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Opinion issued June 5, 2008
In The
Court of Appeals
For The
First District of Texas
____________
NO. 01-07-00741-CR
____________
ALEXANDER CARENZO CARTER, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from 262nd District Court
Harris County, Texas
Trial Court Cause No. 1104376
MEMORANDUM OPINION
Appellant, Alexander Carenzo Carter, was charged with the felony offense of
aggravated robbery. Tex. Pen. Code Ann. § 29.03(a)(1), (2) (Vernon 2007). Carter
pleaded guilty to the indictment. After deliberating, the jury assessed punishment at
35 years’ confinement, plus a $10,000 fine.
In three points of error, Carter contends (1) the trial court erred in failing to
conduct an inquiry with regard to his competency, (2) he received ineffective
assistance of counsel because his attorney failed to request that the court conduct a
competency inquiry to determine his fitness to stand trial, and (3) he received
ineffective assistance of counsel because his attorney failed to move to suppress his
videotaped statement.
We affirm.I. Factual Background
On Valentine’s Day 2007, Carter and an accomplice attacked Roberta Martinez
after she left her office building. Martinez had opened the door to her vehicle when
Carter shoved her across the driver’s seat and demanded her keys and cellular phone.
Carter lay on top of Martinez’s body, threatened her with obscenities, and held a knife
to her neck with one hand. With his other hand, he choked Martinez. Carter dragged
Martinez out of the car, instructed her to keep her head down, and told her to avoid
looking at him. Carter then ordered Martinez to “run to the left,” threatening to kill
her if she ran in another direction or turned back to look at Carter and his accomplice.
Carter and his accomplice eventually drove away in Martinez’s vehicle.
Martinez returned to her office building, called the police, and provided them
with her vehicle information. Shortly thereafter, while on patrol, Officer Hefferin
with the Bellaire Police Department received a radio report of the car theft. Hefferin
recognized the stolen car in traffic from the radio description and began to chase the
vehicle. After the pursuit ensued, Carter crashed the stolen vehicle into a gate of an
apartment complex; Carter and his accomplice exited the vehicle. Hefferin
immediately apprehended Carter’s accomplice, but Carter fled through the apartment
complex and hid behind a gate. After a few minutes, Carter surrendered to an officer
with the Houston Police Department.
During the guilt-innocence phase of Carter’s trial, Detective Lacy, also with
the Bellaire Police Department, testified on behalf of the State. Lacy testified that he
had advised Carter of his Miranda rights after officers had taken him to the police
department. Lacy recounted that Carter indicated that he understood his
constitutional rights, and Carter signed a document stating that he understood those
rights. Carter indicated that he was willing to waive those rights and speak with
Lacy. The trial court admitted a videotape of Detective Lacey’s interview.
In his videotaped confession, Carter acknowledged that he had participated in
the theft of Martinez’s vehicle with a man named “Ghost.” Carter denied that any
weapon was used in the commission of the crime. Carter stated that he robbed
Martinez to get back to the north side of town, and so that he could take his girlfriend
out for Valentine’s Day.
The next day, before resuming trial, Carter’s trial counsel informed the trial
court that Carter had elected to withdraw his plea of “not guilty” and to plead guilty,
leaving the issue of punishment to the jury. The following exchange then took place
outside the presence of the jury:
Trial Court: We’re outside the presence of the jury back on the record
. . . . We’re presently in trial on this matter, the jury, having been
selected. I’ve been told by the lawyers in this case that Mr. Carter now
wishes to change his plea from not guilty to guilty [of] the alleged
offense . . . . Is that the understanding that everyone has?
Trial prosecutor: Yes, Your honor.
Carter’s Counsel: Yes, it is, Your Honor.
. . .
Trial Court: Let me explain this to you, Mr. Carter, during the pendency
of this case, you have done several things that do not give me great
comfort. You went into some type of fit in the holdover, and hit the
glass. Then you came out and said you were incompetent, but then
when you realized I wasn’t buying it, you suddenly regained your
competency. I just want to make sure you understand something, if
you’re doing this for any reason other than the one stated, and you plan
to disrupt this trial or do something along those lines, that will not be a
good thing to do. All right. I’m taking you at your word that this is
what you want to do. You need to take me at my word. I’m dead
serious about how we run business in this court; and this is a very
serious offense. This jury is very sincere in their approach to the case,
as is the attorney for the State, as is your lawyer, as am I and the court
reporter; and I will allow you to do this if this is what you wish to do.
If this is some ill-advised scheme to try to gain advantage and then do
something to disrupt this court, I just advise against it. Are we all
square on ths?
Carter: Yes, sir.
Trial Court: And this is what you wish to do?
Carter: Yes, sir.
Trial Court: All right. Are you pleading guilt[y] to this because you are
guilty of it?
Carter: Yes, sir.
Trial Court: That includes using a knife?
Carter: Yes, sir.
Following Carter’s guilty plea before the jury, the trial proceeded to the
punishment phase. There, Carter testified on his own behalf. Carter explained that
it was his accomplice’s idea to rob Martinez. He testified that he thought about his
actions in jail and was sorry for committing the offense. He told the jury that he
committed the robbery in order to obtain money to take his girlfriend out for
Valentine’s Day. Carter denied holding a knife to Martinez’s neck during the
robbery, stating he instead held the knife by his hip. Finally, Carter testified he was
“traumatized” by the robbery.
II. Discussion
A. Competency to Stand Trial
Carter first contends that the trial court abused its discretion in accepting his
plea of guilty and proceeding with punishment without a competency inquiry.
We review a trial court’s decision not to conduct a competency inquiry under
an abuse of discretion standard. Moore v. State, 999 S.W.2d 385, 393 (Tex. Crim.
App. 1999); Lawrence v. State, 169 S.W.3d 319, 322 (Tex. App.—Fort Worth 2005,
pet. ref’d). A defendant is presumed competent to stand trial and shall be found
competent to stand trial unless proved incompetent by a preponderance of the
evidence. Tex. Code Crim. Proc. Ann. art. 46B.003 (b) (Vernon Supp. 2007). A
defendant is incompetent to stand trial if he lacks: (1) sufficient present ability to
consult with his lawyer with a reasonable degree of rational understanding or (2) a
rational, as well as factual, understanding of the proceedings against him. Id. art.
46B.003 (a). Either party may suggest by motion, or the trial court may suggest on
its own motion, that the defendant may be incompetent to stand trial. Id. art.
46B.004(a). If evidence suggesting the defendant may be incompetent to stand trial
comes to the attention of the court, the court on its own motion shall suggest that the
defendant may be incompetent to stand trial. Id. art. 46B.004(b) (Vernon Supp.
2007). On suggestion that the defendant may be incompetent to stand trial, the court
shall determine by informal inquiry whether there is some evidence from any source
that would support a finding that the defendant may be incompetent to stand trial. Id.
art. 46B.004(c).
In this case, the trial court ordered that Carter undergo a psychiatric evaluation
prior to trial. In the trial court’s order, it noted that Carter stated he was having
memory problems. Id. Carter asserts that reports from court personnel that Carter
had, at some point, exhibited symptoms of a “mental disturbance” raised the question
of his fitness to stand trial. Carter further asserts that the fact that he underwent the
court ordered psychiatric examination before trial and was on some type of
medication should have alerted the trial court to make a further inquiry into his
competence.
Upon review, we conclude that the trial court did not abuse its discretion in not
holding an informal inquiry into Carter’s competence to stand trial because no
evidence exists in the record that suggests that Carter did not have (1) sufficient
present ability to consult with his lawyer with a reasonable degree of rational
understanding or (2) a rational as well as factual understanding of the proceedings
against him. See Tex. Code Crim. Proc. art. 46B.003(a) (Vernon Supp. 2007).
There is no evidence indicating recent severe mental illness, moderate mental
retardation, or truly bizarre acts by Carter. See Salahud-Din v. State, 206 S.W.3d
203, 209 (Tex. App.—Corpus Christi 2006, pet. ref’d). Significantly, Carter testified
lucidly in the punishment phase of trial and responded appropriately to questions
from both defense counsel and the State. See id. at 209. Nothing in Carter’s
testimony in this case is irrational; he testified that he regretted committing the crime,
but that his accomplice and his need for money pressured him into it. See id.
Finally, Carter was able to communicate with the trial judge and appeared to have a
rational and factual understanding of the proceedings against him.
We hold that Carter’s assertions do not establish the required elements of
incompetency concerning his ability to consult with his counsel with a reasonable
degree of understanding or a rational and factual understanding of the proceedings
against him. See Brown, 129 S.W.3d at 766; Tex. Code Crim. Proc. Ann. art.
46B.003(a) (Vernon Supp. 2006). Accordingly, the trial court’s failure to conduct a
competency inquiry did not constitute an abuse of discretion.
B. Ineffective Assistance of Counsel
1. Trial Counsel’s Failure to Move for a Competency Inquiry
In his second point of error, Carter contends he received ineffective assistance
of counsel at trial because his attorney failed to move for an inquiry by the court to
determine Carter’s mental competence to stand trial.
We review claims of ineffective assistance of counsel under the standard set
forth in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052 (1984). Under the
Strickland test, a defendant must prove (1) his trial counsel’s representation was
deficient, and (2) the deficient performance was so serious that it deprived the
defendant of a fair trial. Id. at 687, 104 S. Ct. at 2064. To establish both prongs, the
defendant must prove by a preponderance of the evidence that counsel’s
representation fell below the objective standard of prevailing professional norms, and
there is a reasonable probability that, but for counsel’s deficiency, the result of the
proceeding would have been different. Id. at 690–94, 104 S. Ct. at 2066–68. An
defendant’s failure to satisfy one prong makes it unnecessary for a court to consider
the other prong. Id. at 697, 104 S. Ct. at 2069. This test is applied to claims arising
under the Texas Constitution as well as those arising under the United States
Constitution. Hernandez v. State, 726 S.W.2d 53, 56–57 (Tex. Crim. App. 1986).
Our review of defense counsel’s performance is highly deferential, beginning
with the strong presumption that the attorney’s actions were reasonably professional
and were motivated by sound trial strategy. Jackson v. State, 877 S.W.3d 768, 771
(Tex. Crim. App. 1994). When the record is silent as to trial counsel’s strategy, we
will not conclude that defense counsel’s assistance was ineffective unless the
challenged conduct was “‘so outrageous that no competent attorney would have
engaged in it.’” Goodspeed v. State, 187 S.W.3d 390, 392 (Tex. Crim. App. 2005)
(quoting Garcia v. State, 57 S.W.3d 436, 440 (Tex. Crim. App. 2001)).
When considering the first prong of Strickland, we must decide whether there
is sufficient evidence in the record to refute the strong presumption that trial counsel
rendered adequate assistance and made all decisions in the exercise of reasonable
professional judgment. Bone v. State, 77 S.W.3d 828, 835 (Tex. Crim. App. 2002).
To this end, the Strickland standard requires Carter to rebut the presumption of
adequate assistance by a preponderance of the evidence. See Hernandez v. State, 988
S.W.2d 770, 772 (Tex. Crim. App. 1999).
The analysis we used in Carter’s first issue on appeal applies to Carter’s claim
of ineffective assistance of counsel. Nothing indicates that defense counsel possessed
credible information to present to the trial court regarding Carter’s incompetency to
stand trial. See Jackson v. State, 973 S.W.2d 954, 955 (Tex. Crim. App. 1998) (claim
for ineffective assistance of counsel must be affirmatively supported by the record).
As Carter’s brief notes, “the record . . . is bereft of any evidence of the history of
[Carter’s] psychiatric illness, or of its exact nature[.]” Carter thus has not rebutted the
presumption that trial counsel made her decision not to request a competency inquiry
in the exercise of reasonable professional judgment. Gamble v. State, 916 S.W.2d 92,
93 (Tex. App.—Houston [1st Dist.] 1996, no pet.). In light of these facts, we hold
that the record is insufficient to show trial counsel’s performance was deficient.
2. Trial Counsel’s Failure to Move to Suppress Carter’s Videotaped
Confession
Carter further complains he received ineffective assistance because his trial
counsel did not move to suppress his videotaped confession on the basis that he was
incompetent to give it. Again, the record lacks evidence that Carter was incompetent
at the time he gave his confession and, therefore, that his counsel should have moved
to suppress the confession on these grounds. At the time Carter gave his statement,
he said he understood his rights, waived them, and voluntarily spoke to officers. We
hold that trial counsel’s failure to move to suppress Carter’s statement on this basis
appears to have been made in the exercise of reasonable professional judgment. See
Jackson, 973 S.W.2d at 955.
III. Conclusion
We conclude that the trial court did not abuse its discretion in failing to inquire
into Carter’s competency to stand trial, and that counsel did not render ineffective
assistance. We therefore affirm the judgment of the trial court.
Jane Bland,
Justice
Panel consists of Justices Taft, Jennings, and Bland.
Do not publish. See Tex. R. App. P. 47.2(b).
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366 U.S. 764
81 S.Ct. 1671
6 L.Ed.2d 854
HOHEGAN INTERNATIONAL CORPORATIONv.CITY OF NEW YORK et al.
No. 902.
Supreme Court of the United States
June 5, 1961
Rehearing Denied Nov. 6, 1961.
See 82 S.Ct. 168.
Gerald H. Ullman, for appellant.
Leo A. Larkin and Morris L. Health, for appellees.
PER CURIAM.
1
The motion to dismiss is granted and the appeal is dismissed. Treating the papers whereon the appeal was taken as a petition for writ of certiorari, certiorari is denied.
2
Mr. Justice DOUGLAS is of the opinion that probable jurisdiction should be noted.
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752 F.Supp. 716 (1990)
David PROVOST
v.
Martin F. UNGER, et al.
Civ. A. Nos. 88-0034, 87-1471.
United States District Court, E.D. Louisiana.
November 21, 1990.
Reconsideration Denied February 4, 1991.
*717 ROBERT F. COLLINS, District Judge.
I. INTRODUCTION
The Court is called upon to resolve a conundrum concerning the insurance coverages contracted for by several competing parties. In order to resolve the problem, the Court will first describe the parties in this matter. The Court will then describe the accident that triggered this matter and the procedural history of this action. Next, the Court will examine the law applicable to this case. Finally, the Court will provide a solution to these complex and novel issues.
II. THE PARTIES
A. Martin F. Unger ("Unger"):
Defendant/third party plaintiff; employee of Charles Lewis Pump Company; lessee of vehicle from Budget Rent-A-Car of New Orleans, Inc.
B. Charles Lewis Pump Company ("Lewis"):
Defendant/third party plaintiff; employer of Martin F. Unger; wholly owned subsidiary of Baker International.
C. Aetna Life & Casualty Company ("Aetna"):
Defendant/third party plaintiff; issued a policy of insurance to Baker International, parent company of Charles Lewis Pump Company.
D. Budget Rent-A-Car Of New Orleans, Inc. ("Budget-New Orleans"):
Third party defendant/cross-claimant; owner/lessor of vehicle driven by Martin F. Unger; subsidiary of Diversified Services, Inc.
E. Farmers Insurance Company ("Farmers"):
Third party defendant/cross-claim defendant; issued policy of insurance to Martin F. Unger.
F. Columbia Casualty Company ("Columbia"):
Third party defendant/cross-claim defendant; issued policy of insurance to Diversified Services, Inc., d/b/a Budget Rent-A-Car of New Orleans, Inc.
G. Baker International ("Baker"):
Parent company of Charles Lewis Pump Company; entered "Corp-Rate Agreement" with Budget Rent-A-Car Corporation.
H. Budget Rent-A-Car Corporation ("Budget"):
Franchisor in agreement with Diversified Services, Inc., d/b/a Budget Rent-A-Car of New Orleans, Inc.; entered *718 "Corp-Rate Agreement" with Baker International.
I. Diversified Services, Inc. ("Diversified"):
Parent company of Budget Rent-A-Car of New Orleans, Inc.; franchisee in agreement with Budget Rent-A-Car Corporation; entered "Corp-Rate Participation Agreement" with Budget Rent-A-Car Corporation.
III. PROCEDURAL HISTORY
On December 12, 1986, a 1980 International tractor trailer rig, owned by Rex Milling Company, was involved in an accident with a 1960 Dodge, owned by Budget-New Orleans. Isaac Stevens, the driver of the tractor trailer, was employed by Rex Milling Company. Stevens' son, Rodney Stevens, and David Provost, a Rex Milling employee, were passengers in the tractor trailer at the time of the accident. The Dodge was driven by Martin F. Unger, an employee of Lewis. This ostensibly simple accident triggered three lawsuits.
First, Isaac Stevens and Rex Milling Company filed suit against Unger, Lewis, and Aetna on June 22, 1987 ("Case # 1"). On July 16, 1987, the defendants in Case # 1 filed a third party demand against Budget-New Orleans. On July 12, 1988, an order of dismissal was entered in Case # 1 because Budget-New Orleans and the plaintiffs had reached a settlement agreement. In August of 1988, Isaac Stevens and Rex Milling Company executed Receipt, Release and Hold Harmless Agreements.
Second, Rodney Stevens filed suit against Unger, Lewis, and Aetna on December 10, 1987 ("Case # 2"). The Case # 2 defendants filed third party demands against Budget-New Orleans on January 6, 1988. An order of dismissal was issued in Case # 2 on July 12, 1988 because Budget-New Orleans and the plaintiff had reached a settlement agreement. Rodney Stevens executed a Receipt, Release and Hold Harmless Agreement in August of 1988.
Finally, on December 11, 1987, David Provost filed suit against Unger, Lewis, and Aetna ("Case # 3"). The defendants predictably filed third party demands against Budget-New Orleans on January 6, 1988. American Motorist Insurance Company, Rex Milling Company's compensation carrier, intervened in Case # 3. In September of 1988, Unger, Lewis, and Aetna filed a third party demand against Farmers (Unger's personal automobile insurance carrier). On January 4, 1989, Unger, Lewis, and Aetna filed yet another third party demandthis time against Columbia, the insurance carrier for Budget-New Orleans' parent company, Diversified.
Prior to trial in Case # 3, on January 30, 1989, Provost and American Motorist Insurance Company compromised their claims. Provost's claims were settled for a total sum of $125,000.00. Aetna contributed $50,000.00; Columbia contributed $50,000.00; and Budget-New Orleans contributed $25,000.00. All parties reserved their rights to seek recovery of those sums contributed in the Provost settlement. All parties, except Farmers, participated in this settlement.
On February 1, 1989, Budget-New Orleans filed cross claims against all parties then remaining in Case # 3that is, against Unger, Lewis, Aetna, Columbia, and Farmers. On September 29, 1989, the Court found that Budget-New Orleans was equitably estopped from seeking reimbursement of the settlement amounts paid in Case # 1 and Case # 2.
IV. BACKGROUND
Although the procedural history of this matter is complex, the disputes are quite simple. Budget-New Orleans is attempting to trigger the insurance coverages provided by Aetna to Lewis, Farmers to Unger, and/or its own excess coverage provided by Columbia. Thus, the legal issue presented is the order of payment by Budget-New Orleans and the insurers for the Provost claim.
Budget entered a licensing agreement with Budget-New Orleans in 1962, whereby the franchisee, Budget-New Orleans, was licensed to use the Budget Rent-A-Car name. In an effort to obtain business, Budget offers a special "Corp-Rate Program" to national accounts. This is a discount program for car rental nationwide *719 for corporations. A corporate client tries to meet a certain volume level of business and, upon meeting that volume, receives a discount on the rental. In addition to the discount rate, "Corp-Rate" clients are also provided with greater liability insurance limits, specifically $100,000/person, $300,000/occurrence, $25,000/property damage (hereinafter "100/300/25") instead of the minimum statutory limits.
According to Budget, this liability insurance in the amount of 100/300/25 is primary coverage. It was the intent of Budget that this 100/300/25 primary coverage be honored at all franchised locations.
As part of the sales pitch to a prospective corporate client, the Budget sales person represents that the "Corp-Rate Agreement" will be honored at all participating locations. There is no dispute that Diversified's subsidiary, Budget-New Orleans, was and is a "participating location."
Baker entered the "Budget Corp-Rate Agreement" on August 29, 1985. Although the 1985 "Corp-Rate Agreement" does not address the provision of 100/300/25 coverage, such coverage is addressed in the proposal at page 19 and was in fact "part and parcel of a particular rental in that given year."
The 1985 Agreement between Budget and Baker was never terminated. In August of 1986, Budget again approached Baker with a new proposal through its representative Doug Myers. This new proposal was virtually identical to the earlier one with the only changes being in the daily rate and surcharge locations. In December of 1988, Baker again signed a "Corp-Rate Agreement" with Budget. This Agreement specifically provides that the 100/300/25 liability insurance provided is primary. During the negotiation process on this latest Agreement in 1988, there were no discussions, comments or indications that this coverage was in any way different or better than that which had been previously provided.
Mr. Myers' testimony demonstrates that there was an ongoing business relationship between Baker, Budget, and Budget-New Orleans. Neither Budget nor Budget-New Orleans indicated to Baker that the coverage provided was not primary. What was offered by Budget was liability insurance coverage of "not less than $100,000/$300,000/$25,000." Mr. Myers was never advised that this coverage was not primary.
The Court finds that the foregoing demonstrates the course of dealings between Budget and its franchisees, the dealings of Budget with its Corp-Rate clients, and Budget's intent that Corp-Rate clients, such as Baker and its wholly owned subsidiary, Lewis, be provided with primary liability insurance coverage of not less than $100,000/person, $300,000/occurrence and $25,000/property damage.
As stated previously, this accident occurred in December of 1986. James Perry, Director of Insurance and Risk Management for Baker, was notified about the accident on January 19, 1987, days after the incident took place. Mr. Perry was advised by telephone that Unger (an employee of Lewis) was told that Budget provided only the state minimum required financial responsibility limits. Mr. Perry spoke with Ms. Paula Beck, the Budget sales account representative with whom Doug Myers, on behalf of Baker, had dealt. This conversation was followed with correspondence dated February 6, 1987.
Ms. Beck, in turn, consulted with Budget and was informed that corporate clients, such as Baker and their wholly owned subsidiaries, "received the full coverage of 100/300/25 rather than only the state minimum requirement." Ms. Beck then spoke with Marty Hernandez, Corporate Director of Diversified, d/b/a Budget-New Orleans, requesting that the franchise honor the "Corp-Rate Agreement." Ms. Beck followed this with correspondence to Mr. Hernandez dated February 13, 1987.
Mr. Hernandez subsequently wrote on the bottom of Ms. Beck's letter:
2/24/87 I spoke to Paula Beck and informed her that we would honor the 100/300/25 corporate agreement.
This handwritten note was made after Mr. Hernandez obtained the proper authorization from Paul Silicato, then Executive Vice-President and Chief Operating Officer of Diversified, d/b/a Budget-New Orleans.
*720 On March 2, 1987, Baker was informed by Ms. Beck that Budget-New Orleans would honor the 100/300/25 Agreement. Budget-New Orleans did honor the "Corp-Rate Agreement" and provided primary coverage in the amounts of 100/300/25 in connection with the accident. It appears that when Budget-New Orleans realized that David Provost's claims would exceed $100,000.00 and push Budget-New Orleans' payments over its $100,000.00 self-insured retention with Columbia. Believing that it was not required to pay any sums in excess of $100,000.00, Budget-New Orleans refused to pay any additional sums.
As indicated in the procedural history above, Budget-New Orleans, on behalf of itself, Unger, Lewis and Aetna settled the two Stevens' personal injury claims and the Rex Milling Company property damage claim. All of these settlements were verbally agreed to in July of 1988 and executed in writing in August of 1988. The Court notes that the Isaac Stevens settlement amounted to $46,000.00; the Rodney Stevens settlement amounted to $4,905.26; the Rex Milling Company property damage claim amounted to $22,098.00; and the Intervention in the Isaac Stevens claim amounted to an additional $23,000.00.
It is undisputed that in December of 1986, the Louisiana statutory minimum financial responsibility limits were $10,000/person, $20,000/occurrence and $5,000/property damage. It is also undisputed that the settlement amounts described above exceed the state's minimum requirements. Likewise, it is undisputed that the amounts were paid voluntarily and freely by Budget-New Orleans. James L. Hunter, Budget-New Orleans' claims representative, testified that the issue of other insurance coverages never arose and was not discussed until after the summer of 1988 when Budget-New Orleans first placed Columbia, its excess insurance carrier, on notice of these claims and when Budget-New Orleans realized that Columbia objected to what it viewed as a unilateral extension of coverage. Mr. Hunter stated that the Corp-Rate coverage dispute arose because of the difficulties Budget-New Orleans was having with Columbia. Hunter further stated that the Provost case should be handled by their excess carrier and that no moneys were being sought from Aetna. Mr. Hunter further confirmed Mr. Myers' statements that Corporate renters are not advised of any conditions to the 100/300/25 coverage provided; that is, they are advised they have 100/300/25 insurance coverage without reservation.
V. INTERPRETATION OF THE POLICIES
A. Ranking of Coverages
For the reasons given below, the Court ranks the insurance coverages in the following manner: (1) Budget-New Orleans; (2) Columbia; (3) Aetna; and (4) Farmers.
1. Budget's Primary Position
As detailed above, Budget-New Orleans initially honored and provided extended insurance coverage to Baker and in turn to Lewis and Unger, pursuant to the aforementioned Corp-Rate Agreement. Relying on Jones v. Henry, 542 So.2d 507 (La.1989), Budget-New Orleans asserts that a self-insurance is not insurance. Budget-New Orleans' reliance on Jones is misplaced. Jones held that self-insurance was not insurance for the purposes of the Uninsured Motorist Act.
The Louisiana Motor Vehicle Safety Responsibility Law (LMVSR), R.S. 32:851-1043, has as its purpose the elimination of the reckless and irresponsible driver from the highways by requiring that owners and drivers of motor vehicles provide proof of financial responsibility. 1952 La.Acts., No. 52.
Under the terms for R.S. 32:861, owners and operators of motor vehicles can provide proof of financial responsibility by (1) purchasing a liability policy whose limits conform to the requirements of R.S. 32:900(B)(2) or a binder for the same; (2) posting a motor vehicle liability bond to satisfy the requirements of R.S. 32:861(B); (3) depositing with the state treasurer sufficient cash and securities under the provisions of R.S. 32:861(C); or (4) becoming self-insured under the terms of R.S. 32:1042.
*721 For a self-insurer, this "proof of ability to respond in damages," R.S. 32:851(10), is a certificate indicating the state's satisfaction that the self-insurer has and will continue to have the ability to pay judgments. R.S. 1042(B)(1). Any person who is the registered owner of more than twenty-five motor vehicles or who is the registered owner of property valued in excess of $100,000 over any encumbrances may qualify as a self-insurer. R.S. 32:1042(A).
Self-insurance then is a misnomer. It is not insurance, but instead is one of four methods by which a person can satisfy the LMVSR. The self-insurance certificate indicates only that the self-insurer possessed sufficient assets when the certificate was issued to meet the state's definition of the ability to respond in damages if found legally liable.
The Court finds that Jones stands for the proposition that self-insurance is a method for satisfying the LMVSR. Id. at 509. It does not follow that the coverage provided by Budget-New Orleans is not insurance. The Court does not read Jones to support Budget-New Orleans' argument.
The Court finds that Budget-New Orleans' settlement payments beyond the state minimum limits support the finding that Budget-New Orleans acknowledges, as it must, that it provided 100/300/25 coverage to Corp-Rate renters. The Court further finds that Budget-New Orleans' conduct in settling the two Stevens' claims and the Rex Milling property damage claim, as well as the Intervention, without seeking any payments from the other insurance companies, constituted an acknowledgment and an admission that primary coverage was being provided. This was acknowledged in Mr. Hunter's testimony.
In sum, if it looks like a duck, walks like a duck, and quacks like a duck, it is a duck. Likewise, Budget-New Orleans' Corp-Rate Agreement looks like insurance, functions like insurance, and has settled claims in this litigation like insurance, it is insurance. Thus, the Court finds that Budget-New Orleans' Corp-Rate Agreement is primary to the other coverages in this matter. Budget must therefore fund the first $100,000.00 of the Provost settlement.
2. Columbia's Secondary Position
Columbia argues that the Aetna and Farmers' policies prime its policies. Columbia's argument is not well taken. Columbia's argument is premised on a faulty reading of the policy provided to Budget-New Orleans. In short, Columbia argues that Budget-New Orleans has other collectible insurance which must be exhausted before triggering its coverage.
Columbia's "other insurance" provision reads:
If collectible insurance with any other insurer is available to the Insured covering a loss also covered hereunder (whether on a primary, excess or contingent basis), the insurance hereunder shall be in excess of, and shall not contribute with, such other insurance; provided that this clause does not apply with respect to excess insurance purchased specifically to be in excess of this policy, or to other insurance which is intended to provide the remainder of the limit of liability stated in the Declarations of this policy when the insurance afforded under this policy provides less than 100 percent of the limit set forth in the Declarations. (emphasis added.)
If the Aetna and Farmers' policies were available to Budget-New Orleans, Columbia's policy would not be triggered. In reality, Budget-New Orleans has its self-retention and Columbia's policy to cover any losses occasioned by its vehicles. Budget-New Orleans is not insured by Aetna or Farmers. There are no policies in evidence to support Columbia's assertion that Budget-New Orleans has other collectible insurance. The other available insurance is available to Lewis and Unger, not Budget-New Orleans. In the alternative, Columbia argues that Budget-New Orleans assumed liability for the Provost accident. This argument is contradicted by the releases entered in this matter. In fact, the releases clearly state that Budget does not admit liability and expressly denies liability to the parties.
Finding that Budget-New Orleans does not have other available insurance and that Budget-New Orleans did not assume liability for the Provost claim, the Court finds *722 that Columbia's policy primes both Aetna and Farmers' policies. Thus, Columbia is liable for the remaining $25,000 of the Provost settlement. Having found that Budget-New Orleans and Columbia must fund the Provost settlement, it is unnecessary to discuss in great detail the coverage provided by Aetna and Farmers.
3. Aetna and Farmers' Position
Aetna insured Lewis. Farmers insured Unger. Lewis employed Unger. In Louisiana, an employer's insurance policy is primary to the employee's personal automobile insurance coverage. Boudreaux v. Optimum Insurance Co., 854 F.2d 88 (5th Cir.1988). An employer's insurance is primary when the employee is in the course and scope of his employment. The Boudreaux court held, "[u]nder Louisiana law, the personal policy of an insured operating a non-owned vehicle will be the excess carrier." Id. at 92-93. See also, Deane v. McGee, 261 La. 686, 260 So.2d 669, 671 (1972) (An individual's insurance is considered excess when that individual is not in his own vehicle); Lee v. Allstate Ins. Co., 274 So.2d 433, 437 (La.App. 1st Cir. 1973) (Insurer does not undertake to extend coverage to an insured who is driving another's car in the insured's occupation because such responsibility should rest with insured's employer); Broussard v. Whitaker, 238 So.2d 228, 232 (La.App. 3rd Cir.1970) (Employee's insurance policy is excess to employer's coverage).
The Court therefore finds that Aetna's policy primes Farmers' policy notwithstanding the other insurance clauses of both policies. Since Unger was Lewis' employee at the time of this accident, Lewis' policy primes Unger.
VI. CONCLUSION
The insurance companies agreed to fund the Provost settlement with a reservation of rights to seek repayment. The amounts paid into the settlement are as follows: (1) Budget-New Orleans, $25,000.00; (2) Columbia, $50,000.00; (3) Aetna, $50,000.00; and (4) Farmers, zero. Hence, Budget-New Orleans must pay Aetna $50,000.00 for its contribution to the Provost settlement. Budget-New Orleans must also pay $25,000.00 to Columbia for half of its contribution to the Provost settlement. When Budget-New Orleans reimburses the other parties, it will satisfy its obligation to contribute $100,000.00 to the Provost settlement. Columbia will be reimbursed $25,000.00. Columbia receives only half of its original $50,000.00 contribution because Columbia is obligated to cover Budget-New Orleans' exposure over $100,000.00.
ON MOTIONS FOR RECONSIDERATION
Third party defendant, Budget Rent-A-Car of New Orleans, moves this Court to alter and amend its Judgment entered on November 21, 1990. Columbia Casualty Company also moves this Court for a new trial. Given the history of this action,[1] this Court construes these motions as motions for reconsideration. In accordance with the Court's Minute Entry of November 20, 1990, and finding that the parties merely re-urge their previously unpersuasive arguments, the motions are DENIED.
NOTES
[1] There has been no trial in this matter. The parties submitted briefs on the issue of the reasonableness of a settlement.
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497 F.3d 982 (2007)
EMMERT INDUSTRIAL CORPORATION, an Oregon corporation, Plaintiff-Appellant,
v.
ARTISAN ASSOCIATES, INC., a Michigan corporation, Defendant-Appellee.
No. 05-35622.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted July 12, 2007.
Filed August 13, 2007.
*983 Jeffry S. Garrett, Vicki L. Smith, Lane Powell PC, Portland, OR, for the plaintiff-appellant.
Frederick R. Damm, Clark Hill PLC, Detroit, MI, for the defendant-appellee.
Before: ALFRED T. GOODWIN, STEPHEN REINHARDT, and MILAN D. SMITH, JR., Circuit Judges.
GOODWIN, Senior Circuit Judge:
Emmert Industrial Corporation ("Emmert") appeals a summary judgment in favor of Artisan Associates, Incorporated ("Artisan") on Emmert's three contract *984 claims arising from the parties' agreement for the transportation of industrial metal-stamping presses and press components. We affirm in part, reverse in part, and remand to the district court for further proceedings.
I. FACTS AND PROCEEDINGS BELOW
An Oregon corporation, Emmert is an engineering and transportation company that specializes in transporting objects weighing in excess of 100,000 pounds. Artisan is a Michigan corporation and transportation broker engaged primarily in coordinating complex "heavy haul" projects on behalf of its clients, a business in which Artisan routinely contracts with carriers such as Emmert.[1] In May 1996 Artisan, under a broker's contract with General Motors ("GM"), solicited bids for the "Press Project," a complex undertaking that involved the transportation and delivery of six industrial metal-stamping presses from Japan to GM plants in Georgia, Michigan, and Missouri. Emmert submitted the winning bid for transporting the major components of six presses, subsequently receiving a 46-word notification letter from Artisan stating that Emmert would serve as "the primary carrier" on the Press Project for transportation of "all components that weigh more than 100,000 pounds." Upon receipt of this letter, which also instructed Emmert to "proceed with the necessary planning," Emmert took a number of actions. Emmert sent employees to Japan to inspect the goods to be moved, surveyed port facilities, prepared a pre-moving analysis and route survey, and put together route plans for the Georgia phase of the project. Emmert assigned personnel and equipment to the Press Project, and paid a third party to monitor and detect "strain" on bridges over which loaded Emmert vehicles would pass.
Under Artisan's master operating agreement with GM, the "volume of business tendered to [Artisan] is contingent upon GM's requirements for such Heavy Haul, Rigging, and Flatbed services." Although GM retained control over the flow of work to Artisan in the first instance, once a move had been authorized, Artisan became primarily responsible for on-the-ground oversight and management. Specifically, the Artisan-GM contract provided that Artisan "is required to select and manage a network of certified and permitted carriers and riggers . . . to meet the needs of GM," and that Artisan "shall arrange transportation for GM, including the hiring of carriers and riggers. . . ." The GM contract also provided that:
Operational Control. [Artisan] shall have sole and exclusive control over the manner in which [Artisan] and its employes [sic] and/or sub-contractors perform their Services. [Artisan] shall engage and employ and/or sub-contract with, such individuals or carriers as it may deem necessary in connection therewith. Such individuals shall be considered employes [sic] or sub-contractors of [Artisan] only and shall be subject to employment, discharge, discipline and control solely and exclusively by [Artisan].
Emmert completed two phases of the Press Project, transporting and delivering press components to GM plants in Georgia and Missouri, and invoiced Artisan approximately $4.9 million for this work and for *985 services in preparation for a third project phase involving transportation to GM plants in Michigan. However, before Emmert performed any further Press Project work, GM reminded Artisan in writing that Artisan was scheduled to broker the move of another press in early 1998, and requested a quote for this move "using carriers other than Emmert." GM's logistics liaison also instructed Artisan orally not to engage Emmert on any further Press Project moves. At that point, the remaining Press Project moves consisted of (1) parts of two presses to be moved to Michigan; (2) one press to be moved to Missouri; and (3) various press component shipments.
On the same day it received GM's letter, Artisan notified Emmert that Emmert did not receive the contract to transport the remaining press parts to Michigan and Missouri, moves that Artisan ultimately brokered through another carrier. Artisan also notified Emmert that Artisan did not receive the contract from GM to broker the remaining component shipments, which GM eventually awarded to a different broker.
Artisan objected to numerous individual charges contained in the approximate $4.9 million claimed due by Emmert. After protracted negotiations, Artisan paid Emmert approximately $4.2 million and advised Emmert in October 1997 that it would make no further payments.
Emmert brought this action in June 2003. In its amended complaint Emmert (1) claimed that Artisan breached the contract by failing to pay the remaining balance; (2) attempted to state a claim in quantum meruit for the same amount; and (3) claimed that Artisan's failure to broker any further work to Emmert in the wake of GM's letter constituted an additional, independent breach of the contract. The district court granted Artisan's motion for summary judgment with respect to all three claims, reasoning that Emmert's first two claims were time-barred under the Interstate Commerce Commission Termination Act ("ICCTA"), and that because Emmert had no exclusive contractual right to handle the Press Project moves, Artisan did not breach the parties' contract by ceasing to funnel work to Emmert after July 31, 1997. Emmert now appeals, invoking our jurisdiction under 28 U.S.C. § 1291.
II. DISCUSSION
This is a diversity action in which none of Emmert's affirmative claims presents a federal question, and Emmert contends the district court erred on two grounds in concluding that its first two claims are barred by the ICCTA limitations period codified at 49 U.S.C. § 14705(a). Emmert first argues that the statute applies solely to a carrier's claims against a shipper for charges owed under a filed tariff. Because Emmert has no filed tariff, it asserts that § 14705(a) is inapplicable to its first two claims as a matter of law. Alternatively, Emmert contends that because the statute's substantive elements are not satisfied on the facts of this case, § 14705(a) cannot bar its first two claims. Emmert also argues that the district court erred in dismissing its third claim for breach of contract. Each assignment of error is taken up below.
Applicability and Operation of the ICCTA Limitations Period
Emmert's contention that § 14705(a) is inapplicable to its first two claims as a matter of law was never argued or briefed in the district court. As Artisan correctly points out, we generally will not consider issues raised for the first time on appeal. Cold Mountain v. Garber, 375 F.3d 884, 891 (9th Cir.2004) (citation *986 omitted). However, in our discretion we may consider an issue raised for the first time on appeal under several recognized circumstances, including where the issue presents a pure question of law that does not depend on the factual record developed below, or the relevant record is fully developed. Id.; see also United States v. Carlson, 900 F.2d 1346, 1349 (9th Cir.1990). This appeal fits comfortably within that exception. The question whether § 14705(a) applies solely to claims for charges owed under a filed tariff is purely one of law, resolution of which requires no further development of the factual record in this case. Further, notwithstanding Artisan's argument that it has been prejudiced by Emmert's failure to raise this issue below, this court has already determined that when, as here, an appellee has a full and fair opportunity to address an issue raised for the first time on appeal in its appellate briefing, there is no prejudice. Dream Palace v. County of Maricopa, 384 F.3d 990, 1005 (9th Cir.2004); United States v. Nukida, 8 F.3d 665, 669 (9th Cir.1993). Because Emmert's argument to this court presents statutory interpretation questions of first impression, and because resolution of those questions is likely to broadly impact entities engaged in transporting goods in interstate commerce, we choose to address Emmert's argument.
Turning to the substance of this issue, there is no merit to Emmert's contention that the time limitation in § 14705(a) applies only when a carrier seeks to recover charges owed under a filed tariff. Although neither this circuit nor any of our sister circuits appears to have directly addressed the issue, there are several reasons to reject Emmert's proposed construction of § 14705(a). Before evaluating those reasons, we briefly consider the broader statutory framework.
As originally enacted, the Interstate Commerce Act ("ICA") was a wide-ranging statutory scheme that imposed substantial regulations on the transportation of goods and persons between the states. See Verizon Commc'ns, Inc. v. FCC, 535 U.S. 467, 478 n. 3, 122 S.Ct. 1646, 152 L.Ed.2d 701 (2002); Munitions Carriers Conference, Inc. v. United States, 147 F.3d 1027, 1029-30 (D.C.Cir.1998). The ICA contained a number of rate regulation provisions, including a requirement that most road carriers file tariffs defining the prices and terms under which they would transport persons and property. See Munitions Carriers, 147 F.3d at 1029-30. Enactment of the ICCTA in 1995 largely rolled back this pervasive scheme of federal regulation. Id. The new legislation deregulated most sectors of road transport, and relieved most road carriers of having to file tariffs describing their rates in detail. Id.[2] Despite the many changes implemented by the ICCTA, Congress retained the ICA's statute of limitations governing claims brought by carriers against shippers. See 49 U.S.C. § 14705(a). That statute lies at the heart of the district court's summary judgment on Emmert's first two claims, and in determining whether the statute should be construed as Emmert argues, we must begin "with the plain meaning of the statute's language." Molski v. M.J. Cable, Inc., 481 F.3d 724, 732 (9th Cir.2007) (quoting Botosan v. Paul McNally Realty, 216 F.3d 827, 831 (9th Cir.2000)). The statute at issue in this appeal reads, in full:
A carrier providing transportation or service subject to jurisdiction under chapter 135 must begin a civil action to *987 recover charges for transportation or service provided by the carrier within 18 months after the claim accrues.
49 U.S.C. § 14705(a).
"Where the statutory language is clear and consistent with the statutory scheme at issue, the plain language of the statute is conclusive and the judicial inquiry is at an end." Molski, 481 F.3d at 732. (citations and internal quotation marks omitted). Additionally, where a statute is complete and unambiguous on its face, additional terms should not be read into the statute. See Burlington N.R.R. v. Okla. Tax Comm'n, 481 U.S. 454, 463, 107 S.Ct. 1855, 95 L.Ed.2d 404 (1987). Finally, unless statutory terms are otherwise defined, they are "generally interpreted in accordance with their ordinary meaning." BP Am. Prod. Co. v. Burton, ___ U.S. ___, 127 S.Ct. 638, 643, 166 L.Ed.2d 494 (2006).
As relevant to Emmert's tariff filing argument, the statute's plain language requires a carrier to bring a claim "to recover charges for transportation or service" within 18 months of the claim's accrual. Emmert, however, argues that "charges" should be read to mean "charges owed under a filed tariff." This contention is problematic for several reasons. First, there is no tariff requirement on the face of the statute. Because the statute is complete and unambiguous a conclusion Emmert does not challenge we will not read such a requirement into the statute. See Burlington N.R.R., 481 U.S. at 463, 107 S.Ct. 1855. Second, because the term "charges" is not statutorily defined, it should be interpreted according to its ordinary, everyday meaning. Burton, 127 S.Ct. at 643. The common meaning of "charges" does not necessarily relate to debt owed pursuant to a tariff, but also includes a price, cost, expense, or debt owed under contractual obligation. Simply, the plain and clear language of § 14705(a) includes no tariff requirement, and Emmert presents no sound reason why we should construct one.
Emmert accurately points out that to determine the meaning of § 14705(a) we must consider the particular language at issue in context of the overall statutory scheme. See McCarthy v. Bronson, 500 U.S. 136, 139, 111 S.Ct. 1737, 114 L.Ed.2d 194 (1991) (citation omitted). However, consideration of the broader legislative context belies Emmert's position. First, under basic principles of statutory interpretation, identical words used in different parts of the same statute are presumed to have the same meaning. Sullivan v. Stroop, 496 U.S. 478, 484, 110 S.Ct. 2499, 110 L.Ed.2d 438 (1990). Other sections of the ICCTA use the term "charges" to refer to the price payable for transportation services provided by both carriers subject to a tariff requirement, and those who are not. See, e.g., 49 U.S.C. § 13708 (describing billing and collection requirements for all carriers subject to jurisdiction under 49 U.S.C. § 13501, which includes carriers that must file a tariff, and those that need not). Accordingly, because the word "charges" as used in other sections of the ICCTA includes both tariff and non-tariff charges, the same meaning should apply to the word "charges" in § 14705(a).
A separate consideration of the broader statutory context bolsters our conclusion. The House Report on the ICCTA emphasized the need for consistent federal commercial rules "to ensure that all interstate transportation is subject to the same rules and procedures." H.R.Rep. No. 104-311, at 85 (1995), reprinted in 1995 U.S.C.C.A.N. 793, 797. The intent to create uniform regulation is evident throughout the ICCTA, which establishes various requirements that apply equally to all carriers, including the limited class subject to the tariff requirement. See, e.g., 49 U.S.C. §§ 13708 (billing and charge collection); *988 13707(a) (transfer of possession upon payment); 14101(a) (provision of safe and adequate service, equipment, and facilities). Given this clear intent to create a uniform regulatory scheme, we are not persuaded that Congress would, sub silentio, simultaneously create different limitations periods for claims by tariff filing and non-tariff filing carriers.[3]
Emmert's primary argument to the contrary that no federal question jurisdiction exists over a carrier's claims absent a filed tariff, and therefore a filed tariff is necessary to invoke § 14705(a) can be disposed of quickly. Simply, nothing in the text or context of § 14705(a) indicates that the eighteen-month limitations period is restricted to claims seeking charges under a filed tariff, or even to claims arising under federal law. We accordingly reject Emmert's proposed statutory construction, and conclude instead that because § 14705(a) applies to the first two claims in this "civil action to recover charges for transportation or service provided," Artisan may, as a matter of law, assert the statute's limitations period as an affirmative defense to Emmert's first two claims.
We next consider whether § 14705(a) bars those claims on the facts of this case. As noted, § 14705(a) requires carriers subject to United States Code Title 49, Subtitle IV, Chapter 135 to bring an action to recover charges owed for transportation or service performed within eighteen months after the claim accrues. Emmert does not contest that it is subject to Chapter 135,[4] nor does it challenge the district court's conclusion that it is a "carrier" within the meaning of the ICCTA. Instead, Emmert contends that the district court erred in concluding that its first two claims are time-barred because at least some of the charges it seeks to recover are not for "transportation" within the meaning of the statute, because they are expenses relating to engineering, research, mobilizing and demobilizing, stand-by time, and fees paid for engineering services provided by third parties.
The ICCTA defines "transportation" to include:
(A) a motor vehicle, vessel, warehouse, wharf, pier, dock, yard, property, facility, instrumentality, or equipment of any kind related to the movement of passengers or property, or both, regardless of ownership or an agreement concerning use; and
(B) services related to that movement, including arranging for, receipt, delivery, elevation, transfer in transit, refrigeration, icing, ventilation, storage, handling, packing, unpacking, and interchange of passengers and property.
49 U.S.C. § 13102(23).
In light of this expansive statutory definition of "transportation," the district court concluded that the term encompasses all services rendered incident to the carriage and delivery of an item. And, despite Emmert's efforts to characterize the services at issue as engineering or consulting related, the district court determined that "they actually arise out of the transportation of goods." Accordingly, the district court concluded that Emmert's first two claims sought reimbursement for services governed by the ICCTA, and *989 therefore determined those claims were untimely under the eighteen-month limitations period of § 14705(a).
This circuit has never directly addressed this issue, and there is scant case law on point. However, the extant authority supports the district court's ruling. Considering the statutory predecessor to § 13102(23),[5] the First Circuit determined that "transportation . . . includes all of a motor carrier's services incident to carriage and delivery." PNH Corp. v. Hullquist Corp., 843 F.2d 586, 590 (1st Cir. 1988) (citations omitted). The Fifth Circuit reached a similar conclusion when construing former 49 U.S.C. § 1(3)(a), yet another statutory predecessor to current § 13102(23), which defined transportation as "all services in connection with the receipt, delivery, elevation, and transfer in transit, ventilation, refrigeration or icing, storage and handling of property transported." Centraal Stikstof Verkoopkantoor, N.V. v. Ala. State Docks Dep't, 415 F.2d 452, 455-56 (5th Cir.1969). Emphasizing the statute's breadth, the Fifth Circuit concluded that all "services rendered by a common carrier in connection with transportation of goods shall be covered by the Act." Id. at 456 (emphasis added). While the other circuits do not appear to have considered the reach of the term "transportation," the First and Fifth Circuits' reading of the statute is consistent with long-established Supreme Court jurisprudence. For example, considering an early statutory definition of "transportation" similar to current § 13102(23), the Court determined that Congress intended to define the term broadly enough so that a carrier's duty to the public "included the performance of a variety of services that, according to the theory of the common law, were separable from the carrier's service as carrier," and therefore defined the term so that "the entire body of such services should be included together under the single term `transportation.'" Cleveland, Cincinnati, Chi. & St. L. Ry. Co. v. Dettlebach, 239 U.S. 588, 593-94, 36 S.Ct. 177, 60 L.Ed. 453 (1916); see also S. Ry. Co. v. Reid, 222 U.S. 424, 440, 32 S.Ct. 140, 56 L.Ed. 257 (1912).
Taking the evidence in the light most favorable to Emmert, each of the services for which it seeks reimbursement engineering, research, and operational costs is directly related and incidental to the actual transportation of press components, and each was aimed at furthering that purpose. Although not every service directly involved the physical shipment of goods, each was undertaken specifically as a means toward that end. Given the expansive statutory definition of "transportation" in § 13102(23) we follow the broad construction our sister circuits have applied to similar definitions, and we conclude that the district court did not err by ruling that Emmert's services were at the very least undertaken while "arranging for" the carriage and delivery of the presses. Accordingly, the services for which Emmert seeks to recover charges constitute "transportation" within the meaning of the ICCTA, and § 14705(a) required that Emmert bring an action to recover any charges related to those activities within 18 months after the claim accrued, which is the date on which Emmert delivered, or tendered delivery, of the goods. 49 U.S.C. § 14705(g). Because Emmert last provided services for Artisan in May 1997, its eighteen-month window within which to seek relief had long since closed when it filed its complaint in June 2003, and § 14705(a) necessarily pre-empts any state law providing for a longer limitations *990 period. See Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119, 1128 (9th Cir.2005); Cal. Fed. Savings & Loan Ass'n v. Guerra, 479 U.S. 272, 280-81, 107 S.Ct. 683, 93 L.Ed.2d 613 (1987). We hold that Emmert's first two claims are time-barred under 49 U.S.C. § 14705(a), and accordingly affirm the summary judgment granted to Artisan with respect to those two claims.
Emmert's Third Claim
Emmert's third claim alleged an independent breach of contract arising from Artisan's refusal to award Emmert further Press Project work in the wake of GM's letter, and sought to recover both out-of-pocket expenses and lost profits related to carriage that Artisan brokered to other carriers.
As noted, the parties' short contract identifies Emmert as "the primary carrier" for Press Project moves "on all components that weigh more than 100,000 pounds." Considering the disputed "primary carrier" term, the district court looked to the dictionary meaning of the word "primary," which includes "first in order of time or development," and "of first rank, importance, or value." The district court concluded on that basis that the parties' contract unambiguously contemplated Artisan's use of other carriers for the Press Project. Accordingly, it held that Artisan was within its rights to utilize other carriers, and granted summary judgment on this claim.
We agree with the district court that the parties' contract did not expressly grant Emmert an exclusive right to Press Project moves. However, it is not clear precisely what rights Emmert was granted. The contract is ambiguous in that respect and summary judgment was not appropriate. Moreover, even if Emmert did not possess exclusive rights, it would not necessarily follow that Artisan did not breach Emmert's undisputed contractual right to serve as "the primary carrier" on certain Press Project moves when it refused altogether to broker further Press Project work to Emmert. The district court did not address this point. Nor did the district court determine what the parties intended by denominating Emmert as "the primary carrier" on certain Press Project moves, other than concluding, prematurely at the least, that the parties did not intend "primary" to mean "exclusive." Finally, the district court made no finding regarding the amount of work necessary for Emmert to perform to be considered "the primary carrier" on moves of components weighing in excess of 100,000 pounds. Because these material questions of fact regarding the nature and scope of the parties' agreement remain in dispute, summary judgment on Emmert's third claim was error. See Leisek v. Brightwood Corp., 278 F.3d 895, 898 (9th Cir.2002). We therefore reverse the summary judgment with respect to count three in Emmert's amended complaint, and remand that claim for further proceedings.
AFFIRMED in part, REVERSED and REMANDED in part. Neither party to recover costs on this appeal.
NOTES
[1] The term "broker" is statutorily defined as "a person, other than a motor carrier or an employee or agent of a motor carrier, that as a principal or agent sells, offers for sale, negotiates for, or holds itself out by solicitation, advertisement, or otherwise as selling, providing, or arranging for, transportation by motor carrier for compensation." 49 U.S.C. § 13102(2).
[2] Road carriers still must file tariffs in two specialized categories of transportation: household goods and noncontiguous domestic trade. Munitions Carriers, 147 F.3d at 1029. Neither category is implicated by this appeal.
[3] It is true that Congress intended some exceptions to a truly uniform regulatory scheme, as evidenced by the tariff filing requirement that applies only to "noncontiguous domestic trade" and "the movement of household goods." See 49 U.S.C. § 13702(a). We note, however, that while the ICCTA largely does away with the tariff requirement, it also requires non-tariff filing carriers, upon request, to disclose the same information contained in a filed tariff. See 49 U.S.C. 13710(a)(1).
[4] Nor can Emmert mount such a challenge. See 49 U.S.C. § 13501.
[5] Former 49 U.S.C. § 10102(26) was a near-verbatim forebear to § 13102(23). That definition of "transportation" was somewhat more restrictive, however, as it did not include the "arranging for" clause contained in current § 13102(23).
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526 F.3d 626 (2008)
NORTHERN NATURAL GAS COMPANY, Plaintiff-Counter-Defendant-Appellant,
v.
NASH OIL & GAS, INC., Defendant-Counter-Claimant-Appellee.
No. 07-3104.
United States Court of Appeals, Tenth Circuit.
May 19, 2008.
*628 Alan L. Rupe (Richard A. Olmstead, with him on the briefs), Kutak Rock LLP, Wichita, KS, appearing for Appellant.
Jeffrey L. Carmichael, Morris, Laing, Evans, Brock & Kennedy, Chtd., Wichita, KS, appearing for Appellee.
Before HENRY, Chief Circuit Judge, TACHA, and O'BRIEN, Circuit Judges.
TACHA, Circuit Judge.
Plaintiff-Appellant Northern Natural Gas Company ("Northern") is a natural gas company that operates an underground gas storage field known as the Cunningham storage field in south-central Kansas. Defendant-Appellee Nash Oil & Gas, Inc. ("Nash") owns and operates natural gas wells, some of which are located approximately four miles north of the Cunningham storage field. Based on Northern's belief that its "storage gas" has migrated to Nash's gas wells and Nash is producing that gas, Northern commenced this action, asserting common-law claims of conversion and unjust enrichment and a statutory claim under Kan. Stat. Ann. § 55-1210. The district court granted summary judgment in favor of Nash on the common-law claims, holding they were barred by the statute of limitations or, in the alternative, collateral estoppel. The court dismissed the statutory claim under Fed.R.Civ.P. 12(b)(6). We have jurisdiction under 28 U.S.C. § 1291, and we AFFIRM.
I. BACKGROUND
In 1977, Northern began injecting natural gas into a substratum known as the Viola formation in the Cunningham storage field. By 1993, however, studies undertaken by Northern indicated that the injected storage gas was migrating vertically from the Viola formation to a deeper formation called the Simpson formation. Subsequent studies from 1993 to 1996 further indicated that the storage gas was migrating horizontally northward toward wells operated by Nash. Northern itself concedes in its complaint that "[a]s a result of these studies, Northern became concerned that gas had migrated through a geological pathway in the Viola formation north of the storage facility towards wells operated by Nash."
In January 1999, Northern was negotiating for the purchase of Nash's wells and mineral leases. As part of the negotiations, counsel for Northern sent Nash a letter requesting a variety of information concerning the wells. The letter also stated that Northern would not pay Nash "based upon the ability of your wells to produce storage gas," but that "Northern may be willing to consider the value of your wells as observation wells as some sort of offset to the value of the storage gas previously produced."
Counsel for Nash replied with a letter stating that Nash had specific reservations about producing the information regarding the Nash wells to Northern at that time. In the letter, counsel also asked about Northern's statement concerning Nash's alleged production of storage gas:
*629 Your letter also indicates that Northern would not be interested in paying anything to Nash Oil & Gas based upon the ability of their wells to produce storage gas, but you might be willing to consider paying for the wells as observation wells. Does, in fact, Northern have credible information available to it to suggest that Nash Oil & Gas, Inc., wells are producing storage gas?
In response, counsel for Northern stated in a February 1999 letter that samples taken from Nash's wells preliminarily indicated that the gas being produced by the wells resembled storage gas much more than native gas.
In March 2000, counsel for Northern sent another letter to Nash. The letter explained that Northern continued to investigate whether the gas produced by Nash's wells was storage gas, but that the investigation was ongoing and may not be complete until additional tests could be undertaken. The letter also requested that Nash sign an agreement that purported to toll the statute of limitations for any claims the companies might have against each other. Despite the threat of imminent litigation if Nash did not agree to the tolling provision, Nash declined to sign the proposed agreement.
The same year, Northern hired Michael Begland, a petroleum engineer, to construct a computer-generated reservoir-simulation model. Reservoir simulation is used to predict the flow of gas through porous media. In 2003, the model was finished, and based on its data as well as data from 2002, Northern concluded that several billion cubic feet of storage gas had migrated from the Cunningham storage field and was being produced by Nash.
On September 3, 2004, Northern filed the complaint in this case. In it, Northern alleges that gas has migrated northward from the Cunningham storage facility and is being produced at the Nash wells. Northern brings common-law claims for conversion and unjust enrichment and a statutory claim under Kan. Stat. Ann. § 55-1210. The district court granted summary judgment in favor of Nash on the common-law claims based on the statute of limitations or, in the alternative, collateral estoppel based on the jury's answers to special interrogatories in a similar action Northern had previously litigated against another defendant. The district court dismissed the claim under § 55-1210 pursuant to Fed.R.Civ.P. 12(b)(6).[1] Northern appeals as to all claims.
II. DISCUSSION
We review the entry of summary judgment de novo. Fye v. Okla. Corp. Comm'n, 516 F.3d 1217, 1222 (10th Cir. 2008). Summary judgment is appropriate "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue 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). We view the evidence and make all reasonable inferences in the light most favorable to the nonmoving party. Fye, 516 F.3d at 1222.
A. Conversion and Unjust Enrichment
In Kansas, the statute of limitations for conversion is two years. Kan. Stat. *630 Ann. § 60-513(a)(2). Under the so-called "discovery rule," a cause of action for conversion accrues when the "fact of injury becomes reasonably ascertainable to the injured party." Id. § 60-513(b); see also Dreiling v. Davis, 38 Kan.App.2d 997, 176 P.3d 197, 201 (2008) (describing § 60-513(b) as the discovery rule); Clark Jewelers v. Satterthwaite, 8 Kan.App.2d 569, 662 P.2d 1301, 1304 (1983) ("[A] cause of action in tort for conversion or for the recovery of personal property accrues when substantial injury first appears or when it becomes reasonably ascertainable.").
The statute of limitations for unjust enrichment is three years. Kan. Stat. Ann. § 60-512; Lightcap v. Mobil Oil Corp., 221 Kan. 448, 562 P.2d 1, 13 (1977). Although the parties assume in their briefing that the discovery rule similarly applies to a claim for unjust enrichment, they do not cite and this Court has not located any authority to support this proposition. Nevertheless, because Northern's claim for unjust enrichment is untimely even under the discovery rule, we need not decide the issue and assume for purposes of this appeal that both the claim for conversion and the claim for unjust enrichment accrued when Northern's injury became "reasonably ascertainable."
"The phrase `reasonably ascertainable' means that a plaintiff has the obligation to reasonably investigate available sources that contain the facts of the [injury] and its wrongful causation." Kelley v. Barnett, 23 Kan.App.2d 564, 932 P.2d 471, 474 (1997) (quotations omitted). Moreover, "`reasonably ascertainable' does not mean `actual knowledge.'" Davidson v. Denning, 259 Kan. 659, 914 P.2d 936, 948 (1997). In this case, the district court determined that based on the 1999 and 2000 correspondence between Northern and Nash, Northern could reasonably ascertain at that time that Nash was producing Northern's storage gas. We agree. At that point, Northern suggested that Nash was producing storage gas, stated that samples from Nash's wells supported Northern's position that the produced gas was storage gas, and urged Nash to agree to toll the statute of limitations so that Northern could continue its investigation. Although Northern may not have known to a certainty that the gas was storage gas, it is clear that such fact was capable of being known to Northern at that time. Thus, Northern's injury was reasonably ascertainable by 2000 at the latest, and the claims for conversion and unjust enrichment, which were filed in 2004, are untimely.
Northern contends that even if its injury was reasonably ascertainable by 2000, its claims are not time-barred because Nash's acts (the production of storage gas) constitute a continuing tort entitling Northern to recover damages for each act occurring during the two- or three-year period immediately preceding this lawsuit. In our judgment, the Kansas Supreme Court would not recognize the continuing-tort exception to the statute of limitations for these claims. See Stuart v. Colo. Interstate Gas Co., 271 F.3d 1221, 1228 (10th Cir.2001) ("When no decision of a state's highest court has addressed an issue of that state's law, the federal court confronted with that issue must predict how the state's highest court would rule." (quotations and alteration omitted)).
It is true that Kansas has recognized a form of the "continuing tort" or "continuing wrong" theory in nuisance cases based on flooding. The Kansas Supreme Court has explained:
There are cases in which the original act is considered as a continuing act, and daily giving rise to a new cause of action. Where one creates a nuisance, and *631 permits it to remain, so long as it remains it is treated as a continuing wrong, and giving rise, over and over again, to causes of action.
Henderson v. Talbott, 175 Kan. 615, 266 P.2d 273, 279 (1954); see also Gowing v. McCandless, 219 Kan. 140, 547 P.2d 338, 342 (1976) ("Where the injury or wrong is classified by the courts not as original or permanent, but as temporary, transient, recurring, continuing or consequential in nature, . . . the limitation period starts to run only when the plaintiffs' land or crops are actually harmed by overflow, and for purposes of the statute of limitations, each injury causes a new cause of action to accrue, at least until the injury becomes permanent.").
Kansas has also suggested that the rule applies in a shareholder derivative action where the shareholders did not know of the first instances of the defendant's wrongdoing. See Oberhelman v. Barnes Inv. Corp., 236 Kan. 335, 690 P.2d 1343, 1352-53 (1984). But Kansas has consistently refused to apply the theory in other contexts. See P.W.P. v. L.S. & Johnson Co. Mental Health Ctr., 266 Kan. 417, 969 P.2d 896, 898, 904-05 (Kan.1998) (claims for negligence and intentional infliction of emotional distress are not continuing torts); Lockridge v. Tweco Prods., Inc., 209 Kan. 389, 497 P.2d 131, 133, 137-38 (1972) (claim for misappropriation of a trade secret is not a continuing tort). Indeed, the federal district court in Kansas has refused to apply the doctrine to claims for conversion, fraud, and intentional infliction of emotional distress based, in part, on this very reason. See Cline v. So. Star Cent. Gas Pipeline, 356 F.Supp.2d 1203, 1214-1215 (D.Kan.2005) ("Kansas has only applied the theory in limited circumstances involving a continuing nuisance.").
Moreover, Kansas courts have repeatedly emphasized that it is the role of the state legislature, rather than the state courts, to create exceptions to the statute of limitations. See State v. Mills, 238 Kan. 189, 707 P.2d 1079, 1081 (1985) ("It is not the province of the court to fashion exceptions to the statute of limitations as that task is left to the legislature."); Handy v. Reed, 32 Kan.App.2d 247, 81 P.3d 450, 456 (2004) ("It is fundamental to our system of government that the legislature makes our laws dealing with periods of limitations and the judiciary interprets and enforces such laws. . . . [S]tatutes of limitations are creatures of the legislature, expressing public policy on the right to litigate. The shelter afforded by the running of the statute of limitations . . . is subject to a large degree of legislative control." (quotations and alterations omitted)).
Given Kansas's reluctance to apply the theory in cases other than those involving a continuous nuisance, as well as the directive of the Kansas courts not to engage in judicially created exceptions to the statute of limitations, we hold that Kansas would not apply the continuing-tort doctrine to claims for conversion or unjust enrichment. See Taylor v. Phelan, 9 F.3d 882, 887 (10th Cir.1993) ("As a federal court, we are generally reticent to expand state law without clear guidance from its highest court."). Therefore, summary judgment on these claims was appropriate based on the statute of limitations, and we need not address the district court's alternative reasoning premised on collateral estoppel.
