) he told the doctor how the accident occurred and that he had been drinking on the evening prior to the day of the accident.
6
Mr. Parker was the only witness called by Union Carbide to testify to the facts leading up to the accident. His recollection of the events differed sharply from that of Mr. Rivers. Concerning the incidents on the evening of June 30th, he testified that after leaving the shipyard Mr. Rivers and he stopped at a place and had four or five "pretty heavy drinks"; that during the visit at Mr. Rivers's home he, Mr. Rivers, consumed more than one drink; that later at his, Mr. Parker's, lodging Mr. Rivers had a few more drinks and that the conversation of the evening of June 30th disclosed that Mr. Rivers was aware that the ship was to sail on July 1st. Mr. Parker further testified that he denied Mr. Rivers's request to go ashore in the morning of July 1st because his services were urgently required in the mess hall but he told Mr. Rivers he would be permitted to leave the vessel in the afternoon; that upon learning that Mr. Rivers had gone ashore without his permission he discharged him and requested the union to furnish a replacement; that upon the return of Mr. Rivers, he, Mr. Parker, encountered him in the mess hall where Mr. Rivers seemed to be "half asleep"; that he smelled alcohol on Mr. Rivers's breath and noticed that he was having difficulty speaking; that he escorted Mr. Rivers to the Captain's quarters where he explained the circumstances and left; that approximately 45 minutes later he learned of Mr. Rivers's fall and went to the mess hall; that he saw no water on the deck and that the routine scrubbing had been done the day before.
7
In a statement Mr. Parker gave to the Union Carbide's representative 24 days after the accident he did not mention that Mr. Rivers was intoxicated. His explanation was that he did not feel that it was necessary because Mr. Rivers was his friend and that the statement would be on Mr. Rivers's permanent record. He conceded that immediately after the accident Mr. Rivers traversed a catwalk approximately 250 feet long without assistance.
8
* Union Carbide attempted to substantiate its witness's testimony by offering into evidence records of the United States Public Health Service Hospital at Savannah, Georgia, relating to the admission of Mr. Rivers and his subsequent treatment. A page numbered 77 of the hospital record entitled "Clinical Record, History — Part I," under the caption "Nature and Duration of Complaints (include circumstances of admission)," it was stated: "55 yr old NM [negro male] acutely intoxicated." On the same page under "History of Present Illnesses" it was stated "Started drinking tues. evening. Wed. morning arm was not broken next thing pt. [patient] remembers was waking up 7/2 [the 2 was written over a 3 or vice versa]." The page, numbered 76, entitled "Clinical Record, Narrative Summary," prepared from the day by day Clinical Record, stated under the rubric "History" that the "Patient was admitted accutely intoxicated." Mr. Rivers's counsel objected to the admission of the records as being highly prejudicial and conclusory since the statements were unsupported by facts and the "Narrative Summary" was dated three months after the accident.2 The District Judge held that the records were inadmissible, except that he did admit in evidence Mr. Rivers's proffered one page abstract of the hospital records entitled "Statement of Patient's Treatment" which contained no mention of intoxication.3
9
On appeal it is the contention of Union Carbide that the hospital records in their entirety should have been admitted into evidence. It argues that they were properly admissible under the Business Records Act.4
The Act states:
10
(a) In any court of the United States and in any court established by an Act of Congress, any writing or record, whether in the form of an entry in a book or otherwise, made as a memorandum or record of any act, transaction, occurrence, or event, shall be admissible as evidence of such act, transaction, occurrence, or event, if made in the regular course of any business, and if it was the regular course of such business to make such memorandum or record at the time of such act, transaction, occurrence, or event within a reasonable time thereafter.
11
"All other circumstances of the making of such writing or record, including lack of personal knowledge by the entrant or maker, may be shown to affect its weight, but such circumstances shall not affect its admissibility."
12
Under the statute, admissibility is predicated upon satisfying two requirements. The record must have been made in the regular course of business, and it must have been the regular course of the business to make such record contemporaneously or within a reasonable time. If these two requirements are satisfied, the document is admissible.5 All other circumstances surrounding the making of the entry may be shown to affect the weight the record should be accorded.6 Generally, when the above two requirements are met it has been said:
13
"[t]here is good reason to treat a hospital record entry as trustworthy. Human life will often depend on the accuracy of the entry, and it is reasonable to presume that a hospital is staffed with personnel who competently perform their day-to-day tasks. To this extent at least, hospital records are deserving of a presumption of accuracy even more than any other types of business entries."7
14
In the instant case, there is no suggestion that the statement contained in the "Clinical Record History" was not made in the regular course of business. It was made as part of the admission procedure. Also, there is no doubt that it is the regular practice of the hospital to keep these records. Thus, under the strict interpretation of the Business Records Act, the requirements of admissibility were satisfied.
15
There is, however, some controversy as to whether all entries of observations of a diagnostic nature are admissible.8 In several instances, hospital records which contained conclusory observations were held to be inadmissible evidence.9 Primarily, they were excluded because the diagnoses contained in the records were not based on directly observable facts and were not observations that everyone skilled in the profession would be likely to reach.10 Along this line it is argued that cross-examination is a necessary aid in exposing error, and that the Business Records Act was not intended to provide a means of allowing every entry into evidence without the benefit of testing the recorder's qualifications.11 It should be noted that these cases have not held that all diagnoses are inadmissible and even some have recognized that routine observations are permissible evidence under the statute.12
16
The most recent opinion exhaustively dealing with this question is found in Thomas v. Hogan.13 There, the question of whether a diagnosis of intoxication and the result of a scientific test to determine intoxication contained in a hospital record are admissible was fully explored. The court held that:
17
"We read the statute as supplying a presumption that diagnoses and scientific tests are properly made by qualified personnel, if the recorded information reflects usual routine of the hospital and if it is the practice to record such data contemporaneously or within a reasonable time. For example, a recorded diagnosis that a patient had pneumonia would be admissible, but a diagnosis of a rare disease might not, since it would not be one routinely made by the hospital personnel. Likewise, a record entry of a commonly performed blood test would be admissible, while an entry of the result of a scientific test infrequently done might not. When the two statutory requirements have been met, it makes no difference whether the record reflects an expression of medical opinion or an observation of objective fact. * * *"14
18
In the present case the factors which have led other courts to exclude hospital records are not present. The observation is certainly the type of observation that the trained eye of a doctor could make with reasonable accuracy. It is identical to other instances where it has been thought that hospital records are considered inherently trustworthy because of the competence attributed to hospital personnel who deal in life and death.15 Moreover, it is signed by a physician.16
19
Mr. Rivers contends that the conclusory nature of the disputed entry in this case renders it inadmissible. Such a proposition is untenable.17 The argument only may be used to affect the weight that should be accorded to the record.18
20
The outcome of this case depended in a large measure on whether the jury found that Mr. Rivers was intoxicated at the time of the accident. It was entitled to consider the hospital record which would shed light on the question.19 Indeed, the admission of only the single sheet dated July 13, 1964, the end of the hospitalization, entitled "Statement of Treatment,"20 a mere one line abstract of each of several items which were entered in detail in the regular course of activity in the hospital record only enlarges the prejudice to Union Carbide when the original hospital record was excluded. Thus, the conclusion appears inevitable that the District Judge erred in admitting the one page abstract to the exclusion of the entire hospital record as offered.
II
21
Union Carbide also assigns as error the District Judge's decision to exclude from evidence its offer of hospital records of Mr. Rivers in the years 1958, 1959, 1961, 1962, 1963 and 1965. The records note that Mr. Rivers was a chronic alcoholic before and after the accident.
22
A. Union Carbide first attempted to lay a foundation for an offer of the records when it asked Mr. Rivers on cross-examination what his drinking habits were in the years 1963 and 1964. Union Carbide claims that had he said that he was not in the habit of drinking, the records would have contradicted him thereby raising a question concerning his credibility. However, the District Judge sustained Mr. Rivers's objection to this and a line of such cross-questioning.
23
In this case, the question of Mr. Rivers's sobriety at the time of the alleged accident was crucial. The extent of his addiction to alcohol was relevant to the issue of whether he was intoxicated on the day of the accident.21 Union Carbide's proffered question would have shed some light on this.22 Moreover, the cross-examination was not necessarily limited to the precise scope of the direct examination of Mr. Rivers in which of course there was no allusion to "drinking habits." Here, Mr. Rivers was a party and not merely a witness, and susceptible to a broader cross-examination.23
24
If Mr. Rivers's answers were in the affirmative that his drinking habits were such as to indicate alcoholism, need to impeach him would be dissolved and the records looking to that purpose would be inadmissible. If Mr. Rivers's answers were in the negative to this line of questioning the records could be introduced to establish contradictory facts.24 Thus, the District Judge erred in excluding the question and the line.
25
B. Later, following an examination by Mr. Rivers of his witness, Louis Parise, a port agent of the Maritime Union, as to the economic value of his earning ability, Union Carbide offered the records on the theory that they would disclose a limitation on the ability of Mr. Rivers to perform sustained employment and tend to mitigate the damages. The District Judge also sustained an objection to this offer. In effect, Union Carbide urges that the hospital records are admissible for the purpose of furnishing the jury with a basis from which to infer that Mr. Rivers was so disabled by his chronic alcoholic condition that he would not have been able to work continuously for as long as four months, the length of time for which damages were claimed in this case. For authority supporting the contention, it offers Marquez v. American Export Lines.25 But that case in a per curiam opinion speaks only to the subject in one cryptic comment:
26
"As to the `drunkenness' point, the testimony was relevant on the issue of the plaintiff's credibility and with relation to the amount of damages sustained, namely, time plaintiff worked."26
27
The case is distinguishable from the instant one because here no damages for permanent injury are sought.
28
A second case, Mahon v. Reading Company,27 cited by Union Carbide to support this contention is equally inapposite. That case dealt with the effect of a prior accident on loss of work time. It was held that cross-examination as to the prior accident was improperly excluded because the jury could have inferred that the lost work was caused by an earlier accident. Thus the damage issue revolved around the question of whether plaintiff's lost work time was caused by the first or second accident, a situation different from the instant case.
29
Here the issue sought to be raised by Union Carbide is whether Mr. Rivers would have been able to work as long as four months by reason of his alleged alcoholic condition. Absent further foundation for the offer, it would have required the jury to arrive at a sheerly speculative conclusion, particularly since Mr. Rivers's claim was not for any permanent injury but limited to damages arising only within a four month span. Under these circumstances the District Judge's exclusion of the offer was proper.
30
The judgment of the United States District Court for the Eastern District of Pennsylvania will be reversed and the case remanded for a new trial in conformity herewith.
Notes:
1
As the suit was originally instituted Joshua Hendy Corporation was a codefendant but on the request of James E. Rivers, plaintiff, it was "separated out of the case." Appendix 16a
2
Mr. Rivers argues that the "Narrative Summary" is inadmissible because it was not recorded in a reasonable time. While it is true that it was signed some three months after Mr. Rivers's admission to the hospital, it must be recognized that the "Narrative Summary" is only a recapitulation of the entries contained in the "Clinical Record."
3
Aside from the routine identification material and dates the Statement contains the following information:
"6. CHIEF COMPLAINT AND DATE OF ONSET (If injury, give date, nature and place of accident)
Entered with injury to right shoulder which occurred 11 AM Wednesday morning aboard SS R. E. Wilson.
"7. DIAGNOSES
Dislocation of the right shoulder and fracture through greater tuberosity.
"8. OPERATIONS OR OTHER PROCEDURES
Reduction of right shoulder.
"9. REMARKS
Unable to work indefinitely. To return to clinic 7-21-64."
* * * * *
4
28 U.S.C. § 1732
5
See Johnson v. Mississippi Valley Barge Line Company, 335 F.2d 904 (3 Cir. 1964); Masterson v. Pennsylvania R. R. Company, 182 F.2d 793 (3 Cir. 1950); Bartkoski v. Pittsburgh & Lake Erie R. R. Co., 172 F.2d 1007 (3 Cir. 1949); Norwood v. Great American Indemnity Co., 146 F.2d 797 (3 Cir. 1944)
6
See Gass v. United States, 416 F.2d 767 (D.C.Cir. 1969); Cf. Gaussen v. United Fruit Company, 412 F.2d 72 (2 Cir. 1969)
7
Thomas v. Hogan, 308 F.2d 355, 361 (4 Cir. 1962). See also Medina v. Erickson, 226 F.2d 475, 482 (9 Cir. 1953)
8
See generally the cases collected in Thomas v. Hogan,supra, notes 4-15, pp. 359-360 and Hussein v. Isthmian Lines, Inc., 405 F.2d 946, 948-949 (5 Cir. 1968).
9
See note 8,supra.
10
See Skogen v. Dow Chemical Company, 375 F.2d 692, 705 (8 Cir. 1967); New York Life Ins. Co. v. Taylor, 79 U.S.App. D.C. 66, 147 F.2d 297 (1944)
11
See note 10,supra. See also dissenting opinion in Kissinger v. Frankhouser, 308 F.2d 348, 352 (4 Cir. 1962).
12
New York Life Ins. Co. v. Taylor,supra, note 10. Also, many of these courts have agreed that administrative entries such as treatment and costs are admissible. See, e. g., Missouri Pacific R. R. Co. v. Soileau, 265 F.2d 90, 94 (5 Cir. 1959); Ranger, Inc. v. Equitable Life Assurance Society of United States, 196 F.2d 968, 973 (6 Cir. 1952).
13
308 F.2d 355 (4 Cir. 1962)
14
Id. at p. 360.
15
See note 7, supra, and accompanying text. See also Washington Coca Cola Bottling Works, Inc. v. Tawney, 98 U.S. App.D.C. 151, 233 F.2d 353 (1956).
16
The controverted observation "acutely intoxicated" appears on page marked 77 "History — Part 1." No physician's signature appears until the end of the page marked 79 "History — Part 3" under the words "signature of physician" and beside the date "7-1-64." That signature is difficult to decipher. However, when comparisons are made with
(a) the name under "signature of physician" at the end of the physical examination on page marked 81;
(b) the name of the physician who requested the four laboratory reports as shown on the pages marked 83 and 84; and
(c) the signature of the physician under the title "Doctor's Progress Notes" on one of the two unnumbered pages following the page marked 84 and on "Doctor's Orders" on the page marked 87, it becomes obvious that the somewhat illegible signature is that of Dr. Gluck.
17
Two courts have held that once a hospital record has met the two requirements for admissibility, the entire record must be admitted. Harris v. Smith, 372 F.2d 806, 816 (8 Cir. 1967) and Glawe v. Rulon, 284 F.2d 495, 498 (8 Cir. 1960)
18
28 U.S.C. § 1732
19
See Reed v. Order of United Commercial Travelers, 123 F.2d 252 (2 Cir. 1941), where the court held that a hospital record containing the statement "apparently well under the influence of alcohol" was admissible. The court stated that:
"[t]he jury might have given more credence to the recorded diagnosis of the attending doctor than they were willing to give to the testimony of witnesses who testified to [the plaintiff's] drinking during the evening preceding the accident." At 253.
20
See note 3,supra.
21
Cf. McCormick on Evidence § 162 page 342 n. 11 (1954); I Wigmore on Evidence, § 96, p. 529 (3 Ed. 1940).
22
Cf. Sleek v. J. C. Penney Co., 324 F.2d 467 (3 Cir. 1963); Cranston v. Baltimore and Ohio R. R. Co., 258 F.2d 630, 632 (3 Cir. 1958).
23
Kroger Grocery & Baking Co. v. Stewart, 164 F.2d 841, 844 (8 Cir. 1947)
24
III Wigmore,supra, § 1020 p. 692.
25
384 F.2d 920 (2 Cir. 1967)
26
Id. at 921.
27
367 F.2d 25 (3 Cir. 1966)
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NOT RECOMMENDED FOR FULL TEXT PUBLICATION
File Name: 14a0558n.06
No. 13-6589
UNITED STATES COURTS OF APPEALS FILED
FOR THE SIXTH CIRCUIT Jul 25, 2014
DEBORAH S. HUNT, Clerk
UNITED STATES OF AMERICA, )
)
Plaintiff – Appellee, )
ON APPEAL FROM THE
)
UNITED STATES DISTRICT
v. )
COURT FOR THE WESTERN
)
DISTRICT OF TENNESSEE
VERLON SESSON, )
)
Defendant – Appellant. )
BEFORE: COLE, COOK, and WHITE, Circuit Judges.
PER CURIAM. Verlon Sesson pleaded guilty of being a felon in possession of a
firearm, 18 U.S.C. § 922(g). The district court sentenced him to 180 months’ imprisonment
under the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e). The dispositive issue is
whether the offense of simple robbery under Tennessee law1 qualifies as a violent felony for
sentencing enhancement purposes under the ACCA. During the pendency of this appeal, this
court held that a Tennessee robbery conviction is categorically a violent felony under both the
“use of force” and residual clauses of the ACCA. United States v. Mitchell, 743 F.3d 1054, 1066
(6th Cir. 2014), reh’g en banc denied, No. 13-5288, 2014 U.S. App. LEXIS 7264 (6th Cir. Apr.
1
Sesson pleaded guilty of simple robbery in 1986. The robbery statute in effect at that time, Tenn. Code
Ann. § 39-2-501(a) (1982) (now repealed), defined robbery as “the felonious and forcible taking from the person of
another, goods or money of any value, by violence or putting the person in fear.”
1
3, 2014), petition for cert. filed, __ U.S.L.W. __ (U.S. June 18, 2014) (No. 13-10682). Sesson
acknowledges, and we agree, that we are bound by Mitchell and must AFFIRM.2
2
Sesson argued below and argues in his opening brief that the Shepard documents presented to the district
court, the indictment and judgment pertaining to his simple robbery conviction, did not show that he necessarily
admitted through his plea the elements of the predicate offense that would show serious potential risk of physical
injury to another. Thus, he argues, the district court improperly enhanced his sentence on the basis of his simple
robbery conviction. Br. at 26-28. Sesson reiterates that he was charged originally with armed robbery but pleaded
guilty to simple robbery, and argues that without examining that plea colloquy there is no way of knowing whether
any facts supporting the elements of simple robbery were read into the record such that Sesson could admit to them.
Sesson argues that since the district court ruled the statute divisible, it should have determined which alternative
version of the offense, i.e., the “violence” or “fear” prong, was in issue by using permissible Shepard documents.
We first observe that Sesson did not dispute below that he had a robbery conviction. And on appeal Sesson
admits that the indictment and judgment from the 1986 simple robbery conviction were introduced at sentencing and
both showed that he pleaded guilty of simple robbery. Br. at 26. In any event, we need not address Sesson’s
argument that the Shepard documents in the record were insufficient to show that his conviction of simple robbery
qualified as a violent felony. As this court explained in Mitchell, it does not matter that the robbery statute is
divisible into “violence” and “fear” prongs because “neither alternative element departs from the definitions” in the
ACCA use of force or residual clauses. United States v. Mitchell, 743 F.3d at 1054, 1066 (6th Cir. 2014).
2
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
PACIFIC RIVERS COUNCIL, No. 08-17565
Plaintiff-Appellant,
D.C. No.
v. 2:05-cv-00953-
MCE-GGH
UNITED STATES FOREST SERVICE;
MARK REY, in his official capacity
as Under Secretary of Agriculture; ORDER
DALE BOSWORTH, in his capacity as
Chief of the United States Forest
Service; JACK BLACKWELL, in his
official capacity as Regional
Forester, Region 5, United States
Forest Service,
Defendants-Appellees,
and
CALIFORNIA FORESTRY
ASSOCIATION; AMERICAN FOREST &
PAPER ASSOCIATION; QUINCY
LIBRARY GROUP; PLUMAS COUNTY;
CALIFORNIA SKI INDUSTRY
ASSOCIATION,
Defendant-intervenors-Appellees.
2 PACIFIC RIVERS COUNCIL V. USFS
On Remand From The United States Supreme Court
Filed July 29, 2013
Before: Stephen Reinhardt, William A. Fletcher,
and N. Randy Smith, Circuit Judges.
ORDER
Pursuant to the June 17, 2013, order of the Supreme
Court, we remand this case to the United States District Court
for the Eastern District of California with instructions to
dismiss the case as moot in its entirety.
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44 Wis.2d 421 (1969)
171 N.W.2d 331
CHART, by Guardian ad litem, and another, Appellants,
v.
GUTMANN, by Guardian ad litem, and others, Defendants: STATE, Respondent.
No. 145.
Supreme Court of Wisconsin.
Argued October 2, 1969.
Decided October 28, 1969.
*425 For the appellants there was a brief by Curtis M. Kirkhuff of Madison, attorney, and Richard E. Sommer *426 of Rhinelander, guardian ad litem, and oral argument by Mr. Kirkhuff.
For the respondent the cause was argued by Robert D. Martinson, assistant attorney general, with whom on the brief was Robert W. Warren, attorney general.
WILKIE, J.
The question involved in this appeal as agreed to by the parties is: Whether or not a tort claimant who has exhausted the statutory-claims procedure and in addition has introduced appropriate legislation in the state legislature to appropriate compensation for injuries received, which legislation subsequently failed to pass said state legislature, may then commence suit in a circuit court in this state for the recovery of money damages against the state of Wisconsin.
This case once again presents an attack on the venerable doctrine of governmental immunity from suit by tort claimants in the absence of consent.
The Wisconsin Constitution, art. IV, sec. 27, provides:
"The legislature shall direct by law in what manner and in what courts suits may be brought against the state."
It is undisputed that since Holytz v. Milwaukee[1] there is substantive liability imposed upon the state when its agents, in the course of their employment, commit a tort. This court in that case said:
"Henceforward, there will be substantive liability on the part of the state, but the right to sue the state is subject to sec. 27, art. IV, of the Wisconsin constitution .... The decision in the case at bar removes the state's defense of nonliability for torts, but it has no effect upon the state's sovereign right under the constitution to be sued only upon its consent." (Emphasis added.)[2]
*427 Then in Forseth v. Sweet,[3] this court, recognizing that the above quoted constitutional provision was not self-executing but needed legislative implementation, found "no statutory pattern that would lead us to conclude that the legislature has expressly or impliedly acted under art. IV, sec. 27, to direct in what manner and in what courts suits may be brought against the state."[4]
The appellant here attempts to avoid the impact of Forseth by arguing that the instant case can be factually distinguished from Forseth since here, unlike Forseth, appellants have exhausted the statutory-claims procedure, including denial by the state legislature, before commencing suit against the state.
Our first inquiry must be whether there is historical authority which would permit tort claimants to sue the state. The short answer is: "No."
Sec. 285.01, Stats., as it exists now, is substantially the same as when it was first enacted in 1850.[5] This statute now provides:
"... Upon the refusal of the legislature to allow a claim against the state the claimant may commence an action against the state by serving the summons and complaint on the attorney general...."
This court in Dickson v. State[6] upheld the validity of this statute. Then in 1881 this court decided the Chicago, Milwaukee & St. Paul Ry. v. State Case.[7] In that case the plaintiff railroad company commenced an action in *428 the supreme court pursuant to the statute as it then existed.[8] The action sought to restrain the state of Wisconsin from collecting certain license fees payable by the railroad to the state of Wisconsin under the then existing law. The state of Wisconsin by the attorney general demurred to the complaint on the grounds (1) that the court had no jurisdiction of the person of the defendant or the subject matter of the action, and (2) that the complaint did not state facts sufficient to constitute a cause of action.
In its decision the court first held that since the complaint failed to allege performance of the condition precedent to bringing suit, i.e., refusal by the legislature to honor the claim, the complaint was fatally defective and this defect could be reached by general demurrer. Hence, the state's demurrer was well taken and the court said it did not consider the case on the merits.
Nevertheless, the court then went on to say that this action was not authorized by the statute.
"... It is manifest from the language of the section [sec. 3200], and from the whole chapter of which the section is a part, that the statute relates only to actions upon those ordinary claims against the state which, if valid, render the state a debtor to the claimant; and not to an equitable action brought directly against the state to restrain it from perpetrating an alleged threatened injustice." (Emphasis added.)[9]
The court also said that the above constitutional provision was not self-executing and, therefore, in order for an action of any kind to be maintained directly against the state, it must be authorized by some statute of the state.
Thus, by way of dicta in this opinion the court set forth two important principles:
*429 1. That art. IV, sec. 27 of the Wisconsin Constitution is not self-executing, but rather in order for there to be a suit against the state, it must be authorized by some statutory enactment, and
2. That the statute in question relates only to those types of claims which, if valid, would make the state a debtor to the claimant.
This dicta was subsequently elevated to the status of controlling precedent by this court's decision in Houston v. State.[10] In that case a state veterinarian had negligently tested milk cows for tuberculosis and ordered their destruction. After their destruction it was determined that the cows were healthy and not diseased. The owner submitted a claim to the legislature which was denied. Then suit was commenced in the supreme court for money damages. The state demurred on the grounds that plaintiff lacked legal capacity to sue and that the complaint failed to state a cause of action. This court in sustaining the demurrer, and citing the Chicago, Milwaukee & St. Paul Ry. Case, held that the statute, which was the predecessor of the present sec. 285.01, Stats.,
"... only relates to claims which, if allowed, render the state a debtor to the claimant.... This statute does not include a demand based upon the unlawful and tortious acts of officers or agents of the state....
"... this action for the alleged unlawful and tortious action of the officers and agents of the state cannot be maintained against the state, for the simple reason that the legislature has never authorized an action in this court for such misconduct."[11]
The recent interpretation of the Houston Case appears in Forseth v. Sweet,[12] wherein this court stated:
"... The Houston Case rests in part upon the fact that there is no substantive liability upon the state, a *430 position since modified in Holytz, but a careful reading of the case makes it clear that the decision was primarily based upon the failure of the legislature to provide a procedure for suit."[13]
The appellants in the instant case do not quarrel with this position as stated in Forseth, but rather, strenuously argue that Houston was erroneously decided in the first place and that it can no longer be cited as authority for the proposition that the legislature has failed to provide a procedure for suit against the state of Wisconsin. In other words, appellants argue that the word "claim" as it appears in the statute was erroneously limited to claims that make the state of Wisconsin a debtor to the claimant. The word "claim" they argue also encompasses tort claims and thus the same procedure used by creditor claimants to sue the state, i.e., sec. 285.01, Stats., is available to tort claimants.
Appellants contend that the proper decision in the Houston Case would have been to find that a procedure for tort claimants to sue the state did exist but that tort claimants were not within the purview of the statute granting such permission since sovereign immunity to tort liability still existed. The anomaly of a decision of this type which would say (1) yes, the state has agreed to allow tort claimants to sue it by the procedure provided in sec. 285.01, Stats., but (2) no, tort claimants cannot collect because there is sovereign immunity to tort liability, makes this position untenable.
We think that Houston was correctly decided. The fact is that this decision has been bolstered by seventy-one years of further judicial decisions[14] and seventy-one years of legislative acquiescence in this interpretation.
*431 As this court said in Zimmerman v. Wisconsin Electric Power Co.:[15]
"... Where a law passed by the legislature has been construed by the courts, legislative acquiescence in or refusal to pass a measure that would defeat the courts' construction is not an equivocal act. The legislature is presumed to know that in absence of its changing the law, the construction put upon it by the courts will remain unchanged; for the principle of the courts' decision legislative intentis a historical fact and, hence, unchanging. Thus, when the legislature acquiesces or refuses to change the law, it has acknowledged that the courts' interpretation of legislative intent is correct. This being so, however, the courts are henceforth constrained not to alter their construction; having correctly determined legislative intent, they have fulfilled their function."[16]
Thus, it would appear that sec. 285.01, Stats., does not now, nor has it ever provided a procedure by which tort claimants may sue the state.
Even now there are present legislative efforts to introduce such a procedure. There is presently before the senate of the state of Wisconsin, Senate Bill No. 6.[17] Sec. 285.02 of this proposal provides:
"285.02 Consent to Suits Against the State; Exceptions. (1) The sovereign immunity of the state from suit is waived except as specifically reserved by this chapter.
"(2) The state reserves its sovereign immunity from suit and no action may be maintained:
"(a) Against the state for the intentional torts of its employes unless the employe acted in good faith and in the scope of his employment.
"(b) Against the state or its employes, if founded on tort and based upon acts or omissions done in the exercise *432 of legislative, quasi-legislative, judicial or quasi-judicial functions.
"(c) Against the state for injuries resulting from insufficiency of maintenance of state highways, bridges or roads which the state is obligated to maintain and which a county, city or village by law or by agreement is obligated to maintain. For the purpose of this paragraph, the definition of maintenance in s. 84.07 (1) applies.
". . .
"(3) Where immunity from suit is waived, consent to be sued is granted and the liabilities, defenses and remedies of the state shall be determined as if the state were a private person, except that the state shall not be liable for punitive damages.
"(4) In any action founded on tort against the state or its employes the amount recoverable for an injury shall not exceed $100,000 for each individual, or $1,000,000 for each occurrence.
"(5) Nothing in this chapter shall be construed as an admission of liability by the state.
"(6) Where a remedy against the state is provided elsewhere in the statutes, the provisions of the statutes providing the remedy shall control and be followed."[18]
The Note following this section contains the following language:
"Section 285.02 contains the substantive provisions of ch. 285. Sub. (1) is a broad waiver of immunity from all actions including tort, contract, etc. Subs. (2) and (6) contain the only limiting provisions.
"Sub. (2) (a) differs from most state immunity statutes in that recovery against the state can be had for intentional torts in certain situations. Section 270.58 as amended by ch. 603, laws of 1965, contains a similar provision. That section provides for indemnification of state and municipal employes for any judgment provided they acted in good faith and in the scope of their employment. There are no limitations on intentional torts. To the contrary, ch. 438, laws of 1959, deleted a provision in s. 270.58 excepting false arrest actions as a basis for indemnification. This bill amends s. 270.58 by deleting all references to the `state'. (See SECTION 24)
*433 "Sub. (2) (b) adopts the limitations on suit presently found in s. 895.43 (3) (formerly s. 331.43 (3)) relating to municipal liability. This phraseology gives considerable flexibility to the court since the municipal section has had virtually no interpretation and the common law generally did not draw this distinction. Whether one is performing a judicial, quasi-judicial, legislative or quasi-legislative function should turn on whether the element of discretion exists in the performance of such function. The policy underlying sub. (2) (b) is not to deter public officials from making reasonable policy decisions requiring a certain degree of judgment.
"Sub. (2) (c) has been included to clarify the law relating to liability for defective roads. It is clear that a county may be held liable for negligent maintenance of a state highway provided the county contracted with the state highway commission to maintain the highway. See Dunwiddie v. Rock County, 28 Wis. (2d) 568 (1965). However there is doubt whether this liability would extend to the state assuming immunity were waived. This bill absolves the state from negligent maintenance by the county of state roads on the theory that the county is acting as an independent contractor. SECTION 19 of the bill amends s. 84.07 to codify the Dunwiddie decision.
". . .
"Holytz v. City of Milwaukee, 17 Wis. (2d) 26 (1962) abrogated sovereign immunity against the state (the declaration was dictum since the state was not a party to the action) but did not, and could not, waive the constitutional requirement that the legislature consent to suits against the state. Article IV, sec. 27. Sub. (3) along with sub. (2) makes it clear that these substantive and procedural barriers no longer exist.
"Sub. (4) places a monetary limitation on actions against the state. Sub. (5) makes it clear that none of the language of this chapter is an admission of state liability.
"Sub. (6) recognizes that many existing statutes provide for remedies against the state. Since many of these statutes provide for different procedures than those established in ch. 285, the existing statutes shall control. Examples of statutes not within the purview of ch. 285 are: ch. 32 relating to eminent domain; ch. 88 relating to farm drainage; ss. 267.23 and 304.21 dealing with garnishment *434 of public employes; s. 276.48 concerning partition of lands where the state is a cotenant; and various statutes authorizing suits against the state for refunds from unlawful tax collections."[19]
This proposal indicates that the legislature does not think that the present sec. 285.01, Stats., provides a procedure for tort claimants to sue the state as the appellants argue.
Our second inquiry is whether there are other provisions which, coupled with sec. 285.01, Stats., permit the bringing of a tort action against the state.
Appellants argue that certain sections of ch. 16, Stats., coupled with sec. 285.01, provide the key to the courtroom door and permit a tort claimant to sue the state.
Sec. 16.53 (8), Stats., provides in part:
"All claims of every kind against the state requiring legislative action ... shall be filed in the office of the director. The director shall examine the same, see if ordered by competent authority and if properly made, designate the fund to which they are chargeable. The director shall as soon as practicable refer such claims to the claims commission established under s. 16.007 for its findings of fact, its conclusions, and its report thereon to the legislature for action. . . ." (Emphasis added.)
Sec. 16.007 (1), Stats., creates a claims commission to:
"... receive, investigate and make recommendations on all claims presented against the state which are filed pursuant to s. 16.53 (8). No claim or bill relating to such a claim shall be considered by the legislature until a recommendation thereon has been made by the claims commission."
Finally, sec. 16.007 (6), Stats., provides in part:
"The commission shall report its findings and recommendations, on all claims referred to it, to the legislature for action. If from its findings of fact the commission concludes that any such claim is one on which the state *435 is legally liable, or one which involves the causal negligence of any officer, agent or employe of the state, or one which on equitable principles the state should in good conscience assume and pay, it shall cause a bill to be drafted covering its recommendations and shall report its findings and conclusions and submit the drafted bill to the joint committee on finance at the earliest available time...." (Emphasis supplied.)
Assuming that these sections apply, as they apparently do,[20] to tort claims, the question arises: What happens when the legislature takes not action or fails to pass the recommended bill?
Appellants contend that upon legislative failure to pass upon the claim or inaction by the legislature, sec. 285.01, Stats., is triggered and then the tort claimant can sue the state under the provisions of that statute.[21]
This argument is not without force, but in order for this court to accept it, it would have to ignore the preceding discussion wherein it was seen that sec. 285.01, Stats., was limited to those claims which, if valid, would make the state a debtor to the claimant.[22]
Nevertheless, appellants insist that all the cases which so limited sec. 285.01, Stats., can be distinguished from the instant situation, since they were decided prior to the establishment of the claims procedure of ch. 16, Stats., and/or they all involved direct suits against the state with no attempted compliance with the statutory claims procedure as here. Also, appellants argue that secs. 114.065 and 345.05 permit suits against the state pursuant to sec. 285.01, when the legislature has failed to act upon or has denied a claim arising out of damages *436 caused by the negligent operation of a state-owned aircraft or state-owned motor vehicle. Thus, appellants contend that since the state has waived its immunity to suit in those situations, it should be deemed to have waived its immunity to suit in the limited situation here presented, i.e., where a tort claimant has followed the statutoryclaims procedure and has obtained no relief.
The obvious distinction between these situations can be drawn. Both secs. 114.065 and 345.05, Stats., specifically provide that sec. 285.01 is to be utilized if the legislature fails to act or denies the claims made thereunder.[23] Moreover, both those sections deal specifically with the negligent operation of state owned and operated apparatusaircraft and motor vehicles respectively.
In ch. 16, Stats., there is no specific directive that sec. 285.01 is to be utilized if the legislature fails to act or pass the claim. Similarly, no state owned or operated apparatus is involved here.
This distinction likewise disposes of appellants' contention respecting denial of equal protection of the laws.
Appellants are in the unfortunate position of having suffered a wrong for which there is no judicial remedy.
By the Court.Order affirmed.
NOTES
[1] (1962), 17 Wis. 2d 26, 115 N. W. 2d 618.
[2] Id. at page 41.
[3] (1968), 38 Wis. 2d 676, 158 N. W. 2d 370.
[4] Id. at page 685.
[5] See ch. 249, Laws of 1850, which provided: "Sec. 1. That hereafter it shall be competent for any person or persons, deeming him, her, or themselves, or any body politic, deeming itself aggrieved by the refusal of the legislature to allow any just claim against the state, to exhibit and file a petition... with the clerk of the supreme court...."
[6] (1853), 1 Wis. 110 (*122).
[7] (1881), 53 Wis. 509, 10 N. W. 560.
[8] R. S. 1878, sec. 3200.
[9] Chicago, Milwaukee & St. Paul Ry. v. State, supra, footnote 7, at page 512.
[10] (1898), 98 Wis. 481, 74 N. W. 111.
[11] Id. at pages 487, 488.
[12] Supra, footnote 3. See also Townsend v. Wisconsin Desert Horse Asso. (1969), 42 Wis. 2d 414, 167 N. W. 2d 425.
[13] Id. at page 683.
[14] See Holzworth v. State (1941), 238 Wis. 63, 298 N. W. 163; Petition of Wausau Investment Co. (1916), 163 Wis. 283, 158 N. W. 81.