B. Kan. Stat. Ann. § 55-1210
Before addressing Northern's claim under § 55-1210, it is helpful to review briefly the historical rights of natural gas injectors and landowners to migrated gas. Under the common-law rule of capture, "the owner of a tract of land acquired title to the oil and gas which the owner *632 produced from wells drilled thereon even though it could have been proved that part of such oil or gas migrated from adjoining lands." Mobil Exploration & Producing U.S. Inc. v. State Corp. Comm'n of Kan., 258 Kan. 796, 908 P.2d 1276, 1282 (1995); see also Land and Natural Resources Survey, 71 Denv. U.L.Rev. 1017, 1028 (1994) ("The law of capture embodies a simple concept of ownership; whoever captures it owns it, regardless of where it was located."). Due to this common-law rule, gas producers protected their interests by drilling offset wells to prevent migration.
In 1993, however, the Kansas legislature abolished the rule of capture with respect to migrated gas without limit to where the gas migrates. Kan. Stat. Ann. § 55-1210(a)-(b), (c)(1). Now, an injector of natural gas, such as Northern, does not lose property rights to injected gas when such gas migrates beyond the boundaries of the injector's storage facilities. Specifically, the statute provides:
(a) All natural gas which has previously been reduced to possession, and which is subsequently injected into underground storage fields, sands, reservoirs and facilities, whether such storage rights were acquired by eminent domain or otherwise, shall at all times be the property of the injector, such injector's heirs, successors or assigns, whether owned by the injector or stored under contract.
(b) In no event shall such gas be subject to the right of the owner of the surface of such lands or of any mineral interest therein, under which such gas storage fields, sands, reservoirs and facilities lie, or of any person, other than the injector, such injector's heirs, successors and assigns, to produce, take, reduce to possession, either by means of the law of capture or otherwise, waste, or otherwise interfere with or exercise any control over such gas. . . .
(c) With regard to natural gas that has migrated to adjoining property or to a stratum, or portion thereof, which has not been condemned as allowed by law or otherwise purchased:
(1) The injector, such injector's heirs, successors and assigns shall not lose title to or possession of such gas if such injector, such injector's heirs, successors or assigns can prove by a preponderance of the evidence that such gas was originally injected into the underground storage.
See id. The statute also creates a limited right enabling the injector to conduct testing in order to establish the ownership of gas being produced from wells on property that adjoins the injector's storage facility. Id. § 55-1210(c)(2).
In this case, Northern's complaint purports to set forth an independent cause of action under § 55-1210(c)(1) that would entitle it to declaratory relief and an injunction prohibiting Nash from producing Northern's migrated gas. That subsection, however, does not create a new cause of action; rather, it simply abolishes the common-law rule of capture with respect to property rights of migrated gas such that a plaintiff is no longer precluded from bringing some other cause of action (conversion, breach of contract, or unjust enrichment, for example) to enforce those rights. Indeed, by its plain terms, the provision states that a natural-gas injector "shall not lose title to or possession of" migrated gas if the injector can establish that it originally injected the gas into its own storage facilityin this way, the provision invalidates the rule of capture. The language of the provision does not, however, indicate that the legislature further intended to replace or supplement traditional common-law claims with a new statutory *633 cause of action.[2] Thus, because Northern's complaint asserts a free-standing claim under § 55-1210(c)(1), the district court correctly dismissed it.
Moreover, to the extent Northern's complaint seeks testing under § 55-1210(c)(2), the district court was correct as Northern concedes in its briefthat an injector may conduct tests only on wells of adjoining property owners. Therefore, because Nash's wells are located on land that does not adjoin the land over the Cunningham storage field, Northern is not entitled to an order permitting testing on Nash's wells.
III. CONCLUSION
For the foregoing reasons, we AFFIRM.
HENRY, Chief Judge, dissenting:
Unlike the majority, I am not sure that the Kansas Supreme Court would decline to apply the continuing tort doctrine. I agree that that court has declined to recognize the doctrine in some contexts. However, it seems to me that the cases cited by the majority do not involve the kind of claims advanced by Northern here, which allege acts of conversion and unjust enrichment within the two and three-year periods immediately prior to the filing of this lawsuit.
In analogous circumstances, courts of other states have held that a plaintiff may recover for tortious acts within the limitations period, even if the defendant committed other similar acts outside that period. See, e.g., Narragansett Elec. Co. v. Carbone, 898 A.2d 87, 101 (R.I.2006) (allowing a plaintiff to recover on conversion and unjust enrichment claims concerning electricity wrongfully obtained during the limitations period, even though it was before the limitations period that the defendants had installed an illegal bypass switch to avoid billing); Young v. Young, 709 P.2d 1254, 1259 (Wyo.1985) (allowing the plaintiff to recover for royalty payments wrongfully withheld during the limitations period and reasoning that "conversion is a tortious act[,]" "[the defendant's] failure to remit to [the plaintiff] her royalty share as received was a recurring tort of a sort which involved separate and successive injuries from separate and successive acts[,]" and that "[the defendant's conduct] is an exemplification of periodic recurring wrongful actsa series of tortious acts, each of which could be the basis for a separate claim, not continuing damage from an original tort").
The rationale of these decisions is that "a wrongdoer cannot and should not gain a prescriptive right to continue wrongful and injurious acts. While [the defendant] has had the benefit of the statute of limitations for an extended period and its useful purposes preserved, no permanent right is bestowed to continue such wrongful acts during the limitations period immediately preceding the commencement of [the plaintiff's] action." Young, 709 P.2d at 1259. Notably, as Northern observes, the federal district court appears to have applied this principle in the similar case that Northern filed against Trans Pacific Oil Corporation, allowing Northern to seek damages arising out of the production of *634 gas for the two and three-year periods immediately preceding the filing of the complaint. See Aplt's Br. at 29 (quoting the jury instructions in Northern Natural Gas Co. v. Trans Pacific Oil Corp., 10th Cir. case no. 05-3411).
Given the plausible arguments that can be made in support of this view, and the fact that the Kansas Supreme Court has not definitely resolved this question in these circumstances, I would certify this question of state law to the Kansas Supreme Court.
NOTES
[1] The district court considered evidence beyond the pleadings to dismiss the claim under § 55-1210; therefore, it should have converted Nash's motion to dismiss to one for summary judgment. See GFF Corp. v. Associated Wholesale Grocers, Inc., 130 F.3d 1381, 1384 (10th Cir. 1997). Northern, however, does not appeal the propriety of this procedure, so we will not reverse on this basis and will review the dismissal under the standard applicable to an entry of summary judgment.
[2] We also note that faced with somewhat analogous circumstances, both this Court and the Kansas Supreme Court reached the same conclusion with respect to another subsection of this statute. See Beck v. N. Natural Gas Co., 170 F.3d 1018, 1024 (10th Cir.1999) (stating that "§ 55-1210(c)(3) does not create an independent statutory cause of action for trespass"); Hayes Sight & Sound, Inc. v. ONEOK, Inc., 281 Kan. 1287, 136 P.3d 428, 455-56 (2006) (citing Beck with approval and agreeing that "subsection (c)(3) does not create a cause of action").
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823 P.2d 1065 (1992)
FMA LEASING COMPANY and Alta Ridge Associates, Plaintiffs and Appellants,
v.
CITIZENS BANK and Ken Baxter, Defendants and Appellees.
FMA LEASING COMPANY, Third-Party Plaintiff and Appellant,
v.
ALTA TITLE COMPANY and Fidelity National Title Insurance Company, Third-Party Defendants and Appellees.
No. 890220.
Supreme Court of Utah.
January 10, 1992.
*1066 Francis J. Carney, Stewart M. Hanson, Charles P. Sampson, Salt Lake City, for FMA Leasing Co.
Donald J. Winder, Kathy A.F. Davis, Salt Lake City, for Fidelity Nat. Title Ins.
HOWE, Chief Justice:
FMA Leasing Company appeals from a judgment in favor of Fidelity National Title Insurance Company for $50,022.15. The judgment represents attorney fees Fidelity National paid to defend the title of its insured, Alta Ridge Associates, to certain real property. FMA's liability for the fees was premised on warranties contained in the special warranty deed by which FMA had conveyed the property to Alta Ridge.
Because we do not reach the merits of the appeal, we will make only a brief statement of the facts. FMA sold and conveyed the subject real property to Alta Ridge by a special warranty deed. Alta Title Company sold FMA a title insurance policy, which was underwritten by Fidelity National, insuring the title of Alta Ridge. The policy did not disclose or except a recorded assignment of a certain trust deed to Citizens Bank. When the obligor of the promissory note secured by the trust deed defaulted in payment, Citizens Bank commenced a non-judicial foreclosure proceeding against the property. FMA and Alta Ridge brought this action to restrain that sale. A jury found that the trust deed was unenforceable for lack of consideration and a failed condition. Judgment was entered against Citizens Bank in accordance with that finding.
Alta Ridge cross-claimed against FMA, alleging, among other things, that FMA had breached the warranties in the special warranty deed. It sought reimbursement of its attorney fees and costs in defending against Citizens Bank's claim. FMA then filed a third-party complaint against Fidelity National and Alta Title, alleging that they were negligent in their title search and in their issuance of the title policy because the assignment of the trust deed was not disclosed. FMA sought indemnity in the event Alta Ridge recovered on its cross-claim.
Fidelity National assumed the duty to defend against the foreclosure of the trust deed by Citizens Bank; it retained legal counsel to represent its insured, Alta Ridge, and paid attorney fees. The trial court granted summary judgment on the cross-claim in favor of Fidelity National as subrogee of Alta Ridge and against FMA for the $50,022.15 Fidelity National had expended in attorney fees. The court further determined that there was no just reason for delay and directed that the summary judgment be entered as a final judgment pursuant to Utah Rule of Civil Procedure 54(b). FMA appeals from that judgment. The trial court, however, denied Fidelity National's motion for summary judgment on the third-party complaint filed, finding that "substantial issues of material contested facts" remained for resolution.
We dismiss the appeal sua sponte under the authority of Kennecott Corp. v. Utah State Tax Commission, 814 P.2d 1099 (Utah 1991), because the summary judgment appealed from is not eligible for certification under rule 54(b). In Kennecott, we adopted the Seventh Circuit's approach for determining the separateness of a claim, which
"focuses on the degree of factual overlap between the issue certified for appeal and the issues remaining in the district court." When this factual overlap is such that separate claims appear to be based on the same operative facts or on the same operative facts with minor variations, they are held not to constitute separate claims for rule 54(b) purposes.
Id. at 1103 (citations omitted) (quoting Indiana Harbor Belt R.R. v. American Cyanamid Co., 860 F.2d 1441, 1445 (7th Cir.1988)).
In the instant case, the factual overlap is complete. Fidelity National was awarded judgment against FMA for attorney fees expended by Fidelity in defending the title of its insured, Alta Ridge. The trial court ruled that the warranties in the special warranty deed from FMA to Alta Ridge gave Alta Ridge legal entitlement to those fees. Because Alta Ridge did not personally *1067 incur attorney fees, its insurer, Fidelity, which paid the fees, was subrogated to the right of Alta Ridge against FMA. Thus, the judgment was awarded to Fidelity National and not to Alta Ridge. The correctness of this ruling is now before us. However, there remains in the trial court for adjudication the third-party complaint of FMA against Alta Title and Fidelity for indemnification of the judgment awarded to Fidelity. Should FMA be successful, it would be indemnified by those third-party defendants.
To summarize, both the cross-claim, which has been adjudicated, and the third-party complaint, which remains unadjudicated, arise from the same set of operative facts. Those facts are the conveyance of the property by FMA to Alta Ridge and FMA's simultaneous purchase of a title insurance policy from Alta Title and Fidelity National insuring the grantee's title. The two claims are intertwined because recovery on the third-party complaint will offset the judgment already entered on the cross-claim.
The appeal is dismissed for lack of jurisdiction.
HALL, C.J., and STEWART, DURHAM and ZIMMERMAN, JJ., concur.
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IN THE MISSOURI COURT OF APPEALS
HANDDOWN LIST OF JULY 8, 2014
WESTERN DISTRICT
THE FOLLOWING CASES WERE AFFIRMED PURSUANT TO RULE 84.16(b)
AND ISSUED PER CURIAM
------------------------------------------------------------------
WD76498 In the Matter of the Care and Treatment of Vance Moller vs. State of Missouri
THE FOLLOWING CASES WERE AFFIRMED PURSUANT TO RULE 30.25(b)
AND ISSUED PER CURIAM
----------------------------------------------------------------
WD76452 State of Missouri vs. Christopher M. Sanders
WD76524 State of Missouri vs. Donald Ray Smith
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519 F.3d 466 (2008)
MEDICAL LIABILITY MUTUAL INSURANCE COMPANY, Plaintiff-Appellee,
v.
ALAN CURTIS LLC; Alan Curtis; Evergreene Properties of North Carolina, LLC; Alan Curtis Enterprises, Inc., Defendants-Appellants,
Arkansas Advocates for Nursing Home Residents, Amicus Curiae.
No. 07-2061.
United States Court of Appeals, Eighth Circuit.
Submitted: January 14, 2008.
Filed: March 10, 2008.
*467 *468 Keith, Irving Billingsly, argued, Little Rock, AR, for Appellant.
Jess Askew, III, argued, Bonnie J. Johnson, on the brief, Little Rock, AR, for Appellee.
Before LOKEN, Chief Judge, MURPHY, Circuit Judge, and JARVEY,[1] District Judge.
*469 MURPHY, Circuit Judge.
Medical Liability Mutual Insurance Company (Insurer) brought this action against Alan Curtis and Evergreene Properties of North Carolina, LLC (Evergreene) seeking a declaratory judgment regarding its duties to defend and indemnify them against claims in an Arkansas state court action brought by the estate of Annie Redden. All parties filed motions for summary judgment. The district court[2] concluded that Insurer had no duty to defend or indemnify Curtis, that it had a duty to defend Evergreene on all claims in the underlying lawsuit, and that its duty to indemnify Evergreene extended only to any judgment against it for breach of contract. Curtis and Evergreene appeal. We affirm.
I.
Annie Redden entered into a contract with Evergreene and moved into its Crestpark Inn of Marianna (Crestpark) nursing home facility in 1997. Evergreene holds the medical needs license for Crestpark and contracted with Alan Curtis Enterprises, Inc. (Curtis Enterprises) to provide onsite management and operational services at Crestpark and seven other Evergreene nursing home facilities in Arkansas. Redden moved out of Crestpark on January 9, 2003 and died in November 2003.
On March 3, 2005 Redden's estate initiated a state court action in Arkansas against Evergreene, Curtis Enterprises, and Alan Curtis, an employee of Curtis Enterprises, seeking compensatory and punitive damages for negligence, wrongful death, medical malpractice, and violations of the Arkansas Long Term Care Resident's Rights Act (RRA) (Ark.Code § 20-10-1201 et seq.) and other regulations. The estate's fourth amended complaint, filed on December 20, 2006, upon which this action is based named Evergreene and Alan Curtis, but not Curtis Enterprises as defendants and added a breach of contract claim against "Defendant."
Evergreene is the named insured under a primary policy and a supercover umbrella policy originally issued by Fireman's Fund Insurance Company, but later acquired by Insurer which succeeded to all of the obligations under the policies. The primary policy covers claims on an "occurrence" basis, that is claims are covered only if they arise "from incidents that occur while the policy is in force." The policy was in force from January 15, 2000 to January 15, 2001 and therefore does not cover any claim arising from incidents which occurred outside that period. The underlying lawsuit was initiated on March 3, 2005, after which Evergreene notified Insurer and demanded that it provide coverage under the primary policy both for its defense and indemnity.
Insurer brought this action for a declaratory judgment regarding its rights and obligations under the policies. Both sides moved for summary judgment. Insurer argued that each of the estate claims has a two or three year limitations period. Claims with a two year statute of limitations would be timely only if they had arisen from incidents occurring on or after March 3, 2003, since the state court action was initiated on March 3, 2005. Timely claims with three year statutes of limitation must have arisen from incidents occurring on or after March 3, 2002. Since the policy does not cover claims which arise from incidents occurring after the policy period ended on January 15, 2001, *470 Insurer asked the court to declare that it was not obligated to defend or indemnify on any of the estate claims. Appellants countered that some of the estate claims should be subject to a five year limitations period, which would trigger coverage under the policy because they could arise from incidents occurring as early as March 3, 2000, a date within the policy period. Appellants also argued that the continuous treatment doctrine tolled the statute of limitations on the estate's negligence claims because the estate alleged injuries resulting from a continuous course of treatment, part of which may have occurred during the policy period.
The district court concluded that the estate's breach of contract claim against "Defendant" had a five year limitations period under Arkansas Code § 16-56-111 and that it applied only to Evergreene because Redden never contracted with Curtis. Although Insurer was held to have a duty to defend and indemnify Evergreene against the contract claim because that claim may be based on an incident which occurred during the policy period, Insurer has no duties to Curtis with regard to that claim. The court also decided that the duty to defend Evergreene on the contract claim triggered a duty to defend against all of the estate's claims, but not necessarily to indemnify it. The estate's other claims were barred by applicable statutes of limitation or were based on incidents occurring outside the policy period, and Insurer thus had no duty to indemnify Evergreene or Curtis on any of them.
Since the original complaint was filed on March 3, 2005, and the covered period for occurrences ended on January 15, 2001, the court concluded the case was filed too late to obligate Insurer to cover the wrongful death and medical malpractice claims which have a two year limitations period. That was also true for negligence, statutory and regulatory violations, and claims under the RRA which the court concluded have a three year limitations period. In addition, the continuous treatment doctrine was held not to toll any of the statutes of limitation. Evergreene and Curtis appeal.
On appeal Evergreene and Curtis argue that once the district court determined that Insurer had a duty to defend Evergreene on the contract claim, triggering a duty to defend on all of the estate claims, it should not have reached any questions regarding the duty to indemnify on the negligence, wrongful death, and RRA claims or the duties to defend or indemnify Curtis. They contend that resolution of those coverage questions turns on factual issues to be presented in the underlying lawsuit; to answer the questions in this action raises the risk of inconsistent judgments. Insurer counters that the district court acted within its discretion by resolving all questions about the scope of its duties to defend and indemnify appellants and points out that it is not a party to the underlying lawsuit where different interests and issues are involved.
The RRA does not include a limitations provision, and Evergreene, Curtis, and Amicus Arkansas Advocates for Nursing Home Residents (Advocates) argue that the district court erred by concluding that claims under it are subject to a three year limitations period under Arkansas Code § 16-56-105. Evergreene and Curtis argue for a five year limitations period, either under § 16-56-111 on the theory that the claim sounds in contract or under § 16-56-115 because the claim does not fall under any other Arkansas statute of limitations. Advocates urge us to certify the RRA limitations period question to the Arkansas Supreme Court and argue alternatively that claims under the RRA should have no limitations period or five years. *471 Insurer argues that a party may not request certification after an adverse judgment, that Advocates do not have standing to request certification of an issue to the Arkansas Supreme Court, and that the district court did not err in concluding that the RRA claim has a three year statute of limitations because it either sounds in tort or is a statutory source of liability, both of which have a three year limitations period under Arkansas law.
Evergreene and Curtis argue that the district court also erred by concluding that the continuous treatment doctrine did not toll the statute of limitations on the negligence and RRA claims and by deciding the issue because it involves a factual dispute which should be resolved in the underlying lawsuit. Insurer counters that the district court was correct in concluding that the complaint did not allege facts which could have implicated the continuous treatment doctrine and that regardless, the doctrine would not apply as a matter of law to a relationship between a nursing home and its client.
Curtis argues that the district court erred by concluding that Insurer does not have a duty to defend him coextensive with its duty to defend Evergreene. Curtis says that because Curtis Enterprises acted as Evergreene's agent in the management and operation of Crestpark, the policy obligates Insurer to defend him to the same extent it must defend Evergreene. Insurer counters that Curtis was not a party to the contract between Redden and Evergreene on which the breach of contract claim and the duty to defend are based.
II.
We review for an abuse of discretion a district court's decision to exercise jurisdiction over a declaratory judgment action in which there are parallel state court proceedings, giving great deference to its analysis and conclusions. See Wilton v. Seven Falls Co., 515 U.S. 277, 283, 286, 288, 115 S.Ct. 2137, 132 L.Ed.2d 214 (1995); Scottsdale Ins. Co. v. Detco Indus., Inc., 426 F.3d 994, 997 (8th Cir.2005). An insurer who is not a party to the parallel proceeding "is entitled to have the extent of the coverage of its policy declared," Scottsdale Insurance Co. v. Flowers, 513 F.3d 546, 559 (6th Cir.2008), quoting American States Insurance Co. v. D'Atri, 375 F.2d 761, 763 (6th Cir.1967), and a district court is not prohibited from answering all questions presented to it on declaratory judgment, see Royal Indemnity Co. v. Apex Oil Co., 511 F.3d 788, 793 (8th Cir.2008). Insurer is not a party to the underlying lawsuit, which involves different interests and issues than those presented here, and the district court did not abuse its discretion by resolving all of Insurer's questions regarding the scope of its duties to defend and indemnify Evergreene and Curtis in the underlying lawsuit.
We review a district court's grant of summary judgment de novo, "viewing the record in the light most favorable to the nonmoving party; summary judgment is proper if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." R.D. Offutt Co. v. Lexington Ins. Co., 494 F.3d 668, 672 (8th Cir.2007). We review the district court's determinations of law de novo. Highland Indus. Park, Inc. v. BEI Def. Sys. Co., 357 F.3d 794, 796 (8th Cir.2004).
A.
In the fourth amended complaint in the underlying lawsuit the estate seeks compensatory and punitive damages based on its claim that Evergreene and Curtis negligently, willfully, and recklessly violated *472 the RRA resulting in Redden's injuries and eventual death. The RRA, Arkansas Code § 20-10-1201 et seq., seeks to protect residents of long term care facilities by requiring licensed facilities to meet certain requirements, § 20-10-1203, and by granting rights to residents. Residents now have the right to receive information about the facility, control their own finances, choose their physicians, access information about their medical condition and treatment, and receive adequate and appropriate healthcare. § 20-10-1204. Residents are also provided a civil remedy for violation of any enumerated right or for a failure of "an employee of the long-term care facility . . . to do something which a reasonably careful person would do or did something which a reasonable person would not do . . .," § 20-10-1209.
Arkansas courts have not explicitly addressed which limitations period should apply to claims brought under the RRA. Amicus Advocates urge us to certify this question to the Arkansas Supreme Court. Insurer attacks both Advocates' standing to raise the issue as an amicus and the propriety of requesting certification after an adverse judgment. Certification of the RRA limitations question at this stage, after the district court has issued its judgment and after we have had full briefing and oral argument, would cause undue delay. The task of a "federal court[] sitting in diversity [is to] attempt to predict how the [forum] state's highest court would resolve [a] question" which it has not squarely decided. Highland, 357 F.3d at 798. By ruling on the limitations issue, the district court helped move this litigation forward. We review its determination of state law de novo. Salve Regina Coll. v. Russell, 499 U.S. 225, 231, 111 S.Ct. 1217, 113 L.Ed.2d 190 (1991); Whirlpool Corp. v. Ritter, 929 F.2d 1318, 1321 n. 4 (8th Cir.1991).
Chapter 56 of Arkansas Code Title 16 contains the limitation periods for actions brought in Arkansas. § 16-56-101 et seq. These statutes of limitation do not apply if a statute already includes a limitations period, § 16-56-103, but they do apply to all other common law and statutory actions. The statutes of limitation include § 16-56-104 (one year for actions including assault, battery, and slander), § 16-56-105 (three years for actions including trespass, libel, and "[a]ll actions founded on any contract or liability, expressed or implied"), § 16-56-106 (two years for medical malpractice), § 16-56-111 (five years for actions to enforce written agreements), and § 16-56-115 (catchall period of five years for actions not described by other sections in Chapter 56). The district court concluded that RRA claims have a three year limitations period under § 16-56-105, either because they sound in tort or because they are express liabilities by reason of the legislature's expression of liability.
Based on our review of Arkansas law we conclude that the Arkansas Supreme Court, if presented with the issue of which limitations period applies to an RRA claim, would decide that such a claim is subject to a three year limitations period under § 16-56-105. This conclusion does not of course foreclose the Arkansas Supreme Court from issuing an authoritative decision on this question of state law in a future case.
As early as 1890 the Arkansas Supreme Court ruled that a statutorily created liability had a three year limitations period unless that liability was part of a written agreement which would then have a five year limitations period under what is today § 16-56-111. Davis' Estate v. Herrington, 53 Ark. 5, 13 S.W. 215, 215-16 (1890) (liability to pay child support created by bastardy statute has three year limitations period under what is now Arkansas Code *473 § 16-56-105). The supreme court has continued to recognize that the statutory liability to pay child support in a divorce or bastardy proceeding has a three year limitations period. Winston v. Robinson, 270 Ark. 996, 606 S.W.2d 757, 759-60 (1980); Wilder v. Garner, 235 Ark. 400, 360 S.W.2d 192, 194 (1962); but see Green v. Bell, 308 Ark. 473, 826 S.W.2d 226, 228-29 (1992) (questioning whether limitations period for child support has been statutorily changed to ten years by 1987 amendment to § 9-10-109). This precedent was then applied by the same court in a different type of case in Nebraska National Bank v. Walsh, 68 Ark. 433, 59 S.W. 952 (1900).
Nebraska National Bank involved a statute which made corporate presidents and secretaries liable for corporate debts incurred during any period in which the officers failed to file certain financial information with the county clerk. The supreme court decided that a three year limitations period applies, for "[h]aving reached the conclusion that this is a statutory liability . . ., the statute of limitations would be [the three year limitation] applicable to `all actions founded upon any contract or liability, expressed or implied, not in writing.'" Id., citing Sand. & H. Dig. § 4822; Rev. St. 1837, c. 91, § 6 (now Ark.Code § 16-56-105). Numerous Arkansas decisions have relied on Nebraska National Bank in holding that claims under that and similar corporate officer liability statutes have a three year limitations period. See Love v. Couch, 181 Ark. 994, 28 S.W.2d 1067, 1071 (1930) ("period of limitation applicable for the enforcement of statutory liabilities is three years"); McDonald v. Mueller, 123 Ark. 226, 183 S.W. 751, 752 (1916) (former § 859 creates statutory liability which has three year limitations period under what is now § 16-56-105); Zimmerman v. W. & S. Fire Ins. Co., 121 Ark. 408, 181 S.W. 283 (1915) (claim under former § 863 has three year statute of limitations based on Nebraska National Bank).
Although the Arkansas Supreme Court has not squarely decided which limitations period applies to an RRA claim, it has explicitly referred to an "[RRA] claim [as] a statutory claim," Koch v. Northport Health Servs. of Ark., LLC, 361 Ark. 192, 205 S.W.3d 754, 762 (2005). We have found no Arkansas case questioning the general proposition that where a statute creates a liability but does not include a limitations provision and no other statute of limitations applies,[3] a claim to enforce the statutory liability is an action "founded on . . . liability, expressed or implied" under § 16-56-105 and is subject to a three year limitations period. Other recent cases support the district court's application of § 16-56-105 to the estate's RRA claim. See Highland, 357 F.3d at 798 (§ 16-56-105 applies to private suits brought under Arkansas Hazardous Waste Management Act); Chalmers v. Toyota Motor Sales, USA, Inc., 326 Ark. 895, 935 S.W.2d 258, 261 (1996) (§ 16-56-105 applies to statutory liability under Arkansas franchise law), citing Winston, 606 S.W.2d at 759-60. We conclude that the Arkansas Supreme Court would likely hold that an RRA claim is an action based on a statutory liability which has a three year limitations period under § 16-56-105.
We also agree with the district court that it is possible that Arkansas courts might determine that an RRA claim sounds in tort and is therefore subject to a three year limitations period under Arkansas Code § 16-56-105. As Insurer argued in the district court, the RRA essentially *474 codifies the common law negligence standard. The estate's complaint alleged that Redden's injuries were the "result of employees and/or agents of Defendants, failing to do that, which a reasonably careful person would do under [similar circumstances]. . . ." In Arkansas "[i]t is well settled that the gist of the action as alleged [in the complaint] determines which statute of limitations applies." Shelter Ins. Co. v. Arnold, 57 Ark.App. 8, 940 S.W.2d 505, 506 (1997) (emphasis added); see Ernest F. Loewer, Jr. Farms, Inc. v. Nat'l Bank of Ark., 316 Ark. 54, 870 S.W.2d 726, 728 (1994); O'Bryant v. Horn, 297 Ark. 617, 764 S.W.2d 445, 445 (1989).
Advocates argue that the RRA is more in the nature of a "privately enforceable" civil rights law "than a codification of ordinary duties of care," however, because it gives residents a remedy for deprivation of a wide range of enumerated rights including freedom of choice in selecting a physician and the right to participate in social and religious activities. If the Arkansas Supreme Court were to characterize RRA claims as civil rights actions, it would no doubt look at the limitation periods applied to such cases in Arkansas. A review of those cases suggests that a civil rights action would likely be treated as a tort for limitations purposes.
The Arkansas Civil Rights Act, § 16-123-101 et seq., includes a one year limitation period for employment discrimination claims, but none for other enumerated rights under the act. Section 16-123-105(c) "specifically provides that [Arkansas] state courts may look to state and federal decisions which interpret the federal civil rights laws as persuasive authority" in guiding their interpretation of the act. Faulkner v. Ark. Children's Hosp., 347 Ark. 941, 69 S.W.3d 393, 401 (2002). The Supreme Court has ruled that in diversity cases brought in federal court under 42 U.S.C. § 1983, the forum state's statute of limitations for tort actions should be applied. Wilson v. Garcia, 471 U.S. 261, 276, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985); see Ketchum v. City of W. Memphis, Ark., 974 F.2d 81, 82 (8th Cir.1992) (applying Arkansas's three year personal injury statute of limitations to § 1983 action). We accordingly relied on Wilson in concluding that Arkansas civil rights claims other than for employment discrimination should be treated as torts for limitations purposes. See Birmingham v. Omaha Sch. Dist., 220 F.3d 850, 855 (8th Cir.2000). RRA actions would thus likely be governed by the three year limitations period in § 16-56-105 if they are reviewed under Arkansas law as civil rights actions.
Evergreene, Curtis, and Advocates argue that the RRA claim should be subject either to a five year or to an indefinite limitations period, which could make at least some of the incidents occurring during the policy period actionable, triggering Insurer's duty to defend and indemnify Evergreene and possibly Curtis. Appellants argue that the five year statute of limitations in § 16-56-111 for written contracts should apply, because many of the rights under the RRA were included in the contract between Redden and Evergreene. The RRA claim in the estate's fourth amended complaint does not allege facts which could support a conclusion that the claim is rooted in contract, however. Arkansas is a fact pleading state and looks to the facts alleged in the complaint to determine the gist of the action. See McQuay v. Guntharp, 331 Ark. 466, 963 S.W.2d 583, 584-85 (1998). The district court did not err in rejecting this argument. See Ernest F. Loewer, Jr. Farms, 870 S.W.2d at 727-28 (facts alleged in complaint indicated claim was for conversion despite party's characterization as contract action); O'Bryant, 764 S.W.2d at 445-46 *475 (attaching bill of sale to complaint did not convert action for fraud, misrepresentation, or negligence into a contract action).
Another argument Evergreene, Curtis, and Advocates advance for a five year statute of limitations on the RRA claim is that such a claim is not described explicitly by any limitations provision in Chapter 56 and so falls under the five year catchall in § 16-56-115. Alternatively, they argue where there is doubt as to which statute of limitations applies, the question should be resolved in favor of the longer limitation. Ballheimer v. Serv. Fin. Corp., 292 Ark. 92, 728 S.W.2d 178, 179 (1987). Because we conclude that the Arkansas Supreme Court would likely hold that the estate's RRA claim has a three year statute of limitations under § 16-56-105, we need not look to the catchall statute.
Advocates argue in the alternative that an RRA claim should not have a limitations period at all. In support of this argument they cite Acxiom Corp. v. Leathers, 331 Ark. 205, 961 S.W.2d 735 (1998), where the court held that the Arkansas legislature did not include a limitations period in a tax refund statute because it did not want to limit taxpayers' ability to claim a refund. Arkansas courts have recognized, however, that where a statute contains no specific statute of limitations, claims arising under it may still be time barred, e.g., Winston, 606 S.W.2d at 759-60, and that statutes of limitation "encourage the prompt filing of claims by allowing no more than a reasonable time within which to make a claim so a defendant is protected from having to defend an action in which the truth-finding process would be impaired by the passage of time." McEntire v. Malloy, 288 Ark. 582, 707 S.W.2d 773, 776 (1986). In Acxiom there were no adverse parties and therefore no risk that one party would be prejudiced by having to defend itself against a stale claim as there is in this case. We find no support for the argument that the legislature would have intended to have no limitation period and to allow a party to file an RRA claim even decades after the alleged injuries.
We conclude that the district court did not err in its conclusions that a three year limitations period applied to the estate's RRA claim and that Insurer had no duty to indemnify Evergreene and Curtis in respect to it.
B.
Arkansas courts recognize the continuous treatment doctrine, "which tolls the two-year statute of limitations for medical-malpractice actions until the medical treatment is discontinued." Posey v. St. Bernard's Healthcare, Inc., 365 Ark. 154, 226 S.W.3d 757, 761 (2006); Lane v. Lane, 295 Ark. 671, 752 S.W.2d 25, 27 (1988) ("continuous treatment doctrine becomes relevant when the medical negligence consists of a series of negligent acts, or a continuing course of improper treatment" (emphasis added)). A thorough search of case law from Arkansas and other jurisdictions across the country has not produced a single case in which this doctrine has tolled the limitations period on a claim other than malpractice, and its application in Arkansas appears to be limited to medical malpractice claims. See Howard v. Ozark Guidance Ctr., 326 Ark. 224, 930 S.W.2d 341, 342 (1996); FDIC v. Deloitte & Touche, 834 F.Supp. 1129, 1148 (E.D.Ark.1992) (recognizing that only two states extend the doctrine to accounting malpractice and Arkansas is not one of them).
Arkansas imposes a two year limitations period on medical malpractice actions, which runs from the date of the alleged wrongful act, Arkansas Code § 16-114-203(b), or from the end of a continuous *476 course of medical treatment under the continuous treatment doctrine, Wright v. Sharma, 330 Ark. 704, 956 S.W.2d 191, 193 (1997). Even if we assumed that the continuous treatment doctrine applied based on the facts alleged by Redden's estate, it could not have tolled the statute of limitations on the medical malpractice claim beyond January 9, 2003, Annie Redden's last day in residence and the last day on which she received any care from defendants. The original complaint was filed more than two years later on March 3, 2005. Accordingly, the estate's medical malpractice claim is time barred regardless of whether the continuous treatment doctrine would operate to toll the statute of limitations. The district court did not err in concluding that Insurer had no duty to indemnify Evergreene or to defend or indemnify Curtis on that claim.
C.
The pleadings against an insured determine an insurer's duty to defend, which is broader than the duty to indemnify because it arises where there is a possibility that the injury or damages may fall within the policy coverage. Ison v. S. Farm Bureau Cas. Co., 93 Ark.App. 502, 221 S.W.3d 373, 378 (2006). The fourth amended complaint in the underlying lawsuit alleges breach of contract against "Defendant," stating that "[u]pon becoming a resident at Crestpark, Ms. Redden entered into an express or implied contract with Defendant, whereby for consideration duly paid by her . . . Defendant was to provide her a place of residence and to provide her nutrition, personal care, and nursing care." Redden's contract was with Evergreene, and Curtis makes no claim that Redden and Curtis Enterprises ever entered into a contract. The fourth amended complaint therefore makes a breach of contract claim only against defendant Evergreene. A provision in Section D of the Insurer policy states that "[e]ach [insured] is covered separately," so even if an Arkansas court found that Curtis were an "insured" under the policy Insurer's duty to defend Evergreene on the breach of contract claim would not create a derivative duty to defend Curtis on any of the claims against him.
Curtis appears to argue that Insurer's duty to defend him is coextensive with its duty to defend Evergreene because Curtis and Evergreene have an agency relationship and the policy states that Insurer will defend and indemnify against alleged injuries resulting from the actions of Evergreene's agents. The breach of contract claim which triggered Insurer's duty to defend Evergreene was only brought against Evergreene, however, not Curtis or Curtis Enterprises. Accordingly, the district court did not err in concluding that Insurer has no duty to defend Curtis in the underlying lawsuit.
III.
For these reasons we conclude that the district court did not err by deciding that the only claim in the underlying lawsuit covered under Insurer's policy is the Redden estate's breach of contract claim against Evergreene, that Insurer has a duty to defend and indemnify Evergreene on that claim and therefore also a duty to defend it on all of the estate's claims against it, and that Insurer has no duty to defend or indemnify Curtis. Accordingly, we affirm the judgment of the district court.
JARVEY, District Judge, dissenting.
Under Arkansas law, the pleadings determine an insurer's duty to defend and that duty arises when there is a possibility that the injury or damage may fall within the policy coverage. Madden v. Continental *477 Cas. Co., 53 Ark.App. 250, 922 S.W.2d 731, 734 (1996) (emphasis added). "It is the allegations made against the insured, however groundless, false, or fraudulent such allegations may be, that determine the duty of the insurer to defend the litigation against its insured." Id. The uncertainty regarding the statute of limitations applicable to the claims in the underlying lawsuit causes me to conclude that coverage is still possible. For that reason, I respectfully dissent.
The underlying lawsuit alleges that Ms. Redden was harmed by Evergreene and Curtis' negligent acts and omissions to act, which occurred at least weekly, if not daily, throughout her stay at the Crestpark Retirement Inn from 1997 to 2003. The policy periods on both the primary and the excess liability policies in this case are January 15, 2000 to January 15, 2001. The policies at issue in this lawsuit provide:
We will pay damages and defend you and others covered under this section only when:
the providing or failure to provide professional services occures [sic] during the policy period shown on the Declarations;
the providing or failure to provide professional services took place in the coverage territory.
We will defend any claim brought against you and others covered under this policy seeking damages that are covered under any section of this policy. We will do this even if the allegations of the claim are groundless, false or fraudulent.
The district court and this court make good arguments in favor of a three-year statute of limitations. I do not believe that this is enough to relieve the insurer of its duty to defend both Evergreene and Curtis in this matter. The arguments in favor of a five year statute of limitations pursuant to Arkansas Code § 16-56-111 or § 16-56-115 are not frivolous. To say that the Arkansas Supreme Court would likely find a three year statute of limitations, does not foreclose the possible application of a longer statute. As set forth above, the policy requires that the Insurer defend even "groundless, false, or fraudulent" claims, which is consistent with an insured's duty to defend under Arkansas law when there is any possibility that injury falls within the policy coverage.
I believe the district court erred in deciding that the Insurer had no duty to defend Curtis against the tort claims and, therefore, all claims in this matter. Whether or not there is a duty to indemnify Curtis and/or Evergreene depends on the facts established in the underlying trial, making summary judgment inappropriate. Madden, 922 S.W.2d at 734. Accordingly, I would reverse the judgment of the district court.
NOTES
[1] The Honorable John A. Jarvey, United States District Judge for the Southern District of Iowa, sitting by designation.
[2] The Honorable James M. Moody, United States District Judge for the Eastern District of Arkansas.
[3] For example, a statutorily created liability which is recognized in a written agreement would likely have a five year limitations period under § 16-56-111.
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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
STATE OF DELAWARE, )
)
v. ) ID No. 1308006490A & B
)
MICHAEL DWYER, ) Cr. A. Nos. 513-08-05531, etc.
Defendant. )
Subrnitted: November 19, 2018
Decided: February 1, 2019
.(M
Upon Defena’ant Michael Dwyer ’S Motz'on to Proceea' Pro Sefor the Purpose of
Filing a Requestfor a Certijicate of Eligibl`lity
Under 11 Del. C. § 4214@ and Del. Super. Ct. Spec. R. 2017-](d),
DENIED.
This 1St day of February, 2019, upon consideration of the Defendant Michael
Dwyer’s Motion to Proceed Pro Se for the Purpose of Filing a Request for a
Certit`lcate ofEligibility (D.I. 30) and the record in this matter, it appears to the Court
that:
(1) On July 30, 2014, a Superior Court jury convicted Michael Dwyer of
Theft of Firearm.l A month later, a second Superior Court jury convicted Dwyer of
Possession of a Firearm By a Person Prohibited (PFBPP).2 Both counts arose from
l Verdict Form, State v. Michael Dwyer, ID No. 1308006490A (Del. Super. Ct. July 30,
2014) (D.I. 51-53).
2 Verdict Form, State v. Michael Dwyer, ID No. 1308006490B (Del. Super. Ct. Aug. 27,
2014) (D.I. 10-12).
the same criminal incident, Were charged in the same Information, but had been
severed just before DWyer’s first trial.3
(2) DWyer’s sentencing for both occurred a few months later, on October
3, 2014, after a pre-sentence investigative report Was prepared and the State filed a
habitual criminal petition.4 DWyer Was sentenced to the minimum required for the
triggering PFBPP conviction (Sl3-08-0553I) for Which the State sought habitual
criminal sentencing under the then-extant Habitual Criminal Act: 8 years at Level
V.5 For the theft of a firearm count, he received an additional one year of
imprisonment, again to be served under the provisions of ll Del. C. § 4214(a) as it
3 Information, State v. Michael Dwyer, ID No. 1308006490A(De1. Super. Ct. Oct. 16, 2013)
(D.I. 4); Severance Order, State v. Michael Dwyer, ID No. 1308006490A (Del. Super. Ct. July 23,
2013) (D.I. 43).
4 DEL. CODE ANN. tit. 11, § 4214(a) (2013) (providing that a person Who had been thrice
previously convicted of a felony and Was thereafter convicted of another felony could be declared
a habitual criminal).
5 Ia'. (any person sentenced under then-existing § 4214(a) had to receive a minimum sentence
of not less than the statutory maximum penalty otherwise provided for any fourth or subsequent
Title ll violent felony that formed the basis of the State’s habitual criminal petition); DEL. CODE
ANN. tit. ll, §§ l448(c) and (e), 4201(c) and 4205(b)(4) (2013) (PFBPP by one previously
convicted of a violent felony Was, When DWyer committed his crimes, and is noW, a class D violent
felony With a statutory maximum of eight years imprisonment). DWyer had been previously
convicted of at least one prior violent felony: assault second degree in 1994. See Sentencing
Order, State v. Michael Dwyer, ID No. 9403014783 (Del. Super. Ct. Aug. 2, 1994) (D.I. 6); see
also Motion to Declare Def. an Habitual Offender, State v. Michael Dwyer, ID Nos.
1308006490A&B, at (Del. Super. Ct. Oct. 3, 2014) (D.I. 59; D.I. 15).
then existed.6 Dwyer’s cumulative nine-year incarcerative term will be followed by
work release and probation.7 Dwyer’s sentencing order notes that his habitual
criminal sentence is effective on October 3, 2014.8
(3) lt appears that Dwyer has recently been in contact with the Office of
Defense Services and was notified that he is not eligible to seek relief under ll Del.
C. § 4214(f).
(4) Dwyer has requested permission to proceed pro se so that he might a
apply for certificate of eligibility to file a petition seeking exercise of the Court’s
jurisdiction to modify his sentence under ll Del. C. § 4214(f).9 In his view, Dwyer
“now avers in good faith that he does meet all requirements for at least a ‘certificate
vle
of eligibility.
6 Id. (under then-existing § 4214(a), when sentencing for any other felony the Court was not
bound to impose any minimum but still could, in its discretion, impose a sentence of up to life
imprisonment for that non-violent triggering felony).); DEL. CODE ANN. tit. ll, §§ 1451, 4201(c)
and 4205(b)(6) (2013) (Theft of a Firearm, while a class F Title l l felony, has never been classified
as a violent felony).
7 Sentencing Order, State v. Michael Dwyer, ID Nos. 1308006490A&B, at (Del. Super. Ct.
oct 3, 2014) (D.I. 58; D.I. 14).
8 Ia’. His sentencing order also reflects that Dwyer received 269 days for time previously
served. Id.
9 D.I. 75 and D.I. 30; Del. Super. Ct. Spec. R. 2017-1(0)(2) (“The court will not consider a
pro Se request for a certificate of eligibility or any other pro se filing under this rule unless the
petitioner has been granted permission to proceed pro se.”).
10 D.I. 75 and D.I. 30.
(5) The Court has carefully considered the Dwyer’s motion to proceed pro
se and suggestion that he is due a certificate of eligibility. Because Dwyer has not
met the time-served requirement set forth in ll Del. C. § 4214(f), he cannot seek
sentence review under that statute. And so there is no basis for the Court to exercise
its discretion under Del. Super. Ct. Spec. R. 2017 to allow him to proceed pro se and
file a certificate of eligibility.
(6) For his PFBPP conviction (S13-08-0553I), Dwyer does meet the type-
of-sentence eligibility requirement set forth in 11 Del. C. § 4214(f).ll But Dwyer
does not meet the time-served eligibility requirement set forth in 11 Del. C. §
4214(f).12
(7) Under § 4214(f), an inmate meets the time-served eligibility
requirement when he “has served a sentence of incarceration equal to any applicable
mandatory sentence otherwise required by [the new provisions of 1 1 Del. C. § 4214]
ll DEL. CODE ANN. tit. 11, § 4214(f) (2018) (providing that an inmate must be serving a
sentence imposed upon him as “an habitual criminal [that is] a minimum sentence of not less than
the statutory maximum penalty for a violent felony pursuant to 4214(a) of this title, or a life
sentence pursuant to 4214(b) of this title prior to July 19, 2016”). See Clark v. State, 2018 WL
1956298, at * 3 (Del. Apr. 24, 2018) (“a minimum sentence of not less than the statutory maximum
penalty for a violent felony” means the inmate must have received the minimum sentence a judge
was constrained to impose under the prior version of the Habitual Criminal Act, and so, where a
sentencing judge exercised his or her discretion to impose greater than the minimum required
under pre-2016 § 4214(a), the inmate cannot seek modification under § 4217(f)); Durham v. State,
2018 WL 2069057, at * 1 (Del. May 2, 2018) (same); State v. Williams, 2018 WL 2938313, at *2
(Del. Super. Ct. June 8, 2018) (same).
12 It appears that when Dwyer consulted with the Office of Defense Services, he was
advised by its counsel that he did not meet this statutory requirement Def. Mot., at 1-2.
_4_
or the statutes describing said offense or offenses [for which the inmate was
sentenced], whichever is greater.”13 To determine if this requirement is met the
Court to determines where in the new habitual criminal Sentencing regime a potential
§ 4214(f) petitioner would fall.14
(7) Prior to the subject PFBPP conviction (S13-08-05531) for which he is
serving a habitual criminal sentence, Dwyer had accrued at least the following felony
convictions that would be used to reckon his habitual criminal status: Carrying a
Concealed Deadly Weapon (IN84-01-1593); Assault in the Second Degree (IN94-
04-0510); and Theft of a Firearm (S01-l 1-01891).15 Dwyer’s prior conviction for
Assault in the Second Degree (lN94-04-0510) and the triggering PFBPP conviction
(S13-08-0553I) were each for a “Title 11 violent felony.”16
(8) Under current 11 Del. C. § 4214(0), Dwyer, who has thrice before been
convicted of felonies-one of which was a Title ll violent felony-must receive a
minimum sentence of not less than the statutory maximum penalty otherwise
13 DEL. CoDE ANN. rit. 11, § 4214@ (2018).
'4 State v. Lewis, 2018 WL 4151282, *2 (Del. Super. Ct. Aug. 28, 2018).
15 See Motion to Declare Def. an Habitual Offender, State v. Mz`chael Dwyer, ID Nos.
1308006490A&B, at (Del. Super. Ct. OC'[. 3, 2014) (D.I. 59; D.I. 15).
16 DEL. CODE ANN. tit. ll, § 4201(0) (2018) (“The following felonies shall be designated as
violent felonies . . . Title 11, Section . . . 612 Assault in the Second Degree . . . l448(e)
Possession of a Deadly Weapon by Persons Prohibited (Firearrn or Destructive Weapon Purchased,
Owned, Possessed or Controlled by a Violent Felon . . .”).
_5_
provided for the triggering PFBPP conviction (S13-08-0553I) that is the Title 11
violent felony that formed the basis of the State’s habitual criminal petition.17 Dwyer
would, therefore, have to serve a minimum of eight years before he could be eligible
for § 4214(f) consideration
(9) Put another way, Dwyer’s minimum mandatory sentence for PFBPP
under both the current and the pre-2016 provisions of the Habitual Criminal Act is
exactly the same_eight years that cannot be suspended.18 And he not yet served
those eight years.19 But even when he does, he will still not be eligible for § 4214(f)
consideration as it is but one segment of a two-part cumulative nine-year
imprisonment term, neither component of the which is within § 4214(f)’s reach.20
17 See DEL. CODE ANN. tit. 11, § 4214(0) (2018) (providing now that one, like Dwyer, who is
declared a habitual criminal and whose predicate convictions include at least one prior violent Title
11 felony must receive a minimum sentence of not less than the statutory maximum penalty
otherwise provided for each triggering Title 11 violent felony that forms the basis of the State’s
habitual criminal petition); DEL. CODE ANN. tit. 11, §§ 1448(0) and (e), 4201(c) and 4205(b)(4)
(2013) (PFBPP by one previously convicted of a violent felony was, when Dwyer committed his
crimes, and is now, a class D violent felony with a statutory maximum of eight years
imprisonment).
18 Compare n.5, supra., and n.l7, supra
19 As noted above, Dwyer’s eight-year habitual term for PFBPP began to run on October 3,
2014.
20 Because Dwyer’s habitual criminal sentence for his theft of a firearm conviction is wholly
discretionary, he cannot invoke § 4214(f) to obtain separate review of that sentence. See Clark,
2018 WL 1956298, at *3 (Section 4214(f) does not allow for review of habitual criminal sentences
that are wholly discretionary).
_6_
NOW, THEREFORE, IT IS ORDERED that Defendant Michael Dwyer’s
Motion to Proceed Pro Se for the Purpose of Filing a Request for a Certificate of
Eligibility is DENIED; it plainly appears from his motion and the record of prior
proceedings in this case that he is not eligible for relief under 11 Del. C. § 4214(f)
%;>¢_~>
Paul R. Wallace, Judge
and Del. Super. Ct. Spec. R. 2017-l(d).21
Original to Prothonotary - Sussex County
cc: Hon. E. Scott Bradley
Mr. Michael Dwyer, pro se
Todd E. Conner, Esquire
Dawn M. Williams, Esquire
J ames P. Murray, Esquire
David Hume, IV, Chief Prosecutor, Sussex County
Casey L. Ewart, Deputy Attorney General
21 Clark v. State, 2018 WL 1956298 (Del. Apr. 24, 2018) (this Court did not err when it
denied an inmate’s request for appointment of conflict counsel to seek a certificate of eligibility
upon finding then that the inmate was ineligible for relief under § 4214(f)); Durham v. State, 2018
WL 2069057 (Del. May 2, 2018) (same when this Court denied permission for inmate to proceed
pro se to seek a certificate of eligibility for the same reason); Coble v. State, 2018 WL 6595333
(Del. Dec. 13, 2018) (same).
_7_
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SUPERIOR COURT
OF THE
STATE OF DELAWARE
RICHARD F. STOKES SUSSEX COUNTY COURTHOUSE
RESIDENTJUDGE 1 Tl-IE cIRCLE, SUITE 2
GEORG ETOWN, DE 19947
TELEPHONE (302) 856-5264
November 28, 2018
N448 STATE l\/IAIL
Mr. Michael C. Stelljes
SBI: 00543789
Howard R. Young Correctional Institution
1301 E. 12lh Street
Wilmington, DE 19801
RE: State of Delaware v. Michael C. Sl;elljes
Case ID: 1702005851
Dear Mr. Stelljes:
I have reviewed your motion for postconviction relief, and it is denied.l
You pled guilty to driving under the influence and two counts of vehicular
assault on September 20, 2018. The sentence reflected the plea agreement On the
driving under the influence charge, you were imprisoned for 18 months with the
balance suspended after serving 90 days under the provisions of 11 Del.C. §
4204(1<) for level 2 probation. On each of the vehicular assault in the second
1 This motion was submitted under Superior Court Criminal Rule 61. The Rule apeaks
of “judgment of conviction” which technically is a guilty verdict after trial. An admission at a
violation is not a guilty verdict, and the motion is summarily dismissed The use of a Rule 61
application to attack the sentence received for a violation of probation is inappropriate State v.
Berry, 2007 WL 2822928 at *1 (Del. Super. Ct. Sept. 25, 2007). On the other hand, Rule 61
consideration was given to violation of probation proceedings in State v. Phillips, 2002 WL
524281 (Del. Super. Ct. March 4, 2002); Phillips v. Kearney, 2003 WL 2004392 at *2 (D. Del.
April 21, 2003). However, even if Rule 61 applies, which it does not in my view, the motion
would nonetheless be denied for the reasons discussed above.
degree charges, a one year sentence was entered suspended for probation.2
Upon release from level 5, you started probation. On January 18, 2018,
your probation officer filed a violation report.3 lt alleged that you violated
conditions 1, 2, 3, 7 and 9. Condition 1 reported an arrest for shoplifting which
was pending in Kent County, Case ID #1801003194; The docket is attached as
Exhibit B. You made reference to a drug paraphernalia charge in Court of
Common Pleas Kent County Case ID 1802008651. The docket is attached as
Exhibit C. There was no mention of the charge in the violation report. Condition
2 alleged that you failed to report the shoplifting arrest and police contact;
Condition 3 claimed you failed to report to probation on 12/19/17; Condition 7
alleged you tested positive for illegal drugs without a prescription and Condition 9
alleged a violation of a zero tolerance condition related to the drug use. A hearing
was held on February 23, 2018 and you were represented by Mr. Jeffery McLane,
Esquire, a public defender.4 At his request, Condition 1 was not adjudicated
because the charge was pending. You admitted violating all the remaining
conditions. A TASC evaluation was requested by me to learn further information,
and sentencing was deferred.
On March 23, 2018, a sentencing hearing was held.5 Again, you were
represented by the public defender’s office. TASC assessed you and presented a
verbal report. Your background with drugs was discussed. The recommendation
was for closer supervision. This could be at either the Crest Program or at level 4
home confinement with TASC and an lntensive Outpatient Program (“IOP”).
Your probation officer recommended the Crest Program. Ultimately, you were
sentenced to level 5 imprisonment suspended for completion of Crest.
On March 28, 2018, you arrived at the Central Violation of Probation
Center to begin the Residential Substance Abuse Treatment Program. On April 2,
2018, you were discharged for refusing to participate. Your refusal was the basis
for a second violation of probation report. On April 9, 2018, a hearing was held
2 State v. Michael C. Stelljes, Del. Super. Ct. Crim. Dkt. No. 1702005851, at Docket Item
(“D.l.”) 15 attached as ExhibitA.
3 D.I. 16.
4 D.l. 21, 23.
5 D.l. 25.
and you were again represented by the public defender’s office6 As you refused
to do the program you were resentenced to the level 5 Key Program as
recommended by your probation officer.
On your appearances for the three hearing dates , your public defender
advised you of the appeal rights to the Supreme Court.7 No appeal was filed.
However, you did file two requests for reduction of the sentence under Rule 35
which were denied.8 A Supreme Court appeal was not filed from them. Presently,
you continue to be in the Key Program.
In your Rule 61 motion, you claim your public defender was ineffective
The statement is made: “counsel never told me to or advised me if l wanted to wait
the charges to be dealt with ...” This claim necessarily focuses on the February 23
date Apparently, you surmise that the hearing would have been postponed; you
would not have been sent to the Crest Program, and, therefore, you would not have
been in a position to refuse to participate
Such vague, speculative and conclusory allegations are never sufficient for
Rule 61 relief. Further, the pending shoplifting charge played no role in the
proceedings Your admissions to violating the remaining conditions provided an
ample basis to support the new sentence Furthermore, your hearing would never
have been postponed to await a decision on the shoplifting charge where you have
an illegal drug and failure to comply with supervision background The Court has
authority to adjudicate new charges in a violation hearing because trial and
probation standards are different lndeed a later acquittal of new charges after an
earlier violation of them in a probation hearing does not change the result.9
Moreover, to prevail on an ineffectiveness of counsel basis, the two-prong
test laid out by the United States Supreme Court in Strickland v. Washington"°
must be satisfied. Somerville v. State explained the applicable standard in the
6 D.I. 31.
7 D.I. 22, 26, 32.
8 D.I. 34, 35, 36, 37.
9 State v. Diaz, 113 A.3d 1081 (Del. 2015).
10 Strickland v. Washington, 466 U.S. 668 (1984).
context of a guilty plea that is roughly analogous to a probation admission:
Strickland requires a defendant to show that: ( l) counsel’s
representation fell below an objective standard of reasonableness, and
(2) counsel’s actions were so prejudicial that there was a reasonable
probability that, but for counsel’s errors, the defendant would not
have pleaded guilty and would have insisted on going to
trial...[R]eview is subject to a strong presumption that counsel’s
conduct was professionally reasonable The purpose of this
presumption is to eliminate the distorting effects of hindsight in
examining a strategic course of conduct that may have been within
the range of professional reasonableness at the time11
You have not met either prong of the analysis. You made no showing to
prove that your counsel acted below an objective standard of reasonableness when
providing assistance at the time of the violation hearing. No judge would have
delayed the violation proceedings, and defense counsel made no error and acted
within recognized standards of competence There is no showing that you would
not have admitted the violation but for counsel’s alleged error in not seeking a
postponement
You also complain about the lack of access to a law library. This kind of
claim is procedurally barred under Criminal Rule 61(i)(3),12 (with the exception of
the ineffective assistance of counsel claim). This provision states that “any ground
for relief that was not asserted in the proceedings leading up to the judgment of
conviction, as required by the rules of this court, is thereafter barred, unless the
movant shows (A) cause for relief from the procedural default and (B) prejudice
from violation of the movant’s rights.”13 In order to show cause, you must allege
" S()merville v. State, 703 A.2d 629, 631 (Del. 1997).
12 Super. Ct. Crim. R. 61(i)(3) provides:
(3) Procedural default Any ground for relief that was not asserted in the
proceedings leading to the judgment of conviction, as required by the rules
of this court, is thereafter barred, unless the movant shows (a) cause for
relief from the procedural default and (b) prejudice from violation of the
movant’s rights.
13 Rule 61(i)(3).
more than the fact that a claim was not raised earlier in the process.14 You must
show that “some external impediment” prohibited raising the claim.15 Further, to
show prejudice, you must demonstrate that there was a “substantial likelihood”
that7 had the claim been raised, the outcome of the case would have been
different.16 Here, the violation hearing would not have been delayed. Assuming
without deciding that the alleged lack of legal resources was “an impediment”, you
suffered no prejudice Therefore, your claim is procedurally barred. You must
show both cause and prejudice to overcome the procedural default bar.l7
Considering the foregoing, your motion is denied. Although you did not
raise this point, upon review, you are entitled to more credit time The adjustment
does not effect the sentencing to Key. A corrected order is attached.
IT IS SO ORDERED.
RFS :tls
Enclosures
cc: David Hume, IV, Esquire, Department of Justice
Jeffery P. McLane, Esquire, Office of Defense Services
14 State v. Wescott, 2014 WL 7740466, at *1 (Del. Super. Ct. Nov. 24, 2014).
'J\
Ia'. (Citing Younger v. State, 580 A.2d 552, 556 (Del. 1990)).
16 Flamer v. State, 585 A.2d 736, 748 (Del. 1990).
7 Blackwell v. State, 736 A.2d 971, 973 (Del. 1999).
State of Delaware v.
State'S Atty: AMANDA R NYMAN ,
SUPERIOR COURT CRIMINAL DOCKET
( as of
11/13/2018 )
MICHAEL C STELLJES
Defense Atty: MICHAEL A CAPASSO ,
ASSiqned Judge:
Charges:
Count
Crim.Action#
Esq.
AKA: MICHAEL
MICHAEL
MICHAEL
MICHAEL
Description
DOB:
STELLJES
STELLJES
STEELJES
S STELLJES
Page 1
09/09/1989
Dispo. Date
002
003
004
005
006
007
1702005851
1702005851
1702005851
1702005851
1702005851
1702005851
1702005851
1702005851
1702005851
1702005851
1702005851
1702005851
1702005851
Event Date
Event
ISl7020734Rl
VSl702073401
VSl702073402
ISl7020735R1
VSl702073501
VSl702073502
1817020736W
ISl7020737R1
VSl702073701
VSl702073702
ISl7020738W
ISl7020739W
ISl7020740W
Docket Add Date
vEH.ASSAULT 2ND
vIoL o/PROBATN
vIoL o/PRoBATN
vEH.ASSAULT 2ND
vIoL o/PRoBATN
vIoL o/PROBATN
DR LIC SUsP/REV
DUI oF DRUGS
vIoL o/PROBATN
vIoL o/PROBATN
oPER UNREG Mv
FAIL REQ INs
FAIL SToP sIGN
09/20/2017
02/23/2018
04/19/2018
09/20/2017
02/23/2018
04/19/2018
09/20/2017
09/20/2017
02/23/2018
04/19/2018
09/20/2017
09/20/2017
09/20/2017
02/27/2017
02/28/2017
CASE ACCEPTED IN SUPERIOR COURT.
ARREST DATE:
R9W
02/27/2017
INDICTMENT,
02/27/2017
02/28/2017
TRUE BILL FILED.
03/01/2017
APPLICATION FOR WARRANT AND CERTIFICATION PURSUANT TO SUPERIOR COURT
CRIMINAL RULE 9 WARRANT FILED BY AMANDA NYMAN.
02/27/2017
IT IS ORDERED,
ORDER:
03/01/2017
SHALL BE ISSUED.
02/27/2017
03/01/2017
GRAVES T.
PURSUANT TO RULE 9 THAT WARRANTS FOR THE SAID
MEMORANDUM/R9W BOND RECOMMENDATIONS FILED.
TO: COURT
RECOMMENDED AMOUNT:
FRoM: DAG-NYMAN
$2,000 sEcURED
NO CONTACT WITH VICTIMS MICHAEL FANNIN AND MATTHEW BALDWIN.
02/28/2017
03/01/2017
RULE 9 WARRANT ISSUED.
“ Exhab~.+ A"
HENLEY
suPERIoR couRT cRIMINAL DocKET Page 2
( as of 11/13/2018 )
State of Delaware v. MICHAEL C sTELLJEs DOB: 09/09/1989
state's Atty: AMANDA R NYMAN , Esq. AKA: MICHAEL sTELLJEs
Defense Atty: MICHAEL s sTELLJEs
No. Event Date Docket Add Date Judge
Event
7 05/24/2017 05/24/2017 HowARD ALICIA B.
RULE 9 wARRANT RETURNED
sECURED BAIL-HELD 2,700.00 100%
DEFENDANT ARRAIGNED, WAIVED READING, ENTERED PLEA OF NOT GUILTY AND
REQUESTED A TRIAL BY JURY.
CCR-6/19/l7
8 05/30/2017 05/31/2017
DIsCovERY REQUEST FILED BY MICHAEL cAPAsSo, EsQ.
10 05/31/2017 06/05/2017
DISCOVERY RESPONSE/STATE'S RECIPROCAL REQUEST FOR DISCOVERY FILED BY
AMANDA REESE NYMAN, ESQ
9 06/01/2017 06/01/2017
RELEASED oN $2,?00.00 SECURED BAIL FoR APPEARANCE oN 6/19/17.
11 06/19/2017 06/19/2017 BRADY M. JANE
CASE REVIEW CALENDAR CAPIAS ORDERED-$5000.00 CASH ONLY.
BEGIN FORFEITURE PROCEEDINGS.
CR/HAYNES
12 06/26/2017 06/26/2017 HOWARD ALICIA B.
CAPIAS RETURN - TRIALABLE PENDING
CASH BAIL 2,700.00 100%
DEFENDANT SCHEDULED FOR CASE REVIEW 7/17/17 AT 9AM.
13 07/17/2017 07/17/2017
CASE REVIEW CALENDAR: SET FOR FINAL CASE REVIEW.
FCR: 8/23/2017
TJT: 8/29/2017
14 07/25/2017 07/27/2017
coNTINUANCE REQUEST FILED BY DAG NYMAN, THE sTATE CHEMIST Is oUT oN
vACATIoN LEAVE. GRANTED. NEW DATES: FCR: 9/20/17 AND JT: 9/26/17.
15 09/20/2017 09/20/2017 SToKES RICHARD F
FINAL cAsE REVIEW: DEFENDANT PLED GUILTY/SENTENCED
PLEA AGREEMENT, TRUTH IN sENTENCING/GUILTY PLEA FORM, IMMEDIATE
sENTENCING FoRM, N/P REMAINING cHARGEs.