[15] (1968), 38 Wis. 2d 626, 157 N. W. 2d 648.
[16] Id. at pages 633, 634. See also Hahn v. Walworth County (1961), 14 Wis. 2d 147, 154, 109 N. W. 2d 653; Meyer v. Industrial Comm. (1961), 13 Wis. 2d 377, 382, 108 N. W. 2d 556.
[17] Referred to Committee on Finance on February 18, 1969.
[18] Senate Bill No. 6, pp. 19-21.
[19] Id. at pages 21-23.
[20] See sec. 16.007 (7), Stats., which provides: "This section shall not be construed as relieving any 3rd party liability or releasing any joint tort-feasor."
[21] See secs. 114.065 (5) and 345.05 (4), Stats.
[22] See Houston v. State, supra, footnote 10, and accompanying text.
[23] See secs. 114.065 (5) and 345.05 (4), Stats.
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711 So.2d 598 (1998)
A.W., a child, Petitioner,
v.
STATE of Florida, Respondent.
No. 98-704.
District Court of Appeal of Florida, Fifth District.
May 1, 1998.
*599 James B. Gibson, Public Defender, and James G. Whitehouse, Assistant Public Defender, Holly Hill, for Petitioner.
Robert A. Butterworth, Attorney General, Tallahassee, and Belle B. Turner, Assistant Attorney General, Daytona Beach, for Respondent.
GRIFFIN, Chief Judge.
Petitioner seeks a Writ of Habeas Corpus to obtain release from secure detention pending placement in a moderate risk residential program. We grant the writ.
This case is virtually identical to another recent case decided by this court, J.M. v. State, 705 So.2d 98 (Fla. 5th DCA 1998). In this new case, the child was committed to the Department of Juvenile Justice ["DJJ"], for placement in a moderate risk facility after disposition in several cases pending against her. At the hearing, the lower court reprised briefly the child's history, which apparently included an attack on a member of the staff at the RAP program, frequent running away and her father's apparent inability to restrain her. He urged the DJJ to put her on a "high priority" for placement in a moderate risk facility and ordered her detained for a period of five days as is permitted under section 985.215(10)(a)(1), Florida Statutes (1997). That statute further provides that if a child is committed to a low or moderate risk residential program, the DJJ may seek an order from the court authorizing continued detention for an appropriate time, not to exceed fifteen days, excluding weekends and legal holidays. Notwithstanding the lower court's expressed extreme concern about what may happen to this child if she were to be released, the DJJ evidently made no strides in effecting a placement and did not request she be further detained.
At the end of the five-day detention, the lower court conducted another hearing at which he asked the DJJ the status of her placement. The DJJ representative who attended the hearing professed to have no information concerning a tentative placement date, whereupon, the court recessed the hearing and instructed the DJJ representative to find out. Upon return, the court was advised that the projected placement date was April 27. The court then "on its own motion" ordered the child to be held in detention for an additional ten days "to allow further efforts by the DJJ to place her." The court "urge[d] the DJJ to place her and to make every effort to move her up on their waiting list to place her on or before those additional days expiring." The court specified that she was only to be held in detention for these additional ten days "to allow every effort to be made to place her with those ten days." The court set another hearing to occur on March 20, 1998. On March 20, the DJJ appeared, advised that there was still no placement and the lower court released the child. The state urges that because of this release, this case is moot and should be dismissed. Counsel for A.W., however, urges that because this is a matter capable of repetition but which tends to evade review, we should issue the writ, which we elect to do.
In our earlier decision in J.M., we attempted to clearly articulate that under section 985.215(10)(a)(1), the detention of a child committed to a moderate risk facility can be extended an additional ten days beyond the original five only if requested by the DJJ. We do not know why the legislature chose to repose this discretion solely in the DJJ nor can we be sure why the DJJ has elected not to detain this child beyond the initial five days. From the record, it appears *600 that the DJJ may have seen no point to further detention if they had no intention of placing the child prior to the end of April in any event. It is also not clear from this record whether the lower court simply ignored our decision in J.M. or whether the court believed it could be distinguished on some basis. The lower court's stated emphasis on the additional detention being ordered only for purposes of placement may reflect an effort to read such an exception into the penultimate sentence in the J.M. opinion.
We recognize that the easiest course for the lower court to have taken would have been simply to order the child released and that the actions taken by the trial court appear genuinely designed to act in the best interests of this child. Nevertheless, the statutory scheme, which reposes the power to detain this child only in the DJJ, must be adhered to. There is no exception for situations where the court believes the additional time is essential, not for punishment, but for placement. The petition for habeas corpus is granted.
PETITION GRANTED.
HARRIS and THOMPSON, JJ., concur.
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364 F.Supp. 302 (1973)
Edward L. JENKINS, Plaintiff,
v.
GENERAL MOTORS CORPORATION, a Delaware corporation, et al., Defendants.
Civ. A. No. 4384.
United States District Court, D. Delaware.
September 28, 1973.
*303 L. Vincent Ramunno, Wilmington, Del., for plaintiff.
Harvey B. Rubenstein, Wilmington, Del., for defendants.
OPINION
STAPLETON, District Judge:
This proceeding began as an action by an employee against his employer and his local union. The claim against the employer resulted from a discharge alleged to have been racially motivated. The claim against the local union was founded on an alleged breach of its duty of fair representation. Each defendant asserted that the claims against it were barred by limitations. The Court determined that the issues raised by these contentions should be heard and determined at the outset. After briefing and argument, the Court dismissed the claims against the employer as barred by limitations. As to the local, the Court construed the complaint as stating a cause of action for unlawful discrimination in the processing of plaintiff's grievance that was not necessarily barred by the applicable statute of limitations.[1]
*304 The union thereafter filed a motion to dismiss based upon the argument, among others, that plaintiff had failed to exhaust his internal union remedies. Both sides filed affidavits and the motion was briefed and argued.
The union's initial brief was filed on April 11, 1973; argument was held on July 5, 1973. At the oral argument plaintiff's counsel requested the opportunity to file additional affidavits on or before July 13, 1973 and indicating that the Court was prepared to treat the motion to dismiss as a motion for summary judgment. An opportunity for reply affidavits was afforded.
Plaintiff availed himself of this additional opportunity to file affidavits. Thereafter, he applied to the Court for leave to take discovery prior to any disposition of the defendant's motion. In response to the Court's request, plaintiff's counsel supplied the Court with a list of union officials to whom plaintiff wished to address interrogatories and set forth the scope of the interrogation which plaintiff desired to conduct. All of the requested discovery dealt with the handling of the grievance against the employer which plaintiff had filed as a result of his discharge and which the union allegedly failed to diligently pursue because of plaintiff's race.
While the local union's motion was under advisement, plaintiff was granted leave to amend his complaint and to bring in the International UAW as an additional defendant. The claims against this new defendant are similar to those against the local union and involve the processing of the same grievance.
Plaintiff was discharged by General Motors on July 9, 1968. A grievance was filed the same day. The grievance was unsuccessfully pursued through the first two steps of the grievance procedure specified in the collective bargaining agreement. An appeal was taken to the Appeals Committee. This "Step Three" procedure was initiated by an exchange of "Statements of Unadjusted Grievance" on or about September 12, 1968. The grievance remained unresolved at "Step Three" and, at some date not indicated in the record, the matter was pursued into Step Four and placed on the docket of an impartial "Umpire." Plaintiff's grievance was withdrawn by the union from the Umpire's Docket on April 12, 1970. According to the plaintiff, the union did not contact him to inform him of this withdrawal until December 29, 1970, when he received a letter in response to an inquiry which he had made concerning the status of his grievance. This suit was filed on May 22, 1972.
Under the collective bargaining agreement, the Regional Director of the International Union decides whether to take a grievance into Step Three and, if not there resolved, decides whether to press it through Step Four. The Appeals Committee which processes grievances in Step Three consists of the Regional Director or his designate, the Chairman of the local's Shop Committee or his designate, and "two representatives of Local or Divisional Management."
The local union relies upon the "exhaustion" rule stated by the Third Circuit Court of Appeals in Brady v. Trans World Airlines, Inc., 401 F.2d 87, 104 (1968):
It has been the general rule, and the rule of this circuit, that before a suit against a union for breach of its duty of fair representation may be brought in the courts, the member must first exhaust the available internal union remedies, or show an adequate reason for failing to do so. There is good reason for this rule which forestalls judicial interference with the internal affairs of a labor organization until it has had at least some opportunity to resolve disputes concerning its own legitimate affairs. . . .
The defendant local union also refers the Court to Section 13 of Article 33 of *305 the Constitution of the International Union UAW which provides:
It shall be the duty of any member or subordinate body who feels aggrieved by any action, decision, or penalty imposed upon him or it, to exhaust his or its remedy and all appears therefrom under the laws of the International Union prior to appealing to a civil court of governmental agency for redress.
An affidavit of the Administrative Assistant to the President of the UAW accurately summarized the provisions of Article 33 of the Constitution:
. . . Article 33 of the 1970 Constitution guarantees members of Local Unions the right to challenge the actions of the local union at a membership meeting. This includes wrongful Local Union actions in regard to the processing or withdrawal of contract grievances. If the membership of a Local Union rejects this challenge of its members, or if the member was unable to get the matter raised at a local membership meeting, then the member would have the right to appeal to the International Executive Board. . . . At a hearing before the Appeals Committee of the International Executive Board, the member has the right to be represented by counsel, to produce witnesses and other evidence and to submit briefs or have them submitted on his behalf. A court reporter makes a verbatim transcript of such a hearing. If the member was dissatisfied with the decision of the International Executive Board, he has the further right to appeal to the Constitutional Convention Appeals Committee or to the Public Review Board.[2]
The Public Review Board referred to here was established under Section 1 of Article 32 of the Constitution which provides:
For the purpose of insuring a continuation of high moral and ethical standards in the administrative and operative practices of the International Union and its subordinate bodies, and to further strengthen the democratic processes and appeal procedures within the Union as they affect the rights and privileges of individual members or subordinate bodies, there shall be established a Public Review Board consisting of impartial persons of good public repute, not working under the jurisdiction of the UAW or employed by the International Union or any of its subordinate bodies.
The local union's affidavits further establish that the plaintiff did not pursue any of these remedies in connection with his claim of a breach of its duty of fair representation.
Section 101(a)(4) of the Labor Management Reporting and Disclosure Act of 1959, 29 U.S.C. § 411(a)(4), provides in part as follows:
No labor organization shall limit the right of any member thereof to institute an action in any court, or in a proceeding before any administrative agency, irrespective of whether or not the labor organization or its officers are named as defendants or respondents in such action or proceeding, or the right of any member of a labor organization to appear as a witness in any judicial, administrative, or legislative proceeding, or to petition any legislature or to communicate with any legislator: Provided, That any such member may be required to exhaust reasonable hearing procedures (but not to exceed a four-month lapse of time) within such organization, before instituting legal or administrative *306 proceedings against such organizations or any officer thereof . . .
As noted by the Third Circuit Court of Appeals in Harris v. International Longshoremens Association, 321 F.2d 801, 805 (3rd Cir. 1963), "the proviso of section 101(a)(4), that a `member may be required to exhaust reasonable hearing procedures (but not to exceed a four-month lapse of time)', reflects an effort to encourage mature, democratic self-government of labor organizations through the development of internal procedures for the correction of abuses by union officials and at the same time to provide reasonably expeditious judicial relief to [aggrieved] union members."
While Section 101(a)(4) has been held to constitute a congressional endorsement of the judicially created exhaustion rule, it does not mandate that courts reject every petition where internal union remedies have not been exhausted. Where the available remedies are not "reasonable," where those remedies are not "expeditious" within the time frame of the four month proviso, where pursuit of those remedies would be futile, or where the employee has otherwise adequately explained his failure to pursue available remedies, courts will entertain the request for judicial relief.[3]
A number of courts have heretofore reviewed the internal union remedies upon which the local union here relies and found them to be fair and reasonable.[4] This Court's review of the UAW Constitution leads it to the same conclusion. Indeed, plaintiff does not dispute that the relevant provisions of this Constitution are reasonable as a general proposition. He resists summary judgment, rather, on four grounds: (1) internal union remedies would be futile here because the union must sit in judgment on its own officials and hence cannot be impartial and because the union has already demonstrated its bad faith by its delay in the prosecution of plaintiff's original grievance, (2) "there is no assurance . . . that it will take only four months to complete" those proceedings, (3) plaintiff was unaware of the remedies provided in the Constitution, and (4) plaintiff should be allowed the opportunity at trial to explain his failure to pursue these remedies.
I assume for present purposes that those responsible for handling the plaintiff's grievance against his employer did not act as they should have in processing it. The proceedings which the local union here claims should have been instituted, however, would have involved determination of a different issue by different individuals. This Court is unwilling to assume without any record basis that the members of the International Executive Board and the Public Review Board would shrug off or reject arbitrarily a claim of union discrimination on racial grounds.[5]
If courts assumed bias on the part of all union officials simply from the fact that a claim alleges wrongdoing on the part of union members or from the fact that relief against the union is sought, this would, of course, effectively erase the rule requiring exhaustion of union remedies. The court in Brady *307 made it clear that, in the absence of some evidence to the contrary, a court should not assume disqualifying bias on the part of union officials of higher rank than the alleged wrongdoers. In that case, a controversy had arisen in the plaintiff's local union, Local Lodge 1776, over a dues increase. The plaintiff alleged that as a result of his failure to comply with an illegally adopted increase, an employee of the International Association of Machinists ("IAM") had wrongfully certified to plaintiff's employer that he should be discharged for violating the union security provisions of the collective bargaining agreements. The alleged wrongdoer occupied a position similar to that of the Regional Director in this case; he was the "General Chairman of District 142, which had jurisdiction over Local Lodge 1776." The court held that the plaintiff's claim against the IAM for "hostile discrimination" was barred because of his failure to exhaust internal union remedies. The court concluded:
. . . there is no allegation or evidence that he invoked any appellate union procedures to redress the asserted unfair and arbitrary action against him by the local and district officers. Nor does he advance an adequate reason for his failure to do so. Mr. Brady's argument that it would have been futile to ask IAM to review its own dealings with him is not tenable for IAM's internal procedure provided reasonably prompt review of his contentions on union levels higher than those responsible for the decisions against him.
In this case, the International Executive Board and the Public Review Board were similarly situated with respect to those whose actions plaintiff challenges. This record suggests no reason for holding that a request to those bodies for relief would have been futile.
Plaintiff's second contention is more troublesome. The most helpful Third Circuit precedent in this area is Harris v. International Longshoremens Association, 321 F.2d 801 (3rd Cir. 1963). In that case the Third Circuit Court of Appeals reviewed the legislative history of Section 101(a)(4). The appellant there argued that "a final decision . . . [might] well not have been obtained within four months of the initiation of a proceeding." The court concluded:
On the one hand, it would not promote the stated purposes of Congress to insist that a union member pursue an internal remedy which could not, by its very nature, result in a decision within the period chosen by Congress as a reasonable norm. [Citations omitted] On the other, it would all but nullify any requirement of resort to internal remedies if union members were permitted to ignore reasonable procedures established by unions for internal adjustment of grievances because of mere uncertainty whether a final decision could or would be reached within the statutory period. As long as there is likelihood that some decision will be forthcoming within the four-month period, and the aggrieved member has not shown that he will be harmed by being required to seek such a decision, [citations omitted] the purposes of the act require that judicial intervention be withheld until the member has given the internal grievance procedures the chance to operate which Congress deemed to be reasonable. . . .
* * * * * *
. . . Throughout [the legislative history] the emphasis is upon a member's seeking or actually receiving internal relief during the statutory period, not upon the establishment of procedures which shall guarantee a final decision within that period before a member may be required to utilize them.
The court in Harris held that where there is "a substantial likelihood" of a union member's securing some decision within the four month period and he shows no substantial prejudice which might have resulted from his pursuing his union remedies, Section 101(a)(4) is no bar to application of the exhaustion *308 rule. If "substantial likelihood" in this context means more probable than not, the Harris case does not on this record compel a conclusion that plaintiff's second contention must be rejected. It is entirely possible that a decision would have been received from the Executive Board within four months; on the other hand, it appears entirely possible that it would not have been forthcoming during that period. In short, the record shows the existence of reasonable internal union procedure which, if pursued with diligence by those involved, could have produced a decision within four months.[6] There is no record evidence, however, from which this Court could conclude that a decision within four months would have been more likely than not.
The question presented by the motion of the local union is, therefore, whether Section 101(a)(4) bars application of the exhaustion rule where plaintiff has shown no prejudice and there appears a realistic possibility, though not probability, that a decision could be obtained within the four month period. I conclude that the answer to this question should be in the negative.
The purpose of the exhaustion rule, endorsed by Congress in Section 101(a)(4), is to give unions an initial opportunity to deal with their own internal problems. The legislative history of the Section reviewed in Harris indicates that the intent was to require union members to pursue the remedies for the statutory period and to allow them to seek redress thereafter. Where it appears clear or probable that relief cannot be secured within the statutory period, there is good reason to excuse resort to internal union remedies. Where there is a realistic possibility that a decision will be rendered within the period, however, there is no compelling reason to excuse the failure of a union member to make a good faith effort at seeking union redress.
It is difficult, at best, to prove that a hypothetical proceeding, had it been instituted, would probably have resulted in a decision within four months. Such a showing requires precise advance speculation about a decisional process which may prove either brief or protracted, depending on the nature of the individual case and a host of other factors. Yet, on these facts, a decision for the plaintiff would place on the union the burden of making that showing.[7] Over the long term, effectuation of the "first opportunity" policy which Section 101(a)(4) sought to foster, would depend, under such a ruling, upon unions being able to successfully shoulder that difficult burden. A decision for the union in this context would not, however, require that aggrieved union members shoulder a similar burden. They can assure their right to judicial remedy by the simple expedient of affording the union the four month opportunity Congress wished it to have.
I hold that where a union member has not made a good faith, four month effort to pursue reasonable internal union remedies and provides the Court with no evidence indicating that those remedies would be unlikely to produce a decision within a four month period, Section 101(a)(4) does not preclude application of the exhaustion rule.
*309 In support of the third of his counter-attacks, plaintiff has submitted an affidavit stating as follows:
2. That he is 44 years of age and has an eighth grade education.
3. He has no knowledge and was never made aware either by the Union or by the United States Equal Employment Opportunities Commission or by personal counsel, of any internal Union remedies which were available to him if he had a grievance against the Union. Furthermore, to the best of his knowledge, he has never read nor has he ever been shown a copy of the Constitution of the International Union of the United Automobile Workers, nor is he aware of any requirement that a member must exhaust internal remedies before initiating suit in civil court.
If the objective of the exhaustion rule of the Brady case is to be effectively served, I do not believe that ignorance without more can be held to constitute an "adequate reason for failing to" exhaust administrative remedies.[8] In Donahue v. Acme Markets, Inc., 54 L.C. 11,413 (E.D.Pa.1966), Judge Kirkpatrick had a similar situation before him, though one which was somewhat more appealing from the plaintiff's point of view. I concur in his conclusion:
. . . An affidavit filed by the plaintiff states that he did not know and was never informed of any internal methods of appeal, was never given and had never seen a copy of the Constitution, and was told by the Union representative at the meeting of January 31 that he could do nothing further. I do not think that this is a showing that he has "taken all reasonable steps available to (him) within the (Union's) internal structure." See Gainey v. Brotherhood, [46 L.C. ¶ 18,030] 313 F.2d 318, 322. He was a member of the Union and bound by its Constitution and not justified in remaining in ignorance of the provisions governing his own union or, in fact, of relying on a statement by an officer that there was nothing he could do.
Finally, plaintiff's fourth argument is likewise without merit. There is nothing inherent in the question presently before the Court which should occasion any departure from the usual rules governing motions for summary judgment. Summary judgment has frequently been granted in similar situations.[9] Plaintiff has been given ample opportunity to file affidavits in opposition to defendant's motion. The reasons for his failure to pursue his internal union remedies are matters within his own knowledge and do not require discovery. Indeed, his requested discovery would not be directed to any matter upon which this decision rests.
Plaintiff has failed to exhaust available internal union remedies. Accordingly, the local union is entitled to a summary judgment of dismissal.[10]
NOTES
[1] See Jenkins v. General Motors, et al., 354 F.Supp. 1040 (D.Del.1973).
[2] The union has supplied the Court with a copy of the UAW Constitution adopted in April of 1970. Prior case law indicates that, for present purposes, the provisions of the Constitution existing immediately theretofore were not materially different. E. g., Anderson v. Ford Motor Co., 319 F.Supp. 134 (E.D.Mich.1970).
[3] E. g., Detroy v. American Guild of Variety Artists, 286 F.2d 75 (2nd Cir. 1961); Harris v. International Longshoremens Association, 321 F.2d 801 (1963).
[4] Bsharah v. Eltra Corporation, 394 F.2d 502 (6th Cir. 1968); Anderson v. Ford Motor Co., 319 F.Supp. 123 (E.D.Mich.1970); Imbrunnone v. Chrysler Corp., 336 F.Supp. 1223 (E.D.Mich.1971); Koydra v. Sicard Industries, Inc. (N.D.N.Y.1972); Esquivel v. Air Conditioning Products Co., 82 L.R.R.M. 2001 (E.D.Mich.1972); Harris v. Continental Aviation Corp., 79 L.R.R.M. 2398 (N.D. Ohio 1972).
[5] I assume, without deciding, that the involvement of the Chairman of the local union's Shop Committee and the Regional Director in this matter would warrant an inference that the local union membership might feel extraneous pressures in passing upon plaintiff's complaint against the local union.
[6] Section 8 of Article 33 of the UAW Constitution provides that "The International Executive Board shall use its best efforts to render its decision within sixty (60) days of receipt of the appeal by the International President (i. e. the event which initiates an appeal from an adverse decision at the local union level)."
[7] The unions could, of course, attempt to ease this burden by inserting definite time limits for hearings and decisions. The union procedures of this kind are designed, however, to handle a wide range of problems, some simple and some quite complex. Such fixed limitations, accordingly, would not appear to be realistic alternatives. The sixty day, "best efforts" provision referred to above (footnote p. 12) would seem to be about as far as a union can reasonably be expected to go in this direction.
[8] Brady v. Trans World Airlines, Inc., 401 F.2d 87, 104 (3rd Cir. 1968).
[9] Bsharah v. Eletra Corp., 394 F.2d 502 (6th Cir. 1968); Foy v. Norfolk & Western Ry. Co., 377 F.2d 243 (4th Cir. 1966); Anderson v. Ford Motor Co., 319 F.Supp. 134 (E.D.Mich.1970); Koydra v. Sciard Industries, Inc., (N.D.N.Y.1972); Harris v. Continental Aviation Corp., 79 L.R.R.M. 2398 (N.D. Ohio 1972).
[10] Plaintiff has not requested the Court to consider a "stay of these proceedings as appropriate relief rather than a dismissal. This is perhaps attributable to the fact that plaintiff appears clearly to have lost his right to pursue his internal union remedies as a result of his delay in seeking such relief. If this be the fact, it would not alter any of the conclusions which the Court has here reached. Cf. Anson v. Hiram Walker & Sons, Inc., 248 F.2d 380 (3rd Cir. 1957).
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IN THE SUPREME COURT OF NORTH CAROLINA
No. 337A17
Filed 6 April 2018
THOMAS JACKSON and KORLETTER HORNE JACKSON
v.
CENTURY MUTUAL INSURANCE COMPANY
Appeal pursuant to N.C.G.S. § 7A-30(2) from the unpublished decision of a
divided panel of the Court of Appeals, ___ N.C. App. ___, 803 S.E.2d 868 (2017),
affirming an order of summary judgment entered on 3 June 2016 by Judge Susan E.
Bray in Superior Court, Forsyth County. Heard in the Supreme Court on 12 March
2018.
Botros Law, PLLC, by Tony S. Botros, for plaintiff-appellants.
Cranfill Sumner & Hartzog LLP, by Susan K. Burkhart, for defendant-
appellee.
PER CURIAM.
AFFIRMED.
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946 F.2d 122
UNITED STATES of America, Plaintiff-Appellee,v.Michael Rudolph CRUZ, Defendant-Appellant.
No. 90-5871
Non-Argument Calendar.United States Court of Appeals,Eleventh Circuit.
Oct. 30, 1991.
James R. Gailey, Federal Public Defender, Miguel Caridad, Asst. Federal Public Defender, Miami, Fla., for defendant-appellant.
Linda Collins Hertz, Kathleen M. Salyer, Anne Ruth Schultz, Asst. U.S. Attys., Miami, Fla., for plaintiff-appellee.
Appeal from the United States District Court for the Southern District of Florida.
Before FAY, HATCHETT and ANDERSON, Circuit Judges.
HATCHETT, Circuit Judge.
1
In this appeal involving the interplay between sections of the Sentencing Guidelines, we reject the appellant's claims and affirm the district court.
2
Before his arrest in 1990, Michael Rudolph Cruz served as a special agent with the Internal Revenue Service (IRS), Criminal Investigation Division (CID). IRS Agent Michael Anderson asked Cruz to assist with an investigation referred to as "Target." The Federal Bureau of Investigation (FBI) considered Target a major narcotics importer and distributor, and the IRS was investigating Target for tax evasion. Cruz's assistance and involvement in the investigation into Target's illegal activities was limited to his service as a Spanish interpreter. IRS Agent Anderson briefed Cruz on the investigation before Cruz met with a witness and Cruz had the ability and opportunity to examine Target's file.
3
On February 17, 1990, Cruz met with Target at his business, in Miami, Florida, and offered to provide Target with information relating to the IRS and FBI's investigations in exchange for money. After the meeting, Target contacted his lawyer who in turn notified an Assistant United States Attorney.
4
On April 6, 1990, a grand jury sitting in the Southern District of Florida indicted Michael Rudolph Cruz in a five-count indictment charging the following: Count I, obstructing justice in violation of 18 U.S.C. § 1503; Count II, bribery by a public official in violation of 18 U.S.C. § 201(b)(2)(C); Count III, stealing government property in violation of 18 U.S.C. § 641; Count IV, extortion by a United States officer or employee in violation of 18 U.S.C. § 872; and Count V, bribery by an IRS agent in violation of 26 U.S.C. § 7214(a)(9). Cruz pleaded guilty to Count II of the indictment pursuant to a written plea agreement.
5
At sentencing, Cruz argued that the government had not sufficiently established the cocaine amount involved and challenged the applicability of section 2X3.1 of the Sentencing Guidelines. In addition, Cruz argued at sentencing that he was entitled to a two-point reduction for acceptance of responsibility in accordance with Sentencing Guideline § 3E1.1. Cruz's contentions were fully explored in an evidentiary hearing. After the hearing, the district court found that Cruz knew about the cocaine involved and had contacted Target at his business. Additionally, the district court found that Target was involved with 700 to 800 kilograms of cocaine per month, and therefore, the probation officer had correctly applied the offense level for 1,500 kilograms of cocaine. The district court also denied Cruz's section 3E1.1 request for a two-level reduction for acceptance of responsibility.
6
Thus, the district court determined that Cruz's final base offense level was thirty-two, and his criminal history category was I. These determinations placed Cruz in the Sentencing Guideline's range of 121 to 151 months of imprisonment. The district court sentenced Cruz to 121 months of imprisonment, three years of supervised release, and a $50.00 assessment.
ISSUES
7
On appeal, Cruz raises the following two issues: (1) whether the district court was clearly erroneous in its determination as to the amount of cocaine involved in the case; and (2) whether the district court was clearly erroneous in concluding that he had not accepted responsibility under section 3E1.1 of the Sentencing Guidelines.1
DISCUSSION
8
Cruz contends that the district court was clearly erroneous in its determination as to the cocaine amount involved in the case. In his view, the court could not make a reasonable approximation because the government did not prove by a preponderance of the evidence sufficient facts to allow the court to make this determination. Cruz argues that because the court unreasonably approximated the cocaine amount, it incorrectly applied section 2X3.1 of the Sentencing Guidelines.
9
The guidelines for the offense to which Cruz pled guilty, bribery by a public official, are found in section 2C1.1 of the guidelines. Although section 2C1.1(a) sets the base offense level for "bribery by a public official" at ten years, subsection (c)(1) states:
10
if the bribe was for the purpose of concealing or facilitating another criminal offense or for obstructing justice in respect to another criminal offense, apply section 2X3.1 (accessory after the fact) in respect to such other criminal offense, if the resulting offense level is greater than that determined above.
11
U.S.S.G. § 2C1.1(c). Since Cruz's bribe was "for the purpose of concealing or facilitating" the importation and distribution of cocaine, section 2C1.1(c)(1) is triggered and section 2X3.1 must be cross-referenced.
12
Section 2X3.1(a) states as follows: "Base offense level: 6 levels lower than the offense level for the underlying offense, but in no event less than 4, or more than 30." U.S.S.G. § 2X3.1(a). In order for section 2X3.1 to apply to Cruz, the offense level for the underlying offense must be greater than sixteen in compliance with section 2C1.1(c)(1).2 Since Target's underlying offense involved the unlawful importation, trafficking, and possession of cocaine, section 2D1.1 of the guidelines is applicable in determining the base level for the underlying offense.3
13
Since Target's underlying offense relates to a conspiracy or an attempt to commit an offense involving a controlled substance, section 2D1.4 gives the district court the authority to approximate the cocaine amount. Application note 2 of section 2D1.4 states:
14
Where there is no drug seizure or the amount seized does not reflect the scale of the offense, the sentencing judge shall approximate the quantity of the controlled substance. In making this determination, the judge may consider, for example, the price generally obtained for the controlled substance, financial or other records, similar transactions in controlled substances by the defendant, and the size or capability of any laboratory involved.
15
U.S.S.G. § 2D1.4, comment note 2. This court held in United States v. Ignancio-Munio "that due process does not require the government to prove disputed facts at sentencing beyond a reasonable doubt." United States v. Ignancio-Munio, 909 F.2d 436, 439 (11th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 1393, 113 L.Ed.2d 449 (1991). Thus, the government was only required to prove the amount of cocaine involved in Target's underlying offense by a preponderance of the evidence.
16
Section 2X3.1 applies because at the sentencing hearing, the government presented incontrovertible testimony that at one point, Target was dealing in 700 to 800 kilograms of cocaine a month. In addition, the Assistant United States Attorney in charge of prosecuting Target's case, pointed out that although the investigation is still pending, Target is believed to have been involved in the distribution of over 1,500 kilograms of cocaine. The district court could have supported Cruz's thirty base offense level with a factual finding of only 50 kilograms of cocaine.4 Since the record contains adequate evidence that Target distributed 700 to 800 kilograms of cocaine in a month, Cruz's contention that he should not have been exposed to the maximum level allowed by section 2X3.1 is without merit. The uncontroverted testimony regarding Target's distribution of 700 to 800 kilograms of cocaine per month; the Assistant United States Attorney's statement that Target was involved in the distribution of over 1,500 kilograms of cocaine; and the millions of dollars in narcotics proceeds attributed to Target provided a sufficient basis for the court's factual finding that 1,500 kilograms of cocaine was involved.
17
This court held in United States v. Wilson that the district court's finding as to the amount of drugs involved in a particular offense is a factual determination which must be affirmed unless it is clearly erroneous. United States v. Wilson, 884 F.2d 1355, 1357 (11th Cir.1989). Cruz has failed to establish that the district court's factual finding was clearly erroneous, and his argument that section 2X3.1 should not have been applied fails.
18
Finally, Cruz contends that his guilty plea renders the district court's factual finding that he did not accept responsibility in compliance with section 3E1.1 of the Sentencing Guidelines clearly erroneous. Although section 3E1.1(a) states, "if the defendant clearly demonstrates a recognition and affirmative acceptance of personal responsibility for his criminal conduct, reduce the offense level by two levels," subsection (c) states, "a defendant who enters a guilty plea is not entitled to a sentencing reduction under this section as a matter of right." U.S.S.G. § 3E1.1. Nevertheless, an unqualified guilty plea combined with a truthful admission of involvement in the offense can constitute significant evidence of the acceptance of responsibility. See § 3E1.1 application note 3; United States v. Rodriguez, 905 F.2d 372, 374 (11th Cir.1990). Since the burden of proof as to the entitlement to this reduction rests with Cruz, he must present more to demonstrate that he has accepted responsibility. See United States v. Wilson, 884 F.2d 1355, 1356 (11th Cir.1989).
19
In order to satisfy his burden, Cruz argues that in addition to pleading guilty, he cooperated with the IRS and FBI's investigation of persons believed to be stealing seized money. However, this court has held that a defendant's cooperation with the government does not automatically entitle him to a reduction for acceptance of responsibility. See United States v. Castillo-Valencia, 917 F.2d 494, 500 (11th Cir.1990), cert. denied, --- U.S. ----, 111 S.Ct. 1321, 113 L.Ed.2d 253 (1991). Cruz must still present more to demonstrate that he has accepted responsibility in accordance with section 3E1.1.
20
In his final attempt to satisfy his burden, Cruz contends that nothing in the record indicates that he was less than truthful with the government or the court in his testimony. This court held in Castillo-Valencia, that
21
because demonstration of whether or not the defendant has personally accepted the responsibility for his criminal conduct requires a consideration of both objective factors and subjective considerations of the defendant's demeanor and sincerity, the district court's determination will not be overturned unless it is without foundation.
22
Castillo-Valencia, 917 F.2d at 500. The record demonstrates that the district court was concerned with Cruz's demeanor and sincerity. The court commented that "Mr. Cruz seems to be taking this in a rather light fashion today." (R.2:19). Section 3E1.1 application note 5 states:
23
The sentencing judge is in a unique position to evaluate a defendant's acceptance of responsibility. For this reason, the determination of the sentencing judge is entitled to great deference on review.
24
U.S.S.G. § 3E1.1 application note 5; see United States v. Pritchard, 908 F.2d 816, 824 (11th Cir.1990).
25
In addition, the district court properly considered Cruz's denial of important facts in determining whether or not he was entitled to the two-level reduction for acceptance of responsibility. This court held in United States v. Rodriguez that
26
if an unqualified guilty plea can serve as evidence of a defendant's acceptance of responsibility, see § 3E1.1 application note 3, then logically the qualifications a defendant states in his guilty plea may be evidence that he has not fully recognized and accepted personal responsibility for the crime.
27
United States v. Rodriguez, 905 F.2d 372, 374 (11th Cir.1990). Cruz had the opportunity to present evidence in support of his contentions and to counter the government's evidence, but he failed to take advantage of these opportunities. The determination of whether Cruz is entitled to an acceptance of responsibility reduction is a factual determination which must be affirmed unless it is clearly erroneous. United States v. Campbell, 888 F.2d 76, 78 (11th Cir.1989), cert. denied, --- U.S. ----, 110 S.Ct. 1484, 108 L.Ed.2d 620 (1990). The district court's conclusion that Cruz has not accepted responsibility for his conduct is not clearly erroneous.
CONCLUSION
28
Accordingly, the district court's judgments are affirmed.
29
AFFIRMED.
1
Cruz does not raise the technical violation of United States v. Jones, 899 F.2d 1097, 1102-03 (11th Cir.), cert. denied, --- U.S. ----, 111 S.Ct. 275, 112 L.Ed.2d 230 (1990). This court held in Jones that
the district court must give the parties an opportunity not only to resolve the objections contained in the addendum but also--after the court states its factual findings, applies the guidelines, and imposes sentence--to object to the district court's ultimate findings of fact and conclusions of law and to the manner in which the sentence is pronounced. This will serve the dual purpose of permitting the district court to correct on the spot any error it may have made and of guiding appellate review.
Jones, 899 F.2d at 1102. In the instant case, Jones is applicable to Cruz because the district court summarily concluded the sentencing hearing without giving Cruz the opportunity to object to its ultimate factual findings and legal conclusions. We note the technical violation of Jones, but the record is sufficient for meaningful appellate review.
2
Section 2C1.1(c)(1) requires that the offense level be greater than ten after the application of section 2X3.1(a) which lowers the underlying offense six levels. Hence, the offense level must be greater than sixteen minus six
3
Under section 2D1.1, possession of 100 grams of cocaine carries a base offense level of sixteen. The government must fail to prove that at least 100 grams of cocaine were involved in Target's underlying offense in order for Cruz to succeed in his argument that section 2X3.1 is not applicable. The government's failure to establish the involvement of at least 100 grams of cocaine would yield a base offense level equal to or less than ten after the application of section 2X3.1. Since the resulting offense level would not be greater than the base offense level of ten, section 2C1.1(c)(1) would prevent the application of section 2X3.1
4
Cruz's base offense level was thirty before the two-point adjustment in accordance with section 3B1.3 which states, "If the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission of concealment of the offense, increase by two levels." U.S.S.G. § 3B1.3
Under section 2D1.1, possession of fifty kilograms of cocaine carries a base offense level of thirty-six which would be reduced to thirty upon the application of section 2X3.1.