ATTY: CAPASso CR: KH
16 01/18/2018 01/25/2018
vIoLATIoN oF PRoBATIoN REPORT FILED BY KELLIE MASSEY 567534.
REQUESTING A cAPIAs. SENT To CHAMBERS.
17 01/22/2018 01/25/2018 SToKES RICHARD F
CAPIAS ISSUED FoR vIoLATIoN oF PRoBATIoN.
$8000.00 cASH oNLY.
18 02/01/2018 02/01/2018
CASH BAIL REFUND IN THE AMoUNT oF $2,700. To: AMERICAN FUNDING
CHECK #6105.
SUPERIOR COURT CRIMINAL DOCKET Page 3
( as of 11/13/2018 )
State of Delaware v. MICHAEL C STELLJES DOB: 09/09/1989
State'S Atty: AMANDA R NYMAN , ESq. AKA: MICHAEL STELLJES
Defense Atty: MICHAEL S STELLJES
No. Event Date Docket Add Date Judge
Event
19 02/14/2018 02/14/2018 HOWARD ALICIA B.
CAPIAS RETURN - NON-TRIABLE PENDING
CASH BAIL 8, 000. 00 100%
DEFENDANT SCHEDULED FOR VOP HEARING ON 2/23/18 AT 9: 3OAM BEFORE JUDGE
STOKES.
20 02/14/2018 02/16/2018
LETTER FRoM CHAMBERS To DEFENDANT.
RE: voP HEARING SCHEDULED FoR 2/23/2018 @ 9:00 A.M.
21 02/23/2018 02/23/2018 STOKES RICHARD F
VIoLATIoN-oF-PROBATION HEARING: DEFENDANT FouND IN
vIoLATIoN.sENTENCING DEFERRED.SENTENCING DATE:
DEFENDANT To HAVE A TASC EVALUATION
SENTENCE DATE: 3/23/2018 AT 9:00
ATTY; MCLANE
CR: KH
22 02/23/2018 02/23/2018
ADVICE REGARDING APPEAL FROM VOP HEARING FILED MR. MCLANE, ESQ
23 02/23/2018 02/23/2018 STOKES RICHARD F
oRDER: Now THIS 23RD DAY oF FEBRUARY, 2018, THE DEFENDANT wAs BEFoRE
THE coURT THIS DATE FoR A vIoLATIoN oF PRoBATIoN HEARING IN THE
ABovE cAPTIoNED CASE; AND WHEREAS, THE DEFENDANT WAs FoUND To BE IN
vIoLATIoN oF PRoBATIoN, BoND wAs REvoKED, AND IT 15 HEREBY oRDERED
THAT TASC sHALL EVALUATE THE DEFENDNATN FoR TREATMENT NEEDS AND REPoRT
To THE COURT AT sENTENCING oN FRIDAY, MARCH 23, 2018 AT 9: 30 A. M
1T rs So oRDERED.
24 02/23/2018 02/23/2018
LETTER FRoM CHAMBERS To DEFENDANT RE: DEFENDANT voP sENTENCING oN
3/23/2018 AT 9:30 A.M
25 03/23/2018 03/23/2018 sToKES RICHARD F
sENTENCING cALENDAR: DEFENDANT SENTENCED.
ATTY; RoBINsoN
CR: KH
26 03/23/2018 03/23/2018
ADVICE REGARDING APPEAL FROM VOP HEARING FILED BY ROBERT ROBINSON, ESQ
27 03/23/2018 04/04/2018
DEFENDANT ENTERS INTO THE DRUG COURT PROGRAM.
33 04/04/2018 04/25/2018 STOKES RICHARD F
CORRECTED SENTENCE FILED. NOW THIS 4TH DAY OF APRIL, 2018, THE SENT
ORDER IS HEREBY CORRECTED TO REMOVE THAT THE DEFENDANT WAS DEEMED A
HABITUAL OFFENDER, WHICH WAS ERRONEOUSLY ADMITTED ON THE ORDER DATED
9/20/2017. ALL PREVIOUS TERMS AND CONDITIONS WILL REMAIN IN EFFECT.
28 04/06/2018 04/06/2018 HOWARD ALICIA B.
SUPERIOR COURT CRIMINAL DOCKET Page 4
( as of 11/13/2018 )
State of Delaware v. MICHAEL C STELLJES DOB: 09/09/1989
State'S Atty: AMANDA R NYMAN , ESq. AKA: MICHAEL STELLJES
Defense Atty: MICHAEL S STELLJES
No. Event Date Docket Add Date Judge
Event
ADMINISTRATIVE WARRANT FILED IN SUPERIOR COURT.
PROBATION OFFICER:
BAIL HEARING HELD THIS DATE AND BAIL SET ON VOPS AS FOLLOWS:
BAIL SET: HELD WITHOUT BAIL
VOP HRNG. ON 4/19/18 AT 1230 P.M. BEFORE JUDGE STOKES.
29 04/06/2018 04/06/2018
vIoLATIoN oF PRoBATIoN REPoRT FILED BY DoREEN WILLIAMS 584905.
30 04/06/2018 04/06/2018
LETTER FROM CHAMBERS TO DEFENDANT.
RE: ADVISING OF VOP HEARING SCHEDULED FOR 4/19/18 @ 1:00 P.M.
31 04/19/2018 04/19/2018 STOKES RICHARD F
VIOLATION-OF-PROBATION HEARING: DEFENDANT FOUND IN
VIOLATION.SENTENCED.
ATTY: ROBINSON
CR; KH
32 04/19/2018 04/19/2018
ADVICE REGARDING APPEAL FRoM voP HEARING FILED BY RoBERT RoBINsoN, ESQ
34 07/09/2018 07/09/2018 sToKEs RICHARD F
MoTIoN FoR REDUCTION oF sENTENcE FILED BY DEFENDANT.
35 07/13/2018 07/16/2018 sToKEs RICHARD F
MOTION FOR REDUCTION OF SENTENCE DENIED.
IT IS SO ORDERED
36 08/10/2018 08/13/2018 STOKES RICHARD F
MOTION FOR REDUCTION OF SENTENCE FILED BY DEFENDANT.
37 08/15/2018 08/17/2018 STOKES RICHARD F
MOTION FOR REDUCTION OF SENTENCE DENIED.
IT IS SO ORDERED.
38 08/30/2018 08/30/2018
MOTION FOR POSTCONVICTION RELIEF FILED BY DEFENDANT.
R1
*** END OF DOCKET LISTING AS OF 11/13/2018 ***
PRINTED BY: CSCTSAN
COURT OF COMMON PLEAS CRIMINAL DOCKET Page 1
( as of 11/13/2018 )
State of Delaware v. MICHAEL C STELLJES DOB: 09/09/1989
State'S Atty: , ESq. AKA: MICHAEL STELLJES
Defense Atty: DEFENDER PUBLIC , ESq. MICHAEL STELLJES
MICHAEL STEELJES
MICHAEL S STELLJES
Assigned Judge:
Charges:
Count DUC# Crim.Action# Description Dispo. Dispo. Date
001 1801003194 MK18021369 sHoPLIFT <1500 DISM 07/30/2018
No Event Date Docket Add Date Judge
Event
02/22/2018 02/22/2018
cAsE FILED oN 02/21/2018; ARREST DATE 01/09/2018
ARRAIGNMENT sCHEDULED FoR 04/25/2018 AT 01:00 PM
RELEASED/OWN RECOG. 0.00
MK18021369 DE11084000A1 SHOPLIFT <1500
04/24/2018 04/24/2018
ARRAIGNMENT SCHEDULED FOR 04/25/2018 AT 09:00 AM
04/24/2018 04/24/2018
CASE MOVED TO ANOTHER CALENDAR FOR CONSOLIDATION/JUDICIAL REVIEW
PURPOSES
04/27/2018 04/27/2018
DEFENDANT PLED NOT GUILTY AND DEMANDED JURY TRIAL.
04/27/2018 04/27/2018
JURY TRIAL CASE REVIEW SCHEDULED FOR 06/20/2018
AT 09:00 AM
06/13/2018 06/13/2018
CASE MOVED TO ANOTHER CALENDAR FOR CONSOLIDATION/JUDICIAL REVIEW
PURPOSES
06/20/2018 06/20/2018
DEFENDANT REJECTED PLEA OFFER.
06/20/2018 06/20/2018
JURY TRIAL SCHEDULED FOR 07/30/2018 AT 09:00 AM
07/30/2018 07/30/2018 REIGLE ANNE HARTNETT
CASE DISMISSED UNDER RULE 48(B) ON 7/30/18 AS TO
18-02-1369.
JUDGE/REIGLE DAG/K.SMITH PD/MATONI
*** END OF DOCKET LISTING AS OF 11/13/2018 ***
PRINTED BY: CSCTSAN
“ EX\'\'\\)'\')' B"
COURT OF COMMON PLEAS CRIMINAL DOCKET Page 1
( as Of 11/13/2018 )
state of Delaware v. MICHAEL C STELLJES DOB: 09/09/1989
State'S Atty: , Esq. AKA: MICHAEL STELLJES
Defense Atty: DEFENDER PUBLIC , ESq. MICHAEL STELLJES
MICHAEL STEELJES
MICHAEL S STELLJES
Assigned Judge:
Charges:
Count DUC# Crim.Action# Description Dispo. Dispo. Date
001 1802008651 MK18021096 POSS DRUG PARAP NOLP 07/30/2018
No Event Date Docket Add Date Judge
Event
02/20/2018 02/20/2018
CASE FILED oN 02/16/2018; ARREST DATE 02/13/2018
ARRAIGNMENT SCHEDULED FOR 04/25/2018 AT 01:00 PM
RELEASED/OWN RECOG. 0.00
MK18021096 DE164771000a POSS DRUG PARAP
04/24/2018 04/24/2018
ARRAIGNMENT SCHEDULED FOR 04/25/2018 AT 09:00 AM
04/24/2018 04/24/2018
CASE MOVED TO ANOTHER CALENDAR FOR CONSOLIDATION/JUDICIAL REVIEW
PURPOSES
04/27/2018 04/27/2018
DEFENDANT PLED NOT GUILTY AND DEMANDED JURY TRIAL.
04/27/2018 04/27/2018
JURY TRIAL CASE REVIEW SCHEDULED FOR 06/20/2018
AT 09:00 AM
06/20/2018 06/20/2018
DEFENDANT REJECTED PLEA OFFER.
06/20/2018 06/20/2018
JURY TRIAL SCHEDULED FOR 07/30/2018 AT 09:00 AM
07/30/2018 07/30/2018 REIGLE ANNE HARTNETT
NOLLE PROSEQUI ENTERED ON 7/30/18 AS TO 18-02-1096.
JUDGE/REIGLE DAG/K.SMITH PD/MATONI
*** END OF DOCKET LISTING AS OF 11/13/2018 ***
PRINTED BY: CSCTSAN
“Erh`\b‘\+ C"
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Order entered November 9, 2018
In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-17-01296-CR
SRINIVAS EADHA, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 401st Judicial District Court
Collin County, Texas
Trial Court Cause No. 401-83015-2015
ORDER
Before the Court is appellant’s November 8, 2018 second motion to extend the time to
file appellant’s brief. We GRANT the motion and ORDER appellant’s brief filed on or before
December 10, 2018. If appellant’s brief is not filed by December 10, 2018, this appeal may be
abated for the trial court to make findings in accordance with rule of appellate procedure 38.8.
/s/ LANA MYERS
JUSTICE
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} |
542 F.2d 1235
Bernard V. WASSEL and Sevy Wassel, his wife, Plaintiffs-Appellees,v.Edward M. EGLOWSKY, Stephen H. Stillerman, Appellants,v.Arnold GOLDMAN, and Central Trust Company, Defendants-Appellees.
No. 75-2123.
United States Court of Appeals,Fourth Circuit.
Argued Oct. 5, 1976.Decided Oct. 19, 1976.
Edward M. Eglowsky (Stephen H. Stillerman, on brief), pro se.
Francis S. Brocato, Baltimore, Md., for appellees Bernard V. and Sevy Wassel.
Robert B. Haldeman, Baltimore, Md. (Cleaveland D. Miller, Semmes, Bowen & Semmes, Baltimore, Md., on brief), for appellee Central Trust Co.
Arnold Goldman, pro se.
Before WINTER and CRAVEN, Circuit Judges, and FIELD, Senior Circuit Judge.
PER CURIAM:
1
In an exhaustive opinion, the district judge granted judgment to plaintiffs Bernard V. Wassel and Sevy Wassel against defendants Edward M. Eglowsky and Stephen H. Stillerman, and he gave Eglowsky and Stillerman judgment for contribution against Arnold Goldman, a third-party defendant, exonerating Central Trust Company, another third-party defendant. Wassel v. Eglowsky, 399 F.Supp. 1330 (D.Md.1975). Plaintiffs' recovery was grounded upon defendants' violation of § 12(1) of the Securities Act of 1933, 15 U.S.C. § 77l (1) (selling unregistered securities).
2
Defendants Eglowsky and Stillerman appeal, assigning numerous grounds for reversal. We find none of them meritorious, and we affirm on the opinion of the district court, adopting it as our own with regard to the violation of § 12(1) of the Act and defendants' right to contribution from Goldman.
3
AFFIRMED.
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765 F.2d 150
Stewartv.U.S.
84-3963
United States Court of Appeals,Ninth Circuit.
5/23/85
D.Idaho
AFFIRMED
| {
"pile_set_name": "FreeLaw"
} |
In the
United States Court of Appeals
For the Seventh Circuit
Nos. 17-2042 & 17-2111
JAM PRODUCTIONS, LTD., EVENT
PRODUCTIONS, INC., STANDING ROOM
ONLY, INC., and VICTORIA OPERATING
CO.,
Petitioners, Cross-Respondents,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent, Cross-Petitioner,
and
THEATRICAL STAGE EMPLOYEES
UNION, LOCAL NO. 2 I.A.T.S.E.,
Intervenor-Respondent.
Petition for Review and Cross-Application for Enforcement of an
Order of the National Labor Relations Board.
No. NLRB-1, No. 13-CA-186575
ARGUED DECEMBER 8, 2017 — DECIDED JUNE 28, 2018
2 Nos. 17-2042 & 17-2111
Before KANNE and ROVNER, Circuit Judges, and DURKIN,
District Judge.*
ROVNER, Circuit Judge. The National Labor Relations Board
(“the Board”) seeks to enforce its order requiring Jam Produc-
tions, Ltd., Event Productions, Inc., Standing Room Only, Inc.,
and Victoria Operating Co. (collectively “Jam Productions” or
“Jam”) to bargain with the Theatrical Stage Employees Union
Local No. 2, (“Local No. 2”). Jam argues that in the period
before the election to determine whether Local No. 2 would
represent Jam employees, the union attempted to influence the
election outcome by steering premium union jobs to Jam
employees. We have jurisdiction to review the Board’s applica-
tion for enforcement pursuant to 29 U.S.C. § 160(e). Because
Jam presented enough evidence to warrant a hearing on the
validity of the election results, we deny enforcement and
remand for an evidentiary hearing.
I.
In mid-September 2015, Local No. 2 filed an election
petition to represent employees of Jam Productions as a single
employer. Jam produces concerts, shows, and events at venues
in and around Chicago, including the Riviera Theatre, Park
West Theatre, and Vic Theatre. In conjunction with these
productions, Jam hires part-time and non-union stagehands to
unload lighting and sound equipment into the venue, set it up,
maintain it, take it down, and move it out of the venue after the
show. Given the irregular schedule of shows at any given
*
Of the Northern District of Illinois, sitting by designation.
Nos. 17-2042 & 17-2111 3
venue (shows followed by days or weeks without perfor-
mances) and the fact that one venue (the Riviera) was closed
for the entire summer because it lacks air conditioning, none of
the stagehands are employed full time and their employment
is generally sporadic.
On September 30, Jam and Local No. 2 entered into a
Stipulated Election Agreement identifying the potential
bargaining unit as stagehands at the Riviera, Vic, and Park
West Theatres employed during the payroll period ending on
October 4, 2015. The unit was defined more specifically as: “All
full-time and regular part-time stage production employees
employed by the Employer at the Riviera, Park West, and Vic
Theatres, but excluding production managers and crew
leaders, office clerical employees and guards, professional
employees and supervisors as defined in the Act.” Given the
sporadic nature of the work, the parties agreed to add the
following additional definition to the Agreement: “Also
eligible to vote are all employees in the unit who have been
employed by the Employer for a total of 18 concerts, shows,
and/or events over a 1-year period immediately preceding the
eligibility date.”
The day after the parties signed the Election Agreement,
however, the representation petition was held in abeyance
pending the investigation of an unfair labor practice charge
that Local No. 2 had filed only the day before it filed its
representation petition. Local No. 2’s charge was based on
Jam’s termination of the Riviera’s crew leader, Chris Shaw and
the fifty-three employees he supervised (the “Shaw crew”). The
unfair labor practice charge was not resolved until April 6,
2016, when the Board’s Acting Regional Director approved an
4 Nos. 17-2042 & 17-2111
agreement containing a non-admissions clause and providing
that Jam would reinstate the terminated employees by offering
them immediate and full participation in Jam’s “on-call list.”
Just over a month after the unfair-labor-practice charge was
resolved, on May 16, 2016, the election was held. Prior to the
election, Jam had asked the Regional Director to move the
eligibility date of the election back two weeks on account of the
seven-month election delay. The Regional Director did not
issue an order in response, so Jam included on its voter
eligibility list five stagehands hired in the two-week period
after the agreed-upon October 4, 2015 date, along with a
notation about their hiring date. Local No. 2 prevailed with
twenty-two votes in its favor and ten against; the victory was
not entirely decisive, however, because there were an addi-
tional twenty-one ballots challenged by either Jam or Local
No. 2. Eight of the challenges were uncontested, which left
thirteen contested ballots—all union challenges contested by
Jam. Five of those were the ballots cast by the employees who
had been hired in the two weeks following the stipulated
eligibility date. Local No. 2 challenged the remaining eight
ballots on various grounds such as number of shows worked
and whether the voting employees were in fact “supervisors”
ineligible to vote.
Jam also timely filed an objection contesting the election
results on the grounds that Local No. 2 unlawfully provided
economic benefits to employees during the critical period
preceding the election. Specifically, Jam alleged that Local
No. 2 provided employees premium, higher-paid work at
union venues in the weeks before the election in an attempt to
Nos. 17-2042 & 17-2111 5
influence the employees—particularly the Shaw crew—to vote
for the union.
In response to Jam’s objections, the Board’s Acting Regional
Director conducted an investigation and issued a Corrected
Report on June 20, 2016, concluding that Jam’s offer of proof in
support of its objection fell short of demonstrating the required
“substantial and material factual issues,” see Park Chevrolet-Geo,
Inc., 308 NLRB 1010, fn. 1 (1992), that, if proven, would warrant
setting aside the election. Specifically, the Director concluded
that although Jam had shown that employees did work union
jobs during the critical period, it had not shown that Local
No. 2 engaged in any wrongdoing by hiring those employees
through its open referral system. The report further concluded
that Jam’s evidence of an undeserved financial benefit was too
speculative to support its claim that Local No. 2 engaged in
wrongdoing. As relevant here, the Director also sustained
Local No. 2’s challenges to the ballots of four of the five
employees hired in the two weeks after the original eligibility
date,1 and certified Local No. 2 as the employees’ bargaining
agent.
Jam filed a request for review, and on January 5, 2017, a
three-member panel of the NLRB denied Jam’s request and
affirmed the Regional Director’s Corrected Report certifying
1
The Regional Director sustained twelve union challenges in all: four
employees hired after the original eligibility date and eight employees who
had not worked the requisite number of shows as defined by the eligibility
agreement. Because the nine remaining ballots would be insufficient to
impact the election results, the Regional Director did not consider those
challenges.
6 Nos. 17-2042 & 17-2111
Local No. 2 as the relevant bargaining unit. On the issue of
challenged ballots, one member of the panel would have
overruled the four Local No. 2 ballot challenges to employees
hired after the eligibility date. The dissenting panel member
reasoned that the delay occasioned by the Board’s resolution
of the unfair labor practice prevented the Board from enforcing
other material terms of the Election Agreement like the
eligibility date; he also noted that there was no prejudice to
Local No. 2 because Jam provided proper notice as to those
four employees. He would have, however, denied Jam’s
request for review of five additional union challenges, so the
four ballots he would have allowed would not have impacted
the election’s outcome.
Jam then refused to recognize or engage in collective
bargaining with Local No. 2, prompting the Board’s general
counsel to file a complaint alleging an unfair labor practice in
violation of § 8(a)(1) and (5) of the National Labor Relations
Act, 29 U.S.C. §§ 158(a)(1) and (5). In its answer to the com-
plaint, Jam repeated its objections and challenges to the
certification of the election, but the Board rejected Jam’s
affirmative defenses and issued an order holding that Jam’s
refusal to bargain amounted to an unfair labor practice. See id.
Jam timely petitioned for review of the Board’s order compel-
ling it to bargain, and the Board cross-applied for its enforce-
ment.
II.
Because Jam refused Local No. 2’s request to enter into
collective bargaining, the central issue on appeal is whether the
Board reasonably certified Local No. 2 as the Jam employees’
Nos. 17-2042 & 17-2111 7
representative. As detailed above, an employer’s path to
judicial review of a Board’s decision upholding an election and
certifying a union is “circuitous.” Hanson Cold Storage Co. v.
NLRB, 860 F.3d 911, 914 (7th Cir. 2017) (quoting NLRB v. Serv.
Am. Corp., 841 F.2d 191, 193 n.3 (7th Cir. 1988)). Unlike an
unfair labor practice order by the Board, Board-certification
decisions are not immediately appealable. Thus, an employer
seeking judicial review must, as Jam did here, expose itself to
an unfair labor practice charge by refusing to bargain with the
Board-certified union. Only once Local No. 2 files an unfair
labor practice charge that is sustained by the Board can we
review the Board’s underlying certification decision. See id.
(describing process for employer to obtain judicial review of
Board’s decision upholding election and certifying union); see
also Ruan Transp. Corp. v. NLRB, 674 F.3d 672, 674 (7th Cir.
2012).
We have jurisdiction under 29 U.S.C. §§ 160(e) and (f) over
Jam’s petition for review of the Board’s May 16, 2017 decision.
See, e.g., NLRB v. City Wide Insulation, Inc., 370 F.3d 654, 657
(7th Cir. 2004). If the Board acted reasonably in certifying Local
No. 2, we will uphold the Board’s enforcement of its order
compelling Jam to enter into collective bargaining. See NLRB v.
River City Elevator Co., Inc., 289 F.3d 1029, 1032 (7th Cir. 2002).
We review factual conclusions by the Board to ensure that they
are supported by “substantial evidence” and expect its legal
conclusions to have a “reasonable basis in law.” City Wide
Insulation, 370 F.3d at 657. Both standards are deferential; the
Board’s factual conclusions are supported by substantial
evidence when they are based on “such relevant evidence as a
reasonable mind might accept as adequate to support a
8 Nos. 17-2042 & 17-2111
conclusion.” Sears, Roebuck & Co. v. NLRB, 349 F.3d 493, 502–03
(7th Cir. 2003) (internal quotations and citation omitted); NLRB
v. O’Daniel Trucking Co., 23 F.3d 1144, 1148 (7th Cir. 1994)
(same). We review the Board’s determination not to hold a
hearing on an employer’s objections under the same substan-
tial evidence standard. Clearwater Transport, Inc. v. NLRB, 133
F.3d 1004, 1008 (7th Cir. 1998).
Jam’s primary argument on appeal is that the Board erred
in certifying the election results without holding a hearing on
its objections. Specifically, Jam challenges the Board’s determi-
nation that Local No. 2 work given to the Shaw crew preceding
the election did not make the election unfair.
Here, Jam contends that Local No. 2 engaged in a concerted
effort to steer high-paying union jobs to the twenty-one voting
members of the recently reinstated Shaw crew (whose votes
made up a majority of the counted votes). Jam submitted an
offer of proof outlining multiple instances in the critical period
before the election (between April and the first half of May
2016) where Local No. 2 chose members of the Shaw crew to
work shows Jam alleged would have ordinarily been staffed by
Local No. 2 Union members.
Local No. 2 selects stagehands for shows through an
“automated call steward” system accessible through its web
site. Individuals could log in to the automated system, where
they filled out a member profile describing their applicable job
classifications and availability. Stagehands then received job
offers via text, and simply replied to confirm or deny offers.
To support its theory, Jam submitted the anticipated
testimony of Behrad Emami, the production manager at the
Nos. 17-2042 & 17-2111 9
Riviera Theatre, and Eric Linz, a runner who worked at a
David Gilmour show at the Auditorium Theater on April 5.
Based on telephone conversations and text messages (attached
to Jam’s proffer), Emami would have testified to a number of
interactions with the members of the Shaw crew who were
unavailable to work or attend meetings at the Riviera because
they were working at union venues during the critical period.
Emami was prepared to testify that of the twenty-one voting
members of the Shaw crew, at least thirteen were hired to work
union shows during the critical period, including the David
Gilmour show at the Auditorium Theatre on April 5 and 6; the
Rihanna show at the United Center from April 14 to 16; the
NFL Draft in Grant Park from April 28 to 30; and the stage set
up at Northerly Island at the beginning of May. Eric Linz
would have testified that he had seen at least six members of
the Shaw crew while he was working as a runner at the David
Gilmour show, including two more not included in the thirteen
listed by Emami.
Jam also offered its own records from shows it produced at
union venues2 demonstrating that when Local No. 2 had
supplied stagehands for Jam outside the critical period, it did
not hire non-union employees. Jam’s records demonstrated
that at three large productions at the United Center outside the
critical period—January 13 (a Muse concert with 129 stage-
hands), January 19 (a Bruce Springsteen concert with 109
stagehands), and February 17 (an AC/DC concert with 116
2
In addition to the Riviera, Vic, and Park West Theatres, Jam occasionally
produced shows at union venues. For those shows Local No. 2 typically
provided the stagehands.
10 Nos. 17-2042 & 17-2111
stagehands)—Local No. 2 did not hire any members of the
Shaw crew. And Jam identified (as a hostile witness) the
individual on the Shaw crew, Justin Hoffman, who it believed
helped coordinate the plan to offer union jobs. Finally, Jam
sought employment records from Local No. 2 for the twenty-
one voting employees of the Shaw crew so that Jam could
demonstrate that it was unusual for the Shaw crew to have
received union jobs.
Local No. 2 refused to provide any of the requested records,
and the Regional Director declined to interview any of the
individuals identified in the offer of proof or require Local
No. 2 to turn over any business records. In rejecting Jam’s
request for a hearing, the Regional Director acknowledged that
the Shaw crew had received union jobs during the critical
period, but concluded that Jam had not demonstrated that
Local No. 2 made a gift of “tangible economic value” to garner
union votes.
The Regional Director is obligated to hold a hearing only
when the objecting party raises “substantial and material
factual issues” sufficient to support a prima facie showing of
objectionable conduct. Clearwater Transport, 133 F.3d at 1011
(quoting NLRB v. Lake Holiday Assoc., Inc., 930 F.2d 1231,
1236–37 (7th Cir. 1991)); 29 C.F.R. § 102.69(c)(1)(i). Jam could
meet its burden by alleging misconduct that, if proven, would
warrant setting aside the election under the substantive law of
representation elections. See, e.g., NLRB v. AmeriCold Logistics,
Inc., 214 F.3d 935, 938 (7th Cir. 2000) (“The NLRB must hold a
hearing when the employer makes a prima facie showing of
misconduct that would be sufficient to set aside the election.”);
Nos. 17-2042 & 17-2111 11
see also Serv. Am. Corp., 841 F.2d at 195; Clearwater Transport, 133
F.3d at 1011.
Although the standard of review is deferential, we believe
Jam presented enough evidence to obtain an evidentiary
hearing, and that the Board abused its discretion by failing to
hold one. When conducting a representation election, the
Board has wide discretion to “ensure the fair and free choice”
of bargaining representatives by employees. NLRB v. Savair
Mfg. Co. 414 U.S. 270, 276–77 (1973). This obligation to ensure
fair and free choice includes a prohibition on campaign tactics
by either the employer or the union that induce workers to cast
their votes on grounds other than the advantages and disad-
vantages of union representation. See id. (“We do not believe
that the statutory policy of fair elections … permits endorse-
ments, whether for or against the union, to be bought and sold
in this fashion.”); see also Freund Banking Co. v. NLRB, 165 F.3d
928, 931 (D.C. Cir. 1999). Not only does the Act forbid employ-
ers from utilizing threats or rewards as campaign tactics, it
prohibits “both crude and subtle forms of vote-buying” by the
union. Freund, 165 F.3d at 931 (emphasis added). Thus, a union
is barred from both blatantly giving something of value to an
employee in exchange for his vote as well as offering a benefit
in a way that “tacitly obliges the employee” to vote for the
union. Id. (citing Savair, 414 U.S. at 277–78).
In considering whether a particular incentive taints the
fairness of the election, we ask whether what is offered is
“‘sufficiently valuable and desirable in the eyes of the person
to whom they are offered, to have the potential to influence
that person’s vote?’” River City Elevator, 289 F.3d at 1033
12 Nos. 17-2042 & 17-2111
(quoting Nestle Ice Cream Co. v. NLRB, 46 F.3d 578, 583 (6th Cir.
1995)). Specifically, the Board has held that a union is forbid-
den from providing voters anything of “tangible economic
benefit” during the critical period before the election. See King
Elec., Inc. v. NLRB, 440 F.3d 471, 474 (D.C. Cir. 2006) (quoting
Freund, 165 F.3d at 931–32); see also Mailing Servs., Inc., 293
NLRB 565, 565–66 (1989)).
The financial benefit of the higher-paying jobs immediately
preceding the election could plausibly be seen as an economic
inducement to secure votes in favor of Local No. 2. The NLRB
has refused to certify elections where a union has offered
benefits to employees of similar or lesser value than the
premium-pay jobs allegedly offered here. See Owens-Ill., Inc.,
271 NLRB 1235, 1235–36 (1984) (gift of union jackets); Mailing
Servs., 293 NLRB at 566 (free medical screenings offered by
union impermissible conferral of benefit); Wagner Elec. Corp.,
167 NLRB 532, 533 (1967) (union’s gift of life insurance cover-
age “is a tangible economic benefit”).
The Board defends the refusal to investigate or hold a
hearing on the grounds that union job referrals “in the ordi-
nary course of its referral system, according to the pre-existing
standards and practice” provide no reason to suspect Local
No. 2 of using the jobs to induce votes. But whether the jobs
were in fact offered to the Shaw crew “according to pre-
existing standards and practice” is precisely the question Jam
sought to answer with its objection. The Board attacks Jam’s
offer of proof as nothing more than a fishing expedition,
devoid of the type of “specific evidence” about “specific
people” required to warrant an evidentiary hearing. See NLRB
Nos. 17-2042 & 17-2111 13
v. Service Am. Corp., 841 F.2d 191, 195 (7th Cir. 1988). But in
describing the alleged deficiencies in Jam’s offer of proof, the
Board highlights precisely the Catch-22 Jam faced in attempt-
ing to demonstrate that the referrals were in fact an aberration
from Local No. 2’s ordinary referral operating system.
For instance, the Board faults Jam’s offer of proof for failing
to provide evidence showing (1) Local No. 2’s normal referral
procedures; (2) whether the voting employees were treated
differently than others with access to the referral system; or
(3) whether the employees who received Local No. 2 jobs were
members of Local No. 2 or not. But these are the very questions
Jam sought to have answered with its offer of proof.
As detailed above, Jam provided more than vague, unsub-
stantiated accusations. Using its own employment records, it
compared the likelihood of non-union members receiving
union jobs before the critical period to what appeared to be the
dramatic increase in availability of union jobs during the
critical period. It also identified by name three individuals who
could provide further detail about how the referrals were
given and which specific employees had received Local No. 2
work. And it requested the very union records that the Board
now faults it for failing to produce: Local No. 2’s employment
records that would have identified union members and shed
light on the referral procedures and whether the Shaw crew
received different treatment during the critical period.
The Board’s primary argument is that Local No. 2 did not
engage in objectionable conduct because the referral system
was available to non-union members and thus it was unre-
markable that the Shaw crew received union work. But that
14 Nos. 17-2042 & 17-2111
reasoning begs the question whether, despite the availability of
the referral system, non-union employees were ever selected
for union jobs outside of the critical period. As we noted in
Service American Corporation, “[t]he whole purpose for the
hearing is to inquire into the allegations to determine whether
they are meritorious; it makes little sense to expect the em-
ployer to prove its case, especially without power of subpoena,
to the Regional Director before a hearing will be granted.” 841
F.2d at 197 (quoting NLRB v. J-Wood/A Tappan Div., 720 F.2d
309, 315 (3d Cir. 1983)). Because the Regional Director declined
to interview either Justin Huffman, who Jam believed was
responsible for coordinating jobs for the Shaw crew during the
critical period, or any of the twenty-one Shaw crew members
identified in Jam’s offer of proof, he had no way of knowing if
members of Shaw’s crew ordinarily received union job offers
outside the critical period.
Without subpoena power, Jam produced as much evidence
as it had available tending to suggest that non-union voting
employees received a sudden increase in offers to work union
jobs in the period immediately preceding the election. Al-
though such a benefit may not have formally obligated
members of the Shaw crew to vote for Local No. 2, having been
the beneficiaries of the premium-pay jobs, members of the
Shaw crew may well have felt some duty to return the favor
with a union vote. See Savair, 414 U.S. at 277 (noting that
although an employee may not be “legally bound to vote for
the union and has not promised to do so in any formal sense”
some “would feel obliged” to cast a union vote after having
signed a union recognition slip) (emphasis added). This may be
especially true if, outside of the critical period, the jobs offered
Nos. 17-2042 & 17-2111 15
were rarely, if ever, available for those non-union voting
employees.
Given the large pay disparity for union and non-union
stagehands, certainly the jobs at union venues during the
critical period could be seen as a gift of “tangible economic
value.” If the jobs were in fact, as Jam maintains, previously
unavailable to those employees, the offer of the premium-pay
jobs could certainly be seen as an unearned benefit to induce
union support. Savair, 414 U.S. at 280 (“[A]lthough the benefits
granted by the employer were permanent and unconditional,
employees were ‘not likely to miss the inference that the source
of benefits now conferred is also the source from which future
benefits must flow and which may dry up if it is not obliged.’”)
(quoting NLRB v. Exchange Parts Co., 375 U.S. 405, 409 (1973)).
And, as discussed above, without an evidentiary hearing on
Jam’s objections, it is impossible to determine whether the jobs
at union venues amounted to an improper inducement to vote
in favor of Local No. 2.
It follows that Jam’s circumstantial evidence of a concerted
effort to incentivize non-union employees with access to Local
2 jobs prior to the vote established a “substantial and material
factual issue” sufficient to warrant an evidentiary hearing. The
Regional Director thus abused his discretion by failing to
investigate or hold such a hearing.
That leaves Jam’s contention that the Board’s rulings on the
challenged ballots were clearly erroneous. Jam takes issue
primarily with the Board’s decision to uphold the Regional
Director’s refusal to move the eligibility date in light of the
delay attributable to the unfair labor practice charge. Jam
16 Nos. 17-2042 & 17-2111
suggests that by failing to count the votes of those employees
hired shortly after the original date in the Stipulated Election
Agreement, the Board effectively disenfranchised those
employees.
Under the Board’s election rules, the parties may enter a
stipulated election agreement, which must include, among
other things, the payroll period to be used for determining
voter eligibility. See 29 C.F.R. § 102.62(b). The Board has long
treated such election agreements as “‘contracts,’ binding on the
parties that executed them.” T & L Leasing, 318 NLRB 324, 325
(1995) (quoting Barceloneta Shoe Corp., 171 NLRB 1333, 1343
(1968), enforced mem., 1970 WL 5417 (1st Cir. 1970)). As such,
election agreements will be enforced except in limited circum-
stances. For instance, upon a showing of “cause,” Regional
Directors may revoke their approval of the agreements. And
the parties may withdraw from election agreements upon
agreement of all the parties or an “affirmative showing of
unusual circumstances.” T & L Leasing, 318 NLRB at 325.
Otherwise, the agreement will be enforced so long as the terms
are clear and unambiguous and it does not run afoul of settled
Board policy or specific statutory exclusions. Id.
Given the express and unambiguous payroll period cut-off
of October 4, 2015 in the stipulated agreement, we would be
hard-pressed to conclude that the Board committed clear error
by refusing to allow the ballots of the employees who started
working after the cut-off date. Jam cites several cases it claims
lend support to its argument that eligibility dates may be
moved in the case of a delayed election. But the cases Jam cites
not only involve much longer delays (two or more years) than
Nos. 17-2042 & 17-2111 17
the seven months at issue here, they also speak to the issue of
whether the Regional Director has the authority to change the
eligibility date when an election is delayed, not to whether it
would be an abuse of discretion to enforce the agreed-upon
eligibility date. See Hartz v. Mountain Corp., 260 NLRB 323, 327
(1982) (three-member panel of the Board affirmed decision
allowing union that had not participated in proceedings for
election held two years earlier to withdraw petition for
certification and intervention in another union’s petition);
Interlake v. Steamship Co., 178 NLRB 128, 129 (1969) (concluding
that a new eligibility date would be appropriate for a second
runoff election held three years after original election) (emphasis
added). No one disputes that the Regional Director could have
allowed the parties to agree on a new eligibility date or
perhaps accepted Jam’s request to push back the eligibility date
two weeks on account of the delay. Indeed, on review one
member of the panel would have allowed Jam to push back the
eligibility date. That there were reasons for allowing the
additional voters who shared a community of interest with the
other employees does not mean that it was clear error not to
count the challenged votes.
As the Board noted, the terms of the stipulated agreement
were clear and unambiguous. As detailed above, such terms
will ordinarily be enforced. There was nothing so extraordi-
nary about the delay preceding the election here that the Board
committed clear error by upholding Local No. 2’s challenges to
the voters hired after the agreed-upon eligibility date. In light
of our deferential standard of review, we affirm the Board’s
ruling on the challenged ballots.
18 Nos. 17-2042 & 17-2111
III.
For the foregoing reasons, we GRANT Jam Productions’
petition for review and REMAND for a hearing on its election
objection, and DENY the Board’s cross-application for enforce-
ment.
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
No. 14-677V
Filed: January 27, 2015
Unpublished
****************************
EDDIE DAVID DUKES, *
*
Petitioner, * Joint Stipulation on Damages;
* Influenza Vaccine or Flu Vaccine;
* Guillain-Barré Syndrome (GBS);
SECRETARY OF HEALTH * Special Processing Unit
AND HUMAN SERVICES, *
*
Respondent. *
*
****************************
James Griffin, Lewis, Babcock & Griffin, LLP, Columbia, SC, for petitioner.
Lynn Ricciardella, US Department of Justice, Washington, DC, for respondent.
DECISION ON JOINT STIPULATION1
Vowell, Chief Special Master:
On July 29, 2014, Eddie David Dukes filed a petition for compensation under the
National Vaccine Injury Compensation Program, 42 U.S.C. §300aa-10, et seq,2 [the
“Vaccine Act” or “Program”]. Petitioner alleges that he suffered Guillain-Barré syndrome
(GBS) resulting from the influenza vaccine he received on September 13, 2011.
Petition at 1; Stipulation, filed Jan. 27, 2015, ¶ 4. Petitioner further alleges that he
experienced the residual effects of GBS for more than six months, has filed no other
action for this injury, and has received no prior award or settlement. Petition, ¶¶ 6-8;
Stipulation, ¶¶ 4-5. Respondent denies that the influenza vaccination caused
petitioner’s GBS or any other injury. Stipulation, ¶ 6.
1
Because this unpublished decision contains a reasoned explanation for the action in this case, I intend
to post it on the United States Court of Federal Claims' website, in accordance with the E-Government
Act of 2002, Pub. L. No. 107-347, § 205, 116 Stat. 2899, 2913 (codified as amended at 44 U.S.C. § 3501
note (2006)). In accordance with Vaccine Rule 18(b), petitioner has 14 days to identify and move to
redact medical or other information, the disclosure of which would constitute an unwarranted invasion of
privacy. If, upon review, I agree that the identified material fits within this definition, I will redact such
material from public access.
2
National Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755. Hereinafter, for
ease of citation, all “§” references to the Vaccine Act will be to the pertinent subparagraph of 42 U.S.C. §
300aa (2006).
Nevertheless, the parties have agreed to settle the case. Stipulation, ¶ 7. On
January 27, 2015, the parties filed a joint stipulation agreeing to settle this case and
describing the settlement terms.
Respondent agrees to pay petitioner a lump sum of $175,000.00 in the form of a
check payable to petitioner. Stipulation, ¶ 8. This amount represents compensation for
all damages that would be available under 42 U.S.C. § 300aa-15(a). Id.
I adopt the parties’ stipulation attached hereto, and award compensation in the
amount and on the terms set forth therein. In the absence of a motion for review filed
pursuant to RCFC Appendix B, the clerk of the court is directed to enter judgment in
accordance with this decision.3
s/Denise K. Vowell
Denise K. Vowell
Chief Special Master
3
Pursuant to Vaccine Rule 11(a), entry of judgment can be expedited by each filing a notice renouncing
the right to seek review by a United States Court of Federal Claims judge.
2
Case 1:14-vv-00677-UNJ Document 15 Filed 01/27/15 Page 1 of 5
Case 1:14-vv-00677-UNJ Document 15 Filed 01/27/15 Page 2 of 5
Case 1:14-vv-00677-UNJ Document 15 Filed 01/27/15 Page 3 of 5
Case 1:14-vv-00677-UNJ Document 15 Filed 01/27/15 Page 4 of 5
Case 1:14-vv-00677-UNJ Document 15 Filed 01/27/15 Page 5 of 5
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364 Mass. 454 (1973)
305 N.E.2d 837
MURPHY NURSING HOME, INC., & others[1]
vs.
RATE SETTING COMMISSION & others[2] (and a companion case[3]).
Supreme Judicial Court of Massachusetts, Suffolk.
October 2, 1973.
December 27, 1973.
Present: TAURO, C.J., QUIRICO, BRAUCHER, HENNESSEY, & KAPLAN, JJ.
Evan Y. Semerjian for Murphy Nursing Home, Inc., & others.
David L. Whitney for Daniels Nursing Home, Inc., & others.
Timothy F. O'Leary, Special Assistant Attorney General, for the Rate Setting Commission.
BRAUCHER, J.
These cases, brought by a number of nursing homes, call for judicial review of the rules and regulations (the 1969 Regulations) established by the Rate Setting Commission (commission) on June 25, 1969, to govern the reimbursement of nursing homes for the care of publicly aided patients. The plaintiffs also challenge the constitutionality of the legislative "rate freeze" provided for in St. 1969, c. 800, § 6. We hold that the 1969 Regulations constitute a valid exercise of the authority of the commission and that the rate freeze is not unconstitutional either on its face or as applied.
Both cases began before a single justice in the county court as bills for declaratory relief under G.L.c. 30A, § 7, and G.L.c. 231A. They were referred to a master on October 28, 1969, by a single justice of this court. The master's report was confirmed by consent on November 15, 1972, and on January 25, 1973, a single justice reported the cases for determination by the full court on the pleadings, the master's report, the stipulations of the parties and the exhibits.
We summarize the setting as it appears from the master's report. Facts relating to particular issues will be stated in connection with our discussion of those issues. For a period of approximately ten years, ending in 1968, nursing homes were reimbursed by the Commonwealth for publicly aided patients on a single Statewide flat rate intended to cover all costs plus an element of profit. On January 5, 1968, the Board of Rate Setting, predecessor of the commission, adopted rules and regulations (the 1968 Regulations) for the determination of rates of payment to convalescent and nursing *457 homes for 1968. On June 25, 1969, the commission adopted the 1969 Regulations, effective retroactively to January 1, 1969. The cost reimbursement system reflected in the 1969 Regulations was first adopted in the 1968 Regulations.
There are over 25,000 publicly aided patients in nursing homes in Massachusetts, representing 80% of all patients in nursing homes. The Department of Public Health licenses nursing homes by twenty-bed segments, and it generally takes six to nine months for a new nursing home to become fully licensed. The average annual rate of occupancy of nursing homes in full operation is approximately 94% of licensed capacity, and 100% occupancy is virtually impossible to achieve. Use of the 1969 Regulations to compute rates of reimbursement would result in a saving to the Commonwealth of approximately $4,000,000 as compared with use of the 1968 Regulations.
The governing statute, G.L.c. 7, § 30L, as appearing in St. 1968, c. 492, § 3 (later amended by St. 1970, c. 714), provides that the commission "shall have the sole responsibility for establishing fair and reasonable rates of payment to be used by governmental units ... and for establishing fair and reasonable charges to be used by state institutions for general health supplies, care, services and accommodations." It is to "determine... the rates to be paid by each governmental unit to providers of health services.... Each rate established by the commission shall be deemed a regulation and shall be reviewable as hereinafter provided. The commission shall promulgate rules and regulations for the administration of its duties and the determination of rates as herein required subject to the procedures prescribed by chapter thirty A."
1. Procedure. These cases are properly before us under G.L.c. 30A, § 7, and c. 231A. Massachusetts Gen. Hosp. v. Rate Setting Commn. 359 Mass. 157, 163-166 (1971). Compare the procedure under the predecessor statute, G.L.c. 7, § 30L, as appearing in St. 1963, c. 809, § 1. Palm Manor Nursing Home, Inc. v. Rate Setting Commn. 359 Mass. 652, *458 654-655 (1971), and cases cited. The fact that more than four years have elapsed since the cases began suggests that some better mode of proceeding could be found. Commonly cases involving the trial of contested issues of fact are transferred by the single justice to the Superior Court under G.L.c. 211, § 4A. The present cases were instead referred to a master. Evidentiary hearings before the master extended only eleven days and ended in June, 1970. Much of the delay was occasioned by illnesses of one of the stenographers and of counsel and be proceedings subsequent to the filing of the master's report. Nevertheless, the cases, while not as protracted as some, illustrate the fact that ultimate disposition is often delayed rather than accelerated by reference to a master. See O'Brien v. Dwight, 363 Mass. 256, 279-280 (1973).
2. Retroactivity. The 1968 Regulations provided (par. 14) that the permanent 1968 rate for each nursing home would continue in effect in 1969 until a new permanent rate was established for 1969. Statute 1968, c. 492, § 25, effective September 12, 1968, provided that all rates, classifications and other regulations then in effect should remain in effect "until superseded or repealed by the rate setting commission in accordance with law." On January 6, 1969, the commission established "tentative rates" pursuant to the 1968 Regulations and so notified the plaintiffs and all other nursing homes by a form letter which concluded, "The permanent 1969 rate shall be made retroactive to January 1, 1969." The 1969 Regulations, promulgated June 25, 1969, provided explicitly (par. 1) that 1969 rates "will be retroactive to January 1, 1969."
The plaintiffs in the companion case contend that the retroactive feature of the 1969 Regulations was not "in accordance with law" because under G.L.c. 30A, § 5, inserted by St. 1954, c. 681, § 1 (before the effective date of St. 1969, c. 808, § 5), regulations were to be filed with the Secretary of State and became effective "upon filing, unless a later date is required by any law or is specified by the agency in the regulation" (emphasis supplied). They contend *459 that the result was to confiscate their property, citing Campbell v. Boston, 290 Mass. 427, 430 (1935), and Bernhardt v. Atlantic Fin. Corp. 311 Mass. 183, 191 (1942).
We reject these contentions. Before the 1969 amendment, G.L.c. 30A, § 5, required that regulations be filed with the Secretary of State, and until properly filed the regulations were not effective. Kneeland Liquor, Inc. v. Alcoholic Beverages Control Commn. 345 Mass. 228, 235 (1962). Massachusetts Gen. Hosp. v. Commissioner of Pub. Welfare, 346 Mass. 739, 740 (1964). But in a proper case a regulation could be filed to redetermine rates for past transactions. Massachusetts Gen. Hosp. v. Cambridge, 347 Mass. 519, 522-524 (1964). A case where tentative rates have been set pending the availability of reliable cost data is such a proper case. Employers' Commercial Union Ins. Co. v. Commissioner of Ins. 362 Mass. 34, 39-40 (1972). See Massachusetts Gen. Hosp. v. Commissioner of Admn. 353 Mass. 369, 374 (1967). The Constitution of the United States interposes no barrier to retroactive redetermination of provisional or tentative rates. Great No. Ry. v. Sunburst Oil & Ref. Co. 287 U.S. 358, 362 (1932).
3. The rate freeze. Statute 1969, c. 800, § 6, effective November 22, 1969, provided that "the fee schedules in effect on January 1, 1969, for medical care and assistance provided under the state [Medicaid] plan ... shall continue in effect until June 30, 1970, insofar as such action does not violate federal law." On September 11, 1969, the commission sent the Commissioner of Public Welfare a letter interpreting the "section 6 rate freeze" as intended "to apply to all Medicaid vendors," and to prescribe payment "in accordance with the fee schedules prescribing payment for the same or comparable services if rendered on January 1, 1969." Under G.L.c. 118E, § 6, inserted by St. 1969, c. 800, § 1, Medicaid vendors included hospitals furnishing inpatient services and "skilled nursing homes," but not unskilled nursing homes (also called "intermediate care facilities"). On October 31, 1969, the United States Department of Health, Education and Welfare (HEW) determined that the *460 rate freeze was invalid with respect to inpatient health services. See Catholic Medical Center of Brooklyn & Queens, Inc. v. Rockefeller, 305 F. Supp. 1268 (E.D.N.Y. 1969), affd. 430 F.2d 1297 (2d Cir.1970), app. dism. sub nom. Rockefeller v. Catholic Medical Center of Brooklyn & Queens, Inc. 400 U.S. 931, holding invalid with respect to inpatient hospital services a similar rate freeze in New York. The commission then instructed the Commissioner of Public Welfare not to apply the rate freeze to inpatient hospital services, but to continue to apply it to skilled nursing homes. HEW approved the change on December 12, 1969.
The master found that a home which employs a full time registered nurse for forty hours a week as director of nurses qualifies as a "skilled nursing home," and that one which does not is classified as an unskilled nursing home. Both types of nursing homes must be licensed by the Department of Public Health, and both receive reimbursement for publicly aided patients. There was no evidence to explain or support the distinction between skilled and unskilled nursing homes in the application of the rate freeze, but there was no evidence on which he could conclude that the distinction was irrational or improperly discriminatory.
We hold that the commission correctly interpreted the rate freeze statute. Although, as the plaintiffs contend, "fee schedules" is not an apt term to describe the rates established for nursing homes, another section of the same statute shows that the term was used to include all types of payment to providers of services under the Medicaid program. G.L.c. 118E, § 18 (3), inserted by St. 1969, c. 800, § 1. The rate freeze applied to all Medicaid vendors, but only to payment for services under the Medicaid plan. Skilled nursing homes provided such services; unskilled nursing homes did not, although they did provide services reimbursed pursuant to old age assistance (G.L.c. 118A), disability assistance (G.L.c. 118D), and aid to the blind (G.L.c. 6, §§ 129-150). The effect of the rate freeze was to subject the rates for Medicaid services rendered from November 22, 1969, to June 30, 1970, to the rates for comparable services rendered on January 1, *461 1969. Thus the frozen rates, like the rates for January 1, 1969, were determined by the 1969 Regulations, subject to judicial review under G.L.c. 30A, § 7.
This interpretation of the rate freeze statute disposes of the plaintiffs' claim that the rate freeze was irrational, discriminatory and confiscatory, and hence unconstitutional under Hall-Omar Baking Co. v. Commissioner of Labor & Indus. 344 Mass. 695, 707-709 (1962), Coffee-Rich, Inc. v. Commissioner of Pub. Health, 348 Mass. 414, 425-426 (1965), Aetna Cas. & Sur. Co. v. Commissioner of Ins. 358 Mass. 272, 280-281 (1970), and Travelers Indem. Co. v. Commissioner of Ins. 358 Mass. 387, 389 (1970). Unskilled nursing homes were excluded from the rate freeze because they were not eligible to render services under the Medicaid program, to which the rate freeze was limited. Inpatient hospital services were excluded from the rate freeze because their inclusion would have violated Federal law, as interpreted by HEW and the Federal courts. Skilled nursing homes, like other Medicaid providers apart from inpatient hospital services, remained subject to the rate freeze. St. 1969, c. 800, § 10. The distinctions drawn were neither irrational nor improperly discriminatory.
As for confiscation, we have said: "The right of a hospital to recover from a city or town for care furnished to a person in need of public assistance is purely the creature of statute and the Legislature could limit the right as it saw fit. No constitutional question is involved. If, as was not the case, the hospital had been legally obliged to receive and care for the patients a different question would be presented." Massachusetts Gen. Hosp. v. Cambridge, 347 Mass. 519, 522 (1964). The same principle applies to State reimbursement of nursing homes not legally required to care for publicly aided patients. The plaintiffs contend that a different rule applies because the Commonwealth had established a cost reimbursement system. They had relied on that system, they say, and it was unfair to supersede it retroactively and to do away with it until June 30, 1970. As we interpret the rate freeze statute, however, it did not interfere with the judicial review *462 of the 1969 Regulations already in process. The statute continued in effect the "fair and reasonable rates of payment" for January 1, 1969, established under those regulations, as they might be revised by reason of judicial review. Thus the effect of the rate freeze was merely to foreclose administrative revision of those rates for a period of a little more than seven months, from November 22, 1969, to June 30, 1970. That was hardly confiscation.
4. The 1969 Regulations. The plaintiffs attack seven specific provisions of the 1969 Regulations "for failure to provide fair and reasonable cost reimbursement." We think the quoted language is misleading. The statute calls for "fair and reasonable rates of payment" by governmental units to providers of health services. G.L.c. 7, § 30L, as appearing in St. 1968, c. 492, § 3. The rate for any particular provider is to be "adequate, fair and reasonable as to such provider based, among other things, on the costs of such provider" (emphasis added). G.L.c. 7, § 30O, as appearing in St. 1968, c. 492, § 3. The rates for particular providers are not in issue in these cases. See Massachusetts Gen. Hosp. v. Rate Setting Commn. 359 Mass. 157, 163-166 (1971). Even as to a particular provider, the statute does not mandate reimbursement of all fair and reasonable costs. See Cabot Nursing Home, Inc. v. Rate Setting Commn. 359 Mass. 686, 690-691 (1971). Nursing homes are not public utilities. Unlike many hospitals, they are typically run for profit. Compare Springfield Hosp. v. Commissioner of Pub. Welfare, 350 Mass. 704, 709-710 (1966). They are subject to competitive pressures: the master found that the 80% occupancy rate of one of the plaintiffs for 1969 constituted a reduction caused by competition from another nursing home. Against the interests of publicly aided patients in the adequacy of facilities and services and the interests of nursing homes in making a profit, the commission must balance the interests of the Commonwealth and its taxpayers in avoiding exorbitant expenditures.
There is in this case no finding like that in some of our insurance rate cases, that there was a large aggregate loss to *463 the entire industry for the preceding year and a probable greater loss for the year in issue. See Insurance Rating Bd. v. Commissioner of Ins. 359 Mass. 111, 115 (1971). The master concluded that the allowance for a return on equity capital was unfair and unreasonable, but he reported that there was no evidence that the rate of return encouraged or discouraged new nursing home construction or operation or prompted existing owners or operators to leave the business. The plaintiffs contend that the regulations in some respects take double or even triple precautions against paying for private patients or for empty beds. There is force in that contention, but in the absence of evidences as to overall impact, it falls short of a showing that the regulations necessarily result in rates that are not "fair and reasonable." The plaintiffs have the burden of making such a showing. Palm Manor Nursing Home, Inc. v. Rate Setting Commn. 359 Mass. 652, 656 (1971). Cabot Nursing Home, Inc. v. Rate Setting Commn. 359 Mass. 686, 688 (1971).
In the light of these general considerations, we turn to the specific attacks on the 1969 Regulations.
5. Total bed capacity. Under par. 4 of the 1969 Regulations, a per diem rate of reimbursement for each individual home is to be computed by dividing a cost figure "by actual patient day census or 90% ... of total bed capacity, whichever is the greater." Especially in the case of a new home, the master found, there may be a substantial difference between licensed bed capacity and total bed capacity. As applied to a new home, a per diem rate based on total bed capacity will result in reimbursement less than actual recognizable costs and expenses, and the regulations are unfair and unreasonable in allowing for such a result. He also found that it is not clear whether the commission has a policy of construing licensed and total bed capacity as synonymous, but that there is no basis in the regulations for such a policy and that such a policy "does not make the clear contrary provisions of paragraph 4 fair and reasonable."
The plaintiffs stand on the master's findings and conclusions. The commission did not brief the point, but asserted *464 in oral argument that it was proper for it to interpret its regulations to avoid unfairness in the treatment of new nursing homes. In Palm Manor Nursing Home, Inc. v. Rate Setting Commn. 359 Mass. 652, 656-657 (1971), we upheld the application of the commission's 1967 Regulations to a new nursing home, on a finding that a rate based on cost would be unrealistic when applied to a home operating at less than one-third capacity. Nevertheless, we think it was open to the commission to read "total bed capacity" in its 1969 Regulations to exclude beds which could not lawfully be used. Alternatively, it could exclude unlicensed beds to the extent necessary to avoid unfairness and a serious challenge to the validity of the regulations. Either way, the regulations have not been shown to be invalid. As to new nursing homes constructed during 1968 and 1969, moreover, par. 6 of the 1969 Regulations requires temporary rates based on the regulations only "as far as practical."
6. Salaries and fees. Paragraphs 4 (A) (1) and 4 (D) of the 1969 Regulations provide as one component of the cost figure used in computing the per diem rate, an "Allowance in Lieu of Owners, Officers, Administrators Salaries and Management Fees," to be determined from Schedule I on the basis of 100% of "total bed capacity." Paragraph 4 (D) further provides: "No person included in this category will be allowed any additional salary or compensation regardless of other services performed." Compare the different provision of par. 6 of the 1968 Regulations referred to in Cabot Nursing Home, Inc. v. Rate Setting Commn. 359 Mass. 686, 690 (1971).
The master found that in adopting Schedule I the commission added a 5% cost of living increase to the similar schedule in the 1968 Regulations but changed from a determination based on 95% occupancy to one based on 100% occupancy; the result was no substantial change. He also found that no significant effort was made to determine on a current basis the reasonableness of the amounts. In practice, he found, if a second owner, officer or administrator performs services such as nursing, bookkeeping and housekeeping *465 the commission allows compensation for those services in computing the rate. He concluded that if the schedule results in fair and reasonable compensation, this is more by accident than design, that there was no reasonable basis for using a 100% occupancy rate, and that the results of applying the schedule to one-owner and more than one-owner homes are in some instances contrary to the regulations and in others without rational basis.
There was no finding that the schedule provides for compensation lower than what is fair. There was testimony that the 1969 schedule was arrived at by adding 5% to the 1968 schedule, but no testimony as to how the 1968 schedule was determined. For a 100-bed home, whatever its rate of occupancy, the 1969 schedule yields an allowance of $15,225 or $152.25 per patient, or about 42 per patient day in the per diem rate. The 1968 schedule would have yielded $14,500, or, if the actual rate of occupancy was less than 95%, $152.63 per patient, or about 42 per patient day. This computation demonstrates that the cost of living increase was illusory, but it falls short of a demonstration that the resulting rates were unfair or unreasonable.
On its face, the schedule looks like a schedule of single salaries for administrators rather than a schedule of aggregate amounts for several persons performing administrative services. Although pars. 4 (A) (1) and 4 (D) can be read as applying the schedule to the aggregate of all owners, officers and administrators, the commission apparently reads them to permit additional compensation for administrative services where a second owner performs such services. The regulation is sufficiently ambiguous to permit the commission's reading, and it is not invalid when so read. Nor is it fatal that the owner of one nursing home may work both there and in a second home; in such cases the scheduled allowance applies to his compensation in his own home but not in the second home.
7. Return on equity capital. Paragraph 4 (E) of the 1969 Regulations provides for an allowance of 9% for return on equity capital, computed on the basis of 100% occupancy of *466 total bed capacity. Paragraph 8 (e) defines equity capital, with immaterial exceptions, as assets less liabilities as determined by the balance sheet submitted annually by each nursing home. The master concluded that these provisions were unfair and unreasonable in (a) basing the computation on 100% occupancy, (b) failing to allow an adjustment for a nursing home which had used accelerated depreciation for other purposes, and (c) failing to take into account either corporate income taxes or relative risks and rates of return in other industries.
The objection to computation based on 100% occupancy relates in part to the difference between licensed bed capacity and total bed capacity, discussed under point 5 above. The master found that, in computing the 9% return on equity for new homes, it was the policy of the commission to consider licensed bed capacity as the equivalent of total bed capacity, but he found nothing in the regulations to support the policy. For the reasons stated under point 5, these findings do not show the regulation to be invalid. The objection also rests on the fact that 100% occupancy is virtually impossible to attain, average occupancy being 94%. This means only that for the average nursing home the allowance for return on equity is 8.46% instead of 9%. See the discussion of the impact of income taxes, below.
The master found that most Massachusetts nursing homes use straight-line depreciation for all purposes. But, he found, a nursing home which in prior years used accelerated depreciation would receive a smaller allowance for return on equity than an identical home which used straight-line depreciation. The commission would allow recalculation to straight-line depreciation in such cases, but nothing in the regulations authorized such a recalculation, and nursing home operators were not aware of the commission's position until the hearings before the master. This objection, like the related objection that no return on equity is allowed for fully depreciated assets, seems to ignore par. 8 (b) providing for a depreciation allowance "based on accepted accounting principles" and "the straight line method of calculation." Accepted *467 accounting principles allow the recovery of the cost of an asset through depreciation, but they do not allow that cost to be so recovered twice, and they require that the book value of the asset be reduced by an amount equal to depreciation expense. The commission, it seems to us, followed its regulations faithfully in allowing recalculation of depreciation taken for purposes other than rate purposes, and the regulations were fair and reasonable in these respects. See Priest, Principles of Public Utility Regulation, 112-138, 172 (1969); Phillips, The Economics of Regulation, 191-206, 244-251 (1965); Bauer, Updating Public Utility Regulation, 4-10, 77-78 (1966). Cf. New England Tel. & Tel. Co. v. Department of Pub. Util. 360 Mass. 443, 477-478 (1971).
The 9% rate of return is computed without provision for corporate income taxes and, the master found, is equivalent to about 4% to 7% after such taxes. The rate was based on a rate published by the Social Security Administration in connection with Medicare programs. There was no meaningful independent analysis or investigation, on a comparative basis or otherwise, of its fairness and reasonableness as applied to Massachusetts nursing homes. It is about half the average return to utility companies in the country, and the risk to capital is greater in the nursing home industry than in the public utility industry. The 9% rate is slightly less than half the average rates of return for corporations other than utilities and financial institutions.
In the absence of evidence of the overall impact of the 1969 Regulations, these findings do not show that the regulations are inconsistent with the commission's responsibility to establish "fair and reasonable rates of payment." We are not even told how the rates set by the commission compare with those charged to private patients. The plaintiffs seek a system of government contracting based on 100% of all "fair and reasonable costs," plus 11%, after taxes, on invested capital. Cf. Boston Gas. Co. v. Department of Pub. Util. 359 Mass. 292, 302-306 (1971); New England Tel. & Tel. Co. v. Department of Pub. Util., supra, at 471-478. A system of full cost reimbursement, even if costs are closely *468 supervised, may eliminate incentives to efficient operation and lead to wasteful cost increases. See Paul, United States Government Contracts & Subcontracts, 86-87 (1964); Staley, Incentive Contracting: Government Point of View, Southwestern Legal Foundation, Government Contracts and Procurement, 1, 7-9, 28-30 (1964). A member of the commission testified, for example, to the possibility that two owners of separate nursing homes could arrange to perform services in each other's homes, avoiding the limitations on allowances for services by owners. In view of such possibilities, we do not find it unreasonable to limit the return on capital to a rate less than is allowed to closely regulated monopolies and less than is expected in unregulated private industry.
8. Depreciation. Paragraph 8 (b) of the 1969 Regulations provides for an allowance for depreciation based on original acquisition cost, with stated useful lives, and on the straight-line method of calculation. Where there has been a change of ownership after 1966, however, depreciation allowances are based on stated dollar amounts per bed or, where actual construction took place in 1968 or 1969, limited to construction or acquisition costs. The figures, the master found, were arrived at by taking average construction and equipment costs for the years 1960 through 1967 and applying correction factors for replacement costs in 1969. The limitations were a reaction to the high capital cost of homes which were being sold. Since the commission knew that nursing homes were being sold at higher per bed costs, in transactions not shown to be other than arm's length, the master concluded that the limitations were "not fair and reasonable under a cost reimbursement system."
We draw a different conclusion. There was testimony that the value of nursing homes rose after 1966, that homes were currently selling for more than the amounts set forth in the regulations, and that those amounts had been submitted to the commission at its direction as limitations on appreciation for homes with a high capital cost "because of frequent change in ownership." We infer that past rates established *469 by the commission and expectations as to future rates had produced active trading in nursing homes at rising prices, and that the commission validly acted to limit such expectations to fair and reasonable rates based on average original costs adjusted for inflationary changes in such costs. Cf. Priest, Principles of Public Utility Regulation, 188-190 (1969); Bauer, Updating Public Utility Regulation, 77-78 (1966).
9. Legal and accounting expenses. Paragraphs 8 (c) and 8 (d) of the 1969 Regulations include legal, accounting and auditing fees in reimbursable cost, but exclude such fees for services in connection with rate appeals to the commission. The master concluded that the exclusions are consistent with the general rule in matters involving litigation and are fair and reasonable in the circumstances. We agree. See Aiello v. Commissioner of Pub. Welfare, 358 Mass. 91, 92 (1970). Compare Cabot Nursing Home, Inc. v. Rate Setting Commn. 359 Mass. 686, 690-691 (1971).
10. Educational expenses. Paragraph 8 (f) of the 1969 Regulations states that educational expenses will be allowed up to 50% of the total costs incurred for non-owner employees if conducted by recognized schools or other approved groups for administration and nursing. The master found that the Department of Public Health recommends that nursing home personnel take advantage of continuing educational opportunities, but that they are not required to do so. Programs and assistance are available through the Department of Public Health. The master concluded that the limitations on reimbursement are fair and reasonable. We agree. The result is to reimburse the expenses only if the owners and administrators think the expenses are sufficiently useful to justify spending some of their own money. The alternative would be for the commission to review and approve the educational programs in advance.
11. Fringe benefits. Paragraph 8 (h) of the 1969 Regulations allows reimbursement of 75% of premium costs of the first $2,000 of coverage under group life, accident and dismemberment insurance, and 75% of total premium costs *470 for health insurance. Fifty per cent of full-time employees must be covered. The master found that some homes pay none of this cost and others vary in percentage of cost covered up to 100%. The 75% limitation was determined on the basis that the State, counties and municipalities pay that percentage for their employees. Nursing homes compete with hospitals for personnel, and reimbursement of hospitals for such costs is limited only by the test of reasonableness. The master concluded that the 75% limitation was not based on relevant considerations, and that it is not fair and reasonable to limit reimbursement except by the test of reasonableness.
We agree that the reason given for the 75% limitation does not support it. The governmental units referred to pay 75% of the premium cost for their employees; a nursing home which adopted a similar plan would be allowed as a reimbursable cost only 75% of the 75%. Nevertheless, we think the regulation was within the discretion of the commission, in the interest of uniform treatment of nursing homes with different policies and for the reasons given above with respect to educational expenses.
12. Decrees are to be entered by the single justice declaring that the 1969 Regulations were validly adopted by the commission and that St. 1969, c. 800, § 6, is not unconstitutional on its face or as construed and applied to the plaintiffs.
So ordered.
NOTES
[1] Fairmount Nursing Home, Inc., Clark Manor Nursing Home Corp., and Adams Nursing Home of Williamstown, Inc.
[2] Commissioner of Public Welfare and Attorney General.
[3] Daniels Nursing Home, Inc., Francis Manor Nursing Home, Inc., Deering Nursing Home, Inc., and Quentin M. Gehlin vs. Rate Setting Commission and Attorney General.
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53 F.Supp.2d 91 (1999)
In re the Application of John WALSH.
No. Civ.A. 98-11638-WGY.
United States District Court, D. Massachusetts.
June 11, 1999.
*92 E. Chouteau Merrill, Brown, Rudnick, Freed & Gesmer, Boston, MA, for John Walsh, plaintiff.
Thomas J. Barbar, Anne Marie Corraro, Cambridge, MA, Robert G. Najarian, Jr., Law Offices of Donald H. Jackson, Jr., Hanover, MA, for Jaqueline Walsh, defendant.
Bernard J. Bonn, III, Dechert, Price & Rhoads, Boston, MA, for Martha R. Miller, interested party.
MEMORANDUM AND ORDER
YOUNG, Chief Judge.
A. Introduction
On December 18, 1998, this Court entered a Judgment and Findings of Fact and Conclusions of Law (collectively, "the Order") granting the petition of John Walsh under the International Abduction Remedies Act (the "Act"), 42 U.S.C. §§ 11601-11610 (1998), thereby requiring the return of his two young children, Eoghain and Mary Kate Walsh, to Ireland, their country of habitual residence. See In re the Application of John Walsh, 31 F.Supp.2d 200 (D.Mass.1998). In significant measure, this Order vindicates the dignity of the courts of Ireland. See id. at 207. While preparations were being made for the children's return, the children's mother, Jacqueline Walsh ("Jacqueline"), and their aunt, Martha Miller, filed a Motion to Dismiss or Vacate the Order on the basis of the "fugitive disentitlement" doctrine.
Under certain circumstances, the doctrine of fugitive disentitlement permits a court to dismiss proceedings brought before it by an individual who has challenged a court's dignity by fleeing its jurisdiction. This doctrine is potentially relevant to this action because the petitioner, John Walsh, fled the United States after he became the subject of a default warrant for assault with intent to murder in the Commonwealth of Massachusetts. While the Findings of Fact underlying this Court's Order have been determined and will not be reconsidered or disturbed, this Court stayed its Order for thirty days to consider the applicability of the fugitive disentitlement doctrine to the established record even though this legal challenge to the petition was not raised at trial.
B. Background
The facts of this case are described in great detail in the Order and will only briefly be recounted here. In 1993, John Walsh was arrested by the police in Malden, Massachusetts for assault with intent to murder a neighbor who he believed "had dealt the drugs that caused the death of another Malden youth from an overdose." Id. at 202. After his arraignment in 1994, but prior to trial, John fled to his homeland of Ireland. See id. Jacqueline, John's American wife, was "[p]regnant with their second child [and] followed" with their daughter Mary Kate. Id. A default warrant for the arrest of John Walsh issued thereafter in Massachusetts. See id.
After a few years of drinking, violence, and legal skirmishing, Jacqueline violated an Irish court order by absconding with the two children to Massachusetts. See id. Taking a sudden interest in his family, John Walsh filed a petition under the Act seeking the return of the children to Ireland. See id. As described above, this Court granted the petition but required John Walsh to make certain preparations before the children were to be returned. See id. Just as those preparations neared completion, Jacqueline and the children's aunt, as an intervenor, brought the instant Motion to Dismiss or Vacate.
*93 John Walsh has conducted all of the described litigation from his distant home in Tramore, Ireland and has yet to make a personal appearance. This Court recently asked the Attorney General of the Commonwealth of Massachusetts whether he intended to "seek extradition of John Walsh under the Treaty of Extradition Between the United States of America and Ireland, T.I.A.S. No. 10813." See Letter from Young, C.J., to Massachusetts Attorney General Thomas Riley of January 21, 1999, at 1. To date, the Attorney General has not initiated any extradition proceedings.
C. Fugitive Disentitlement
The equitable doctrine of fugitive disentitlement "limits access to courts by a fugitive who has fled a criminal conviction in a court in the United States." Magluta v. Samples, 162 F.3d 662, 664 (11th Cir. 1998). In essence, this doctrine, were it to be applied in this case, seeks to vindicate the dignity of the orders of the Malden District Court. Under the doctrine, courts can "sanction parties where their fugitive status has some connection to the proceeding." Pharaon v. Board of Governors of Fed. Reserve Sys., 135 F.3d 148, 151 (D.C.Cir.1998), cert. denied, ___ U.S. ___, 119 S.Ct. 371, 142 L.Ed.2d 307 (1998) (emphasis added) (internal quotations omitted). The Supreme Court has emphasized the importance of this "nexus" requirement. See Ortega-Rodriguez v. United States, 507 U.S. 234, 246, 113 S.Ct. 1199, 122 L.Ed.2d 581 (1993) (refusing to expand fugitive disentitlement doctrine and dismiss proceedings for "any conduct that exhibited disrespect for any aspect of the judicial system" because "[s]uch a rule would sweep far too broadly....").
Recently, under circumstances similar to the present case, the Sixth Circuit invoked the doctrine of fugitive disentitlement to dismiss a petition under the Act. See Prevot v. Prevot, 59 F.3d 556, 566-67 (6th Cir.1995). Even though fugitive disentitlement is not contemplated by the Act, the Prevot court held "nothing in the Convention or the Act [] purports to strip an American court of the powers inherent to it as a court." Id. at 566. Since the respondents essentially rest their entire argument on Prevot, a careful comparison of the factual underpinnings of Prevot to the record in this case is required. Such comparison, coupled with recent Supreme Court teachings and the absence of any active extradition proceedings against John Walsh, counsel this Court to deny the Motion to Dismiss or Vacate.
D. Prevot v. Prevot
In Prevot, Jean-Claude Prevot brought a petition under the Act to obtain the return of his two children to France after his wife, Debra, had removed them to the United States. See id. at 558. Several years earlier, Jean-Claude had fled the United States with Debra and the children to avoid court ordered restitution payments that were part of a plea arrangement entered in a theft charge against him in a Texas state court. See id. at 558-559. By fleeing the United States, Jean-Claude violated his probation and would have faced a ten-year prison term were he to return to the United States. See id. at 559. Despite Mr. Prevot's fugitive status, the District Court granted the petition and ordered the children returned to France. See Prevot v. Prevot, 855 F.Supp. 915, 922 (W.D.Tenn.1994). On appeal, the Sixth Circuit reversed and remanded with instructions to dismiss. See Prevot, 59 F.3d at 567.
After exhaustively discussing the history of and various rationales for the fugitive disentitlement doctrine, and recognizing that its application to the Act was a matter of first impression, the Sixth Circuit reasoned that the petition should have been dismissed on the grounds that the petitioner's "fugitivity, and his actions, constitute abuses to which a court should not accede." Id. at 567. As for the requisite nexus, the court stated:
*94 Mr. Prevot's flight and his subsequent invocation of [the Act] were ... "related components of a general scheme." He fled to escape his criminal conviction and other responsibilities to court, probation officers, victim and government, and to assemble and hold his family in a refuge beyond the reach of American courts and American responsibilities. In Mr. Prevot's hands [the Act] is a tool used to permit him to escape American justice and responsibilities while holding his children with him. Flight was but one step, and [a claim under the Act] the latest link, in a chain of proximately related events that began with the Texas conviction and ended in the district court proceedings in this case. It is obvious that if Mr. Prevot returned to the United States and was imprisoned he could not successfully maintain [a claim under the Act.] Either the habitual residence of the children would have changed, or they would no longer be in his custody, or the exceptions relating to risk of harm to the children would apply.
Id.
Respectfully, this Court cannot endorse the Sixth Circuit's reliance on Prevot's tenuous chain-of-events analysis to support application of the fugitive disentitlement doctrine. The Prevot court merely glamorizes an unrelated act of "judicial defiance" in contravention of the Supreme Court's teachings in Ortega-Rodriguez. See Ortega-Rodriguez, 507 U.S. at 246, n. 17, 113 S.Ct. 1199. The reasoning in Prevot renders the nexus requirement meaningless any flight from justice and later attempt to reunite family could easily be dubbed a "chain of proximately related events" and automatically disentitle a fugitive from proceeding under the Act.[1]
Even if this Court chose to follow Prevot and essentially abandon the nexus requirement, the fact that John Walsh merely eluded a criminal allegation, rather than a conviction, prevents this Court from extending the Prevot holding to the facts of this case. As recounted above, the Sixth Circuit emphasized that Mr. Prevot could not "successfully maintain" a claim under the Act if he were to return to the United States because he faced certain imprisonment. Prevot, 59 F.3d at 567. Without a waiting caretaker, the court could not have ordered the return of the Prevot children to France. See id. Here, however, John Walsh would return to face a fair trial with the corresponding presumption of innocence. He might very well return to Ireland after resolution of his case and "successfully maintain" his petition. Accordingly, this Court refuses to apply the fugitive disentitlement doctrine in the absence of stronger precedent.[2]
E. Extradition
As a final matter, although John Walsh has participated in this litigation from his *95 "hideout" in Ireland, see Intervenor Rep. Mem. at 1, he has never actually been outside the reach of the Massachusetts authorities. Under the Treaty of Extradition Between the United States of America and Ireland, Jan. 3, 1985, T.I.A.S. No. 10813, the United States and Ireland "agree[] to extradite to the other, ... any persons, including its citizens or nationals, who are wanted for prosecution or the imposition or enforcement of a sentence in the Requesting State for an extraditable offense."[3]Id. at art. 1. While this Court fully recognizes that extradition is neither a straightforward nor simple legal device, the failure of Massachusetts authorities even to initiate extradition proceedings after four years and a direct inquiry by this Court suggests that, given the array of other pressing issues confronting the Massachusetts Attorney General, vindication of the warrant of the Malden District Court is not particularly high on his list. But see Cellucci Targets Backlog of Outstanding Warrants, Boston Globe, Jan. 21, 1999, at F8 (discussing Massachusetts Governor Paul Cellucci's newly announced plan to make fugitives more accountable to the courts in wake of recent report of State Senator Cheryl Jacques detailing backlog of 275,000 outstanding warrants). Thus, even if this Court were empowered to apply the doctrine of fugitive disentitlement to this case, which it is not, it would be reluctant to apply a protectionist doctrine in order itself to champion the Commonwealth's judicial system when the Commonwealth's own chief law enforcement officer appears unwilling to devote enforcement resources to the same issue. Cf. Ortega-Rodriguez, 507 U.S. at 246, 113 S.Ct. 1199 (holding that Court of Appeals should not have applied fugitive disentitlement doctrine when fugitive had been recaptured because District Court had "authority to defend its own dignity, by sanctioning an act of defiance that occurred solely within its domain") (emphasis added).
F. Conclusion
For the foregoing reasons, the Motion to Dismiss or Vacate is DENIED. However, in view of the fact that the issues addressed in the Court's December 18, 1998 Order and the present Memorandum and Order concern matters of first impression in the First Circuit, execution of the Order is STAYED pending appeal.
NOTES
[1] The intervenor similarly attempts to elevate the chain-of-events in this case to the level of a nexus by stating that John Walsh "[set t]he international stage." Intervenor Rep.Mem. at 1; Jan. 20 Mot.Sess.Tr. at 3. No matter what the chain of events is called, it still does not constitute a nexus.
[2] Counsel for John Walsh also argue that Prevot was implicitly overruled by Degen v. United States, 517 U.S. 820, 116 S.Ct. 1777, 135 L.Ed.2d 102 (1996), wherein the Supreme Court held that striking a fugitive defendant's pleadings in a civil forfeiture action, and subsequently entering summary judgment against him, was "too blunt an instrument for advancing" the need to redress indignity visited upon the District Court. Id. at 828. While Degen certainly is in tension with Prevot, it does not overrule Prevot. The key distinction between Degen and Prevot is the manner in which fugitive disentitlement was asserted. In Prevot, fugitive disentitlement was used as a shield to prevent a fugitive from bringing claims in an American court. In Degen, on the other hand, the government attempted to use fugitive disentitlement as a sword to prevent a fugitive from responding to claims brought against him in an American court. Degen also does not control the outcome of the present case because the Supreme Court "acknowledge[d] disquiet" in the fact that the fugitive in that case conducted his litigation from Switzerland where he was not subject to extradition. Id. at 828. In this case, however, the fugitive in question is subject to extradition. See infra Part E.
[3] A review of the treaty clearly indicates that the charge pending against John Walsh in Massachusetts is an "extraditable offense." See id. at art. 2.
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766 F.Supp. 901 (1991)
Ibrahim Ahmed DALIS, Petitioner,
v.
Michael BRADY, INS, District Director, Respondent.
No. 90-C-2304.
United States District Court, D. Colo.
June 4, 1991.
*902 Vicki Mandell-King, Asst. Federal Public Defender, Denver, Colo., for petitioner.
George Gill, Asst. U.S. Atty., Denver, Colo., for respondent.
ORDER
CARRIGAN, District Judge.
Petitioner, Ibrahim Ahmed Dalis, who is currently incarcerated at the INS Detention Facility, commenced this action seeking a writ of habeas corpus. The case was assigned to Magistrate Judge Donald E. Abram who reviewed the matter and prepared a recommendation pursuant to Local Rule 605. The Magistrate Judge has recommended that the petition be granted. Copies of both the recommendation and the Local Rule were mailed to the petitioner and the respondent on May 15, 1991. In response to the Magistrate Judge's recommendation, the parties have stipulated that the petition be granted based on the reasoning set forth in the Magistrate Judge's recommendation.
I have reviewed the entire file, including the Magistrate Judge's recommendation and the parties' stipulation. The recommendation appears to be supported by the law and the facts, and I therefore adopt it as the order of this court.
Accordingly IT IS ORDERED that:
(1) the Magistrate Judge's recommendation is adopted as the order of this court;
(2) the petition for writ of habeas corpus is granted;
(3) pursuant to the parties' stipulation, the petitioner shall be released immediately;
(4) petitioner shall be subject to supervision as provided in 8 U.S.C. § 1252(d); and
(5) pursuant to the parties' stipulation, the stay of deportation shall remain in effect until further order of this court.
D.E. ABRAM, Chief United States Magistrate Judge.
Petitioner, Ibrahim Ahmed Dalis, currently incarcerated at the INS Detention Facility, has filed a petition for writ of habeas corpus pursuant to 28 U.S.C. § 2254. Petitioner, an Arab citizen of Israel admitted as a nonimmigrant student, has asserted that he is being illegally detained in violation of his rights of due process, right to bail and rights of equal protection. He has named as Respondent the INS District Director. A hearing was held on April 10, 1991. At that hearing Respondent offered to release Petitioner on a $15,000 bond. Petitioner asserted that he could not afford the $15,000 bond. A Public Defender was appointed Petitioner and on April 24, 1991 a second hearing was held in which both sides presented their arguments concerning the release of Ibrahim Ahmed Dalis.
Pursuant to Rule 605 of the Local Rules of Practice of the United States District Court for the District of Colorado, this matter has been referred to Magistrate Judge Donald E. Abram. Magistrate Judge Abram has reviewed the Petition *903 and the applicable law, and hereby recommends that the Petition be granted.
ASSERTIONS
In July of 1986, Petitioner was arrested by state authorities in Toledo, Ohio for criminal charges.[1] Bond was set at $10,000. Petitioner asserts, however, that when Petitioner attempted to meet bail he found that an "Immigration hold" had been placed on him. Petition, p. 7 ¶¶ 2-4. Petitioner asserts that no bond was ever set by the INS. Petition, p. 7 ¶ 6. Deportation proceedings commenced and Petitioner was found deportable and ordered deported in February of 1989. Petition, p. 8 ¶ 11.
I. Petitioner asserts that he has been held under a "warrantless arrest" and should therefore have been interviewed and been informed of his rights within 24 hours of his "Immigration hold." Petitioner asserts that the "Immigration hold" expired after 24 hours. Petitioner asserts that he should have been allowed to post bail and be released before the institution of deportation proceedings or released on personal recognizance, pending the outcome of the criminal proceedings. Petition, p. 7 ¶¶ 7-9.
II. Petitioner also asserts that the INS violated its own policy by instituting the deportation proceedings while Petitioner was still in confinement. Petitioner states that he is not an "aggrevated [sic] felon" and therefore this was improper policy. Petition, p. 8 ¶ 10.
III. Petitioner further asserts that he was released from confinement on June 25, 1990 and transported to Lucas County Jail in Toledo and held until June 28, 1990 to allow the INS to resume custody of Petitioner. Petitioner asserts that this was illegal confinement for over 48 hours. Petition, p. 8 ¶ 12.
IV. Petitioner was transported to WSI/INS Processing Center in Aurora, Colorado on June 28, 1990 to await deportation to Israel after a final administrative order of deportation. Petitioner asserts that no bond has been set for release from detention. Petitioner further asserts that he has been held illegally past the six month limitation. Petitioner now seeks his immediate release from detention and requests release on bond while this petition is being adjudicated. Petition, pp. 8-9, ¶¶ 13-15.
EXHAUSTION OF REMEDIES
Exhaustion of available and adequate administrative remedies is a prerequisite to all habeas corpus petitions in federal court. 28 U.S.C. § 2254(b). The procedure to exhaust administrative remedies of bond determinations starts with the Immigration Judge. The Immigration Judge has original jurisdiction to hear review of a bond request unless a final order of deportation has been rendered. 8 C.F.R. § 242.2(d) (1990). However, no appeal shall be allowed when the Service notifies the alien that it is ready to execute the order of deportation and takes him into custody for that purpose. 8 C.F.R. § 242.2(d) (1990). In this case, Petitioner has been taken into custody pending the execution of the final order of deportation. Because no appeal is available to Petitioner under these circumstances, Petitioner has effectively exhausted his administrative remedies. 8 C.F.R. § 242(d) (1990); 28 U.S.C. § 2254(b). This Court therefore has jurisdiction to review this Petition.
I. WARRANTLESS ARREST
Petitioner's first assertion was that he was held under an "Immigration hold." Petitioner asserts that an "Immigration Hold" is a warrantless arrest and that he should therefore have been interviewed and been informed of his rights within 24 hours of his "Immigration Hold." Petition, p. 7, ¶¶ 7-9. Petitioner cites to 8 C.F.R. § 287.3. Respondents argue, and this Court agrees, that Petitioner was not held on an "Immigration Hold," but on an "Immigration Detainer." See Administrative Record (A.R.) 000085. An Immigration Hold under 8 *904 C.F.R. § 287.3 discusses illegal entries and the stopping of aliens suspected of being in the Country illegally. An "Immigration Detainer" is not a warrantless arrest and is found under a separate section of the Code, 8 C.F.R. § 242.2. The Immigration Detainer was properly administered in accordance with 8 C.F.R. § 242.2 with the appropriate form as required by that section. A.R. 000099. Because this Court finds that there was no warrantless arrest and the procedures for proper detention have been followed, Petitioner did not have a right to be interviewed and informed of his rights within 24 hours under 8 C.F.R. § 287.3 and this Court recommends that this ground of the Petition be dismissed.
II. "AGGRAVATED FELON"
Petitioner also asserts that the INS violated its own policy by instituting the deportation proceedings while Petitioner was still in confinement. Petitioner states that he is not an "aggrevated [sic] felon" and therefore this was improper policy. Under 8 U.S.C. § 1252(i), it states, "In the case of an alien who is convicted of an offense which makes the alien subject to deportation, the Attorney General shall begin any deportation proceeding as expeditiously as possible after the date of the conviction."
It is true, as Petitioner suggests, that conviction as an "aggravated felon" would implicate 8 U.S.C. § 1252(i). However, being an aggravated felon is not the only type of conviction which would implicate this section. While Petitioner was not charged as an "aggravated felon," Petitioner was found to be guilty as one who committed a "crime of moral turpitude" under 8 U.S.C. § 1251(a)(4). See, A.R. 000068 [citing to the Statutes at Large, Immigration and Nationality Act, Pub.L. No. 414, § 241(a)(4), 66 Stat. 204 (1952)]. A "crime of moral turpitude" is subject to the expeditious nature of 8 U.S.C. § 1252(i). Because Petitioner was found guilty of a "crime of moral turpitude," it was proper for the Service to begin deportation proceedings while Petitioner was incarcerated. 8 U.S.C. §§ 1251(a)(4), 1252(i).
III. TEMPORARY DETENTION FOR OVER FORTY-EIGHT HOURS
Petitioner further asserts that he was released from confinement on June 25, 1990 and transported to Lucas County Jail in Toledo and held until June 28, 1990 to allow the INS to resume custody of Petitioner. Petitioner asserts that this was illegal confinement for over 48 hours. 8 C.F.R. § 242.2(a)(4). While it may be true that the Service held Petitioner past the allowed 48 hours, Petitioner has alleged no injury for the extra few hours of which he was held. Further, even if as Petitioner asserts, he was held for a brief time past the allowed 48 hours, this does not entitle Petitioner to the drastic remedy of habeas corpus. The federal habeas statute empowers the federal courts to dispose of the matter "as law and justice require." 28 U.S.C. § 2243; see also Kuhlmann v. Wilson, 477 U.S. 436, 447, 106 S.Ct. 2616, 2623, 91 L.Ed.2d 364 (1986). Kuhlmann states, "the Court has reaffirmed that `habeas corpus has traditionally been regarded as governed by equitable principles.' The Court uniformly has been guided by the proposition that the writ should be available to afford relief to those `persons whom society has grievously wronged' in light of modern concepts of justice." Id. at 447, 106 S.Ct. at 2623. Law and justice would not require such drastic relief as granting release from custody merely because the Petitioner, while awaiting transfer of custody, was held for a short amount of time past the allowed forty-eight hours. Petitioner has alleged no prejudice or injury by this short wait during transfer.
IV. BOND AND DETENTION REVIEW
Petitioner asserts that he is entitled to be released on bond and that it is a violation of his rights of due process and right as against excessive bail to be denied bond. Petitioner also asserts that his current detention is illegal. The Federal District Court does not have jurisdiction to review an INS deportation order. Direct review of a deportation order must be taken *905 exclusively in the U.S. Court of Appeals. INA § 106(a), 8 U.S.C. § 1105a(a). However, bond determinations and review of detention for aliens awaiting deportation are properly reviewable before this Court. Bond determinations are reviewable as separate and distinct from deportation hearings and have been held to be subject to review by a district court. In Gornicka v. Immigration and Naturalization Service, 681 F.2d 501 (7th Cir.1982), the court held,
Thus it is clear bond hearings are separate and apart from deportation hearings. The consideration taken into account in a bond hearing do not form part of the record in the deportation proceeding. Whether or not bond is required has no bearing on whether a final order of deportation will be entered. A bond determination is not a final order of deporation, is not made during an administrative proceeding under section 1252(b), and does not effect the deportation proceeding.
Id. at 505. (footnote omitted).
The Federal District Court may review the Petitioner's detention and review the Petitioner's lack of release on bond. This review, however, is limited to whether the Attorney General is proceeding with reasonable dispatch to effectuate deportation and if the Attorney General has effected deportation within six months of the final order of deportation. 8 U.S.C. § 1252(c) states:
When a final order of deportation under administrative processes is made against any alien, the Attorney General shall have a period of six months from the date of such order, or, if judicial review is had, then from the date of the final order of the court, within which to effect the alien's departure from the United States, during which period, at the Attorney General's discretion, the alien may be detained, released on bond in an amount and containing such conditions as the Attorney General may prescribe, or released on such other condition as the Attorney General may prescribe. Any court of competent jurisdiction shall have authority to review or revise any determination of the Attorney General concerning detention, release on bond, or other release during such six-month period upon a conclusive showing in habeas corpus proceedings that the Attorney General is not proceeding with such reasonable dispatch as may be warranted by the particular facts and circumstances in the case of any alien to effect such alien's departure from the United States within such six-month period.
Thus, release of custody, the setting of bond, or detention are under the discretion of the Attorney General. This discretion is limited, however, to the six months following final order of deportation and upon proceeding with reasonable dispatch to effect departure. If there has been no deportation within the six-month period, the Petitioner must be released subject to supervision as provided for in 8 U.S.C. § 1252.
A. REASONABLE DISPATCH TO EFFECT REMOVAL
On February 7, 1989, the Immigration Judge issued Petitioner's deportation order. A.R. 000067-000069. Petitioner was also notified that if he wished to appeal that he must do so by February 21, 1989. A.R. 000066. On June 22, 1990, the Service issued a Warrant of Deportation against Petitioner. A.R. 000059. On July 6, 1990 Petitioner submitted an appeal of the Order of Deportation to the BIA. A.R. 000048. Petitioner also filed a Motion for Leave to Proceed Out of Time. A.R. 000045. On December 7, 1990, the BIA denied review on the merits because of the untimeliness of the appeal.[2]
Petitioner has presented no assertion that the Attorney General is failing to seek deportation diligently. Petitioner has, however, asserted that the Attorney General has exceeded the six months in which to effect deportation. Under 8 U.S.C. § 1252(c), the Attorney General has six *906 months from the date of the final order of deportation or if there is judicial review, of confirmation of that order by appeal "from the date of the final order of the court." Id. Petitioner and Respondent disagree as to whether a "dismissal for untimeliness" is a final order of the Court. If such a dismissal is a final order of the Court, the Attorney General would have an additional six months of time in which to detain Petitioner pending deportation.
Petitioner asserts that the date of measurement for the six months in which to effectuate final deportation is the date that he was taken into custody by the service. Petition, p. 8 ¶ 15. Petitioner cites to § 242(c) of the Act [codified at 8 U.S.C. § 1252(c)]. The applicable portion of which Petitioner refers to states,
For the purposes of this section an order of deportation heretofore or hereafter entered against an alien in legal detention or confinement, other than under an immigration process, shall be considered as being made as of the moment he is released from such detention or confinement, and not prior thereto.
This section states that the six months in which to effect deportation shall begin commence from the moment of release from custody other than that of the "immigration process." Immediately before Petitioner was taken into custody by the Service and after the decision to deport Petitioner had been rendered, Petitioner was in the Custody of the Ohio Reformatory serving his criminal sentence for assault with a deadly weapon. Petitioner was released from confinement in the State prison on June 25, 1990 and held for three days to be retaken into custody by the Service. Respondents assert that 8 U.S.C. § 1252(c) (last sentence) is inapplicable and that the date of determination of the six months should be measured from the December 7, 1990 dismissal of the untimely appeal. Response, p. 2 ¶ 15. Respondents cite to the first sentence of 8 U.S.C. § 1252(c). "When a final order of deportation under administrative processes is made against any alien, the Attorney General shall have a period of six months from the date of such order, or, if judicial review is had, then from the date of the final order of the court...." Id. See also Response, p. 2, ¶ 15. (Admission that "The Service argues that the six-month period has not expired yet claiming that the dismissal of petitioner's appeal to the BIA updated the finality of the deportation decision." Petition, pp. 7-8, ¶ 15).
While it is true as Respondent suggests that the date to be measured by should be when Petitioner's final order of judgment occurred, this Court does not believe that a dismissal for "untimeliness" is a final order of the court. Further, the six month limitation on the Attorney General with which to effect deportation did not begin to run until Petitioner was released from state custody under the state charges. 8 U.S.C. § 1252(c) (last sentence). Petitioner's date of release from state custody was on June 25, 1990. The Attorney General had six months from that date to effect deportation or to release Petitioner from custody. However, even if Petitioner is released for failure to effectuate deportation, upon release Petitioner would still be subject to the supervision provided for in 8 U.S.C. § 1252.
B. APPEAL FROM THE FINAL ORDER
Respondents assert that because Petitioner appealed his order of deportation, (even though untimely and dismissed without addressing the merits), that the appeal should change the date of the final order of deportation. Respondents rely on the first sentence of 8 U.S.C. § 1252(c). Petitioner, however, asserts that a dismissal for untimeliness of appeal is not a final order of deportation under 8 U.S.C. § 1252(c) and therefore Petitioner has been held beyond the six months allowed the Attorney General.
Petitioner cites to 8 C.F.R. § 3.37, 8 C.F.R. § 243.1 and 242(b) of the Act. 8 C.F.R. § 3.37 states, "Except when certified to the Board, the decision of the Immigration Judge becomes final upon waiver of appeal or upon expiration of the time to appeal if no appeal is taken." Id. (emphasis added). Petitioner has not effectively appealed in this case. Petitioner's appeal *907 to the BIA was dismissed as untimely. 8 C.F.R. § 243.1 states,
Except as otherwise required by section 242(c) of the Act for the specific purposes of that section, an order of deportation, including an alternate order of deportation coupled with an order of voluntary departure, made by the special inquiry officer in proceedings under Part 242 of this chapter shall become final upon dismissal of an appeal by the Board of immigration Appeals, upon waiver of appeal, or upon expiration of the time allotted for an appeal when no appeal is taken; or, if such an order is issued by the Board or approved by the Board upon certification, it shall be final as of the date of the Board's decision.
If the appeal had been heard on the merits and dismissed by the BIA, there would in effect have been a new final order of deportation, and it would be proper to allow the Attorney General another six months in which to effect deportation. However, the BIA has not reviewed the Petitioner's appeal, but has summarily dismissed the appeal due to untimeliness. Petitioner should not be disadvantaged by having an additional six months of detention merely because he filed an untimely appeal. The purpose of the statute is to allow the petitioner an opportunity to have his claim reviewed and is in effect another order of deportation. Where there was no such review, the petitioner should not be disadvantaged. The federal habeas statute empowers the federal courts to dispose of the matter "as law and justice require." 28 U.S.C. § 2243; see also Kuhlmann v. Wilson, 477 U.S. at 447, 106 S.Ct. at 2623. Justice would not allow such a result in this case.
C. STAY OF DEPORTATION
Respondent further argues that "8 C.F.R. 3.6 provides that where a case is pending before the BIA, a stay of deportation is considered applied." Response, p. 2, ¶ 15. 8 C.F.R. § 3.6(a), entitled Stay of Execution of Decision, states,
Except as provided in § 242.2 of this chapter and paragraph (b) of this section, the decision in any proceeding under this chapter from which an appeal to the Board may be taken shall not be executed during the time allowed for the filing of an appeal unless a waiver of the right to appeal is filed, nor shall such decision be executed while an appeal is pending or while a case is before the Board by way of certification.
8 C.F.R. § 3.6 (1990).
Petitioner, in response asserts that this section only applies "to timely appeals within the allotted time for the appeal (10 days.)" Traverse, p. 3, ¶ 15.
In U.S. ex rel. Pupo-Tordecilla v. Sava, 704 F.Supp. 55 (S.D.N.Y.1989), the federal district court of New York ruled on 8 C.F.R. § 3.6 in a similar situation. In that case the alien was seeking a stay of deportation while his untimely appeal was being reviewed citing to 8 C.F.R. § 3.6. The court, however, interpreted 8 C.F.R. § 3.6 to not stay deportation proceedings upon the alien's untimely appeal.
Considering Sava, in light of Petitioner's case, 8 C.F.R. § 3.6 did not stay the deportation proceedings during Petitioner's untimely appeal and therefore did not stay the Attorney General's six month limitation to effect deportation. Petitioner's detention has gone beyond the six months allowed for the Attorney General to effect deportation. It is therefore recommended that Petitioner be granted the writ of habeas corpus.
RELEASE
Although it is recommended that Petitioner be released, 8 U.S.C. § 1252(d) states,
Any alien, against whom a final order of deportation as defined in subsection (c) of this section heretofore or hereafter issued has been outstanding for more than six months, shall, pending eventual deportation, be subject to supervision under regulations prescribed by the Attorney General. Such regulations shall include provisions which will require any alien subject to supervision (1) to appear from *908 time to time before an immigration officer for identification; (2) to submit, if necessary to medical and psychiatric examination at the expense of the United States; (3) to give information under oath as to his nationality, circumstances, habits, associations, and activities, and such other information, whether or not related to the foregoing, as the Attorney General may deem fit and proper; and (4) to conform to such reasonable written restrictions on his conduct or activities as are prescribed by the Attorney General in his case. Any alien who shall willfully fail to comply with such regulations, or willfully fail to appear or to give information or submit to medical or psychiatric examination if required, or knowingly give false information in relation to the requirements of such regulation, or knowingly violate a reasonable restriction imposed upon his conduct or activity, shall be fined not more than $1,000 or imprisoned not more than one year, or both.
Therefore, it is recommended that Petitioner be released without bond. However, this release should be subject to the supervision as provided for in the foregoing section of the United States Code.
IT IS THEREFORE RECOMMENDED that Petitioner Ibrahim Ahmed Dalis's Petition be granted. Petitioner should be released from detention without bond as he has been held past the six months allowed for the Attorney General to effect deportation. However, it is further recommended that Petitioner will continue to be held under I.N.S. supervision as is required under 8 U.S.C. § 1252(d).
FURTHER, IT IS ORDERED that under Rule 605 of the Local Rules of Practice of the United States District Court for the District of Colorado, the parties shall have ten (10) days after service hereof to serve and file any written objections in order to obtain reconsideration by the District Judge to whom this case is assigned. The party filing objections must specifically identify those findings or recommendations to which the objections are being made. The District Court need not consider frivolous, conclusive or general objections. A party's failure to file such written objections to proposed findings and recommendations contained in this report may bar the party from a de novo determination by the District Judge of the proposed findings and recommendations. United States v. Raddatz, 447 U.S. 667, 676-83, 100 S.Ct. 2406, 2412, 65 L.Ed.2d 424 (1980); 28 U.S.C. § 636(b)(1). Additionally, the failure to file written objections to the proposed findings and recommendations within ten (10) days after being served with a copy may bar the aggrieved party from appealing the factual findings of the Magistrate Judge that are accepted or adopted by the District Court. Thomas v. Arn, 474 U.S. 140, 155, 106 S.Ct. 466, 474, 88 L.Ed.2d 435 (1985).
LOCAL RULES OF PRACTICE
RULE 605
Prisoner Petitions
A. Subject to provisions of the United States Supreme Court Rules governing § 2254 and § 2255 cases, the uniform rules of ancillary forms for use in the district court within the Tenth Circuit have been adopted. These rules apply to pro se petitions for writs of habeas corpus pursuant to 28 U.S.C. §§ 2241 and 2254 and motions under Rule 35, Federal Rules of Criminal Procedure, and to civil rights complaints under 42 U.S.C. § 1983. Copies of the uniform rules and ancillary forms shall be made available upon request made to the clerk.
B. When presented for filing, pro se petitions under 28 U.S.C. §§ 2241 and 2254 and pro se complaints under 42 U.S.C. § 1983 shall be delivered to a magistrate who shall review the motion and affidavit to proceed in forma pauperis and rule thereon in accordance with 28 U.S.C. § 1915. If the motion is granted, the magistrate shall promptly review the file and, if there is any basis for jurisdiction and possible merit, the Magistrate shall direct the clerk to make service of process.
C. If the magistrate determines that the case may be dismissed pursuant to 28 *909 U.S.C. § 1915(d) or F.R.Civ.P. 12, the magistrate shall prepare a recommendation and appropriate order for consideration by a district judge, who shall at that time be selected as provided in Rule 200.
D. These cases shall be assigned to a district judge drawn by lot and to a designated magistrate. The assigned magistrate shall review promptly all further pleadings and may:
1. Issue such orders as may be needed to obtain a complete record.
2. Conduct such evidentiary hearings as may be necessary, including the conduct of on-site depositions and investigations.
3. Prepare appropriate findings and recommendations for consideration by the district judge, copies of which shall be mailed to the parties who shall have ten (10) days after service thereof to serve and file specific written objections thereto. If no such objections are timely filed, the magistrate's proposed findings and recommendations may be accepted by the district judge and appropriate orders entered without further notice.
4. Obtain the expected release date of inmates filing complaints under 42 U.S.C. § 1983 to determine when plaintiffs may be available for trial.
(Revisions Effective February 1, 1984)
NOTES
[1] Petitioner was arrested, charged, and convicted by a jury of Felonious Assault. A.R. 000092-000097. Petitioner had shot at his wife and her son while they were in their automobile. A.R. 000137-000138.
[2] The appeal was filed almost one and a half years after the time allotted for appeal. Petitioner was notified after the initial deportation order that he must appeal by February 21, 1989. A.R. 000066. Petitioner did not file an appeal until July 6, 1990. A.R. 000048.
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Third District Court of Appeal
State of Florida
Opinion filed February 20, 2019.
Not final until disposition of timely filed motion for rehearing.
________________
No. 3D17-1875
Lower Tribunal No. 05-32390
________________
Elvis Simeon,
Appellant,
vs.
The State of Florida,
Appellee.
An Appeal under Florida Rule of Appellate Procedure 9.141(b)(2) from the
Circuit Court for Miami-Dade County, Dennis J. Murphy, Judge.
Law Offices of Richard Rosenbaum, and Richard L. Rosenbaum (Fort
Lauderdale), for appellant.
Ashley Moody, Attorney General, and Christina L. Dominguez, Assistant
Attorney General, for appellee.
Before LOGUE, SCALES and LINDSEY, JJ.
PER CURIAM.
Elvis Simeon appeals a July 18, 2017 order denying, without an evidentiary
hearing, his Florida Rule of Criminal Procedure 3.850 motion alleging ineffective
assistance of trial counsel. In the rule 3.850 motion, Simeon alleged that defense
counsel provided him with inadequate representation at his October 15, 2015
probation violation hearing. Although the trial court correctly found that most of
the grounds set forth in Simeon’s rule 3.850 motion were either refuted by the
record or legally incorrect1, in its July 18, 2017 order, the trial court did not
address one facially sufficient ground alleged in Simeon’s motion, which, on
remand, the trial court should address.
I. RELEVANT FACTS AND PROCEDURAL BACKGROUND
In September 2006, Simeon was charged by information with second degree
murder with a deadly weapon and possession of a firearm by a convicted felon. In
August 2009, Simeon pled guilty and was sentenced, as a habitual felony offender,
to seven years in prison, with a three-year mandatory minimum, followed by six
years of probation. After serving his prison sentence, Simeon started serving his
six-year probation on November 1, 2012.
The record reflects that, in July 2015, the State filed an amended affidavit of
violation of probation based on technical violations for Simeon’s failure to report
to his probation officer and for Simeon’s moving from his residence without
permission. At the probation revocation hearing, after acknowledging that Simeon
“had some mental problems” and that Simeon had been “Baker Act[ed] at some
1 We affirm the denial of these other grounds without discussion.
2
time,” defense counsel stated that Simeon intended to admit to the technical
violations. After Simeon was duly sworn and he admitted to the technical
violations of his probation, the trial court sentenced Simeon to the twenty-five year
mandatory sentence on the underlying convictions (i.e., for second degree murder
with a firearm and possession of a firearm by a convicted felon).
In June 2017, Simeon, now represented by different counsel, filed a
sprawling, twenty-page rule 3.850 motion asserting multiple grounds.2 In this
sworn motion, Simeon asserted, among other things, that his prior defense counsel
was ineffective for failing to investigate and, at the probation violation hearing,
offer evidence of, Simeon’s mental illness. Specifically, Simeon alleged that he
had been “diagnosed as having a bi-polar disorder and a major depressive
disorder” for which he had been put on several medications to treat. According to
Simeon, he stopped taking his medications for lack of money after he lost his job,
and after he was “kicked out of his house.” Simeon, therefore, was purportedly not
on his prescribed medications when he (a) changed his residence without
permission, (b) failed to report to his probation officer, and (c) entered the open
plea at his violation of probation hearing. Simeon’s rule 3.850 motion asserts that
Simeon’s counsel was ineffective for failing to adequately investigate and advise
2 Simeon’s rule 3.850 motion is labeled as a “Successive Petition for Post-
Conviction Relief Based upon Manifest Injustice.” We note that this was Simeon’s
first post-conviction motion in lower tribunal case number 05-32390.
3
Simeon of possible defenses associated with Simeon’s mental health issues. The
trial court summarily denied Simeon’s motion without addressing this insular
claim.
II. ANALYSIS3 AND CONCLUSION
On this record, we conclude that, albeit somewhat buried in his motion,
Simeon did raise a facially sufficient claim of ineffective assistance of counsel,4
and the trial court’s order did not address this claim. See Medrano v. State, 892
So. 2d 508, 509 (Fla. 3d DCA 2004) (holding that defense counsel was ineffective
for failing to offer evidence of the defendant’s mental illness and treatment at the
probation violation hearing where the defendant’s “mental illness prevented him
from willfully or knowingly violating the terms of his probation”). Accordingly,
we remand to allow the trial court to address this claim in Simeon’s motion.5 If, on
3 “The standard of review of a summary denial of a rule 3.850 motion is de novo.”
Lebron v. State, 100 So. 3d 132, 133 (Fla. 5th DCA 2012). “To uphold the trial
court’s summary denial of claims raised in a 3.850 motion, the claims must be
either facially invalid or conclusively refuted by the record. Further, where no
evidentiary hearing is held below, we must accept the defendant’s factual
allegations to the extent they are not refuted by the record.” Peede v. State, 748
So. 2d 253, 257 (Fla. 1999) (citation omitted).
4 “A violation that causes a revocation of probation must be both willful and
substantial.” Copeland v. State, 864 So. 2d 1197, 1199 (Fla. 1st DCA 2004).
“[M]ental illness . . . can render a technical violation of probation ‘not substantial
or willful because a mental . . . . illness can be debilitating to the point that a
probationer cannot comply with the terms of probation.’” Id. (quoting Meade v.
State, 799 So. 2d 430, 432 (Fla. 1st DCA 2001)).
5 We express no opinion on the merits of this claim.
4
remand, the trial court denies the claim without conducting an evidentiary hearing,
then, in its order, the trial court should attach those portions of the record
conclusively showing Simeon is not entitled to relief. See Fla. R. Crim. P.
3.850(f)(5).
Affirmed in part, reversed in part, and remanded.
5
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110 B.R. 599 (1990)
In re Paula Lea McCOLLAM, Debtor.
Bankruptcy No. 89-33456-BKC-TCB.
United States Bankruptcy Court, S.D. Florida.
January 31, 1990.
*600 Barry L. Roseman, Smolar, Roseman & Barnes, Atlanta, Ga., Theodore A. Jewell, Palm Beach, Fla., for movant.
Douglass E. Wendel, Palm Beach, Fla., trustee.
Daniel L. Bakst, Ackerman, Bakst & Laver, P.A., West Palm Beach, Fla., for debtor.
ORDER ON OBJECTION TO EXEMPTION
A. JAY CRISTOL, Bankruptcy Judge.
The debtor has claimed on her Schedule B-4 as an exemption from the claims of creditors:
"Travelers Indemnity Co. annuity, exempt pursuant to Florida Statute 222.14."
This statutory provision, Fla.Stat. § 222.14, provides an exemption for:
"the proceeds of annuity contracts issued to citizens or residents of the state. . . . "
The objection of a creditor, Thomas E. LeCroy, to the claimed exemption of the annuity was heard September 26. The matter was heard in Judge Britton's absence and decided upon review of each party's written argument and cited authorities, and review of the record upon which the dispute is based. The objection is overruled and the claimed exemption is allowed.
The facts are undisputed. The debtor is a beneficiary under an annuity contract purchased by Travelers Insurance Co. to provide payments in connection with a general release and settlement agreement entered into on July 9, 1985. The debtor is a surviving child of Paul J. Coombs, whose death provided members of his family with a claim against National Car Rental System, Inc.; Maurice Elijah Moore, M.P.; and Travelers Insurance Co. Under the agreement, the debt obligation of Travelers is extinguished and discharged by the amount of each successive annuity payment.
The objecting creditor, Thomas E. LeCroy, has a claim against the debtor arising from an automobile accident that occurred on July 16, 1987, two years after the subject annuity contract was established.
An important consideration is that there was no reliance by the creditor LeCroy or any other creditor on existing funds of the debtor which it can be asserted were placed beyond the reach of creditors by the purchase of the annuity.
The first issue raised in the objection is that the statutory exemption for *601 proceeds of annuity contracts is not applicable to the payments made to the debtor. The creditor relies on the contrast of a comparable Louisiana statute[1] to Fla.Stat. § 222.14 to support this argument. However, the difference of including the word "payments" following the word "proceeds" in the Louisiana statute does not convince me that the Florida statute intends to exclude or must be interpreted to exclude "payments". In fact, under the UCC § 9-306(1) definition cited in the Brief in Support of Objection to Exemption (CP 10), the payments received by the debtor fall into the category of proceeds, i.e., "whatever is received upon the collection of collateral".
The debtor argues (Supplemental Response CP 11) that the logic of LeCroy's attack and conclusion is "strained to the limit" as it pertains to the interpretation of proceeds under Fla.Stat. § 222.14. I agree.
The second point raised in the Brief discusses the statutory requirement that an annuity be "issued to citizens or residents of the state." The objector elaborates upon this point with a grammatical and syntactical discourse on the word "issue". However, this court is convinced that the benefit received by the debtor which is derived from the issuance of the annuity brings this debtor within the class entitled to claim the § 222.14 exemption. The debtor is clearly the beneficiary. See In re Ebenger, 40 B.R. 463 (Bankr.S.D.Fla. 1984).[2]
Another argument in support of the objection distinguishes In re Benedict, 88 B.R. 387 (Bankr. M.D.Fla.1988), which is exactly on point and is relied upon by the debtor. The argument in the Brief is that the debtor is not a third party beneficiary. However, it is the debtor who has the right to receive the payments and to change beneficiaries, which are the direct benefits provided by the contract. The creditor also asserts that the court in Benedict "failed to consider absurd results from its reasoning." (CP 10 at p. 9). The distinguishing aspect, if any, from Benedict is unpersuasive, and this court finds sufficient grounds to allow the exemption without relying on the reasoning in Benedict.
The debtor has argued (Response CP 9) that the logic of the objection is "misdirected" as it pertains to the allegation that there is a debt owing from Travellers separate and apart from the annuity. I agree, although accepting the debtor's interpretation on this point is also not necessary to this court's conclusion.
I am convinced from the fact of the humanitarian loss for which the annuity compensates this debtor[3] that there can be no suggestion of fraud or any improper conduct by the debtor to avoid creditors in establishing the annuity. Therefore, the policy argument set forth in the objector's Brief which compares the debtor's annuity to an annuity purchased to pay off a lottery debt or a lawyer's fee is totally unrelated to the facts here.
The debtor is not an attorney collecting an account receivable, and therefore In re Young, 64 B.R. 611 (E.D.La.1986), aff'd, 806 F.2d 1303 (5th Cir.1987), cited by the creditor, is not applicable to the facts before me.
The argument by the creditor that the annuity contract was motivated by tax considerations has no bearing on the debtor's entitlement to claim the statutory exemption.
The principle is well-established that:
"Exemption statutes . . . should be liberally construed in favor of the debtor so that [he] and [his] family will not become *602 public charges." Killian v. Lawson, 387 So.2d 960, 962 (Fla.1980).
Under these circumstances, I find no merit in the objection on any of the points argued in the Brief. I am convinced that the debtor is entitled to claim the annuity as exempt under Fla.Stat. § 222.14.
Conclusion
For the foregoing reasons, the creditor's objection to the debtor's exemption of the Travellers annuity is overruled.
DONE and ORDERED.
NOTES
[1] La.Rev.Stat.Ann. § 20:33(1):
"all pensions, all proceeds of and payments under annuity policies or plans . . . are exempt."
[2] The exemption shields the proceeds of annuity contracts from:
"attachment, garnishment or legal process . . . of any creditor of the person who is the beneficiary of such annuity contract." Fla.Stat. § 222.14.
[3] The creditor has characterized the annuity as an investment of a "personal injury settlement over a time." (CP 10 at p. 10).
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Case: 13-10387 Document: 00512539895 Page: 1 Date Filed: 02/21/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 13-10387
Conference Calendar
United States Court of Appeals
Fifth Circuit
FILED
February 21, 2014
UNITED STATES OF AMERICA,
Lyle W. Cayce
Clerk
Plaintiff-Appellee
v.
JORGE SEGURA GOMEZ,
Defendant-Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:12-CR-11-3
Before REAVLEY, OWEN, and SOUTHWICK, Circuit Judges.
PER CURIAM: *
The Federal Public Defender appointed to represent Jorge Segura Gomez
has moved for leave to withdraw and has filed a brief in accordance with
Anders v. California, 386 U.S. 738 (1967), and United States v. Flores, 632 F.3d
229 (5th Cir. 2011). Segura Gomez has not filed a response. We have reviewed
counsel’s brief and the relevant portions of the record reflected therein. We
concur with counsel’s assessment that the appeal presents no nonfrivolous
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 13-10387 Document: 00512539895 Page: 2 Date Filed: 02/21/2014
No. 13-10387
issue for appellate review. Accordingly, counsel’s motion for leave to withdraw
is GRANTED, counsel is excused from further responsibilities herein, and the
APPEAL IS DISMISSED. See 5TH CIR. R. 42.2.
2
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380 F.2d 792
UNITED STATES of America, Appellee,v.Antonio WANTON, Appellant.
No. 500, Docket 31172.
United States Court of Appeals Second Circuit.
Argued June 13, 1967.Decided July 14, 1967.
1
Gustave A. Gerber, New York City, for appellant.
2
Charles P. Sifton, Asst. U.S. Atty. (Robert M. Morgenthau, U.S. Atty. for Southern Dist. of New York, Michael W. Mitchell, John A. Stichter, Asst. U.S. Attys., on the brief), for appellee.
3
Before HAYS and FEINBERG, Circuit Judges, and McLEAN, District Judge.1
4
McLEAN, District Judge.
5
In May 1965, Israel Cotto Vallejo and Antonio Wanton, the present appellant, were indicted in a five-count indictment. The first count charged both defendants with conspiracy to violate the narcotics laws. The second count charged Vallejo with selling, dispensing and distributing cocaine which was not in the original stamped package, in violation of 26 U.S.C. 4704(a) and companion sections. The third count charged him with receiving, concealing and facilitating the transportation and concealment of cocaine in violation of 21 U.S.C. 173 and 174. The fourth and fifth counts made similar charges, respectively, against Wanton.
6
The trial judge dismissed the conspiracy count at the close of the government's case. The jury convicted Vallejo on counts 2 and 3 and Wanton on counts 4 and 5. Appellant was sentenced to imprisonment for two years on count 4 and five years on count 5, the sentences to run concurrently.
7
Vallejo took a separate appeal. This court affirmed his conviction in open court. United States v. Vallejo, Docket No. 31172 (2d Cir. May 3, 1967).
8
Appellant's principal contention is that the government failed to make a prima facie showing that he possessed cocaine and that therefore his motion for a directed verdict of not guilty should have been granted. For the reasons stated hereinafter, we reject this contention and affirm the judgment.
9
The evidence which gives rise to this claim may be briefly summarized. In the early morning hours of Sunday, September 21, 1964, a federal narcotics agent observed Vallejo and Wanton standing on the corner of 82nd Street and Broadway. As he approached them, he saw Vallejo drop six tinfoil packages to the sidewalk. He saw Wanton drop one tinfoil package. As the two men moved away, the agent arrested both. He then picked up the seven tinfoil packages from the sidewalk. Each contained a white powder. None bore a tax stamp.
10
The agent emptied the contents of six packages into a 'substitute container,' i.e., a glassine envelope. He emptied the contents of the seventh package into another glassine envelope.
11
A government chemist analyzed the contents of each envelope. He testified that the contents of the envelope which contained the larger quantity of white powder weighed 3.2 grams and contained 30.1 per cent cocaine. He said that the contents of the other envelope weighed .86 grams and also contained cocaine. He did not determine the percentage of cocaine in the .86 grams. The chemist also testified that 'the exhibits,' by which he presumably meant both batches of powder, also contained sugar and mannitol.
12
The problem arises from the fact that the seven tinfoil packages all looked alike. The agent was unable to specify which one of the seven had been dropped by Wanton. He arbitrarily assumed that the package, the contents of which turned out to weigh .86 grams, was the one which Wanton had possessed. Counts 4 and 5 of the indictment against Wanton proceeded on this hypothesis. Each count referred to 'approximately 860 miligrams' (i.e., .86 grams) of cocaine hydrochloride.
13
The trial judge ruled that the glassine envelope containing the .86 grams of powder could not be admitted separately against Wanton because there was no proof that this envelope contained the contents of the particular tinfoil package which Wanton had possessed. He solved the difficulty by admitting both glassine envelopes, i.e., the contents of all seven packages, against Wanton and against Vallejo as well.
14
Wanton and Vallejo each took the witness stand. Each testified that he did not possess or drop to the sidewalk any tinfoil packages whatsoever.
15
The trial judge charged the jury that the government had the burden of proving beyond a reasonable doubt as to each defendant, and as to each count, that he knowingly possessed a narcotic drug. He charged further that if the jury found that a defendant did not knowingly possess cocaine, it must acquit him. Appellant's counsel took no exception to the court's charge.
16
The jury was of course entitled to believe the testimony of the narcotics agent that Wanton had in fact possessed and discarded one tinfoil package which contained a white powder, and that Vallejo had possessed and discarded six tinfoil packages which also contained a white powder. It was likewise entitled to believe the uncontradicted testimony of the chemist that all the powder contained cocaine. But since it could not be said that the .86 gram package was Wanton's it may be that this package was one of Vallejo's and that Wantion's one package was merged with five of Vallejo's to make up the larger batch of powder. Since the larger batch contained sugar and mannitol (a non-narcotic substance), in an unspecified amount, the argument is made that the government's proof was insufficient because Wanton's package might have contained only sugar or mannitol and no cocaine. Such a circumstance seems to us so unlikely as to be almost inconceivable. It would at least have more plausibility if Wanton had testified that he happened to be carrying around that night a package of sugar or of mannitol, or both, and that this is what he discarded when the officer approached. But Wanton's version was that he possessed no package at all and discarded noting.
17
The question could have been avoided if the narcotics agent had taken the trouble to pour the contents of each tinfoil package into a separate glassine envelope, so that the chemist could have separately analyzed each. Nevertheless, we are satisfied that his failure to do so was not fatal. The course followed by the trial judge was correct. He properly left it to the jury to determine whether Wanton possessed cocaine or not. The jury's verdict is conclusive.
18
Of course, since Wanton's particular package cannot be identified, there is no assurance that his package actually contained .86 grams of cocaine as the indictment alleges. It might have contained more or less. This makes no difference, as long as the evidence was sufficient, as it was here, to sustain the jury's verdict that Wanton's package contained cocaine in some amount. A variance as to quantity between the indictment and the proof is not fatal.
19
See Cromer v. United States, 78 U.S.App.D.C. 400, 142 F.2d 697 (1944), cert. denied, 322 U.S. 760, 64 S.Ct. 1274, 88 L.Ed. 1588 (1944).
20
We have considered appellant's other contentions and find them to be without merit.
21
The judgment is affirmed.
1
Of the Southern Distroct of New York, sitting by designation
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55 F.3d 564
100 Ed. Law Rep. 590
UNITED STATES of America, Plaintiff-Appellee,v.Robert W. WAYMER, Defendant-Appellant.
No. 93-9319.
United States Court of Appeals, Eleventh Circuit.
June 16, 1995.
Henry C. Johnson, Jr., Decatur, GA and Dwight Lowell Thomas, Atlanta, GA, for appellant.
Joe D. Whitley, U.S. Atty., William L. McKinnon, Jr., and Amy Levin Weil, Asst. U.S. Attys., Atlanta, GA, for appellee.
Appeal from the United States District Court for the Northern District of Georgia.
Before HATCHETT and COX, Circuit Judges, and JOHNSON, Senior Circuit Judge.
JOHNSON, Senior Circuit Judge:
1
In this appeal from the Northern District of Georgia, Robert W. Waymer seeks reversal of his convictions on twenty-two counts of mail fraud and eleven counts of money laundering. For the reasons stated below, we affirm.
I. STATEMENT OF THE CASE
A. Factual Background
2
Waymer was an elected member of the Atlanta Board of Education ("the Board"). Buddy Allen was the President and General Manager of Allen Service Company, the parent to several companies, including Peatross Service Company. John Assmar was a real estate broker.
3
In 1986, Allen agreed to pay Assmar fifteen percent of the gross proceeds of any service contracts Assmar obtained on behalf of Allen's companies. In 1986, Assmar, acting on behalf of Peatross, began a pilot sanitation and pest control program for two Atlanta public schools. By the 1988-89 school year, Allen's companies provided pest control and other services to all 113 Atlanta public schools.
4
In mid-1988, Assmar died. Shortly thereafter, Allen paid more than $30,000 to Assmar's widow as Assmar's commission for the remainder of 1988. Although this commission grew out of Assmar's role in obtaining Allen's contracts with the school system, by the time of Assmar's death, he was doing virtually nothing to assist in the performance of the contracts.
5
After Assmar's death, but prior to the end of 1988, Waymer approached Allen and told him that he and Assmar had been partners and that he wanted to assume Assmar's role in Allen's school system contracts. Allen responded that he had already paid Assmar's widow the fifteen percent commission for 1988. Waymer approached Allen again at the end of 1988. At that time, Allen agreed to pay Waymer the fifteen percent if Waymer provided him with an assurance from the school system that Waymer could do business with Allen at the same time that he was a member of the Board.
6
Waymer told Dr. Woodrow Wilson, the Associate Superintendent of the Atlanta school system, that he was considering doing business with someone who did business with the school system and asked his advice. Because Waymer was in the real estate business, Wilson assumed Waymer was talking about real estate work. He advised Waymer that it was allowable if the other party's business with the school system was accomplished through a sealed bid procedure. Wilson further advised Waymer to abstain if matters came before the Board involving that business and to disclose the relationship to the Board and Superintendent. Waymer then wrote Wilson a letter stating that he was engaged in real estate and marketing activities with Allen, that Waymer had done consulting work for Allen since 1986, and that Waymer would make full disclosure of his relationship with Allen. Waymer's letter did not inform Wilson that Allen would be paying Waymer fifteen percent of Allen's companies' proceeds from the contract with the school system and that Waymer would be required to perform almost no services for Allen in order to receive the payments. Neither Waymer nor Wilson took the matter before the entire Board.
7
From the beginning of 1989 to the end of 1991, Allen paid Waymer by checks made payable to Elloree Real Estate Company. All of the checks were deposited into the Elloree business account. Each time Waymer deposited a check from Allen's companies into the Elloree account, he wrote one or more checks on that account to himself and deposited the money in his personal account. In all, Allen paid Waymer more than $200,000.
B. Procedural History
8
In April 1993, a superseding indictment charged Waymer with twenty-four counts of mail fraud, in violation of 18 U.S.C.A. Secs. 1341 (West 1984 and Supp.1994) and 1346 (West Supp.1994), and eleven counts of money laundering, in violation of 18 U.S.C.A. Sec. 1956(a)(1)(B)(i) (West Supp.1994). The mail fraud counts alleged (1) a scheme to defraud the citizens of Atlanta of Waymer's honest services and (2) a scheme to defraud Allen of money and property. The money laundering counts relied upon the mail fraud counts as the specified unlawful activity constituting the source of the laundered proceeds. Waymer pleaded not guilty.
9
At the trial, which commenced in July 1993, the court granted a motion for judgment of acquittal on two of the mail fraud counts. The jury returned guilty verdicts on all remaining mail fraud counts based on the scheme to defraud the citizens of Atlanta of Waymer's honest services.1 Waymer was also convicted on all money laundering counts. He was sentenced to concurrent terms of thirty-three months' imprisonment.
10
Waymer raises the following issues on appeal: (1) whether section 1346 is unconstitutionally vague or overbroad; (2) whether the school system's mailing of checks to Allen's companies satisfies the mailing requirement of section 1341; (3) whether the evidence was sufficient to establish mailing of the twenty-two checks at issue; and (4) whether the fact that Waymer was being paid fifteen percent of the proceeds of Allen's companies' contracts with the Board was "material."2
II. DISCUSSION
11
A. Vagueness and overbreadth challenges to section 1346
12
Federal law prohibits the use of the mails in furtherance of a scheme to defraud. 18 U.S.C.A. Sec. 1341. To prove mail fraud, the government must show that the accused (1) intentionally participated in a scheme or artifice to defraud and (2) used the United States mails to carry out that scheme or artifice. United States v. Hooshmand, 931 F.2d 725, 731 (11th Cir.1991). The "honest services amendment" to the mail fraud statute, 18 U.S.C.A. Sec. 1346, allows the United States to predicate a mail fraud prosecution on a "scheme or artifice to deprive another of the intangible right of honest services."3 Waymer contends that section 1346 is unconstitutionally vague and overbroad. Our review is de novo.
1. Vagueness
13
Because "honest services" are not defined in the mail fraud statute, Waymer contends that section 1346 is unconstitutionally vague. A statute is not unconstitutionally vague if it "define[s] the criminal offense with sufficient definiteness that ordinary people can understand what conduct is prohibited and in a manner that does not encourage arbitrary and discriminatory enforcement." Kolender v. Lawson, 461 U.S. 352, 357, 103 S.Ct. 1855, 1858, 75 L.Ed.2d 903 (1983). Waymer's void-for-vagueness challenge to section 1346 does not involve the First Amendment; therefore, we review section 1346 only as applied in the instant case. United States v. Awan, 966 F.2d 1415, 1424 (11th Cir.1992). In other words, we need only examine the vagueness of the statute in light of the particular facts of this case. Id.