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STATE OF MICHIGAN
COURT OF APPEALS
MARY MA, UNPUBLISHED
June 15, 2017
Plaintiff-Appellant,
v Nos. 330380 and 332462
Berrien Circuit Court
LAWRENCE J. WEBER, MICHAEL H. LC No. 14-000175-CD
CARLSON, RANDY F. EBRIGHT, GREGORY J.
HILL, MICKEY L. BELLVILLE, and KEITH A.
STEINMETZ,
Defendants-Appellees.
Before: GADOLA, P.J., TALBOT, C.J., and GLEICHER, J.
PER CURIAM.
Plaintiff, Mary Ma, was employed by American Electric Power, Inc. (AEP) for eleven
years prior to her termination in 2011. On June 17, 2011, AEP discharged Ma. After AEP ended
the employment relationship, Ma filed suit in federal district court. Specific factual findings
were made after a bench trial1 that, when applied in this matter, require that summary disposition
be granted in defendants’ favor. We conclude that these factual findings must be given
preclusive effect in this case. Thus, in Docket No. 330380, we affirm the trial court’s decision to
grant summary disposition in defendants’ favor.
In Docket No. 332462, defendants appeal as of right from a subsequent order of the trial
court denying their motions for attorney fees and for the taxation of certain costs. Finding no
errors in the trial court’s decision, we likewise affirm this order.
I. FACTS
Ma was hired by AEP in 2000 as a mechanical engineer. She worked at the Donald E.
Cook Nuclear Plant (the Plant), which is operated by AEP. Eventually, she became a supervisor,
first of AEP’s operations group, and in 2009, of AEP’s nuclear safety analysis group. At the
time Ma’s employment with AEP ended, her direct supervisor was defendant Mickey Bellville,
1
Ma v American Electric Power, Inc, 123 F Supp 3d 955 (2015).
-1-
the Plant’s Nuclear Engineering Manager. Bellville reported to defendant Randy Ebright, the
director of the Plant’s Engineering organization. Ebright reported to defendant Mike Carlson,
the Plant’s Vice President. Carlson reported to the highest ranking officer of the Plant, Chief
Nuclear Officer Larry Weber, another defendant to this suit. Defendant Keith Steinmetz was the
Plant’s Nuclear Fuels supervisor. Defendant Gregory Hill was another engineer employed at the
Plant.
During her tenure with AEP, Ma received many satisfactory performance reviews. In
2009, she received a “Key Contributor Award,” a highly selective award that only a few
employees receive each year. However, as the federal district court explained:
On the other hand, Ma also had a series of interpersonal conflicts with
other employees at AEP, particularly those who worked in groups other than her
own. These interpersonal conflicts went beyond just an uncomfortable
relationship between colleagues, and seriously compromised the ability of some
individuals to work together. For instance, Ma and Supervisor Keith Steinmetz
had interpersonal conflicts during Ma’s time at AEP. . . . Ma also did not get
along with Engineer Greg Hill; their relationship was marked by several
altercations indicating that the two had no personal affection for each other.
Again, this animosity seriously undermined the ability of these individuals to
work together . . . .
This created untenable circumstances that adversely affected the groups’
ability to collaborate on error resolution, and in turn, the promise of safe working
conditions at AEP. The interpersonal conflicts served to cultivate the impression
among many of Ma’s colleagues that she was not a team player. For instance,
Chief Nuclear Counsel and Regulatory Affairs Manager Jim Petro testified that
when it came to Ma, “everything in her view was an us and a them.” . . . And
[Human Resources] specialist Tiffany Rydwelski testified that she was concerned
that “people wouldn’t go to [Ma] for concerns because [Ma] would deflect or take
criticism of someone challenging her work.” . . .
. . . In fact, the Court observes that interpersonal issues concerning Ma
dated all the way back to 2003, and that the frequency of Ma’s incidents
concerning interpersonal conflicts increased in the time leading up to her
termination. The interpersonal conflicts occurred often enough, over a sustained
period of time and with a similar enough pattern for the Court to conclude that Ma
is the common denominator of the troubled relationship, and the root source of the
inability to forge constructive working relationships amidst interpersonal
conflict.[2]
The events that ultimately led to Ma’s discharge were described by the federal district
court as follows:
2
Id. at 958-959.
-2-
In March 2010, Engineer Hill and Supervisor Steinmetz had raised a
safety concern relating to Ma. They believed that Ma and her group may have
engaged in misconduct. In particular, they believed that Ma had intentionally
withheld information regarding an evaluation for a fuel reload project. Supervisor
Steinmetz reported his safety concern to one of AEP’s managers. The manager
did not take action. Director Ebright also investigated the matter, and determined
that there was no evidence to support the contention that Ma had improperly
withheld information.
In May 2010, Ma raised a safety concern by filing a Condition Report. In
the Condition Report, Ma notified AEP’s high-level management that some of her
fellow engineers may have intentionally withheld information from the Nuclear
Regulatory Commission. Specifically, Ma indicated that these engineers were
allegedly aware of certain errors concerning a nuclear safety analysis but failed to
notify the Nuclear Regulatory Commission of those errors, which, if true, would
constitute a violation of Nuclear Regulatory Commission regulations. In the
report, Ma specifically listed the names of those who she believed were in the
wrong, including Engineer Hill.
The accusations between the individuals continued, and the conflict
continued to escalate during the summer and fall of 2010. In July 2010,
Supervisor Steinmetz raised another safety concern through AEP’s Employee
Concerns Program, which raised the possibility that Ma was an unethical
employee. In October 2010, Ma raised another safety concern through AEP’s
Employee Concerns program, claiming that Supervisor Steinmetz had
inappropriately yelled at her as retaliation for her having written the May 2010
Condition Report. Tensions continued to rise, to a point where the employees
were loath to even speak to one another. In the backdrop, some leadership
changes took effect at AEP. In particular, in June 2010, Vice President Carlson
and Director Ebright had taken over AEP’s increasingly-fractured engineering
organization.
On October 15, 2010, Vice President Carlson, Director Ebright, and HR
Specialist Tiffany Rydwelski met with Ma. During the meeting, Ma discussed
Engineer Hill’s and Supervisor Steinmetz’s inappropriate conduct and hostility
towards her. Ma expressed that she felt that AEP had not properly dealt with this
situation. From there, on October 22, 2010, Vice President Carlson met with
Engineer Hill. Engineer Hill discussed what he felt was Ma’s inappropriate and
hostile conduct. He expressed that he felt that AEP had not properly dealt with
this situation. According to Vice President Carlson, this series of meetings
confirmed to him that the work environment at the Cook Power Plant required
immediate improvement.
On November 2, 2010, Ma met with HR Specialist Rydwelski, Vice
President Carlson, Supervisor Yu Shen, Manager Mickey Bellville, Engineer Hill,
and Supervisor Steinmetz. According to Vice President Carlson, he attended the
meeting with the goal of making his expectation known to everyone that all sides
-3-
of the interpersonal conflict needed to exhibit professionalism going forward. He
stressed the need for each side to effectively communicate with each other and to
treat each other with respect, and to put past feelings of resentment or anger
behind them for the sake of the group. HR Specialist Rydwelski also testified that
she raised her concerns about the interpersonal issues with Engineer Hill,
Supervisor Steinmetz, and Ma, and stressed the need for everyone to engage in
professional behavior.
Later that same day, Ma sent an email to her Manager, Yu Shen, with
several others copied, including HR Specialist Rydwelski, in which Ma
commented that she heard Engineer Hill was “smearing her reputation.” HR
Specialist Rydwelski testified that after reading the email, she believed Ma was
continuing “to go down the behavioral path of, you know, us/them, win/lose, Greg
Hill. It’s not the cohesive collective teamwork we would like to see in an email.”
. . . Vice President Carlson felt that the tenor of Ma’s email violated his direction.
As a result, the following day, Vice President Carlson again met with Ma, and
further warned her that continued noncompliance with his expectations would
lead to discipline.
Despite the meetings, AEP senior management continued to feel that Ma
was failing to act as a team player and therefore violating Vice President
Carlson’s directions. During December 2010, Ma was involved in additional
interpersonal conflicts with other AEP employees, namely, ones concerning
whether it was appropriate for AEP employees to call Ma over the weekend; these
conflicts involved more emails sent by Ma that AEP’s management found
objectionable. In January 2011, Ma received a letter indicating that AEP’s
management believed that her workplace communications were unprofessional.
The issue raised in the letter culminated in a meeting later that month.
On January 28, 2011, Director Ebright and HR Specialist Rydwelski again
met with Ma to address the ongoing interpersonal problems between her and
others, including Engineer Hill. HR Specialist Rydwelski testified that during the
meeting, Ma described a hypothetical situation in which “Greg Hill kills my
baby.” HR Specialist Rydwelski testified that because Ma made that strange
comment, she referred Ma to the AEP’s Employee Assistance Program, which
was designed to assist employees who had professional or interpersonal
shortcomings and enable them to correct their behavior. As part of the Employee
Assistance Program, Ma attended counseling sessions focused on developing her
interpersonal skills.
In February 2011, the Employee Assistance Program required that Ma
take a period of leave from AEP. Following this period of leave, Ma returned to
work at AEP. On February 10, 2011, Director Ebright and HR Specialist
Rydwelski again met with Ma. During this meeting, they again stressed the need
for Ma to comply with the expectations set at earlier meetings. HR Specialist
Rydwelski testified that for a period after Ma returned, she did not hear any
negative reports about Ma’s behavior. . . . However, HR Specialist Rydwelski
-4-
also testified that when she did discuss Ma’s performance with others at a later
time, her conclusion was that Ma had not corrected her behavior in the time
following her experience in the Employee Assistance Program and her period of
leave. . . .
Around this time, there were some personnel changes at AEP. Manager
Shen, the engineer to whom Ma reported, left AEP to take a job in the Middle
East. This meant that Ma began reporting to Manager Bellville. Manager
Bellville now reported to Director Ebright. And Manager Ebright now reported to
Vice President Carlson.
Also around this time, AEP tasked a group of engineers with finding a
solution to certain “LOTIC2” errors concerning what the engineers termed a
“LOCA” safety analysis. Ma, as well as her husband, was a member of this
group. The engineers selected for the group were to identify the problem and
offer various resolution proposals to solve the errors. This complicated nuclear-
science issue involved many engineers over a period of several months. At first
Ma led the group, but at some point, Manager Bellville, due to what he believed
were flaws in Ma’s leadership style, transferred the leadership of the group to
Engineer John Zwolinski.
The process of fleshing out the issues concerning the “LOTIC2” errors
culminated in the Spring and early Summer of 2011. By her account, Ma offered
three resolution proposals. Senior management began to coalesce around one
resolution proposal, which several engineers referred to as the “relay failure”
proposal. The “relay failure” proposal was not one that Ma had suggested. Ma
had reservations about the “relay failure” proposal because she believed that it
was unsafe and would violate Nuclear Regulatory Commission requirements, and
she raised some variant of those concerns with the other members of the team.
Despite Ma’s reservations, on June 3, 2011, Vice President Carlson announced
that AEP would implement the “relay failure” proposal.
The parties disagree on how best to categorize Ma’s behavior as a member
of that group, her reluctance to embrace the “relay failure” proposal, and her
eventual refusal to participate in the solution. Ma described her conduct as
repeatedly raising her concern that the “relay failure” proposal was illegal or
unsafe. In contrast, many others—including Plant Manager Shane Lies, Vice
President Carlson, and the eventual leader of the group, Engineer Zwolinski—
described Ma’s conduct as being disagreeable and contrarian, and denied that Ma
ever raised concerns of illegality. To be sure, Chief Nuclear Counsel and
Regulatory Affairs Manager James Petro testified that if an AEP employee
genuinely believed that a proposed solution was potentially illegal, AEP would
accord the employee the right to not work on it. But AEP management, namely
Vice President Carlson, viewed Ma’s actions as rooted not in safety concerns, but
insubordination. On June 13, 2011, several AEP employees—including Plant
Manager Lies, Vice President Carlson, Director Ebright, and Chief Nuclear
-5-
Counsel Petro—met to discuss, and ultimately agreed with, Vice President
Carlson’s recommendation that Ma be fired from AEP.
On June 17, 2011, AEP terminated Ma’s employment. Chief Nuclear
Counsel Petro testified that Ma was terminated for a combination of
insubordination and unresolved personal relationship issues within the workplace,
which in his view “culminated in the refusal to work.” . . . Director Ebright
testified that the altercation “led me to the conclusion that the things we had been
coaching, counseling, demonstrating, you know, fostering with Mary, the
information that we had provided and the written warning where we met with her
when she returned from the time away from the facility, . . . she had not followed
through on her commitment to rehabilitate her behavior, and that basically it was
destructive to our facility and consequential to our nuclear safety culture.” . . . HR
Specialist Rydwelski testified that “there was a recommendation of separation
from the company because of her lack of working on a work product, which was a
sign of continued behavior deficiency . . . . In my view there were behaviors that
were exhibited by [Ma] that were not recoverable. She didn’t internalize
them.” . . .
After Ma’s employment was terminated, she raised her concern about the
“relay failure” proposal directly with the Nuclear Regulatory Commission. In
response to Ma’s correspondence, the Nuclear Regulatory Commission conducted
an investigation. Ultimately, the Nuclear Regulatory Commission did not find
sufficient evidence to support Ma’s claim that the “relay failure” proposal
violated federal standards.[3]
In January 2013, Ma filed suit in federal district court, naming AEP, Ebright, and Carlson
as defendants. Against AEP, Ma alleged that she was discharged as retaliation for her reports of
safety concerns, a violation of 42 USC 5851(a).4 Ma raised a claim of tortious interference with
business relations, a claim brought under Michigan law,5 against Ebright and Carlson. On June
17, 2013, AEP, Carlson, and Ebright filed a motion arguing that the court lacked jurisdiction
over the statutory claim, an argument ultimately rejected by the court. The motion also asked
that the district court refuse to exercise supplemental jurisdiction6 over the tortious interference
3
Id. at 959-962. In the letter written to Ma explaining the basis for her discharge, Ebright wrote,
“Your continuing behavioral deficiencies and your failure to correct your performance is
unacceptable. Based on your failure to improve and sustain your performance at an acceptable
level, your employment is terminated effective today.”
4
Under this statute, “[n]o employer may discharge any employee or otherwise discriminate
against any employee with respect to his compensation, terms, conditions, or privileges of
employment because the employee . . . notified his employer of an alleged violation of this
chapter or the Atomic Energy Act of 1954 (42 USC 2011 et seq.)[.]” 42 USC 5851(a)(1)(A).
5
See, e.g., Dalley v Dykema Gossett, 287 Mich App 296; 788 NW2d 679 (2010).
6
See 28 USC 1367.
-6-
claim. This particular argument was raised in response to the district court’s request that the
parties brief the issue.
The district court agreed that it should not exercise supplemental jurisdiction over the
tortious interference claim, explaining:
In the first place, the state-law claim introduces new party defendants, namely
Defendants Carlson and Ebright. Neither of these defendants is a proper
defendant on the sole federal claim, and their addition to the case for a purely
state-law claim (on which the corporate defendant is not a proper party defendant)
needlessly complicates the case. Second, the theory of state-law liability asserted
is, at best, underdeveloped in Michigan law. Tortious interference claims are not
novel in their own right, but their potential application to supervisors in a
statutory employment discrimination case against the common employer of the
plaintiff and the defendant supervisors raises a series of novel issues under
Michigan common law. . . . Michigan courts—not federal courts—should lead the
way in developing the parameters of any common law theory of liability against
supervisors in the context of statutory employment law claims against an
employer because common law developments have the potential to impinge on
the prerogatives of the Michigan legislature in creating the parameters of the
statutory claim. Finally, the federal statute at issue here does not create any claim
against supervisors. . . . Rather, Congress created a claim solely against the
corporate employer. Proceeding with a state common law tort against the
supervisors risks eroding Congress’ decision not to impose ERA liability on
supervisors. Accordingly, the Court declines to exercise supplemental
jurisdiction over Count III of Ma’s complaint.
On June 17, 2014, Ma filed suit in Berrien Circuit Court against Weber, Carlson, Ebright,
Hill, Bellville, and Steinmetz. Ma’s complaint alleged that in 2004, she raised safety concerns
regarding analyses performed by other workers, specifically Hill and Steinmetz. She alleged that
these two men resented her for raising these concerns and retaliated against her by making false
statements about her to others. The complaint explained that no disciplinary action was taken
against Ma at that time because others at the company rewarded her for her actions and would
not permit any disciplinary action against her. However, Ma’s complaint alleged that in 2010,
Weber, Carlson, and Ebright began “abetting and engaging in retaliation” against her as well.
Ma alleged that her employment was eventually terminated “because she voiced her concerns
about safety issues to the company and refused to sign off on reports to government regulatory
agencies that she believed were false and intended to conceal serious unsafe, and thereby
contrary to the interests of the Cook Plant, conditions at the plant.” The complaint raised a
single count of tortious interference with business relations against all six defendants.
In Ma’s federal suit, a bench trial was held in November 2014.7 The federal district court
issued detailed findings of fact and conclusions of law on August 18, 2015.8 The district court
7
Ma, 123 F Supp 3d at 956.
-7-
concluded that Ma was discharged not as retaliation for her reports of safety violations, but
“because of the interpersonal challenges that were plainly evident during the entirety of Ma’s
tenure at AEP.”9 The court explained that Ma “was unable or unwilling to work collaboratively
as part of a team; she wanted to be an island of righteousness in her own world. . . . Ma did not
effectively talk, collaborate, and otherwise work with many of her co-workers at the Cook Power
Plant, and . . . it was this shortcoming that caused AEP to terminate her employment.”10 The
court found Ma’s theory of the case, that “there was some sort of conspiracy at AEP, and that her
detractors long-intended to see her fired from the company[,]” was not supported by the
evidence.11
After this ruling, defendants moved for summary disposition in Berrien Circuit Court.
Among several arguments, defendants contended that there was no evidence that their actions
were taken solely to further their own personal interests, with no benefit to AEP. The trial court
declined to consider the federal district court’s findings. However, the trial court granted the
motion, concluding that Ma failed to present any evidence that would allow a jury to conclude
that defendants were acting solely for their own benefit and without any benefit to AEP.
After the trial court granted the motion, defendants argued that Ma’s complaint was
frivolous and sought attorney fees pursuant to MCR 2.114 and MCL 600.2591. Defendants also
sought certain deposition expenses as taxable costs. The trial court denied both requests.
II. DOCKET NO. 330380
In Docket No. 330380, Ma challenges the trial court’s order granting summary
disposition in defendants’ favor pursuant to MCR 2.116(C)(10). Albeit for reasons different than
those explained by the trial court, we agree that defendants are entitled to summary disposition.
A. STANDARD OF REVIEW
This Court reviews de novo a trial court’s decision on a motion for summary
disposition.12 As our Supreme Court has explained:
A motion under MCR 2.116(C)(10) tests the factual sufficiency of the
complaint. In evaluating a motion for summary disposition brought under this
subsection, a trial court considers affidavits, pleadings, depositions, admissions,
and other evidence submitted by the parties, MCR 2.116(G)(5), in the light most
favorable to the party opposing the motion. Where the proffered evidence fails to
8
Id. at 955-967.
9
Id. at 964.
10
Id.
11
Id. at 965.
12
Maiden v Rozwood, 461 Mich 109, 118; 597 NW2d 817 (1999).
-8-
establish a genuine issue regarding any material fact, the moving party is entitled
to judgment as a matter of law.[13]
As is explained below, the lynchpin to our analysis is our application of the doctrine of collateral
estoppel. We review de novo “issues concerning the application of the doctrine of collateral
estoppel.”14
B. ANALYSIS
We begin by examining the theory of liability pleaded in Ma’s complaint. As this Court
has explained:
The elements of tortious interference with a business relationship are the
existence of a valid business relationship or expectancy, knowledge of the
relationship or expectancy on the part of the defendant, an intentional interference
by the defendant inducing or causing a breach or termination of the relationship or
expectancy, and resultant damage to the plaintiff.[15]
It is also well established that “[t]o maintain a cause of action for tortious interference,
the plaintiff must establish that the defendant was a ‘third party’ to the contract rather than an
agent of one of the parties acting within the scope of its authority as an agent.”16 In this matter,
all of the defendants are employed by AEP, a party to the business relationship at issue. Thus, it
is incumbent on Ma to demonstrate that these individuals were not acting within the scope of
their authority as employees. In this regard, it is “settled law that corporate agents are not liable
for tortious interference with the corporation’s contracts unless they acted solely for their own
benefit with no benefit to the corporation.”17
Ma’s theory of the case is that defendants collaborated to effectuate her dismissal through
false accusations of improper behavior in the workplace. Ma contends that the source of
animosity and conflict at AEP was the fault of others. At its core, Ma’s theory represents her
interpretation of the ongoing interpersonal conflicts that existed during her tenure with AEP. But
as the federal district court found, “Ma’s personal interpretation is heartfelt, but wrong.”18 The
federal court found that Ma indeed lacked the interpersonal skills necessary to function
effectively in the workplace.19 The court explained that “Ma’s approach created an untenable
13
Id. at 120.
14
Barrow v Pritchard, 235 Mich App 478, 480; 597 NW2d 853 (1999).
15
Dalley, 287 Mich App at 323 (quotation omitted).
16
Lawsuit Fin, LLC v Curry, 261 Mich App 579, 593; 683 NW2d 233 (2004).
17
Reed v Mich Metro Girl Scout Council, 201 Mich App 10, 13; 506 NW2d 231 (1993).
18
Ma, 123 F Supp 3d at 964.
19
Id.
-9-
situation for AEP’s senior management, as the different groups of engineers could not work
together to develop solutions to safety problems. . . . AEP’s Senior Management had not only the
right, but also the responsibility, to put this conflict to an end.”20
When applied to Ma’s tortious interference claim, these factual findings require
dismissal. As explained, to prevail in this matter, Ma must be able to demonstrate that
defendants were acting solely for their own benefit and with no benefit to the employer when
they purportedly interfered with her employment relationship.21 Ma attempts to do so by
contending that her discharge was the result of false accusations levied against her regarding her
interpersonal skills, motivated by a personal desire on the part of defendants to see her
discharged. And if Ma were correct, perhaps one could conclude that defendants were acting
solely for their own benefit in making these accusations. If it were true that Ma conducted
herself properly in the workplace and that accusations to the contrary were false, the inference
could be drawn that by making these accusations, defendants were acting for their own personal
reasons, not to benefit AEP.22 But as the federal district court found, Ma did, in fact, lack
interpersonal skills.23 The court explicitly found that Ma’s theory—that there was a long-
standing conspiracy of sorts aimed at effectuating her discharge—was “not supported by the
evidence.”24 These findings preclude a conclusion that defendants were acting solely for their
own benefit.
The district court’s findings also foreclose liability for a second reason. Ma bears the
burden of establishing that defendants’ allegedly tortious conduct caused the termination of her
employment relationship.25 To establish causation, Ma would be required to demonstrate that
20
Id. at 965.
21
Reed, 201 Mich App at 13.
22
In the trial court, Ma contended that she did not “have to prove exactly what [d]efendants’
personal interest was.” She then hypothesized various reasons why each defendant may have
been motivated to interfere with her employment relationship. Defendants contend that this is an
admission that Ma cannot establish that they acted solely in furtherance of their personal
interests. We do not necessarily take the same view. Clearly, Ma must demonstrate that
defendants were acting “solely for their own benefit with no benefit to the corporation.” Id. But
acting solely for one’s own benefit and acting with no benefit to the corporation are two sides to
the same coin. Had Ma been able to demonstrate that defendants were acting without any benefit
to the corporation, a rational fact-finder could have also concluded that they were acting for
solely personal reasons, even if those precise reasons were not known. We are of the opinion
that Ma is, in that sense, correct in stating that it is not necessary to prove the precise personal
interest of each defendant.
23
Ma, 123 F Supp 3d at 964.
24
Id. at 965.
25
Dalley, 287 Mich App at 323.
-10-
defendants’ conduct was a proximate cause of her damages.26 Proximate cause requires proof of
two elements: “(1) cause in fact, and (2) legal cause.”27 “The cause in fact element generally
requires showing that ‘but for’ the defendant’s actions, the plaintiff’s injury would not have
occurred.”28 The federal district court’s factual findings conclusively demonstrate that the harm
suffered by Ma—the termination of her employment relationship with AEP—was not caused by
a purported conspiracy or collaborative effort by defendants to push her out of the company.
Rather, AEP terminated her employment because of her inability to effectively communicate and
work with others. These findings preclude Ma from establishing that but for any purportedly
tortious conduct by defendants, she would have remained employed with AEP.
The remaining question, then, is whether the federal district court’s factual findings must
be given preclusive effect in this matter. As this Court has explained:
Collateral estoppel precludes relitigation of an issue in a subsequent,
different cause of action between the same parties when the prior proceeding
culminated in a valid final judgment and the issue was actually and necessarily
determined in that prior proceeding. Collateral estoppel is a flexible rule intended
to relieve parties of multiple litigation, conserve judicial resources, and encourage
reliance on adjudication.
Generally, application of collateral estoppel requires (1) that a question of
fact essential to the judgment was actually litigated and determined by a valid and
final judgment, (2) that the same parties had a full and fair opportunity to litigate
the issue, and (3) mutuality of estoppel.[29]
This Court has explained that before collateral estoppel may be applied, “the ultimate
issue to be concluded must be the same as that involved in the first action.”30 “The issues must
be identical, and not merely similar.”31 Ultimately, the dispositive issue in the federal case was
whether Ma’s discharge was the result of retaliation due to her reports of suspected safety
concerns, “or because of her continued pattern of interpersonal and professional shortfalls[.]”32
26
Alar v Mercy Mem Hosp, 208 Mich App 518, 530; 529 NW2d 318 (1995) (explaining that
with regard to “all purportedly tortious conduct,” an actionable claim requires proof of proximate
causation).
27
Id.
28
Skinner v Square D Co, 445 Mich 153, 163; 516 NW2d 475 (1994), overruled in part on other
grounds by Smith v Globe Life Ins Co, 460 Mich 446, 455 n 2; 597 NW2d 28 (1999).
29
Rental Props Owners Ass’n of Kent Co v Kent Co Treasurer, 308 Mich App 498, 529; 866
NW2d 817 (2014) (citations omitted).
30
Id.
31
Id.
32
Ma, 123 F Supp 3d at 964.
-11-
In this matter, the very same question is at issue. Ma’s theory is that she was discharged not due
to a lack of interpersonal skills, but because defendants sought to retaliate against her due to her
reports of safety concerns. Distilling the matter further, the relevant factual findings are that the
accusations against Ma were true, and that her termination indeed resulted from her lack of
interpersonal skills, not a nefarious collaborative effort against her. These are precisely the same
findings that foreclose Ma’s theory of liability in the instant matter.
It is clear that the issue was litigated and determined by the federal district court. “To be
actually litigated, a question must be put into issue by the pleadings, submitted to the trier of fact,
and determined by the trier.”33 Clearly, the cause of Ma’s discharge was put into issue by her
federal complaint. Because of the nature of the statutory claim raised by Ma, the trial court was
required to address whether she would have been discharged absent any engagement in protected
activities, such as her reports of safety concerns.34 This, in turn, required the federal district
court to determine the reason for her discharge.35 After considering the evidence and arguments
presented by the parties, the court found that Ma was terminated “because of the interpersonal
challenges that were plainly evident during the entirety of Ma’s tenure at AEP.”36 The reason for
Ma’s discharge was a question put into issue by the pleadings, submitted to the trier of fact, and
determined by that trier. Thus, the issue of the reason for Ma’s discharge was actually litigated
in the federal district court. It is equally clear that the trial court’s determination was essential to
the judgment. Simply put, the federal court could not have resolved the matter without
determining the reasons for Ma’s discharge. That was the core issue to be determined in that
matter.37
33
Rental Props, 308 Mich App at 529.
34
Ma, 123 F Supp 3d at 962.
35
Id. at 964.
36
Id.
37
Ma contends that the district court’s finding regarding the true reason for her discharge was
not, in fact, necessary to that court’s decision. Ma argues that AEP needed only demonstrate that
her discharge was not caused by her protected activities; she claims that it was not also necessary
to prove the actual cause of her discharge. This is an incorrect statement of the law, a fact of
which Ma seems aware. As the Sixth Circuit Court of Appeals explained in its decision
affirming the federal district court’s ruling in Ma’s federal case:
Ma challenges the district court’s conclusion that AEP met its burden,
maintaining that because only a subset of the senior management team testified, it
was impossible for the court to discern AEP’s true reason for terminating her.
Although she aptly notes that an employer must present evidence of its actual
rather than hypothetical motivations, see Passaic Valley Sewerage Comm’rs v.
U.S. Dep’t of Labor, 992 F.2d 474, 482 (3d Cir. 1993), Ma points to no authority
necessitating that all decisionmakers testify. Instead, the statute requires AEP
provide “clear and convincing” evidence of its motivations. See 42 U.S.C. §
-12-
Ma also had a full and fair opportunity to litigate the issue in the federal district court. As
explained, the question of the reason for her discharge was put into issue due to the nature of the
claim asserted by Ma. She was afforded a lengthy bench trial, where she was free to present
testimony and evidence regarding the issue. Under these circumstances, Ma was clearly given a
full and fair opportunity to litigate the cause of her termination.
The trial court declined to consider the federal district court’s decision, reasoning that the
defendants in that action were not the same defendants named in Ma’s circuit court case. The
trial court’s reasoning was incorrect. Defendants assert collateral estoppel defensively, and our
Supreme Court has held that mutuality of estoppel is not required when the doctrine is asserted
defensively.38 This means that where a plaintiff has had the full and fair opportunity to litigate
an issue, if that issue is decided against that plaintiff, he or she may not relitigate the very same
issue, whether against the same or different defendants.39 Thus, it is irrelevant that the federal
matter did not involve the same defendants as Ma’s circuit court case.
That said, we agree that the doctrine could not have been properly asserted at the
summary disposition phase. This is because it was not until after Ma filed the present appeal that
she exhausted all avenues of appellate review of the federal district court’s decision. Until all
appellate review was exhausted, the federal district court’s decision was not final, and thus,
could not be given preclusive effect.40 But at this point, the federal district court’s decision has
been affirmed by the Sixth Circuit Court of Appeals,41 and the United States Supreme Court has
denied Ma’s petition seeking a writ of certiorari.42 Thus, the decision is now final. There are no
barriers to the application of collateral estoppel in this case.
Ma contends that “the determination of whether collateral estoppel should be applied is
whether doing so would result in substantial justice.” She then argues that, for various reasons,
substantial justice would not be served by the application of collateral estoppel. Ma derives such
a rule from our Supreme Court’s decision in Monat v State Farm.43 The principal holding of
Monat is that where collateral estoppel is asserted defensively, mutuality of estoppel is not
5851(b)(3)(B). [Ma v American Elec Power, Inc, 647 Fed App’x 641, 644 (CA 6,
2016) (emphasis supplied).]
38
Monat v State Farm Ins Co, 469 Mich 679, 695; 677 NW2d 843 (2004).
39
Id. at 692 (“A party is entitled to his day in court on a particular issue, and is not entitled to his
day in court against a particular adversary”).
40
Leahy v Orion Twp, 269 Mich App 527, 530; 711 NW2d 438 (2006) (“A decision is final
when all appeals have been exhausted or when the time available for an appeal has passed”).
41
Ma, 647 Fed App’x 641.
42
Ma v American Electric Power, Inc, ___ US ___; 137 S Ct 242; 196 L Ed 2d 135 (2016).
43
Monat, 469 Mich 679.
-13-
required.44 In explaining its rationale for adopting this rule (and responding to the dissent), the
Court stated:
Further, the dissent, at least in part, apparently bases its position on the
notion that fairness, in the context of defensive collateral estoppel, is determined
only on the basis of symmetry. . . . However, as explained in Bruszewski v United
States, 181 F2d 419 (CA3, 1950), the achievement of “substantial justice,” rather
than symmetry, is the proper measure of fairness in the context of defensive
collateral estoppel:
This second effort to prove negligence is comprehended by
the generally accepted precept that a party who has had one fair
and full opportunity to prove a claim and has failed in that effort,
should not be permitted to go to trial on the merits of that claim a
second time. Both orderliness and reasonable time saving judicial
administration require that this be so unless some overriding
consideration of fairness to a litigant dictates a different result in
the circumstances of a particular case.
The countervailing consideration urged here is lack of
mutuality of estoppel. In the present suit [the plaintiff] would not
have been permitted to take advantage of an earlier affirmative
finding of negligence, had such finding been made in [his first suit
against a different defendant]. For that reason he urges that he
should not be bound by a contrary finding in that case. But a
finding of negligence in [the plaintiff’s first suit] would not have
been binding against the [defendant in a second suit] because [that
defendant] had no opportunity to contest the issue there. The
finding of no negligence on the other hand was made after full
opportunity to [the plaintiff] on his own election to prove the very
matter which he now urges a second time. Thus, no unfairness
results here from estoppel which is not mutual. In reality the
argument of [the plaintiff] is merely that the application of res
judicata in this case makes the law asymmetrical. But the
achievement of substantial justice rather than symmetry is the
measure of the fairness of the rules of res judicata. [Id. at 421.][45]
Simply put, our Supreme Court did not adopt an overriding rule that to apply collateral
estoppel, “substantial justice” must also be established. Rather, the Court explained that when
evaluating whether it is fair to permit the defensive use of collateral estoppel without mutuality,
the primary concern is substantial justice, not symmetry. Our Supreme Court found that where a
44
Id. at 695.
45
Monat, 469 Mich at 693-694 (alterations in original).
-14-
plaintiff has had the full and fair opportunity to litigate an issue once, the application of collateral
estoppel against that plaintiff in a suit involving a different defendant best achieves “substantial
justice,” and thus, is fair.46 Ma was afforded such an opportunity, and is not entitled to a second
bite at the proverbial apple in this suit.
Even if “substantial justice” were a controlling standard, we would not find Ma’s
arguments availing. Ma essentially contends that defendants caused her suit to be split between
two courts. She thus assigns the responsibility for any duplicative judicial efforts to defendants
alone. Ma’s argument focuses on the fact that in the federal case, Ebright and Carlson argued
against the exercise of supplemental jurisdiction. She contends that these individuals
vociferously argued for the dismissal of the tort claim on the basis that it bore no relationship to
the federal statutory claim. She also discusses at length the fact that defendants in this matter did
not seek to join the case with the federal suit under FR Civ P 20, which allows for the permissive
joinder of claims.
We are not persuaded. It is clear that with respect to the exercise of supplemental
jurisdiction, the district court requested briefing on the issue from the parties. Thus, it is not
entirely fair to view this as a situation where Ebright and Carlson forcefully sought to have the
claim against them dismissed by the federal district court. Nor did these individuals contend that
the two counts were entirely unrelated as a factual matter; rather, they explicitly acknowledged
that the claims arose from the same set of operative facts.47 And in any event, it is clear that the
basis for the district court’s decision not to assume supplemental jurisdiction over the tortious
interference claim had little, if anything, to do with the relatedness of the facts underlying the
two claims. This is not surprising, given that Ma’s federal complaint relied on the exact same
factual allegations to support each count. Finally, we can hardly fault defendants for failing to
seek joinder under FR Civ P 20 when the district court had already expressed an unwillingness to
assume supplemental jurisdiction over the very same claim.48
In sum, the federal district court’s findings regarding the cause of Ma’s discharge must be
given preclusive effect. Those findings necessitate a conclusion that defendants were not acting
solely for their own benefit, and also establish that Ma’s termination was not caused by
defendants’ actions. Accordingly, summary disposition must be entered in defendants’ favor.
46
Id.
47
The defendants in the federal matter did contend that the statutory claim and state law claim
served different purposes, and thus, had “no community” with one another, a phrase frequently
quoted by Ma in her supplemental brief on appeal. A fair reading of the brief filed in federal
court makes it clear that those defendants were referring to the legal elements of the two claims,
not the factual allegations that Ma relied on to support each claim.
48
See Sunpoint Securities, Inc v Porta, 192 FRD 716, 719 (MD Fl, 2000) (explaining that FR
Civ P 20 is “procedural only and does not affect jurisdictional requirements.”).
-15-
III. DOCKET NO. 332462
In Docket No. 332462, defendants appeal as of right from the trial court’s order denying
their motion for attorney fees pursuant to MCR 2.114 and for the taxation of certain costs
pursuant to MCR 2.625(F). Finding no errors warranting relief, we affirm the trial court’s order.