14
The constitutionality of a vague statutory standard is closely related to whether the standard incorporates a requirement of mens rea. Colautti v. Franklin, 439 U.S. 379, 395, 99 S.Ct. 675, 685, 58 L.Ed.2d 596 (1979). "A statutory requirement that an act must be willful or purposeful may not render certain, for all purposes, a statutory definition of the crime which is in some respects uncertain. But it does relieve the statute of the objection that it punishes without warning an offense of which the accused was unaware." United States v. Conner, 752 F.2d 566, 574 (11th Cir.) (quoting Screws v. United States, 325 U.S. 91, 101-02, 65 S.Ct. 1031, 1035-36, 89 L.Ed. 1495 (1945) (Douglas, J., concurring)), cert. denied sub nom., Taylor v. United States, 474 U.S. 821, 106 S.Ct. 72, 88 L.Ed.2d 59 (1985); see also United States v. Margiotta, 688 F.2d 108, 129 (2d Cir.1982) ("[t]he broad language of [section 1341], intended by Congress to be sufficiently flexible to cover the wide range of fraudulent schemes mankind is capable of devising, is not unconstitutionally vague because section 1341 contains the requirement that the defendant must have acted willfully and with a specific intent to defraud."), cert. denied, 461 U.S. 913, 103 S.Ct. 1891, 77 L.Ed.2d 282 (1983).
15
Applying that principle to this case, we note that to convict a person of mail fraud, the government must prove specific intent to defraud. 18 U.S.C.A. Sec. 1341 (West Supp.1994). Hooshmand, 931 F.2d at 732. Here, the jury found that Waymer specifically intended to commit a fraud on Atlanta's citizens. Waymer does not maintain that the jury was improperly instructed as to specific intent. Nor does he argue that the evidence was insufficient to support the jury's conclusion that he specifically intended to defraud the citizens of Atlanta of his honest services. Therefore, his vagueness challenge must fail. Accordingly, we hold that the term "honest services" in section 1346, as applied to Waymer, is not unconstitutionally vague.
2. Overbreadth
16
Waymer contends that section 1346 could be used to prosecute expression protected by the First Amendment and, thus, is facially overbroad. Application of the overbreadth doctrine is employed as a last resort and is not to be invoked when a limiting construction has been or could be placed on the challenged statute. Broadrick v. Oklahoma, 413 U.S. 601, 613, 93 S.Ct. 2908, 2916, 37 L.Ed.2d 830 (1973). In cases like this one, where the statute at issue regulates conduct and not merely speech, the statute will not be struck down unless its overbreadth is "not only real, but also substantial in relation to the statute's plainly legitimate sweep." Id. If a conduct-regulating statute reflects legitimate governmental interests and is not substantially overbroad, whatever overbreadth does exist should be cured on a case-by-case basis. Id.
17
We see no basis for facial invalidation of section 1346 on overbreadth grounds. Section 1346 effectuates the legitimate governmental aim of punishing those who use the mails to carry out fraudulent schemes to deprive others of their intangible rights to honest services. Assuming arguendo that certain marginal applications of section 1346 would impermissibly intrude on First Amendment rights, we hold that such potential problems with section 1346 are insubstantial when judged in relation to the statute's plainly legitimate sweep. Thus, defects in the honest services amendment to the mail fraud statute can be effectively addressed on a case-by-case basis. Accordingly, section 1346 is not facially overbroad.
B. The Mailing Requirement
18
The federal mail fraud statute does not purport to reach all frauds; rather, it aims at instances where the use of the mails is "part of the execution of the fraud." Schmuck v. United States, 489 U.S. 705, 710, 109 S.Ct. 1443, 1447, 103 L.Ed.2d 734 (1989) (quoting Kann v. United States, 323 U.S. 88, 95, 65 S.Ct. 148, 151, 89 L.Ed. 88 (1944)). Thus, "mailing" is a required element of the crime of mail fraud. To satisfy the mailing requirement, however, the use of the mails need not be an essential element of the scheme. Schmuck, 489 U.S. at 710, 109 S.Ct. at 1447. It is sufficient for the mailing to be "incident to an essential part of the scheme" or "a step in the plot." Id. at 711, 109 S.Ct. at 1448 (quoting Badders v. United States, 240 U.S. 391, 394, 36 S.Ct. 367, 368, 60 L.Ed. 706 (1916)).
1. Payment of a Lawful Debt
19
In this case, the government met the mailing requirement by showing that the Board's payments to Allen's companies were accomplished by use of the mails. Waymer contends that because the school system had a legal obligation to pay Allen, the mailing of checks in payment of that legal debt cannot satisfy the mailing requirement.
20
Waymer's contention is foreclosed by the Supreme Court's decision in Schmuck, which expressly rejected the claim that a routine or innocent mailing cannot supply the mailing element of the mail fraud offense. 489 U.S. at 714-15, 109 S.Ct. at 1449-50 (1988). Schmuck involved a scheme whereby the defendant would purchase used cars, roll back their odometers, and sell them to dealers for inflated prices. The dealers, in turn, would sell the cars to consumers for prices which reflected the earlier fraud. In order to complete the resale transactions between the dealers and the consumers, title had to be transferred to the consumers; this was accomplished by mailing a title application form to the Wisconsin Department of Transportation.
21
The Supreme Court held that although it was an innocent act in itself, the mailing of the title applications supplied the mailing element for the defendant's mail fraud conviction. The Court wrote:
22
Under these circumstances, we believe that a rational jury could have found that the title-registration mailings were part of the execution of the fraudulent scheme, a scheme which did not reach fruition until the retail dealers resold the cars and effected transfers of title. Schmuck's scheme would have come to an abrupt halt if the dealers either had lost faith in Schmuck or had not been able to resell the cars obtained from him. These resales and Schmuck's relationships with the retail dealers naturally depended on the successful passage of title among the various parties. Thus, although the registration-form mailings may not have contributed directly to the duping of either the retail dealers or the customers, they were necessary to the passage of title, which in turn was essential to the perpetuation of Schmuck's scheme.
23
Id. at 712, 109 S.Ct. at 1448.
24
This case presents an even stronger factual scenario for finding mailing than did Schmuck. In Schmuck, despite the fact that the mailing took place after the defendant had already received the desired benefit from his fraud, the Supreme Court held that the mailings were in furtherance of his overall fraudulent scheme. Here, by contrast, the checks mailed to Allen were the very source of the payments to Waymer. Unless and until Allen got paid, Waymer could not get paid.4 In short, because the success of Waymer's scheme to defraud Atlanta's citizens directly depended on Allen's being paid, and because Allen was paid by mail, the mailings in this case satisfy the mailing requirement of section 1341.
2. Sufficiency of the Evidence of Mailing
25
Waymer next contends that there was insufficient evidence to conclude that the twenty-two checks at issue in this case were, in fact, mailed from the school system to Allen. We review challenges to the sufficiency of the evidence de novo. Hooshmand, 931 F.2d at 733. In so doing, we review the evidence, including all reasonable inferences and credibility choices, in the light most favorable to the government and decide whether a reasonable factfinder could find guilt beyond a reasonable doubt. Id. We need not rule out every hypothesis of innocence; a jury is free to choose among reasonable constructions of the evidence. Id.
26
The Atlanta school system paid Allen's companies for his services out of two accounts, the general fund and the cafeteria account. Larry Washington and Mary Bright each supervised one of these accounts. Both testified that the customary practice was for the school system to mail checks to vendors. However, Washington testified that on three or four occasions between 1986 and 1992, checks drawn on the general fund were picked up personally by someone from Allen's companies. Bright testified that 20% of the time preceding the last year and 50% of the time in the last year, checks from the cafeteria account were picked up rather than mailed. Bright and Washington further testified that their approval was required for checks to be picked up, but that they kept no records of which checks were mailed and which were picked up.
27
Mailing can be proved through circumstantial evidence. United States v. Metallo, 908 F.2d 795, 798 (11th Cir.1990), cert. denied, 503 U.S. 940, 112 S.Ct. 1483, 117 L.Ed.2d 625 (1992). Proof of a routine practice of using the mail to accomplish a business end is sufficient to support a jury's determination that mailing occurred in a particular instance. Id. This Court has not previously addressed the issue of whether significant deviations from a claimed routine practice of mailing render the evidence insufficient to support a finding of mailing in a particular instance. However, the Fifth Circuit has written:
28
Where, for example, the usual business practice includes the frequent use of private couriers ... the inference that the ... mails ... were employed in executing the fraud is cast into serious doubt. Absent other probative evidence to show that a mailing ... occurred ... a jury cannot reasonably overcome the presumption of innocence.
29
United States v. Moody, 903 F.2d 321, 332 (5th Cir.1990).
30
In this case, we need not decide whether the testimony of Bright and Washington, standing alone, would be sufficient to establish that the checks at issue were mailed, because the government presented additional evidence of mailing. Specifically, the government offered proof of more than four days' delay between the date that each of the twenty-two checks at issue was cut by the school system and the date that the same check was deposited into one of Allen's companies' accounts.5 The record contains evidence which shows that the school system normally would write a check on one day and then mail it on the next. Allen testified that his customary practice was to deposit checks soon after they were received because "we are a small company and our funds are needed in other areas." The Fifth Circuit has held that time delay evidence is probative of the method of transport and that three or four days' time delay is in accordance with the ordinary degree of postal efficiency. Moody, 903 F.2d at 332-33. We agree with the Fifth Circuit. Such evidence supports an inference of mailing.
31
Viewed in the light most favorable to the government, the evidence in this case was sufficient to support the finding of mailing. Taken together, the following evidence supports the jury's conclusion: (1) evidence of the school system's sometimes-broken custom of mailing checks to Allen's companies; (2) testimony regarding the school system's practice of cutting a check on one day and mailing it on the next; (3) Allen's testimony that his companies typically deposited checks as soon as they were received; and (4) evidence that there were more than four days' delay between the date of the school system's cutting and the date of Allen's companies' depositing the twenty-two checks at issue in this case. Accordingly, we hold that the evidence was sufficient for the jury to decide beyond a reasonable doubt that the twenty-two checks at issue in this case were mailed.
32
C. Materiality of the Undisclosed Information
33
A defendant's breach of a fiduciary duty may be a predicate for a violation of the mail fraud statute where the breach entails the violation of a duty to disclose material information. Margiotta, 688 F.2d at 127-28. In other words, "[f]raud, for purposes of a mail fraud conviction, may be proved through the defendant's non-action or non-disclosure of material facts intended to create a false and fraudulent representation." United States v. O'Malley, 707 F.2d 1240, 1247 (11th Cir.1983). An affirmative duty to disclose need not be explicitly imposed; it may instead be implicit in the relationship between the parties. Margiotta, 688 F.2d at 128. See also United States v. Silvano, 812 F.2d 754, 759 (1st Cir.1987) ("[T]he affirmative duty to disclose material information arises out of a government official's fiduciary relationship to his or her employer, whether as a public or as a private employee.").
34
Waymer contends that his general fiduciary duty to the citizens of Atlanta did not require him to disclose that he was receiving fifteen percent of the proceeds from Allen's companies' contracts with the Atlanta school system and that he performed virtually no services in exchange for those payments. In other words, he maintains that the information he withheld was not material. Waymer correctly asserts that this is not a case of a fiduciary's complete failure to disclose. He also rightly points out that when he consulted with Wilson about his plans to have a "business relationship" with Allen, Wilson assumed that the relationship would involve compensation of some sort. On the basis of these facts, Waymer contends that what he failed to disclose were minor details concerning how that compensation was to be calculated. We cannot agree.
35
For a School Board member to be receiving a direct and substantial cut from a vendor's contract with the school system in exchange for the performance of virtually no services so obviously smacks of impropriety that it can hardly be characterized as a minor detail of which the Board need not be apprised. The fact that Allen's companies could afford to pay Waymer--who did nothing to help Allen procure or retain the school board contracts and virtually nothing to help Allen perform on those contracts--fifteen percent of the proceeds of the contracts strongly suggests that there were at least fifteen percent of unnecessary expenses in Allen's bids for the contracts. Had the Board known this, it likely would have re-bid the contracts at a considerable savings to the citizens of Atlanta. Accordingly, we find no merit in Waymer's contention that as a fiduciary to the citizens of Atlanta, he had no duty to disclose the fact that he was receiving fifteen percent of what the school board was paying Allen's companies ostensibly for pest control and other services.
III. CONCLUSION
36
For the foregoing reasons, Waymer's convictions and sentence are AFFIRMED.
1
The jury was deadlocked on Waymer's guilt regarding the alleged scheme to defraud Allen of money and property
2
In addition to those listed above, Waymer raises numerous other issues. After careful review of the record, we conclude that Waymer's contentions regarding those other issues are without merit and do not warrant discussion. Accordingly, we summarily affirm the district court as to all issues not herein discussed
3
In 1988, Congress enacted section 1346, overriding the Supreme Court's decision in McNally v. United States, 483 U.S. 350, 107 S.Ct. 2875, 97 L.Ed.2d 292 (1987). McNally had held that the mail fraud statute did not criminalize schemes to defraud citizens of their rights to honest government. Id. at 359, 107 S.Ct. at 2881. Congress' purpose in enacting section 1346 was to restore the mail fraud statute to its pre-McNally position by allowing mail fraud convictions to be predicated on deprivations of honest services. United States v. Martinez, 905 F.2d 709, 715 (3rd Cir.1990)
4
Cf. United States v. Maze, 414 U.S. 395, 402, 94 S.Ct. 645, 649, 38 L.Ed.2d 603 (1974) (no mail fraud despite foreseeable mailing of bills to credit card owner, because defendant's fraudulent scheme was complete when he used the stolen credit card to receive the object of the fraud); Parr v. United States, 363 U.S. 370, 393, 80 S.Ct. 1171, 1184, 4 L.Ed.2d 1277 (1960) (defendant who made unauthorized use of school district's credit card did not commit mail fraud, despite the fact that the oil company which issued the credit card mailed the invoices to the school district for payment); Kann, 323 U.S. at 94, 65 S.Ct. at 150 (mailing requirement was not met where defendants cashed fraudulently obtained checks at local bank and local bank then mailed checks to drawee banks for collection; "it was immaterial to [the defendants], or to any consummation of the scheme, how the bank which paid or credited the check would collect from the drawee bank"). As this Court has noted, "if a defendant has been able to take possession of the object of the fraud and if the fraud is then at an end, further mailings 'involve[ ] little more than post-fraud accounting among the potential victims of the various schemes, and the long-term success of the fraud [does] not turn on which of the potential victims [bears] the ultimate loss.' " United States v. Smith, 934 F.2d 270, 272 (11th Cir.1991) (quoting Schmuck, 489 U.S. at 714, 109 S.Ct. at 1449)
5
The original indictment charged forty-six counts of mail fraud, but the superseding indictment charged only twenty-four. The charges that were dropped were for checks for which the delay was four days or less
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180 F.2d 835
HURSTv.UNITED STATES.
No. 4010.
United States Court of Appeals Tenth Circuit.
February 17, 1950.
Rehearing Denied March 20, 1950.
Harley V. Hurst, pro se.
Robert E. Shelton, United States Attorney for Western District of Oklahoma and Haskell B. Pugh, Assistant United States Attorney, Oklahoma City, Okl., for appellee.
Before PHILLIPS, Chief Judge, and MURRAH and PICKETT, Circuit Judges.
MURRAH, Circuit Judge.
1
This is an appeal from an order denying a motion to vacate judgment and sentence under Section 2255, 28 U.S.C.A.
2
Appellant was indicted on two counts for violations of 12 U.S.C.A. § 588b [now 18 U.S.C.A. § 2113] (bank robbery) in the United States District Court for the Western District of Oklahoma. An indictment containing two counts was also returned against appellant in the same district, charging violations of 18 U.S.C.A. § 315 [now 18 U.S.C.A. § 2115] (robbery of a United States Post Office). He appeared before the trial court with counsel of his own choice and entered pleas of guilty to the charges in both indictments. He was sentenced for a period of ten years on count one and given five years probation on count two in the bank robbery case; in the post office robbery case he was given a five year sentence on count one, to run concurrently with the sentence imposed in the bank robbery case, and five years probation on count two, making a total of ten years to be served in the two cases.
3
As the basis for his motion appellant sets forth numerous grounds, most of them pertaining to the manner of his arrest and arraignment. But, since appellant appeared before the sentencing court with counsel and entered pleas of guilty, we are not concerned with the manner of his arrest and arraignment, except insofar as it might have bearing upon his contention that his pleas of guilty were not freely, intelligently and voluntarily entered.
4
The circumstances leading to appellant's arrest and arraignment may be fairly stated as follows: On March 19, 1947, Roy Nicholson, an investigator of the Department of Public Safety of the State of Oklahoma, arrested appellant on a warrant for burglary issued in Garfield County, Oklahoma. The arrest was made in Shawnee, Oklahoma, and Nicholson at that time was accompanied by Robert D. Oswalt, an agent of the Federal Bureau of Investigation. Nicholson and Oswalt drove appellant to Chandler, where he was placed in the Lincoln County jail under instructions from the sheriff of Garfield County, and on the next day he was transported by officials to Enid, Oklahoma. While confined in the Garfield County jail at Enid he was questioned by F.B.I. agents on suspicion of bank robbery.
5
On April 7, a complaint was lodged before the United States Commissioner for the Eastern District of Oklahoma, charging appellant and others with robbery of the Clayton State Bank, Clayton, Oklahoma. On the same day he was transported by a state official to the Oklahoma County jail in Oklahoma City and surrendered to the custody of the United States Marshal for the Western District of Oklahoma. He was promptly arraigned before the United States Commissioner for the Western District on the complaint issued by the Commissioner for the Eastern District, and entered a plea of guilty. While confined in the Oklahoma County jail on the Eastern District charge, appellant was interviewed by F.B.I. agents, and on April 5 and 7, made written statements involving himself and others, in the robbery of the Bank of Nardin and the United States Post Office at Asher, both within the Western District of Oklahoma. Because of the matters contained in the written statements and other available evidence, a complaint was filed before the United States Commissioner for the Western District, charging appellant with robbery of the Nardin Bank, and he was arraigned that day. On April 15, a complaint was filed before the same Commissioner charging appellant with robbery of the Post Office at Asher. Upon request of appellant the Commissioner conducted a preliminary hearing on both charges, and pleas of not guilty were entered.
6
On May 5 appellant was indicted by Grand Jury in the Western District for robbery of the Nardin Bank and the Asher Post Office. On arraignment before the trial court appellant entered pleas of guilty. It is the judgments in these two cases that appellant now seeks to set aside by his motion to vacate.
7
At the hearing on the motion appellant testified that while he was confined in the jail at Enid and Oklahoma City F.B.I. agents continuously questioned him; that he was told if he did not cooperate and sign a confession they would see that he was sent to Kansas and given a life sentence on charges pending there. He stated that on one occasion the agents questioned him "nearly all day"; that he was told if he would sign the confession and enter pleas of guilty to the Nardin Bank and Asher Post Office robberies, the confession would not be used, and the many other state and federal charges would be dropped; that because of the threats and promises, and because he was so discouraged at being moved from place to place and kept in the "drunk cell", he finally signed the confession and entered his pleas of guilty.
8
The accused F.B.I. agents denied undue questioning or the making of any threats or promises to obtain pleas of guilty. The agent present when the confession was made, testified that appellant made his confession upon learning that co-defendants had confessed, implicating him in numerous offenses.
9
The attorney employed by appellant and present when the pleas were entered testified that when he learned of the many charges pending against his client he advised him that it would be better to plead guilty to the Federal charges and throw himself upon the mercy of the court.
10
He stated that before the pleas of guilty were entered he discussed the confession and its contents with his client and an F.B.I. agent; that at no time did the appellant intimate he had signed the same because he was discouraged or under duress. He further testified that before the court accepted appellant's pleas of guilty it inquired of him, as counsel, if he thought the pleas proper and he advised the court that he thought they were.
11
The trial court's finding that appellant's pleas of guilty were freely, intelligently and voluntarily entered is amply supported by the evidence, and its judgment denying the motion should be, and is, affirmed.
12
Affirmed.
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776 F.2d 1058
Kochv.Office of Personnel Management
84-1522
United States Court of Appeals,Federal Circuit.
7/1/85
MSPB, 20 M.S.P.R. 461
Affirmed
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606 F.Supp.2d 401 (2009)
Louis CEVASCO and Diane Cevasco, Plaintiffs,
v.
NATIONAL RAILROAD PASSENGER CORP., et al., Defendants,
National Railroad Passenger Corp., Third-Party Plaintiff,
v.
T.C. Johnson Company, et al., Third-Party Defendants,
This Report and Recommendation also applies to the following cases: 05 Civ. 7419, 06 Civ. 6195, 06 Civ. 6196, 06 Civ. 6956.
No. 04 Civ. 5760 (PAC)(GWG).
United States District Court, S.D. New York.
March 23, 2009.
*402 Ira Mark Maurer, Cahill, Goetsch & Maurer, P.C., White Plains, NY, Ira Dennis Navon, Brooklyn, NY, for Plaintiffs.
Melissa Shari Katz, Landman Corsi Ballaine & Ford PC, Scott Lawrence Haworth, William Dudley Newcomb, III, Sedgwick, Detert, Moran & Arnold, LLP, Joseph Dedonato, Morgan, Melhuish, Monaghan, Arviidson, Abrutyn & Lisowski, Margaret Marie Murphy, Shelowitz & Associates, PLLC, New York, NY, Dominic *403 Paul Bianco, Gallagher Walker Bianco& Plastaras, Mineola, NY, for Defendants.
William G. Ballaine, Ronald E. Joseph, Sophia Ree, Landman Corsi Ballaine & Ford PC, New York, NY, for Defendants/Third-Party Plaintiff.
William S. Matlin, Hoffman & Roth, LLP, New York, NY, for Third-Party Defendant Crescent Contracting, Inc.
Robert D. Ely, Melito & Adolfsen, P.C., New York, NY, for Third-Party Defendant Hatch Mott MacDonald.
Anthony F. Tagliagambe, Brian A. Kalman, London Fischer LLP, New York, NY, for Third-Party Defendants STV, Inc. and STV/HMK, a joint venture of STV, Inc. and Hatch Mott MacDonald.
Robert Joseph Walker, Gallagher Walker Bianco& Plastaras, Mineola, NY, for Defendants/Third-Party Defendants.
ORDER ADOPTING R & R
PAUL A. CROTTY, District Judge:
The five consolidated actions in this matter involve personal injury lawsuits against Defendant and Third-Party Plaintiff National Railroad Passenger Corp. ("Amtrak"), resulting from an accident at a work project inside the East River Tunnel in New York City. The issue before the Court is Amtrak's dispute over indemnification provisions in its contracts with Third-Party Defendants Crescent Contracting ("Crescent"), STV, Inc. ("STV"), Hatch Mott MacDonald, Inc. ("HMM"), and STV/HMM, a joint venture of STV and HMM. Amtrak seeks indemnification from Crescent, STV, HMM, and STV/HMM for the personal injury lawsuits filed by the employees of the Third-Party Defendants. Amtrak moves for partial summary judgment on this issue and HMM cross-moves for summary judgment seeking dismissal of Amtrak's claims for indemnification.
The Court assumes the parties' familiarity with the underlying facts and the procedural history of the cases, also available in Magistrate Judge Gorenstein's Report and Recommendation ("R & R") at 404-20. In brief, Amtrak and the Third Party Defendants entered into contracts in 2001 and 2002 whereby Third Party Defendants would install interim dry fire standpipe systems inside the East River Tunnel and perform construction management services on the project (the "Standpipe Project"). (R & R 404-06.) The contracts included indemnification clauses protecting Amtrak from liability to the Third-Party Defendants' employees. (Id.) On July 9, 2004, an Amtrak employee lost control of a crane on a separate project approximately one mile away from the Standpipe Project. The crane moved toward the Standpipe Project and ultimately collided with trucks at the Standpipe Project worksite, injuring employees of the Third Party Defendants. (Id. 406-07.) The individual plaintiffs sued Amtrak for their injuries.
The Court referred the general pretrial matters in these cases to Magistrate Judge Gorenstein on May 27, 2005.[*] Amtrak filed its motions for partial summary judgment on February 5, 2008, and HMM cross-moved for summary judgment on March 12, 2008. Magistrate Judge Gorenstein issued his R & R on February 23, 2009, recommending that this Court grant Amtrak's motions and deny HMM's motions. The R & R provided ten days for written objections, pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure. The R & R specifically advised that if a party failed to *404 file timely objections, that party "will not be permitted to raise any objections to the Report and Recommendation on appeal." (R & R 419-20.) No objections have been filed.
DISCUSSION
"To accept the report and recommendation of a magistrate, to which no timely objection has been made, a district court need only satisfy itself that there is no clear error on the face of the record." Wilds v. United Parcel Serv., 262 F.Supp.2d 163, 169 (S.D.N.Y.2003). Upon review and analysis, the Court finds no clear error and agrees with Magistrate Judge Gorenstein's determinations that:
1) The term "arising out of within the indemnification provision of the Crescent and Amtrak contract covers the circumstances of the injuries in this case and the language obligates Crescent to defend and indemnify Amtrak against the personal injury claims.
2) The contract between STV/HMM and Amtrak unambiguously and without limitation states that it will indemnify and hold Amtrak harmless for any claims arising from injuries to STV/HMM employees, and Amtrak may enforce this provision against STV/HMM. The indemnification clause does not limit itself to services performed pursuant to the terms of the agreement.
3) HMM must indemnify Amtrak for Plaintiff Cevasco's claims because Cevasco was an agent of the joint venture of STV/HMM, and HMM is jointly responsible for STV/HMM's obligations under the contract.
4) Amtrak did not materially breach the contract by failing to inform STV/HMM of other projects in the tunnels because: A) the contract did not require such information; and B) the failure to inform STV/HMM did not substantially frustrate the purpose of the agreement.
Accordingly, the Court accepts and adopts the Report and Recommendation as its opinion. Amtrak's motions for partial summary judgment are GRANTED, and HMM's motions for summary judgment are DISMISSED. The Clerk of Court is directed to terminate the motions at Docket # 220 in 04 Civ. 5760; Docket # 133 in 05 Civ. 7419; Docket # 87 in 06 Civ. 6195; Docket # 91 in 06 Civ. 6196; Docket # 75 in 06 Civ. 6956; Docket #248 in 04 Civ. 5760; and Docket # 158 in 05 Civ. 7419. The order of reference to Magistrate Judge Gorenstein is ongoing.
SO ORDERED.
REPORT AND RECOMMENDATION
GABRIEL W. GORENSTEIN, United States Magistrate Judge.
In five consolidated actions, defendant and third-party plaintiff National Railroad Passenger Corp. ("Amtrak") moves for partial summary judgment against thirdparty defendants Crescent Contracting ("Crescent"), STV, Inc. ("STV"), Hatch Mott MacDonald, Inc. ("HMM"), and STV/HMM, a joint venture of HMM and STV ("STV/HMM"), based on contractual indemnification provisions.[1] HMM has cross-moved for summary judgment dismissing Amtrak's indemnification claims against it. For the reasons stated below, Amtrak's motion for partial summary *405 judgment should be granted, and HMM's cross-motion should be denied.
I. BACKGROUND
A. Factual Background
On November 7, 2002, Amtrak entered into a contract with Crescent to install interim manual dry fire standpipe systems inside the East River Tunnel in New York City (the "Standpipe Project"). See Construction Contract ("Crescent Contract") (annexed as Ex. A to Declaration of Ronald E. Joseph in Support of Defendant/Third-Party Plaintiffs Motion for Summary Judgment ("Joseph Decl."), filed Feb. 5, 2008 (Docket #221)), ¶ 1. Paragraph 68 of the Crescent Contract addressed indemnification, stating in relevant part:
68.0 INDEMNIFICATION
68.1 Contractor agrees to defend, indemnify and hold harmless Amtrak... irrespective of any negligence or fault on their part, from and against any and all losses and liabilities, penalties, fines, forfeitures, demands, claims, causes of action, suits, costs, and expenses incidental thereto (including costs of defense and attorneys' fees), which any or all of them may hereafter incur, be responsible for or pay as a result of injury or death of any person ... arising out of or in any degree directly or indirectly caused by or resulting from materials, products or equipment supplied by, or from activities of, or Work performed by Contractor ....
68.2 Contractor shall be responsible for all damages and expenses on account of injuries (including death) to any of its employees, agents or subcontractors while on the premises of Amtrak and shall indemnify, defend, and hold Amtrak harmless from all claims or damage suits which may arise in consequence of such injuries. Crescent Contract, General Provisions ("Crescent Contract Gen."), ¶ 68. The contract further provided that Crescent would be "solely responsible for providing a safe place for the performance of the Work," id. ¶ 61.1; that it would be "solely responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the Work," id., and that it "shall take all precautions necessary for the safety of, and shall provide all protection necessary to prevent damage, injury or loss to ... [a]ll employees involved in the Work," id. ¶ 61.2. It also stated that "Amtrak assumes no responsibility or liability for the physical condition or safety of the work site or any improvements located thereon." Id. ¶ 61.1.
On December 11, 2001, Amtrak entered into a contract with the joint venture STV/HMM to perform construction management services in relation to the Standpipe Project. See Services Contract (annexed as Ex. H to Joseph Decl.) ("STV/HMM Contract"). Paragraph 35 of the STV/HMM Contract addressed indemnification, stating in relevant part:
35. INDEMNIFICATION
A. Contractor agrees to defend, indemnify and hold harmless Amtrak ... from and against any and all losses and liabilities, penalties, fines, forfeitures, demands, claims, causes of action, suits, costs and expenses incidental thereto, (including costs of defense and attorneys' fees), which any or all of them may hereafter incur, be responsible for or pay as a result of injury or death of any person . . . to the extent arising from the negligent acts, negligent omissions, or willful misconduct in the Services performed by Contractor ....
B. Contractor shall be responsible for all damages and expenses on account of injuries (including death) to any of its employees, agents or subcontractors *406 while on the premises of Amtrak and shall indemnify, defend, and hold Amtrak harmless from all claims or damage suits which may arise in consequence of such injuries irrespective of any negligence or fault of Amtrak.
STV/HMM Contract, General Provisions ("STV/HMM Contract Gen."), ¶ 35. In a separate Joint Venture Agreement, dated the same day as the STV/HMM Contract with Amtrak, STV and HMM together created the joint venture STV/HMM, and agreed that they would be jointly and severally liable to Amtrak. See Joint Venture Agreement (annexed as Ex. I to Joseph Decl.), ¶¶ 2.1, 15.1.
On the night of July 9, 2004, at least two separate work groups were scheduled to work projects in the East River Tunnel: (1) Crescent employees, an STV safety engineer, HMM engineers, and Amtrak pilots working on the Standpipe Project at the east portal of Tunnel Line 1, see Deposition of Howard Carter, Jr. ("Carter Dep.") (annexed as Ex. A to Affidavit in Opposition ("Kalman Aff."), filed Mar. 12, 2008 (Docket # 243)), at 40-41; Deposition of Louis Cevasco ("Cevasco Dep.") (annexed as Ex. E to Kalman Aff. and as Ex. B to Joseph Decl.), at 45-47; and (2) Amtrak employees replacing a "buss breaker" approximately 1 mile east of the Standpipe Project, see Carter Dep. at 40, 42-43; Deposition of David Zwolinski (annexed as Ex. J to Kalman Aff.), at 25-26. Plaintiffs were part of the group working on the Standpipe Project.[2]
The work group that was replacing the breaker was using a Terex crane. See Deposition of Brian Earp (annexed as Ex. M to Joseph Decl. and as Ex. K to Kalman Aff.), at 21. At about 3:40 a.m. on July 10, 2004, an Amtrak employee lost control of the crane, which began moving west toward the Standpipe Project work site. See id. at 42, 56-57; Deposition of David Rollins ("Rollins Dep.") (annexed as Ex. G to Kalman Aff. and as Ex. O to Joseph Decl.), at 71, 75-78, 84. The crane operator, believing the crane was going to derail at the next switch, jumped off. See Rollins Dep. at 78-81, 99-100. The crane continued on the tracks, however, and ultimately collided with the Crescent trucks at the Standpipe Project work site, where plaintiffs were working. See Deposition of Girolamo Vitale (annexed as Ex. A to Crescent Mem.), at 143-45; Deposition of Edley Gayle (annexed as Ex. F to Crescent Mem.), at 130-33; Cevasco Dep. at 84, 87; Deposition of Jugal Sood (annexed as Ex. K to Crescent Mem.), at 259-61; Rollins Dep. at 115.
B. Procedural History
Plaintiffs brought separate actions against Amtrak for personal injuries allegedly sustained in the collision. See Cevasco Fourth Am. Compl., filed Apr. 19, 2007 (Docket # 159); Sood Second Am. Compl., filed Apr. 19, 2007 (05 Civ. 7419, Docket # 80); Adornetti First Am. Compl., filed Apr. 19, 2007 (06 Civ. 6195, Docket # 44); Vitale Compl.; Gayle Compl. Amtrak filed a third-party complaint against Crescent, STV, HMM, and STV/HMM, as well as others. See Third Am. Third-Party Complaint, filed Jan. 7, 2008 (Docket #213) ("Amtrak Compl."), ¶¶ 112-193. Crescent, STV, HMM, and STV/HMM filed counter-claims against Amtrak. See *407 Crescent's Answer to Third Am. Complaint, filed Mar. 12, 2008 (Docket # 242);[3] HMM's Answer to Third Am. Third-Party Complaint, filed Mar. 24, 2008 (Docket # 256), ¶¶ 278-82.
Amtrak filed the instant motion for partial summary judgment on February 5, 2008.[4] In its motion, Amtrak asserts that Crescent is contractually obligated to defend and indemnify it against the claims of all plaintiffs in these actions, see Amtrak Mem. at 1-2, 15; Amtrak Reply Mem. at 6-12, and that STV, HMM, and STV/HMM are obligated to defend and indemnify it against the claims of Cevasco and Sood, the two plaintiffs employed by STV and HMM, see Amtrak Mem. at 2, 15-16; Amtrak Reply Mem. at 12-17. Crescent, HMM, and STV, together with the joint venture STV/HMM, have submitted papers opposing the motions, raising various overlapping arguments, all of which are disposed of in the course of our discussion below. For the sake of clarity, we refer to the arguments made in the brief jointly filed by STV and the joint venture STV/HMM as the arguments of STV.
Additionally, HMM filed a cross-motion for summary judgment against Amtrak, seeking dismissal of Amtrak's contractual indemnification claims on the same grounds it opposes Amtrak's motion for summary judgment.[5] While HMM did not seek summary judgment against STV, STV has asserted in response to HMM's cross-motion that, if it is found to have any indemnification obligation, that obligation must be shared between STV and HMM *408 pursuant to the terms of the Joint Venture Agreement. See STV Reply Mem. at 7-10. While we address all of HMM's arguments with respect to Amtrak below, we do not address the question of sharing the indemnification obligation inasmuch as neither HMM nor STV has moved for summary judgment on this issue.
II. APPLICABLE LEGAL STADARDS
A. Law Governing Motions for Summary Judgment
Rule 56(c) of the Federal Rules of Civil Procedure states that summary judgment is appropriate when "the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). A genuine issue of material fact "may reasonably be resolved in favor of either party" and thus should be left to the finder of fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
In determining whether a genuine issue of material fact exists, courts must resolve all ambiguities and draw all factual inferences in favor of the non-moving party. Id. at 255, 106 S.Ct. 2505 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970)). Nevertheless, once the moving party has shown that there is no genuine issue as to any material fact and that it is entitled to a judgment as a matter of law, the nonmoving party "must come forward with `specific facts showing there is a genuine issue for trial,'" Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (quoting Fed.R.Civ.P. 56(e)) (emphasis in original), and "may not rely on conclusory allegations or unsubstantiated speculation," Jeffreys v. City of New York, 426 F.3d 549, 554 (2d Cir.2005) (quoting Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 428 (2d Cir.2001)). In sum, the nonmovant must offer "concrete evidence from which a reasonable juror could return a verdict in his favor." Anderson, 477 U.S. at 256, 106 S.Ct. 2505.
B. Choice of Law
Both the Crescent Contract and the STV/HMM Contract provide that they shall be "governed by and construed in accordance with the laws of the District of Columbia without regard to choice of law considerations." Crescent Contract Gen. ¶ 81.1; STV/HMM Contract Gen. ¶ 23. "Absent fraud or violation of public policy, a court is to apply the law selected in the contract as long as the state selected has sufficient contacts with the transaction." Hartford Fire Ins. Co. v. Orient Overseas Containers Lines (UK) Ltd., 230 F.3d 549, 556 (2d Cir.2000) (citing Int'l Minerals & Res., S.A. v. Pappas, 96 F.3d 586, 592 (2d Cir.1996)).
Here, Amtrak is incorporated and has its principal place of business in the District of Columbia. See Declaration of Marvin D. Smith, dated Feb. 1, 2008 (annexed as Ex. Q to Joseph Decl.), ¶¶ 5-6. Moreover, the parties do not dispute that the law of the District of Columbia governs the contracts, and they have relied upon that law in their arguments. See Amtrak Mem. at 11-13; Crescent Mem. at 9-10; STV Mem. at 22-24, 27-28; HMM Mem. at 6-7, 11-18. Accordingly, the Court will apply the substantive law of the District of Columbia.[6]
*409 C. Construction of a Contract Containing an Indemnification Agreement
The District of Columbia Court of Appeals has summarized a court's role in interpreting a contract as follows:
"Fundamentally, when interpreting a contract, `the court should look to the intent of the parties entering into the agreement.'" [Dodek v. CF 16 Corp., 537 A.2d 1086, 1093 (D.C.1988) ] (quoting Intercounty Constr. Corp. v. District of Columbia, 443 A.2d 29, 32 (D.C. 1982)[)] (citation omitted). The question of intent is resolved by an objective inquiry, and "[t]he first step" is therefore to determine "what a reasonable person in the position of the parties would have thought the disputed language meant." Id. (quoting Intercounty Constr. Corp., 443 A.2d at 32). Contractual provisions are interpreted taking into account the contract as a whole, so as to give effect, if possible, to all of the provisions in the contract. See [Akassy v. William Penn Apts., Ltd. P'ship, 891 A.2d 291, 303 (D.C.2006) ] (noting that "[w]e construe the contract as a whole, giving effect to each of its provisions, where possible") (citation omitted).
Steele Foundations, Inc. v. Clark Constr. Group, Inc., 937 A.2d 148, 154 (D.C.2007).
With respect to the use of extrinsic evidence to interpret a contract, the District of Columbia Court of Appeals has held as follows:
"The meaning of an integrated contract is an issue for the finder of fact only if the contractual language is ambiguous, ..., i.e., where its interpretation depends upon the credibility of extrinsic evidence or upon a choice of reasonable inferences from such evidence." Dodek v. CF 16 Corp., 537 A.2d 1086, 1092 (D.C.1988) (citing Int'l Bhd. of Painters & Allied Trades v. Hartford Accident & Indem. Co., 388 A.2d 36, 43 (D.C.1978)). Whether a contract is ambiguous is a question of law for the court to determine, reviewed de novo on appeal. See id. at 1092; Akassy v. William Penn Apts., Ltd. P'ship., 891 A.2d 291, 299 (D.C.2006). In determining whether a contract is ambiguous, the court must consider that "contracts are not rendered ambiguous by the mere fact that the parties do not agree upon their proper construction." Dodek, 537 A.2d at 1093 (quoting Holland v. Hannan, 456 A.2d 807, 815 (D.C.1983)). Ambiguity exists only if the court determines that the proper interpretation of the contract cannot be derived from the contractual language exclusively, and requires consideration of evidence outside the contract itself. See Dodek, 537 A.2d at 1093.
Steele Foundations, Inc., 937 A.2d at 153.
Finally, with respect to indemnity agreements, the District of Columbia Court of Appeals has held that "such agreements are narrowly construed by the courts `so as not to read into [them] any obligations the parties never intended to assume.'" Rivers & Bryan, Inc. v. HBE Corp., 628 A.2d 631, 635 (D.C.1993) (quoting Haynes v. Kleinewefers & Lembo Corp., 921 F.2d 453, 456 (2d Cir.1990)) (alteration in original). On the issue of whether a party may enter into an agreement requiring indemnification for its own negligence, it is settled that such agreements will be upheld as long as there is a "clear intention . . . from the face of the contract" that indemnification for negligence was contemplated. Rivers & Bryan, 628 A.2d at 635 (citing cases). "[N]o particular form or words are needed but the intent to waive negligence must be clear." W.M. Schlosser Co. v. Maryland Drywall Co., 673 A.2d 647, 653 (D.C.1996) (quoting Moses-Ecco Co. v. Roscoe-Ajax Corp., 320 F.2d 685, 688 (D.C.Cir.1963)); see id. at 653-54 (language such as "indemnify from any and all claims," "indemnify against any loss," or *410 "assume all liability for any and all loss" is "sufficiently comprehensive as to include indemnification for damages resulting from the negligence of [indemnitee]"). "When the terms of an indemnity agreement are... broad and comprehensive, the presumption is that if the parties had intended some limitation of the all-embracing language, they would have expressed such limitation." Id. at 654 (quoting Princemont Constr. Corp. v. Baltimore & Ohio R.R., 131 A.2d 877, 878 (D.C.1957)) (internal quotation marks omitted).
III. DISCUSSION
A. Whether Amtrak's Motion is Premature
Crescent argues that Amtrak's motion is "premature" because "[p]ursuant to D.C. law, the validity, interpretation, and/or enforceability of the indemnification clauses are dependent upon a finding of liability and on what grounds the liability is based, particularly in regards to defense costs." Crescent Mem. at 10. Crescent does not cite any authority for this proposition and the Court is unaware of any bar under District of Columbia law that would prevent a party from seeking summary judgment as to an indemnity obligation where, as here, there is a broad indemnification clause that includes a duty to defend, a lawsuit has actually been filed against the indemnitee, and the indemnitee's claim is being brought as a third party action. See generally Harris v. Rivera, 921 F.Supp. 1058, 1062 (S.D.N.Y.1995) (permitting such a suit under New York law). In the absence of the citation of a single case from the District of Columbia (or any other jurisdiction) stating otherwise, Amtrak's claim cannot be dismissed on this ground.
It appears that Crescent's real argument is that there may be circumstances under which it would have no indemnification obligation under the Amtrak contract. Specifically, Crescent asserts that it should not be liable if punitive damages were awarded based on Amtrak's gross negligence or "wanton, reckless and willful disregard for the safety of the plaintiffs and the general public." See Crescent Mem. at 10, 23-24. HMM makes a similar argument, asserting that indemnity cannot cover "reckless, wanton or willful misconduct." HMM Mem. at 15-18.
In response, Amtrak has stated that it seeks a ruling only regarding the parties' duty to defend and Amtrak's right to indemnification against any "compensatory damage claims." See Amtrak Reply Mem. at 21 & n. 10. Thus, we take Amtrak's response to mean that is seeking partial summary judgment on the question of whether Crescent, STV, HMM, and STV/HMM are obligated to defend Amtrak and whether they are obligated to indemnify Amtrak against claims arising out of Amtrak's ordinary negligence. Accordingly, Amtrak's summary judgment motion is construed as a motion for "partial" summary judgment with respect to its claim of indemnification.
B. Indemnification Under the Crescent Contract
Paragraph 68.1 of the Crescent Contract provides that Crescent must indemnify Amtrak for any personal injury claims "arising out of or in any degree directly or indirectly caused by or resulting from" the "activities of, or Work performed by" Crescent. Crescent Contract Gen. ¶ 68.1. Crescent does not dispute that all five plaintiffs were working on the Standpipe Project, which was the "Work performed by" Crescent under the contract. See Crescent Mem. at 2-3; Defendant/Third-Party Plaintiffs 56.1 Statement of Undisputed Material Facts, filed Feb. 5, 2008 (Docket # 222), ¶¶ 10, 31, 35, 43, 44, 47; Defendant/Third-Party Defendant *411 Crescent Contracting, Inc.'s Statement of Material Facts, filed Mar. 12, 2008 (Docket # 253), ¶¶ 10, 31, 35, 43, 44, 47. Rather, Crescent argues that the plaintiffs' claims do not "aris[e] out of" Crescent's work on the Standpipe Project because their injuries were caused by an instrumentality that originated on another, unrelated project: that is, the crane from the breaker project that collided with the Crescent trucks at the Standpipe Project. See Crescent Mem. 10-11; 13-21. Crescent argues that it has no liability because "[t]here was no causal connection between the crane and Crescent's work beyond the mere presence of the plaintiffs on Crescent's trucks when the free wheeling crane hit it." Id. at 11. Crescent notes that the "crane was in no way associated with Crescent's work." Id. at 14.
In other words, Crescent reads the words "arising out of ... the .. Work performed by [Crescent]" as limited to injuries that were actually caused by an incident originating from the Crescent site. In Crescent's view, because the original cause of the injuries was the release of the crane at the breaker project site, the injuries the crane caused at the Standpipe Project work site do not come within the indemnification clause.
The Court rejects this reading of the clause as inconsistent with its plain and unambiguous meaning. The term "arising out of is "broad and sweeping." See W.M. Schlosser Co., 673 A.2d at 653; accord id. at 654 ("arising out of" characterized as "all-embracing") (citation omitted). The injuries to the various individuals at the Crescent site "arose out of" their work there, even though the cause of the injuries emanated from a spatially distant source.
The parties have not cited to a District of Columbia case on point. Nonetheless, the case of Mead v. National Railroad Passenger Corp., 676 F.Supp. 92 (D.Md. 1987), is instructive. In Mead, an Amtrak train passing by a work site struck a contractor's automatic welder on the site, pieces of which then struck an employee. 676 F.Supp. at 95-96. Applying District of Columbia law, Mead concluded that the employee's injuries occurred "as a result of" the work performed by the contractor. Id. at 96.[7] If anything, the term "as a result of" is less encompassing than the term "arises out of." Nonetheless, Mead found the injuries to have occurred "as a result of" the contractor's work because "[b]ut for the presence of this welder, with which [the contractor] was performing work for Amtrak, [the] injuries would not have occurred." Id.
Numerous cases in other jurisdictions have interpreted the phrase "arising out of" or "arises out of to apply to situations where some external cause generated the injuries at issue. Thus, in Vitty v. D.C.P. Corp., 268 N.J.Super. 447, 633 A.2d 1040 (App.Div.1993), an employee of a towing contractor was seated in a parked tow truck in a designated area when the tow truck was struck by another vehicle that was forced off the road by a drunk driver. 268 N.J.Super. at 450-51, 633 A.2d 1040. Noting that "the words `arising out of should be construed in accordance with their common and ordinary meaning as referring to a claim `growing out of or having its `origin in' the subject matter of the towing agreement," id. at 453, 633 A.2d 1040, the Court concluded that, because the employee was "on duty and acting in the performance of his employment *412 responsibilities," id. at 451, 633 A.2d 1040, his injuries arose out of the performance of the contract, id. at 453, 633 A.2d 1040, even if the injuries "resulted from a freak accident that perhaps could not have been envisioned by the parties," id.
In Liberty Mutual Fire Insurance Co. v. E.E. Cruz & Co., 475 F.Supp.2d 400 (S.D.N.Y.2007), property that had been left on a work site by a city contractor was damaged when the city connected a nearby sewer pipe prematurely. 475 F.Supp.2d at 403. Although the contractor was not actively working at the time, and "the cause of the occurrence was allegedly unrelated to ... work under the Contract," these circumstances "d[id] not preclude the claim from `aris[ing] out of [the contractor's] `ongoing operations.'" Id. at 411. The Court gave a broad construction to the term "arising out of," noting that "[t]he New York Court of Appeals has held that the phrases `based on' and `arising out of... are unambiguous and legally indistinguishable, and that both call for the application of a `but-for' causation test in order to determine coverage." Id. at 409 (citation and some quotation marks omitted).
Case law is replete with similar fact patternsthat is, situations where an injury or claim was held to "arise out of work at a location even though the actual cause of the injury originated from matters remote from the work at the site itself. See, e.g., Hoffman Constr. Co. of Alaska v. U.S. Fabrication & Erection, Inc., 32 P.3d 346, 357 (Alaska 2001) (injuries held to "arise out of steel work where the wind blew scraps of asbestos onto the work site) ("the phrase `arising out of [the indemnitor's] performance' is very broad and includes claims for any injuries sustained by the indemnitor's employees while on the job"); Perkins v. Rubicon, Inc., 563 So.2d 258, 259 (La.1990) (where employee was injured at the contractor's work site because plant owner accidentally released toxic gas at an unrelated work site, employee's injuries were held to be "arising out of" the performance of the contract inasmuch as the employee "would not have been present at the site to be injured but for the performance of work under the contract"); Consol. Edison Co. of N.Y. v. Hartford Ins. Co., 203 A.D.2d 83, 83, 610 N.Y.S.2d 219 (1st Dep't 1994) (where subcontractor's employee was injured by steam valve, employee's injuries arose out of his work because the term "arising out of [the contractor's] operations ... focuses not upon the precise cause of the accident ... but upon the general nature of the operation in the course of which the injury was sustained").
Courts construing the phrase "arising out of in the context of indemnity agreements have recognized that it refers to "the scope of the employment of the person injured and the site of the occurrence," George A. Fuller Co. v. Fischbach & Moore, Inc., 7 A.D.2d 33, 35, 180 N.Y.S.2d 589 (1st Dep't 1958), lv. denied, 6 N.Y.2d 705, 187 N.Y.S.2d 1025, 159 N.E.2d 355 (1959)that is, not to the original cause of the injury. See also Wallace v. Sherwood Constr. Co., 877 P.2d 632, 634 (Okla.App. 1994) (because the injured employee "was on the job site as [the subcontractor's] agent, performing duties required ... under the subcontract," and "[b]ut for this performance of the subcontract, [he] would not have been injured," the injuries arose out of the performance of the subcontract).
In arguing that the phrase "arising out of requires something more than the "mere presence of the injured parties on the work site," Crescent relies primarily on Bland v. L'Enfant Plaza North, 473 F.2d 156 (D.C.Cir.1972), and National Union Fire Insurance Co. of Pittsburgh v. Port Authority of New York and New Jersey, 261 A.D.2d 259, 690 N.Y.S.2d 260 (1st Dep't), lv. denied, 94 N.Y.2d 754, 701 *413 N.Y.S.2d 340, 723 N.E.2d 89 (1999). See Crescent Mem. at 15-16. Bland v. L'Enfant Plaza North, however, is irrelevant to this case. Bland held only that a broad indemnification clause does not exclude losses caused by the indemnitee's own negligence. 473 F.2d at 157. Indeed, a party in Bland attempted to argue, as Crescent does here, that the mere presence of the employees on the work site when they were injured was insufficient to establish that the injuries "arose out of" the work, and the Court characterized this argument as "seek[ing] to have us split hairs." Id.
National Union Fire Insurance Co. did not involve a workplace injury but rather a provision in a hotel's lease agreement requiring the lessor to indemnify the landowner for any injuries arising out of the "use or occupancy" of the hotel premises. 261 A.D.2d at 259-60, 690 N.Y.S.2d 260. The court held that injuries in the hotel resulting from the 1993 bombing of the World Trade Center did not come within this clause. Id. at 260, 690 N.Y.S.2d 260. In support of this conclusion, the court cited to only one other case, Sea Insurance Co. v. Westchester Fire Insurance Co., 849 F.Supp. 221, 226 (S.D.N.Y.1994), affd, 51 F.3d 22 (2d Cir.1995), which was construing an insurance policy's exclusion of coverage for injuries arising out of "any premises owned or rented to any insured" where the premises was "not an insured location." 849 F.Supp. at 224. Sea Insurance Co. found that this clause did not exclude coverage for injuries caused by an automobile driven by a person employed at the location merely because she was on the way to the location, and not at the location, at the time the accident occurred. Id. at 226. It is difficult to see how Sea Insurance Co. supports the conclusion of the Court in National Union Fire Insurance Co., which involved injuries to persons actually in the covered premises. In any event, the fact that National Union Fire Insurance Co. was not construing whether an injury arose out of work at a work site; that application of its rule here would be inconsistent with other New York cases, such as Consol. Edison Co. of N.Y. v. Hartford Ins. Co., 203 A.D.2d 83, 83, 610 N.Y.S.2d 219 (1st Dep't 1994); and that such application is also inconsistent with the broad interpretation given to the term "arising out of" by the District of Columbia courts, it does not alter our conclusion as to the plain meaning of the contract language in this case.
Crescent also relies on Rivers & Bryan, Inc. v. HBE Corp., 628 A.2d 631 (D.C. 1993). See Crescent Mem. at 14. But that case involved a contract in which indemnification was limited to losses "resulting from subcontractor's failure" to "comply with all federal, state and local statutes and/or ordinances relating to the performance of this subcontract." 628 A.2d at 634. Here, there was no limitation at all as to the cause of the damage.
Crescent further argues that the word "arise" includes "an expression of causation flowing from the work, not to the workers or the worksite." Crescent Mem. at 17. It is not clear what Crescent means by this argument. What is clear, however, is that the definitions supplied by Crescent of the term "arise"including "to originate from a source" and "to come into being or to attention"contain no element of causation. As previously discussed, Crescent does not contend that the plaintiffs were injured at their homes, on their way to work, or at some other work site. Rather, it concedes that they were injured at the Standpipe Project itself in the course of their performance of the work called for by the contract to take place at that work site. As a result, the workers' injuries "originated from" that work site and "came into being" because of their work at that site, even if the chain of *414 causation that led to the injuries began at another location.
Crescent's argument is perhaps best exemplified by its contention that an indemnification clause that called for indemnification for harm arising out of "work performed under the contract" would have been sufficiently broad to require indemnification but that the one herecalling for indemnification for harm arising out of "work performed by Contractor" is not. Crescent Mem. at 14-15. The Court sees no distinction between these two terms. The work performed by Crescent is the very work that was being performed under the contract. The injuries here arose from that work.
Because Crescent obligated itself to defend and indemnify Amtrak for any injuries arising out of work at the Standpipe Project, it must defend and indemnify Amtrak against the claims of the plaintiffs here.[8]
C. Indemnification Under the STV/HMM Contract
Paragraph 35(B) of the STV/HMM Contract similarly contains an extremely broad indemnity clause. That paragraph provides in relevant part as follows:
Contractor [STV/HMM] shall be responsible for all damages and expenses on account of injuries (including death) to any of its employees, agents or subcontractors while on the premises of Amtrak and shall indemnify, defend, and hold Amtrak harmless from all claims or damage suits which may arise in consequence of such injuries irrespective of any negligence or fault of Amtrak.
STV/HMM Contract Gen. ¶ 35(B). This paragraph's requirement that STV/HMM "shall indemnify, defend and hold Amtrak harmless" is without limitation. It applies to any claims that arise from any injuries of STV/HMM's employees, agents or subcontractors "while on the premises of Amtrak." It further provides that this obligation to indemnify exists "irrespective of any negligence or fault of Amtrak."
In the face of this broad indemnification clause, STV and/or HMM make a number of arguments in an effort to avoid the paragraph's enforcement, none of which is persuasive.
*415 1. Connection Between the Indemnity Provision and the Work Under the Agreement
HMM argues that Paragraph 35(B), when read separately from the surrounding paragraphs, is "vague, ambiguous, and fails to pas[s] the `reasonableness' test required in Patterson v. District of Columbia, 795 A.2d 681 (D.C.Ct.App. 2002)" because it does not require a "reasonable connection to the services intended by the ... underlying agreement." HMM Mem. at 11; see Patterson, 795 A.2d at 683 ("in deciding whether the contract language is susceptible of clear meaning, we look to the contract language itself, and ask ourselves generally what a reasonable person in the position of the parties would have thought the disputed language meant") (citation and internal quotation marks omitted). HMM argues that the indemnity language "does not even attempt to apply the indemnity to the construction management services contemplated in the agreement," HMM Mem. at 11, and that the language "ignores the underlying services to be rendered by the indemnitor," id. at 12.
The problem with HMM's argument is that it forces an artificial narrowing on the scope of the indemnity language contained in the contract. The indemnity provision here applies to "all" claims that arise "in consequence of" any injuries of STV/HMM's employees, agents or subcontractors "while on the premises of Amtrak." STV/HMM Contract Gen. ¶ 35(B). It is difficult to imagine a more broadly-worded clause. By arguing that the language "ignores the underlying services to be rendered by the indemnitor," HMM Mem. at 12, or fails to "specifically incorporate the agreed upon services," id. at 15, HMM essentially faults it for being too broad and encompassing. Apparently, HMM would require that the clause repeat what is obvious from the agreement itself: that the indemnity obligation is included in a contract in which the indemnitor was required to provide specific services to Amtrak that is, construction management services for the Standpipe Project. A clause in a contract is not rendered ambiguous simply because the contract does not repeatedly advert to the context in which the clause was written. Paragraph 35(B) could only have created an indemnity obligation relating to the services called for under the contractnot one relating to some other work that STV/HMM might have been performing. Indeed, as HMM concedes, see HMM Mem. at 3, the contract governs the very work that was underway when it was interrupted by the runaway crane.
It appears that HMM's real point is that the accident here arose "not because of the services to be rendered pursuant to the terms of the agreement but due to external forces involving a crane operator losing control of a crane in an independent work project"that is, the breaker installation project. Id. at 12. HMM notes that the indemnitor had no control over the breaker installation project, that it did not even know about it, and thus that the breaker project could not have been "foreseen or intended at the time ... the agreement was signed." Id. HMM goes on to note that the agreement was "specifically written to provide construction management services during the installation of standpipe," id. at 12-13, and even noted that the rail lines involved in the accident were to be closed, id. at 13. HMM reasons that the agreement thus could not have "intended" that the indemnity clause would cover the particular accident that incurred here. STV similarly argues that the indemnification clause cannot cover injuries that were caused by an event originating at the breaker project because STV/HMM had no obligations under the contract with respect to the performance of the breaker project, that the breaker project was the *416 sole responsibility of Amtrak, and that STV/HMM was responsible only for the Standpipe Project. STV Mem. at 10-13, 24-30.
None of these facts, however, can change the clear meaning of the indemnification clause, which requires indemnity for "all" damages incurred by STV/HMM, its employees or agents. The clause does not limit claims to those that were caused by an act or omission at the particular job site. It does not limit indemnification to potential threats known to STV/HMM or controlled by STV/HMM. Nor does the clause suggest that the origin of the causal force that generates the "claims" or "injuries" must emanate from a point within the physical area of the work site. Contrary to STV's suggestion, this reading does not mean that STV/HMM is being given "obligations and responsibilities to other projects such as the Buss Breaker Project." Id. at 12. It is responsible for no injuries at that site.[9]
The Court also rejects HMM and STV's argument that because they had no reason to know about the breaker project, they could not have agreed to indemnify for any injuries that derived from acts or omissions at the breaker project. STV Mem. at 7, 22-23; HMM Mem. at 12. As STV puts it, `"[i]t defies logic ... that STV and/or STV/HMM would agree to defend and/or indemnify Amtrak with respect to the Buss Breaker Project when STV and STV/HMM was not aware of the Buss Breaker Project until after the accident." STV Mem. at 23. In essence, STV is arguing that the clause does not cover the accident because, when the parties drafted the agreement, STV could not have contemplated the sort of accident that occurred here.
However, the intent of the parties is judged by the particular language they use. See Tillery v. D.C. Contract Appeals Bd., 912 A.2d 1169, 1176 (D.C.2006) ("the written language embodying the terms of an agreement will govern the rights and liabilities of the parties, regardless of the intent of the parties at the time they entered into the contract, unless the written language is not, susceptible of a clear and definite undertaking") (citations and internal bracketing omitted); see also Segal Wholesale, Inc. v. United Drug Serv., 933 A.2d 780, 784 (D.C.2007) ("where a document is facially unambiguous, its language should be relied upon as providing the best objective manifestation of the parties' intent") (citing Hercules & Co. v. Shama Rest. Corp., 613 A.2d 916, 927 (D.C.1992)) (internal quotation marks omitted).[10] Where the parties write a broad clause, such as the one agreed upon here, it will necessarily cover any events that come within its language, even if it could later be shown that the parties did not foresee all possible events that might be encompassed by the language agreed on. Thus, the fact that a particular event was not contemplated *417 does not mean that the parties did not "intend" that the event be covered by the broad language of the indemnity clause.[11]
2. Indemnification with Respect to Cevasco's Claims
HMM asserts that it is not obligated to indemnify Amtrak for Cevasco's claims because Cevasco was an employee of STV. See HMM Mem. at 2-3; accord id. at 5-9. STV has not made a parallel argument with respect to Sood, who was an employee of HMM.
To support this argument, HMM notes that the Joint Venture Agreement between STV and HMM relating to the Standpipe Project has provisions stating that (1) the joint venture "shall not have employees of its own, but shall perform the services with the employees of each party," Joint Venture Agreement ¶ 7.5; (2) that "[i]t is not the purpose or intent of the parties ... to constitute either party as a partner, agent, or representative of the other party," id. ¶ 1.5; and (3) that each party had to obtain its own worker's compensation insurance, id. ¶ 14.1. See HMM Mem. at 5; HMM Reply Mem. at 3-10.[12]
HMM then points to the indemnity clause in the STV/HMM Contract, which states that the "Contractor"that is, the STV/HMM joint ventureshall be responsible for damages resulting from injuries "to any of its employees, agents or subcontractors" and that the joint venture must indemnify Amtrak for any claims arising from such injuries. See HMM Mem. at 6; HMM Reply Mem. at 3-5. HMM concludes that the indemnity provision with respect to Cevasco's claims "can never be applied to either HMM, individually, or to the STV/HMM joint venture" on the ground that neither of these entities employed Cevasco. HMM Mem. at 6. Instead, HMM argues that paragraph 35(B) means that each of the two joint-venture entities is responsible exclusively for its own employees.
HMM's argument fails, however, because it misreads the word "its" in the indemnity clause. "Its" precedes "employees, agent or subcontractor" and thus identifying who "it" is tells us whose employees, agents or subcontractors would have to be the subject of indemnification. HMM's argument seems to assume that the "its" in paragraph 35(B) refers either to HMM or to STVapparently depending on whose employee has been injured. In fact, the "its" in this clause refers not to either entity separately but rather to the "Contractor." The "Contractor" is defined as "the party performing construction management services under this contract." STV/HMM Contract Gen. ¶ 1. The "party performing construction management services" is in turn defined as "STV/HMM; a joint venture of STV Incorporated . . . and *418 Hatch Mott MacDonald." STV/HMM Contract at 1. In other words, the joint venture STV/HMM is made responsible by paragraph 35(B) to provide indemnification to Amtrak. And, under this paragraph, STV/HMM is responsible for claims by the "employees, agents or subcontractors" of the joint venture STV/HMM. Thus, the only question to be decided is whether Cevasco is an "employee, agent, or subcontractor" of the joint venture STV/HMM.
We accept arguendo HMM's assertion that the joint venture has no employees and that neither STV nor HMM is the agent of the other. But this does not address whether STV and HMM or their employees were agents of the joint venture STV/HMM. HMM does not dispute that a separate provision of the contract required that STV and HMM be jointly responsible for the joint venture's obligations to perform the Amtrak contract.[13] Thus, STV/HMM's responsibilities to perform the Amtrak contract were assumed by both HMM and STV. As a consequence, the contract could only have been performed by individuals operating under the auspices of HMM or STVthat is, their employees. Indeed, as HMM notes, the Joint Venture Agreement provides that the joint venture "shall not have employees of its own, but shall perform the services [required under the Amtrak contract] with the employees of each party." Joint Venture Agreement ¶ 7.5 (emphasis added). Thus, any worker on the project employed by either HMM or STV was acting as the agent of the joint venture STV/HMM. Because Cevasco was an employee of STV, he was acting as an agent of the joint venture STV/HMM and thus comes within the indemnity clause.
In sum, the indemnity obligation unequivocally requires the joint venture STV/HMM to indemnify Amtrak for any claims by any persons acting as agents of STV/HMM. These agents include both STV, HMM, and their employees. It thus does not matter whose particular employee is injured for purposes of enforcing the indemnity obligation as long as that person is acting as the agent of the joint venture STV/HMM in its performance of the contract. Both Cevasco and Sood were acting as agents of the joint venture in doing their work on the project and thus any harm to them comes within the indemnity clause.
3. Material Breach
STV argues that the indemnification clauses are unenforceable because Amtrak breached a material provision of the contract, allegedly requiring Amtrak to inform STV/HMM of "any other Amtrak/LIRR involvement that may have any impact on the contract." STV Mem. at 16 (quoting STV/HMM Contract ¶ 3.2.5(A)(3)). STV cites no case law in support of this argument and thus it is questionable whether even STV takes the argument seriously. In any event, it is rejected. A material breach is one that "goes to the `essence' and frustrates substantially the purpose for which the contract was agreed to." United States ex rel. Bricks, Blocks & Concrete Co. v. Frontier Ins. Co., 2001 U.S. Dist. LEXIS 24451, at *12 (D.D.C. Apr. 23, 2001) (citing Keefe Co. v. Americable Int'l, Inc., 755 A.2d 469, 475 (D.C.2000)); see also Greyhound Lines, Inc. v. Bender, 595 F.Supp. 1209, 1224 (D.D.C.1984) (listing factors of material breach); Fowler v. A & A Co., 262 A.2d 344, 347 (D.C.1970) (material breach *419 exists where a party is "receiving something substantially less or different from that for which he bargained") (internal quotation marks and citation omitted). The District of Columbia Court of Appeals has cited with approval case law holding that "[f]or a breach to be material, it must be so serious to destroy the essential object of the agreement." 3511 13th Street Tenants' Ass'n v. 3511 13th Street, N.W. Residences, LLC, 922 A.2d 439, 445 (D.C. 2007) (quoting Ranes v. Am. Family Mut. Ins. Co., 219 Wis.2d 49, 57, 580 N.W.2d 197 (1998)).