A. ATTORNEY FEES
Defendants contend that the trial court abused its discretion when it refused to award
attorney fees pursuant to MCR 2.114 and MCL 600.2591. We disagree. A trial court’s ruling on
a motion for costs and attorney fees is reviewed for an abuse of discretion.49 “An abuse of
discretion occurs when the decision results in an outcome falling outside the range of principled
outcomes.”50 To the extent the trial court’s decision involves factual findings, those findings are
reviewed for clear error.51 “Clear error signifies a decision that strikes [the reviewing court] as
more than just maybe or probably wrong.”52 A factual finding is clearly erroneous if, despite the
existence of evidence supporting the finding, the reviewing court, after reviewing the entire
record, is left with a definite and firm conviction that a mistake has been made.53
In their motion, defendants argued that attorney fees were warranted under MCR 2.114.
This court rule provides that the signature of an attorney or party constitutes a certification by the
signer that:
(1) he or she has read the document;
(2) to the best of his or her knowledge, information, and belief formed after
reasonable inquiry, the document is well grounded in fact and is warranted by
existing law or a good-faith argument for the extension, modification, or reversal
of existing law; and
(3) the document is not interposed for any improper purpose, such as to harass or
to cause unnecessary delay or needless increase in the cost of litigation.[54]
Pursuant to MCR 2.114(E), if a document is signed in violation of these requirements, the trial
court “shall impose upon the person who signed it, a represented party, or both, an appropriate
sanction, which may include an order to pay the other party or parties the amount of the
49
Keinz v Keinz, 290 Mich App 137, 141; 799 NW2d 576 (2010).
50
Id.
51
Id.
52
In re Williams, 286 Mich App 253, 271; 779 NW2d 286 (2009).
53
Id.
54
MCR 2.114(D).
-16-
reasonable expenses incurred because of the filing of the document, including reasonable
attorney fees.”
Statutory authority also provides a basis for awarding attorney fees and other costs.
Pursuant to MCL 600.2591:
(1) Upon motion of any party, if a court finds that a civil action or defense to a
civil action was frivolous, the court that conducts the civil action shall award to
the prevailing party the costs and fees incurred by that party in connection with
the civil action by assessing the costs and fees against the nonprevailing party and
their attorney.
(2) The amount of costs and fees awarded under this section shall include all
reasonable costs actually incurred by the prevailing party and any costs allowed
by law or by court rule, including court costs and reasonable attorney fees.
(3) As used in this section:
(a) “Frivolous” means that at least 1 of the following conditions is met:
(i) The party’s primary purpose in initiating the action or asserting the defense
was to harass, embarrass, or injure the prevailing party.
(ii) The party had no reasonable basis to believe that the facts underlying that
party’s legal position were in fact true.
(iii) The party’s legal position was devoid of arguable legal merit.
(b) “Prevailing party” means a party who wins on the entire record.
Defendants’ arguments are all derived from the filing of Ma’s complaint. Defendants
argue (1) that the complaint was not well-grounded in fact and law because Ma lacked any
reasonable basis for claiming that defendants were third parties to the business relationship; (2)
that the complaint was not well-grounded in fact or law because her allegations that defendants
acted tortuously were false and unsupported, and (3) that Ma filed her complaint for an improper
purpose. We address each argument in turn.
1. “THIRD PARTY” ISSUE
This Court extensively addressed MCL 600.2591 in Louya v William Beaumont Hosp.55
In Louya, this Court explained that to determine if a suit is frivolous under MCL 600.2591, “it is
necessary to determine whether there was a reasonable basis to believe that the facts supporting
the claim were true at the time the lawsuit was filed . . . .”56 This Court stated, “There is a
55
Louya v William Beaumont Hosp, 190 Mich App 151; 475 NW2d 434 (1991).
56
Id. at 162.
-17-
significant difference between bringing a lawsuit with no basis in law or fact at the outset and
failing to present sufficient evidence to justify relief at trial.”57 This Court went on to explain:
Furthermore, the mere fact that the attorney may doubt the possibility of
success on the merits of a case, even at the outset of litigation, does not
necessarily and logically lead to a conclusion that the claim is “frivolous” as
defined by MCL 600.2591(3)(a)(ii); MSA 27A.2591(3)(a)(ii). Rule 3.1 of the
Michigan Rules of Professional Conduct prohibits an attorney from instituting or
defending a frivolous action. However, the comment to the rule also provides:
The filing of an action or defense or similar action taken for a
client is not frivolous merely because the facts have not first been
fully substantiated or because the lawyer expects to develop vital
evidence only by discovery. Such action is not frivolous even
though the lawyer believes that the client’s position ultimately will
not prevail. [Emphasis added.]
In our view, the statute at issue and the rules of professional conduct
should be read in harmony, if possible, to avoid the anomalous result of holding a
lawyer personally liable for an opponent’s costs and attorney fees after ethically
representing a client’s interest.
* * *
We will not construe MCL 600.2591; MSA 27A.2591 in a manner that has
a chilling effect on advocacy or prevents the filing of all but the most clear-cut
cases. Nor will we construe the statute in a manner that prevents a party from
bringing a difficult case or asserting a novel defense, or penalizes a party whose
claim initially appears viable but later becomes unpersuasive. Moreover, an
attorney or party should not be dissuaded from disposing of an initially sound
case which becomes less meritorious as it develops because they fear the penalty
of attorney fees and costs under this statute.
In this case, the court’s failure to focus its inquiry on what [counsel]
reasonably believed at the time he commenced the case is of critical importance.
The statutory scheme is designed to sanction attorneys and litigants who file
lawsuits or defenses without reasonable inquiry into the factual basis of a claim or
defense, not to discipline those whose cases are complex or face an “uphill fight.”
The ultimate outcome of the case does not necessarily determine the issue of
frivolousness.[58]
57
Id.
58
Id. at 162-164.
-18-
While Louya specifically addressed MCL 600.2591, we find its analysis equally
applicable to defendants’ arguments under MCR 2.114, because in this case, the document
purportedly signed in violation of MCR 2.114 is Ma’s complaint. Whether considered under the
statute or the court rule, the ultimate issue is the same: was the complaint frivolous when it was
filed because it was not well-grounded in fact or law?
Like the trial court, we conclude it was not. Defendants argue that Ma had no basis,
either factually or legally, to believe that they were acting solely for their own benefit and
without any benefit to AEP. What is clear in this matter is that Ma has a different view of her
relationships with her former coworkers. Both in this case and in her federal suit, Ma believed
that her conduct was appropriate, and it was the conduct of others that caused the interpersonal
conflicts at AEP. Given this belief, her allegations that defendants lied about her conduct were
not baseless. Rather, she appears to have had an honest belief that others were collaborating to
effectuate her discharge from AEP due to her reports of safety concerns. As the federal district
court explained, “Ma’s personal interpretation is heartfelt, but wrong.”59 This, however, does not
render her complaint frivolous. That Ma was unable to prove her interpretation to be correct
does not mean that the complaint was frivolous from the beginning.60
The remaining question is whether Ma’s complaint was devoid of any arguable legal
merit. Again, we agree with the trial court, and conclude it was not. Had Ma been able to prove
that the accusations against her were false, and that indeed, others were collaborating against her
to effectuate her discharge, a rational fact finder may well have concluded that defendants were
acting solely for their own benefit, not for the benefit of AEP. Again, that Ma was unable to
prove her case does not render the complaint frivolous.61
2. TORTUOUS ACTS
Defendants next contend that Ma had no reasonable basis to believe that they acted “both
intentionally and either improperly or without justification[,]” a showing which is necessary to
prevail on a claim of intentional interference with business relations.62 Defendants essentially
argue that Ma had no reasonable factual basis to claim that they lied about her conduct. As
explained, Ma did not believe her conduct was inappropriate. Thus, when faced with accusations
that she was acting inappropriately, Ma made an entirely logical inference that those making the
accusations were lying. Again, Ma’s interpretation of the facts was eventually found to be
59
Ma, 123 F Supp 3d at 964.
60
See Kitchen v Kitchen, 465 Mich 654, 662; 641 NW2d 245 (2002) (explaining that a complaint
is not frivolous merely because it ultimately did not succeed).
61
Id.
62
Dalley, 287 Mich App at 323.
-19-
untrue. But it took a federal trial to reach that conclusion.63 Once again, that Ma was ultimately
unable to prove her case does not demonstrate that her complaint was frivolous when filed.64
3. IMPROPER PURPOSE
Finally, defendants contend that Ma brought her suit for an improper purpose under MCL
600.2591(3)(a)(i), which defines as frivolous any suit initiated for the primary purpose of
harassing, embarrassing, or injuring the prevailing party. Defendants contend that this suit was
“simply an extension of the contempt [Ma] had for coworkers who disagreed with her.” The trial
court disagreed, and we can discern no error in that conclusion. Clearly, Ma’s relationships with
coworkers were strained and difficult. But as explained before, it appears that Ma believed that
she was not the source of the problem. Ma was proven incorrect in this regard. But while Ma
did not prevail, we will not assume, as do defendants, that this litigation was no more than an
extension of her apparent problems working with others. Rather, like the federal district court,
we believe Ma’s interpretation of the circumstances, although ultimately incorrect, was
“heartfelt,”65 and that the instant suit was undertaken in a good-faith effort to vindicate her
beliefs. Because defendants have failed to demonstrate that the complaint was frivolous, the trial
court correctly refused to award sanctions.
B. TAXATION OF COSTS
Defendants contend that the trial court erred when it rejected their request to tax costs of
$8,188.70, which represented the costs defendants incurred to procure deposition transcripts in
this matter, as well as incidental costs incurred with regard to Ma’s deposition. We disagree.
“This Court reviews for an abuse of discretion a trial court’s ruling on a motion for costs
pursuant to MCR 2.625.”66 Whether a particular expense may be taxed as a cost is a question of
law, reviewed de novo on appeal.67
Under Michigan’s court rules, “[c]osts will be allowed to the prevailing party in an
action, unless prohibited by statute or by these rules or unless the court directs otherwise, for
63
We note that the district court denied a motion for summary judgment brought pursuant to FR
Civ P 56, the federal rule of civil procedure that parallels MCR 2.116(C)(10). In denying the
motion, the court explained that from the evidence presented, one of two inferences could be
made: (1) Ma was terminated due to “[s]ome combination of insubordination and inability to get
along with other people,” or (2) that she was discharged as retaliation for reporting various safety
concerns. In other words, even the federal district court that eventually ruled against Ma found
that there was at least some potential merit to her factual allegations.
64
Kitchen, 465 Mich at 662.
65
Ma, 123 F Supp 3d at 964.
66
Van Elslander v Thomas Sebold & Assoc, Inc, 297 Mich App 204, 211; 823 NW2d 843
(2012).
67
Id.
-20-
reasons stated in writing and filed in the action.”68 But “[t]he power to tax costs is purely
statutory, and the prevailing party cannot recover such expenses absent statutory authority.”69
Thus, the presumption in civil cases is that costs will be allowed as a matter of course.70 But not
all expenses may be taxed.71 This is because the term “costs” must be understood through
statutory provisions that define what items are taxable as costs.72
One particular statute, MCL 600.2549, permits the taxation of deposition fees:
Reasonable and actual fees paid for depositions of witnesses filed in any
clerk’s office and for the certified copies of documents or papers recorded or filed
in any public office shall be allowed in the taxation of costs only if, at the trial or
when damages were assessed, the depositions were read in evidence, except for
impeachment purposes, or the documents or papers were necessarily used.
A plain reading of the statute reveals that it concerns two distinct items: depositions and
“documents or papers.” With regard to the taxation of fees associated with these items, the
statute explains that costs may be taxed “only if, at the trial or when damages were assessed, the
depositions were read into evidence, except for impeachment purposes, or the documents or
papers were necessarily used.”73
In Portelli v I R Const Prods Co, Inc, this Court addressed whether certain costs for
depositions were taxable under MCL 600.2529 where the matter was decided at the summary
disposition phase, rather than at trial:
Costs for depositions are expressly taxable pursuant to MCL 600.2549;
MSA 27A.2549. The plain language of the statute states that such costs are
recoverable where the deposition is “read in evidence” at trial or where it is
“necessarily used.” MCL 600.2549; MSA 27A.2549. Here, excerpts of the
deposition transcripts of Irving Rozian, James Williams, Michael Pruess, and
plaintiff were necessarily used in the context of I.R. Construction’s motion for
summary disposition.[74]
Thus, the Portelli Court seemed to hold that when deposition transcripts are relied upon
to support a summary disposition motion, those transcripts are “necessarily used,” and thus, costs
68
MCR 2.625(A)(1). See also Van Elslander, 297 Mich App at 216.
69
Van Elslander, 297 Mich App at 216 (citation omitted).
70
Id.
71
Id.
72
Id.
73
MCL 600.2549 (emphasis supplied).
74
Portelli v I R Const Prods Co, Inc, 218 Mich App 591, 605; 554 NW2d 591 (1996).
-21-
associated with those depositions are taxable, assuming other requirements of the statute are
satisfied. However, in Portelli, this Court ultimately determined that the deposition costs at issue
were not taxable, for the reason that the deposition transcripts were never filed in any clerk’s
office.75 Accordingly, this Court’s holding that transcripts used to support a summary
disposition motion satisfy the “necessarily used” component of the statute is obiter dictum and
need not be followed.76
Like the trial court, we believe that Portelli misread the statute at issue. As explained,
MCL 600.2549 differentiates between depositions and “documents or papers.” The “necessarily
used” language of the statute clearly applies only to the latter category, “documents and
papers.”77 With regard to depositions, the statute provides that the taxation of costs is permitted
“only if, at trial or when damages were assessed, the depositions were read in evidence, except
for impeachment purposes . . . .”78 Here, the depositions were never read into evidence.
Accordingly, the only statutory authority relied on by defendants for the taxation of these costs
does not permit the costs to be taxed. The trial court properly rejected defendants’ request.
Affirmed.
/s/ Michael F. Gadola
/s/ Michael J. Talbot
/s/ Elizabeth L. Gleicher
75
Id. at 606-607.
76
See Griswold Props, LLC v Lexington Ins Co, 276 Mich App 551, 558; 741 NW2d 549 (2007)
(explaining that statements in opinions concerning principles of law not essential to the judgment
are obiter dictum and do not establish binding precedent).
77
MCL 600.2549.
78
MCL 600.2549.
-22-
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829 F.2d 1130
Flaniganv.Bowen
NO. 86-7705
United States Court of Appeals,Eleventh Circuit.
SEP 10, 1987
1
Appeal From: N.D.Ala.
2
AFFIRMED.
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289 F.2d 948
Roberta I. THOMASv.UNITED STATES.
No. 474-59.
United States Court of Claims.
May 3, 1961.
Gerald B. Greenwald, Washington, D. C., for plaintiff. Blumenthal & Somers, New York City, and Becker & Maguire, Washington, D. C., were on the brief.
Laurence H. Axman, Washington, D. C., with whom was Asst. Atty. Gen. William H. Orrick, Jr., San Francisco, Cal., for defendant.
JONES, Chief Judge.
1
The plaintiff sues for 10 months' back pay for asserted wrongful removal as a civilian employee of the Army performing services as a clerk-stenographer, GS-3, and stationed in Germany.
2
The essential facts are undisputed.
3
The plaintiff was employed in 1953. She was in an excepted position under 5 C.F.R. 6.101(h) Schedule A. This regulation provides that any position beyond the continental limits of the United States may be filled without examination by the Civil Service Commission if appointment through competitive examination is regarded as impracticable.
4
On November 29, 1954, plaintiff was served with notice of proposed removal, charging that she had made a false statement in an official document. In completing the security forms in response to a request for information concerning membership, affiliation, and association with certain organizations (named on the Attorney General's list), she had written the word "None," whereas by her own admissions she had attended the George Washington Carver School and the Jefferson School of Social Science in 1946. Plaintiff replied to these charges in writing on December 6, 1954, explaining that her attendance at these schools had been discussed with a Government official prior to her being hired by the Department of the Army; that her attendance had consisted solely of her presence at one night class in each school lasting 45 minutes; that at the time of her attendance she was unaware that the schools were named on the Attorney General's list; that she did not feel that attendance for 45 minutes in each school constituted "association, membership in, or affiliation with" these schools; that previous to completing the security forms she had stated her attendance at these schools on Army personnel forms requesting information as to schools attended, and that the Counter Intelligence Corps had access to and consulted these personnel forms before she was employed; that she had a good record of 10 years of service, 7 of which had been in prior Government service, and that in the circumstances she did not feel she was guilty of falsifying the records.
5
On December 23, 1954, plaintiff was notified of her removal effective December 31, 1954, subject to a right to request a review under Department of the Army, Civilian Personnel Regulation E2. Plaintiff was told that if an appeal was taken the removal action would not be effective until final action on appeal, and that in the meantime she would be on annual leave or leave without pay. Regulation CPR E2 provided for successive appeals up to and including action by the Secretary of the Army, whose action would be final.
6
Miss Thomas appealed to the Employee Grievance Board, which unanimously recommended her reinstatement and that she be given a 5-day suspension for carelessness in completing the security forms. This recommendation was disapproved by the commanding general.
7
Appeal was then made to the next echelon, and finally to the Secretary of the Army in Washington who ruled that in the light of the record the penalty of removal was too severe and that pursuant to the recommendation of the Department's Employee Grievance Review Board, in which the Secretary concurred, a 30-day suspension should be substituted in lieu of removal. As a result of the Secretary's decision, the plaintiff was offered reinstatement to her overseas position.
8
Defendant pleads that plaintiff is not entitled to recover under the Veterans' Preference Act, 5 U.S.C.A. § 851, nor the Lloyd-La Follette Act, 5 U.S.C.A. § 652 (a) and (b). Plaintiff does not base her claim on either of these acts. She was appointed to the Army personnel service under rules which permitted appointment to the Civilian Army Personnel Service without the necessity of a competitive examination. It is doubtful whether the terms of the act under which the service was performed justified a regulation broad enough to exclude her from the benefits of the Lloyd-La Follette Act, supra. Since the requirement for a competitive examination was specifically waived by the rules she could well be considered as having served the probationary period.
9
In any event these acts grant certain affirmative rights to certain groups and classified persons. The fact that one does not come within the terms of those acts does not license someone in authority to kick an employee all over the lot as if she had no rights whatever. Those acts, while granting additional rights to certain persons, did not even purport to take from anyone not a member of the group any rights otherwise possessed. Indeed, the Lloyd-La Follette Act only affirmatively authorized back pay when there has been reinstatement, yet we have repeatedly held that even where no reinstatement has been ordered judgment for back pay may be given if the facts of the case justify such action. McGuire v. United States, Feb. 11, 1959, ___ Ct.Cl. ___; Prosterman v. United States, Jan. 14, 1959, ___ Ct.Cl. ___. See also Caddington v. United States, Ct.Cl.1959, 178 F.Supp. 604.
10
The plaintiff was serving in a foreign land, having been regularly employed. She had attended only one class of 45 minutes in each school. In filling out personnel forms she listed these two schools. In filling out security forms she did not list these schools. She claimed she did not know at the time that they were on the Attorney General's list. She states in her affidavit that the employing officer had access to and knew of the listing in Form 57. She further states that she talked about the matter with the employing officer who did not think attending 45 minutes one time at each school would be taken seriously. But when the incident came to the attention of the commanding officer in Germany she was given notice of proposed removal. With full possession of the above facts, she was ordered discharged subject to appeal. In the meantime she was to be on leave without pay. The first appeal was to the Employee Grievance Board which recommended that instead of dismissal she be given a 5-day suspension for carelessness in making out her file papers.
11
But the commanding officer refused to accept the recommendation and ordered the dismissal. She was told that she would not be furnished transportation back home. The record does not show whether or how long he may have served as a top sergeant before being promoted, but he certainly showed little understanding of a very human problem. At any rate, here was a woman without funds in a strange distant land, and was forbidden employment. Finally, when her desperate condition was disclosed and she told the officials she was completely without funds, they arranged for her transportation back to the United States.
12
In November, the Secretary of the Army ordered that she be given a 30-day suspension in lieu of removal. As we construe the order of the Secretary, the effect of the plain language was to cancel the order of dismissal and substitute a 30-day suspension.1 It is true the officials offered to reinstate her in her foreign position. We consider this offer to have been wholly unnecessary, since the decision of the Secretary had the effect of automatically restoring her subject to the 30-day suspension. At any rate, this phase was solved, since plaintiff had found it difficult to find employment in this country with this cloud hanging over her, was in debt, and in no financial condition to return to Germany. She accordingly resigned effective November 29, 1955.
13
This is a strange case. One is reminded of the story in Victor Hugo's "Les Miserables." Jean Valjean was the sole support of a widowed sister who had seven children. Temporarily out of work, he stole a loaf of bread to feed them. He was captured, tried, and convicted. In describing the sentence, Hugo said, in our civilization there are terrible hours, such as those when the * * * law pronounces shipwreck upon a man. What a mournful moment is that in which society withdraws itself and gives up a thinking being. Jean Valjean was sentenced to five years in the galleys."
14
That was fiction. This is fact.
15
The plaintiff had gone to a faraway land to perform secretarial work for the Army. She had a good record of a previous service in and out of the Government. But because, forsooth, she had failed to list in her security form the two schools which she attended a total of 90 minutes, she was discharged and given a record that would reflect on her loyalty and integrity. Moreover, this action was taken despite the fact that the plaintiff had listed these schools on another form and thus clearly had shown herself guiltless of any effort at concealment.
16
In this case there is not even the slightest indication of disloyalty. That is not embodied in the charge. The complaint is failure to disclose attendance at two classes. When that omission is laid alongside the fact that disclosure was made in an accompanying form and that defendant had in its hands full knowledge of the facts, the difference becomes so much tweedledee. It does not rise to the dignity of a charge, but sinks to the level of a suspicion.
17
To use these simple facts, that when taken together became almost completely meaningless as a basis for discharging an employee in a foreign land and placing a cloud of suspicion and question of integrity and loyalty on an otherwise unquestioned record of service, is an act that cannot be justified on any reasonable basis.
18
The case of Brown v. United States, 122 Ct.Cl. 361, is inapposite. In that case there was a discharge. In this case there was no discharge. The attempted discharge was set aside and a 30-day suspension substituted therefor by the Secretary of the Army, whose decision was final. The order included these words: "that a 30-day suspension be imposed in lieu of removal." The minor officials misinterpreted and failed to carry out the clear wording of that decision.2 This court has jurisdiction of contracts, express or implied in fact. Less the 30 days' suspension, the plaintiff remained on the payroll. That the laborer is worthy of his hire is gospel as well as the law of life. In addition, it is the law of our country. This court represents the conscience of the Nation. Neither justice, conscience, nor the law itself calls for setting aside the action of the Secretary of the Army and substituting therefor the mistaken interpretation of a minor official who had no authority to change the Secretary's order.
19
The law is not an end in itself. It is a means to an end. Its primary purpose is to reach the ends of justice between man and man and between the citizen and his government. If it fails in that one thing, it fails in everything. Both justice and conscience call for removing any blemish from the record of one whose action viewed in its worst light could only call for a temporary suspension. That result has already been reached by the action of the Secretary of the Army.
20
Fortunately, the Secretary of the Army so worded his decision as to constitute a setting aside of the order of removal which in all the circumstances we construe as automatic reinstatement at the end of the 30-day suspension. It follows therefore that the plaintiff is entitled to back pay for that period of her service during which she was wrongfully removed. Plaintiff's vindication by the Secretary of the Army would merely be a Pyrrhic victory if that vindication were not read for what it was — authorization of pay for the period of her removal less the 30 days thought adequate as a reprimand by the Secretary of the Army.
21
Plaintiff's motion for summary judgment is granted and defendant's similar motion is denied.
22
Judgment will be entered for the plaintiff with the amount to be determined pursuant to Rule 38(c), 28 U.S.C.A.
23
It is so ordered.
24
DURFEE and MADDEN, Judges, concur.
Notes:
1
See Service v. Dulles, 354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed.2d 1403; Vitarelli v. Seaton, 359 U.S. 535, 79 S.Ct. 968, 3 L. Ed.2d 1012
2
United States v. Wickersham, 201 U.S. 390, 26 S.Ct. 469, 50 L.Ed. 798
25
WHITAKER, Judge (dissenting).
26
Plaintiff's superiors acted unduly harshly and unjustly deprived plaintiff of her position; but we must not let our indignation over their treatment of her induce us to make bad law.
27
Let us start at the fundamentals. The United States, as a sovereign, can only be sued if it consents to be sued. Only by Act of Congress, approved by the President, can that consent be given.
28
Congress has consented that all employees of the United States, except those in the State Department, may sue it for their wrongful discharge in only two different Acts, one, the Lloyd-La Follette Act, 5 U.S.C.A. § 652, 62 Stat. 354, and the other, the Veterans' Preference Act, 5 U.S.C.A. § 863, 58 Stat. 390. In no other Act has Congress consented that its employees may sue the United States. Therefore, unless plaintiff's rights under those Acts have been violated, she may not sue the United States. Brown v. United States, 122 Ct.Cl. 361, 377. Plaintiff may not sue under those Acts, because her position was excepted from the terms of them. 5 C.F.R. 6.101(h), Schedule A. That is what an "excepted position" means — it is excepted from the provisions of the Civil Service Acts. Having been excepted from their terms, she is not entitled to their protection.
29
Until the original Civil Service Act was passed, the provisions of which are now incorporated in the Lloyd-La Follette Act, an employee could be discharged at will, without redress. An employee in an excepted position is in the same position as were all employees before the passage of the Civil Service Act, and may be discharged at will, without redress.
30
I do not think Service v. Dulles, 354 U.S. 363, 77 S.Ct. 1152, 1 L.Ed.2d 1403, is to the contrary. The plaintiff in that case was a member of the foreign service and was protected neither by the Lloyd-La Follette Act nor the Veterans' Preference Act. However, the McCarran Rider, 65 Stat. 581, gave the Secretary of State authority to summarily discharge an employee "whenever he shall deem such termination necessary or advisable in the interests of the United States." But by regulation the Secretary had limited his power to discharge an employee by prescribing that certain procedures should be followed prior to discharge. The Supreme Court held that these regulations were binding on the Secretary and, since the procedure set forth was not followed, plaintiff was entitled to recover.
31
The reasoning of the Supreme Court was that, since these employees did not have the protection of the Lloyd-La Follette Act, and might be discharged whenever the Secretary "deemed" it advisable, he had to follow his own regulations in coming to the conclusion that it was advisable; otherwise the power to discharge had not been lawfully invoked.
32
Plaintiff, of course, does not come within the terms of the McCarran Rider; nor does she come within the terms of any other Act regulating the discharge of Government employees.
33
I regret to disagree, but this court has no power to entertain a suit over which Congress has not given it jurisdiction.
34
LARAMORE, Judge, joins in the foregoing dissenting opinion.
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In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 03-2646
JAEL K. SPEIGHTS,
Petitioner-Appellant,
v.
MATTHEW J. FRANK, Secretary, Wisconsin
Department of Corrections,
Respondent-Appellee.
____________
Appeal from the United States District Court
for the Western District of Wisconsin.
No. 03-C-0057-C—Barbara B. Crabb, Chief Judge.
____________
SUBMITTED MARCH 4, 2004—DECIDED MARCH 19, 2004
____________
Before EASTERBROOK, MANION, and EVANS, Circuit
Judges.
EASTERBROOK, Circuit Judge. Jael Speights was con-
victed in a Wisconsin court of burglary and sexual assault.
Susan Alesia, who had been assigned to represent him
on appeal, concluded that no non-frivolous argument was
available and told Speights that she planned to file a no-
merit report, following Wisconsin’s procedure for criminal
defense lawyers to accommodate their obligation to be
zealous advocates with their obligation to avoid frivolous
litigation. See McCoy v. Court of Appeals, 486 U.S. 429
2 No. 03-2646
(1988). Cf. Anders v. California, 386 U.S. 738 (1967).
Speights insisted that counsel prosecute the appeal without
a no-merit report; she declined and sent him an “Appellate
Decision Form” giving Speights three options in
check-the-box fashion:
(1) I want Attorney Alesia to close my file without
taking any action.
(2) I want Attorney Alesia to file a No Merit Report.
(3) I want to [sic] Attorney Alesia to withdraw from my
case so that I can represent myself or I can pay for
another attorney to represent me. I understand that the
Public Defender’s Office will not appoint another
attorney to represent me.
Alesia’s letter acknowledged knowing that Speights did not
like any of the options but added that she was unwilling
nonetheless to file a regular brief on the merits. Speights
did not respond promptly, and Alesia wrote him another
letter, this time telling him:
It is my understanding that our office is not going to
appoint another attorney to represent you. I discussed
this situation with my supervisors and I have concluded
that because you are not willing to make a decision . . .
my only option is to file the No Merit Notice of Appeal.
This is the document that informs the court that I will
be filing a No Merit Report.
That letter induced Speights to act; he returned the Appel-
late Decision Form with an “X” next to the third option.
Alesia then withdrew as his lawyer and asked the court for
a 60-day extension of time so that Speights could file his
own brief. In the following months Speights received
another extension of the deadline and twice requested but
was denied appointment of new counsel. He never filed a
brief, though, and eventually the court dismissed his appeal
for lack of prosecution. Speights then sought collateral
review in both state and federal court, arguing that he had
No. 03-2646 3
been denied the assistance of counsel. The state judiciary,
and the federal district judge, denied his petitions, ruling
that Speights had waived any entitlement to appellate
counsel by selecting the third option on the Appellate
Decision Form.
Wisconsin’s judiciary concluded that Speights had se-
lected the third option in order to block Alesia from explain-
ing to the appellate court why she had concluded that the
appeal was untenable. Speights does not deny that this was
his actual motivation (and in any event the state’s findings
on that factual issue would be hard to upset, see 28 U.S.C.
§2254(e)) but contends that the state was not entitled to put
him to the choice. This line of argument boils down to
disagreement with McCoy, which held that Wisconsin may
require a lawyer who believes that an appeal would be
frivolous to explain the weaknesses of any potential appel-
late arguments. Wisconsin’s procedure may lead some
defendants to think it better to represent themselves than
to allow counsel to arm the court with reasons why they
should lose. Once McCoy sustained Wisconsin’s approach,
however, persons in Speights’s position cannot claim a
constitutional entitlement to avoid making that decision,
even though from their perspective it amounts to a choice
among evils. Defendants may have an unconditional right
to counsel on appeal, but they do not have a right to counsel
who pretend that frivolous arguments actually are meritori-
ous. The choice to which the Appellate Decision Form puts
a defendant may be hard, but it is also lawful. Unlike the
situation in Betts v. Litscher, 241 F.3d 594 (7th Cir. 2001),
which held that counsel may not abandon a client who
opposes the filing of a no-merit report, attorney Alesia
secured her client’s unequivocal consent. She made it plain
that, in the absence of Speights’s agreement, she would file
a no-merit report, as McCoy, Anders, and Betts require;
Speights replied that he preferred to go it alone.
That leaves Speights’s contention that Alesia did not
warn him about the dangers of self-representation—or at
4 No. 03-2646
least give him more information about how the no-merit
procedure works—and that this omission entitles him to a
new lawyer and a new appeal within the state system. He
derives this “right to be warned and informed” from the
requirement that waivers of counsel be knowing and intel-
ligent. See Johnson v. Zerbst, 304 U.S. 458 (1938); Faretta
v. California, 422 U.S. 806, 835 (1975). The requirement
of voluntariness does not itself require explanations and
advice about the risks and benefits of each choice; if it
did, Miranda warnings would be woefully inadequate (for
they do not tell the suspect what counsel could do for him
or what risks an uncounseled interrogation poses) and
consents to search could not be made without the sort of
advice that Schneckloth v. Bustamonte, 412 U.S. 218 (1973),
held to be unnecessary. See also Ohio v. Robinette, 519 U.S.
33 (1996). What one can say is that waiver of the right to
the assistance of counsel at trial, the stage of a criminal
prosecution most difficult for a layperson to navigate, may
require an oral inquiry to ensure that the defendant chooses
with knowledge of his entitlements and his eyes open to the
dangers of self-representation. See Iowa v. Tovar, No.
02-1541 (U.S. Mar. 8, 2004), slip op. 9-10; United States v.
Hill, 252 F.3d 919, 928 (7th Cir. 2001). The Supreme Court
has never held that waivers of counsel at any stage of the
proceedings other than trial require such a give-and-take
between the accused and someone trying to educate him
about counsel’s benefits— and in Tovar the Court held that
the Constitution does not require warnings along these
lines when the accused wants to plead guilty without legal
assistance. It is enough, Tovar held, if the accused knows of
his right to counsel and the plea itself is voluntary.
Much the same may be said about waivers of legal
assistance in prosecuting an appeal. Once the trial is over,
the major complexities, choices, and risks are past. That
is one reason why, the Court held in Martinez v. Court
of Appeal, 528 U.S. 152 (2000), the defendant no longer has
No. 03-2646 5
an unqualified right to act as his own lawyer. When a state
allows defendants to represent themselves on appeal, how-
ever, it may permit them to decide without the rigmarole
that attends waiver of counsel for trial. Just as a simple
consent to proceed without counsel suffices during custodial
interrogation, so a straightforward assent is enough on
appeal. So, at least, a state may think without contradicting
any decision of the Supreme Court or acting unreason-
ably—and, unless the state judiciary does one or the other,
collateral relief is unavailable. 28 U.S.C. §2254(d). Tovar
strongly implies that the Supreme Court is not likely to
extend, beyond the trial itself, any requirement that a
defendant be informed about the benefits of counsel and
risks of waiver. See also Patterson v. Illinois, 487 U.S. 285,
298-99 (1988). If such an extension (or a requirement that
counsel explain the no-merit procedure clearly enough for
a client to grasp) to occur nonetheless, that must happen on
direct review; given §2254(d) a collateral attack is not the
occasion for the development of new constitutional rules.
Speights, who bears the burden of persuasion on col-
lateral attack, see Tovar, slip op. 13-14, does not contend
that he misunderstood the choices offered. He is literate in
English and not afflicted by any mental disease. Appointed
counsel made it clear that, if Speights so requested (or even
if he did nothing), she would proceed with a no-merit report,
satisfying her obligations under McCoy. Armed with this
knowledge, Speights dismissed his lawyer, prevented the
filing of the no-merit report, and undertook to represent
himself. He bungled the job. Wisconsin is not obliged by the
Constitution to give him a second bite at the apple.
AFFIRMED
6 No. 03-2646
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—3-19-04
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FILED
November 30, 2017
TN COURT OF
WORKERS’ COMPENSATION
CLAIMS
Time 3:28 PM
TENNESSE BUREAU OF WORKERS’ COMPENSATION
IN THE COURT OF WORKERS’ COMPENSATION CLAIMS
AT MURFREESBORO
Richard Lasser, ) Docket No.: 2017-05-0613
Employee, )
v. ) State File No.: 22849-2017
Waste Management, Inc., )
Self-Insured Employer. ) Judge Thomas Wyatt
EXPEDITED HEARING ORDER DENYING TEMPORARY DISABILITY
BENEFITS
The Court conducted an Expedited Hearing on November 21, 2017, on the request
of Richard Lasser. The sole issue is Mr. Lasser’s entitlement to temporary partial
disability benefits following his rejection of Waste Management, Inc.’s assignment of
alternative modified work at a rescue mission. For the reasons set forth below, the Court
holds that Mr. Lasser is not entitled to the requested benefits.
History of Claim
Mr. Lasser suffered multiple injuries on March 28, 2017, when a vehicle struck the
roll-off/trash compactor truck he drove. He underwent authorized treatment that resulted
in multiple restrictions, including a prohibition against his driving a commercial vehicle.
To accommodate his restrictions, Waste Management assigned Mr. Lasser the tasks of
picking up trash and washing trucks. Mr. Lasser attempted to perform this work for three
days but complained the required prolonged walking and bending caused such severe
pain that he “couldn’t move.” Mr. Lasser testified the work Waste Management offered
him was “a little humiliating” and “insulting,” but he did it because he had to.
By letter dated April 18, Waste Management offered Mr. Lasser work at the
Cookeville Rescue Mission General Store that allegedly accommodated his restrictions.
Mr. Lasser rejected the offered work and communicated his decision the following day
by letter from his counsel stating that “there is no indication that the purported light duty
assignment is within Mr. Lasser’s current restrictions.”! Counsel’s letter also stated that
“the law in Tennessee is not yet settled regarding whether ‘alternative modified work
assignments’ such as the assignment Waste Management has proposed here are
permissible. I suggest to you that we should not make this the first case in which
Tennessee courts decide the issue.” (Ex. 4.) Mr. Lasser failed to appear for work at the
rescue mission.
Waste Management renewed its offer of work at the rescue mission by letter dated
April 25. This letter again set forth Mr. Lasser’s restrictions but also provided the name
of a person to whom Mr. Lasser could address questions about his duties, assignments
and schedule. (Ex. 5 at 2.) Mr. Lasser again did not appear at the rescue mission.
Waste Management suspended Mr. Lasser’s temporary disability benefits because
he did not appear at work as scheduled. Mr. Lasser filed a Petition for Benefit
Determination, setting forth the following:
The ER does not have light duty work available that accommodates
EE’s restrictions. The ER is attempting to force ER to go to work for
Cookeville Rescue Mission while he is on restrictions. The EE refused
to do so, as he does not work for Cookeville Rescue Mission, he is a
garbage truck driver for Waste Management. The ER has suspended
EE’s TTD/TPD benefits because ER refuses to go to work at Cookeville
Rescue Mission. EE seeks an Expedited Hearing Order requiring the ER
to pay TPD benefits if they cannot offer a light duty position that
accommodates EE’s restrictions.
(T.R. 1 at 2.)
Mr. Lasser testified that he did not accept the work at the rescue mission because
he worked for Waste Management, thus work at the rescue mission was “not my job.”
On cross-examination, Mr. Lasser testified that his objection to performing work at the
mission did not concern a safety issue, a disagreement with his schedule, or a concern
about the distance between the location of the mission and his home. He did voice a
concern that he did not know the rules or procedures governing his work at the mission.
Mr. Lasser contended Waste Management’s assignment to perform janitorial work
at the mission was coercive, akin to retaliation, and threatened the integrity of the
workers’ compensation system. Waste Management argued its light-duty assignment
was reasonable but Mr. Lasser’s refusal to accept the work was personal and
1 The letter from Waste Management offering work at the rescue mission listed Mr. Lasser’s specific
restrictions and stated Mr. Lasser would perform his assigned duties “within restrictions.” (Ex. 3 at 2-3.)
2
unreasonable. Waste Management contended Mr. Lasser’s refusal to perform the
assigned light-duty work precluded the requested temporary partial disability benefits.
Findings of Fact and Conclusions of Law
To prevail at this interlocutory stage of the claim, Mr. Lasser must show that he is
likely to prevail at a hearing on the merits. McCord v. Advantage Human Resourcing,
2015 TN Wrk. Comp. App. Bd. LEXIS 6, at *7-8, 9 (Mar. 27, 2015). The Court holds
that Mr. Lasser did not meet this burden.
In Hackney v. Integrity Staffing Solutions, Inc., 2016 TN Wrk. Comp. App. Bd.
LEXIS 29, at *13-14 (July 22, 2016), the Workers’ Compensation Appeals Board held
that an employee who refused to accept work within her restrictions on a different shift
was not entitled to temporary partial disability benefits. The Appeals Board reached this
conclusion despite the fact the employee needed to care for her family during the shift
offered by the employer. In explaining its decision, the Appeals Board wrote:
Employee’s refusal was not based on a physical inability to
perform the work offered as a result of her injury; nor was it in any other
way related to her workplace accident. Rather, her reasons for declining
the offers of employment were purely personal, i.e., she wanted to be
home for the sake of her family. While this desire is certainly
commendable, Employee’s wish to be at home with her family is
personal in nature and unrelated to her injury. Accordingly, the trial
court’s denial of temporary disability benefits is affirmed.
In view of this authority, the Court holds that Mr. Lasser’s reasons for refusing
Waste Management’s offer of light-duty work were likewise personal. His concern about
working at an entity other than Waste Management has no substantive relevance under
the law to Waste Management’s obligation to pay temporary partial disability benefits.
The Workers’ Compensation Law does not prohibit Waste Management from
offering Mr. Lasser work within his restrictions at an entity other than Waste
Management. Waste Management does not owe Mr. Lasser temporary partial disability
benefits when he refused to perform the available work due to personal reasons.
IT IS, THEREFORE, ORDERED as follows:
1. Mr. Lasser’s claim for temporary partial disability benefits is denied at this time.
2. The Court schedules a telephonic Status Conference at 10:30 Eastern Time (9:30
Central Time) on February 1, 2018. The parties shall call toll free at (855) 747-
1721 or (615) 741-3061 to participate in the Status Hearing. Failure to call in may
3
result in a determination of the issues, including scheduling issues, without the
absent party’s participation.
ENTERED this the 30th day of November, 2017.
Durbeodegt—
J udge Thomas Wyatt 2
Court of Workers’ Compensation Claims
APPENDIX
Exhibits: The Court admitted the following into evidence during the Expedited Hearing:
—
6.
7.
8. Genex form indicating restrictions placed by Dr. Elalayli.
. Stipulations of the parties;
Statement of restrictions from Middle Tennessee Occupational &
Environmental Medicine, Inc.;
. Letter of April 18, 2017, from Waste Management to Mr. Lasser’s counsel
with offer of alternative modified work;
Letter of April 19, 2017, from Mr. Lasser’s counsel to Waste Management
rejecting offer of alternative modified work;
Letter of April 25, 2017, from Waste Management to Mr. Lasser’s counsel
with second offer of alternative modified work;
Causation questionnaire;
Notice of Controversy; and
Technical Record: The Court considered the following in making its decision and
marked them as the Technical Record:
CONIA R WN
Petition for Benefit Determination;
Dispute Certification Notice;
Waste Management’s statement of additional issues certified to the Court;
Mr. Lasser’s position statement;
Waste Management’s position statement with exhibits;
Request for Expedited Hearing;
Motion to Extend Request for Expedited Hearing Deadlines;
Order Extending Deadlines;
. Notice of Expedited Hearing;
10. Mr. Lasser’s Pre-Hearing Brief with exhibits;
11. Waste Management’s Pre-Hearing Brief with exhibits.
4
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 30" day
of November, 2017.
Name Certified Via Email Email Address
Mail
Zachary Wiley, x zwiley(@forthepeople.com
Employee Attorneys [email protected]
John E. Anderson, xX janderson(@dickinsonwright.com
Employer’s Attorney
Prrawy S uu fowrimarion))
PENNY SHRUM, COURT CLERK = '
we.courtclerk(@tn.gov
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Citation Nr: 1730437
Decision Date: 07/31/17 Archive Date: 08/04/17
DOCKET NO. 13-17 739 ) DATE
)
)
On appeal from the
Department of Veterans Affairs Regional Office in Nashville, Tennessee
THE ISSUE
Entitlement to service connection for an ear syndrome, to include Meniere's disease, or to include as secondary to the hearing loss and tinnitus disabilities.
REPRESENTATION
Appellant represented by: Tennessee Department of Veterans' Affairs
WITNESSES AT HEARING ON APPEAL
Appellant and his spouse
ATTORNEY FOR THE BOARD
E. Weston, Associate Counsel
INTRODUCTION
The Veteran had active duty service from December 1965 to October 1967.
This appeal comes before the Board of Veterans' Appeals (Board) from the December 2011 rating decision of the RO in Nashville, Tennessee.
In October 2015, the Veteran testified before the undersigned VLJ at a videoconference hearing, and a transcript of this hearing is of record.
In February 2016, the Board remanded the case on appeal to obtain a more probative medical opinion regarding the etiology of Meniere's disease.
FINDING OF FACT
The evidence of record does not show that a current ear syndrome, to include Meniere's disease, is etiologically related to service; nor is it proximately due to, the result of, or aggravated by, the Veteran's other hearing disabilities.
CONCLUSION OF LAW
The criteria for service connection for an ear syndrome, to include Meniere's disease, and/or as secondary to the hearing loss and tinnitus disabilities, have not been met. 38 U.S.C.A. §§ 101, 1101, 1110, 1112(a)(1), 5107 (West 2014); 38 C.F.R. §§ 3.102, 3.303, 3.307, 3.309, 3.310 (2016).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
I. Duties to Notify and Assist
VA has certain notice and assistance obligations to claimants pursuant to the Veterans Claims Assistance Act of 2000 (VCAA), 38 U.S.C.A. §§ 5102, 5103, 5103A, 5107; 38 C.F.R. §§ 3.102, 3.156(a), 3.326(a). VA provided the requisite notice to the Veteran in October 2015. (Virtual VA, Correspondence, 9/26/2008, pps. 1-3). See Pelegrini v. Principi, 18 Vet. App. 112, 120-21 (2004); Dingess v. Nicholson, 19 Vet. App. 473, 486 (2006); Barr v. Nicholson, 21 Vet. App. 303, 312 (2007).
VA also has a duty to assist the Veteran to obtain potentially relevant records, and to provide examinations or medical opinions when necessary to make a decision on the claim. Here, the Veteran's service treatment records, VA records, and private treatment records have been obtained and associated with the claims file. The Veteran received VA treatment, and VA examinations in 2011, 2013, and 2017 in connection with his claims; which, collectively, contain a description of the history of disabilities at issue; document and consider relevant medical facts and principles; and provide opinions regarding the Veteran's claimed conditions.
By including in the claims file any outstanding treatment and examination records, and by obtaining the medical opinion of a qualified expert, a highly experienced, board-certified otolaryngologist/ear, nose, and throat (ENT) surgeon, the Agency of Original Jurisdiction (AOJ) has substantially complied with the Board's 2016 Remand instructions. See D'Aries v. Peake, 22 Vet. App. 97, 104-106 (2008); Stegall v. West, 11 Vet. App. 268 (1998). Additional development is not warranted.
Finally, the Veteran had a hearing before the Board. The presiding VLJ appropriately conducted the hearing by explaining the issue and noting possible sources of evidence the Veteran may have overlooked that may be advantageous to his position. Bryant v. Shinseki, 23 Vet. App. 488 (2010); 38 C.F.R. § 3.103(c)(2). Accordingly, VA has satisfied its duties to notify and assist, and there is no prejudice to the Veteran in adjudicating this appeal. See Soyini v. Derwinski, 1 Vet. App. 540, 546 (1991); Sabonis v. Brown, 6 Vet. App. 426, 430 (1994).
II. Service Connection
Service connection may be granted for a disability resulting from disease or injury incurred in or aggravated by active military, naval, or air service.
38 U.S.C.A. § 1110; 38 C.F.R. § 3.303(a). In order to prevail on the issue of service connection, generally, there must be (1) medical evidence of a current disability; (2) medical evidence, or in certain circumstances, lay evidence of an in-service occurrence or aggravation of a disease or injury; and (3) competent evidence of a nexus between the claimed in-service disease or injury and the present disability. Shedden v. Principi, 381 F.3d 1163, 1167 (Fed. Cir. 2004); Hickson v. West, 12 Vet App. 247, 253 (1999); Barr v. Nicholson, 21 Vet. App. 303, 306 (2007); Pond v. West, 12 Vet. App. 341, 346 (1999).
Service connection also may be established on a secondary basis for a disability that is shown to be proximately due to or the result of a service-connected disease or injury. 38 C.F.R. § 3.310. Establishing service connection on a secondary basis requires evidence sufficient to show (1) that a current disability exists; and (2) that the current disability was either (a) caused by, or (b) aggravated by, a service-connected disability. Id.; Allen v. Brown, 7 Vet. App. 439 (1995) (en banc).
The probative value attributed to a medical opinion issued by either VA or private treatment providers to support service connection depends on factors such as thoroughness, degree of detail, and whether there was a complete review of the veteran's claims file. See Prejean v. West, 13 Vet. App. 444, 448-9 (2000). The Board must consider whether the examining medical provider had a sufficiently clear and well-reasoned rationale, and a basis in supporting objective clinical data. See Bloom v. West, 12 Vet. App. 185, 187 (1999); Hernandez-Toyens v. West, 11 Vet. App. 379, 382 (1998); see also Claiborne v. Nicholson, 19 Vet. App. 181, 186 (2005) (rejects medical opinions that do not indicate whether the physicians actually examined the veteran, do not provide the extent of the examination, and do not provide supporting clinical data). The Court has held that a bare conclusion, even when reached by a health care professional, is not probative without an accurate factual predicate in the record. Miller v. West, 11 Vet. App. 345, 348 (1998).
When all the evidence has been assembled, VA is responsible for determining whether the evidence supports the claim or is in relative equipoise, with the veteran prevailing in either event; or whether there is a preponderance of the evidence against the claim, in which case, the claim is denied. 38 U.S.C.A. § 5107(b);
See Wise v. Shinseki, 26 Vet. App. 517, 531 (2014) ("By requiring only an 'approximate balance of positive and negative evidence' . . . the nation, 'in recognition of our debt to our veterans,' has 'taken upon itself the risk of error' in awarding . . . benefits.") (quoting Santosky v. Kramer, 455 U.S. 745, 755 (1982));
38 C.F.R. § 3.102.
The Veteran seeks service connection for an ear syndrome, to include his current Meniere's disease. The Veteran has asserted that he believes that all of his ear problems (hearing loss, tinnitus, and Meniere's disease) have been caused by excessive noise from artillery fire that he had regular exposure to during his military service. In the alternative, the Veteran argues that his well-documented tonsil problems during his years in service have caused his Meniere's disease and warrant service connection.
Service treatment records reflect that the Veteran had tonsillitis in 1965 and 1966, enlarged tonsils in 1967, and a physician scheduled him for a tonsillectomy due to "very bad tonsils." (STR - Medical, 4/30/14, p. 23). However, service treatment records do not reveal any signs or symptoms of an ear syndrome or Meniere's disease, and the Veteran certified that he had no change to his health upon separation. In fact, a clinician specifically described the Veteran as "normal, healthy" at his exit exam in October 1967. (STR - Medical, 4/30/14, p. 20).
On VA examination in July 2011, the examiner acknowledged the Veteran's diagnosis of Meniere's disease, in conjunction with his reported tinnitus in 1997. The examiner further confirmed that the Veteran's sensorineural hearing loss was more likely than not due to his noise exposure during military service without hearing protection. In the November 2011 VA examination report, the examiner acknowledged that the Veteran received treatment for Meniere's disease at two private hospitals and reaffirmed the diagnosis, along with mild to moderately severe sensory hearing loss in the left ear, moderately severe to profound sensory hearing loss in the right ear, and tinnitus. The examiner concluded, "I think there is a less than 50 percent chance that excessive noise caused his Meniere's disease. There are many causes of Meniere's disease but I don't know of any evidence that noise exposure is a cause of Meniere's disease."
On VA examination in August 2013, the examiner again confirmed that the Veteran had bilateral hearing loss that was at least as likely as not caused by or the result of excessive noise in military service. However, the examiner found that the Veteran's tinnitus in his right ear, as first reported in 1997 at the same time as the onset of his Meniere's disease, was less likely than not due to noise exposure in service. The examiner analyzed, "Given the veteran's initial report of tinnitus onset (1997, not during military service) and the likelihood that the tinnitus is related to the Meniere's disease diagnosis, it is my clinical opinion that the veteran's unilateral tinnitus (right ear) is less likely than not (less than 50% probability) that the tinnitus is caused by military noise exposure." The Veteran denied any excessive post-service occupational or recreational noise exposure.
In response to the 2016 Remand, VA procured a private otolaryngologist/ENT specialist to issue a specific medical opinion as to whether it is at least as likely as not that the Veteran's ear syndrome, to include Meniere's disease, was caused by tonsillar problems, including the tonsillitis episodes documented in his service treatment records. After review of the Veteran's file and the 2016 Remand instructions, the ENT specialist issued the following opinion in January 2017:
It is not likely that the veterans ear syndrome including Meniere's was caused by his tonsillar problems including tonsillitis which was documented on his service records. Tonsillitis in and of itself is not a known risk factor for Meniere's disease. Enlarged adenoids can obstruct the Eustachian tube outlets and results in middle ear infection but this occurs primarily in children. Meniere's disease is not completely understood that [sic] is thought to be related to hypertonic fluid within the labyrinth creating pressure. I am unaware of any relationship of tonsil disease to that of Meniere's disease.
Here, the medical opinion issued by the ENT holds considerable probative weight. The opinion was prepared upon consideration of review of the claims file and it offers the degree of detail necessary to make a determination. See Prejean v. West, 13 Vet. App. 444, 448-9 (2000). The opinion further provides a sufficiently clear rationale based on supporting clinical data, as documented in recent ear examinations and hearing tests on file. See Bloom v. West, 12 Vet. App. 185, 187 (1999); Hernandez-Toyens v. West, 11 Vet. App. 379, 382 (1998); see also Claiborne v. Nicholson, 19 Vet. App. 181, 186 (2005). In sum, the ENT opinion concisely explained that the Veteran's tonsil disease, as documented in service, is not a known risk factor for Meniere's disease.
It is worthy of note that the otolaryngologist/ENT specialist has attained more than 25 years of medical practice experience as a board-certified physician in that field. Although she acknowledged that Meniere's disease is not completely understood, she also firmly maintained that she knows of no relationship between tonsil disease and Meniere's disease, and declared that it is not likely that the Veteran's current ear syndrome, to include Meniere's disease, could be caused by tonsillar problems. Moreover, the record does not present any comparable probative evidence, such as another probative medical opinion, to either contradict this specialist's opinion or to confirm a nexus between the Veteran's Meniere's disease and service. See Shedden, 381 F.3d at 1167.
Lay persons may be competent and sufficiently credible to provide opinions on conditions with "unique and readily identifiable features"... [that are] "capable of lay observation." Barr, 21 Vet. App. at 309; Layno v. Brown, 6 Vet. App. 465, 469 (1994) ("Lay evidence...may provide sufficient support for a claim of service connection"); See Davidson v. Shinseki, 581 F.3d 1313, 1315 (Fed. Cir. 2009); Jandreau v. Nicholson, 492 F.3d 1372, 1376 (Fed. Cir. 2007); Buchanan v. Nicholson, 451 F.3d 1331, 1337 (Fed. Cir. 2006); 38 C.F.R. § 3.159 (a)(2). That said, lay persons are not competent to provide opinions on medical issues outside their common knowledge that require specialized education, training, or experience, including certain complex etiologies and diagnoses. See Jandreau, 492 F.3d at 1377 n.4 (for example, lay persons are not competent to diagnose complex cancers), Colantonio v. Shinseki, 606 F.3d 1378, 1382 (Fed. Cir. 2010) (recognizing that in some cases, lay testimony "falls short" in proving an issue that requires expert medical testimony).
In this case, for example, the Veteran offers into evidence several medical articles generally related to the subject area of hearing disorders and Meniere's disease, including a journal article from 1925 that suggests a causal relationship between tonsillar infection and Meniere's disease. (Correspondence, 10/13/2015, p. 9). However, this evidence contains outdated materia; do not appear to have been published in scholarly, peer-reviewed medical journals; and too attenuated in subject matter and specific applicability to the Veteran's particular medical circumstances to provide substantial probative value. Unlike the VA ENT, the Veteran is not qualified to issue a competent opinion about such a complex disease etiology as that exemplified by Meniere's disease. As a result, the Veteran's lay statements, articles, and beliefs regarding his complex ear syndrome and Meniere's disease are not adequate to support his claim or very probative in comparison to the opinions of specialized medical experts who examined his case.
Furthermore, the weight of the probative medical evidence regarding Meniere's disease does not support secondary service connection. See 38 C.F.R. § 3.310.
The 2011, 2013, and 2017 examiners reviewed the pertinent clinical evidence and applied their respective expertise to confirm that the Veteran's Meniere's disease has not been caused by his other service-connected ear disabilities. Thus, there is no medical evidence to show that an ear syndrome, to include Meniere's disease, has been caused by or aggravated by any other service-connected disability.
Accordingly, both the medical and lay evidence on record weighs against a finding that the Veteran's current Meniere's disease began during service, is related to service, or is secondary to any other service-connected disability. The Board finds that the preponderance of the evidence weighs against the Veteran's claim of entitlement to either direct or secondary service connection for an ear syndrome, to include Meniere's disease. Therefore, the doctrine of reasonable doubt is not applicable, and the claim must be denied.
ORDER
Service connection for an ear syndrome, to include Meniere's disease, or to include as secondary to the hearing loss and tinnitus disabilities, is denied.
______________________________________________
JONATHAN B. KRAMER
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. WR-25,869-67
EX PARTE RONALD DWAYNE WHITFIELD, Applicant
ON APPLICATION FOR A WRIT OF HABEAS CORPUS
CAUSE NO. 528856-J IN THE 337th DISTRICT COURT
FROM HARRIS COUNTY
Per curiam.
O R D E R
Pursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the
clerk of the trial court transmitted to this Court this application for writ of habeas corpus. Ex parte
Young, 418 S.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant was convicted of burglary of a
motor vehicle and sentenced to 5 years' imprisonment.
In his present application, Applicant raises one ground challenging his conviction. This
application, however, presents a more serious question. This Court's records reflect that Applicant
has filed nine prior applications challenging this conviction, seven of which were dismissed as
subsequent applications pursuant Article 11.07, § 4 of the Texas Code of Criminal Procedure. It is
obvious from the record that Applicant continues to raise issues that have been presented and
rejected in previous applications or that should have been presented in previous applications. The
writ of habeas corpus is not to be lightly or easily abused. Sanders v. U.S., 373 U.S. 1 (1963); Ex
parte Carr, 511 S.W.2d 523 (Tex. Crim. App. 1977). Because of his repetitive claims, we hold that
Applicant's claims are barred from review under Article 11.07, § 4, and are waived and abandoned
by his abuse of the writ.
Therefore, we instruct the Honorable Louise Pearson, Clerk of the Court of Criminal
Appeals, not to accept or file the instant application for a writ of habeas corpus, or any future
application attacking this conviction unless Applicant is able to show in such an application that any
claims presented have not been raised previously and that they could not have been presented in a
previous application for a writ of habeas corpus. Ex parte Bilton, 602 S.W.2d 534 (Tex. Crim. App.
1980).
Filed: November 15, 2006
Do Not Publish
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 17-1597
____________
JERRY L. RAY,
Appellant
v.
MICHAEL CAIN, an Individual; JAMES MARKLEY, an Individual;
CITY OF WASHINGTON
____________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 2:13-cv-01483)
District Judge: Honorable David S. Cercone
____________
Submitted Under Third Circuit L.A.R. 34.1(a)
January 26, 2018
Before: HARDIMAN, VANASKIE, and SHWARTZ, Circuit Judges
(Filed: February 9, 2018)
____________
OPINION*
____________
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does
not constitute binding precedent.
HARDIMAN, Circuit Judge
Jerry Ray appeals a summary judgment in favor of the City of Washington,
Pennsylvania and two of its Police Officers, Michael Cain and James Markley. We will
affirm.
I
Shortly after 2:00 a.m. on October 16, 2011, Officers Cain and Markley found Ray
lying unconscious at the intersection of Jefferson Avenue and West Chestnut Street in
Washington, Pennsylvania. Ray had been drinking at a nearby bar and did not remember
how he ended up in the street.
Upon seeing Ray, Officer Markley parked his police cruiser in a position to protect
Ray from oncoming traffic. Markley activated the cruiser’s emergency lights, and he and
Officer Cain got out of the car. Markley roused Ray and instructed him to move to the
nearest sidewalk after Ray began to stand up. Instead of doing as the officer requested,
Ray staggered across the intersection and onto the far sidewalk, where he hit a pole and
fell into the roadway. The officers then handcuffed Ray and placed him under arrest for
public intoxication.
Once Ray was handcuffed, the officers called for backup and Cain used his
department-issued flashlight in the strobe setting to warn any oncoming traffic of Ray
and Markley’s presence in the roadway. After seeing no vehicles on the road, Cain
returned to the cruiser so he could move the car to Ray’s new location for protection.
Meanwhile, Markley stayed with Ray and attempted to get him onto the sidewalk. Before
Markley could accomplish that task, an intoxicated motorist drove through the
2
intersection and grievously injured Ray immediately after Markley jumped out of the
way.
Ray sued Officers Cain and Markley under 42 U.S.C. § 1983, claiming they
subjected him to a “state-created danger” in violation of the Fourteenth Amendment. Ray
also sued the City of Washington for “failure to train” under Monell v. Department of
Social Services of City of New York, 436 U.S. 658 (1978). The District Court granted
Defendants summary judgment on these claims.1
II2
Ray’s principal argument on appeal is that the District Court erred when it held
that Officers Cain and Markley could not be liable under a state-created danger theory.
Liability under § 1983 based on a state-created danger is an exception to the
general rule that due process does not impose a duty on States “to protect their citizens
from private harm.” L.R. v. Sch. Dist. of Phila., 836 F.3d 235, 242 (3d Cir. 2016). To
establish a state-created danger claim, a plaintiff must demonstrate, inter alia, that a state
1
The District Court denied the officers’ motion for summary judgment on Ray’s
§ 1983 excessive force claims. A jury returned a verdict in favor of Markley and Cain,
and a final order was entered by the District Court. The claims adjudicated at trial and
Ray’s pendent state-law claims, which the District Court dismissed following summary
judgment, are not at issue in this appeal.
2
The District Court had jurisdiction under 28 U.S.C. §§ 1331 and 1367(a). Our
jurisdiction lies under 28 U.S.C. § 1291. Summary judgment is proper when “there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a). “A factual dispute is material if it bears on an essential
element of the plaintiff’s claim, and is genuine if a reasonable jury could find in favor of
the nonmoving party.” Natale v. Camden Cty. Corr. Facility, 318 F.3d 575, 580 (3d Cir.
2003).
3
actor (1) “acted with a degree of culpability that shocks the conscience” and (2)
“affirmatively used his or her authority in a way that created a danger to the citizen or
that rendered the citizen more vulnerable to danger than had the state not acted at all.” Id.
(quoting Bright v. Westmoreland County, 443 F.3d 276, 281 (3d Cir. 2006)). We agree
with the District Court that Officers Cain and Markley did not act in a manner that shocks
the conscience.
The degree of culpability sufficient to shock the conscience will vary from case to
case. Sanford v. Stiles, 456 F.3d 298, 309–10 (3d Cir. 2006). When a “snap judgment” is
required due to a “hyperpressurized environment,” liability attaches only to conduct taken
with the intent to harm. Vargas v. City of Philadelphia, 783 F.3d 962, 973 (3d Cir. 2015).
When a defendant has time to make unhurried judgments, however, deliberate
indifference—i.e., a conscious disregard of a substantial risk of serious harm—will
suffice. Id. (citations omitted). Between these poles we have recognized an intermediate
category, under which conduct shocks the conscience if a defendant “consciously
disregarded a great risk of harm.” Sanford, 456 F.3d at 310. Ray argued that this
standard, applicable to situations in which the state actor is not under great pressure but
“nonetheless does not have the luxury of proceeding in a deliberate fashion,” id., applied
in this case. Officers Cain and Markley argued, and still do, that the intent-to-harm
standard should govern. The District Court assumed without deciding that Ray was
correct on this score, but concluded that the facts did not support a finding that the
officers consciously disregarded a great risk of harm. We need not ascertain which side
has the stronger argument regarding their preferred standards of review. Even assuming
4
that Ray’s standard applies, the District Court did not err in granting summary judgment
for the officers.
Ray claims Cain and Markley acted with a conscious disregard of a great risk of
harm at five moments during the encounter: (1) Markley’s placement of the police cruiser
at an angle insufficient to fully protect Ray at his initial location; (2) their failure to
prevent Ray from crossing the intersection when he stood up; (3) their decision to
handcuff Ray while he was still in the roadway; (4) Cain’s “abandon[ment] [of] his post”
to retrieve the cruiser; and (5) Markley’s failure to protect Ray from oncoming traffic or
move him to safety. Ray Br. 32–35.
We agree with the District Court that no reasonable jury could have found that the
officers’ conduct shocks the conscience. Ray’s first allegation, as the District Court
noted, is “of no legal moment from a causation standpoint,” because Ray was injured not
at his initial location but rather at the opposite corner of the intersection. Ray v. Cain,
2016 WL 5468117, at *11 (W.D. Pa. Sept. 29, 2016). Ray’s second allegation is
contradicted by the undisputed record evidence of the officers’ attempts to bring Ray to
safety by ordering him to move to the sidewalk and—after he left the roadway but before
he fell back in—ordering him to the ground. Id. at *12.
The officers’ decision to handcuff Ray while he remained in the roadway is
likewise insufficient to show conscious disregard for the risk to Ray, because it was
accompanied by efforts to mitigate that risk. Those efforts included: Officer Cain’s use of
the strobe setting on his flashlight during the arrest to divert possible oncoming traffic,
the officers’ call for backup, and Officer Cain’s attempt to reposition the cruiser to
5
protect Ray. The fact that those efforts were thwarted by a drunk driver does not mean
they acted with conscious disregard. For the same reasons, no reasonable jury could have
found that Officer Cain acted with conscious disregard in temporarily leaving the scene
of the arrest. With the benefit of hindsight, Cain’s decision turned out to be a
miscalculation and if the decision was erroneous when made (a debatable point), it was
no more than negligence. And as the District Court noted, “mere negligence is not
enough to shock the conscience.” Vargas, 783 F.3d at 974 (alteration omitted) (quoting
Sanford, 456 F.3d at 311). Finally, Ray’s contention that Officer Markley acted
“carelessly and wantonly,” Ray Br. 34, in failing to remove Ray from the roadway in
time to avoid injury is unsupported by the record. It is undisputed that until the moment
Ray was struck by the drunk driver, Officer Markley had tried, by his words and deeds, to
secure Ray’s safety.
Ray’s reliance upon our decision in Kneipp v. Tedder, 95 F.3d 1199 (3d Cir.
1996), is misplaced. In that case, plaintiffs had “adduced sufficient evidence to raise
a material issue as to whether [the defendant police officer] acted in willful disregard” for
the safety of an intoxicated pedestrian. Id. at 1208. After stopping a man and his visibly
intoxicated wife walking home on a cold winter night for causing a disturbance, police
officers allowed the man to go home alone while they questioned the wife. Id. at 1210.
They then abandoned her, only to find her later that night at the bottom of a roadside
embankment with permanent brain damage caused by exposure to the cold. Id. at 1202–
03. Far from abandoning Ray, Officers Cain and Markley took several affirmative steps
to protect him. Kneipp is therefore inapposite.
6
For these reasons, the District Court did not err when it granted Officers Cain and
Markley summary judgment on Ray’s “state-created danger” claim.
III
Our affirmance of the District Court’s judgment in favor of Markley and Cain is
fatal to Ray’s Monell claim against the City of Washington. “It is well-settled that, if
there is no violation in the first place, there can be no derivative municipal claim.”
Mulholland v. Gov’t Cnty. of Berks, 706 F.3d 227, 238 n.15 (3d Cir. 2013). See also City
of Los Angeles v. Heller, 475 U.S. 796, 799 (1986) (explaining that if a municipal
employee “inflicted no constitutional injury . . . , it is inconceivable that [the
municipality] could be liable”).
IV
For the reasons stated, we will affirm the District Court’s summary judgment.
7
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[Cite as State ex rel. Merrill v. Ohio Dept. of Natural Resources, 130 Ohio St.3d 30, 2011-
Ohio-4612.]
THE STATE EX REL. MERRILL, TRUSTEE, ET AL., APPELLEES;
TAFT, APPELLEE AND CROSS-APPELLANT, v. OHIO DEPARTMENT OF NATURAL
RESOURCES ET AL., APPELLANTS AND CROSS-APPELLEES.
[Cite as State ex rel. Merrill v. Ohio Dept. of Natural Resources,
130 Ohio St.3d 30, 2011-Ohio-4612.]
Land held in public trust abutting private property—The territory of Lake Erie
held in trust by the state of Ohio for the people of the state extends to the
natural shoreline, which is the line at which the water usually stands when
free from disturbing causes.
(No. 2009-1806—Submitted February 1, 2011—Decided September 14, 2011.)
APPEAL AND CROSS-APPEAL from the Court of Appeals for Lake County,
Nos. 2008-L-007 and 2008-L-008, 2009-Ohio-4256.
__________________
SYLLABUS OF THE COURT
1. A party to an action has standing to appeal from a judgment when it is an
independent party to an action and has been aggrieved by the final order
from which it seeks to appeal.
2. When an organization demonstrates that it has a claim or defense that shares a
common question of law or fact with the main action and that intervention
will not unduly delay or prejudice the adjudication of the rights of the
original parties, it meets the requirements of Civ.R. 24(B)(2) for
permissive intervention.
3. The territory of Lake Erie held in trust by the state of Ohio for the people of
the state extends to the natural shoreline, which is the line at which the
water usually stands when free from disturbing causes. (Sloan v. Biemiller
(1878), 34 Ohio St. 492, and State v. Cleveland & Pittsburgh RR. Co.
SUPREME COURT OF OHIO
(1916), 94 Ohio St. 61, 113 N.E. 677, approved and followed; R.C.
1506.10 and 1506.11, construed.)
__________________
O’DONNELL, J.
{¶ 1} We are asked to resolve three issues on appeal and cross-appeal:
first, whether the state of Ohio, as distinct from the Ohio Department of Natural
Resources (“ODNR”), has standing to appeal from the decisions of the trial and
appellate courts in this case; second, whether the court of appeals properly held
that the trial court did not abuse its discretion in permitting the National Wildlife
Federation and the Ohio Environmental Council to intervene in this action; and
third, whether the appellate court identified the proper boundary between property
abutting Lake Erie owned by private individuals and the territory of Lake Erie
held in trust by the state for all Ohioans.
{¶ 2} Regarding the standing issue, we conclude that despite ODNR’s
adoption of a conciliatory lis pendens posture agreeing not to enforce its
controversial lease policy pending the court’s determination of the boundary issue
and its failure to appeal the judgment of the trial court, it remains a party to this
case; the state of Ohio, a separately named party, had standing to appeal the trial
court judgment entered against it affecting the territory of Lake Erie.
{¶ 3} On the intervention question, we agree with the conclusion of the
court of appeals that the National Wildlife Federation and the Ohio
Environmental Council are proper parties to this action and that the trial court did
not abuse its discretion in permitting them to intervene.
{¶ 4} Finally, regarding the shoreline issue, Ohio law with respect to the
territory of Lake Erie held in trust by the state and the rights of littoral-property
owners has been settled for more than a century, and we see no reason to change
the existing law. Based on opinions of this court from as early as 1878 and the
Ohio General Assembly’s statement of public policy enunciated in the Fleming
2
January Term, 2011
Act in 1917, we conclude that the territory of Lake Erie held in trust by the state
of Ohio for the people of Ohio extends to the “natural shoreline,” which is the line
at which the water usually stands when free from disturbing causes.
Factual and Procedural History
{¶ 5} The pleadings in this case allege that ODNR instituted a policy
prohibiting littoral-property owners from exercising property rights over all land
lakeward of the ordinary high-water mark, despite the inclusion of that area of
land in their respective deeds, unless the owner entered into a lease agreement
with ODNR and paid a fee for its use.
{¶ 6} In May 2004, Robert Merrill, as trustee for the Diane N. Merrill
Living Trust, the Ohio Lakefront Group, Inc., a nonprofit corporation representing
lakefront-property owners, and several other individually named lakefront-
property owners (collectively referred to as “the Merrill plaintiffs”) filed a
complaint for declaratory judgment and mandamus in the Lake County Common
Pleas Court against ODNR, its director, and the state of Ohio, seeking
declarations that owners of property abutting Lake Erie hold title to the land
“between [the ordinary high-water mark] and the actual legal boundary of their
properties * * * as defined by their deeds” and that the public trust does not
include nonsubmerged lands; alternatively, they sought a writ of mandamus to
compel ODNR to commence appropriation proceedings or to compel the state of
Ohio to compensate them for its alleged taking of their property. They
subsequently filed an amended complaint containing the same counts. The
individually named lakefront-property owners also filed attachments to the first
amended complaint, containing copies of their deeds and identifying the
property’s lakeward boundary, although those descriptions varied from deed to
deed, i.e., “a distance of 374.0 feet to the shore of Lake Erie,” “to a point in the
low water mark of Lake Erie,” “145 feet to a point in the water’s edge of Lake
3
SUPREME COURT OF OHIO
Erie,” “to Lake Erie,” “a distance of 293.04 feet to the shore of Lake Erie,” and
“to the shore of Lake Erie.”
{¶ 7} Separately, Homer S. Taft, L. Scot Duncan, and Darla J. Duncan
(“the Taft plaintiffs”) filed the next consecutively numbered case in the Lake
County Common Pleas Court, claiming ownership of their land to the ordinary
low-water mark of Lake Erie. The trial court consolidated that action with the
suit filed by the Merrill plaintiffs.