The provision STV points to is one that requires STV/HMM to hold a pre-construction conference with Amtrak and other personnelone that would have occurred years before the accident here. The contract states that the conference is intended to "ensure that all parties have a clear understanding of the contract requirements and any other Amtrak/LIRR involvement that may have any impact on the contract." See STV Mem. at 16 (quoting STV/HMM Contract ¶ 3.2.5). While STV asserts that Amtrak's failure to inform it of the other projects in the tunnels constituted a material breach of the STV/HMM Contract, the language of the contract does not specifically require that Amtrak inform STV/HMM of all other projects in the tunnels. Even if it could be so construed, STV has not shown that any such requirement would go to the "essence" or the purpose of the contract and that the failure to do so "destroy[ed] the essential object of the agreement." 3511 13th Street Tenants' Ass'n, 922 A.2d at 445.
4. Further Discovery
STV asserts that Amtrak's motion for summary judgment should be denied because it cannot oppose it without further discovery responses that Amtrak has not yet provided. See STV Mem. at 17-22. It asserts it needs to depose a Marvin Smith on the issue of the parties' intent regarding the indemnification clause, see id. at 17-18; that it needs documents from the "contract file" that might bear on the parties' intent, id. at 18, 21; and that it requires documents regarding the breaker project to show that STV/HMM had no involvement with that project, see id. at 18, 21-22. The issues for which the discovery is sought, however, are not relevant to the resolution of Amtrak's motion. First, we assume that STV/HMM had no obligations or responsibilities with respect to the breaker project. Second, the intent of the parties may not be established from extrinsic evidence where the contract is not ambiguous. See Steele Foundations, Inc., 937 A.2d at 153; accord N.P.P. Contractors, Inc. v. John Canning & Co., 715 A.2d 139, 142 (D.C.1998) ("Because the contract language is unambiguous, we do not consider the testimony of N.P.P.'s president. . . concerning his subjective intent as to the scope of the indemnification clause.") (citation omitted); Dodek, 537 A.2d at 1092 ("Where a contract is unambiguous ... `summary judgment is appropriate ... since, absent such ambiguity, a written contract duly signed and executed speaks for itself and binds the parties without the necessity of extrinsic evidence.'") (quoting Holland v. Hannan, 456 A.2d 807, 815 (D.C.1983)). As already discussed, the indemnification clause is unambiguous with respect to the obligations of STV/HMM.
IV. CONCLUSION
For the foregoing reasons, Amtrak's motions for partial summary judgment (consisting of Docket # 220 in 04 Civ. 5760; Docket # 133 in 05 Civ. 7419; Docket # 87 in 06 Civ. 6195; Docket #91 in 06 Civ. 6196; and Docket #75 in 06 Civ. 6956) should be granted. HMM's cross-motions for summary judgment (consisting of Docket #248 in 04 Civ. 5760; Docket # 158 in 05 Civ. 7419) should be denied.
*420 PROCEDURE FOR FILING OBJECTIONS TO THIS REPORT AND RECOMMENDATION
Pursuant to 28 U.S.C. § 636(b)(1) and Rule 72(b) of the Federal Rules of Civil Procedure, the parties have ten (10) days from service of this Report and Recommendation to serve and file any objections. See also Fed.R.Civ.P. 6(a), (b), (d). Such objections (and any responses to objections) shall be filed with the Clerk of the Court, with copies sent to the Hon. Paul A. Crotty, and to the undersigned, at 500 Pearl Street, New York, New York 10007. Any request for an extension of time to file objections must be directed to Judge Crotty. If a party fails to file timely objections, that party will not be permitted to raise any objections to this Report and Recommendation on appeal. See Thomas v. Arn, 474 U.S. 140, 106 S.Ct. 466, 88 L.Ed.2d 435 (1985).
NOTES
[*] These cases were originally assigned to District Court Judge Howell. The cases were reassigned to this Court on October 12, 2005.
[1] The five actions are: Cevasco v. National Railroad Passenger Corp., 04 Civ. 5760; Sood v. National Railroad Passenger Corp., 05 Civ. 7419; Adornetti v. National Railroad Passenger Corp., 06 Civ. 6195; Vitale v. National Railroad Passenger Corp., 06 Civ. 6196; and Gayle v. National Railroad Passenger Corp., 06 Civ. 6956. The five actions have been consolidated for pre-trial purposes under the docket number 04 Civ. 5760. All citations refer to this docket, unless otherwise noted.
[2] Cevasco was employed as a project manager by STV. Cevasco Dep. at 12. Vitale was an employed as a driver by Crescent. Vitale First Am. Compl., filed Apr. 19, 2007 (06 Civ. 6196, Docket #46) ("Vitale Compl."), ¶ 73. Sood was employed as a resident engineer by HMM. Deposition of Jugal Sood (annexed as Ex. C to Joseph Decl.), at 30. Adornetti was employed as a driver by Crescent. Deposition of Girolamo Adornetti (annexed as Ex. F to Joseph Decl.), at 37-38. Gayle was employed as a pilot by Amtrak. Gayle First Am. Compl., filed May 10, 2007 (06 Civ. 6956, Docket # 39) ("Gayle Compl."), ¶ 21.
[3] Although it appears Crescent intended to file its Answer to Amtrak's Third Amended Third-Party Complaint as Docket # 242, the document actually filed is an older document, dated April 23, 2007, which appears to be Crescent's Answer to Cevasco's Third Amended Complaint. Nevertheless, the other parties replied to this document as though it were an Answer to the Third Amended Third-Party Complaint. See, e.g., Amtrak's Answer to Counter-Claims Asserted in Crescent Contracting, Inc.'s Answer to Third Amended Third-Party Complaint, filed Apr. 4, 2008 (Docket # 268). Similarly, STV never filed an Answer to Amtrak's Third Amended Third-Party Complaint, but other parties filed replies to counter-claims that apparently were raised in STV's Answer. See, e.g., HMM's Answer to STV, Inc.'s Cross-Claim of Third Amended Third-Party Complaint, filed Mar. 25, 2008 (Docket #261).
[4] See Notice of Motion, filed Feb. 5, 2008 (Docket # 220); Memorandum of Law in Support of Defendant/Third-Party Plaintiff's Motion for Summary Judgment, filed Feb. 6, 2008 (Docket # 223) ("Amtrak Mem."); Crescent Contracting, Inc.'s Memorandum of Law in Opposition to Defendant/Third-Party Plaintiff's Motion for Summary Judgment, filed Mar. 12, 2008 (Docket # 251) ("Crescent Mem."); Memorandum of Law in Opposition to National Railroad Passenger Corp's Motion for Summary Judgment, filed Mar. 12, 2008 (Docket # 245) ("STV Mem."); Memorandum of Law in Opposition to Amtrak's Motion for Summary Judgment and in Support of Hatch Mott MacDonald's Cross Motion for Summary Judgment, filed Mar. 12, 2008 (Docket # 250) ("HMM Mem."); Memorandum of Law in Further Support of Defendant/Third-Party Plaintiff's Motion for Summary Judgment and in Opposition to Third-Party Defendant Hatch Mott MacDonald's Cross Motion for Summary Judgment, filed Apr. 21, 2008 (Docket # 275) ("Amtrak Reply Mem."). Although these documents were filed separately in each of the live consolidated actions (with the exception of the submissions by HMM and STV, which were filed only in 04 Civ. 5760 and 05 Civ. 7419), we cite only to the docket of 04 Civ. 5760, which contains all relevant submissions.
[5] See Notice of Cross Motion, filed Mar. 12, 2008 (Docket #248); HMM Mem.; Memorandum of Law in Opposition to Hatch Mott MacDonald's Motion for Summary Judgment, filed Apr. 21, 2008 (Docket #271) ("STV Reply Mem."); Amtrak Reply Mem.; Reply Memorandum of Law in Further Support of Third Party Defendant Hatch Mott MacDonald's Cross Motion for Summary Judgment, filed May 5, 2008 (Docket #278) ("HMM Reply Mem.").
[6] While it is not relevant to the disposition of the pending motions, the Court notes that the Joint Venture Agreement between STV and HMM contains a choice-of-law clause stating that it "shall be construed in accordance with the laws of the State of New York." Joint Venture Agreement ¶ 25.0.
[7] In a separate part of its analysis, Mead also noted that the indemnification provision in a different clause required indemnification for injuries "to any of the employees of AMTRAK while on the premises of AMTRAK in connection with operations performed or to be performed under the contract." 676 F.Supp. at 96-97
[8] Crescent argues that a separate indemnity provision, Paragraph 68.2, does not unambiguously obligate Crescent to indemnify Amtrak for Amtrak's own negligent acts. See Crescent Mem. at 11, 21-23. Given the scope of Paragraph 68.1, it is not necessary to reach this question. In any event, Paragraph 68.2 obligates Crescent to "indemnify, defend, and hold Amtrak harmless from all claims or damage suits which may arise in consequence of [injuries (including death) to any of Crescent's employees, agents or subcontractors while on the premises of Amtrak]." Crescent Contract Gen. ¶ 68.2 (emphasis added). The language in this paragraph includes no limitations regarding acts or omissions of either party. The language is not susceptible to any interpretation that would obviate the indemnity obligation in the event Crescent could show that the claim was caused by Amtrak's negligence. See Bland, 473 F.2d at 157 (indemnification language "must necessarily" cover the negligence of the contractor, who was the "only other significant party besides the subcontractor in a position to cause any losses arising out of ... this contract") (internal quotation marks omitted); Moses-Ecco Co., 320 F.2d at 688 ("Since the parties specified that `all' losses on `any' claims included those of [sub-contractor]'s employees, we think further specification would be superfluous and ritualistic. Moreover, it would appear that no valid claim by an employee of [sub-contractor] could arise against [contractor] except through [contractor]'s own negligence."). Thus, even if Crescent were not already obligated to defend and indemnify Amtrak under Paragraph 68.1, Crescent would be obligated by Paragraph 68.2 to defend and indemnify Amtrak against the claims of Crescent employees Adornetti and Vitale.
[9] STV's reliance on Zamierowski v. National Railroad Passenger Corp., 2006 WL 1816377 (S.D.N.Y. June 28, 2006), see STV Mem. at 29-30, for this point is unavailing as it is irrelevant. Zamierowski refused to enforce an indemnity obligation only because the Court found that the obligation was contingent on the indemnitee's completion of certain work that was the subject of the contract. 2006 WL 1816377, at *6-7. Also of no relevance is STV's assertion that "[l]iability may not be imposed upon a party who merely furnishes the occasion for the occurrence of the event but is not one of its causes." STV Mem. at 30. The cases cited in support of this provision involve the standards of causation in tort suits arising out of motor vehicle accidents. They have nothing to do with obligations that parties may undertake by contract.
[10] Thus, it is of no moment that a fact witness supplied during this litigation by Amtrak answered the question "Are you unable to interpret the indemnification language?" with "Yes." See STV Mem. at 10.
[11] STV briefly argues that the "Indemnification Provisions"presumably including Paragraph 35(B)"[a]re ambiguous" because a different section, Paragraph 35(A), contains an indemnification clause that is limited to indemnification for negligent acts or omissions of the contractor. STV Mem. at 13-14. There is nothing in Paragraph 35(A), however, that purports to give meaning to Paragraph 35(B). If anything, the existence of the more limited language in Paragraph 35(A) makes even more obvious the broad sweep of the indemnity clause contained in Paragraph 35(B).
[12] While it does not affect the disposition of the instant motions, the assertion in Article 1.5 of the Joint Venture Agreement that STV and HMM were not acting as each other's agent is seemingly superseded with respect to STV's and HMM's obligations to Amtrak inasmuch as the STV/HMM Contract provided as follows:
In the absence of any specific limitation of authority, each Contractor party shall act as the agent of the other with full and complete authority to bind the other with respect to any and all transactions arising out of performance under the Contract.
STV/HMM Contract ¶ 12.
[13] The Services Contract between STV/HMM and Amtrak provides:
The Contractor hereunder shall be comprised of two parties ... each of which separately represent and warrant that each shall be jointly and separately liable for the performance of the Contract in accordance with the terms and conditions hereunder.
STV/HMM Contract ¶ 12.
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718 F.2d 1099
Jefferson Tp.v.City of West Carrollton
81-3355
UNITED STATES COURT OF APPEALS Sixth Circuit
8/10/83
S.D.Ohio, 517 F.Supp. 417
AFFIRMED
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812 F.2d 1406
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.Andre ANDERSON, Plaintiff-Appellant,v.Debra SUMMERVILL, Lorraine Grill, Defendants-Appellees.
No. 86-1496 and 86-1518.
United States Court of Appeals, Sixth Circuit.
Jan. 28, 1987.
Before KEITH and KENNEDY, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.
ORDER
1
These appeals have been referred to a panel of the Court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the brief and record, this panel agrees unanimously that oral argument is not needed. Rule 34(a), Federal Rules of Appellate Procedure.
2
In this case, plaintiff-prisoner filed a civil rights complaint against two female corrections officers alleging they had made lewd suggestions to him. He requested monetary damages and other relief. The district court dismissed the complaint as 'frivolous' under 28 U.S.C. Sec. 1915(d). These appeals followed, plaintiff having filed successive notices of appeal from the same judgment. On appeal, plaintiff has filed an informal brief and moves for the appointment of appellate counsel.
3
Upon consideration, we agree with the district court. Plaintiff's complaint falls short of stating a claim for relief under an Eighth Amendment analysis. Parrish v. Johnson, 800 F.2d 600, 611 (6th Cir.1986). We affirm. Rule 9(d)(3), Rules of the Sixth Circuit.
4
It is therefore ORDERED that the motion for appellate counsel be denied and that the final order of the district court be affirmed.
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831 F.2d 1063
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.Bruce R. DRUMM, Plaintiff-Appellant,v.CABINET FOR HUMAN RESOURCES, STATE OF KENTUCKY, Defendant-Appellee.
No. 87-5081.
United States Court of Appeals, Sixth Circuit.
Oct. 28, 1987.
Before RALPH B. GUY, Jr., DAVID A. NELSON and BOGGS, Circuit Judges.
ORDER
1
This case has been referred to a panel of the court pursuant to Rule 9(a), Rules of the Sixth Circuit. Upon examination of the record and the briefs, this panel agrees unanimously that oral argument is not needed. Fed.R.App.P. 34(a).
2
Plaintiff, an inmate of the Northpoint Training Center in Burgin, Kentucky, filed his civil rights action challenging the constitutionality of Kentucky statutes by which he was deprived of temporary custody of his two minor children. At the time plaintiff filed his complaint in federal court, civil and criminal actions were pending against him in both Jefferson County and Bullitt County, Kentucky. Plaintiff sought the return of his children, relief from the pending civil actions and damages. The district court abstained and dismissed plaintiff's action, and plaintiff appealed. We affirm. When state proceedings are pending, federal action is precluded absent a showing of extraordinary circumstances. Younger v. Harris, 401 U.S. 37 (1971); Moore v. Sims, 442 U.S. 415 (1979). See also Huffman v. Pursue, Ltd., 420 U.S. 592 (1975) (applying Younger to pending civil proceedings). Plaintiff has failed to show that these extraordinary circumstances exist. Therefore we hereby affirm the order of the district court. Rule 9(b)(5), Rules of the Sixth Circuit.
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Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
6-17-2005
Hasko v. Atty Gen USA
Precedential or Non-Precedential: Non-Precedential
Docket No. 03-4205
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2005
Recommended Citation
"Hasko v. Atty Gen USA" (2005). 2005 Decisions. Paper 999.
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 03-4205
SUZANA HASKO; ERION HASKO; KRESHNIK HASKO
Petitioners
v.
*ALBERTO GONZALES, Attorney General of the United States
Respondent
*Pursuant to F.R.A.P. 43(c)
Petition for Review of an Order
of the Board of Immigration Appeals
(No. A77 564 158)
_________
Argued: February 17, 2005
Before: Sloviter, Ambro and Aldisert, Circuit Judges.
(Filed June 17, 2005)
Steven A. Mundie (Argued)
233 Broadway, Suite 3507
New York, NY 10279
Attorney for Petitioner
1
Earle B. Wilson (Argued)
Stephen J. Flynn
United States Department of Justice
Office of Immigration Litigation
Civil Division
P.O. Box 878, Ben Franklin Station
Washington, D.C. 20044
Attorneys for Respondent
OPINION OF THE COURT
ALDISERT, Circuit Judge
Petitioners Suzana Hasko, Erion Hasko and Kreshnik Hasko, all natives and
citizens of Albania, seek review of a final order of removal issued by the Board of
Immigration Appeals (“BIA” or “Board”) on September 26, 2003. The lead petitioner is
Suzana Hasko (“Ms. Hasko”).1 We must decide whether substantial evidence supports the
Board’s determination that: (1) Ms. Hasko lacked credibility in regard to the essential
underpinnings of her asylum claim; and (2) even if her testimony was credible, the
alleged harm she suffered in Albania did not constitute “persecution or a well-founded
fear of persecution on account of race, religion, nationality, membership in a particular
social group, or political opinion.” 8 U.S.C. § 1101(a)(42)(A) (2000). We have
1
Ms. Hasko’s two sons are riders on Ms. Hasko’s request for asylum and
withholding of removal. Their eligibility for asylum is therefore predicated on Ms.
Hasko’s claim.
2
jurisdiction to review the BIA’s order under 8 U.S.C. § 1252. We will deny the petition
for review.
I.
Because we write only for the parties, who are familiar with the facts, procedural
history and contentions presented, we will not recite them except as necessary to the
discussion.
II.
For a petitioner to establish that she is a refugee eligible for asylum, she must
demonstrate that she is unable or unwilling to return to her country of origin “because of
persecution or a well-founded fear of persecution on account of race, religion, nationality,
membership in a particular social group, or political opinion.” 8 U.S.C. § 1101(a)(42)(A)
(2000). A petitioner for asylum bears the burden of supporting her claim through credible
testimony. Gao v. Ashcroft, 299 F.3d 266, 272 (3d Cir. 2002). An adverse credibility
finding by the IJ should be supported by specific, cogent reasons for the disbelief in
petitioner’s testimony. Balasubramanrim v. INS, 143 F.3d 157, 161-162 (3d Cir. 1998).
We review the Board’s factual determinations under the substantial evidence
standard, meaning that we will uphold findings “to the extent that they are ‘supported by
reasonable, substantial, and probative evidence on the record considered as a whole.’”
Balasubramanrim v. INS, 143 F.3d 157, 161 (3d Cir. 1998) (quoting INS v. Elias-
3
Zacarias, 502 U.S. 478 (1992)) When the BIA accepts some of an IJ’s adverse credibility
findings and rejects others “the scope of the Court’s review [] includes both the BIA’s
decision and the portion of the IJ’s decision that was left unchallenged in front of the
BIA.” Douglas v. Ashcroft, 374 F.3d 230, 234 (3d Cir. 2004).
Here, there is substantial evidence to support the Board’s adverse credibility
finding. The Immigration Judge (“IJ”) found Ms. Hasko not credible because of a number
of factors. On appeal the Board stated:
[w]hile we do not agree with the whole of the Immigration Judge’s opinion,
particularly with the Immigration Judge’s speculative conclusions about the
‘implausibility’ of attackers driving the respondent home or that the
respondent would have been unable to travel alone internationally if she
were truly traumatized by a rape – we nevertheless agree with the
Immigration Judge that overall, the respondent lacks credibility.
(Board op. at 2.)
The Board found Ms. Hasko incredible for several reasons. First, she testified that
she knew the men who raped her were “socialist” political opponents because they made
threatening phone calls to her yet she did not report these threatening calls in her written
application or during her direct testimony. (Board op. at 2.) Second, the Board noted other
inconsistencies or implausibilities in Ms. Hasko’s testimony. For example, Ms. Hasko
testified that her doctor reported her rape but she provides no testimony as to why the
police did not act on that report. (Board op. at 2.) The IJ noted inconsistencies regarding
the date of the rape and whether Ms. Hasko was threatened with an arrest in 1991. (IJ op.
at 7-8, 10-11.) Third, the Board recognized an inconsistency as to what happened during
4
the 1991 demonstration. In her written application, Ms. Hasko states that her life was
threatened by the police, but she does not mention this important fact in her oral
testimony. (Board op. at 2.)
Finally, the Board noted that none of Ms. Hasko’s testimony was corroborated by
independent documentary evidence. (Id.) Ms. Hasko contends that the IJ did not consider
the affidavits proffered by her or accord them any weight because they were not certified
in accordance with 8 C.F.R. § 1287.6. These affidavits were not actually discounted under
8 C.F.R. § 1287.6 because this section only pertains to “official records.” These
documents were part of “Group Exhibit 7.” Even if the BIA or IJ erred in not considering
these three affidavits, the result of this case is not affected because the letters do not
resolve any of the inconsistencies in Ms. Hasko’s report. See Giu Cun Liu v. Ashcroft,
372 F.3d 529, 533 (3d Cir. 2004) (concluding that the certification rule is not an “absolute
rule of exclusion, and is not the exclusive means of authenticating records before an
immigration judge”). They merely confirm the fact that Ms. Hasko participated in a
political demonstration and was subsequently arrested. They do not speak to whether she
was raped by members of the Socialist regime or by private lawless individuals.2
The State Department’s Country Report on Human Rights Practices for Albania,
2
The first statement is from Mark Kola who confirmed that Ms. Hasko participated
in the funeral demonstration of Azen Hajdari and was arrested on September 16, 1998.
The second statement is from Arben Myftari, Ms. Hasko’s former neighbor, who
corroborates her claim that she was arrested by police on September 16, 1998. The third
statement by Luljeta Veizi, another neighbor, does the same.
5
February 2001 and the Profile of Asylum Claims and Country Conditions, February 1996
also contradict Ms. Hasko’s testimony. There is no indication that a low level member of
the Democratic Party would be politically targeted based on her attendance at sporadic
demonstrations or that sexual assaults are used for political purposes. See Zubeda v.
Ashcroft, 333 F.3d 463, 477-478 (3d. Cir. 2003) (“Country reports . . . are the most
appropriate and perhaps the best resource for information on political situations in foreign
nations.”). Moreover, the United States Consul based in Tirana, Albania, opined that Ms.
Hasko’s claim that she was targeted for sexual abuse because of her participation in the
Democratic Party was not “credible at all.”
There is substantial evidence in the record to support the adverse credibility
findings of the BIA and IJ.
III.
Even if Ms. Hasko’s testimony was credible, the alleged harm she suffered in
Albania did not constitute “persecution or a well-founded fear of persecution on account
of race, religion, nationality, membership in a particular social group, or political
opinion.” 8 U.S.C. § 1101(a)(42)(A) (2000). A petitioner is not eligible for asylum if the
injuries and adverse incidents she sustained were caused by private, lawless individuals.
See Matter of Kasigna, 21 I&N Dec. 357, 365 (BIA 1996) (“While a number of
descriptions of persecution have been formulated in our past decisions, we have
recognized that persecution can consist of the infliction of harm or suffering by a
6
government . . . .”).
Even if the alleged rape, mistreatment and telephonic threats were true, Ms. Hasko
did not prove anything but lawless private conduct. The Board did not accept Ms.
Hasko’s contention that she was raped by political opponents because of her involvement
with the Democratic Party in Albania. (Board op. at 4.) Ms. Hasko never identified these
attackers in any way except to say that she knew they were “socialists” because they had
been making telephonic threats. She did not mention these threatening calls in her written
application or during her direct testimony.
*****
We have considered all contentions present by the parties and conclude that no
further discussion is necessary. Substantial evidence supports the IJ and Board’s adverse
credibility findings. Even if Ms. Hasko’s testimony was credible, the alleged harm she
suffered in Albania did not constitute “persecution or a well-founded fear of persecution
on account of race, religion, nationality, membership in a particular social group, or
political opinion.” 8 U.S.C. § 1101(a)(42)(A) (2000)
The petition for review will be denied.
7
AMBRO, Circuit Judge, Concurring.
I agree that Hasko’s petition for review must be denied as there is substantial
evidence to support the Board of Immigration Appeals’ (“BIA”) adverse credibility
determination. However, I write to comment on aspects of the Immigration Judge’s (“IJ”)
opinion (which the BIA cut back) that I found disconcerting.
The IJ based part of his adverse credibility ruling on the fact that Hasko said her
rapists drove her home. While this is not what we would expect to hear, that is not the
issue. The issue is whether Hasko is making up her story. If Hasko were lying but
wanted to be believed, and could make up any story she wanted, why would she have
chosen an uncommon, unexpected story, i.e., that her rapists drove her home?
In addition, it “made absolutely no sense” to the IJ that Hasko “would leave the
protection of her husband and journey outside the protection of her home.” The IJ “d[id]
not believe” that Hasko would be able to take an arduous international trip if she were
truly traumatized by a rape. This is little more than bad human speculation, i.e., guessing
without evidentiary support in the record.
Finally, the IJ wrote that it was “not credible that the respondent would not try to
have her attackers arrested again based on the severity of their attack and would not at
8
least attempt to report the event to the police.” However, Hasko gave two plausible
explanations for not reporting the rape: (1) that the police would “never find who did
this,” any hearing concerning her case would be “fake,” and “people were not getting
their rights”; and (2) that her abductors told her they would kidnap her children if she
went to the police. Moreover, it is common knowledge that when women are raped they
often do not report it. They may be ashamed or fear reprisals from their attackers, having
their own character put on trial, or being forced to relive the incident. See, e.g., Wood v.
Alaska, 957 F.2d 1544, 1552 (9th Cir. 1992); United States v. Wiley, 492 F.2d 547, 553
(D.C. Cir. 1973) (“One said to be a victim of rape may be stigmatized by society, there
may be humiliating publicity, and the necessity of facing the insinuations of defense
counsel may be a deterrent. . . . One result of all of these obstacles is that rape is one of
the most under-reported of all crimes.” (footnotes omitted)).3
Put simply, when an IJ makes a credibility ruling, he or she should base it not on
personal speculation, but rather on objective reason and evidence in the record.
3
As a general matter, presumably an IJ will often be able to find in the case history
of a credible alien the kind of inconsistencies, omissions, mistakes, and/or suspicious
statements that the IJ found in Hasko’s case, especially one who is (1) non-English
speaking, (2) potentially suffering from post-traumatic stress disorder from being raped,
and (3) an overwhelmed single mother in a new country.
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243 U.S. 29 (1917)
BOWERSOCK
v.
SMITH, ADMINISTRATRIX OF SMITH.
No. 172.
Supreme Court of United States.
Submitted February 1, 1917.
Decided March 6, 1917.
ERROR TO THE SUPREME COURT OF THE STATE OF KANSAS.
*30 Mr. Charles F. Hutchings and Mr. McCabe Moore for plaintiff in error.
Mr. Joseph Taggart, Ada Burhans Smith, Administratrix, pro se, Mr. J.H. Mitchell and Mr. S.D. Bishop for defendant in error.
MR. CHIEF JUSTICE WHITE delivered the opinion of the court.
Chapter 356 of the Laws of Kansas of 1903, General Statutes of 1909, §§ 4676 to 4683, is entitled and provides in part as follows:
"An Act requiring safeguards for the protection of all persons employed or laboring in manufacturing establishments, and providing civil remedies for all persons so engaged, or their personal representatives, in cases where any such person may be killed or injured while employed or laboring in any manufacturing establishment which is not properly provided with the safeguards required by this act.
* * * * * * * *
"Sec. 4. All . . . machinery of every description used in a manufacturing establishment shall, where practicable, *31 be properly and safely guarded, for the purpose of preventing or avoiding the death of or injury to the persons employed or laboring in any such establishment; and it is hereby made the duty of all persons owning or operating manufacturing establishments to provide and keep the same furnished with safeguards as herein specified.
"Sec. 5. If any person employed or laboring in any manufacturing establishment shall be killed or injured in any case wherein the absence of any of the safeguards or precautions required by the act shall directly contribute to such death or injury, the personal representatives of the person so killed, or the person himself, in case of injury only, may maintain an action against the person owning or operating such manufacturing establishment for the recovery of all proper damages. . . .
"Sec. 6. In all actions brought under and by virtue of the provisions of this act, it shall be sufficient for the plaintiff to prove in the first instance, in order to establish the liability of the defendant, that the death or injury complained of resulted in consequence of the failure of the person owning or operating the manufacturing establishment where such death or injury occurred to provide said establishment with safeguards as required by this act, or that the failure to provide such safeguard directly contributed to such death or injury."
This act being in force, Smith, the superintendent of the Lawrence Paper Manufacturing Company, while engaged in adjusting some unguarded dryer rolls, was caught between them, crushed and killed. Relying upon the law above quoted, his personal representative sued Bowersock, the owner of the factory, to recover the damages suffered. The petition alleged the dangerous character of the dryer rolls and the fact that, although it was practicable to guard them, the requirements of the act in that respect had not been complied with, and *32 charged that the failure to do so directly caused the death of Smith. It was further alleged that at the time of the accident Smith was engaged in adjusting the machinery under the direction of a superior officer, the assistant manager of the factory. The answer, while denying generally the allegations of the petition, alleged that it was not practicable to guard the dryer rolls and averred that Smith was guilty of contributory negligence. It was also averred that as superintendent Smith by his contract of employment was under the duty of safeguarding the machinery and was charged generally with authority to direct the use of the same and hence he had assumed the risk of injury from failure to guard the dryer rolls and hence his injury and death resulted solely from his own neglect and through no fault on the part of the owner.
At the trial the plaintiff's evidence tended to support all of the allegations of the petition. The defendant offered evidence tending to show that the guarding of the dryer rolls was not practicable and that Smith had been guilty of contributory negligence. Further evidence was introduced tending to show that when Smith was employed as superintendent it was stipulated by him as a condition to his accepting the position, that he should have full and complete charge and management of the factory, including grounds, building, machinery and men, and that he should place guards on the machinery where needed for the protection of the employees. In addition the defendant, in support of the allegation that he had fully performed his duty under the statute, introduced in evidence the following notice which he had posted in the factory in question and three others which he carried on:
"CAUTION. Every Employe is Urged to be Careful in Order to Avoid Accidents.
"If there is any machinery, dangerous place or tool that you think should be safeguarded, repaired or improved, we will regard it a favor if you will report same at once to *33 the office. It is desired that all employee assist in reducing accidents to lowest possible point. November, 1911."
The court instructed the jury over the objection of the defendant that under the statute contributory negligence was no defence and that the fact that Smith was employed as superintendent of the factory with authority to safeguard the machinery would not bar a recovery and charged with reference to the burden of proof in accordance with the provision of the statute relating to that subject. There was a verdict for the plaintiff and the judgment entered thereon was affirmed by the court below. It was held, following previous decisions, that the common-law defences of contributory negligence, fellow servant and assumption of the risk were not applicable to suits under the statute. The court further construing the statute, held that it embraced all employees of every class or rank in the factories to which it applied and that merely because the deceased was employed as superintendent did not exclude him from the benefits of the act nor relieve the owner from responsibility under it. And it was held that a different result was not required because the deceased had contracted with the owner to safeguard the machinery under the circumstances of his employment. In so ruling the court referred to the evidence and pointed out that although there was testimony as to the authority of the deceased under his contract to safeguard the machinery, at the same time the evidence showed that in the exercise of such authority he was under the control of three superiors, all of whom had testified that they did not consider it practicable to safeguard the dryer rolls. Attention was also directed to the notice above reproduced which the defendant posted with reference to guards on machinery as showing a control over that subject by the owner. 95 Kansas, 96.
The case is here because of the asserted denial of rights guaranteed by the Fourteenth Amendment.
*34 That government may, in the exercise of its police power, provide for the protection of employees engaged in hazardous occupations by requiring that dangerous machinery be safeguarded and by making the failure to do so an act of negligence upon which a cause of action may be based in case of injury resulting therefrom, is undoubted. And it is also not disputable that, consistently with due process, it may be provided that in actions brought under such statute the doctrines of contributory negligence, assumption of risk and fellow servant shall not bar a recovery, and that the burden of proof shall be upon the defendant to show a compliance with the act. Missouri Pacific Ry. Co. v. Mackey, 127 U.S. 205; Second Employers' Liability Cases, 223 U.S. 1; Missouri Pacific Ry. Co. v. Castle, 224 U.S. 541; Chicago, Burlington & Quincy Ry. Co. v. United States, 220 U.S. 559; Mobile, Jackson & Kansas City R.R. Co. v. Turnipseed, 219 U.S. 35; Easterling Lumber Co. v. Pierce, 235 U.S. 380.
While not directly disputing these propositions and conceding that the Kansas statute contains them and that it is not invalid for that reason, nevertheless it is insisted that the construction placed upon the statute by the court below causes it to be repugnant to the due process clause of the Fourteenth Amendment. This contention is based alone upon the ruling made by the court below that under the statute the deceased had a right to recover although he had contracted with the owner to provide the safeguards the failure to furnish which caused his death, a result which, it is urged, makes the owner liable and allows a recovery by the employee because of his neglect of duty. We think the contention is without merit. It is clear that the statute as interpreted by the court below a construction which is not challenged imposed a duty as to safeguards upon the owner which was absolute and as to which he could not relieve himself by contract. This being true, the contention has nothing to rest upon since *35 in the nature of things the want of power to avoid the duty and liability which the statute imposed embraced all forms of contract, whether of employment or otherwise, by which the positive commands of the statute would be frustrated or rendered inefficacious. Second Employers' Liability Cases, 223 U.S. 1, 52.
Again it is contended that the statute denies to the plaintiff in error the equal protection of the laws, since it discriminates against factories owned and operated by individuals in favor of those carried on by corporations. This is the case, it is said, because a corporation in the nature of things can only comply with the requirements of the statute by contracting with agents or employees to safeguard the machinery, to whom in case of injury the corporation would not be liable, while an individual owner under the ruling of the court must perform that duty himself. The reasoning is obscure but we think it suffices to say that it rests upon an entire misconception since the statute imposes the positive duty to have the machinery duly safeguarded whether the owner be an individual or a corporation, and the want of power by contract to escape the liability which the statute imposes also equally applied to corporations as well as individuals. It follows, therefore, that the statute affords no semblance of ground upon which to rest the argument of inequality which is urged.
Affirmed.
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256 S.W.3d 556 (2007)
Beth RIDDLE, Joseph Riddle, and Julia Riddle, Appellants,
v.
Richard UDOUJ, Special Administrator of the Estate of Olivia Udouj, Deceased, and Michael Udouj and Richard Odouj, Trustees of the Olivia Udouj Trust, Appellees.
No. CA 06-865.
Court of Appeals of Arkansas.
May 9, 2007.
Rehearing Denied June 20, 2007.
*557 Sam Sexton, III, Fort Smith, AR, for appellants.
Warner, Smith & Harris, PLC, by: Douglas O. Smith, Jr., Stephanie Harper Easterling, and Robert A. Frazier, Fort Smith, AR, for appellees.
JOHN B. ROBBINS, Judge.
The Sebastian County Circuit Court dismissed appellants' claims for breach of warranty and constructive fraud on the ground that they were barred by the statute of limitations. We affirm.
In 1996, appellants Julia and Joseph Riddle purchased a residential lot from appellees Michael and Richard Udouj, trustees of the Olivia Udouj Trust. A survey showed two fences on the lot, one running along and just inside the northern border and the other running along and just inside the eastern border. The deed conveyed property on both sides of the fences. Appellees warranted that they were:
lawfully seized in fee of the aforegranted premises; that We are free from all encumbrances; that We have good right to sell and convey the same to the said Grantees as aforesaid and that We will . . . forever warrant and defend the title to said real estate against all lawful claims and demands whatsoever.
Appellants' neighbors to the north were the Knights, who had lived there for approximately fifty years, and their neighbors to the east were the Kaelins, who had lived there for approximately twenty years. In 1998, appellant Joseph Riddle cut some hedges along the fence adjacent to the Kaelins' property. The Kaelins' attorney wrote to Mr. Riddle, demanding that he not come behind the fence because "Dr. and Mrs. Kaelin tell me that the fence that divides your yards has been in place for over thirty years, and therefore in my opinion, the fence now establishes the property line between your property and Dr. Kaelin's property." Mr. Riddle apparently did not abide by this request because, in 2000, the Kaelins' attorney wrote a second letter, complaining that appellants "went into the Kaelins' yard and removed plants." The attorney again warned that the fence established the property line.
On June 18, 2001, appellants sued the Kaelins to quiet title to the strip of land between the eastern fence and the surveyed property line.[1] The Kaelins counterclaimed, and the Knights intervened, *558 both asserting that the fence lines had become boundaries by acquiescence. The issues were thus joined, and, following a trial, Judge Harry Foltz issued an order on October 15, 2002, finding that the fence lines had been recognized for many years as the boundaries by acquiescence. Title to the disputed strips was quieted in the Kaelins and the Knights. Appellants appealed to this court, where Judge Foltz's order was affirmed in an unpublished opinion. Riddle v. Kaelin, CA03-167, 2003 WL 22052835 (Sept. 3, 2003).
Approximately a year and a half later, on January 13, 2005, appellants sued appellees in the present action. They alleged that appellees breached the covenant of warranty because they had not been the owners of all of the property conveyed in the deed and asserted that appellee Olivia Udouj, who had signed a property disclosure form in connection with the sale, committed constructive fraud by representing that there were "no encroachments . . . adverse possession claims or similar matters that may affect title to the Property" and that there were no fences or other features "shared in common with adjoining landowners." Appellees answered by pleading the statute of limitations as a defense, and they subsequently filed a motion for summary judgment on that ground. The trial judge agreed that appellants' causes of action were time barred and granted summary judgment. Appellants now bring this appeal.
Breach-of-Warranty Action
All parties agree that the statute of limitations for breach of a covenant of warranty is five years. The disagreement concerns when that cause of action arose. Appellants argue that the cause of action arose when Judge Foltz entered his order on October 15, 2002, in which case their 2005 filing would be timely. Appellees contend that appellants' claim arose in 1996 when the property was sold or in 1998 when appellants received the first letter from the Kaelins' attorney, either of which would result in appellants' complaint being filed outside the statute of limitations.
Generally, the running of a statute of limitations commences when the plaintiff has a complete and present cause of action. See Oaklawn Bank v. Alford, 40 Ark.App. 200, 845 S.W.2d 22 (1993). An action for breach of a covenant of warranty requires that the covenant be broken and that an actual or constructive eviction occur. See Bosnick v. Hill, 292 Ark. 505, 731 S.W.2d 204 (1987); Belleville Land & Lumber Co. v. Griffith, 177 Ark. 170, 6 S.W.2d 36 (1928). A grantor's covenant of seisin, which implies that he is in possession of all of the land conveyed, is broken as soon as it is made if the grantor does not have possession, the right of possession, and complete title. See Bosnick, supra. The breaking of such a covenant may also result in the immediate, constructive eviction of the grantee. See Timmons v. City of Morrilton, 227 Ark. 421, 299 S.W.2d 647 (1957).
Applying these precedents, appellants' cause of action arose, as a matter of law, in 1996, when the property was conveyed to them. In that year, appellees deeded land on both sides of the fences to appellants. Yet, as Judge Foltz would later determine, those fences had for many years been recognized and consented to as the property lines.[2] That being the case, appellees conveyed *559 land that they did not possess, have the right to possess, or have title to. This amounted to an immediate breach of the covenant. See Timmons, supra (holding that, when the land conveyed is at that time in possession of a stranger, the covenant is broken on the date the deed is made, and limitations commences immediately).
Moreover, appellees' 1996 conveyance resulted in the immediate, constructive eviction of appellants from the property on the other side of the fences. Timmons, supra. Constructive eviction has been defined as the inability of a land purchaser to obtain possession because of a paramount outstanding title. Black's Law Dictionary at 576 (7th ed.1999). On the date of the conveyance, paramount title to the property on the other side of the fences lay in the Kaelins and the Knights, as per Judge Foltz's order. Appellees, therefore, did not possess those strips of land and could not convey them. Appellants likewise could not obtain possession of those strips and were, on the date of the deed that conveyed them, constructively evicted from them. To hold otherwise would be to accord no conclusive effect to Judge Foltz's determination that the property's boundaries had long been established.[3]
Appellants cite Turner v. Eubanks, 26 Ark.App. 22, 759 S.W.2d 37 (1988), for the proposition that an eviction does not occur until entry of the order quieting title in another. Whatever statements made by the Turner court to that effect were, as recognized in the opinion, a merely academic discussion and are therefore obiter dictum, which we need not follow. See Ward v. Williams, 354 Ark. 168, 118 S.W.3d 513 (2003).
Appellants further emphasize and the dissent appears to agree with this view that, after purchasing the land in 1996, they continued to exercise possessory rights over the land beyond the fences and thus were not evicted until the 2002 court order. But, whatever entry onto the disputed areas appellants may have exercised, it was not by virtue of their own rights or title. As Judge Foltz ruled, the boundaries between the properties had been established by acquiescence many years before; thus, at the time of conveyance, paramount title to the disputed areas lay in the Kaelins and the Knights. The fact that appellants did not incur the expense of asserting their rights in the property until long after the property had been conveyed, as they also argue, is not availing. A timely-filed action would have produced timely-incurred expenses.
The dissent also advances the idea that appellants had no reason to sue appellees prior to 2002 because, until that time, they believed that the Knights' and Kaelins' claims were illegitimate. However, the running of the statute of limitations commenced when the appellants had a complete and present cause of action. See Oaklawn Bank, supra. Bosnick, supra, is authority that appellants had a complete and present cause of action in 1996, when the property was conveyed to them. In Bosnick, the Metzlers conveyed land to the Bosnicks by a deed containing a covenant. The Bosnicks later discovered that a Mr. Hill claimed to adversely possess 2.72 acres of the land conveyed to them, which he had fenced and run cattle upon. When the Metzlers refused to take action to place the Bosnicks in possession of the 2.72 acres, the Bosnicks sued the Metzlers for breach of warranty. The supreme court *560 recognized that Hill's possession of the 2.72 acres was a breach of the covenant of warranty, that such a breach occurs as soon as the covenant is made, and that:
[w]hile the chancellor held Hill had not fully satisfied the time requirements to support his adverse claim, the chancellor determined that, at the time the Metzlers conveyed the property to the Bosnicks, Hill had fenced 2.7 acres of the property and had run cattle on it for at least three years prior to when this suit was commenced. The Bosnicks were compelled to bring this action to gain possession of the disputed parcel claimed by Hill. Accordingly, the Metzlers are therefore obligated to pay the costs and expenses reasonably incurred by the Bosnicks for their successful efforts in vindicating their rights under the covenant of seisin given them by the Metzlers.
Bosnick, 292 Ark. at 509, 731 S.W.2d at 207. Thus, the Bosnicks had a cause of action against their grantors for breach of warranty as of the date of the conveyance, even though the person who claimed to own part of the property was later determined to have had an invalid claim.
Based on the above, we conclude that the trial court was correct in ruling that appellants' claim for breach of warranty was barred by the statute of limitations. This aspect of the trial court's order is therefore affirmed.
Constructive Fraud Action
Again, the parties agree on the applicable statute of limitations three years in the case of fraud but disagree as to when the cause of action arose.
A cause of action for fraud begins to run when the wrong occurs. Hampton v. Taylor, 318 Ark. 771, 887 S.W.2d 535 (1994); Wilson v. Gen. Elec. Cap. Auto Lease, Inc., 311 Ark. 84, 841 S.W.2d 619 (1992). Once that date is established, the question then becomes whether the defendant committed some affirmative act of concealment to hide his fraud. See, e.g., Hampton, supra; see also Tech. Partners, Inc. v. Regions Bank, 97 Ark.App. 229, 245 S.W.3d 687 (2006); Gibson v. Herring, 63 Ark.App. 155, 975 S.W.2d 860 (1998). Fraudulent concealment consists of some positive act of fraud, something so furtively planned and secretly executed as to keep the plaintiff's cause of action concealed, or perpetrated in a way that it conceals itself. Chalmers v. Toyota Motor Sales, USA, Inc., 326 Ark. 895, 935 S.W.2d 258 (1996). A continuation of the prior non-disclosure is not enough to toll the statute. See Tech. Partners, supra.[4]
In the case at bar, Olivia Udouj allegedly made a misrepresentation in the 1996 property disclosure form. Therefore, the statute of limitations expired in 1999 unless tolled by her fraudulent concealment. There is no evidence that Mrs. Udouj engaged in any positive acts of concealment or any furtive planning to hide her alleged misrepresentation. Therefore, the trial court was correct that appellants' 2005 complaint for fraud was untimely. Although this line of reasoning was not used by the trial court, we may affirm the trial court if it is correct for any reason. Fritzinger v. Beene, 80 Ark.App. 416, 97 S.W.3d 440 (2003).
Affirmed.
PITTMAN, C.J., MARSHALL, and MILLER, JJ., agree.
GLOVER and HEFFLEY, JJ., dissent.
*561 DAVID M. GLOVER, Judge, dissenting.
I agree that appellants' claim for fraud is barred by the statute of limitations, but I disagree that the same is true of appellants' breach-of-warranty action. Appellants' claim for breach of warranty did not accrue until the entry of Judge Foltz's 2002 order, meaning that their 2005 complaint was filed within the limitations period.
Appellants purchased a lot that, by all indications, extended beyond the fences in question. A survey showed the fences well within appellants' property lines, and representations on the property disclosure form indicated that no fences were shared with adjoining landowners. Approximately two years after the purchase, appellants were told by the neighbors' attorney that, in his opinion, the fence line had become the boundary line. Appellants did not accede to this opinion or give it any credence whatsoever. In fact, about two years later, they conducted other activity in the area beyond the fence. Ultimately, appellants and their neighbors found it necessary to file legal action to settle the question of where the boundary lines lay. Until the day that Judge Foltz entered his order in 2002, that question remained unsettled. How then can it be said that, prior to entry of the order, appellants were evicted from a portion of their property?
The mistake that the majority makes is in using Judge Foltz's 2002 findings to leap backward in time and effect an eviction of appellants six years earlier. While this approach may have a certain legalistic appeal, given Judge Foltz's determination that the boundary lines had been recognized for "many years," it is wholly inconsistent with what occurred in the actual passage of time before the entry of the Foltz order. During that time, appellants possessed and went upon the land beyond the fences, treated it as their own, were not deprived of the enjoyment of it, and did not yield to what they obviously considered their neighbors' unfounded claims. Nothing equivalent to an eviction occurred until Judge Foltz informed the parties in 2002 where the boundary lines lay a finding of fact that, I submit, could have gone either way or been overturned on appeal, in which case appellants would never have been evicted at all. Clearly, the fact of eviction did not exist until entry of Judge Foltz's order.
I also believe that the majority's reliance on Bosnick v. Hill, 292 Ark. 505, 731 S.W.2d 204 (1987), and Timmons v. City of Morrilton, 227 Ark. 421, 299 S.W.2d 647 (1957), is misplaced. In Bosnick, the third party asserting an interest in the grantee's land was in actual, fenced possession of a portion of the property, and the grantee was forced to file suit to regain possession. Here, appellants did not have to regain possession because they acquired possession, continued it, and did not relinquish it until required to do so. In Timmons, the grantee claimed that his grantor had constructed obstacles that prevented him from full possession of the property. The supreme court held that the grantee was constructively evicted on the date of the deed because the obstacles were "visible and obvious." By contrast, the appellants in this case had no visible and obvious means of realizing that they might not be entitled to full possession of the property conveyed to them. While the fences themselves were obvious, that they represented a boundary line was not. A boundary by acquiescence is established through silence. See McWilliams v. Schmidt, 76 Ark.App. 173, 61 S.W.3d 898 (2001). Who can say in the present case, without benefit of the trial court's factual finding, whether the fences were boundaries by acquiescence? This is especially true when, as stated earlier, all indications were that appellants were entitled to possession *562 beyond the fence lines and they in fact exercised that possession.
This case is more akin to Smiley v. Thomas, 220 Ark. 116, 246 S.W.2d 419 (1952). There, Smiley's predecessors conveyed land to Thomas in 1929. Thomas later discovered that there was an outstanding, one-half mineral interest in the land in O'Brien Bros., Inc. In 1950, he sued O'Brien to quiet title and sued Smiley for breach of warranty. The trial court ruled that O'Brien had title to the one-half mineral interest and that Smiley was liable for breach of warranty. Smiley apparently defended on the basis of the statute of limitations, which our supreme court addressed as follows:
All of [Smiley's] defenses of the Statute of Limitations, Laches and Statute of Nonclaims against the Thomases are without merit. There had been no constructive eviction, in effect, until the present suit was filed in December, 1950, wherein Mrs. Smiley was a party and the court held, as indicated, that O'Brien Bros. owned the ½ mineral interest in the land involved here and that the covenant of warranty in the above deed had been breached.
Id. at 121, 246 S.W.2d at 421 (emphasis added). Under Smiley, the grantees were not evicted until suit was filed and the court held that the third party owned the disputed interest. That should be the result in this case, and, contrary to the majority's effort to distinguish Smiley, I do not believe that the "retroactive" application of Judge Foltz's findings should change that.
I would reverse and remand to allow appellants to pursue their claim for breach of warranty. I am authorized to state that Judge Heffley joins in this dissent.
NOTES
[1] By that time, Joseph and Julia Riddle had sold their lot to their daughter, appellant Beth Riddle, who was also named as a plaintiff in the action. However, Joseph and Julia continued to live on the premises.
[2] Judge Foltz's finding was based in large part on the testimony of Mr. Cecil Knight, who said that a previous owner of appellants' property, Mr. Udouj, built one of the fences in 1955, which Mr. Knight and Mr. Udouj treated as the property line. See Riddle v. Kaelin, supra.
[3] The existence of Judge Foltz's findings, which compel the conclusion that the covenant of warranty was breached and appellants were evicted on the date of the deed, distinguish this case from Smiley v. Thomas, 220 Ark. 116, 246 S.W.2d 419 (1952), relied on by the dissent.
[4] We rely on these authorities rather than appellants' citation to Scollard v. Scollard, 329 Ark. 83, 947 S.W.2d 345 (1997), and Hyde v. Quinn, 298 Ark. 569, 769 S.W.2d 24 (1989), which are either inapplicable or do not fully state the law regarding fraudulent concealment.
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Order filed April 17, 2014
In The
Fourteenth Court of Appeals
____________
NO. 14-14-00223-CV
____________
IN THE INTEREST OF D.C., a Minor Child
On Appeal from the 257th District Court
Harris County, Texas
Trial Court Cause No. 2012-05172J
ORDER
This is an accelerated appeal from a judgment in a suit in which the
termination of the parent-child relationship is at issue
The notice of appeal was filed March 17, 2014. Appellant’s motion for
extension of time to file the notice of appeal was granted. Appellant has
established indigence or is presumed to be indigent. See Tex. R. App. P. 20.1(a).
The reporter’s record was due within 10 days after the notice of appeal was filed.
See Tex. R. App. P. 35.1(b); 28.4(a)(1). The record has not been filed. The court
reporter has not requested an extension of time to file the record.
Appeals in parental termination cases and child protection cases are to be
brought to final disposition within 180 days of the date the notice of appeal is
filed. See Tex. R. Jud. Admin. 6.2(a). The trial and appellate courts are jointly
responsible for ensuring that the appellate record is timely filed. See Tex. R. App.
P. 35.3(c). The trial court must direct the court reporter to immediately commence
the preparation of the reporter’s record and must arrange for a substitute reporter,
if necessary. See Tex. R. App. P. 28.4(b)(1).
Because the reporter’s record has not been filed timely in this accelerated
appeal, we issue the following order:
We order Tiffani Yeates, substitute court reporter, to file the record in this
appeal on or before April 28, 2014. If Tiffani Yeates does not timely file the
record as ordered, the court will consider issuing an order requiring her to appear at
a hearing to show cause why the record has not been timely filed and why she
should not be held in contempt of court for failing to file the record as ordered.
PER CURIAM
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663 N.W.2d 541 (2003)
HOUSING AND REDEVELOPMENT AUTHORITY of the CITY of ST. PAUL, Petitioner, Appellant,
v.
Geraldine M. LAMBRECHT, et al., Respondents Below,
Shannon Kelly's, Inc., Respondent.
No. C7-01-1919.
Supreme Court of Minnesota.
June 26, 2003.
*543 Margaret K. Savage, Marc J Manderscheid, Lisa M. Agrimonti, Briggs and Morgan, P.A., St. Paul, MN, for appellant.
Patrick J. Kelly, Sarah J. Sonsalla, Kelly & Fawcett, P.A., St. Paul, MN, for Shannon Kelly's, Inc., respondent.
Heard, considered, and decided by the court en banc.
OPINION
MEYER, Justice.
This appeal arises out of the dismissal by summary judgment of a lessee's claim of loss of going-concern damages in a condemnation proceeding. The district court granted the Housing and Redevelopment Authority of the City of Saint Paul's (HRA) motion for partial summary judgment against Shannon Kelly's, Inc. (Shannon Kelly's). The court determined that Shannon Kelly's could not establish a claim for loss of going-concern damages as a matter of law; and in any event, the claim was precluded by certain lease language and the acceptance of relocation benefits by Shannon Kelly's. The court of appeals reversed on all three grounds, finding that issues of genuine fact remain as to whether a claim for loss of going concern existed and that neither the lease language nor the acceptance of relocation benefits precluded recovery. We granted review only on the limited issue of whether the district court erred in holding that Shannon Kelly's was not entitled to recover for loss of going-concern value.
We reverse the court of appeals on two grounds. We conclude that the condemnation clause in Shannon Kelly's lease precluded any recovery for loss of going-concern damages because the lease language effectively ended Shannon Kelly's interest in the property upon condemnation. In addition, we conclude that Shannon Kelly's did not establish its claim as a matter of law and the district court properly granted summary judgment to HRA. We decline to address whether Shannon Kelly's claim is also precluded by the acceptance of relocation benefits.
On July 30, 1997, HRA adopted a resolution authorizing the condemnation of Block 39 as part of a redevelopment plan in downtown St. Paul. Block 39 is bounded by St. Peter, Fifth, Wabasha, and Sixth Streets and includes 395 Wabasha, which housed Shannon Kelly's. Shannon Kelly's was a restaurant/brewery owned by James H. McGovern and had occupied its downtown location for over seven years. McGovern also owned twenty-five percent of W.O.A.M., Inc., the corporation that owned 395 Wabasha at the time Block 39 was condemned. Upon adopting the resolution, *544 HRA sent letters to all of the businesses affected, including W.O.A.M. and Shannon Kelly's, notifying them of the pending condemnation and offering relocation assistance.
On October 9, 1997, HRA filed its petition in condemnation in Ramsey County District Court. On October 20, 1997, W.O.A.M., with knowledge of the pending condemnation, sold 395 Wabasha to Hoyt Development Company (Hoyt). That same day, Shannon Kelly's entered into a five-year lease agreement with Hoyt. The lease contained a "condemnation clause" that allegedly terminated the lease upon condemnation and a clause that allowed the lessee the right to remove personal property and trade fixtures upon termination of the lease.
On December 31, 1997, the district court granted HRA's petition for condemnation, appointed three commissioners to value the property, authorized payment, and provided for the transfer of title for all properties located on Block 39. As a result of this order, on February 5, 1998, HRA advanced Shannon Kelly's $100,000 in relocation benefits and deposited with the district court a sum for the value of fixtures and land.[1] McGovern removed from Shannon Kelly's his brewery equipment, a center island bar, a smoke eater, kitchen equipment, office equipment, grain and hops related to the brewery, and the stained glass from a ceiling-mounted light fixture.
On February 10, 1998, McGovern signed a purchase agreement for the Shore Club Bar & Restaurant, located at 301 Stillwater Road in Willernie, Minnesota. After obtaining a liquor license from the City of Willernie, McGovern began operating the restaurant under a new name, Manitou Island Inn (the Inn). McGovern transferred some of Shannon Kelly's assets to the Inn, such as a smoke eater, a center island bar, and stained glass. Because the Inn was not a brewery, McGovern was unable to utilize Shannon Kelly's brewing equipment and it remained in storage. A number of employees from Shannon Kelly's were hired to work at the Inn.
In July 1999, three court-appointed commissioners determined that the condemnation award for 395 Wabasha should be $700,000 for the value of the real estate, $263,000 for the value of the trade fixtures, and $77,000 for Shannon Kelly's going-concern value, for a total award of $1,040,000. In their award, the commissioners did not specify how this amount was to be divided between Hoyt (the lessor) and Shannon Kelly's (the lessee). All parties subsequently appealed to the district court. Shannon Kelly's appealed on the basis that the damages awarded by the commissioners did not constitute just compensation. Hoyt appealed on the grounds that the damages were inadequate and that the commissioners failed to award the entire compensation award to it. HRA cross-appealed on the basis that the award was contrary to the evidence and that it improperly included a claim for loss of going concern when no such loss was established at the commissioners' hearing.
In November 2000, HRA moved for partial summary judgment on Shannon Kelly's loss of going-concern claim. In support of its motion, HRA provided an affidavit from Robert Kessler, the Director of the Office of License, Inspections *545 and Environmental Protection for St. Paul, the office in charge of executing liquor licenses. In his affidavit, Kessler stated there was no reason that McGovern could not have obtained a liquor license to operate a bar in a new location in St. Paul after 395 Wabasha was condemned. HRA also provided excerpts from McGovern's depositions and multiple other documents to support its motion.
In its response, Shannon Kelly's provided an affidavit of McGovern, in which he described his attempts to relocate Shannon Kelly's in downtown St. Paul, and that his clientele came from within a one block to one and one-half block radius from 395 Wabasha. He noted in his affidavit that he was not able to relocate Shannon Kelly's and that any attempt to relocate Shannon Kelly's further than one block to one and one-half blocks would cause irreparable harm to his business. McGovern claimed the condemnation resulted in the destruction of the going concern of his business because he was not able to relocate his business in downtown St. Paul. Shannon Kelly's argued that the going-concern value would be developed by experts at trial. No other documentation to support these contentions was provided at the summary judgment hearing.
The district court granted HRA's motion for partial summary judgment on three grounds. First, it concluded that Shannon Kelly's could not assert a valid claim for loss of going concern because it could not establish either prong of the test set forth in City of Minneapolis v. Schutt, 256 N.W.2d 260 (Minn.1977). The district court concluded that Shannon Kelly's could not meet the first prong because its going-concern value did not come primarily from its location, it did not enjoy a monopoly, its customers were not captive, it was not unique, and there was no indication it was precluded from relocating because of the unavailability of liquor licenses in St. Paul. The district court noted that two other breweries existed in downtown St. Paul and that many other businesses had converted old bars into new establishments with the creation of the Xcel Energy Center. The district court also concluded that Shannon Kelly's could not meet the second prong of Schutt because it could relocate elsewhere and, in fact, McGovern had opened a new restaurant elsewhere in the state. Second, the district court noted that even if Shannon Kelly's could have established a valid loss of going-concern claim, the claim was precluded because of the condemnation language in its lease. Finally, the district court also noted that Shannon Kelly's acceptance of payments for relocation benefits precluded it from asserting a loss of going-concern claim.
Shannon Kelly's appealed. The court of appeals reversed on all three grounds. Housing & Redevelopment Auth. of the City of St. Paul v. Lambrecht, 645 N.W.2d 157, 166-68 (Minn.App.2002). The court of appeals began by noting that genuine questions of material fact remained as to whether Shannon Kelly's business had satisfied the requirements under Schutt. Id. at 166. The court of appeals concluded that whether the location is unique or transferable (the second Schutt factor) is a question of fact to be resolved by the jury rather than a question of law to be decided by the district court. Id. Therefore, the district court had improperly engaged in fact-finding in denying Shannon Kelly's claim. The court further determined that neither the lease language nor the acceptance of relocation benefits precluded Shannon Kelly's claim for loss of going concern. Id. at 167-68. HRA appealed.
A party seeking compensation in a condemnation action must prove that (a) they had an interest in the condemned property; (b) the interest was taken by *546 the government in the course of the condemnation; and (c) the interest taken is compensable. See State v. Saugen, 283 Minn. 402, 169 N.W.2d 37, 39 (1969). Because the parties do not dispute the government took Block 39 in the course of a condemnation, the two issues to be decided are whether Shannon Kelly's had an interest in the property at the time of condemnation and whether that interest is compensable.
We begin by addressing whether Shannon Kelly's had an interest in the condemned property at the time of condemnation. Because this issue requires interpretation of contractual provisions, we review this issue de novo. Progressive Specialty Ins. Co. v. Widness ex rel. Widness, 635 N.W.2d 516, 518 (Minn.2001).
Generally, upon condemnation of property by a government body, a tenant is entitled to share in the award of the property to the extent of the valuation of such leasehold. See United States v. Petty Motor Co., 327 U.S. 372, 378-79, 66 S.Ct. 596, 90 L.Ed. 729 (1946); Jay M. Zitter, Validity, Construction, and Effect of Statute or Lease Provision Expressly Governing Rights and Compensation of Lessee upon Condemnation of Leased Property, 22 ALR5th 327, 350 (1994). A lease agreement containing what is commonly referred to as a "condemnation clause" may further determine the rights of the tenant in the event of a condemnation. Zitter, 22 ALR5th at 350 (observing that a condemnation clause may provide that the lease ends automatically upon condemnation, or that the lease could be cancelled at the option of a party, or that some or all of the tenant's rights are assigned to the landlord). When the lease contains a clause that "automatically terminates [the lease] upon condemnation of the land, the lessee is entitled to no compensation for the loss of his leasehold interest, since he agreed in advance to such a termination." Naegele Outdoor Adver. Co. of Minnesota, Inc. v. Village of Minnetonka, 281 Minn. 492, 503, 162 N.W.2d 206, 214 (1968).
Shannon Kelly's lease provided that:
15. Condemnation. The parties hereto agree that if the leased premises, or any part thereof, shall be taken or appropriated for public use by any public or quasi-public authority during the term of this lease, that this lease shall terminate as of the date of such appropriation and all condemnation proceeds shall be the sole property of Lessor; it is further agreed that if this lease is terminated because of a [sic] such taking of the property, that the monthly rental for the month in which the condemnation taking occurs shall be prorated between the parties hereto.
(Emphasis added.) We examined a similar lease provision in Korengold v. City of Minneapolis, 254 Minn. 358, 95 N.W.2d 112 (1959). Korengold involved a condemnation proceeding by the City of Minneapolis for a public library site in downtown Minneapolis. 254 Minn. at 359, 95 N.W.2d at 113. A dental lab was a tenant in one of the condemned buildings. Id. The owner of the dental lab had signed a lease containing the following provision:
The tenant further agrees that if the demised premises, or any part thereof, or any part of the improvements of which they form a part, shall be taken for any street or other public use, or shall during the continuance of this lease be destroyed by the action of the public authorities, then this lease and the term demised shall thereupon terminate.
Id. at 359-60, 95 N.W.2d at 114. We denied the tenant damages for equipment and fixture removal and relocation because the condemnation clause left the tenant "without a compensable interest in the *547 condemned premises." Id. at 362, 95 N.W.2d at 115. In denying the claim, we adopted the general rule that if a tenant agrees to a lease clause that automatically terminates a lease at the time of condemnation, "`the tenant has no right which persists beyond the taking and can be entitled to nothing.'" Id. at 363, 95 N.W.2d at 115 (quoting Petty Motor Co., 327 U.S. at 376).
The condemnation clause in Shannon Kelly's lease is substantially the same as the corresponding lease term in Korengold. Shannon Kelly's attempts to distinguish Korengold from the instant case because Korengold involved a lessee's claim for fixtures and the instant claim is one for loss of going-concern value. Shannon Kelly's argument is not persuasive. Whether the claim is for fixtures, equipment, or loss of going concern, the condemnation clause unequivocally terminates Shannon Kelly's rights in the property at the time of condemnation. The condemnation clause in Shannon Kelly's lease was designed to describe the rights of each party upon the occurrence of certain events. Had Shannon Kelly's intended to retain some rights in the property after condemnation, it could have retained those rights through the lease agreement. We conclude that Shannon Kelly's contracted away all its rights in the property, including any claim for loss of going concern. We hold that the condemnation provision in the lease agreement terminated Shannon Kelly's interest in the property at the time of condemnation and therefore it did not have an interest in the condemned property.