{¶ 8} ODNR and the state counterclaimed, seeking a declaration that the
state of Ohio holds the lands and waters of Lake Erie to the ordinary high-water
mark, as set by the United States Army Corps of Engineers in 1985, in trust for
the people of Ohio, subject only to the paramount authority retained by the United
States for the purposes of commerce, navigation, national defense, and
international affairs.
{¶ 9} In June 2006, pursuant to a joint stipulation of all parties in Merrill,
the trial court certified a class action as to the declaratory-judgment count of the
Merrill complaint, with the class consisting of owners of Ohio property bordering
Lake Erie. The court stayed the mandamus claims pending resolution of the
declaratory-judgment claim.
{¶ 10} Subsequently, the National Wildlife Federation and the Ohio
Environmental Council, nonprofit organizations committed to conserving natural
resources and whose members make recreational use of the shores and waters of
Lake Erie, sought to intervene as defendants and counterclaimants, asserting that
the state holds the lands and waters of Lake Erie in trust for the public to the
ordinary high-water mark. The trial court permitted them to intervene.
{¶ 11} ODNR and the state then moved for summary judgment on the
declaratory-judgment claim, urging, inter alia, that the public-trust territory of
Lake Erie extends to the ordinary high-water mark, as identified by the United
States Army Corps of Engineers in 1985. The National Wildlife Federation and
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January Term, 2011
the Ohio Environmental Council filed a joint motion for summary judgment,
concurring in and adopting the bases for summary judgment advanced by ODNR
and the state.
{¶ 12} The Merrill and Taft plaintiffs each filed cross-motions for
summary judgment. In response to the cross-motions for summary judgment,
ODNR advised the court that it welcomed resolution of the controversy and
posited that it “must and should honor the apparently valid real property deeds of
the plaintiff-relator lakefront owners unless a court determines that the deeds are
limited by or subject to the public’s interests in those lands or are otherwise
defective or unenforceable.” ODNR further explained that “acting with the
consent and direction of” the governor, it “will discharge its statutory duties and
will adopt or enforce administrative rules and regulatory policies with the
assumption that the lakefront owners’ deeds are presumptively valid.” It also
represented to the court that while it “will require owners who wish to build
structures along the shores of Lake Erie that could impact coastal lands to obtain
permits before commencing any such construction[,] * * * it will no longer
require property owners to lease land contained within their presumptively valid
deeds.”
{¶ 13} After review, the trial court granted partial summary judgment to
the Merrill and Taft plaintiffs and denied summary judgment to ODNR, the state,
the National Wildlife Federation, and the Ohio Environmental Council,
concluding that the public trust neither extended to the ordinary high-water mark
nor terminated at the low-water mark; rather, the trial court determined that the
boundary of the public-trust territory is “a moveable boundary consisting of the
water’s edge, which means the most landward place where the lake water actually
touches the land at any given time.” The trial court opinion also reformed the
legal descriptions in deeds held by littoral-property owners containing legal
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SUPREME COURT OF OHIO
descriptions that extended the property into the lake to extend the property only to
the water’s edge.
{¶ 14} The trial court further concluded: “Defendants-Respondents and
Intervening Defendants have failed, as a matter of law, to show that the landward
boundary of the public trust territory in Ohio along the Lake Erie shore is the
Ordinary High Water Mark of 573.4 IGLD (1985), and Plaintiffs-Relators and
Intervening Plaintiffs have failed to show that the lakeward boundary of the
public trust territory in Ohio along the Lake Erie shore is the Ordinary Low Water
Mark. The court declares that the law of Ohio is that the proper definition of the
boundary line for the public trust territory of Lake Erie is the water's edge,
wherever that moveable boundary may be at any given time, and that the location
of this moveable boundary is a determination that should be made on a case-by-
case basis.” (Emphasis sic.)
{¶ 15} The trial court order included language from Civ.R. 54(B), “finding
that there is no just reason for delay,” thereby creating a final, appealable order.
{¶ 16} The state of Ohio, the National Wildlife Federation, and the Ohio
Environmental Council appealed to the Eleventh District Court of Appeals, and
the Merrill plaintiffs and Taft, individually, cross-appealed, all challenging the
trial court’s determination that the public-trust territory of Lake Erie is a
moveable boundary consistent with the water’s edge. Additionally, Taft argued
that the court erred in allowing intervention. Notably, ODNR neither filed a
notice of appeal to the court of appeals nor joined in the state’s notice of appeal.
Its failure to separately appeal prompted the court of appeals, during oral
argument, to question whether the state of Ohio had appellate standing before that
court.
{¶ 17} The appellate court concluded that the state of Ohio lacked
appellate standing without ODNR as an appellant, and it affirmed the trial court’s
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January Term, 2011
holdings regarding the intervening parties and the boundary of the public trust,
but vacated the trial court’s reformation of the littoral owners’ deeds.
{¶ 18} In holding that the state of Ohio lacked standing, the court of
appeals cited R.C. 109.02 for the proposition that the Ohio attorney general could
“only act at the behest of the governor, or the General Assembly,” and in this
case, the “attorney general represented the state due to the activities of ODNR,
which department is under the authority of the governor,” who no longer
supported the position taken by ODNR. State ex rel. Merrill v. Ohio Dept. of
Natural Resources, 11th Dist. Nos. 2008-L-007 and 2008-L-008, 2009-Ohio-
4256, ¶ 44. Thus, because the governor “ordered ODNR to cease those activities
that made it a party to the action,” the appellate court found “no authority for the
attorney general to prosecute this matter on his own behalf” and concluded that
the state “no longer has standing in this matter.” Id. Thus, the court of appeals
ordered the state’s assignments of error and briefs stricken.
{¶ 19} Regarding intervention, the appellate court held that the trial court
had correctly permitted the National Wildlife Federation and the Ohio
Environmental Council to intervene because they met the requirements for
intervention as of right pursuant to Civ.R. 24(A) in that the relief sought by the
Merrill and Taft plaintiffs “would extinguish the rights” of their members to
“make recreational use of the shore along Lake Erie below the ordinary high
water mark.” Id. at ¶ 114. The court also concluded that the intervening parties
met the requirements for permissive intervention pursuant to Civ.R. 24(B)
because they demonstrated that their defense and counterclaim factually and
legally related to the claims asserted by the Merrill and Taft plaintiffs.
{¶ 20} The court of appeals also affirmed the trial court’s determination
regarding the boundary of the public trust, holding that the boundary is the
shoreline, which it defined as “the actual water’s edge.” Id. at ¶ 127.
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SUPREME COURT OF OHIO
{¶ 21} In its opinion, the court of appeals erroneously stated that the
question regarding the boundary of the public trust is a matter of first impression
in Ohio. Id. at ¶ 1. It is not. That question has been a matter of settled law in
Ohio for more than a century—since 1878—when this court first announced the
law in a case that called for Lake Erie as the boundary in a deed of conveyance,
and when it subsequently clarified that decision in 1916, and when the legislature,
in response to our request, thereafter codified Ohio law regarding the public trust
in Lake Erie by enacting the Fleming Act in 1917.
{¶ 22} Despite this body of law, the court of appeals concluded: “Based
upon its decisions, the Supreme Court has identified that the waters, and the lands
under the waters of Lake Erie, when submerged under such waters, are subject to
the public trust, while the littoral owner holds title to the natural shoreline. As we
have identified, the shoreline is the line of contact with a body of water with the
land between the high and low water mark. Therefore, the shoreline, that is, the
actual water’s edge, is the line of demarcation between the waters of Lake Erie
and the land when submerged thereunder held in trust by the state of Ohio and
those natural or filled in lands privately held by littoral owners.” (Emphasis sic.)
Id. at ¶ 127.
{¶ 23} ODNR, its director, and the state jointly appealed to this court, as
did the National Wildlife Federation and the Ohio Environmental Council;
individually, Taft cross-appealed. We accepted jurisdiction over these appeals,
which collectively assert six propositions of law and raise the following three
issues: whether the state of Ohio has appellate standing, whether the National
Wildlife Federation and the Ohio Environmental Council are proper intervening
parties, and whether the territory of the public trust extends to the ordinary high-
water mark, as claimed by the state and the environmental groups, or the low-
water mark, as claimed by Taft.
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January Term, 2011
Standing to Appeal
{¶ 24} The state presents a twofold argument to support its position that it
had standing to appeal the decision of the trial court, which declared that the
boundary of the public trust is the water’s edge, and the decision of the court of
appeals, which affirmed the trial court’s declaration. First, the state claims that it
had standing because it is an independent party to this action, and the judgment
entered against it is adverse to its interests. Second, it maintains that the Ohio
attorney general is empowered by the common law and statutes to represent the
state when it is a named party.
{¶ 25} The Merrill and Taft plaintiffs collectively argue that the state
lacked standing to appeal because R.C. 1506.10 designates ODNR as the agency
responsible for the enforcement of the state’s public-trust rights in Lake Erie, and
here, ODNR complied with a gubernatorial directive to cease its active
participation in the matter and did not appeal the trial court’s judgment to the
court of appeals. Thus, they assert, ODNR’s waiver of its appellate rights
foreclosed the state from appealing.
{¶ 26} Separately, Taft argues that the court of appeals correctly
determined that the state lacked standing because R.C. 109.02 precludes the
attorney general from representing the state in the court of appeals absent
authorization from the governor or the General Assembly, and the governor’s
directive to ODNR negates any claim by the attorney general of authorization to
represent the state in this matter. Taft further contends that the General Assembly
enacted R.C. 109.02 in abrogation of the common law, and therefore, the attorney
general lacks nonstatutory authority to act on behalf of the state.
{¶ 27} “Standing is a preliminary inquiry that must be made before a court
may consider the merits of a legal claim.” Kincaid v. Erie Ins. Co., 128 Ohio
St.3d 322, 2010-Ohio-6036, 944 N.E.2d 207, ¶ 9, citing Ohio Pyro, Inc. v. Dept.
of Commerce, 115 Ohio St.3d 375, 2007-Ohio-5024, 875 N.E.2d 550, ¶ 27, and
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SUPREME COURT OF OHIO
Cuyahoga Cty. Bd. of Commrs. v. State, 112 Ohio St.3d 59, 2006-Ohio-6499, 858
N.E.2d 330, ¶ 22. Standing is a question of law, so we review the issue de novo.
Kincaid at ¶ 9.
{¶ 28} To have appellate standing, a party must be “aggrieved by the final
order appealed from.” Ohio Contract Carriers Assn., Inc. v. Pub. Util. Comm.
(1942), 140 Ohio St. 160, 23 O.O. 369, 42 N.E.2d 758, syllabus; see also In re
Guardianship of Santrucek 120 Ohio St.3d 67, 2008-Ohio-4915, 896 N.E.2d 683,
¶ 5; Willoughby Hills v. C.C. Bar's Sahara, Inc. (1992), 64 Ohio St.3d 24, 26, 591
N.E.2d 1203. Cf. Forney v. Apfel (1998), 524 U.S. 266, 271, 118 S.Ct. 1984, 141
L.Ed.2d 269, quoting United States v. Jose (1996), 519 U.S. 54, 56, 117 S.Ct.
463, 136 L.Ed.2d 364 (“a party is ‘aggrieved’ [by] and ordinarily can appeal
[from] a decision ‘granting in part and denying in part the remedy requested’ ”).
{¶ 29} In this case, both the Merrill and Taft plaintiffs sued both the state
of Ohio and ODNR, seeking a declaration regarding the interest of the state as
trustee over the public trust. In addition, count three of Merrill’s first amended
complaint sought a writ of mandamus to compel the state to pay compensation as
a result of ODNR’s alleged taking. Thus, the pleadings verify that the state
became an independent party to the underlying action. It is also an aggrieved
party; the trial court’s determination regarding the boundary of the public trust,
which the court of appeals affirmed, is adverse to the state’s position, and the trial
court’s ruling denied the relief sought by the state in its counterclaim for
declaratory judgment. Accordingly, we conclude that the state of Ohio had
standing to appeal from the judgments of both the trial court and appellate court
due to its status as an aggrieved party.
{¶ 30} Nor does R.C. 1506.10 deprive the state of the ability to appeal in
this case. That statute designates ODNR as “the state agency in all matters
pertaining to the care, protection, and enforcement of the state's rights designated
in this section.” It also provides that “[a]ny order of the director of [ODNR] in
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January Term, 2011
any matter pertaining to the care, protection, and enforcement of the state's rights
in that territory is a rule or adjudication within the meaning of sections 119.01 to
119.13 of the Revised Code.” Here, however, the state appealed from a decision
entered in a declaratory-judgment action, and a matter that seeks a declaration of
rights is different from one that pertains to “the care, protection, and enforcement”
of those rights. We do not construe R.C. 1506.10 as prohibiting the state from
litigating its interests in the public trust, including its right to appeal from a
judgment that adversely affects those interests.
{¶ 31} Similarly, the court of appeals erroneously determined that the
attorney general lacked standing to appeal on behalf of the state. We recognize
that pursuant to a gubernatorial directive, ODNR did not appeal the judgment of
the trial court. As a separate party, however, the state did not abandon its
independent right to appeal. By appealing from the trial court’s judgment, the
state preserved its interest in protecting what it perceives to be the public trust.
{¶ 32} Taft also maintains that the attorney general lacked standing to
appeal because pursuant to R.C. 109.02, absent direction from the governor, the
attorney general had no independent authority to act on behalf of the state.
{¶ 33} In Ohio, the attorney general is a constitutional officer. Section 1,
Article III, Ohio Constitution. The General Assembly has also recognized that the
attorney general is the chief law officer “for the state and all its departments.”
R.C. 109.02. That statute sets forth the attorney general’s statutory duties: “The
attorney general shall appear for the state in the trial and argument of all civil and
criminal causes in the supreme court in which the state is directly or indirectly
interested. When required by the governor or the general assembly, the attorney
general shall appear for the state in any court or tribunal in a cause in which the
state is a party, or in which the state is directly interested. Upon the written
request of the governor, the attorney general shall prosecute any person indicted
for a crime.”
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SUPREME COURT OF OHIO
{¶ 34} The state and federal constitutions “were adopted with a
recognition of established contemporaneous common law principles; and * * *
they did not repudiate, but cherished, the established common law.” State v. Wing
(1902), 66 Ohio St. 407, 420, 64 N.E. 514. In deference to that principle, "the
General Assembly will not be presumed to have intended to abrogate a settled
rule of the common law unless the language used in a statute clearly imports such
intention." State ex rel. Hunt v. Fronizer (1907), 77 Ohio St. 7, 16, 82 N.E. 518.
{¶ 35} This court recently addressed the common-law powers of the
attorney general in relation to R.C. 109.02 in State ex rel. Cordray v. Marshall,
123 Ohio St.3d 229, 2009-Ohio-4986, 915 N.E.2d 633. In rejecting an argument
similar to Taft’s position herein, we concluded that nothing in R.C. Chapter 109
abrogated the attorney general’s common-law power to commence a prohibition
action that sought to compel a common pleas judge to vacate an entry issued in a
criminal case. Id. at ¶ 18, 23.
{¶ 36} Guided by that analysis, we reach the same result and hold that
nothing in R.C. Chapter 109 appears to abrogate the attorney general’s common-
law power to appeal on behalf of the state from an adverse judgment. Cf.
Northeast Ohio Coalition for the Homeless & Serv. Emps. Internatl. Union, Local
1199 v. Blackwell (C.A.6, 2006), 467 F.3d 999, 1008 (attorney general permitted
to intervene on behalf of the state in an appeal of a judgment from which the
secretary of state did not wish to pursue an appeal). Thus, Taft’s position is not
well taken.
{¶ 37} Accordingly, we hold that a party to an action has standing to
appeal from a judgment when it is an independent party to an action and has been
aggrieved by the final order from which it seeks to appeal. Hence, the state of
Ohio has standing to appeal in this case, as it is an independent party against
which an adverse judgment had been rendered.
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January Term, 2011
Intervention
{¶ 38} The court of appeals concluded that the National Wildlife
Federation and the Ohio Environmental Council could intervene either as of right
or with permission. Merrill, 2009-Ohio-4256, ¶ 115, 118. On cross-appeal, Taft
maintains that the appellate court abused its discretion in affirming the trial
court’s decision to permit the National Wildlife Federation and the Ohio
Environmental Council to intervene, contending that these organizations neither
met the requirements of Civ.R. 24(A)(2) for intervention as of right, as they failed
to demonstrate an interest relating to the property or transaction that is the subject
of the action, nor met the requirements of Civ.R. 24(B) for permissive
intervention, in that they failed to demonstrate that they had a claim or defense
that shared a common question of law or fact with the main action.
{¶ 39} In response, the National Wildlife Federation and the Ohio
Environmental Council claim that they met the requirements for intervention as of
right pursuant to Civ.R. 24(A)(2) because some of their members make
recreational use of the land that is the subject matter of this action. In addition,
some of their members are Ohioans and are thus beneficiaries of the public trust
and have a legally protectable interest in public-trust lands. They further contend
that the relief requested by the littoral owners would extinguish their members’
right to use the shore of Lake Erie for recreational purposes.
{¶ 40} These organizations also maintain that they have demonstrated the
existence of common questions of law or fact between their claimed interest in
and right to use the shore and the underlying declaratory-judgment action
sufficient to warrant permissive intervention pursuant to Civ.R. 24(B).
{¶ 41} We construe Civ.R. 24 liberally to permit intervention. State ex
rel. SuperAmerica Group v. Licking Cty. Bd. of Elections (1997), 80 Ohio St.3d
182, 184, 685 N.E.2d 507; see also Rumpke Sanitary Landfill, Inc. v. State, 128
Ohio St.3d 41, 2010-Ohio-6037, 941 N.E.2d 1161, ¶ 22, citing Ohio Dept. of
13
SUPREME COURT OF OHIO
Adm. Servs., Office of Collective Bargaining v. State Emp. Relations Bd. (1990),
54 Ohio St.3d 48, 51, 562 N.E.2d 125. Whether intervention is granted as of right
or by permission, the standard of review is whether the trial court abused its
discretion in allowing intervention. See State ex rel. First New Shiloh Baptist
Church v. Meagher (1998), 82 Ohio St.3d 501, 503, 696 N.E.2d 1058, fn.1;
Rumpke, Inc., at ¶ 22. We acknowledge that State ex rel. First New Shiloh Baptist
Church and Rumpke commented only on the standard of review for intervention
as of right, but because there is no reason to apply a different standard of review
to permissive intervention, we conclude that the same standard applies. Cf. Ohio
Consumers' Counsel v. Pub. Util. Comm., 111 Ohio St.3d 384, 2006-Ohio-5853,
856 N.E.2d 940, ¶ 17 (abuse-of-discretion standard is applied when reviewing
permissive-intervention decisions made by the Public Utilities Commission of
Ohio).
{¶ 42} Regarding intervention as of right, Civ.R. 24(A)(2) provides that
any applicant shall be allowed to intervene in a cause of action “when the
applicant claims an interest relating to the property or transaction that is the
subject of the action and the applicant is so situated that the disposition of the
action may * * * impede the applicant's ability to protect that interest." Further,
the applicant's interest must be one that is " ‘legally protectable,’ " State ex rel.
Dispatch Printing Co. v. Columbus (2000), 90 Ohio St.3d 39, 40, 734 N.E.2d 797,
quoting In re Schmidt (1986), 25 Ohio St.3d 331, 336, 25 OBR 386, 496 N.E.2d
952, and must not be adequately protected by the existing parties. Civ.R.
24(A)(2); State ex rel. LTV Steel Co. v. Gwin (1992), 64 Ohio St.3d 245, 247, 594
N.E.2d 616.
{¶ 43} Regarding permissive intervention, Civ.R. 24(B)(2) provides that a
trial court has discretion to permit an applicant to intervene “when [the]
applicant’s claim or defense and the main action have a question of law or fact in
common.” However, in exercising its discretion, the court “shall consider
14
January Term, 2011
whether the intervention will unduly delay or prejudice the adjudication of the
rights of the original parties.” Id.
{¶ 44} The defense and counterclaim asserted by the National Wildlife
Federation and the Ohio Environmental Council in this case relate both legally
and factually to the claims asserted by the Merrill and Taft plaintiffs; thus, they
have satisfied the “common question of law or fact” requirement of Civ.R.
24(B)(2). Nor did allowing intervention unduly delay or prejudice the
adjudication of the rights of the original parties. The court of appeals, therefore,
did not abuse its discretion in determining that these organizations met the
requirements for permissive intervention. Based on this conclusion, we need not
analyze intervention as of right.
{¶ 45} Accordingly, when an organization demonstrates that it has a claim
or defense that shares a common question of law or fact with the main action and
that intervention will not unduly delay or prejudice the adjudication of the rights
of the original parties, it meets the requirements of Civ.R. 24(B)(2) for permissive
intervention. Hence, the trial court did not abuse its discretion in permitting the
National Wildlife Federation and the Ohio Environmental Council to intervene in
this action.
The Public Trust
{¶ 46} The substantive issue for our resolution concerns the territory of
the public trust, and the parties here disagree as to its boundary. The state, the
National Wildlife Federation, and the Ohio Environmental Council all urge us to
hold that the court of appeals erred in setting the landward boundary of the public
trust at the water’s edge, arguing instead that the boundary is the ordinary high-
water mark, which they claim that case law has construed to mean the natural
shoreline, as well as “the line where the water usually stands when free from
disturbing causes.”
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SUPREME COURT OF OHIO
{¶ 47} The Taft plaintiffs contend that the court of appeals erred by not
defining the landward boundary of the public trust as the low-water mark, as
modified by accretion, reliction, or erosion.
{¶ 48} The Merrill plaintiffs, as appellees in the Supreme Court, assert
that the boundary is the natural shoreline, which it claims is the line at which the
water meets the shore wherever that may be at any given time, and they urge this
court to affirm the judgment of the court of appeals.
{¶ 49} More than 130 years ago, in Sloan v. Biemiller (1878), 34 Ohio St.
492, we determined that when a real estate conveyance calls for Lake Erie as the
boundary, the littoral owner’s property interest “extends to the line at which the
water usually stands when free from disturbing causes.” Id. at paragraph four of
the syllabus. In our analysis, we adopted the position taken by the Supreme Court
of Illinois in Seaman v. Smith (1860), 24 Ill. 521, syllabus (“The line at which the
water usually stands when free from disturbing causes, is the boundary of land in
a conveyance calling for Lake Michigan as a line”).
{¶ 50} Contrary to the position advanced by the state, although Sloan
quoted language from Seaman that referred to “the usual high-water mark,” which
is synonymous with the ordinary high-water mark, neither Sloan nor Seaman
adopted that as the boundary or defined “the line at which the water usually stands
when free from disturbing causes” to mean “the usual high-water mark.” As a
subsequent case from the Supreme Court of Illinois explained, “[i]t is clear from
the reasoning and conclusion in [Seaman], in the light of the judgment entered,
that it was not the high-water mark that was taken as the true limit of the
boundary line, but the line where the water usually stood when unaffected by
storms or other disturbing causes.” Brundage v. Knox (1917), 279 Ill. 450, 471,
117 N.E. 123. In addition to a storm, a drought may constitute a disturbing cause.
See Appeal of York Haven Water & Power Co. (1905), 212 Pa. 622, 631, 62 A.
97.
16
January Term, 2011
{¶ 51} Subsequent to our decision in Sloan, in State v. Cleveland &
Pittsburgh RR. Co. (1916), 94 Ohio St. 61, 79, 113 N.E. 677, we held that “the
state holds the title to the subaqueous land [of Lake Erie within the boundaries of
Ohio] as trustee for the protection of public rights.” In so holding, we followed
our decision in Sloan, among other cases, and concluded that “[t]he littoral owner
is entitled to access to navigable water on the front of which his land lies, and,
subject to regulation and control by the federal and state governments, has, for
purposes of navigation, the right to wharf out to navigable water.” Id. at
paragraph five of the syllabus. In that case, we also urged the General Assembly
to pass legislation that would “appropriately provide for the performance by the
state of its duty as trustee for the purposes stated; that [would] determine and
define what constitutes an interference with public rights, and that [would]
likewise, in a spirit of justice and equity, provide for the protection and exercise
of the rights of the shore owners.” Id. at 84. The General Assembly did so the
following year when it enacted the Fleming Act.
{¶ 52} The Fleming Act clarified the public policy of the state of Ohio
with respect to the waters of Lake Erie, and its pronouncement conformed to
decisions of this court dating from 1878 (Sloan). See G.C. 3699-a, Am.H.B. No.
255, 107 Ohio Laws 587, recodified as R.C. 123.03, and now renumbered as R.C.
1506.10. The current version of the statute is substantially similar to the original
statute, and notably, both refer to the “natural shore line.”
{¶ 53} At present, R.C. 1506.10 provides: “It is hereby declared that the
waters of Lake Erie consisting of the territory within the boundaries of the state,
extending from the southerly shore of Lake Erie to the international boundary line
between the United States and Canada, together with the soil beneath and their
contents, do now belong and have always, since the organization of the state of
Ohio, belonged to the state as proprietor in trust for the people of the state, for the
public uses to which they may be adapted, subject to the powers of the United
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SUPREME COURT OF OHIO
States government, to the public rights of navigation, water commerce, and
fishery, and to the property rights of littoral owners, including the right to make
reasonable use of the waters in front of or flowing past their lands. Any artificial
encroachments by public or private littoral owners, which interfere with the free
flow of commerce in navigable channels, whether in the form of wharves, piers,
fills, or otherwise, beyond the natural shoreline of those waters, not expressly
authorized by the general assembly, acting within its powers, or pursuant to
section 1506.11 of the Revised Code, shall not be considered as having prejudiced
the rights of the public in such domain. This section does not limit the right of the
state to control, improve, or place aids to navigation in the other navigable waters
of the state or the territory formerly covered thereby.”
{¶ 54} Subsequently, in State ex rel. Squire v. Cleveland (1948), 150 Ohio
St. 303, 337, 38 O.O. 161, 82 N.E.2d 709, we held that the Fleming Act did “not
change the concept of the declaration of the state’s title as [declared in Cleveland
& Pittsburgh RR. Co., 94 Ohio St. 61, 113 N.E. 677].” Instead, the act merely
reiterated this court’s pronouncement in that case. Thus, we reaffirmed that
“littoral owners of the upland have no title beyond the natural shore line; they
have only the right of access and wharfing out to navigable waters.” Squire at
337. From that holding, it follows that the converse is also true: if a littoral owner
has no property rights lakeward of the natural shoreline, then the territory of the
public trust does not extend landward beyond the natural shoreline. Hence, our
review centers on the term “natural shoreline.”
{¶ 55} Not long after our opinion in Squire, the General Assembly, in
1955, enacted R.C. 123.031 in Am.Sub.S.B. No. 187, 126 Ohio Laws 137, 138,
which has since been amended and renumbered as R.C. 1506.11. R.C. 123.031
defined the “territory” of the public trust with reference to the “natural shore
line.” The current version of the statute also includes that reference point,
defining the term “territory” to mean “the waters and the lands presently
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January Term, 2011
underlying the waters of Lake Erie and the lands formerly underlying the waters
of Lake Erie and now artificially filled, between the natural shoreline and the
international boundary line with Canada.” R.C. 1506.11.
{¶ 56} As noted previously, the General Assembly enacted the Fleming
Act a year after this court urged it to pass legislation defining what constitutes an
interference with public rights, and, therefore, we presume it did so mindful of the
common law. We likewise presume that the General Assembly acted with full
knowledge of the common law when it subsequently amended and added sections
to the Fleming Act. Accordingly, we conclude that when the General Assembly
defined the boundary of the “territory” of the public trust as the “natural
shoreline,” it ascribed a meaning to that term consistent with the meaning set forth
in this court’s decisions, including Sloan.
{¶ 57} The boundary of the public trust does not, however, as the court of
appeals concluded in affirming the trial court, change from moment to moment as
the water rises and falls; rather, it is at the location where the water usually stands
when free from disturbing causes. That is what we stated in Sloan, that is what
has been understood for more than a century in Ohio, that is what the General
Assembly meant by “natural shore line” when it enacted G.C. 3699-a in 1917, and
that is what the law was when ODNR began to enforce the leasing policy, which
it has since abandoned, having recognized the presumptive validity of the owners’
deeds. We see no reason to modify that law now.
{¶ 58} Finally, the decision of the court of appeals erroneously intimated
that a littoral-property owner might extend lakefront property with the addition of
artificial fill. Merrill, 2009-Ohio-4256, ¶ 127. According to representations in
their briefs, the parties generally agree that artificial fill cannot extend a littoral
owner’s property, except where a littoral owner reclaims land stripped away
because of sudden changes caused by avulsion. Additionally, the parties
acknowledge that while accretion may increase the property of a littoral owner,
19
SUPREME COURT OF OHIO
erosion may decrease it. Cf. State ex rel. Duffy v. Lakefront E. Fifty-Fifth St.
Corp. (1940), 137 Ohio St. 8, 11, 17 O.O. 301, 27 N.E.2d 485; United States v.
461.42 Acres of Land in Lucas Cty., Ohio (N.D.Ohio 1963), 222 F.Supp. 55, 56.
Thus, we need not further comment on or clarify the effect of these processes on
the property line because the parties generally have no dispute regarding them.
{¶ 59} Accordingly, the territory of Lake Erie held in trust by the state of
Ohio for the people of the state extends to the natural shoreline, which is the line
at which the water usually stands when free from disturbing causes.
{¶ 60} This court has a history of protecting property rights, and our
decision today continues that long-standing precedent. In Cleveland & Pittsburgh
RR. Co., 94 Ohio St. 61, 113 N.E. 677, syllabus, this court acknowledged that a
littoral owner has a right to access and wharf out to navigable waters, and in
Squire, we held that if the state or a municipality improperly destroys or impairs
that property right, a littoral owner is entitled to compensation. 150 Ohio St. 303,
38 O.O. 161, 82 N.E.2d 709, paragraph six of the syllabus. We recently reiterated
our adherence to the principles that protect property rights in Norwood v. Horney,
110 Ohio St.3d 353, 2006-Ohio-3799, 853 N.E.2d 1115, ¶ 37, where we
explained that “the founders of our state expressly incorporated individual
property rights into the Ohio Constitution in terms that reinforced the sacrosanct
nature of the individual's ‘inalienable’ property rights, Section 1, Article I [Ohio
Constitution], which are to be held forever ‘inviolate.’ Section 19, Article I.”
(Footnote deleted.) Id. We further observed that Ohio has always considered
property rights to be fundamental and concluded that “the bundle of venerable
rights associated with property is strongly protected in the Ohio Constitution and
must be trod upon lightly, no matter how great the weight of other forces.” Id. at
¶ 38.
{¶ 61} During the pendency of this litigation, ODNR announced that it
“should honor the apparently valid real property deeds of the plaintiff-relator
20
January Term, 2011
lakefront owners unless a court determine[d] that the deeds are limited by or
subject to the public’s interests in those lands or are otherwise defective or
unenforceable.” It further represented that it “will adopt or enforce administrative
rules and regulatory policies with the assumption that the lakefront owners’ deeds
[are] presumptively valid, and also, will no longer require property owners to
lease land contained within their presumptively valid deeds.”
{¶ 62} Our decision today reaffirms this court’s previous determination
that the territory of the public trust in Lake Erie extends to the natural shoreline,
which is the line at which the water usually stands when free from disturbing
causes, which we first announced in 1878 and clarified in 1916, and which the
General Assembly codified in 1917. Nothing contained in our opinion interferes
with the presumptively valid deeds of the lakefront owners. Similarly, we
reaffirm our statement in Squire that “[t]he littoral owners of the upland have no
title beyond the natural shoreline; they have only the right of access and wharfing
out to navigable waters.” Id. at 337.
Conclusion
{¶ 63} The state of Ohio has standing to appeal from a judgment when it is
an independent party to an action and has been aggrieved by the final order from
which it seeks to appeal. In addition, the National Wildlife Federation and the
Ohio Environmental Council are proper intervening parties to this lawsuit
pursuant to Civ.R. 24. Further, we conclude that the territory of Lake Erie, held
in trust by the state of Ohio for the people of the state, extends to the natural
shoreline, which is the line at which the water usually stands when free from
disturbing causes.
{¶ 64} Consequently, we reverse the holding of the court of appeals that
the state of Ohio lacked appellate standing, but we affirm its holding that upheld
the decision to permit the National Wildlife Federation and the Ohio
Environmental Council to intervene pursuant to Civ.R. 24(B)(2).
21
SUPREME COURT OF OHIO
{¶ 65} Having clarified that the territory of Lake Erie is held in trust for
the people of Ohio and extends to the natural shoreline, the line at which the water
usually stands when free from disturbing causes, we affirm the appellate court to
the extent that its judgment is consistent with this pronouncement, but we reverse
its decision implying that artificial fill can alter the boundary of the public trust
and its decision to affirm the trial court’s decision that the boundary of the public
trust changes from moment to moment. This matter is remanded to the trial court
for further proceedings on pending claims consistent with this opinion.
Judgment accordingly.
PFEIFER, LUNDBERG STRATTON, CUPP, and MCGEE BROWN, JJ., concur.
O’CONNOR, C.J., and LANZINGER, J., concur in syllabus and judgment
only.
_________________
Homer S. Taft, pro se.
Calfee, Halter & Griswold, L.L.P., James F. Lang, and Fritz E.
Berckmueller, for appellee class-action plaintiffs.
L. Scot Duncan, pro se, and for appellee Darla J. Duncan.
Michael DeWine, Attorney General, Alexandra T. Schimmer, Chief
Deputy Solicitor General, Stephen P. Carney, Deputy Solicitor, and Cynthia K.
Frazzini, Assistant Attorney General, for appellant and cross-appellee state of
Ohio.
Porter, Wright, Morris & Arthur, L.L.P., and Kathleen M. Trafford,
Special Counsel for appellants and cross-appellees Ohio Department of Natural
Resources and Director David Mustine.
Neil S. Kagan and Peter A. Precario, for appellants and cross-appellees
National Wildlife Federation and Ohio Environmental Council.
Chester, Willcox & Saxbe, L.L.P., Charles R. Saxbe, and Gerhardt A.
Gosnell II, in support of the state’s first proposition of law on behalf of amici
22
January Term, 2011
curiae former Ohio Attorneys General Betty Montgomery, Jim Petro, and Nancy
Rogers.
Michael A. Cox, Attorney General of Michigan, B. Eric Restuccia,
Solicitor General, S. Peter Manning, Division Chief, and Robert P. Reichel and
Darryl J. Paquette, Assistant Attorneys General; and Thomas W. Corbett Jr.,
Attorney General of Pennsylvania, in support of the state of Ohio on behalf of
amici curiae the states of Michigan and Pennsylvania.
The Law Office of Colin Bennett, L.L.C., and Colin William Bennett, in
support of appellants and cross-appellees on behalf of amici curiae Joseph
Sommer, Frances Buchholzer, Robert Teater, Ohio Bass Federation, Izaak Walton
League of America, Ohio Chapter, and Northeast Ohio Watershed Council.
R. S. Radford and Luke A. Wake; and Michael R. Gareau & Associates
Co., L.P.A., and David M. Gareau, in support of appellees on behalf of amicus
curiae, Pacific Legal Foundation.
John P. O'Donnell, L.L.C., and John P. O'Donnell; and Baker & Hostetler,
L.L.P., and John H. Burtch, urging affirmance on behalf of amici curiae Willow
Beach Club, Brookwood-Cresthaven Beach Club, Inc., the Linwood Park
Company, and the Ohio Association of Realtors.
Ogletree, Deakins, Nash, Smoak & Stewart, P.C., Bruce G. Hearey, and
LerVal M. Elva, in support of appellees on behalf of amicus curiae National
Federation of Independent Business Small Business Legal Center.
Michael E. Gilb, urging affirmance on behalf of amicus curiae Geauga
Constitutional Council.
Smith, Martin, Powers & Knier, P.C., and David L. Powers, in support of
class-action plaintiffs on behalf of amicus curiae Save Our Shoreline.
Chad A. Endsley, in support of class-action plaintiffs on behalf of amicus
curiae Ohio Farm Bureau Federation.
23
SUPREME COURT OF OHIO
Faulkner, Muskovitz & Phillips and Robert M. Phillips; and Patrick A.
D'Angelo, urging affirmance on behalf of amici curiae Ohio Fraternal Order of
Police Lodge 8 and Cleveland Police Patrolmen's Association.
Montgomery Consulting Group, L.L.C., Betty Montgomery, opposing the
state’s second proposition of law on behalf of amicus curiae Betty Montgomery.
Shannon Lee Goessling, in support of class-action plaintiffs on behalf of
amicus curiae Southeastern Legal Foundation, Inc.
Maurice A. Thompson, urging affirmance on behalf of amicus curiae 1851
Center for Constitutional Law.