We next address whether the district court properly granted summary judgment to HRA. The court of appeals reversed the district court's grant of summary judgment, finding that the evidence was sufficient to withstand a motion for summary judgment and concluding that the Schutt factors were questions of fact to be resolved by the jury rather than questions of law to be decided by the district court.[2]
On appeal from an order for summary judgment, we examine whether there are any genuine issues of material fact, whether either party is entitled to judgment as a matter of law, and whether the lower court erred in its application of the law. See Pergament v. Loring Properties, Ltd., 599 N.W.2d 146, 149 (Minn. 1999); Lubbers v. Anderson, 539 N.W.2d 398, 401 (Minn.1995). Summary judgment is appropriate when the record shows a complete lack of proof on any essential element of the plaintiff's claim. Lubbers, 539 N.W.2d at 401 (holding that to establish a genuine issue of material fact the nonmoving party cannot merely make conclusory unverified statements or explain what evidence might be established at trial).
Under both the Minnesota and federal constitutions, private property cannot be taken without just compensation, but there is no requirement that compensation be paid for every interest taken. See Kimball Laundry Co. v. United States, 338 U.S. 1, 5, 69 S.Ct. 1434, 93 L.Ed. 1765 (1949) (finding that not all takings are compensable under the Fifth Amendment); Schutt, 256 N.W.2d at 265 (holding that the loss of twenty percent of a business through a permanent taking did not result in the loss of a compensable interest). In general, courts have held that a lessee is not entitled to compensation for a claim alleging loss of going concern because such a claim is not a taking under the constitution, *548 the going-concern value is too intangible to constitute property under the constitution, or the amount of damages resulting from the loss of this interest is too speculative. Schutt, 256 N.W.2d at 261-62.
In Minnesota, the business owner must satisfy both prongs of the Schutt test to obtain compensation for loss of going concern. Those two prongs are that (1) "his going-concern value will in fact be destroyed as a direct result of the condemnation" and (2) "his business either cannot be relocated as a practical matter, or that relocation would result in irreparable harm to the interest." Id. at 265. As long as the business can potentially be relocated, courts have held that the government has not taken any interest compensable under the constitution, even though the owner can show that the goodwill of the business suffered damage or that there are no suitable places to which the business could be relocated. See Kimball Laundry, 338 U.S. at 11-12, 69 S.Ct. 1434; 26 Am.Jur.2d, Eminent Domain § 335 at 749 (1996). Under circumstances where the business can potentially be relocated, the condemnation has only taken the physical property and has not prevented the business owner from actually moving his business. Kimball Laundry, 338 U.S. at 11-12, 69 S.Ct. 1434 (stating that while the business owner may suffer a loss because he has difficulty finding another suitable location, this type of alleged loss is "so speculative that proof of it may justifiably be excluded" by the district court). But see Saugen, 283 Minn. at 410, 169 N.W.2d at 42-43 (awarding loss of going-concern damages because the business owner's attempts to obtain a new liquor license were refused); City of Detroit v. Michael's Prescriptions, 143 Mich.App. 808, 373 N.W.2d 219, 225 (1985) (finding loss of going concern where entire segments of a residential and business community eliminated drug store's customer base); City of Lansing v. Wery, 68 Mich.App. 158, 242 N.W.2d 51, 52-53 (1976) (finding loss of going concern when relocation attempts were prevented by government action).
We consider the proper role of the district court in deciding questions that arise under Schutt. HRA claims the court should apply the Schutt factors to decide as a matter of law whether there has been a taking before submitting any question of damages to the jury. On the other hand, Shannon Kelly's asserts the court of appeals properly determined that the Schutt questions are decided by the jury.
We have long held that the power to determine whether there has been a taking is vested in the court and is not within the purview of the jury. State v. Prow's Motel, Inc., 285 Minn. 1, 4-5, 171 N.W.2d 83, 85-86 (1969) (holding "that the power to determine whether some property right of a landowner has been taken or damaged in a constitutional sense [is] vested in the trial court"); see 27 Am.Jur.2d, Eminent Domain § 617 at 163-64 (1996) (stating that in general the district court "has the duty to determine such issues as the condemnor's legal authority to take and the limits thereon, the purpose of the taking, the necessity and expediency of the taking, and questions of title"). Once the trial court determines the threshold question of whether an interest has been taken, then the parties present evidence of the loss of that interest to the jury for a determination of the amount of compensation due. See Prow's Motel, 285 Minn. at 6-7, 171 N.W.2d at 86; 27 Am.Jur.2d, Eminent Domain § 618 at 164. We conclude that the court, not the jury, has the power to apply the Schutt factors to determine whether a compensable interest exists. The court of appeals erred when it concluded that "whether the location is unique or transferable is a question for the trier *549 of fact." Lambrecht, 645 N.W.2d at 166. We reverse the court of appeals and hold that the district court must apply the Schutt two-prong test to any claim for loss of going concern as a matter of law before submitting damages to the jury.
We now consider whether the district court correctly applied the Schutt two-prong test in denying Shannon Kelly's claim for loss of going-concern value. At summary judgment, Shannon Kelly's alleged its business was destroyed as a direct result of the condemnation, that it could not be relocated without causing irreparable harm to its business, and that it did not succeed in relocating as a practical matter. In support of these contentions, McGovern alleged that his business was expressly tied to 395 Wabasha and therefore was taken as a direct result of the condemnation action. McGovern described his many attempts to relocate Shannon Kelly's throughout St. Paul and his inability to find a suitable relocation site.[3] However, the district court found that the inability to relocate was not due to the fact that the property was unique; that the business was directly tied to the location; that no liquor licenses were available in the city of St. Paul; or because government action had prevented the relocation. Rather, as he stated numerous times in his deposition, McGovern's efforts to relocate Shannon Kelly's failed because he was unwilling or unable to pay the price required to secure an alternate downtown location. Other than McGovern's unsupported affidavit, Shannon Kelly's has not provided any evidence showing that it was unable to relocate. See Kimball Laundry, 338 U.S. at 11, 69 S.Ct. 1434 (finding that when the ability to relocate is prevented by the owner's "good fortune or lack of it in finding premises suitable for the transference of going-concern value," then as a matter of law the government has not taken the going-concern value). We conclude that Shannon Kelly's failed to establish that its business could not be relocated, and we affirm the district court's grant of summary judgment for HRA.
Reversed and remanded.
HANSON, J., took no part in the consideration or decision of this case.
Concurring in part, dissenting in part, GILBERT, J.
GILBERT, Justice (concurring in part and dissenting in part).
While I generally concur with the result reached by the majority based on this record, we should end our discussion with the termination of condemnation rights in the lease. I disagree with the majority's characterization of the proper role of the district court in always deciding questions that arise under City of Minneapolis v. Schutt, 256 N.W.2d 260 (Minn.1977). The resolution of the first issue renders the remaining issue moot and all that follows is dicta. We should save any discussion on *550 the Schutt test for another day when it is properly presented for decision.
In this case, we are reviewing a summary judgment granted by the district court as a matter of law on undisputed facts. The district court based its decision on the premise there was no genuine issue of material facts presented and then ruled as a matter of law that the Schutt factors had not been met. Furthermore, Schutt also involved undisputed facts on cross motions for summary judgment. 256 N.W.2d at 261. It is unnecessary and improper to conclude that therefore in all other cases alleging loss of going concern it is for the court and not the jury to apply the Schutt factors in all circumstances. There is no authority cited by the majority supporting this proposition of law. The majority also engages in improper factual finding. We should simply reverse the court of appeals and affirm the district court based on the undisputed facts presented and hold the court did not err as a matter of law under the facts of this case.
PAGE, Justice (concurring specially).
I concur in the result. I agree with Justice Gilbert, however, that upon concluding that Shannon Kelly's did not have an interest in the condemned property, nothing more needed to be or should have been said.
ANDERSON, Paul H., Justice (concurring specially).
I join in the special concurrence of Justice Page.
NOTES
[1] On a separate summary judgment motion, the court granted a dismissal of Shannon Kelly's claim for recovery on the fixtures, concluding that the lease between Hoyt and Shannon Kelly's clearly and unequivocally terminated Shannon Kelly's interest in the property, and awarding all condemnation proceeds for fixtures to Hoyt. Shannon Kelly's did not appeal from the court's dismissal of the claim.
[2] Having disposed of Shannon Kelly's claim under the terms of the lease, it is not necessary for us to reach this issue. Nevertheless, we believe the court of appeals incorrectly decided the question and we write to provide clarification on this important point of law.
[3] Shannon Kelly's asserts that it "was not given the opportunity to defend the summary judgment motion by presenting additional affidavits and testimony demonstrating the importance of Shannon Kelly's location through statistical studies of its customer base, the financial unfeasibility of relocation, and the fair market value of its business." The record establishes that discovery was completed when HRA moved for summary judgment and Shannon Kelly's never sought additional time from the district court in which to respond to the summary judgment motion. Having failed to raise this issue before the district court, Shannon Kelly's has waived its opportunity to complain.
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973 F.Supp. 1276 (1997)
BUSHNELL CORPORATION, Plaintiff,
v.
ITT CORPORATION, Defendant.
No. 96-2511-JWL.
United States District Court, D. Kansas.
July 18, 1997.
*1277 *1278 *1279 *1280 Donald L. Kahl, Heather E. Pollock, Susan L. Gates, Hall, Estill, Hardwick, Gable, Golden & Nelson, Tulsa, OK, John J. Miller, Overland Park, KS, for plaintiff.
William R. Sampson, Bill J. Hays, Shook, Hardy & Bacon, L.L.P., Overland Park, KS, for defendant.
MEMORANDUM AND ORDER
LUNGSTRUM, District Judge.
In this action, plaintiff has asserted numerous causes of action against defendant, including antitrust, defamation, and tortious interference claims. Those three specific claims are the subject of defendant's present motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c) (Doc. 57). For the reasons set forth below, the court grants the motion with respect to plaintiff's antitrust and tortious interference with contract claims, and defendant is hereby awarded judgment on those counts. The court denies the motion with respect to plaintiff's claims for defamation and tortious interference with prospective business relations, provided that plaintiff files a timely amendment of its complaint to cure pleading deficiencies in accordance with this opinion.
I. Procedural Considerations and Summary of Opinion
In considering a motion for judgment on the pleadings pursuant to Fed.R.Civ.P. 12(c), the court generally applies the same standards that govern motions to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6). Mock v. T.G. & Y. Stores Co., 971 F.2d 522, 528-29 (10th Cir.1992). Dismissal of a cause of action for failure to state a claim is appropriate only where it appears beyond a doubt that the plaintiff can prove no set of facts in support of the theory of recovery that would entitle it to relief, Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 101-02, 2 L.Ed.2d 80 (1957); Fuller v. Norton, 86 F.3d 1016, 1020 (10th Cir.1996), or where an issue of law is dispositive. Neitzke v. Williams, 490 U.S. 319, 326, 109 S.Ct. 1827, 1832, 104 L.Ed.2d 338 (1989). The pleadings are liberally construed, and all reasonable inferences are viewed in favor of the plaintiff. Fed.R.Civ.P. 8(a); Fuller, 86 F.3d at 1020. All well-pleaded facts, as distinguished from conclusory allegations, must be taken as true. Jojola v. Chavez, 55 F.3d 488, 494 n. 8 (10th Cir.1995) (citing Swanson v. Bixler, 750 F.2d 810, 813 (10th Cir.1984)). The issue in resolving a motion such as this is not whether the plaintiff will ultimately prevail, but whether it is entitled to offer evidence to support the claims. Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 1686, 40 L.Ed.2d 90 (1974).
In its brief in opposition to the motion, plaintiff attacks the method by which defendant has challenged the sufficiency of plaintiff's claims. In particular, plaintiff notes that defendant has already answered and denied the allegations. Rule 12 clearly permits defendant to challenge plaintiff's claims in this fashion, however. See Fed. R.Civ.P. 12(c) ("After the pleadings are closed but within such time as not to delay the trial, any party may move for judgment on the pleadings."), 12(h)(2) ("A defense of failure to state a claim upon which relief can be granted ... may be made in any pleading permitted or ordered under Rule 7(a), or by *1281 motion for judgment on the pleadings, or at the trial on the merits."); see also 2 James W. Moore, Federal Practice § 12.38 (3d ed.1997); 5A Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1367 (2d ed.1990). Moreover, defendant's motion complies with the deadline in the court's scheduling order for motions to dismiss for failure to state a claim.
Nonetheless, the court cannot completely ignore plaintiff's procedural concerns. Defendant argues in its brief that it should prevail on the claims at issue because plaintiff permitted the scheduling order's deadline for amendments to the complaint to pass without acting, "[d]espite ITT's repeated warnings that [plaintiff's] claims were ripe for dismissal." Thus, defendant would have the court enter judgment against plaintiff for even the most technical pleading deficiencies.
The court will not so readily accede to defendant's "all-or-nothing" approach. In particular, the court believes that it should treat purely procedural failings differently from the failure to state a claim for substantive reasons. Such a distinction is warranted by different purposes served by motions under rule 12(c) and those under rule 12(b)(6), as explained by the commentators Wright and Miller:
The motion for judgment on the pleadings under Rule 12(c) has its historical roots in common law practice, which permitted either party, at any point in the proceeding, to demur to his opponent's pleading and secure a dismissal or final judgment on the basis of the pleadings. The common law demurrer could be used to search the record and raise procedural defects, or it could be employed to resolve the substantive merits of the controversy as disclosed on the face of the pleadings. In contrast, the Rule 12(c) judgment on the pleadings procedure primarily is addressed to the latter function of disposing of cases on the basis of the underlying substantive merits of the claims and defenses as revealed in the formal pleadings and what is subject to judicial notice.
A Rule 12(c) motion is designed to provide a means of disposing of cases when the material facts are not in dispute and a judgment on the merits can be achieved by focusing on the content of the pleadings and any facts of which the court will take judicial notice. The motion for a judgment on the pleadings only has utility when all material allegations of fact are admitted in the pleadings and only questions of law remain.
5A Wright & Miller, supra, § 1367, at 509-10 (footnotes omitted).
Rule 12(c) should be read in conjunction with several other federal rules authorizing pretrial motions, especially the various Rule 12(b) motions to dismiss.... Collectively these procedures provide an arsenal of weapons for challenging the sufficiency of an opponent's pleading and the viability of the underlying claim or defense. Although under modern practice these various techniques have to some extent become interchangeable, distinctions still remain as to their respective scope and effect. The question of which device should be employed in a particular context usually will be answered on the basis of the challenge, the identity of the party interposing it, and the nature of the alleged defect.
In the first instance, Rule 12(c) should be contrasted with the motion available under Rule 12(b). A motion to dismiss for any of the reasons enumerated in Rule 12(b) may be made as soon as plaintiff has filed his complaint. In proceeding under Rule 12(c), however, the pleadings must be closed before a party can move for judgment on the pleadings. There are other points of departure. With the exception of certain applications of the Rule 12(b)(6) motion, a Rule 12(b) motion to dismiss is directed solely towards procedural defects or the statement of plaintiff's claim for relief and does not seek to determine the substantive merits of the controversy. The granting of a Rule 12(b) motion merely means that plaintiff has failed to satisfy one of the procedural prerequisites for asserting his claim for relief. A motion for judgment on the pleadings, however, theoretically is directed towards a determination of the substantive merits of the controversy; thus, courts are unwilling to grant a judgment under Rule 12(c) unless it is clear that the merits of the controversy *1282 can be fairly and fully decided in this summary manner.
5A Wright & Miller, supra, § 1369, at 532-33 (footnotes omitted).
Accordingly, in ruling on defendant's motion, the court will consider whether, with respect to a particular cause of action, plaintiff fails to state a claim for substantive reasons or because of what Wright and Miller would term procedural defects in the pleading. The court stresses that defendant properly brought its motion under rule 12(c) in either case. The distinction, however, affects the court's disposition of the claims at issue here because plaintiff, in its brief in opposition to the motion, has requested leave to amend its complaint in the event that it has failed to state a claim properly.
Where the challenge to a claim is substantive, the motion more comports with the usual purpose of a motion under rule 12(c), and judgment in favor of defendant is appropriate if the challenge is successful. In that case, plaintiff loses not for failure to plead certain facts, but because the facts that have been alleged, accepted as true for purposes of the motion, nonetheless do not give rise to liability under a recognized cause of action.
If, on the other hand, plaintiff does not state a claim with respect to certain allegations because the procedural pleading requirements of Fed.R.Civ.P. 8(a) have not been met, judgment for defendant is not necessarily the proper result here. Rather, the court concludes in its discretion that plaintiff should be permitted to cure the procedural deficiencies by filing an amended complaint.
Fed.R.Civ.P. 15(a) provides that, if the pleadings are closed, a plaintiff may amend its complaint only upon leave of court or consent of the other party, although such leave "shall be freely given when justice so requires." Granting leave to amend is a matter for the district court's discretion. Triplett v. LeFlore County, Okla., 712 F.2d 444, 446 (10th Cir.1983). "In dismissing a complaint for failure to state a claim, the court should grant leave to amend freely `if it appears at all possible that the plaintiff can correct the defect.'" Id. (quoting 3 James W. Moore, Federal Practice ¶ 15.10 (1983)). "`The Federal Rules reject the approach that pleading is a game of skill in which one misstep by counsel may be decisive to the outcome and accept the principle that the purpose of pleading is to facilitate a proper decision on the merits.'" Id. (quoting Conley, 355 U.S. at 48, 78 S.Ct. at 103).
Thus, where defendant argues that plaintiff has not pled a claim with sufficient particularity, the motion is more in the nature of a rule 12(b)(6) motion. If the court agrees that plaintiff's pleading is deficient, it will allow plaintiff to amend, as it routinely would in addressing motions filed before the close of the pleadings. In Gallardo v. Board of County Comm'rs, 857 F.Supp. 783 (D.Kan. 1994), the court disposed of a rule 12(c) motion in this fashion:
As stated above, the court decides a Rule 12(c) motion employing the same standards that govern Rule 12(b)(6) motions. On 12(b)(6) motions, courts typically allow a plaintiff leave to amend his complaint in order to cure the defective pleading. On 12(c) motions, courts may grant leave to amend and may dismiss causes of action rather than grant judgment.
Id. at 787 (citations omitted). The court believes a similar result is warranted here.
Defendant notes the scheduling order deadline and contends that plaintiff had ample opportunity to amend its complaint. Plaintiff must adhere to a certain pleading standard, however, in order that defendant may be able to defend the action. In this case, defendant could have clarified any confusion with respect to claims by filing an earlier motion under rule 12(b)(6), by filing a motion for more definite statement under Fed.R.Civ.P. 12(e), or by the simple use of interrogatories. In light of that fact, as well as defendant's apparently intentional delay in filing its motion until the expiration of the amendment period as set forth in the scheduling order, the court does not believe that defendant will suffer undue prejudice from the additional delay caused by the court's granting leave to amend.
After considering defendant's motion, the court concludes that plaintiff's antitrust claims are ripe for judgment based on their substance. The court concludes as a matter *1283 of law that, even if plaintiff's allegations are accepted as true, defendant's conduct is not anti-competitive and does not give rise to antitrust injury. Amendment of those claims will not be permitted plaintiff's failure to state a claim with respect to these elements does not result from any procedural deficiency that may be corrected by additional pleading. Plaintiff has identified the conduct by defendant to which it objects, but that conduct does not give rise to antitrust liability as a matter of law, and judgment on the pleadings is therefore appropriate. Defendant's motion is granted with respect to those claims.
Judgment is also granted in favor of defendant on any claim by plaintiff for tortious interference with contract. Plaintiff has not identified any third-party contract that was breached as a result of improper interference by defendant, and plaintiff has abandoned any such claim by its failure to address that cause of action in its brief in opposition. Therefore, defendant's motion is also granted with respect to that claim.
The court agrees with defendant that plaintiff has not pled sufficient facts to state a claim for defamation. Such deficiency is procedural, however, and plaintiff may cure the defect by amended complaint. Plaintiff's claim for tortious interference with prospective business relations is also procedurally deficient to the extent that it relies on the tort of defamation to provide the "wrongful means" necessary to defeat defendant's competitor's privilege; plaintiff may amend to cure that defect as well. Defendant's motion is denied with respect to those claims, provided that plaintiff files a timely amended complaint curing the pleading defects, as more fully set forth herein. This denial of defendant's motion is without prejudice, however; defendant may attack the amended complaint by motion to dismiss for failure to state a claim after its filing. Because plaintiff will have already been given the opportunity to amend, plaintiff's claims would at that time be subject to dismissal if the procedural defects discussed herein have not been cured.
Finally, plaintiff's tortious interference with prospective business relations is not deficient to the extent that it relies on other causes of action remaining in the case for the "wrongful means". Defendant's motion is denied in that respect.
The court emphasizes that plaintiff, in amending its complaint, is not permitted to add claims or otherwise go beyond the additional pleading necessary to cure the defects, in accordance with the remainder of this opinion. Plaintiff's amended complaint must be filed with the court on or before August 1, 1997.
II. Antitrust
Defendant argues that plaintiff's complaint does not state a claim for violation of antitrust law. According to the complaint, plaintiff succeeded as a party to an agreement with defendant that gave plaintiff the exclusive right to market and distribute certain night vision products manufactured by defendant. In its general fact section, the complaint alleges that defendant used plaintiff's trade secrets and proprietary information to develop and market night vision products in competition with plaintiff; contacted customers of plaintiff to convince them to purchase night vision products from defendant instead of from plaintiff; promoted its products at prices barely above plaintiff's standard costs for the product purchased by plaintiff from defendant under the agreement; solicited vendors of plaintiff using confidential information; and published defamatory statements about plaintiff to plaintiff's customers and the industry in general. Plaintiff also alleges in the complaint's fact section that defendant undertook such acts in furtherance of a conspiracy to restrain trade and as part of a conspiracy and attempt to monopolize the relevant market.
The complaint contains nine counts antitrust violations, breach of contract, declaratory judgment for continued enforcement of the agreement, breach of implied covenant of good faith, misappropriation of trade secrets, unfair competition, defamation, tortious interference, and breach of fiduciary duty. Plaintiff's first count, labeled "Sherman Act §§ 1, 2", incorporates the complaint's factual allegations and contains the following additional allegations:
24. The acts complained of by Bushnell have been undertaken by ITT in furtherance *1284 of a conspiracy or combination with others in restraint of trade in the relevant market. Further the complained of acts affect interstate commerce and trade.
25. The acts complained of by Bushnell have been undertake [sic] by ITT in furtherance of a conspiracy and attempt to monopolize the relevant market. In taking these actions ITT intended to drive its competition in the night vision market out of business.
26. As a direct result of the intentional actions of ITT, both competition and Bushnell have been injured in an amount to be determined at trial and will request attorneys' fees as provided by law.
A. Antitrust Injury
In count I, plaintiff seeks damages for violations of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2. Damages for antitrust violations are recoverable by private parties under section 4 of the Clayton Act, 15 U.S.C. § 15. To recover such damages, however, a private plaintiff must establish the existence of "antitrust injury". Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 334, 110 S.Ct. 1884, 1889, 109 L.Ed.2d 333 (1990); Sharp v. United Airlines, Inc., 967 F.2d 404, 406-07 (10th Cir. 1992). The Supreme Court has defined antitrust injury as "injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful." Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489, 97 S.Ct. 690, 697, 50 L.Ed.2d 701 (1977). The court concludes that, under the facts alleged by plaintiff, taken as true, plaintiff did not suffer antitrust injury in this case as a matter of law.
In Brunswick, the defendant, a national bowling center chain, took over several bowling centers that would otherwise have gone out of business; plaintiff, who owned other bowling centers, sought damages to recover income that it would have received had the acquired centers gone bankrupt. Id. at 488, 97 S.Ct. at 697. The Supreme Court held that such injury did not constitute antitrust injury because "it is inimical to the antitrust laws to award damages for losses stemming from continued competition." Cargill, Inc. v. Monfort of Colo., Inc., 479 U.S. 104, 109-10, 107 S.Ct. 484, 489, 93 L.Ed.2d 427 (1986) (quoting Brunswick, 429 U.S. at 488, 97 S.Ct. at 697). In reaching that conclusion, the court noted that the antitrust laws "were enacted for `the protection of competition, not competitors.'" Brunswick, 429 U.S. at 488, 97 S.Ct. at 697 (quoting Brown Shoe Co. v. United States, 370 U.S. 294, 320, 82 S.Ct. 1502, 1521, 8 L.Ed.2d 510 (1962)).
In Cargill, the Supreme Court again held that the plaintiff had not established antitrust injury. There, the plaintiff sought to recover for profits lost by the defendant's lowering prices to a level at or slightly above its costs. Cargill, 479 U.S. at 114-15, 107 S.Ct. at 491-92. The Court held that the plaintiff could not recover for such injury because, as in Brunswick, the loss resulted from competition. Id. at 115-16, 107 S.Ct. at 491-93.
In Atlantic Richfield, the Supreme Court reaffirmed that "[a]ntitrust injury does not arise for purposes of § 4 of the Clayton Act ... until a private party is adversely affected by an anticompetitive aspect of the defendant's conduct." 495 U.S. at 339, 110 S.Ct. at 1892. In that case, the Court held that, unless the prices are predatory, losses from a pricing practice do not stem from anticompetitive conduct. Id. at 337-41, 110 S.Ct. at 1890-93. The Court again emphasized that the antitrust laws were enacted to protect competition, not competitors. Id. at 338, 110 S.Ct. at 1891; see also Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222, 113 S.Ct. 2578, 2587, 125 L.Ed.2d 168 (1993) ("[A] plaintiff seeking to establish competitive injury resulting from a rival's low prices must prove that the prices complained of are below an appropriate measure of its rival's costs.").
These Supreme Court cases mandate this court's conclusion that the injury plaintiff complains of does not constitute antitrust injury as a matter of law. The allegations in plaintiff's complaint, taken as true, establish that defendant contacted plaintiff's customers and vendors, defamed plaintiff, used plaintiff's trade secrets and proprietary information, marketed products in competition with plaintiff, and set prices barely above plaintiff's costs for the products. The *1285 logical and stated result of such conduct is plaintiff's inability to compete further in the market. Such injury is not an antitrust injury, however, because it does not affect competition in the market generally. In fact, plaintiff essentially complains about increased competition in the market. Plaintiff is not saved by its conclusory allegation that defendant's conduct injured competition or by its argument that the removal of one competitor from the market injures competition generally. It is clear from the Supreme Court precedent that making life difficult for one particular competitor in the absence of conduct that otherwise affects the entire market does not give rise to antitrust injury. Specifically, under Atlantic Richfield, losses from a competitor's setting prices barely above plaintiff's own costs does not constitute the requisite injury. Because plaintiff can establish only injury to a competitor but not to competition, plaintiff has not established antitrust injury, and defendant is therefore entitled to judgment on plaintiff's antitrust claims.
B. Section 1 of Sherman Act
Defendant is also entitled to judgment on its claim under section 1 of the Sherman Act based on plaintiff's failure as a matter of law to establish the required elements for a violation of that section. Section 1 prohibits "[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce." 15 U.S.C. § 1. "A plaintiff who alleges a violation of section 1 must establish: (1) concerted action in the form of a contract, combination, or conspiracy, and (2) an unreasonable restraint of trade." Systemcare, Inc. v. Wang Labs. Corp., 117 F.3d 1137, 1139 (10th Cir.1997). Plaintiff fails on the second element.
To establish a violation of section 1, plaintiff must prove either an unreasonable restraint under the "rule of reason" or a per se violation of the section. Coffey v. Healthtrust, Inc., 955 F.2d 1388, 1392 (10th Cir. 1992). As noted above, plaintiff basically alleges that defendant attempted to drive it out of business. A conspiracy to eliminate a competitor by unfair means is not a per se violation. Midwest Underground Storage, Inc. v. Porter, 717 F.2d 493, 496 (10th Cir. 1983). Nor has plaintiff identified any other possible per se violation. Therefore, defendant's conduct must be judged under the rule of reason.
To satisfy the rule of reason, plaintiff must show an adverse affect on competition. Coffey, 955 F.2d at 1392; Midwest Underground Storage, 717 F.2d at 498. "[T]he adverse affect must be on competition, not on any individual competitor or on plaintiff's business." Reazin v. Blue Cross & Blue Shield of Kan., Inc., 899 F.2d 951, 960 (10th Cir.1990). Under the rule of reason, "the court examines whether the challenged agreement is one that promotes competition or one that suppresses competition." City of Chanute, Kan. v. Williams Natural Gas Co., 955 F.2d 641, 652 (10th Cir.1992).
The court concludes that, even if plaintiff's allegations are accepted as true, defendant's conduct does not unreasonably restrain trade under section 1 as a matter of law because the conduct does not have an adverse affect on competition. As noted above in the discussion of antitrust injury, defendant's conduct may affect plaintiff's business adversely, but it does not implicate competition in the market generally. Therefore, plaintiff's section 1 claim cannot stand.
Plaintiff relies on Perryton Wholesale, Inc. v. Pioneer Distributing Co. of Kansas, 353 F.2d 618 (10th Cir.1965). In Perryton, the court stated that a violation of section 1 may be found "when a conspiracy exists to suppress competition in interstate trade through the elimination of a competitor by unfair means." Id. at 621. In Midwest Underground Storage, however, the court made it clear that such elimination is not a per se violation and must therefore be judged on a case-by-case basis. 717 F.2d at 496. Moreover, the Perryton court specifically distinguished cases, like the present case, involving a conspiracy to terminate a distributorship, which does not injure competition generally. 353 F.2d at 622. In the present case, section 1 is not violated because competition is not suppressed.
*1286 C. Section 2 of Sherman Act
Finally, the lack of anti-competitive conduct by defendant also entitles it to judgment on the merits of section 2. Section 2 of the Sherman Act prohibits monopolies in interstate trade or commerce, as well as attempts or conspiracies to monopolize. 15 U.S.C. § 2. Plaintiff has alleged both an attempt and a conspiracy to monopolize. These causes of action require proof of conduct in furtherance of the attempt or conspiracy, which conduct must be anti-competitive. See TV Communications Network, Inc. v. Turner Network Television, Inc., 964 F.2d 1022, 1025-26 (10th Cir.1992) (listing elements of causes of action); Multistate Legal Studies, Inc. v. Harcourt Brace Jovanovich Legal & Professional Publications, Inc., 63 F.3d 1540, 1550 (10th Cir.1995) (conduct in furtherance element requires showing of anti-competitive conduct), cert. denied, ___ U.S. ___, 116 S.Ct. 702, 133 L.Ed.2d 659 (1996). Again, for the reasons stated above, the court concludes that defendant's conduct was not anti-competitive as a matter of law.[1]
III. Defamation
Defendant next asserts that plaintiff has not properly stated a claim for defamation. In its seventh count, the complaint states:
51. ITT and its agents have intentionally published false and defamatory statements regarding Bushnell to third parties for the express purpose of injuring Bushnell's reputation and goodwill in the marketplace.
The complaint contains one other allegation touching on this claim:
16. ITT, its distributors and employees have published various false and defamatory statements regarding Bushnell to Bushnell's customers and the industry in general for the purpose of injuring Bushnell in its business. These false and defamatory statements have included statements that Bushnell used rejected components in its night vision products, that Bushnell was not able to provide current-technology night vision products, and that Bushnell had no continuing rights under the Agreement.
Defendant argues that these allegations are not sufficient to state a claim for defamation because Kansas law[2] requires that a defamation complaint "set forth the alleged defamatory words spoken or published, the names of those persons to whom they were spoken or published and the time and place of their publication." Schulze v. Coykendall, 218 Kan. 653, 657, 545 P.2d 392 (1976); see Classic Communications, Inc. v. Rural Tele. Serv. Co., 956 F.Supp. 910, 920 (D.Kan.1997) (applying Schulze pleading standard); Gentry v. Hopkins, 1989 WL 161439, at *3 (D.Kan. Dec.19, 1989) (same).
*1287 As the court has ruled on a prior occasion, however, the sufficiency of a complaint alleging defamation under Kansas law is judged under rule 8(a) instead of under Kansas pleading standards:
The question of whether a state law defamation claim has been sufficiently pled in a federal diversity case is a procedural one governed by Fed.R.Civ.P. 8. Kelly v. Schmidberger, 806 F.2d 44, 46 (2d Cir. 1986). Instead of enforcing the state's technical pleading requirements, the federal court determines whether a short and plain statement of the claim showing entitlement to relief has been pled. Fed. R.Civ.P. 8(a)(2); Caster v. Hennessey, 781 F.2d 1569, 1570 (11th Cir.1986).
Nelson v. Allstate Ins. Co., 1993 WL 105120, at *5 (D.Kan. Mar.8, 1993) (Lungstrum, J.); accord Etzel v. Musicland Group, Inc., 1993 WL 23741, at *10 (D.Kan. Jan.8, 1993); see also 5 Wright & Miller, supra, § 1245 (sufficiency of defamation pleading should be judged under rule 8(a), not under a state's pleading requirements); McGeorge v. Continental Airlines, Inc., 871 F.2d 952, 955 (10th Cir.1989) (judging sufficiency of defamation complaint under rule 8(a)).
Nonetheless, the court concludes that plaintiff's allegations are insufficient under rule 8(a) to state a claim for defamation. "[I]n the context of a defamation claim, Fed. R.Civ.P. 8(a) requires that the complaint provide sufficient notice of the communications complained of to allow [the defendant] to defend itself." McGeorge, 871 F.2d at 955. There is a significant exception to the general rule of liberally construing a complaint in applying rule 12(b)(6): when the complaint attempts to state a "traditionally disfavored" cause of action, such as defamation, courts have construed the complaint by a stricter standard. 5A Wright & Miller, supra, § 1357.
Paragraph 16 of plaintiff's complaint is not sufficient. Although three allegedly defamatory statements are listed, the allegation does not identify with necessary specificity who made the statements and to whom the statements were made. The allegation states that "ITT, its distributors and employees" made the statements to "Bushnell's customers and the industry in general," but such a generic statement does not provide adequate details about the alleged defamation to enable defendant to defend the allegation. Nor does the complaint give any time frame for the alleged statements, a fact of particular importance to a defendant in considering the application of the statute of limitations. See id. The court concludes that plaintiff's allegations of defamation did not give defendant "sufficient notice of the communications complained of" to allow defendant to answer and defend this claim. Cf. Nelson, 1993 WL 105120, at *5 (amended complaint gave sufficient notice of defamation claim where it set forth the alleged defamatory words spoken and the time period in which they were allegedly spoken).
This deficiency, however, is procedural, not substantive. Therefore, plaintiff is permitted to amend its complaint to allege additional, clarifying facts with respect to its defamation allegation. Defendant's motion is denied as it relates to this claim, provided such an amendment is effected.
IV. Tortious Interference
A. Interference with Contract
In its tortious interference count, labeled "Tortious Interference With Business and Contractual Relations," plaintiff's complaint incorporates its prior allegations and thereafter alleges as follows:
54. Bushnell has established business and contractual relations with its customers and its vendors. ITT was fully aware of these relationships.
55. ITT has, and will continue to: (1) wrongfully solicit the customers of Bushnell to do business with ITT and to cease doing business with Bushnell, and (2) wrongfully solicit Bushnell's vendors, all using Bushnell's trade secrets and confidential and proprietary information misappropriated from Bushnell.
56. ITT, as evidenced by its actions, acted wilfully and fraudulently in soliciting Bushnell's customers and vendors while representing different facts and pricing information to Bushnell so that they were unaware of ITT's actions. ITT took these actions with an intent to injure Bushnell's *1288 business and reputation so as to increase ITT's status and position in the market.
"Kansas has long recognized that a party who, without justification, induces or causes a breach of contract will be answerable for damages caused thereby." Dickens v. Snodgrass, Dunlap & Co., 255 Kan. 164, 168, 872 P.2d 252 (1994) (citing Turner v. Halliburton Co., 240 Kan. 1, syl. ¶ 7, 722 P.2d 1106 (1986)). Under Kansas law, the elements essential to recovery for tortious interference with contract are as follows:
(1) the contract; (2) the wrongdoer's knowledge thereof; (3) his intentional procurement of its breach; (4) the absence of justification; and (5) damages resulting therefrom.
Id. at 168-69, 872 P.2d 252.
Here, plaintiff has alleged that it had "contractual relations" with its customers and vendors. It has not, however, alleged that any particular contract was breached as a result of conduct by defendant. The court concludes that this most basic element of breach must be alleged to state a claim for tortious interference with contract. See Reazin v. Blue Cross & Blue Shield of Kan., 663 F.Supp. 1360, 1491 (D.Kan.1987) (it is fundamental that the tort of interference with contract requires proof of breach), aff'd, 899 F.2d 951 (10th Cir.1990).
Plaintiff has not addressed this particular tort in opposing defendant's motion for judgment on the pleadings. Accordingly, the court deems abandoned any claim by plaintiff for tortious interference with contract. Defendant's motion is granted with respect to this claim, and judgment thereon is awarded in favor of defendant. Plaintiff will not be permitted to amend its complaint to allege properly a claim of tortious interference with contract because plaintiff, by its silence, has not indicated that it could correct the defect here.
B. Interference with Prospective Business Relations
Kansas also recognizes the tort of tortious interference with prospective business relations, which requires proof of the following elements:
(1) the existence of a business relationship or expectancy; (2) knowledge of the relationship or expectancy by the defendant; (3) that, except for the conduct of the defendant, plaintiff was reasonably certain to have continued the relationship or realized the expectancy; (4) intentional misconduct by the defendant; and (5) damages suffered by plaintiff as a direct or proximate cause of defendant's misconduct.
DP-Tek, Inc. v. AT&T Global Info. Solutions Co., 100 F.3d 828, 831-32 (10th Cir.1996) (quoting Turner, 240 Kan. at 12, 722 P.2d 1106). The Kansas Supreme Court has stated, however:
It is recognized that not all interference in present or future contractual relations is tortious. A person may be privileged or justified to interfere with contractual relations in certain situations.
Turner, 240 Kan. at 12, 722 P.2d 1106.
In DP-Tek, the Tenth Circuit held that the Kansas Supreme Court would adopt Restatement section 768, which sets out a privilege for competitors. DP-Tek, 100 F.3d at 833. Section 768 provides:
One who intentionally causes a third person not to enter into a prospective contractual relation with another who is his competitor or not to continue an existing contract terminable at will does not interfere improperly with the other's relation if
(a) the relation concerns a matter involved in the competition between the actor and the other and
(b) the actor does not employ wrongful means and
(c) his action does not create or continue an unlawful restraint of trade and
(d) his purpose is at least in part to advance his interest in competing with the other.
Restatement (Second) of Torts § 768(1) (1979).
Plaintiff acknowledges in its complaint that defendant is its competitor. Therefore, the privilege set out in section 768 is implicated by plaintiff's assertion of its claim for tortious interference with prospective business relations. Moreover, there is no dispute about the applicability of the first and fourth elements of the competitor's privilege, and *1289 the court's ruling on plaintiff's antitrust claim makes the third element applicable as well.
With respect to the second element, the Tenth Circuit has held that the Kansas Supreme Court would interpret "wrongful means" to require independently actionable conduct. DP-Tek, 100 F.3d at 835. Defendant argues that, given the obvious implication of section 768, plaintiff's claim is deficient because it does not properly allege the independently actionable conduct by defendant in its interference with plaintiff's business relations. In arguing this point, defendant notes that plaintiff has not properly stated a claim for violation of the antitrust laws or for defamation.
The court disagrees that plaintiff's complaint is deficient in this regard. In its tortious interference count, plaintiff alleges that defendant interfered by using misappropriated trade secrets and proprietary information. The count also incorporates the complaint's other allegations, which include a claim for misappropriation of trade secrets. Therefore, plaintiff has alleged independently actionable conduct by defendant as the wrongful means by which it allegedly interfered. Moreover, liberally construed, the word "wrongfully" in paragraph 55 of plaintiff' claim refers to the other causes of action asserted in the complaint, such as breach of contract, unfair competition, and breach of fiduciary duty. Such causes of action may serve as the independently actionable conduct required under the privilege. See DP-Tek, Inc. v. AT&T Global Info. Solutions Co., 891 F.Supp. 1510, 1522-23 (D.Kan.1995) (Lungstrum, J.) (breach of fiduciary duty and misappropriation of trade secrets may serve as the wrongful means to sustain a tortious interference claim), aff'd, 100 F.3d 828 (10th Cir.1996). Accordingly, defendant's motion is denied with respect to plaintiff's tortious interference with prospective business relations claim to the extent that it relies on such causes of action for the necessary wrongful means.
Because plaintiff's antitrust claims proved deficient, plaintiff has not properly pled a claim for tortious interference based on an antitrust violation as the predicate cause of action for the wrongful means requirement. Because that deficiency is substantive, plaintiff may not now amend its tortious interference claim to include such conduct as the wrongful means.
Similarly, because plaintiff's defamation claim was not properly pled, its pleading of the tortious interference claim is also deficient, to the extent that defamation would provide the wrongful means under Restatement section 768. See Classic Communications, 956 F.Supp. at 922. Because the failure to plead defamation properly was procedural, however, plaintiff may amend its complaint to allege properly a claim of tortious interference with prospective business relations based also on defamation as the wrongful means. Defendant's motion, as it relates to this issue, is denied, contingent upon a proper amendment by plaintiff.
Plaintiff is instructed to amend its claim for tortious interference with prospective business relations as follows. In that count, plaintiff should list specifically its causes of action whose allegations it alleges provide the wrongful means by which defendant interfered. Except for defamation, those other causes of action have already been sufficiently pled, and their allegations may be incorporated in the tortious interference count by reference. Allegations of defamation may also be incorporated by reference as wrongful means as long as that cause of action has been properly pled in the amended complaint. Plaintiff is reminded that the scope of its amendment is very narrow and is limited to curing pleading defects in accordance with this opinion. Plaintiff may not add causes of action, either independently or as the predicate conduct for its tortious interference claim.
IT IS THEREFORE ORDERED BY THE COURT THAT defendant's motion for judgment on the pleadings (Doc. 57) is granted with respect to plaintiff's antitrust and tortious interference with contract claims, and defendant is hereby awarded judgment on those claims.
IT IS FURTHER ORDERED THAT defendant's motion is denied with respect to plaintiff's claim for defamation and tortious interference with prospective business relations, provided that plaintiff cures those claims' procedural pleading deficiencies in accordance with this opinion by timely filing of *1290 an amended complaint. Such amended complaint shall be filed with the court on or before August 1, 1997. In this event, defendant's motion is denied without prejudice; it may file a motion to dismiss for failure to state a claim after the filing of the amended complaint.
IT IS SO ORDERED.
NOTES
[1] The court does not agree with defendant's contention that plaintiff's attempted monopolization claim is insufficient for failure to allege a relevant market. See TV Communications, 964 F.2d at 1025-26. The complaint adequately names the night vision product market. The court does agree that plaintiff's complaint does not sufficiently allege the existence of a conspiracy (conspiracy in restraint of trade and conspiracy to monopolize claims) or defendant's market power (attempt to monopolize claim). Although such failures are fatal to antitrust pleading, see id., they are more procedural than substantive in nature, and the court would ordinarily permit amendment to cure the deficiencies. The absence of antitrust injury or anti-competitive conduct, however, dooms plaintiff's antitrust claims on substantive grounds, thereby requiring judgment for defendant on the pleadings under rule 12(c).
[2] The court concludes that Kansas substantive law controls plaintiff's defamation and tortious interference claims. When exercising diversity jurisdiction, the court must apply the forum state's choice of law rules to determine which state's substantive law applies. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021-22, 85 L.Ed. 1477 (1941). In Kansas, tort actions are governed by the law of the state where the tort occurred, that is, the state where the wrong was felt. Ling v. Jan's Liquors, 237 Kan. 629, 634-35, 703 P.2d 731 (1985). Because the alleged wrong to plaintiff involved financial harm, the court would look to the state in which plaintiff felt that financial injury. See Lawrence-Leiter & Co. v. Paulson, 963 F.Supp. 1061, 1065 (D.Kan.1997) (in defamation action, concluding that Kansas courts would apply law of state of plaintiff's domicile, where plaintiff felt injury from alleged tort); St. Paul Furniture Mfg. Co. v. Bergman, 935 F.Supp. 1180, 1187 (D.Kan.1996) (same conclusion in case involving tortious interference claim). Thus, because plaintiff's principal place of business is in Kansas, Kansas law applies to both the defamation and tortious interference claims.
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181 P.3d 288 (2007)
ADT SECURITY SERVICES, INC., Plaintiff-Appellant and Cross-Appellee,
v.
PREMIER HOME PROTECTION, INC., Defendant-Appellee and Cross-Appellant, and
Ronald Baskin, Defendant-Cross-Appellant.
No. 05CA1769.
Colorado Court of Appeals, Div. III.
July 26, 2007.
Certiorari Denied April 21, 2008.
*290 Sander Ingebretsen & Parish P.C., Richard G. Sander, Daniel E. Rohner, Denver, Colorado; Boies, Schiller & Flexner LLP, Stuart H. Singer, Carlos Sires, Fort Lauderdale, Florida, for Plaintiff-Appellant and Cross-Appellee.
Kelly Garnsey Hubbell + Lass LLC, Walter W. Garnsey, Jr., David R. Fine, Denver, Colorado, for Defendant-Appellee and Cross-Appellant and Defendant-Cross-Appellant.
Opinion by Judge BERNARD.
In this breach of contract case, plaintiff, ADT Security Services, Inc., appeals from the judgment and award of damages entered in favor of defendant Premier Home Protection, Inc. on Premier's counterclaim of breach of the covenant of good faith and fair dealing. Premier and defendant Ronald Baskin cross-appeal the judgment and award of damages entered in favor of ADT on ADT's claim for unpaid attrition chargebacks and lead fees. We affirm the judgment in ADT's favor on its claim, but reverse the judgment in Premier's favor on its counterclaim.
I. Background
The following facts are undisputed. ADT, a subsidiary of a publicly traded company, Tyco International, Ltd., is a residential and commercial electronic security services company that markets its monitoring services through independent dealers. Premier was one of ADT's independent dealers. Baskin is Premier's sole owner and president.
On March 13, 1999, Premier entered into an Authorized Dealer Agreement (the agreement) with ADT. Baskin signed the agreement both individually and in his capacity as president of Premier.
The agreement authorized Premier to sell and install electronic security service systems in homes and small businesses, enter into alarm monitoring contracts with customers, and offer the alarm monitoring contracts to ADT for purchase. ADT determined the purchase price for the alarm monitoring contracts in accordance with provisions in the *291 Authorized Dealer Guidelines (guidelines), which were incorporated into the agreement.
Under § 9.2.4 of the agreement, dealers were required to pay a connection fee for each alarm monitoring contract sold to ADT. The connection fee was set forth in the guidelines, and ADT had discretion to change the guidelines. During the entire time Premier was an authorized dealer for ADT, the connection fee was set at $200.
In November 2002, ADT terminated Premier's dealership contract, and in July 2003, ADT sued Premier and Baskin (collectively, Premier) for fraud and breach of contract. ADT first claimed it was entitled to collect unpaid attrition chargebacks and lead fees (for the termination of alarm monitoring accounts because of nonpayment) from Premier because of alleged breach of contract and fraud in obtaining and selling alarm monitoring contracts to ADT. Premier countered ADT was not entitled to attrition chargebacks because ADT did not comply with collection procedures in the guidelines and terminated accounts early.
ADT's second claim was that Premier committed fraud by making false representations about the identity of account holders and credit card information on alarm monitoring contracts offered to ADT for purchase. Premier responded that, for specified account holders, Premier did not know about the false representations; for some account holders, ADT continued to collect payment even after learning of the misrepresentations; and for the remaining account holders, Premier was entitled to an offset for the monitoring fees collected by ADT.
Premier counterclaimed, alleging ADT had breached the contract by violating the implied covenant of good faith and fair dealing by not setting the connection fee on the basis of actual costs. ADT responded it did not breach the duty of good faith and fair dealing because the connection fees were offset by a bonus paid for alarm monitoring contracts. At oral argument on appeal, Premier indicated it relied solely upon the covenant of good faith and fair dealing as the basis for its breach of contract claim.
After a bench trial, the trial court found that, on ADT's breach of contract claim based on unpaid attrition chargebacks and lead fees, (1) ADT substantially complied with collection procedures; and (2) except for one account, ADT did not terminate accounts early. The trial court interpreted the guidelines to allow ADT to terminate alarm monitoring accounts that had been "in the collection process" for 120 days. Accordingly, the trial court entered judgment in favor of ADT and awarded ADT damages of $640,276 and prejudgment interest of $110,662.67. The trial court awarded Premier damages of $1,200 for the one account found to have been terminated early.
On ADT's fraud claims, the trial court found that (1) Premier committed identity theft for specified accounts; and (2) Premier committed fraudulent nondisclosure with respect to credit card information on specified accounts. The trial court awarded ADT damages of $16,171.60 on the identity theft claim, $64,735.32 on the credit card fraud claim, and $13,462 in prejudgment interest.
On Premier's counterclaim for breach of the duty of good faith and fair dealing, the trial court found that ADT breached the duty by charging Premier connection fees in excess of what ADT was entitled to charge. The trial court's finding was based on its conclusion that the term "connection fee" in § 9.2.4 of the agreement referred to a variable fee and not a fixed fee. The trial court entered judgment in favor of Premier and awarded Premier damages of $1,954,383 and prejudgment interest of $701,074.
II. ADT's Appeal
ADT asserts the trial court erred in finding it breached the duty of good faith and fair dealing by charging connection fees in excess of actual costs because Premier's justified expectations in the contract were not violated by ADT's conduct. We agree and reverse.
A. History of the Connection Fee
Section 9.2.4 of the agreement between ADT and Premier provides:
Immediately upon purchase, Authorized Dealer shall pay ADT a connection fee for *292 each Purchased Alarm Account in an amount set forth in the Guidelines. The parties acknowledge and agree that such connection fee is reimbursement for administrative expenses and costs associated with the cutin and connection associated with the Purchased Alarm Accounts, not a franchise fee.
As noted, during the period that Premier was a dealer for ADT (March 1999 to November 2002), the connection fee was set at $200 in the guidelines.
Before Premier became a dealer, the connection fee was devised by senior Tyco executives, in 1997, for the purpose of enhancing ADT's income. ADT began collecting the connection fee in late 1997; ADT executives were told that the connection fee was $200 and that the fee would be recorded as a credit to revenue, with the expenses amortized over the life of the contract. In April 1998, Tyco management asked ADT executives to prepare an analysis of costs incurred and services provided to the dealers in order to provide support for the $200 connection fee. In response, an ADT executive prepared a number of connection fee schedules with connection fees ranging from $57.40 to $200.10. A senior Tyco executive also became actively involved in preparing connection fee schedules, and in June 1998, estimated connection fees to be $239.06.
In October 2000, ADT lowered its estimate of connection fees to $108.87, prompting a senior Tyco executive to send out an e-mail warning that a $90 reduction would have a financial impact nearing $45 million. Subsequently, a number of schedules were prepared to justify connection fees of at least $200. One of these schedules estimated connection fees at $286.57.
In January 2001, ADT without informing its dealers modified § 9.2.4 in the agreement to delete the language that referred to the connection fee as reimbursement for administrative expenses and costs. From April 2001 to June 2002, ADT continued to prepare various connection fee schedules. In November 2002, ADT terminated Premier's contract.
The connection fee transactions between ADT and its dealers then became the subject of an investigation by the Securities and Exchange Commission (SEC). As a result of this investigation, ADT discontinued the connection fee and the offsetting bonus in 2003. In April 2006, the SEC filed a civil injunctive action against Tyco, in the United States District Court for the Southern District of New York.
The SEC's complaint in that action alleged that Tyco, in 1997, implemented a scheme designed to overstate its operating income in connection with transactions between ADT and its dealers. The SEC alleged that Tyco management directed ADT to implement a $200 connection fee to be paid by dealers to ADT for each alarm monitoring contract purchased and to simultaneously increase the price ADT paid the dealers for those contracts by $200. Tyco referred to this offsetting payment as a "growth bonus." The SEC alleged that because the $200 connection fee was offset by the $200 growth bonus, the transaction should not have been recognized under generally accepted accounting principles. Accordingly, the SEC alleged, Tyco inflated its operating income by approximately $567 million from September 1998 through December 2002. Tyco settled this action with the SEC in April 2006.
B. Duty of Good Faith and Fair Dealing
ADT first argues that, as a matter of law, it could not have breached the duty of good faith and fair dealing, because a breach requires bad faith or deceit. ADT contends it did not act in bad faith, because it offset the connection fee with the bonus by increasing the purchase price paid to dealers. We decline to address this issue, because it is raised for the first time on appeal. Estate of Stevenson v. Hollywood Bar & Cafe, Inc., 832 P.2d 718, 721 n. 5 (Colo.1992).
ADT's second argument is that the trial court erred in finding that it breached the duty of good faith and fair dealing, because Premier's justified expectations under the contract were not violated by ADT's conduct. We agree. We conclude the trial court's judgment on this issue and the associated award of damages must be reversed.
*293 1. Elements of the Implied Covenant
A duty of good faith and fair dealing is implied in every contract subject to the Uniform Commercial Code. Section 4-1-304, C.R.S.2006. This duty applies when one party has discretionary authority to determine certain terms of the contract, such as quantity, price, or time. Amoco Oil Co. v. Ervin, 908 P.2d 493, 498 (Colo.1995).
The concept of discretion in performance "refers to one party's power after contract formation to set or control the terms of performance." Discretion occurs when the parties, at formation, defer a decision regarding performance terms of the contract.
Amoco Oil Co., supra, 908 P.2d at 498 (citation omitted) (quoting Steven J. Burton, More on Good Faith Performance of a Contract: A Reply to Professor Summers, 69 Iowa L.Rev. 497, 501 (Jan.1984)).
The good faith performance doctrine is generally used to give effect to the intentions of the parties or to honor their reasonable expectations. Good faith performance of a contract involves "faithfulness to an agreed common purpose and consistency with the justified expectations of the other party." Amoco Oil Co., supra, 908 P.2d at 498 (quoting Wells Fargo Realty Advisors Funding, Inc. v. Uioli, Inc., 872 P.2d 1359, 1363 (Colo.App.1994)); see also Restatement (Second) of Contracts § 205 cmt. a (1981).
A party's justified expectations are violated if evidence indicates it would not have signed the contract had it known of the manner in which the party given discretion would exercise its discretion to determine open terms under a contract. See Amoco Oil Co., supra, 908 P.2d at 499 ("[A]lthough the dealers left the rental calculation to Amoco's discretion, they presumably would not have signed the agreements had they known Amoco would charge a duplicate amount for service bays."). Thus, the implied covenant of good faith and fair dealing is breached when a party uses discretion conferred by the contract to act dishonestly or to act outside of accepted commercial practices to deprive the other party of the benefit of the contract. Wells Fargo Realty Advisors Funding, Inc., supra, 872 P.2d at 1363.
However, the duty of good faith cannot be used to contradict terms or conditions for which a party has bargained. Amoco Oil Co., supra, 908 P.2d at 498; see Shiplet v. First Sec. Bank, Inc., 234 Mont. 166, 762 P.2d 242, 246 (1988) ("[It] appears the gravamen of the statutory [UCC] good faith requirement is whether the terms of the agreement were carried out faithfully."), overruled on other grounds by Sacco v. High Country Indep. Press, Inc., 271 Mont. 209, 896 P.2d 411 (1995). The doctrine does not obligate a party to accept a material change in the terms of the contract, or to assume obligations that vary or contradict the contract's express provisions, nor does it permit a party to inject substantive terms into the contract. Wells Fargo Realty Advisors Funding, Inc., supra, 872 P.2d at 1363.
2. Justified Expectations
We conclude that ADT's conduct was not contrary to Premier's justified expectations, as established by the language of the contract.
Section 9.2.4 of the agreement between ADT and Premier, which defined the connection fee as a reimbursement, indicated the connection fee was variable. In addition, § 9.2.4 gave ADT discretion to set the connection fee. The connection fee was set at $200 in the guidelines when Baskin signed the agreement on behalf of Premier and himself, and the fee remained the same during the duration of Premier's contract.
The purchase price ADT would pay Premier for each alarm monitoring contract was not specified in the agreement or the guidelines. However, testimony at trial indicated Premier received about $1200 for each alarm monitoring contract, less the connection fee. There was no reference to a growth bonus in either the agreement or in the guidelines. Before entering into the agreement, ADT did not disclose to Premier that the connection fee was designed, as part of an accounting scheme, to be offset by a growth bonus that increased the purchase price for each alarm monitoring contract.
Premier argued at trial that its justified expectations under the contract were that *294 ADT would calculate the amount of the reimbursements due to ADT under § 9.2.4 based upon the actual cost of the connecting fee. However, Premier was aware that the connection fee remained at $200 throughout the life of the contract, and that it received the same net amount from ADT for each alarm monitoring contract.
The trial court did not directly address the issue of what Premier's justified expectations were. Instead, the trial court focused on ADT's conduct, finding that (1) the history of the connection fee revealed that ADT did not fix the $200 connection fee based on actual administrative costs and expenses ADT only attempted to justify the connection fee after charging the $200; (2) ADT included items in the connection fee schedules that should not have been included, such as a welcome kit, interest on funds utilized to acquire an account, a trademark fee, and a management fee; and (3) Tyco admitted in its filings with the SEC that ADT "determined the amounts reimbursed from dealers under ADT's authorized dealer program exceeded the costs actually incurred." Based on these findings, the trial court concluded ADT breached the duty of good faith and fair dealing by charging Premier in excess of what it was entitled to charge for the connection fee.
Although these determinations were sufficient to support a conclusion that the connection fee was not, in fact, based upon the actual costs associated with connecting accounts, the trial court did not resolve what Premier's justified expectations were and how ADT's conduct defeated those expectations. Because we have previously concluded the contract unambiguously described the connection fee as variable, the record allows us to conclude it was Premier's justified expectation that the fee would be based upon actual costs and any recalculations would be based upon future changes in costs.
However, there is no indication in the contract to suggest the costs were more likely to rise or to fall, or that costs would be regularly recalculated. There is no evidence in the record to indicate Premier would not have entered into the contract had it known the connection fee was not based on actual costs and it would have to pay the $200 connection fee for each customer it recruited during the contract. When Baskin signed the contract containing the connection fee language, the accompanying guidelines indicated the connection fee was $200. We therefore conclude it was Premier's justified expectation that it would be charged a connection fee of $200 for each contract, unless and until the connection fee was raised or lowered, and that Premier did not have a justified expectation the connection fee would be increased or decreased at any particular time.
We conclude that ADT's performance of the contract associated with the connection fee treating it as a fixed fee contrary to the plain language of the agreement did not deny Premier "the benefit of the contract." See Wells Fargo Realty Advisors Funding, Inc., supra, 872 P.2d at 1363. Although Baskin testified it was important to him that the connection fee be calculated accurately because it was "a large sum of money," and that Premier should be reimbursed by the portion of the connection fee Premier paid for each customer agreement that did not represent the actual costs of the connection fee, Premier knew what the connection fee was at the time it entered into the contract. It could, based upon the $200 figure, calculate its costs, anticipate its income, and project its profits before the contract's formation. There was no guarantee that the connection fee would rise or fall during the contract's term, and the connection fee never changed during the business relationship. We therefore conclude Premier would have presumably entered into the contract even had Premier known that ADT was treating the connection fee as a fixed fee, offset by a growth bonus, that would not change during the contract's life. See Amoco Oil Co., supra, 908 P.2d at 499.
Premier relies heavily on Amoco Oil Co., supra, to support its position that ADT's conduct denied Premier's justified expectations. However, this case is distinguishable from Amoco Oil Co. There, although precise rental figures were established at the time of the agreement's formation, Amoco retained discretion to modify the rental terms, thus keeping the terms open and requiring the *295 dealers to depend upon Amoco's good faith in setting new figures. Amoco adjusted the figures in a way that disadvantaged the gasoline dealers, leading to a conclusion that Amoco had violated the implied covenant of good faith and fair dealing.
Here, as in Amoco Oil Co., the contract gave ADT discretion to set the connection fee in the guidelines. At the time the contract was signed, the guidelines stated the connection fee was $200. Although ADT reserved the right to change the connection fee, thus maintaining some future discretion over the amount of the fee, Premier knew, at the time of the contract's formation, what the fee would be. However, unlike in Amoco Oil Co., there was no modification of the connection fee during the business relationship between ADT and Premier.
The determination of the amount of the connection fee, an important term of the contract's performance, was not deferred, because Premier knew the amount of the fee when the contract was signed, and the fee never changed. Therefore, the implied covenant was not breached under these circumstances, because there was no exercise of "discretion in performance" by ADT that denied Premier the benefit of the contract. Amoco Oil Co., supra, 908 P.2d at 498; cf. Bayou Land Co. v. Talley, 924 P.2d 136, 154 (Colo.1996) ("even if the implied covenant [of good faith and fair dealing] were to arise in a deed of trust context, it would not be violated by" the actions of the party possessing discretion under the contract).
Accordingly, although we agree with the trial court's interpretation of the term "connection fee" in § 9.2.4 of the agreement as referring to a variable fee, not a fixed fee, we reverse the judgment on Premier's claim that ADT breached the implied covenant of good faith and fair dealing, and the damages awarded in connection with that claim.
III. Premier's Cross-Appeal
Premier argues that the trial court erred in holding that, except for one alarm monitoring account, ADT did not prematurely terminate accounts for nonpayment, and thus, ADT is entitled to attrition chargebacks. Premier contends the trial court failed to adopt the correct interpretation of the relevant provisions and failed to consider appropriate extrinsic evidence. We disagree.
A. Attrition Chargeback Provisions
For alarm monitoring accounts terminated for nonpayment, the agreement required Premier to pay ADT an "attrition chargeback," which was equal to the purchase price paid by ADT for the account (about $1200). Section 15 of the agreement provided:
During the term of this Agreement and for as many as twelve months (12) months thereafter . . . Authorized Dealer shall be charged the Attrition Chargeback with respect to Purchased Alarm Accounts that become Canceled Alarm Accounts or Non-Producing Alarm Accounts. The guidelines and procedures to be used with respect to Authorized Dealer's Attrition Chargeback are more specifically set forth in the Guidelines.
"Canceled Alarm Accounts" are defined in the guidelines as "Purchased Alarm Accounts which, from time to time, are designated by ADT as canceled." "Nonproducing Alarm Accounts" are defined as "(i) any Purchased Alarm Account for which the total accounts receivable balance is equal to or greater than three (3) times the MRR [Monthly Recurring Revenue], and (ii) at least one MRR is ninety (90) or more days past due." The MRR is defined as the "total recurring regular monthly amounts due from Subscribers pursuant to their respective Service Agreements."
Collection practices with regard to termination of accounts are contained in two versions of the guidelines that were in effect during Premier's contract with ADT. The 1999 guidelines provided, "On the last day of each fiscal month, we cancel all accounts with account receivable balances greater than or equal to 120 days old."
The 2001 guidelines specified cancellation procedures for accounts "90 days past due" and "120 days past due." For accounts "90 days past due," the guidelines provided that "[a]ccounts scheduled to hit 120 days past due by month end will also be sent a certified letter providing 10-days notice of termination *296 of alarm service." On the last day of the fiscal month, accounts that had not been paid were to be canceled. For accounts classified as "120 days past due," those account holders who had not received a cancellation letter (providing ten days notice) were to be sent such a letter, and accounts were to be canceled if not paid after ten days.
B. Analysis
Premier contends that the term "120 days past due" means that an account is subject to termination for nonpayment and collection of attrition chargebacks only if it had 120 days of accrued delinquent MRR at the termination date. ADT counters that the 120-day period before cancellation begins on the date the customer first enters the collection process. The trial court held that the term "120 days past due" was ambiguous and then interpreted the term to mean that accounts are subject to termination when they are in the collection process for 120 days. We agree with the trial court.
Whether a written contract is ambiguous is a question of law we review de novo. Pub. Serv. Co. v. Meadow Island Ditch Co. No. 2, 132 P.3d 333, 339 (Colo. 2006). A contract is ambiguous when it is reasonably susceptible of more than one meaning. Pub. Serv. Co., supra, 132 P.3d at 339. When an ambiguity is found to exist that cannot be resolved by reference to other contractual provisions, the trial court must consider extrinsic evidence in order to determine the parties' intent. Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1314 (Colo.1984).
The extrinsic evidence a trial court considers may include "any pertinent circumstances attendant upon the transaction, including the conduct of the parties under the agreement." Pepcol Mfg. Co., supra, 687 P.2d at 1314 (citing Nahring v. City & County of Denver, 174 Colo. 548, 552, 484 P.2d 1235, 1237 (1971)). Once a contract is determined to be ambiguous, the meaning of its terms is a question of fact, Pepcol Mfg. Co., supra, 687 P.2d at 1314, and the findings of the trial court must be accepted on review, unless they are so clearly erroneous as not to find support in the record, M.D.C./Wood, Inc. v. Mortimer, 866 P.2d 1380, 1384 (Colo.1994).