______________________
24
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859 N.E.2d 323 (2003)
344 Ill. App.3d 1230
307 Ill.Dec. 312
IN RE A.K.
No. 3-02-0817.
Appellate Court of Illinois, Third District.
November 20, 2003.
Affirmed.
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@ffice of tip Bttornep QBeneral
&ate of fEexa$
DAN MORALES January 23.1992
*TTORNEY
GENERAL
Honorable Mark H. Dettman Gpiioa No. DM-77
Midland County Attorney
P. 0. Box 2559 Re: Authority of a sheriff to conduct
Midland, Texas 79702 investigations and make arrests outside
his county, and related question
(RQ-169)
Dear Mr. Dettman:
You have requested our opinion regarding the authority of the Midland
County Sheriff to engage in law enforcement activities outside Midland County.
You indicate that the sheriff believes “he is entitled to conduct hi law enforcement
operations anywhere in the State of Texas as well as in other states, which in this
case have included Arizona, Oklahoma, Indiana, and Illinois.” The activities involve
“reverse-sting” operations “in which law enforcement agents pose as drug dealers
and agree to sell confiscated narcotics to willing buyers.” After funds from sale of
the drugs are seized, “these seized funds are forfeited to the sheriffs department
and other arresting agencies.”
Article 5, section 23. of the Texas Constitution provides that the “duties and
prerequisites, and fees of office [of sheriff], shall be prescribed by the Legislature.”
Pursuant to such authorization, article 2.17 of the Code of Criminal Procedure
declares, “Each sheriff shall be a conservator of the peace in Iris county.” (Emphasis
added.)
In Attorney General Opinion H-1016 (1977), this office was asked whether a
sheriff was authorized to make a warrantless arrest outside his county, where the
offense is committed in his presence or within his view.1 Relying primarily on
hrrcst uodcr warrantextends 30 any part of the State; and any peace officer to whom said
warrantis directed,or into whose hamis the same has km transferred,shall be authorized to -tc
the Sam0in anycouolyin thisstate.’code trim. Proc art. t5.oL5.
p. 383
Honorable Mark H. Dettman - Page 2 (DM-77)
Hemon v. State, 49 S.W.2d 463 (Tex. Grim App. 1932), the opinion concluded that
a sheriff, outside his county, had no more authority than did a private individual to
make warrantless arrests.2 In Henson, the court had declared:
In the absence of a warrant of arrest issued under the provisions
of article 223, supra [now article 15.06 of the Code of Criminal
Procedure], a sheriff as such is not authorized to make an arrest
outside of his county.
49 S.W.2d at 465. Furthermore, the court said that the statutes
evidence the intention of the Legislature to confine the
jurisdiction of the sheriff to his county, except in so far as the
authority to execute warrants of arrest in any county of the state
is conferred by article 223, [Code of Criminal Procedure].
Id.
Subsequent to the issuance of Attorney General Opinion H-1016, the
legislature enacted section (d) of article 14.03 of the Code of Criminal Procedure.
That statute provides:
A peace officer who is outside his jurisdiction may arrest,
without warrant, a person who commits an offense within the
officer’s presence or view, if the offense is a felony or a violation
of Title 9, Chapter 42, Penal Code [disorderly conduct and
related offenses]. A peace officer making an arrest under this
subsection shall, as soon as practicable after making the arrest,
notify a law enforcement agency having jurisdiction where the
arrest was made. The law enforcement agency shall then take
custody of the person committing the offense and take the
person before a magistrate in compliance with Article 14.06 of
this code.
2Article 14.01(a) of the Code of Criminal Procedure states, “A peace of&&r or any other
person, may, witbout a warrant,arrest an offender when the offense is committed io his Presence or
within his view, if the offense is one classifiedas a felony or as an offew against the public peace..”
p. 384
Honorable Mark H. Dettman - Page 3 (DM-77)
The question before us is whether the enactment of section (d) of article 14.03
extended the authority of a sheriff to initiate investigations and make arrests outside
his county.
Article 14.03(d) in fact makes clear that a peace offtcer’s authority is, in
general, .&n&f to his geographical jurisdiction. On its face, article 14.03(d) grants
to a sheriff no authority beyond that already conferred by article 14.01(a). See note
2, SZQM.~ h our opinion, the purpose of article 14.03(d) is to make clear that a
peace officer need not sit idly by while a felony is committed in his plain view. The
statute provides, however, that the appropriate law enforcement agency of the
foreign jurisdiction is to be brought in as soon as is practicable. In our view, the
thrust of article 14.03(d) is to define rather narrowly the limits of a peace officer’s
authority outside his own jurisdiction.
This conclusion is buttressed by a number of other statutes. Section
411.009(b) of the Government Code, for example, provides that the director of the
Department of Public Safety
may require a sheriff or other police officer in a county or
municipality, within the limits ofthe officer’sjr&%&on, to aid or
assist in the performance of a duty imposed by this chapter.
(Emphasis added.)
Section 411.022(a) of the Government Code contrasts the authority of an officer of
the Texas Rangers with that of a sheriff:
An officer of the Texas Rangers is governed by the law
regulating and defining the powers and duties of sheriffs
performing similar duties, except that the officer may make
arrests, execute process in a criminal case in wry county.
(Emphasis added.)
Furthermore, chapter 362 of the Local Government Code provides a
mechanism for a governmental body, including a county, to offer the assistance of its
law enforcement officers to other jurisdictions. Such authorization would not be
3Article 14.01(a)permits a warrantless arrest for any felony or “offense against the public
peace,” while article 14.03(d) authorizes arrest for any felony or violation of the disorderly conduct
statutes.
p. 385
Honorable Mark H. Dettman - Page 4 (DM-77)
necessary if a sheriff’s general authority extended beyond his county. S&on
362.002 provides:
(a) A county, municipality, or joint airport may, by
resolution or order of its governing body, provide for, or
authorize its chief administrative officer, chief of police, or
marshal to provide for. its regularly employed law enforcement
officers to assist another county, municipality, or joint airport.
This assistance may be provided only when tbe mayor or other
officer authorized to declare a state of civil emergency in the
other county, municipality, or joint airport considers additional
law enforcement officers necessary to protect health, life, and
property in the county, municipality, or joint airport because of
disaster. riot, threat of concealed explosives, or unlawful
assembly characterized by force and violence or the threat of
force and violence by three or more persons acting together or
without lawful authority.
(b) A county, municipality, or joint airport may, by
resolution or order of its governing body, enter into an
agreement with a neighboring municipality, joint airport, or
contiguous county to form a mutual aid law enforcement task
force to cooperate in criminal investigations and law
enforcement. Peace officers employed by counties, municipalities,
or joint airportscovered by the agreement hove or@ the oddidonal
investigativeauthority throughout the region (LTset forth in the
ugreement. The agreement must provide for the compensation
of peace officers involved in the activities of the task force.
(c) A law enforcement officer employed by a county,
municipality, or joint airport that is covered by the agreement
may make an arrest outside the county, municipality, or joint
airport in which the officer is employed but within the area
covered by the agreement. The law enforcement agencies of the
area where the arrest is made shall be notified of the arrest
without delay, and the notified agency shall make availablt the
notice of the arrest in the same manner as if the arrest were
made by a member of that agency. (Emphasis added.)
p. 386
Honorable Mark H. Dettman - Page 5 (DM-77)
Section 362.003(a) provides that during the time in which a law enforcement officer
regularly employed by one jurisdiction is in the service of another political
subdivision, he has “all the powers of a regular law enforcement officer” of that
political subdivision. In our opinion, the existence of chapter 362, enacted in 1987,
makes clear beyond all doubt that a sheriff does not have any general authority to
conduct investigations outside hi county. His authority to make arrests outside his
county is limited by the conditions imposed in article 14.03(d) of the Code of
Cdminal Procedure.
We note that at least one court, in a decision issued after the enactment of
article 14.03(d). has confirmed this conclusion. In Lundrum v. State. 751 S.W.2d 530
(Tex. App.-Dallas 1988. pet. refd), the court held that a city peace officer’s
jurisdiction to investigate crime extends throughout the county as does his
jurisdiction to arrest. In dicta, the court said that “[a] county sheriff’s jurisdiction is
county-wide.” Id at 531. We believe that the court’s emphasis on “investigate,” as
well as “arrest,” is significant, and confirms our view that the general power of
investigation granted to a sheriff is limited to the jurisdiction for which he was
elected: the county. Since the authority of a sheriff to investigate crime is generally
limited to his county, it is clear that he can exercise no such authority outside the
State of Texas?
You also inquire about the proper disposition of funds seized by the sheriff
while operating in areas outside Midland County. Chapter 59 of the Code of
criminal Procedure, enacted in 1989, describes the procedures for the forfeiture of
contraband. Article 59.06 provides for the disposition of forfeited property. Section
(a) thereof declares that “[a]11forfeited property shall be administered by the
attorney representing the state, acting as the agent of the state.” The forfeited
property must be administered in accordance “with the provisions of any local
agreement entered into between the attorney representing the state and law
enforcement agencies.” Id. We have been informed that an agreement exists
‘Article 14.051 of the Code of Crimhal Procedure autbrkes a peace officer who is
,”ccmmissioocd and authorizedby another state to make arrestsfor felooies”to make an arrestin Texas
wkn the officer‘lsin freshpursuit’of a suspected felon. As of 1991,42 other states and the Diitrict of
Columbia, including all of the. states borderingTexas, have adopted simii statutoryprovisioos, thus
cmphasiziq that a peace officer may make ao arrest outside his home state only under spe&cally
reslrictcdclrcumstanccs. Texas is also a partyto the Uniform Crimiial ExtraditionAct, article 5l.U.
Code of CZmiaal Procedure.
p. 387
Honorable Mark H. Dettman - Page 6 (DM-77)
between the attorney for the stat@ and the Midland County Sheriffs Office.
Sections (b), (c), and (d) of article 59.06 furnish a detailed description of the
procedures that must be followed when an agreement exists.
We have not been furnished with a copy of the existing agreement between
the sheriff and the relevant prosecutor. The provision for a “local agreement”
specified in article 59.06 requires such an agreement between the prosecuting
attorney “in the county in which a forfeiture proceeding is held” and the law
enforcement agency. If no “local agreement” controls, section (a) provides that any
seized property “shall be sold on the 75th day after the date of the final judgment of
forfeiture at public auction under the direction of the county sheriff.” Any proceeds
resulting from such sale must be distributed as follows:
(1) to any interest holder to the extent of the interest
holder’s nonforfeitable interest; and
(2) the balance, if any, after deductions of all storage and
disposal costs, to be deposited not later than the 39th day after
the date of the sale in the state treasury to the credit of the
general revenue fund.
Since there appears to have been no authority for the sheriff to have seized
the funds in question in the first place, we will not speculate on their proper
disposition. We cannot, however, imagine any basis for the position of the
commissioners court that funds seized in out-of-county operations, including those
outside the State of Texas, should be deposited in the general fund of Midland
County. In any event, the proper disposition of funds resulting from a forfeiture
based on the extra-jurisdictional activities of a sheriff requires the resolution of a
nmber of fact questions that cannot be addressed in the opinion process.
SUMMARX
A sheriff has no general authority to investigate criminal
activities outside of the geographical boundaries of the county
for which he is elected. His authority to make warrantless
SAttorney representingthe state”is defmed for purposes of chapter59 as “theprosecutorwith
felonyjurisdictionin the county in which a forfeitureproceedingis held under this chapter.’
P. 388
Honorable Mark H. Dettman - Page 7 (DM-77)
arrests outside his county is circumscribed by the conditions
imposed in article 14.03(d) of the Texas Code of Criminal
Procedure.
DAN MORALES
Attorney General of Texas
WILL PRYOR
First Assistant Attorney General
MARYKELLBR
Deputy Assistant Attorney General
JUDGE ZOLLIE STEAKLEY (Ret)
Special Assistant Attorney General
RENEA HICKS
Special Assistant Attorney General
MADELEINE B. JOHNSON
Chair, Opinion Committee
Prepared by Rick Gilpin
Assistant Attorney General
p. 389
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T.C. Summary Opinion 2009-169
UNITED STATES TAX COURT
KEITH ROBERT CALDWELL, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 9011-08S. Filed November 18, 2009.
Keith Robert Caldwell, pro se.
Scott Little, for respondent.
MORRISON, Judge: This case was heard pursuant to the
provisions of section 7463 of the Internal Revenue Code in effect
at the time the petition was filed. Pursuant to section 7463(b),
the decision to be entered is not reviewable by any other court,
and this opinion shall not be treated as precedent for any other
case. Unless otherwise indicated, subsequent section references
- 2 -
are to the Internal Revenue Code as amended, and all Rule
references are to the Tax Court Rules of Practice and Procedure.
Background
Petitioner Keith Robert Caldwell1 resided in Virginia at the
time his petition was filed.
This case, which relates to Caldwell’s 2006 tax, is very
similar to Caldwell v. Commissioner, T.C. Summary Opinion 2008-
77, which related to his 2004 tax. The procedural history of
each case is similar in the following respects.
(1) Caldwell filed a petition disputing respondent IRS’s
disallowance of his alimony deduction for the relevant year.
(2) The IRS conceded that the alimony deduction was to be
allowed in full and that he would have no deficiency for the
year. The IRS conceded the previous case (i.e., the case
relating to his 2004 tax) because Caldwell supplied additional
substantiation for the alimony deduction, including (a) the court
order requiring Caldwell to pay the alimony and (b) documents
showing that the amount of retirement income Caldwell reported on
his return was being reported to him gross, not net, of the
alimony (a tax deduction in the latter situation would have been
duplicative). We infer that this additional substantiation may
1
Caldwell has previously represented to the Court that he
has a doctorate in management.
- 3 -
be what led the IRS to concede the alimony deduction in this case
as well.
(3) Caldwell refused to agree to any stipulations
reflecting the IRS’s concession. In the previous case, he
refused to agree to the stipulations at least in part because he
wanted the IRS to also stipulate an issue relating to his 2003
tax year (even though the Court advised him that the issue was
not before it) and to “stipulate” that it would not audit him
with respect to the alimony issue for other years. We do not
know why he refused to agree to stipulations in this case. He
simply stated that he would not do so until the Court responded
to the motion discussed below.
(4) Caldwell filed a motion for (a) reasonable litigation
and administrative costs under section 7430; and (b) other types
of relief that we do not have authority to provide.
Caldwell’s request in the previous case, purportedly
entirely under section 7430, was for $100,000 tax-free. We infer
from the amount requested, the absence of any indication that he
had costs potentially recoverable under that section (which
generally allows recovery only of a taxpayer’s direct costs of an
audit or litigation, such as accountant’s and attorney’s fees and
court costs), and his vague reference in the motion in that case
to “significant physical and mental harm as well as financial
loss” that most of the amount instead reflected compensation for
- 4 -
generalized distress caused by the litigation and preceding
audit.
Caldwell’s request in this case is for reasonable litigation
and administrative costs and for an apology from the Commissioner
of Internal Revenue and a change in the IRS’s procedures to
protect him from “erroneous” audits. Caldwell titled the motion
in this case (i.e., the 2006 case) “Motion to Require the
Respondent to Provide a Written Letter of Apology to the
Petitioner, and to Reimburse the Petitioner Administrative Costs
Related to Filing and Processing Legal Actions Relevant to this
Case.” For convenience, we refer to the parts requesting
reimbursement of costs as the “Request for Costs,” and to the
parts requesting an apology and other relief as the “Request for
Apology.”2
The IRS filed an objection to the motion in this case, which
we discuss below to the extent necessary to decide the motion.
In neither case did Caldwell’s motion state, nor did
anything else before the Court indicate, what Caldwell’s
litigation and administrative costs were (aside from a $60 filing
2
Rule 54(b) requires in relevant part that “Unless otherwise
permitted by the Court, motions shall be separately stated and
not joined together * * *.” Although Caldwell’s motion might
more properly have been made as two separate motions, we decline
to question it on that ground because neither the IRS’s ability
to respond to the motion nor the Court’s ability to decide it
have been adversely affected. See Rule 1(d) (“The Court’s Rules
shall be construed to secure the just, speedy, and inexpensive
determination of every case.”).
- 5 -
fee for each case) or suggest that the costs were substantial.
Caldwell did not pay a lawyer or other representative to
represent him in this case.
In the previous case, the Court issued an order on March 13,
2008, before Caldwell filed the foregoing motion in that case (or
the corresponding motion in this case) which provided in part as
follows.
At an oral status report on this matter * * *.
* * * petitioner indicated his desire to seek
administrative and or litigation costs, pursuant to
section 7430 and Rule 230 et seq. [Fn. ref. omitted.]
* * * * * * *
The Court advises petitioner that litigation and
administrative costs are limited to substantiated, out
of pocket costs incurred in addressing the tax dispute
currently before the Court * * *.3 * * * In the event
that petitioner elects to request an award of
reasonable litigation and administrative costs pursuant
to section 7430, petitioner should review section 7430
and follow the requirements outlined in Rules 230
through 233, particularly Rule 231(b) [requiring
certain specific assertions] and (d) [requiring an
affidavit describing the costs].
3
In section 4 of his petition, petitioner states,
in part: “The Petitioner’s requested relief in this
matter is $50,000.00.” In his January 29, 2008,
memorandum * * * petitioner demands a $100,000 tax-free
payment from the government to avoid public disclosure
of respondent’s actions in challenging petitioner’s
claimed alimony deduction. The Tax Court is a court
with jurisdiction strictly limited by statute. We may
exercise our jurisdiction only to the extent authorized
by Congress. See sec. 7442; Naftel v. Commissioner, 85
T.C. 527, 529 (1985). Petitioner should be mindful of
the Court’s limited jurisdiction in any claim he might
choose to make in this proceeding. For example, the
Tax Court does not have jurisdiction to consider claims
for punitive damages against the Internal Revenue
- 6 -
Service. Grigoraci v. Commissioner, 122 T.C. 272, 280
(2004); Petito v. Commissioner, T.C. Memo 2002-271.
See also Chocallo v. Commissioner, T.C. Memo 2004-152.
Discussion
No Deficiency or Overpayment
The IRS has conceded all issues other than those relating to
Caldwell’s motion discussed below, and we accept the IRS’s
concessions. Accordingly, the Court will enter a decision of no
deficiency or overpayment for Caldwell’s 2006 taxable year. See
Fazi v. Commissioner, 105 T.C. 436, 444 (1995) (“It is within
this Court’s discretion to accept or reject a concession.”).
Request for Apology
The part of Caldwell’s motion which we characterize as a
“Request for Apology” asks that we require the IRS to enter into
the record “a written apology to the Petitioner, signed by the
Commissioner, Internal Revenue Service”, which must “explain the
steps that the IRS has taken to prevent future acts of erroneous
tax audits that were demonstrated in the IRS audit of the
Petitioner’s tax filings [for] 2006, 2004, and 2003.”
The Tax Court may exercise jurisdiction only to the extent
authorized by Congress. See sec. 7442; Naftel v. Commissioner,
85 T.C. 527, 529 (1985). The question of the Court’s
jurisdiction is fundamental and must be addressed when raised by
a party or on the Court’s own motion. See Estate of Young v.
Commissioner, 81 T.C. 879, 880-881 (1983). If we find that we do
- 7 -
not have jurisdiction to consider an issue, then despite a
party’s choice of the Tax Court as a forum to settle the dispute,
we may not decide the issue. Naftel v. Commissioner, supra at
530.
Despite the Court’s warning to him in the previous case that
the Court’s powers to grant relief are limited, Caldwell has not
stated why he believes that we have jurisdiction to order the
Commissioner of Internal Revenue to apologize to him or to order
the IRS prospectively to change its procedures. The IRS objected
to the Request for Apology on the ground that Congress has not,
through section 7430 (relating to administrative or litigation
costs) or otherwise, authorized us to grant such relief.3 We
agree.
We lack jurisdiction to order the IRS to grant the relief
requested in the Request for Apology, or similar relief, and will
accordingly deny the Request for Apology.
Request for Costs
We construe the remainder of Caldwell’s motion (Request for
Costs) as a motion for reasonable litigation and administrative
costs under section 7430. (Caldwell has not stated what rule of
3
The IRS further argued that the Federal Government’s
sovereign immunity would prevent us from granting such relief.
Since nothing of which we are aware even suggests we could grant
the relief, we need not consider whether sovereign immunity
prevents us from granting it.
- 8 -
law may authorize us to consider the Request for Costs, but we
are not aware of any other than, possibly, section 7430.)
Rule 231(b) requires that a section 7430 motion be in
writing and contain, among other things: a statement that the
moving party has exhausted the administrative remedies available
to such party within the IRS; a statement that the moving party
has not unreasonably protracted the Court proceeding, and, if the
claim includes a claim for administrative costs, the
administrative proceeding; and a statement of the specific
litigation and administrative costs for which the moving party
claims an award, supported by an affidavit in the form specified
by Rule 231(d).
Despite being directed by this Court to present his motion
for costs in the previous case in accordance with Rule 231 and
receiving an explanation in the Court’s opinion in that case that
his failure to do so was one of the reasons his motion for costs
was denied, Caldwell appears to have ignored Rule 231(b) entirely
in filing the Request for Costs. He did not include any of the
statements discussed above, or ever indicate what his
administrative or litigation costs may have been aside from his
$60 filing fee.
The IRS objected to Caldwell’s Request for Costs, stating,
among other things, that Caldwell failed to exhaust his
administrative remedies, failing, for example, to participate in
- 9 -
an IRS Appeals office conference; that he unreasonably protracted
administrative and Court proceedings by not responding to an IRS
auditor’s requests for information and by refusing to agree to
the IRS’s full concession of this case (aside from the motion);
and that he failed to state what costs he is claiming. Since it
is clear that Caldwell failed to state that he exhausted his
administrative remedies within the IRS--and the record before the
Court does not otherwise indicate that he exhausted them--we
shall simply deny the motion on that ground.4
Although Rule 174(b) provides that “[t]rials of small tax
cases will be conducted as informally as possible consistent with
orderly procedure,” and we on occasion relax procedural rules in
such cases, we see no reason to direct that any further action be
taken before denying the Request for Costs for failure to comply
with our Rules (which section 7463(a) authorizes us to apply to a
4
The Request for Costs does not clearly indicate whether it
seeks “administrative costs”, which sec. 7430(c)(2) defines
basically as costs associated with an IRS audit, “litigation
costs”, which sec. 7430(c)(1) defines basically as costs
associated with a Tax Court case, or both. We infer from its
title’s reference to “filing and processing legal actions
relevant to this case” and its statement that the IRS “forced”
him to file the petition that the motion seeks litigation costs
at least. We observe from the absence of any mention in the
record before the Court of an unsuccessful request to the IRS for
administrative costs that Caldwell likely did not make such a
request. Such a failure would leave us without jurisdiction even
to consider whether to award him administrative costs. See secs.
7430(b)(4), (f)(2); Bent v. Commissioner, T.C. Memo. 2009-146 (“A
taxpayer who wants to claim administrative costs must first file
an application with the IRS and then file a petition with the Tax
Court * * *.”).
- 10 -
so-called “small tax case” such as this one). Although this
Court has twice before explained to Caldwell that a motion for
administrative or litigation costs must conform to section 7430
and Rules 230-233, he has made no effort to comply with these
rules. Moreover, he declined the Court’s offer at a calendar
call for this case (in a trial session at Washington, D.C., close
to his address--his home, we infer--in an outer suburb of the
city) to schedule a hearing to discuss the case and motion.
The Court has considered all of Caldwell’s contentions,
arguments, requests, and statements. To the extent not discussed
herein, we conclude that they are meritless, moot, or irrelevant.
To reflect the foregoing,
An appropriate order and
decision will be entered.
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236 F.2d 737
John J. MURPHY, Appellant,v.Charles E. WILSON, Secretary of Defense, et al., Appellees.
No. 12905.
United States Court of Appeals District of Columbia Circuit.
Argued May 7, 1956.
Decided July 12, 1956.
Petition for Rehearing Denied August 6, 1956.
Mr. Claude L. Dawson, Washington, D. C., for appellant.
Mr. Milton Eisenberg, Asst. U. S. Atty., with whom Messrs. Leo A. Rover, U. S. Atty., at the time brief was filed, Lewis Carroll and Joseph M. F. Ryan, Jr., Asst. U. S. Attys., were on the brief, for appellees. Mr. Oliver Gasch, U. S. Atty., also entered an appearance for appellees.
Before WILBUR K. MILLER, FAHY and DANAHER, Circuit Judges.
DANAHER, Circuit Judge.
1
Appellant was involuntarily retired and placed upon an annuity. After exhausting his administrative remedies he sought a mandatory injunction that he be restored to his post in government employment and a declaratory judgment that all proceedings looking to his retirement be adjudged void. Answer having been filed and the case having come on for trial, respective counsel stipulated that the facts are undisputed and that there were only two legal issues involved. The matter was submitted accordingly, and after arguments of counsel, the District Court entered judgment in favor of the appellees, and this appeal followed.
2
Appellant asserts that as a veterans preference eligible1 he was entitled to the procedures set forth in § 14 of the Veterans' Preference Act.2 He also claims that he was entitled to examine the evidence upon which the determination of his total disability was predicated and to a hearing. He is mistaken on both points.
3
Section 14 of the Veterans' Preference Act deals with privileges to be accorded to an eligible veteran when disciplinary action is taken against him. It sets forth specific procedures to be followed before such an employee "shall be discharged, suspended for more than thirty days, furloughed without pay, reduced in rank or compensation, or debarred for future appointment * * *." It deals with "such cause as will promote the efficiency of the service * * *." It has nothing whatever to do with his retirement for total disability within the meaning of the Civil Service Retirement Act.3 In Ellmore v. Brucker,4 we have had occasion to point out that retirement, whether voluntary or involuntary, is not to be equated with removal from the classified civil service for cause, as provided for in the Lloyd-LaFollette Act.5 So here; there is no difference in principle.
4
Neither the Retirement Act nor the regulations of the Civil Service Commission make provision for a hearing. In the administration of the Retirement Act, the Commission is not only authorized, but is directed to perform any and all acts for the purpose of effectuating its provisions.6 Its duty is to make whatever inquiry may be necessary concerning disability,7 and it may take or cause to be performed whatever other steps are necessary to its determination. Appellant does not challenge the Commission's authority to make such regulations as may be necessary and proper for the purposes of the Act.8
5
Instead, appellant in his brief next tells us he "demanded" that he be given an opportunity to examine any medical evidence in his file before the Board of Appeals and Review and to examine other evidence contained in his file. But both in the trial court and here, his contention with respect to the right to know or to examine the medical evidence in his file is related solely to his claim of a right to a hearing, which, as above noted, he was not entitled to receive under the Act.
6
There is no error and the judgment of the District Court is
7
Affirmed.
Notes:
1
As defined in Section 2 of the Veterans' Preference Act, approved June 27, 1944, 58 Stat. 387, 5 U.S.C.A. § 851
2
5 U.S.C.A. § 863
3
Act of May 22, 1920, 41 Stat. 614, as amended, 5 U.S.C.A. §§ 691-740, in particular § 710 thereof
4
98 U.S.App.D.C. ___, 236 F.2d 734
5
Act of Aug. 24, 1912, 37 Stat. 555, as amended, 5 U.S.C.A. § 652
6
5 U.S.C.A. § 709
7
Cf. Robertson v. Chambers, 1951, 341 U.S. 37, 39, 71 S.Ct. 547, 95 L.Ed. 726
8
5 U.S.C.A. § 709
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327 S.W.2d 519 (1959)
Leon SIMPSON (Plaintiff), Appellant,
v.
AMERICAN AUTOMOBILE INSURANCE COMPANY, a Corporation (Defendant), Respondent,
Travelers Indemnity Company, a Corporation (Defendant), Appellant, and
Grocers Terminal Warehouse, Inc., a Corporation (Defendant), Appellant.
No. 30176.
St. Louis Court of Appeals, Missouri.
September 15, 1959.
Motion for Rehearing or to Transfer Denied October 16, 1959.
*520 Arnot L. Sheppard, Gentry, Bryant & Sheppard, St. Louis, for appellant Simpson.
John F. Evans, Evans & Dixon, St. Louis, for appellants Travelers Indemnity Co. and Grocers Terminal Warehouse, Inc.
John S. Marsalek, Moser, Marsalek, Carpenter, Cleary, Jaeckel & Hamilton, St. Louis, for respondent.
Motion for Rehearing or to Transfer to Supreme Court Denied October 16, 1959.
RUDDY, Judge.
This action was instituted by Leon Simpson under the Declaratory Judgments Act, Section 527.010 et seq. RSMo 1949, V.A. M.S., for a declaration and determination of the respective rights, liabilities, duties and legal relations among plaintiff and the following defendants: American Automobile Insurance Company, Travelers Indemnity Company and Grocers Terminal Warehouse, Inc. (The above named defendants will be referred to hereinafter as American, Travelers and Grocers.) This action *521 grew out of sums of money and costs paid in settlement of a case brought by William Ogle against defendant, Grocers. In the instant action the trial court rendered findings and judgment against Simpson, Travelers and Grocers and they appeal.
The controversy which gave rise to this declaratory judgment action had its beginning when William Ogle, an employee of Aero Drayage Company, hereinafter referred to as Aero, sustained an injury while loading a truck owned by Aero and operated by Ogle.
As stated, Ogle was in the employ of Aero and in the course of his employment on April 28, 1955, he drove a truck owned by Aero to Warehouse No. 4 of Grocers at Second and Convent Streets in the City of St. Louis for the purpose of obtaining a load of merchandise to be delivered elsewhere. Ogle backed the truck up to the loading dock where three employees of Grocers, one of whom was plaintiff, Leon Simpson, brought the merchandise from the warehouse to the truck and Ogle placed the merchandise in the truck. All of the merchandise had been loaded, except one carton, and the truck had been completely filled, except for a small space at the rear of the truck. Ogle in an attempt to load the last carton in the space left in the truck, stood on the truck near or upon the center ridge pole and the side rail and when in that position he fell to the ground and was injured.
On August 12, 1955, a suit was filed by Ogle against Grocers claiming damages in the sum of $75,000 for personal injuries sustained. In the petition filed in said suit it was alleged by Ogle that the defendant Grocers, "its agents, servants, and employees negligently and carelessly pushed, shoved, and thrust a box of merchandise into the body of the said truck and against the side of said truck striking the person of the plaintiff (Ogle) and shaking and jostling the said truck causing plaintiff to fall to the ground" and be injured. No place in his petition does Ogle name or identify the employee or employees who performed the alleged negligent act. It is admitted that Leon Simpson, plaintiff in the instant action, was an employee of Grocers and was present on the platform helping in the loading of said truck on the occasion in question.
At the time of the accident and injury to Ogle there was in force a policy of insurance issued by Travelers to Grocers known as a comprehensive general liability policy of insurance. The terms of this policy are immaterial to a disposition of this appeal and for this reason we omit them, except to point to a provision in the policy which provided that in the event any payment was made under the terms of the policy Travelers should be subrogated to all of Grocers' rights of recovery therefor against any person or organization.
There was also in force at the time of the accident and injury to Ogle a policy of insurance issued by American referred to by the parties as a public liability insurance policy and described in the policy as a "Combination Automobile Policy." In the Declarations under "Item 1. Name and Address of Insured" appears the following: "Arthur C. Reichardt, Flora Reichardt, Shirley Reichardt Doing Business as Aero Drayage Co. and Grocers Warehouse, Inc. * * *" The address given is "3401 Chouteau Ave." and the occupation is described as "Warehouse." The coverage provisions of American's policy material to a disposition of this appeal are as follows:
"Insuring Agreements
"1. Coverages.
"Coverage A.Bodily Injury Liability. To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile.
*522 * * * * * *
"II. Defense, Settlement, Supplementary Payments. As respects the insurance afforded by the other terms of this policy under coverages A and C the Company shall:
"(a) defend any suit against the insured alleging such injury, sickness, disease or destruction and seeking damages on account thereof, even if such suit is groundless, false or fraudulent; but the Company may make such investigation, negotiation and settlement of any claim or suit as it deems expedient;
* * * * * *
"III. Definition of Insured. With respect to the insurance for bodily injury liability and for property damage liability the unqualified word `insured' includes the named insured and also includes any person while using the automobile and any person or organization legally responsible for the use thereof, provided the actual use of the automobile is by the named insured or with his permission. The insurance with respect to any person or organization other than the named insured does not apply:
* * * * * *
"(b) to any employee with respect to injury to or sickness, disease or death of another employee of the same employer injured in the course of such employment in an accident arising out of the maintenance or use of the automobile in the business of such employer.
"IV. Automobile Defined * * *
"(a) Automobile. Except where stated to the contrary, the word `automobile' means:
* * * * * *
"(e) Purpose of Use. * * * (3) Use of the automobile for the purposes stated includes the loading and unloading thereof."
The exclusion provisions of said policy material to a disposition of this appeal are as follows:
"Exclusions
"This policy does not apply:
* * * * * *
"(c) under coverages A and B, to bodily injury to or sickness, disease or death of any employee of the insured while engaged in the employment, other than domestic, of the insured or in domestic employment if benefits therefor are either payable or required to be provided under any workmen's compensation law;
* * * * * *
"(e) under coverage A, to any obligation for which the insured or any company as his insurer may be held liable under any workmen's compensation law."
In addition to filing suit against Grocers, Ogle filed a claim for Workmen's Compensation against his employer, Aero. American was asked by Grocers to assume the defense of Ogle's action against it and to assume the responsibility for any judgment that might be rendered against it. American refused to assume the defense of Grocers in Ogle's action and disclaimed any responsibility to Grocers under its policy of insurance. At the request of Grocers, Travelers assumed the defense of Grocers in the suit brought by Ogle.
Thereafter Ogle's suit was compromised and settled and a stipulation for dismissal of Ogle's action was signed by the attorneys for plaintiff and defendant Grocers and filed in court. The action was dismissed with prejudice to the rights of plaintiff and at the costs of defendant. Travelers paid Ogle $5,390 on behalf of Grocers in settlement of said suit and in addition paid $325 to its attorneys and $28.65 court costs. In addition, Aero paid Ogle $1,000 in settlement of his compensation claim.
*523 Following the aforesaid settlement of Ogle's suit by Travelers in behalf of Grocers, a suit was filed by Grocers against Leon Simpson seeking to recover the sum of $5,743.65, the amount of money paid out in the settlement of Ogle's suit. This suit was filed by Travelers, through its attorneys. The attorneys for Travelers had an understanding with the defendant, Leon Simpson, that they would retain counsel to defend him in the mentioned suit by Grocers. In this suit by Grocers it was alleged that defendant, Leon Simpson, "negligently and carelessly pushed, shoved and thrust a box of merchandise against William J. Ogle, directly causing him to fall from the side of said truck * * *." Grocers further alleged the filing of Ogle's suit against Grocers and the settlement thereof and prayed for judgment against Leon Simpson in the sum of $5,743.65, the amount paid out by Travelers in settlement of Ogle's suit. American was called upon to assume the defense of the aforesaid suit against Leon Simpson and to pay whatever judgment, if any, that should be rendered against Leon Simpson. American refused to accept the defense of said suit or to pay any judgment rendered against Leon Simpson.
Thereafter, Leon Simpson filed the declaratory judgment action that is the subject of this appeal. In the petition in the instant action, Leon Simpson set out all of the facts and events we have related aforesaid and in addition alleged that American, by reason of its contract of insurance issued to Grocers, plaintiff, Leon Simpson, and Grocers became additional insureds, "wherefore American became legally obligated to defend the case of Ogle v. Grocers Terminal Warehouse, Inc., filed in the Circuit Court of the City of St. Louis * * *; and is perforce now legally obligated to defend plaintiff against the suit now pending * * wherein Grocers is plaintiff and plaintiff herein is there defendant; and to pay any judgment which may be rendered against plaintiff in that action."
It is further alleged in said petition that American denies any such legal responsibility rests upon it, "and says that it is not bound under its policy of insurance to Aero," to assume any such responsibility and was not bound to assume any responsibility in connection with the case of Ogle v. Grocers.
It is further alleged in said petition as follows:
"Travelers denies that it ever assumed any responsibility in connection with the Ogle injury; denies any responsibility to plaintiff herein with respect to the pending action against him; but claims that American's policy of insurance created upon it responsibility for the loss sustained by Grocers in connection with the claim and suit of Ogle against Grocers, and the payment it made in settlement of that action; that by reason of its contract of subrogation with Grocers, American is liable to indemnify Travelers for the payments and costs of settlement of the suit of Ogle v. Grocers, as aforesaid."
Plaintiff, Leon Simpson, then concluded his petition with a prayer that generally sought a declaration and determination of the rights, liabilities, duties and responsibilities and legal relations among the plaintiff and defendants. He further prayed that the court "determine and declare that the policy issued by American extended coverage to plaintiff and Grocers as additional insureds, thereby making American legally responsible for the sums of money and costs paid in settlement of the case of Ogle vs. Grocers aforesaid, and that said policy issued by American covers the liability of plaintiff to Grocers; * * *." He further prayed for a determination and declaration that American is legally bound to assume the defense on behalf of plaintiff of the action brought against him by Grocers.
At the trial of the instant case (the declaratory judgment action) evidence supporting *524 all of the matters we have related aforesaid was adduced. In addition representatives of Travelers and American testified and agreed that the defense of both suits, e. g. Ogle v. Grocers and Grocers v. Leon Simpson, had been tendered to American and that American in both cases refused to accept responsibility for the defense of these actions. It was the position of American that its policy did not cover the accident and injury forming the basis of this litigation.
The witnesses for American testified that the settlement of Ogle's action against Grocers was prudent and warranted when viewed as a claim against Grocers only. These witnesses testified, however, viewing Ogle's suit as a claim against Leon Simpson, there was no reason to pay Ogle anything in so far as Simpson was concerned because there was no identification of Leon Simpson as the person who was responsible for Ogle's injury.
In connection with showing Leon Simpson's part in the accident wherein Ogle was injured the deposition of Ogle was offered and admitted in evidence. In addition a signed statement of Leon Simpson was offered and admitted in evidence. Other evidence was adduced concerning Simpson's part in the accident. American contends that none of the evidence shows any responsibility on the part of Leon Simpson for Ogle's injury. In addition, American points to the failure of Ogle's petition in his suit against Grocers to join Leon Simpson as a defendant and to identify Simpson as the employee or one of the employees of Aero who performed the negligent act that caused Ogle's injury. Travelers and Grocers dispute this contention of American and they contend otherwise.
We feel the evidence relating to Leon Simpson's part in the accident causing Ogle's injury need not be stated because it is not material in view of the position we have taken with regard to the liability of American.
The Court in its declaratory judgment found that American was not obligated by its policy to defend Leon Simpson in the suit brought against him by Grocers or to pay any judgment which may be rendered in said action. The court further declared and adjudged:
"2. The Court adjudges and declares that Travelers' policy does not insure Grocers Terminal Warehouse, Inc., against liability for bodily injuries arising out of the use of the truck mentioned in evidence, and that the sum paid out by Travelers in connection with Ogle's suit against Grocers was paid by Travelers as a volunteer, and not by virtue of any legal obligation resting upon it under its policy. For that reason, in addition to the reason set out in the last previous paragraph, defendant Travelers has no right to recover said sum from defendant American, nor from plaintiff, Leon Simpson, in the suit filed by Travelers against Simpson in the name of its policyholder, Grocers Terminal Warehouse, Inc."
When it is necessary to mention Travelers, Grocers, and Simpson collectively hereinafter, we shall refer to them as appellants.
Appellants have presented many points for our consideration. Practically all the points presented depend on this court finding ambiguity in some of the language of the policy issued by American.
One of the points relied on by the appellants is that the truck was actually being loaded at the moment of Ogle's injury. Therefore, the truck was being used by Grocers and Simpson at the time of the accident and injury. They state the accident occurred under circumstances that bring it within the provision of the policy which states that use of the truck includes the loading and unloading thereof.
In another point relied on by the appellants they contend that Grocers is either *525 a named or an additional insured and that Simpson is an additional insured. Simpson in his petition alleged that Grocers was an additional insured and the case was tried on that theory. However, we think it makes no difference whether Grocers is a named or additional insured for the purpose of this action.
In connection with these two points relied on by appellants we rule that Grocers and Simpson were "using" Aero's truck and that Simpson was an additional insured at the time of Ogle's injury within Insuring Agreement III which defines insured, subject to the interpretation we have given hereinafter to Exclusion (c) in American's policy. We deem it unnecessary to further discuss these two points in view of the position we have taken with regard to the dominant issues presented by appellants.
Another point relied on by appellants and briefed and discussed extensively by them is that Section III (b) under Definition of Insured does not relieve American of its responsibility under the policy, since the injured Ogle was in the employ of Aero, while plaintiff (Simpson) was in the employ of Grocers, pointing out that Ogle and Simpson were not employed by the same employer. Hence this clause in the policy is not applicable. We need not rule or discuss this point because American has stated in its brief that it has never contended that Section III (b) of the Insuring Agreement has any application in this case.
We now discuss the remaining points relied on by appellants, which involve the question of whether or not American's policy covers Leon Simpson, as an additional insured, in the suit brought against him by Grocers. Appellants in their brief say that the basic question to be answered is, does the policy of American give coverage to Simpson under the circumstances shown. American in its brief asserts that the sole question before this court is whether American, under its policy, is required to defend Simpson in the suit brought against him by Grocers and to pay any judgment which may be rendered in that suit. Thus, we start this discussion with agreement among the parties as to the basic question involved.
American contends that its policy in the Insuring Agreement III defines the unqualified word "insured" to include the named insured and also any person using the automobile with the named insured's permission and that Exclusion (c) states in plain terms that the policy does not cover injuries to any employee of the insured and since it is admitted that Ogle, when injured, was an employee of the insured, Aero, liability for his injury was clearly excluded from coverage, because Aero is a named insured in the policy. Opposed to this is the contention of appellants that there is a patent ambiguity as to the meaning of "insured" as used in Exclusion (c), which must be resolved in favor of coverage of Simpson else violence will be done the cardinal principle of construction of insurance policy language. Appellants further contend that the great weight of authority supports their position that "insured" means the person, named or additional insured, who is sued and who needs the protection given by the policy. They point to the fact that Ogle sued Grocers and Grocers sued Simpson and that neither defendant was the employer of Ogle.
In addition to the contention that there is ambiguity in the meaning of "insured" as used in Exclusion (c) the appellants also contend that the word "employee" as used in Exclusion (c) is ambiguous, and must, therefore, be construed favorably to the extension rather than the restriction of the policy coverage.
The rules governing the construction of a policy of insurance are well settled. In the case of Central Surety & Ins. Corp. v. New Amsterdam Casualty Co., 359 Mo. 430, 222 S.W.2d 76, loc. cit. 78, the court said:
*526 "* * * The policy is a contract. Plain and unambiguous language must be given its plain meaning. The contract should be construed as a whole; but, in so far as open to different constructions, that most favorable to the insured must be adopted. State ex rel. Security Mutual Life Ins. Co. v. Allen, 305 Mo. 607, 614, et seq., 267 S.W. 379, 381, 382. However, as said in 14 R.C.L. § 103, p. 931, the rule "does not authorize a perversion of language, or the exercise of inventive powers for the purpose of creating an ambiguity when none exists."' (Italics ours.) Wendorff v. Missouri State Life Ins. Co., 318 Mo. 363, 1 S.W.2d 99, loc. cit. 101, 57 A.L.R. 615."
Unequivocal language must be given its plain meaning. State ex rel. Mutual Life Ins. Co. of New York v. Shain, 344 Mo. 276, 126 S.W.2d 181. If the language is plain and unambiguous there is no occasion for construction, and it must be given effect unless contrary to public policy or positive law. This is so even when considering a restrictive provision in a policy. The rule of liberal construction in favor of the insured applies only when the contract is ambiguous and susceptible of more than one interpretation. Graham v. Gardner, Mo.App., 233 S.W.2d 797, 800.
Appellants in support of their contention that the word "employee" is an ambiguous word cite State ex rel. Maryland Casualty Co. v. Hughes, 349 Mo. 1142, 164 S.W.2d 274, 275. In that case the court was construing a provision in a policy that insured against bodily injuries "accidentally suffered or alleged to have been suffered by any person or persons not employed by the Assured, while within or upon" certain described premises. The sole question for determination was whether a minor who worked at raking leaves on the premises of the assureds was "employed" within the meaning of the policy provision. The court held (164 S.W.2d loc. cit. 276) that under the facts before it "The restrictive words `not employed' are susceptible of many meanings, and therefore necessarily introduce ambiguity and leave the clause open to construction. And that construction most favorable to the assured must be adopted." In the course of construing the aforesaid provision the court said: "That the word `employee' `may have different meanings in different connections admits of no doubt.' 30 C.J.S. Employee, p. 226." 164 S.W.2d loc. cit. 277.
In the case before us it is conceded that Ogle was an employee of Aero, one of the named insureds. We do not have before us the same question that was before the court in the Maryland Casualty Co. case, supra. The sole question we have is whether the injury to Ogle, a conceded employee of one of the named insureds, is excluded from coverage by reason of the provision which excludes bodily injury to any employee of the insured while engaged in the employment of the insured.
We see no reason to hold that the word "employee" as used in the exclusion clause of American's policy is ambiguous. Its meaning is plain and unambiguous when applied to the facts of this case. The sole question in connection with the use of this word in the policy under review is whether Ogle was injured while an employee of an insured. It is conceded, as we said, that he was an employee of Aero at the time of his injury. To hold that the word "employee" as used in American's policy is ambiguous and susceptible of more than one interpretation would be a distortion of its meaning.
Taking up the primary question as to whether there is a patent ambiguity as to the meaning of "insured" as used in Exclusion (c) we find much difficulty has been encountered in determining who is the "insured" within the exclusionary clause. Some cases hold that the exclusion *527 applies only where the tort-feasor causing the injury employs the injured party, while others have taken the view that it is applicable in any case where the injured party is an employee of any person entitled to insurance protection under the policy, notwithstanding the fact that the actual employer has not been charged with liability. 50 A.L.R.2d 79.
Appellants cite a number of cases construing the exclusionary clause of the policy strictly against the insurer. In those cases it is held that an employee of an insured other than the insured who seeks protection is not within the language of the exclusionary clause. Some of the cases cited by appellants are: Sandstrom v. Clausen's Estate, 258 Wis. 534, 46 N.W. 2d 831; Farm Bureau Mutual Automobile Insurance Co. v. Smoot, D.C., 95 F.Supp. 600; New v. General Casualty Company of America, D.C., 133 F.Supp. 955; Morgan v. Greater New York Taxpayers Mutual Insurance Association, 305 N.Y. 243, 112 N.E.2d 273; Wenig v. Glens Falls Indemnity Company, 294 N.Y. 195, 61 N. E.2d 442; Maryland Casualty Company v. New Jersey Manufacturers (Casualty) Insurance Company, 48 N.J.Super. 314, 137 A.2d 577.
In the Sandstrom case, (46 N.W.2d loc. cit. 832) the court held that the exclusionary clause cannot be held to "withdraw protection when the claim is made by the employee of any other than the party against whom the action is brought." However, the exclusionary clause was interpreted in the light of a statute of the State of Wisconsin.
The policy in question in the Farm Bureau Mutual Automobile Insurance Co. case was issued to James F. Smoot or Dennie Smoot in the disjunctive. The basis of the court's ruling can be found in the following language of the court: "Properly interpreted, this was a coverage afforded to either or each of the persons named. With reference to the rights and liabilities of insurer and insured the policy must be read as though it were two separate policies, one insuring James F. Smoot, and the other insuring Dennie Smoot." 95 F.Supp. loc. cit. 603. The policy in our case was issued in the conjunctive.
In the New case the court concluded that the policy involved was subject to different interpretations when applied to the situation where there is more than one person included within the meaning of the term "insured." The court then said: "This being the case, the Court must adopt an interpretation which will grant protection under the policy against the claim of the injured party." 133 F.Supp. loc. cit. 958. In other words, the court found that the term "insured" as used in the policy was ambiguous.
In the Morgan case [112 N.E.2d 274] the policy under review covered damages arising from assault and battery unless "committed by or at the direction of the Assured." An assault and battery was committed by one of the assureds. The court held that "since defendant has undertaken separate obligations to each of the assureds, an assault committed by an assured relieves the defendant insurer of its obligation to that particular assured but not of its obligations to the other assureds." However, in a dissenting opinion one of the judges said there was no coverage in view of the plain words of the policy which excluded coverage for loss occasioned by assault and battery committed by "`any partner * * while acting within the scope of his duties as such.'" 112 N.E.2d loc. cit. 276.
In the Wenig case the problem presented was whether as a matter of law the evidence was sufficient to establish the defense of the insurer that the assured voluntarily admitted liability for the accident in violation of the terms of the policy. The evidence showed that an additional insured, the husband of the named insured, entered into an agreement with the plaintiff wherein he admitted liability for the accident. The court, in holding that the named assured was covered under the policy, said:
*528 "* * * the obligation of the company to each assured is separable and a breach of condition or warranty by one assured does not terminate the obligation of the company to another assured." 61 N.E.2d loc. cit. 445.
In the Maryland Casualty Company case the court held that "the exclusionary language of the policy should be restricted in its application to the particular insured seeking the protection of the policy under the facts of each case as it arises." 137 A.2d loc. cit. 583.
In the aforesaid cases and others cited by appellants the tenor of the decisions is that the word "insured" as found in the omnibus and exclusion clauses of the policy is ambiguous. Therefore, it must be contrued favorably to the extension rather than the restriction of the policy coverage. No Missouri case is cited by the appellants.
Opposed to the holdings in the aforesaid cases wherein the courts found ambiguity in the language of the policies involved is the contention of American that the policy in plain terms says it does not apply to the injury of an employee of the insured, and since Ogle was an employee of the insured, Aero, the policy does not cover regardless of the form in which liability thereunder is sought to be enforced.
Simpson becomes an additional insured solely by reason of the Insuring Agreement III defining who is included in the unqualified word "insured." He was not a named insured and it seems clear that he should have no more protection under the policy than the primary insureds. The purpose of Exclusion clause (c) was to withdraw from coverage certain injuries, namely, "bodily injury to * * * any employee of the insured while engaged in the employment, * * * of the insured * *." The injury forming the basis of this litigation was Ogle's injury sustained while in the employ of the insured, Aero.
In order to adopt the contention of the appellants and the position taken in the authorities cited by appellants we would have to interpolate in the exclusion clause such words as "against whom liability is sought to be imposed," or "against whom an action is brought." This we cannot do.
"Courts cannot write provisions into contracts not written by the parties to them. They can only enforce agreements as written." Blanke Bro. Realty Co. v. American Surety Co. of New York, 297 Mo. 41, 247 S.W. 797, 801. "Courts are without authority to rewrite contracts, even insurance contracts." Forir v. Toman (Standard Accident Ins. Co., Garnishee) Mo., 202 S.W.2d 32, 34.
The question before this court in the case of Sibothan v. Neubert (Associated Indemnity Co., Garnishees) Mo.App., 168 S. W.2d 981, loc. cit. 984, was somewhat analogous to the question we are reviewing. In the Sibothan case the named insured was the daughter of the plaintiff. The mother had obtained a judgment against her daughter, Ida S. Neubert, for personal injuries sustained by plaintiff through the negligence of her daughter in the operation of the latter's automobile in which the plaintiff was riding at the time of the accident. The omnibus clause of the policy issued to the daughter provided that the unqualified term "insured" included "the named Insured, his spouse, child, parent, sister or brother * * *." [168 S.W.2d 982.] The policy provided under "Risks not covered" that whether the automobile be operated by the named insured or another, the policy did not cover "(a) claims for injury or death of the `insured'." The issue in the case before this court was whether the insurer was liable for the injury under its policy. In ruling in favor of the insurer on the question presented, we said:
"The only question, therefore, is whether plaintiff was an `insured' within the meaning of such exclusion clause; and of this we think there can be no doubt in view of the language of the `additional insured' or omnibus clause, which obviously must be read *529 along with the `risks not covered' clause in order to fix the measure of the obligation assumed by the garnishees under the policy."
A contention similar to appellants was made by plaintiff in the Sibothan case, namely, that the provisions in the omnibus clause were written in the policy, not for the purpose of limiting liability, but instead for the purpose of extending coverage to persons other than the "named insured" and that while plaintiff was concededly one of the "insured" within the purview of the policy in the sense that she would have been covered if she had incurred any liability to some third person, she was not to be so regarded in the case of her own personal claim against the "named insured," as to whom she stood in no different position than any other third person who might have been injured through the negligence of the "named insured" in the operation of the automobile. In disposing of this contention we said:
"It is of course true that the `additional insured' clause was written in the policy for the primary purpose of extending and not limiting liability; and if there were no other clause to be considered upon the question of the garnishees' liability, the court would doubtless hold that they were not to be relieved of liability from the mere circumstance that plaintiff happened to be a person to whom the protection of the policy had been extended. However, the `risks not covered' clause is no less entitled to be accorded its effect; and it provides that the policy shall not cover claims for injury of the `insured.'" 168 S.W.2d loc. cit. 984.
The policy under review excludes liability for injury to any employee of the "insured." Aero is an insured.
In the case of Perkins v. Perkins, Mo. App., 284 S.W.2d 603, 605, the exclusion clause in the policy involved provided that the coverage did not apply "to the insured." The named insured was injured while riding in her automobile operated by the additional insured. The court held that the policy did not cover a claim against the "additional insured" by the "named insured."
The basis of the holdings in the Sibothan and Perkins cases was that the exclusions were plain and without ambiguity, and must be enforced as written.
We stated before that there was a contrariety of opinion in the cases outside Missouri in connection with the determination of who is the "insured" within the exclusionary clause. Opposed to the cases cited by the appellants from other jurisdictions are cases cited by American, some of which we discuss briefly.
In the case of Associated Indemnity Corporation v. Wachsmith, 2 Wash.2d 679, 99 P.2d 420, 423, 127 A.L.R. 531, Carl Buss was injured in an accident while a passenger in a truck owned by R. Wachsmith, Sr., but which at the time was being operated by his son, Richard Wachsmith, Jr. At the time of the accident Buss was in the employ of R. Wachsmith, Sr., and was riding on the truck in the course of his employment. The policy in question included an omnibus clause and defined the unqualified "insured" to include "every person entitled to protection hereunder." It excluded under a clause "Risks Not Covered," "claims for injury * * * of any employee of the Insured sustained in the course of his employment * * *."
Buss recovered a judgment against Wachsmith, Jr. It was contended that the policy protected the driver, as an additional insured, and that the exclusion did not apply because Buss was not an employee of the driver. The court found there was no ambiguity in the exclusionary clause and said:
"The trial court concisely summed up the matter in his memorandum opinion, when he stated: `* * * It states that "the unqualified term `insured' *530 shall include every person entitled to protection hereunder * * *." Certainly, the named assured is one entitled to protection under the policy; therefore, he is included within the meaning of the term "insured." Since he is so included, Buss, as his employee, comes directly within the terms of the "Risks Not Covered" paragraph.'" 99 P.2d loc. cit. 424.
The court held the insurer not liable under the policy.
The same question was presented in the case of Continental Cas. Co. v. Pierce, 170 Miss. 67, 154 So. 279, loc. cit. 281, and was ruled in favor of the insurer. In that case two employees of the named insured were riding in the named insured's automobile upon the named insured's business. One of the employees was driving when a collision occurred injuring the other employee. The injured employee sued the other employee and the employer's insured and recovered judgment against both in the trial court. The court in holding that the policy did not cover liability for injury to any employee of the named insured, said:
"* * * it would require the writing into the policy of something which is not there, and the striking out of something which is there, to hold that the coverage of the policy included an employee of hers who, according to the terms of the policy, was expressly excluded therefrom.
"The construction contended for by appellee is not a reasonable one."
The court in the aforesaid case went on to say that the contention was unreasonable because it would result in a holding that if the named insured had been driving the automobile and had injured an employee by her negligent driving, the policy would not have protected her, but that it would protect an additional insured under the same circumstances.
The contention of the appellants in the instant case that the exclusion clause only applies when the injured party is an employee of the one sued was rejected in the case of Birrenkott v. McManamay, 65 S.D. 581, 276 N.W. 725. In that case one employee of the named insured obtained a judgment against another employee who was an additional insured under the policy. In denying liability against the employer's insurer, the court said:
"It is the opinion of this court that when the clause in the policy protecting any person operating the insured vehicle with the consent of the assured is invoked, that the person invoking said clause is placed in the same position as the named assured. He is therefore subject to the general limitations in the policy in the same manner as the named insured would be * * *. This being true, the person invoking the policy is subject to the exemption clause stating that at no time will the insurance company be liable for the damages sustained by an employee of the named assured while engaged in the business of the named assured." 276 N.W. loc.cit. 726.
In the case of Travelers Insurance Company v. Ohio Farmers Indemnity Company, D.C., 157 F.Supp. 54, loc. cit. 60, the facts and policy provisions were similar in most respects to those presented in our case. In that case the court said:
"It is concluded by this Court that the exclusion clause of Ohio's policy did not extend coverage for injuries to an employee of the named insured or to additional insureds, both of whom are included in the unqualified word `insured' as defined in the policy."
Other cases supporting the aforesaid cases cited by American and examined by us are Employers' Liability Assurance Corp. v. Owens, Fla., 78 So.2d 104; Webb v. American Fire & Casualty Co., 148 Fla. 714, 5 So.2d 252; Gibbs v. Employers Mut. Liability & Ins. Co. of Wis., 224 N.C. 462, 31 S.E.2d 377.
*531 We have demonstrated the difference of opinion that exists in the cases in determining who is the "insured" within the exclusionary clause of the type of insurance policy under review in this appeal. Exclusion clause (c) in American's policy clearly excludes from coverage "bodily injury to * * * any employee of the insured while engaged in the employment, * * * of the insured * * *." The omnibus clause III of the Insuring Agreement defines the unqualified word "insured" as the named insureds and all additional insureds. The exclusion clause was concerned with the hazards to which the policy did not apply and it should be interpreted in terms of the injuries to be excluded, not in the terms of the persons who are to be indemnified. Standard Surety & Casualty Co. of New York v. Maryland Casualty Co., 281 App.Div. 446, 119 N.Y.S.2d 795, loc. cit. 799; 281 App.Div. 1069, 121 N.Y.S.2d 767.
We find no ambiguity in the use of the word "insured" in the exclusion clause. Its meaning when used in any clause of the policy was clearly defined in the omnibus clause of the policy. We have no right to find ambiguity where none exists merely for the purpose of invoking the rule that where ambiguity exists the construction most favorable to the insured must be adopted. As we said earlier, we are not permitted to exercise inventive powers or engage in perversion of language for the purpose of creating an ambiguity when none exists. Central Surety & Ins. Corp. v. New Amsterdam Casualty Co., supra.
Included in the points relied on by appellants is one that a policy covering an additional insured or insureds is in legal effect two policies of insurance; one a contract between the insurer and the named insureds and the other a contract between the insurer and the additional insureds and even though one of them shall be denied coverage, that alone will not prevent coverage of the others, despite the fact that the additional insureds' coverage may be broader than the named insureds'. It seems to us that the proposition contains its own condemnation. There is only one contract of insurance contained in American's policy and it must be construed as a whole. The additional insureds cannot claim coverage under the omnibus clause, which gives them coverage as additional insureds through definition of insureds, and then seek to ignore that very definition that gives them coverage, when considering the exclusion clause. The contention of appellants is unsound.
We rule that American's policy does not cover the injury sustained by Ogle. American was not obligated to defend the suit brought by Grocers against Simpson and obviously, from what we have said, American was not obligated to defend Ogle's suit against Grocers.
In a final point relied on by appellants they contend that the exclusionary clause covers two subjects: (a) liability for "bodily injuries" to an employee of "insured" while engaged in the employment of the "insured"; and (b) "bodily injuries" to an employee to whom "insured" is liable under a workmen's compensation law. That part of Exclusion (c) which refers to benefits payable or required to be provided under any workmen's compensation law has reference and application to employees while engaged in domestic employment. It has no application to employees engaged in employment other than domestic. The sentence referring to workmen's compensation benefits clearly modifies the words "domestic employment." Ogle was not engaged in domestic employment and appellants make no such contention. This point is ruled against appellants.
The trial court in paragraph 2 of its declaratory judgment found and declared that Travelers' policy does not insure Grocers against a claim based on Ogle's injury. While it is true that Simpson *532 in his petition in the instant case asked for a determination and declaration of the responsibilities and legal relations of plaintiff and defendants to each other, we cannot see that Simpson has any right to have a declaration on the question whether Travelers' policy extended coverage to Grocers for Ogle's injury. Grocers and Travelers have raised no such issue and neither has prayed for affirmative relief. It is fundamental in a declaratory judgment action that there be a justiciable controversy between plaintiff and the defendants. The action of Grocers against Simpson seeks to fix liability on Simpson for Ogle's injury. It alleges that Simpson's negligent act caused Ogle's injury. Grocers cause of action against Simpson presents no controversy between Grocers and Travelers. In connection with Grocers action Simpson called upon American to defend the action. This American refused to do. Thus, the only justiciable controversy presented is one between Simpson and American. Simpson has no interest in any other controversy. And this is true even though Grocers action against Simpson is a subrogation action by Travelers.
That the aforesaid was the only controversy presented to the trial court can be taken from the statement made by Mr. Evans, attorney for Travelers, in the course of the hearing below, when he said:
"* * * the immediate question in this declaratory judgment suit is whether or not American Automobile under the policy is required to defend Leon Simpson against these charges that are made in the Grocers Terminal suit against him. He is demanding that they defend him and hold him harmless and indemnify him against any loss brought against him by Grocers Terminal. Now this other is all background, of course * * *."
Mr. Sheppard when asked by Mr. Evans, following the aforesaid statement, "Isn't that the theory?" answered, "Yes, sure."
In appellants' brief they said "We need not discuss whether or not Travelers voluntarily paid the settlement money" stating that is a matter to be determined if American is sued by Grocers or Travelers.
Pursuant to what we have said, Paragraph (1) of the trial court's "Declarations of Law" is affirmed and Paragraph (2) is reversed and ordered stricken and in lieu thereof the trial court is directed to declare that no other justiciable controversy was presented by plaintiff's petition and evidence and, therefore, all other declarations and relief prayed for are denied. In all other respects the trial court's judgment is affirmed. The trial court is directed to amend its findings of fact to conform with the views herein expressed.
ANDERSON, J., and MARSHALL CRAIG, Special Judge, concur.
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5 Ill. App.2d 471 (1955)
126 N.E.2d 34
Marion Wolfrum, Plaintiff-Counterdefendant-Appellant,
v.
Alfred H. Wolfrum, Defendant-Counterplaintiff-Appellee.
Gen. No. 9,995.
Illinois Appellate Court Third District.
April 7, 1955.
Rehearing denied May 3, 1955.
Released for publication May 3, 1955.
*472 Paul C. Verticchio, of Gillespie, for plaintiff-counterdefendant-appellant.
McLin J. Brown, of Hillsboro, for defendant-counterplaintiff-appellee.
MR. JUSTICE HIBBS delivered the opinion of the court.
On April 13, 1953 Marion Wolfrum filed her complaint for divorce in the circuit court of Montgomery county alleging desertion by her husband and asking *473 custody of their two children, a boy age six and a girl age four and a half. Alfred H. Wolfrum filed his answer to the complaint on February 17, 1954 and also his counterclaim asking that a divorce be granted him because of his wife's adultery and that the custody of their children be awarded to him. Mrs. Wolfrum filed her answer to the counterclaim on March 15, 1954 and on April 15, 1954 a hearing was had, which resulted in a decree dismissing the original complaint for divorce and granting a divorce and custody of the children to Wolfrum according to the prayer of his counterclaim. Marion Wolfrum has appealed to this court.
[1, 2] Appellant first contends that the circuit court erred in finding her guilty of adultery and granting her husband a divorce on that ground. She denied under oath that she had been unfaithful to her marriage vows and contends that the circumstantial evidence relied upon by her husband to prove her unfaithful is not sufficient probative value to establish that fact. We do not believe it necessary to repeat in detail the evidence adduced by appellee. We do believe, however, that the testimony of his witnesses including that of Mrs. Wolfrum's father, stepmother and brother was sufficient proof of circumstances from which the trial judge could reasonably infer that appellant was guilty of adultery. While it is true that to establish adultery there must be affirmative proof of the carnal act, Hoef v. Hoef, 323 Ill. 170, 153 N.E. 658; Fowler v. Fowler, 315 Ill. App. 270, 42 N.E.2d 954, it is also true that such proof is ordinarily established by circumstantial evidence. In Zimmerman v. Zimmerman, 242 Ill. 552 at page 558, the Supreme Court of Illinois pointed out that adultery "is an act committed in secrecy, and invariably the parties use every means in their power to conceal their act and prevent discovery ... `It, like all other charges, may be established by circumstantial evidence, and the evidence need only, *474 when considered together, convince the mind that the charge is true' ..." We believe that there is ample evidence in the record to support that portion of the decree of the trial court granting a divorce on the ground of adultery to Alfred Wolfrum.
Mrs. Wolfrum next contends that even if it be assumed that her husband is entitled to a divorce, the trial court erred in awarding custody of their children to him and in permitting them to be taken temporarily from the State of Illinois. The decree provides that "... Alfred H. Wolfrum shall have the care, custody, control and education of their two minor children ... without any further interference on the part of the said Marion Wolfrum, until the further order of this Court; that said minor children shall live at the home of Alfred A. Wolfrum and Bertha Wolfrum, counterclaimant's parents, at 15 Johnson Street, West Roxbury, Boston, Massachusetts, while counterclaimant is in the Naval Service, and until such time as his Naval Service is completed when counterclaimant shall return the children to the State of Illinois, and there provide a home for them, where he and said children shall live; that counterdefendant, Marion Wolfrum is given the right of visitation with said children at reasonable times and at reasonable places."
It appears from the record that Alfred H. Wolfrum is in the Navy, and when not at sea, is stationed at Bremerton, Washington. Mrs. Wolfrum lived in and about Bremerton after their marriage on December 28, 1946 until May of 1951. She and their two children, who had been born in the meantime, then returned with Wolfrum's consent to her mother's home on a farm near Virden, Illinois. Wolfrum visited his family in Illinois in June of 1951 and again in June of 1952. He has not visited them since then. Mrs. Wolfrum and the children moved from her mother's home in August of 1953 and have since resided alone and with friends in *475 various apartments in Jacksonville, Springfield and Girard, Illinois and in Washington, D.C. There is also evidence in the record from which it can be inferred that she and the children resided in the same apartment with the man with whom the trial court found she had committed adultery.
Alfred H. Wolfrum's parents, Alfred A. Wolfrum and Bertha Wolfrum live in Boston, Massachusetts. The younger Wolfrum testified, however, that upon his anticipated discharge from the Navy in 1956 he expects to settle permanently in Illinois rather than in Massachusetts.
[3, 4] The trial court in divorce proceedings is vested with a broad discretion in determining the custody of minor children. (Nye v. Nye, 411 Ill. 408, 105 N.E.2d 300.) It is usual, however, to place small children in the care of their mother, if she is a fit person, since maternal care is especially necessary during early childhood. (People v. Hickey, 86 Ill. App. 20; Draper v. Draper, 68 Ill. 17; Miner v. Miner, 11 Ill. 43; Nye v. Nye, supra.) This is not an inflexible rule, however, since the welfare of the child is the prime consideration. (Livingston v. Livingston, 334 Ill. App. 261, 78 N.E.2d 831.) Thus, if a mother is shown to be unfit, reason demands that custody of children of tender years be awarded to the father if their care can be assured.
In the present case, it appears that Marion Wolfrum gave her children adequate physical care and that she had affection for them. The only question is whether her moral misconduct was sufficiently grave to justify the trial court in removing the children from her control. In Nye v. Nye, supra, the Supreme Court of Illinois affirmed a decision of the Appellate Court for the First District which reversed a decree of the circuit court of Cook county denying custody of small children to a mother who had followed a course of adulterous conduct with a man she later married. The Supreme *476 Court found that the mother's indiscretions had ceased upon her marriage to her paramour and that she was a respected member of her community. It therefore held that the circuit court erred in denying her prayer for custody.
[5] The facts in the case at bar are quite different from those in the Nye case, supra. There is evidence in the record which, if believed, discloses a shocking course of adulterous conduct by Marion Wolfrum with a man who himself is married and the father of a family. Assuming that her prior conduct could be condoned, there is no assurance that Mrs. Wolfrum's conduct in the future will improve. While she may be in a position to marry after the divorce in this case, it cannot be assumed the man with whom she is involved can ever attain the same freedom or for that matter even desires to do so. The Nye case, upon which Mrs. Wolfrum relies so heavily, states the rule succinctly at page 415 as follows: "... past misconduct, where the evidence indicates no probable future misconduct, should not be a basis for denying custody to the mother." Mrs. Wolfrum's father and brother both indicated that they felt that she was not a fit person to have the custody of her children. From this and other evidence in the record the trial court could well believe that there was little hope of immediate reformation by Mrs. Wolfrum. We therefore hold that it exercised its discretion reasonably in awarding custody of the children to Alfred H. Wolfrum. The trial judge heard the witnesses and is far better able than this court to assess their credibility and to predict which parent will best care for the children in the future.
[6, 7] Appellant further contends that the court erred in permitting the children to be taken outside of this State even for a limited period, because they and their custodians could not be reached with process of the circuit court of Montgomery county, and she *477 would be deprived of her substantial rights of visitation. Reliance is also had upon the principle that so to do is contrary to the policy of this State, and cite in support thereof the cases of Chase v. Chase, 70 Ill. App. 572; Smith v. Smith, 101 Ill. App. 187; Wade v. Wade, 345 Ill. App. 170. This latter principle is not an inflexible rule as illustrated by Schmidt v. Schmidt, 346 Ill. App. 436 where the above and other cases are reviewed, and the court concludes at page 444 as follows: "It appears to us that modern ways of living require us to adopt the view that where circumstances demand it for the best interests of the child, it should be permitted that he be taken outside of the State and the jurisdiction of the court."
We believe the need of removing the children from the influence of the mother was under all the circumstances appearing in the record a sufficient reason to justify their removal from this State for a limited period. It is true that appellant will be deprived of her rights of visitation for such period, but this is a consequence of her conduct, which she might well have foreseen. The paternal grandparents who live in Massachusetts are according to the record of good repute and eager and well able to properly care for the children. The period of time will be short, and there is no positive rule of law that prevents, in a proper case, such a provision in a divorce decree.
The decree provides that the appellee shall have the care and custody of his two children until the further order of the court, and they shall live at the home of their paternal grandparents while appellee is in the Naval Service until such service is completed, when the father shall return the children to the State of Illinois, and shall provide a home for them where he and said children shall live. The decree also provides that the mother be given the right of visitation with her children at reasonable times and places. The proofs *478 show that the appellee is to be discharged from the Navy in 1956 and expects to settle permanently in Illinois.
While we do not doubt the sincerity of appellee's promise to establish a home for himself and children in this State upon his discharge from the Navy, unforeseen events do occur which materially alter future conduct, decisions and commitments. We believe the trial court should have in its decree made adequate provision to enforce a compliance therewith. Appellee's parents live outside the jurisdiction of the circuit court of Montgomery county and are not subject to its process. If for any reason either they or the appellee should fail to return the children to this State according to the intendments of the decree, the trial court might be powerless to compel obedience thereto.
[8] Alfred H. Wolfrum, the appellee, should be required to furnish a bond in an amount to be determined by the trial court, signed by himself, his father and mother, namely, Alfred A. Wolfrum and Bertha Wolfrum, as principals, with surety or sureties to be approved by said court, conditioned that they will return said children to Montgomery county, Illinois at such time as said court shall direct, and abide the further order of the court.
The decree is affirmed in part and reversed in part and the cause remanded to the circuit court of Montgomery county with directions to proceed in accordance with the foregoing opinion.
Affirmed in part, reversed in part and remanded.
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IN THE DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FIFTH DISTRICT
NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
PETER PRAHASKY,
Petitioner,
v. Case No. 5D17-1579
STATE OF FLORIDA,
Respondent.
________________________________/
Opinion filed June 23, 2017
Petition for Belated Appeal
A Case of Original Jurisdiction.
David W. Collins, of Collins Law Firm,
Monticello, for Petitioner.
No appearance for Respondent.
PER CURIAM.
The petition for belated appeal is granted. A copy of this opinion shall be filed with
the trial court and be treated as the notice of appeal from the January 25, 2016 order
denying Petitioner’s motion for post-conviction relief, filed in Case No. 11-CF-182, in the
Circuit Court in and for Hernando County, Florida. See Fla. R. App. P. 9.141(c)(6)(D).
PETITION GRANTED.
COHEN, C.J., EDWARDS and EISNAUGLE, JJ., concur.
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547 F.2d 1176
U. S.v.Faulisi
No. 76-2735
United States Court of Appeals, Ninth Circuit
12/22/76
1
D.Ariz.
AFFIRMED
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