We conclude that the term "120 days past due" is facially ambiguous; the guidelines do not clarify whether accounts can be terminated only when there are 120 days of accrued unpaid MRR, or whether accounts can be terminated 120 days from the first unpaid MRR. The term could reasonably be interpreted in either of the two ways proposed by the parties.
After correctly determining that the term "120 days" was ambiguous, the trial court found that accounts are subject to termination when they are in the collection process for 120 days. The trial court based its finding on the stated purpose of the collection procedure in the guidelines, which was to improve customer retention, improve cash flow, and collect the entire balance due to ADT. The trial court's finding is also supported by testimonial evidence provided by an ADT witness.
The record supports the trial court's determination of the meaning of the ambiguous term "120 days past due," and, therefore, we agree with the trial court's ruling as to the claim for attrition chargebacks.
The judgment is reversed as to Premier's counterclaim of breach of the implied covenant of good faith and fair dealing and the related award of damages. The judgment is affirmed in all other respects.
Judge ROY concurs.
CRISWELL[*], J., specially concurs.
Judge CRISWELL specially concurring.
I fully agree with Part III of the majority opinion. I also agree with the majority's conclusion in Part II that the evidence here would not support a finding that ADT's failure to change the amount of the connection fee, that is, its inaction, resulted in a denial of Premier's reasonable expectations.
*297 However, I have serious reservations whether the claim being asserted by Premier with respect to the amount of the connection fee implicates the covenant of good faith and fair dealing, in any case.
I agree, of course, that such a covenant inheres in every contract. I also agree that it may be used to condition a party's exercise of a discretionary authority given by the contract. In my view, however, the covenant is implicated only if the contract does not set forth any other criteria for the exercise of such discretion. It is the covenant's standard of good faith that is used to judge the legitimacy of the exercise of discretion only if there is no other standard established by the contract therefor.
In Amoco Oil Co. v. Ervin, 908 P.2d 493 (Colo.1995), for example, the contract between Amoco and its various dealers allowed Amoco to change the stations' rental rate, but it did not set forth any criteria that it was to use in establishing such a rate. Hence, when Amoco established a rental rate based on several factors, but used duplicating factors in at least one instance, the covenant of good faith and fair dealing was relied upon to invalidate the rental rate, even though nothing in the express contract itself prohibited use of the formula employed by Amoco.
Here, in contrast, both the trial court and we agree that the express terms of this contract required the establishment of a connection fee based upon certain expenses incurred by ADT. Hence, once the trial court found that the amount of the connection fee was not based on these expenses, the conclusion is manifest that ADT's failure to adjust the initial fee was a violation of the express terms of the parties' agreement. Under such an analysis, the covenant of good faith and fair dealing need not be relied upon, and therefore, neither party's "reasonable expectations" become relevant.
Nevertheless, Premier made clear both in the trial court and in counsel's argument before us that it was not relying upon any claimed violation of an express term of the agreement; it emphasized that it was relying solely upon a violation of the covenant. And, for the reasons given by the majority, it failed to prove such a violation.
NOTES
[*] Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S.2006.
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Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
03/13/2020 12:09 AM CDT
- 890 -
Nebraska Supreme Court Advance Sheets
304 Nebraska Reports
TNT CATTLE CO. v. FIFE
Cite as 304 Neb. 890
TNT Cattle Company, Inc., appellee,
v. Dianna Fife, appellant.
___ N.W.2d ___
Filed January 31, 2020. No. S-18-1067.
1. Declaratory Judgments. An action for declaratory judgment is sui
generis; whether such action is to be treated as one at law or one in
equity is to be determined by the nature of the dispute.
2. Declaratory Judgments: Appeal and Error. In appellate review of
an action for a declaratory judgment in a law action, factual find-
ings by the trier of fact will not be set aside unless such findings are
clearly erroneous.
3. Breach of Contract: Leases. An action for breach of a lease agreement
is an action at law.
4. Jurisdiction: Pleadings: Appeal and Error. Factual findings in a
court’s determination of a factual challenge to subject matter jurisdiction
are reviewed under a clearly erroneous standard.
5. Parties: Words and Phrases. An indispensable party to a suit is one
whose interest in the subject matter of the controversy is such that the
controversy cannot be finally adjudicated without affecting the indis-
pensable party’s interest, or which is such that not to address the interest
of the indispensable party would leave the controversy in such a condi-
tion that its final determination may be wholly inconsistent with equity
and good conscience.
6. Parties: Waiver. Neb. Rev. Stat. § 25-323 (Reissue 2016) deprives a
court of the authority to determine a controversy absent all indispensable
parties and cannot be waived.
7. Parties. The burden of procuring the presence of all indispensable par-
ties is on the plaintiff.
8. Breach of Contract: Time: Words and Phrases. An anticipatory
breach of contract is one committed before the time has come when
there is a present duty of performance and is the outcome of words or
acts evincing an unequivocal repudiation of the contract.
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Nebraska Supreme Court Advance Sheets
304 Nebraska Reports
TNT CATTLE CO. v. FIFE
Cite as 304 Neb. 890
9. Breach of Contract: Time. When there is an anticipatory breach, the
promisee has the option to treat the contract as ended so far as further
performance is concerned and maintain an action immediately rather
than await the promisor’s time for performance.
10. Pleadings: Evidence: Trial. A party may at any and all times invoke the
language of his opponent’s pleadings on which the case is being tried on
a particular issue as rendering certain facts indisputable.
11. Pleadings: Evidence: Waiver. The pleadings in a cause are not a means
of evidence, but a waiver of all controversy, so far as the opponent
may desire to take advantage of them, and therefore, a limitation of
the issues.
12. Pleadings. Statements in pleadings remain binding only until the plead-
ing is amended.
13. Pleadings: Evidence. Matters contained in superseded pleadings
are simple admissions that are admissible as evidence of the facts
alleged therein and may be introduced and considered the same as any
other evidence.
14. Pleadings. A judicial admission does not extend beyond the intend-
ment of the admission as clearly disclosed by its context and must be
unequivocal, deliberate, and clear, and not the product of mistake or
inadvertence.
15. Property: Contracts: Leases. A transferor of an interest in leased
property, who immediately before the transfer is obligated to perform
an express or implied promise of the lease resting on privity of contract,
continues to be obligated after the transfer.
16. Landlord and Tenant: Leases: Liability. A landlord who has trans-
ferred his or her interest in the land remains liable under a lease agree-
ment, on the implied promise of quiet enjoyment, for disturbances of the
tenant by the former landlord himself or herself or by someone whose
conduct is attributable to the former landlord.
17. Leases: Evidence: Intent. Where the terms of a written lease appear
to be ambiguous and uncertain as to the intended length of the tenancy
or the beginning or end of the term, then, as in other cases of ambi-
guity, parol evidence may properly be resorted to for the purpose of
resolving the uncertainty and explaining the parties’ true intentions in
that respect.
18. Contracts. Instruments made in reference to and as part of the same
transaction are to be considered and construed together.
19. Contracts: Intent: Appeal and Error. When a document is ambiguous,
it is for the trier of fact to determine the intent of the parties from all
the facts and circumstances, and such findings will be upheld on appeal
unless they are clearly erroneous.
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Nebraska Supreme Court Advance Sheets
304 Nebraska Reports
TNT CATTLE CO. v. FIFE
Cite as 304 Neb. 890
20. Contracts: Rescission: Words and Phrases. A “rescission” amounts to
the unmaking of a contract.
21. Contracts. A modification continues the original contract with some
changes.
22. Contracts: Rescission. In determining whether a rescission took place,
courts look not only to the language of the parties but to all the
circumstances.
23. Contracts: Rescission: Intent. Mutual rescission of a contract must be
clear, positive, unequivocal, and decisive, and it must manifest the par-
ties’ actual intent to abandon their contract rights.
24. Breach of Contract: Damages. In a breach of contract case, the ulti-
mate objective of a damages award is to put the injured party in the
same position the injured party would have occupied if the contract had
been performed, that is, to make the injured party whole.
25. ____: ____. One injured by a breach of contract is entitled to recover
all its damages, including the gains prevented as well as the losses sus-
tained, provided the damages are reasonably certain and such as might
be expected to follow the breach.
26. Damages: Proof. While damages need not be proved with mathematical
certainty, neither can they be established by evidence which is specula-
tive and conjectural.
27. ____: ____. Uncertainty as to the fact of whether damages were sus-
tained at all is fatal to recovery, but uncertainty to amount is not if the
evidence furnishes a reasonably certain factual basis for computation of
the probable loss.
28. Damages: Appeal and Error. The amount of damages to be awarded
is a determination solely for the fact finder, and the fact finder’s deci-
sion will not be disturbed on appeal if it is supported by the evidence
and bears a reasonable relationship to the elements of the damages
proved.
Appeal from the District Court for Buffalo County: William
T. Wright, Judge. Affirmed.
Jack W. Besse, of Parker, Grossart & Bahensky, L.L.P., for
appellant.
Siegfried H. Brauer, of Brauer Law Office, for appellee.
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
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Freudenberg, J.
I. NATURE OF CASE
This appeal involves a dispute between an out-of-state land-
lord and her tenant as to the duration of their farm lease
agreement. Two writings were considered by the court as
embodying their agreement, one which stated that the “lease
period will go from January 2007 until December 2017 a ten
year period” and the other providing that “[t]he land will be
maintained . . . from January 2007 until December 2017.” The
court found for the tenant that there was an 11-year lease and
awarded damages for breach of contract. The landlord argues
on appeal that the lower court lacked jurisdiction to issue the
judgment, because title to the farmland was transferred into
a trust before the tenant was evicted, and that therefore, the
landlord in her capacity as sole trustee of the trust was an
indispensable party. On the underlying merits, the landlord
asserts that the lease was for 10 years and that, in any event,
an oral modification replaced the written agreement such that
an oral year-to-year lease governed when she gave notice of
termination. The landlord also argues that the district court’s
calculation of the tenant’s damages was based on speculative
and conjectural evidence. We affirm the judgment below.
II. BACKGROUND
Rowland Trampe is the sole owner and president of TNT
Cattle Company, Inc. (TNT). He entered into a long-term
lease agreement with Dianna Fife to lease farmland located
at “Section Twenty-Six (26), Township Ten (10) North,
Range Seventeen (17), West of the 6th P.M., Buffalo County,
Nebraska” (Fife farm). When Fife indicated to Trampe that he
should vacate the Fife farm before the end of the lease term
as understood by Trampe, TNT sued Fife. The fundamental
disagreement between TNT and Fife was whether their writ-
ten agreement provided that the lease period would end in
December 2016 or in December 2017 and, further, whether a
subsequent oral agreement to change the crops grown on the
Fife farm rescinded the written agreement such that they were
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operating under an oral year-to-year lease when Fife advised
Trampe the tenancy would be ending.
TNT’s original complaint was filed on April 19, 2017, and
relied on a singular document containing the parties’ nota-
rized signatures and stating that the “lease period will go from
January 2007 until December 2017 a ten year period.” An
amended complaint claimed that this document in conjunction
with another document executed at the same time constituted
the written agreement between the parties. The other docu-
ment, containing the notarized signatures of the parties dated
the same as the first document, described that “[t]he land will
be maintained by TNT . . . from January 2007 until December
2017,” without mention of a “ten year period.”
TNT alleged in its original complaint filed on April 19,
2017, that “[Fife] has forwarded certain communications to
[TNT] within the last few months that taken together indicate
that [Fife] intends to breach the Lease and deny [TNT] posses-
sion of and access to the [Fife f]arm for the 2017 crop year.”
More specifically, TNT alleged Fife had asserted that the lease
would terminate as of December 31, 2016, and that she had
the right to exclude TNT after that date. TNT sought injunc-
tive relief from any action by Fife to terminate the lease or
dispossess TNT from the Fife farm before December 31, 2017;
declaratory judgment that the lease ran through December 31,
2017; and damages for anticipatory breach of the lease. In
the amended complaint, filed on September 14, 2017, TNT
repeated the allegations of the original complaint, alleging still
that TNT’s “anticipated dispossession” for the 2017 crop year
would cause TNT irreparable harm and that in the event TNT
is not granted injunctive relief, it would suffer damages for lost
profits from the 2017 crop year.
Fife, in her answers, alleged that the parties had agreed that
the lease term would end on December 31, 2016, and that any
reference to “December 2017” was a mistake that should be
construed against TNT, which she alleged was the scrivener.
She alleged that, in any event, the long-term lease agreement
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was no longer controlling, because it was subsequently modi-
fied to an oral year-to-year lease. Fife counterclaimed against
TNT for an accounting of her crop share during the course of
their lease agreement, intentional interference with the contrac-
tual relationship with a lease agreement between “defendant”
and a new tenant, and trespass, when Trampe allegedly allowed
his cattle to graze on stalks on the Fife farm in the fall and
winter of 2009 through 2012. TNT did not file any pleading in
response to the counterclaim.
After a pretrial hearing, the court found the evidence insuf-
ficient to warrant a temporary injunction, reasoning that TNT
had failed to establish a clear right to an injunction by virtue
of the lease agreement, because that agreement was ambigu-
ous. A bench trial was held on permanent injunctive relief and
the underlying claims of declaratory judgment and breach of
contract, bifurcating the trial on the underlying merits of these
claims from a determination of any damages. Trial on Fife’s
counterclaim was postponed until after the court’s determina-
tion on Fife’s claims. The court ultimately found that injunc-
tive relief was moot, but found in favor of TNT for breach of
contract and awarded TNT damages.
1. Oral Year-to-Year Lease
From 2003 to 2008
The evidence at trial demonstrated that Fife had purchased
the Fife farm in January 2003 and that from that time until
2008, Trampe farmed the land under an oral year-to-year
arrangement. Prior to Fife’s acquisition, Trampe had been
farming the land for the previous landlord.
2. Long-Term Written Lease
Agreement for Row Crop
Trampe testified that in the summer of 2007, he and Fife
began discussing putting an irrigation pivot on the Fife farm
in order to utilize all the approved irrigated acres and thereby
not lose the Fife farm’s designation with the U.S. Department
of Agriculture Farm Service Agency. Trampe noted that the
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dry hay was “becoming older hay and was going to fizzle
out” anyway.
Trampe offered to assist at his own expense with some of
the “dirt work” necessary for installation of a pivot so long as
he could recoup that investment through a 10-year lease. The
pivot was installed and began operation in 2008 for the 2008
farm year.
According to Trampe, he understood that the 10-year lease
period would commence once the pivot was in place. Trampe
explained that when negotiating the new arrangement, he was
aware that the pivot would not be installed until the spring of
2008. Thus, he understood that the duration of the new lease
would be for one final year of dryland hay production plus 10
years of irrigated row crop production.
Fife acknowledged multiple telephone conversations with
Trampe generally pertaining to installation of pivot irrigation,
but she could not recall “anything at all” with respect to what
was said.
(a) Exhibits 3 and 4
Trampe testified that after discussing the matter at length
over the telephone, Fife mailed a lease document to him with
the crops and percentages left blank. The original draft lease
agreement sent by Fife with items left blank was entered into
evidence as exhibit 4. Trampe explained that he had found the
document the night before the trial.
The document as sent by Fife originally provided: “The land
will be maintained by TNT Cattle Co, . . . from January 2007
until December 20__.” Further, several lines of the document
described that “[c]rop percentage will be __% for the sale of
[specified crop],” alternating “for TNT Cattle Co.” and “for
Dianna S. Fife Trust.” These lines specified alfalfa, soybeans,
and corn. Four similar lines following left the crop blank. The
document provided that “None of Dianna S. Fife heirs may
contest this contract.”
The forwarding letter, exhibit 3, which Trampe had also
located the evening before trial, stated in relevant part:
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I am enclosing a rough draft of a contract for us to
sign. See what you think and let me know. If you like
it, just fill in the number of years in the blank and the
percentage of crops etc. You can re-type it if you like. I
think you will need to initial the % areas when you go to
a Notary. I will have to do the same so they know we both
agree on it. You can go to a Notary and then send them to
me and I will sign them in front of a Notary. I will send
your copy back to you and I will keep a copy. I have no
problem with the number of years you want to work the
land. I don’t plan to sell it for a long time.
Fife did not recall the letter, but acknowledged that her signa-
ture was on it.
The blank for the end date of the lease period in exhibit 4
was filled in by Trampe as 2017. Trampe filled in the percent-
ages for the sale of alfalfa as 50 percent to TNT and 50 percent
to the “Dianna S. Fife Trust.” Trampe filled in the blanks for
the lines pertaining to soybeans and corn as 66.7 percent to
TNT and 33.3 percent to the “Dianna S. Fife Trust.” The four
other lines were simply left blank. Trampe then signed the
agreement in the presence of a notary.
Fife objected to the admission of exhibits 3 and 4 on the
grounds of foundation and unfair surprise. The court overruled
the objections and admitted exhibits 3 and 4 into evidence.
(b) Exhibit 1
Trampe testified that based on the letter and exhibit 4, he
had created another document, exhibit 1, which provided in
full:
Rowland Trampe owner and operater of TNT Cattle
Co. Inc. agrees to rent the farm ground from Dianna Fife
in section 26 T-10-N-R-17-W in Grant township. The
lease period will go from January 2007 until December
2017 a ten year period. The ground will be rented on
shares in corn and soybeans 66.7 percent to TNT Cattle
Co. and 33.3 percent to Dianna Fife. Dianna will pay
her share of the Fertilizer and TNT Cattle Co. will pay
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his share of Fertilizer plus 100 percent of the herbicides
and insecticides. Dianna will pay all bills for the repairs
of the wells the pumps gear heads the pivot and her
well motor.
(c) Exhibits 1 and 4 Signed
Simultaneously
Trampe testified that he signed both exhibit 1 and exhibit 4
in front of a notary on January 16, 2007, and the exhibits so
reflect. Trampe testified that he mailed both documents to Fife
together. Fife subsequently returned both documents to Trampe
via the postal service, after signing them both in the presence
of a notary on February 7, 2007.
Fife signed exhibit 1 “Dianna Fife,” but signed exhibit 4 as
“Dianna S. Fife Trust.”
Fife could not specifically recall preparing or signing exhibit
4, but she verified that it was her signature on the document.
Trampe testified that he received the signed documents back
from Fife sometime around mid-February 2007.
3. Change of Crop to
Organic Alfalfa
The lease arrangement continued without incident until
2015. Before the 2015 growing season commenced, Fife
approached Trampe, expressing the desire to switch from the
genetically modified row grain crop that was being grown
on the Fife farm to organic alfalfa. Further, Fife expressed to
Trampe that she no longer wished to contribute to any of the
farming expenses.
Trampe explained that alfalfa seed is an expensive perennial
and that switching to alfalfa from the row crops required more
fieldwork and water. Furthermore, the first year of an alfalfa
crop does not yield a good harvest. After the first year, the
perennial crop produces a good yield for about 6 years.
Trampe testified that he believed he had at least 3 more
years under the lease agreement to recoup his investment. In
other words, they were simply modifying the agreement to
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change the crop and the percentage shares of costs and profits,
not the lease term. Trampe testified that he expected to have
at least three cuttings of alfalfa in 2015 and four in 2016 and
2017. He would not have planted such an expensive crop at his
own expense for only a 2-year lease.
Trampe proposed that they could split the profits 50-50 if
Fife paid half of the farming expenses. If, on the other hand,
Fife did not contribute to any of the farming expenses, she
could receive one-third of the profits, while Trampe would
retain two-thirds. According to Trampe, Fife told him that
she wished to enter into the one-third arrangement where she
would not incur any farming expenses.
TNT replowed and reconfigured the ground to allow for the
production of alfalfa, planting the first new crop in the spring
of 2015. Thereafter, TNT made three cuttings of alfalfa in 2015
and four in 2016, keeping two-thirds for himself and allocat-
ing the remaining one-third of the yield to Fife. The evidence
was undisputed that Fife received one-third of the profits from
these harvests.
4. Termination
(a) Letter
Trampe testified that he received a letter from Fife in August
2016, in which Fife first communicated she might be looking
for another tenant, and that she and Trampe had different ideas
about the end date of the lease agreement. Trampe described
that the letter stated Fife “had other offers to farm the ground.”
Fife described that she sent the letter in July 2016 and that
in the letter, she notified Trampe that TNT’s lease would
terminate effective December 31, 2016. The letter was not
in evidence.
(b) Conversations
Trampe and Fife spoke on the telephone after Trampe
received the letter. The court found that they discussed their
disagreement as to when the lease period would end and
“apparently negotiated through 2016 calendar year.”
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Trampe and Fife had a face-to-face meeting at a restaurant
in Kearney, Nebraska, in September 2016. The exact date of
the conversation is unclear. Trampe testified that during the
conversation, he expressed his opinion that their lease agree-
ment was until 2017:
[B]ut I said if it would help . . . , if you want a new con-
tract—because she told me just give her a new bid on it.
She wanted to go a three-year contract. So I thought about
it and I did, I sent her a new proposal, assuming that if
that was the case, well, I would be all right with that
because planting the hay, I was hoping to get five or six
years out of it where I incurred all the expenses, to kind
of recoup some of those expenses.
Fife testified she told Trampe during this conversation that
the 10-year lease would end on December 31, 2016, but that
she had not entered into an agreement with anyone else and
was “more than willing to have him send me a new contract
starting in 2017.” She did not recall Trampe’s end of the con-
versation, but acknowledged that Trampe sent her some pro-
posals afterward.
(c) Negotiations for New
Lease Unsuccessful
Ultimately, Fife did not accept Trampe’s offer, because she
had better bids. Trampe responded it would be hard to compete
with other bidders who did not have to recoup an investment
into the ground and who could take advantage of the seed he
had planted.
(d) Notice of Eviction
Trampe testified that at some later point, he received a letter
from Fife telling him that “I needed to have my stuff or pos-
session and/or shared payoff by December 31 of ’16 or there
would probably be a sheriff there to greet me if I was trespass-
ing on her land, that she would consider it trespassing after
December 31 of ’16.” By December 31, 2016, Trampe had
removed himself and his belongings from the Fife farm.
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5. Changing Theories of Recovery
and Ownership of Fife Farm
In its original complaint, TNT had sued Fife in her individ-
ual capacity and alleged that the parties’ original lease agree-
ment was represented in a singular ambiguous written instru-
ment, exhibit 1, and that Fife breached the agreement when
she demanded Trampe vacate the premises before the intended
end date of the lease. In her answer to the original complaint,
Fife admitted she was a nonresident landowner “possessed of
and fee owner of” the Fife farm. Further, Fife’s counterclaim
alleged that “defendant” was the owner of the Fife farm. She
attached to her counterclaim the warranty deed that conveyed
the Fife farm to “Dianna S. Fife” in 2003. Fife did not sign the
pleadings and was not present at the hearing on TNT’s request
for a temporary injunction. It was undisputed that although the
“Dianna S. Fife Trust” (hereinafter Fife trust) existed when
Fife and TNT entered into the long-term lease agreement, Fife
held title to the Fife farm as an individual at that time.
But, at the July 2017 trial, both parties presented evidence
that conflicted with the original pleadings. Fife was called by
her counsel as a witness and testified that in September 2016,
she had transferred the Fife farm into an irrevocable trust, the
Fife trust, and that the Fife farm had remained in the Fife trust
since that time. Fife described that she was the sole trustee
but was not asked to provide any additional details about the
Fife trust or its beneficiaries. No evidence was adduced as to
the precise date of the transfer, and the deed itself is not in
the record.
At the close of direct examination and before cross-
examination of Fife, TNT asserted that Fife was precluded
by the judicial admission in her answer and counterclaim to
the original complaint from claiming she no longer owned
the Fife farm. Despite Fife’s counsel’s objection that Fife had
not signed or verified the answer and counterclaim, the court
agreed and stated that the judicial admission controlled over
the testimony at the hearing. The court denied a motion by
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Fife’s counsel to withdraw the admissions so as to conform to
the evidence or, alternatively, to amend by interlineation.
But Trampe had also presented evidence of exhibit 4 as
constituting part of the written lease agreement, which had not
been pled. And a subsequent hearing was held on November
30, 2017, after TNT filed a motion seeking to amend its com-
plaint to conform to the evidence that there were two writings
forming the lease agreement instead of one. The proposed
amended complaint still named Fife in her individual capacity
as the only defendant.
Fife objected to the amended complaint on the ground of
unfair surprise. The court allowed the amended complaint, but
also allowed Fife to file an amended answer and counterclaim.
Further, the court allowed the evidence to be reopened and held
a continuation of the trial on November 30, 2017.
In her amended answer, Fife affirmatively alleged that the
Fife farm “is owned by the [Fife trust] and that the trustee of
said trust is . . . Fife.” She did not change the allegation in her
counterclaim that “[Fife] is the owner of the real estate . . . .”
The court explicitly recognized both the amended complaint
and the amended answer and counterclaim, explaining that the
case was to “proceed on those documents at this point.”
Neither the parties nor the judge discussed at the continua-
tion of trial the fact that the operative answer alleged that the
Fife trust owned the Fife farm and that Fife was no longer
bound by her statements in the prior pleadings. TNT did not
assert that any statement in Fife’s amended answer was a judi-
cial admission.
While Fife testified at the reopened trial telephonically,
no further testimony was adduced pertaining to who or what
entities would be directly affected by the judgment. Rather,
Fife reiterated that when she asked Trampe for a copy of their
agreement, Trampe sent her only exhibit 1. Fife also submitted
evidence that the document found in exhibit 1 was the only
document filed with the U.S. Department of Agriculture Farm
Service Agency in June 2017.
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There was no motion by Fife to dismiss for lack of an indis-
pensable party, and there was no attempt by TNT to join in the
action Fife in her capacity as trustee.
6. Order of December 2017
The court issued its order on liability in December 2017.
In the prior hearing on temporary injunctive relief under the
original complaint, the court had determined that the lease
reflected in exhibit 1 was ambiguous. The court reiterated that
determination in its December 2017 order deciding the ques-
tions of permanent injunctive relief, declaratory judgment, and
breach of contract.
In determining Fife’s liability, the court considered the evi-
dence admitted at the three hearings on May 31, July 26, and
November 30, 2017. The court opined that both Trampe and
Fife were “poor historians,” but that Trampe’s recollection of
events was clearer than Fife’s. Thus, the court found “generally
that . . . Trampe’s recollection of events is the more credible.”
The court considered exhibit 4 as an “additional docu-
ment memorializing the lease agreement of the parties” and
found that because exhibit 4 was partially prepared by Fife
and both parties executed exhibit 1, “[b]oth are responsible
for any ambiguity and lack of clarity that arises from these
two documents.”
The court ultimately concluded that it was “clear . . . that
it was the parties’ intention that the lease period would run
from January 2007 until December 2017, an eleven-year farm
lease.” Further, the court rejected Fife’s contention that the
11-year lease was terminated by virtue of the subsequent
agreement to produce organic alfalfa on the Fife farm. In this
regard, the court noted that Fife had relied on the 10-year
language in exhibit 1 in asserting that TNT’s tenancy was due
to end. Thus, the court concluded that Fife had breached the
lease agreement.
In its order, the court did not consider the question of when
exactly the breach had occurred and whether any indispensable
parties were missing from the action. The court appeared to
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find that Fife was simultaneously the owner of the Fife farm
and not the owner of it:
Fife is a resident of the State of Washington who owns
agricultural land located within Section 26, Township
10, Range 17 West of the 6th P.M. in Buffalo County,
Nebraska. [Fife] purchased this land in her own name on
January 20, 2003 from the Richard J. Cook Family Trust
which she was then serving as Co-Trustee (Exhibit No.
5). She has since transferred this land to her own fam-
ily trust.
(Emphasis supplied.)
The court found that by the time of the order, injunctive
relief was moot. The court found in favor of TNT on its causes
of action for declaratory relief and breach of contract, and the
case proceeded for a determination of damages.
7. Damages
The joint pretrial conference memorandum clarified that the
hearing was to determine the amount of damages sustained as
a result of the loss of the hay crop that would have been har-
vested from the Fife farm during the 2017 crop year. Trampe
had previously testified that he had last harvested alfalfa from
the Fife farm in the fall of 2016.
(a) Yield and Market Value
At the trial on damages, Trampe testified that he had been
farming alfalfa and other crops for approximately 40 years.
Trampe testified that in his experience in farming alfalfa on
the type of ground that the Fife farm consisted of, the normal
range of expected production would be 8 to 10 tons per acre
on irrigated land and around 5 tons on dryland. Production
on the Fife farm was close to average, though “it might have
been a touch lower because it was new hay.” Trampe testified
that he farmed 29.14 dry acres on the Fife farm and 130.8
“irrigated acres.” Approximately 86 of the irrigated acres
were irrigated by the pivot, while the remaining 44 certified
irrigated acres had been irrigated through a gravity irrigation
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system. Trampe, however, did not irrigate those acres in 2015
and 2016.
TNT admitted into evidence receipt for the sale on January
24, 2017, of some alfalfa that had been grown in 2016 from
different harvests. It was not all of the crop he had grown and
harvested in 2016. He received $85 per ton. At the hearing for
a temporary injunction, Trampe had said that he fed 90 percent
of his alfalfa bales from the Fife farm to his cattle, but it was
unclear what time period Trampe was referring to. Trampe did
not sell alfalfa in 2017, because he used all his hay to feed
his cattle.
Trampe testified that he was familiar with the alfalfa hay
market in 2018, in which farmers were selling their 2017 har-
vests. Trampe said that the price of alfalfa had risen to a range
of $90 to $100 per ton.
Trampe had expected a full growing season of alfalfa to
yield an average harvest, or “cuttings,” of 8.6 tons per acre.
Trampe testified that, generally, the density and weight of the
bales increased from the first to the last cuttings of the season.
Thus, a bale from the first harvest would average 1,425 pounds,
a bale from the second harvest would average 1,475 pounds, a
bale from the third harvest would average 1,500 pounds, and a
bale from the fourth harvest would average 1,700 pounds.
A farmer in the same area who was the current tenant of the
Fife farm testified that in 2016, he had purchased from Fife
380 bales of alfalfa harvested from the Fife farm. The average
weight per bale ranged from 1,366 to 1,685 pounds. He paid
$65 per ton. He testified that prices rose the following year. In
2017, alfalfa of the sort grown on the Fife farm sold for $85
per ton.
(b) Lost Farm Program Payment
Trampe testified that every year, it was his normal practice
to apply for farm program payments by certifying the acres
each year. Trampe had always certified the acres on Fife’s
behalf through the exercise of a power of attorney she had
given him. Though there were initially complications, Trampe
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was ultimately able to receive the farm program payment for
2016. He had also received a farm program payment in 2015.
For both years, the amount of the payment was approximately
$3,460. Despite acknowledging that 2017 was governed by
a new farm bill, Trampe was unaware of any reason why he
would not have received the farm program payment for 2017
had he been allowed to farm the Fife farm that year.
(c) Expenses
(i) Seed
Trampe testified that he paid $14,300 for the alfalfa seed
that he planted in 2015.
(ii) Fertilizer
Trampe spent $8,280 on a combination of annual fertilizer
and a starter fertilizer. In 2016, Trampe hauled and spread his
own cattle’s manure onto the Fife farm as fertilizer. He did not
give an estimate as to what that fertilizer was worth, and he did
not recall what any transportation costs were. Trampe testified
that he would have fertilized the Fife farm for the 2017 crop
year, but obviously did not. A “rough guess” of the cost of fer-
tilizer was $40 to $45 per acre.
(iii) Pivot Operation
TNT paid the electric bills pertaining to the operation of
the pivot irrigation system on the Fife farm. Those bills were
$3,337.21 for 2015 and $3,424.63 for 2016. Based on his expe-
rience in 2017 farming other properties, Trampe believed that
the electric company had increased its rates between 2016 and
2017 by about 4 to 6 percent. Trampe also spent about $100
per year in drip oil for the pivot irrigation system.
(iv) Swathing, Raking, Baling,
and Loading
Trampe testified that there are a number of expenses relat-
ing to harvesting. Operating swathers, tractor-pulled rakes
and balers, and loaders requires fuel. Trampe testified that
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per harvest of the Fife farm’s 130 acres of irrigated land, he
used a 120-gallon tank of fuel to operate the swather. Raking
the same land consumed approximately 26 gallons of fuel
per harvest. Baling the same field consumed approximately
55 gallons of fuel per harvest. In addition, the netting for the
bales costs $200 a roll, with each roll wrapping about 125
bales of the 6-foot-tall bales that Trampe made. Each bale,
Trampe testified, weighed about 1,500 pounds. The loading
process required 13 or 14 gallons of fuel per harvest of the
130 irrigated acres. Two fuel bills in October 2017 demon-
strated that farm diesel was priced at approximately $2.10
and that clear diesel was priced at $2.60 per gallon. Trampe
testified that a normal farm year for alfalfa consisted of
four harvests.
A witness called by Fife who specializes in hay produc-
tion and transportation for third-party clients testified that in
2017, his business charged $15 per acre of alfalfa to swath
and rake it, $15 per bale of alfalfa to bale it, and $2 per bale
to move it to the edge of the field for the customer. The wit-
ness opined that those prices were fair and reasonable for the
Buffalo County area. The Fife farm’s current tenant testified
that he agreed that those prices were fair and reasonable for the
Buffalo County area.
(v) Vehicle and Equipment Maintenance
Trampe testified that he had to service his two tractors
approximately every 200 hours of use. In addition to the Fife
farm’s 159 acres, Trampe farmed 1,200 other acres of land. He
serviced his tractors three or four times per year at a cost of
approximately $100 per service, not including labor. Trampe
did not determine how many hours his equipment had been
used on the Fife farm versus the other acres he farmed.
Trampe also had his two balers inspected and serviced every
3 years. The balers were used only on the Fife farm and 70
acres of Trampe’s own land. He estimated that one-third of the
total usage was on the Fife farm. He had the balers serviced in
2016 for approximately $9,000.
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(d) September 2018 Order on Damages
In an order on September 24, 2018, the court found that at
the beginning of the 2017 crop year, TNT “was anticipating the
production of a crop that was just about to reach its peak pro-
ductivity.” Further, “TNT’s discovery efforts to obtain records
of alfalfa production on the Fife [f]arm during 2017 from . . .
Fife was wholly unproductive,” because Fife kept no records.
This left TNT “in the unenviable position of having to project
the anticipated yield using sources of information other than
records of the actual yield itself.”
Utilizing the testimony and evidence submitted by TNT, the
court calculated that there were 85 acres of “actually” irrigated
ground, which would have yielded 731 tons of hay (8.6 tons
per acre of expected production). Further, there were 74 acres
of nonirrigated ground that would have yielded 370 tons of hay
(5 tons per acre of nonirrigated ground).
While the court noted that Fife has admitted evidence that
her one-third crop share from the Fife farm in 2016 was only
286.55 tons, such yield was from the second year of produc-
tion, not the third year, in which a higher yield was expected.
Moreover, the court found that Fife,
having failed to produce any records whatsoever of the
actual production of hay from the Fife [f]arm in ques-
tion in 2017, a year in which the Fife [f]arm was totally
under her control cannot, in the Court’s opinion, persua-
sively argue that she is being treated unfairly if the Court
accepts . . . Trampe’s opinion as to the expected yield
in 2017.
The court found that alfalfa in 2017 was worth $85 per ton.
Thus, Trampe had shown that the 2017 farm year would have
produced a total of $93,585 in gross profits from the land.
As expenses, the court calculated $6,757.50 for fertilizer;
$100 for oil for the pivot; $3,549.96 in electricity for the pivot
(based on a 5-percent increase in rates); $1,823.28 in fuel
costs for swathing, raking, baling, and stacking; and $2,388 in
net wrap.
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The court rejected Fife’s contention that the alfalfa seed cost
should be prorated and also deducted from the damages calcu-
lation. The court explained:
TNT . . . sustained this one-time seed expense expecting
receipt of the benefit of this investment over the entire
productive life of this perennial crop. . . . Fife’s termina-
tion of the lease a year early in 2017, not only damaged
TNT . . . in its loss of profits in 2017, but kept it from
recovering the benefits of its seed investment over the
full cycle in which this perennial crop would have been
expected to produce economically harvestable hay. . . .
Its seed cost/investment amounted to a one-time over-
head expense. It should not be subjected to further loss
in 2017 by charging it with prorated portion of this over-
head again.
The court also rejected Fife’s argument that Trampe’s costs
should include costs of transporting machinery to and from the
Fife farm and of transporting alfalfa to market or to Trampe’s
land to feed his cattle and that the failure to adduce evidence of
transportation costs rendered any damages calculation specula-
tive. The court explained that transportation costs between the
Fife farm and Trampe’s cattle operation a short distance away
was part of the expected overhead of the cattle operation and
that there was no evidence that cost was saved in 2017 rather
than used to raise, harvest, or transport other feed or hay.
Whatever transportation costs Trampe would have incurred
had likely actually been incurred: “The cost of transporting the
replacement feed it used in 2017 has already been paid.”
Relying on ACI Worldwide Corp. v. Baldwin Hackett &
Meeks,1 the court found that fixed overhead expenses, such as
TNT’s costs to inspect and maintain its equipment over the full
breadth of its farm operations, need not be deducted from gross
income to arrive at the net profit properly recoverable.
1
ACI Worldwide Corp. v. Baldwin Hackett & Meeks, 296 Neb. 818, 896
N.W.2d 156 (2017).
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Thus, deducting a total of $14,518.74 in expenses from
TNT’s two-thirds share in the 2017 expected profits, the court
found a total loss of net profits in the amount of $47,821.26.
The court then added $3,461 in the lost 2017 farm program
payment. The court explained that at the time of the trial on
damages, the federal farm program benefits for 2017 had not
yet been calculated by the U.S. Department of Agriculture
Farm Service Agency, but “there is nothing to suggest that
Congress will change the existing farm program.”
The court awarded TNT a total of $51,332.26 in damages,
plus costs. Following the court’s denial of her motion for new
trial, Fife timely appealed.
III. ASSIGNMENTS OF ERROR
Fife assigns that the trial court erred in (1) awarding TNT
a money judgment against her when she did not own the
Fife farm and was not the landlord, (2) failing to find that
the written lease agreement was terminated and became a
year-to-year oral lease agreement beginning in 2015 and thus
was properly terminated by written notice, (3) determining
that the written lease agreement was for 11 years rather than
10 years, and (4) awarding $51,332.26 based upon specula-
tive evidence.
IV. STANDARD OF REVIEW
[1] An action for declaratory judgment is sui generis; whether
such action is to be treated as one at law or one in equity is to
be determined by the nature of the dispute.2
[2] In appellate review of an action for a declaratory judg-
ment in a law action, factual findings by the trier of fact will
not be set aside unless such findings are clearly erroneous.3
2
American Amusements Co. v. Nebraska Dept. of Rev., 282 Neb. 908, 807
N.W.2d 492 (2011).
3
State ex rel. Spire v. Northwestern Bell Tel. Co., 233 Neb. 262, 445
N.W.2d 284 (1989).
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[3] An action for breach of a lease agreement is an action
at law.4
[4] Factual findings in a court’s determination of a factual
challenge to subject matter jurisdiction are reviewed under a
clearly erroneous standard.5
V. ANALYSIS
1. Indispensable Party Question
[5] We first address the threshold question of whether
TNT’s action lacked an indispensable party. Fife asserts that
the evidence was undisputed that the Fife farm had been trans-
ferred to the Fife trust by the time of the alleged breach. Thus,
Fife asserts that in her capacity as trustee, she was an indis-
pensable party to TNT’s action for damages and declaratory
judgment based on breach of contract and the court lacked
jurisdiction over TNT’s claims when she was named only in
her individual capacity. An indispensable party to a suit is
one whose interest in the subject matter of the controversy is
such that the controversy cannot be finally adjudicated with-
out affecting the indispensable party’s interest, or which is
such that not to address the interest of the indispensable party
would leave the controversy in such a condition that its final
determination may be wholly inconsistent with equity and
good conscience.6
[6] Neb. Rev. Stat. § 25-323 (Reissue 2016) mandates that
indispensable parties be joined in an action, stating in relevant
part that “when a determination of the controversy cannot be
had without the presence of other parties, the court must order
4
See, Caeli Assoc. v. Firestone Tire & Rubber Co., 226 Neb. 752, 415
N.W.2d 116 (1987); Quinn v. Godfather’s Investments, 213 Neb. 665, 330
N.W.2d 921 (1983).
5
See Jacobs Engr. Group v. ConAgra Foods, 301 Neb. 38, 917 N.W.2d 435
(2018).
6
Midwest Renewable Energy v. American Engr. Testing, 296 Neb. 73, 894
N.W.2d 221 (2017).
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them to be brought in.”7 Section 25-323 deprives a court of the
authority to determine a controversy absent all indispensable
parties and cannot be waived.8
[7] The burden of procuring the presence of all indispen
sable parties is on the plaintiff.9 This burden is similar to the
burden to establish other factual matters that the court’s subject
matter jurisdiction depends upon.10 The party invoking the
court’s jurisdiction ordinarily has the burden of proving by a
preponderance of the evidence the necessary facts for subject
matter jurisdiction.11
Fife and TNT disagree as a factual matter whether the Fife
farm belonged to the Fife trust when the events occurred that
TNT sought to litigate. The relevant time period for the cause
of action for breach of contract and declaratory relief tried
below is when the breach occurred.12 Though TNT originally
pled injunctive relief, that claim was moot by the time of trial
and the case was tried as an action at law under the alleged
lease contract.
[8,9] Ordinarily, there is no breach until the time for per
formance.13 While TNT’s operative complaint alleged antici-
patory breach, such was not the theory upon which the case
was tried. An anticipatory breach of contract is one commit-
ted before the time has come when there is a present duty of
7
See id. See, also, Neb. Rev. Stat. § 25-21,159 (Reissue 2016).
8
See Midwest Renewable Energy v. American Engr. Testing, supra note 6.
9
See Pestal v. Malone, 275 Neb. 891, 750 N.W.2d 350 (2008).
10
See, Jacobs Engr. Group v. ConAgra Foods, supra note 5; Rozsnyai v.
Svacek, 272 Neb. 567, 723 N.W.2d 329 (2006). But see Davis v. State, 297
Neb. 955, 902 N.W.2d 165 (2017).
11
See 61A Am. Jur. 2d Pleading § 506 (2010).
12
See Hooker and Heft v. Estate of Weinberger, 203 Neb. 674, 279 N.W.2d
849 (1979).
13
See, Reichert v. Rubloff Hammond, L.L.C., 264 Neb. 16, 645 N.W.2d 519
(2002); Phipps v. Skyview Farms, 259 Neb. 492, 610 N.W.2d 723 (2000);
1 Howard O. Hunter, Modern Law of Contracts, § 12:1 (2019).
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performance and is the outcome of words or acts evincing an
unequivocal repudiation of the contract.14 This is distinguish-
able from a disagreement about the interpretation or meaning
of a term in a contract.15 When there is an anticipatory breach,
the promisee has the option to treat the contract as ended
so far as further performance is concerned and maintain an
action immediately rather than await the promisor’s time for
performance.16 TNT did not cease to pay rent and sue Fife
immediately when it became apparent that they disagreed as
to the meaning of the duration terms of their lease agreement.
Rather, TNT sued Fife after she gave notice of eviction, and
the trial commenced after Fife had evicted TNT. The case was
tried on the ground that by evicting TNT, Fife had breached
the implied term of quiet enjoyment that was part of her
ongoing duty of performance under a lease term that had not
yet ended.
[10,11] TNT does not contest that the operative period of
time for the action was the eviction in December 2016, but
points out that the district court found by judicial admis-
sion that the Fife farm still belonged to Fife in her indi-
vidual capacity in December 2016. At TNT’s request, the
court had acknowledged from Fife’s original answer and
14
See, Weber v. North Loup River Pub. Power, 288 Neb. 959, 854 N.W.2d
263 (2014); Chadd v. Midwest Franchise Corp., 226 Neb. 502, 412
N.W.2d 453 (1987).
15
See, Hughes v. Cornhusker Cas. Co., 235 Neb. 656, 456 N.W.2d 765
(1990); 1 Hunter, supra note 13. See, also, Mobley v. N. Y. Life Ins. Co.,
295 U.S. 632, 55 S. Ct. 876, 79 L. Ed. 1621 (1935); Trans Union Credit
Info. v. Assoc. Credit Services, 805 F.2d 188 (6th Cir. 1986); American
Hosp. Supply v. Hospital Products Ltd., 780 F.2d 589 (7th Cir. 1986);
Pacific Coast Eng. Co. v. Merritt-Chapman & Scott Corp., 411 F.2d 889
(9th Cir. 1969); Lowenstein v. Federal Rubber Co., 85 F.2d 129 (8th Cir.
1936); Kimel v. Missouri State Life Ins. Co., 71 F.2d 921 (10th Cir. 1934);
17A Am. Jur. 2d Contracts § 686 (2016).
16
See Hooker and Heft v. Estate of Weinberger, supra note 12. See, also, 23
Richard A. Lord, A Treatise on the Law of Contracts by Samuel Williston
§ 63:33 (4th ed. 2018).
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counterclaim to the original complaint a judicial admission
that she “owned” the Fife farm as an individual. Fife testi-
fied at the trial that she had transferred the Fife farm to the
Fife trust in September 2016, but the court had originally
refused to consider this testimony that contradicted her judi-
cial admission. A party may at any and all times invoke the
language of his opponent’s pleadings on which the case is
being tried on a particular issue as rendering certain facts
indisputable.17 The pleadings in a cause are not a means of
evidence, but a waiver of all controversy, so far as the oppo-
nent may desire to take advantage of them, and therefore, a
limitation of the issues.18
However, after the court acknowledged as judicial admis-
sions Fife’s statements in her original pleadings, it allowed
TNT to amend its complaint. The court also permitted Fife to
amend her answer. When she did so, she no longer admitted
to TNT’s allegation that she owned the Fife farm. Rather, in
her amended answer, Fife affirmatively alleged that the Fife
farm was owned by the Fife trust. The court then reopened
and continued the trial in which Fife had testified that she had
transferred the Fife farm into the Fife trust.
[12,13] Statements in pleadings remain binding only until
the pleading is amended.19 Matters contained in superseded
pleadings are simple admissions that are admissible as evi-
dence of the facts alleged therein and may be introduced and
considered the same as any other evidence.20 Such original
pleading is not conclusive evidence, but competent, as any
other admission of a party against interest, and should be given
such weight as the trier of fact deems it entitled in the light of
17
See Cook v. Beermann, 201 Neb. 675, 271 N.W.2d 459 (1978).
18
See Prime Home Care v. Pathways to Compassion, 283 Neb. 77, 809
N.W.2d 751 (2012).
19
See American Title Ins. Co. v. Lacelaw Corp., 861 F.2d 224 (9th Cir.
1988).
20
See, Sturzenegger v. Father Flanagan’s Boys’ Home, 276 Neb. 327, 754
N.W.2d 406 (2008); Cook v. Beermann, supra note 17.
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the pleader’s explanation, if any, of the circumstances under
which the admissions were made.21
At no point after Fife’s original answer and counterclaim
were superseded did TNT offer them into evidence as an
ordinary admission to be weighed in considering the ques-
tion of the ownership of the Fife farm as of September 2016.
Since TNT did not offer the original answer or counterclaim
as evidence to be considered in the continuation of the trial
under the amended pleadings, Fife’s testimony that the Fife
farm was owned by the Fife trust as of September 2016
was undisputed.
[14] It is true that the amended counterclaim remained
unchanged insofar as it stated the “defendant” was the owner
of the subject real estate, but TNT did not seek to rely on the
amended counterclaim as either a simple admission or a judi-
cial admission. The consideration of admissions is at the option
of the opposing party.22 Furthermore, this statement in the
amended counterclaim in the context of the amended answer to
which it was attached did not qualify as a judicial admission.
A judicial admission does not extend beyond the intendment
of the admission as clearly disclosed by its context23 and must
be unequivocal, deliberate, and clear, and not the product of
mistake or inadvertence.24 In light of the clear statement in the
amended answer that the Fife farm had been transferred to the
Fife trust, the unchanged statement in the counterclaim that
“[d]efendant is” the owner of the Fife farm was not unequivo-
cal, deliberate, and clear, but instead appears to be the product
of mistake or inadvertence.
The district court did not ultimately find as a factual mat-
ter that Fife continued to own the Fife farm. It is true that the
21
Johnson v. Griepenstroh, 150 Neb. 126, 33 N.W.2d 549 (1948).
22
See, Prime Home Care v. Pathways to Compassion, supra note 18; Cook
v. Beermann, supra note 17.
23
Cervantes v. Omaha Steel Castings Co., 20 Neb. App. 695, 831 N.W.2d
709 (2013).
24
Wisner v. Vandelay Investments, 300 Neb. 825, 916 N.W.2d 698 (2018).
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court stated in its order that Fife “is” a Washington resident
who “owns” the Fife farm, but it also found that “[s]he has
since transferred this land to her own family trust.” The con-
fusing nature of the verb tenses notwithstanding, it appears the
court found that at some unspecified point in time before its
order, the ownership of the Fife farm was transferred to the
Fife trust. This finding was not clearly erroneous.
The question thus becomes whether Fife is correct that
because she no longer owned the Fife farm when she evicted
TNT, and was allegedly acting instead in her capacity as sole
trustee for the Fife trust, which owned the land at that time,
Fife in her capacity as trustee was an indispensable party to
TNT’s action. We conclude that Fife in her capacity as trustee
of the Fife trust was not an indispensable party.
At the time of the breach, the lease implicated principles of
both privity of contract and privity of estate.25 Fife relies on
our statements in other contexts that a suit must be brought
by or against a person or persons who have an interest in
the property and will be affected by the order of the court26
and that parties to whom or from whom contractual obliga-
tions are jointly owed are indispensable parties to actions
concerning contractual obligations.27 These propositions are
inapposite to the case at bar. The transfer of the Fife farm to
the Fife trust meant that privity of estate was transferred to
the Fife trust, while privity of contract remained with Fife
as the individual who entered into the lease agreement with
TNT. Privity of contract is not transmitted to the purchaser of
a leasehold.28
25
See Brick Development v. CNBT II, 301 Neb. 279, 918 N.W.2d 824 (2018).
26
See Ruzicka v. Ruzicka, 262 Neb. 824, 635 N.W.2d 528 (2001).
27
See, Hecker v. Ravenna Bank, 237 Neb. 810, 468 N.W.2d 88 (1991);
Wolfenbarger v. Britt, 105 Neb. 773, 181 N.W. 932 (1921); Harker v.
Burbank, 68 Neb. 85, 93 N.W. 949 (1903); Council Bluffs Savings Bank v.
Griswold, 50 Neb. 753, 70 N.W. 376 (1897); Bowen v. Crow, 16 Neb. 556,
20 N.W. 850 (1884).
28
Brick Development v. CNBT II, supra note 25.
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[15,16] A transferor of an interest in leased property, who
immediately before the transfer is obligated to perform an
express or implied promise of the lease resting on privity
of contract, continues to be obligated after the transfer.29
Specifically, a landlord who has transferred his or her inter-
est in the land remains liable under a lease agreement, on the
implied promise of quiet enjoyment, for disturbances of the
tenant by the former landlord himself or herself or by some-
one whose conduct is attributable to the former landlord.30 It
was under this theory that the case was tried. The evidence
presented was that Fife held herself out as an individual with
authority to evict TNT from the land, causing TNT to vacate
the Fife farm, thereby breaching Fife’s implied promise, as an
individual, not to disturb TNT’s right to quiet enjoyment for
the duration of the lease period.
Although a covenant of continuing quiet enjoyment would
run with the land under privity of estate to the Fife trust as the
new owner of the Fife farm, the alleged act of eviction by Fife
in her individual capacity was not an act of joint liability with
Fife in her official capacity. Neither does the judgment against
Fife in her individual capacity affect the person or persons who
have an interest in the property since its transfer into the Fife
trust. The transferor landlord is liable under privity of con-
tract for the transferor’s acts interfering with quiet enjoyment,
while the transferee landlord is liable under privity of estate
for the transferee’s acts interfering with quiet enjoyment.31 The
determination of one does not affect the interests of the other,
nor would it leave the controversy in such a condition that its
final determination may be wholly inconsistent with equity and
good conscience.32
29
See 2 Restatement (Second) of Property: Landlord and Tenant §§ 16.1 and
16.3 (1977).
30
See 2 Restatement (Second), supra note 29, § 16.3.
31
See id.
32
See Midwest Renewable Energy v. American Engr. Testing, supra note 6.
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The present situation is admittedly unique because the trans-
feror and the agent of the transferee are the same person in
different capacities. And it is true that a principal is under a
duty to reimburse its agent for payment of damages which the
agent is required to make to a third person on account of the
authorized performance of an act which constitutes a tort or
breach of contract. But the trial below did not litigate whether
Fife was secretly acting in her authorized capacity on behalf of
the Fife trust when she evicted TNT.
In sum, Fife is correct that she demonstrated she did not
personally own the Fife farm when the breach occurred that
formed the basis for TNT’s action. Nevertheless, under priv-
ity of contract, she was a proper defendant in TNT’s action
for breach of contract and related declaratory judgment action
stemming from her act of evicting TNT. Fife in her capac-
ity as trustee of the Fife trust was not an indispensable party
regardless of whether Fife can later prove that she was, undis-
closed to TNT, acting at the time of the eviction on behalf of
the Fife trust. The lower court had jurisdiction to issue the
challenged judgment. We turn next to the underlying merits
of the appeal.
2. Underlying Merits
Fife argues on appeal that the district court erred in con-
cluding that the lease agreement was for 11 years, ending in
December 2017, instead of concluding that it was for 10 years,
ending in December 2016. Alternatively, Fife asserts the dis-
trict court erred by failing to conclude that the written long-
term lease had been rescinded due to an oral modification and
that the parties were operating under an oral year-to-year lease
at the time of the alleged breach.
[17,18] Where the terms of a written lease appear to be
ambiguous and uncertain as to the intended length of the
tenancy or the beginning or end of the term, then, as in other
cases of ambiguity, parol evidence may properly be resorted
to for the purpose of resolving the uncertainty and explaining
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the parties’ true intentions in that respect.33 Further, instru-
ments made in reference to and as part of the same transaction
are to be considered and construed together.34
Fife argues that the court’s conclusion that the lease agree-
ment was for 11 years was the result of improperly consider-
ing exhibits 3 and 4 together with exhibit 1. But Fife does not
assign and argue as error that exhibits 3 and 4 were improp-
erly admitted, and an alleged error must be both specifically
assigned and specifically argued in the brief of the party assert-
ing the error to be considered by an appellate court.35
Fife merely offers the conclusory statement that “[t]he
court’s consideration of Exhibit 3 and Exhibit 4 was improper
in light of the testimony of [Trampe]” that it was his intention
that the farm lease would last for 10 years.36 Fife has taken this
testimony out of context. Trampe testified that he understood
that the 10 years would begin once the irrigation pivot was in
place, which was not until 2008.
[19] Exhibit 4, which was signed by both Fife and TNT,
provided unambiguously that the lease agreement was until
December 2017. Exhibit 1 is less clear in its statement that
the “lease period will go from January 2007 until December
2017 a ten year period,” and this phrase renders the agree-
ment embodied by the two documents ambiguous. When a
document is ambiguous, it is for the trier of fact to determine
the intent of the parties from all the facts and circumstances,
and such findings will be upheld on appeal unless they are
clearly erroneous.37
33
See, Nebraska Depository Inst. Guar. Corp. v. Stastny, 243 Neb. 36, 497
N.W.2d 657 (1993); Annot., 151 A.L.R. 279 (1944).
34
Norwest Corp. v. State, 253 Neb. 574, 571 N.W.2d 628 (1997).
35
State v. Sundquist, 301 Neb. 1006, 921 N.W.2d 131 (2019).
36
Brief for appellant at 18.
37
See Hensman v. Parsons, 235 Neb. 872, 458 N.W.2d 199 (1990). See,
also, e.g., Wurst v. Blue River Bank, 235 Neb. 197, 454 N.W.2d 665
(1990).
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The district court’s finding that the parties intended the lease
to end in December 2017 was not clearly erroneous. The court
found that Trampe’s recollection of events was more credible
than Fife’s, and Trampe testified that it was their intent for the
lease to end in December 2017. The documents read together
also support the district court’s conclusion that TNT and Fife
intended the lease to end in December 2017. The “December
2017” end date is consistent with the December 2017 end
date specified in exhibit 4, and it is the more specific term
in exhibit 1 that controls over the characterization of “a ten
year period.”38
[20,21] Likewise, we find no error in the district court’s
conclusion that the parties did not intend to rescind their long-
term lease agreement ending in December 2017 when they
orally agreed in 2015 to change their arrangement with regard
to the crops to be grown by TNT on the Fife farm. Rescission
of contract means to abrogate, annul, avoid, or cancel a con-
tract; particularly, nullifying a contract by the act of a party.39
A “rescission” amounts to the unmaking of a contract.40 The
cancellation, abandonment, or rescission of a written contract
may not only be written, but it may also be oral.41 As opposed
to rescission, a modification continues the original contract
with some changes.42 The terms of a written executory contract
may be changed by a subsequent parol agreement prior to any
breach of such contract.43
38
See Hans v. Lucas, 270 Neb. 421, 703 N.W.2d 880 (2005).
39
Hoeft v. Five Points Bank, 248 Neb. 772, 539 N.W.2d 637 (1995).
40
Id.
41
Davco Realty Co. v. Picnic Foods, Inc., 198 Neb. 193, 252 N.W.2d 142
(1977).
42
See 2A David Frisch, Lawrence’s Anderson on the Uniform Commercial
Code § 2-209:59 (3d ed. 2013).
43
Atokad Ag. & Racing v. Governors of Knts. of Ak-Sar-Ben, 237 Neb. 317,
466 N.W.2d 73 (1991), overruled on other grounds, Eccleston v. Chait,
241 Neb. 961, 492 N.W.2d 860 (1992).
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TNT CATTLE CO. v. FIFE
Cite as 304 Neb. 890
[22,23] In determining whether a rescission took place,
courts look not only to the language of the parties but to all the
circumstances.44 Mutual rescission of a contract must be clear,
positive, unequivocal, and decisive, and it must manifest the
parties’ actual intent to abandon their contract rights.45
Fife did not present clear and unequivocal evidence that she
and Trampe intended to abandon all rights under the written
long-term lease agreement. Trampe testified that he would not
have agreed to invest in planting organic alfalfa without the
assurance under the written lease that he had three full crop
years to recoup his investment. Further, Fife relied on the “ten
year” language of the long-term lease agreement when giving
TNT notice of termination. The district court correctly found
the evidence demonstrated that Trampe and Fife intended to
orally modify their long-term written lease agreement to change
the crops grown and their respective shares and expenses and
that they intended to leave unchanged the other provisions of
their agreement, including its duration.
It is undisputed that Fife evicted TNT in December 2016,
prior to the December 2017 end date of the lease agreement.
She sent Trampe a letter warning him that if he did not vacate
the Fife farm by December 31, 2016, he would be considered
trespassing. TNT accordingly removed its possessions and
ceased operations on the Fife farm by that time. The district
court did not err in finding that Fife thereby breached the
lease agreement.
3. Damages
Fife argues that even if the court were correct in finding her
liable, it erred in the amount of damages awarded. She gener-
ally asserts in this regard that the award of $51,332.26 was
based on speculative evidence. We disagree.
44
Hoeft v. Five Points Bank, supra note 39.
45
17B C.J.S. Contracts § 585 (2011).
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304 Nebraska Reports
TNT CATTLE CO. v. FIFE
Cite as 304 Neb. 890
[24,25] In a breach of contract case, the ultimate objective
of a damages award is to put the injured party in the same
position the injured party would have occupied if the contract
had been performed, that is, to make the injured party whole.46
One injured by a breach of contract is entitled to recover all its
damages, including the gains prevented as well as the losses
sustained, provided the damages are reasonably certain and
such as might be expected to follow the breach.47
[26-28] While damages need not be proved with mathemati-
cal certainty, neither can they be established by evidence which
is speculative and conjectural.48 Uncertainty as to the fact of
whether damages were sustained at all is fatal to recovery, but
uncertainty to amount is not if the evidence furnishes a rea-
sonably certain factual basis for computation of the probable
loss.49 The amount of damages to be awarded is a determina-
tion solely for the fact finder, and the fact finder’s decision will
not be disturbed on appeal if it is supported by the evidence
and bears a reasonable relationship to the elements of the dam-
ages proved.50
In evaluating the evidence of damages in this case, the court
noted that although Fife and her new tenant had harvested in
2017 the alfalfa planted by TNT, TNT’s discovery efforts to
obtain records of the alfalfa production on the Fife farm in 2017
were wholly unproductive. This left TNT “in the unenviable
position of having to project the anticipated yield using sources
of information other than records of the actual yield itself.”
46
Gary’s Implement v. Bridgeport Tractor Parts, 281 Neb. 281, 799 N.W.2d
249 (2011).
47
Id.
48
Id.
49
Sack Bros. v. Great Plains Co-op, 260 Neb. 292, 616 N.W.2d 796 (2000);
Union Ins. Co. v. Land and Sky, Inc., 253 Neb. 184, 568 N.W.2d 908
(1997).
50
Dutton-Lainson Co. v. Continental Ins. Co., 279 Neb. 365, 778 N.W.2d
433 (2010).
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TNT CATTLE CO. v. FIFE
Cite as 304 Neb. 890
Fife takes issue with TNT’s proof in its efforts at making
such projections. First, Fife asserts that the district court erred
by accepting Trampe’s testimony that TNT would have pro-
duced 1,101 tons of alfalfa had he been allowed to stay on the
land for the 2017 crop year. Fife argues that the district court
erred by accepting Trampe’s testimony “based solely upon
[his] farming experience without foundation for the opinion.”51
However, Fife did not object to this testimony during the trial.
A litigant’s failure to make a timely objection waives the right
to assert prejudicial error on appeal.52 It was not unreasonable
for the court to accept Trampe’s calculation over the evidence
submitted by Fife of the yield produced on the Fife farm in
2016, when, in 2016, the alfalfa crop was only in its second
year of production, and Trampe testified that the second year
of production would ordinarily produce a smaller yield than
the third year of production.
Second, Fife asserts that the court erred in applying alfal-
fa’s 2017 market value to the damages calculation, because
Trampe testified that in 2017, he fed all the alfalfa he pro-
duced on other farmland to his cattle. According to Fife,
because he fed alfalfa to his cattle, it was necessary for
Trampe to present evidence “as to the economic impact
feeding one’s own alfalfa has on the impact of his cattle
production.”53 Fife does not explain why the absence of such
evidence rendered the damages calculation speculative. We
find that it was not unreasonable for the district court to
base damages on the lost market value of the lost crops,
whether or not Trampe would have fed the 2017 alfalfa yield
to his cattle.
Third, Fife asserts that the district court did not properly
deduct from its damages calculation the costs of production,
specifically, seed costs and transportation costs. The seed costs
51
Brief for appellant at 20.
52
Ford v. Estate of Clinton, 265 Neb. 285, 656 N.W.2d 606 (2003).
53
Brief for appellant at 21.
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TNT CATTLE CO. v. FIFE
Cite as 304 Neb. 890
were incurred in 2015, but Fife argues that the court should
have prorated that expense over the 3 years that remained of the
lease from the time of the modification to organic alfalfa. The
district court rejected this argument, reasoning that prorating the
seed expense would exacerbate the loss to TNT resulting from
the premature eviction that prevented TNT from recovering the
benefits of its one-time seed investment over the expected 3-year
alfalfa cycle. We find no error in this determination.
Likewise, the court’s failure to deduct the transportation
costs was not unreasonable. As the district court noted, those
costs were incurred as part of TNT’s normal overhead for its
cattle operation, and the cost of transporting replacement feed
used in 2017 had already been paid by TNT. There was no
evidence that transportation costs were saved rather than used
to raise and transport replacement feed. Such fixed overhead
expenses need not be deducted from gross income to arrive at
the net profit properly recoverable.54
Lastly, Fife asserts that the court erred by adding to TNT’s
damages calculation the lost benefit of his anticipated 2017
farm subsidy. Fife points out that the subsidy had not yet been
approved at the time of trial. Trampe testified, however, that
TNT’s application for the subsidy had been approved in all
the prior years on the Fife farm. It was not unduly speculative
and conjectural for the court to conclude that TNT would have
received this subsidy in 2017 as well.
We find no merit to Fife’s contention that the amount of the
district court’s damages award was based on speculative and
conjectural evidence. Rather, the district court’s decision was
supported by the evidence and bore a reasonable relationship
to the elements of the damages proved.
VI. CONCLUSION
The district court did not lack jurisdiction over the action
brought by TNT against Fife solely in her individual capacity.
54
See ACI Worldwide Corp. v. Baldwin Hackett & Meeks, supra note 1.
- 925 -
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304 Nebraska Reports
TNT CATTLE CO. v. FIFE
Cite as 304 Neb. 890
We affirm the district court’s judgment finding that the lease
agreement between Fife and TNT was for a period of 11 years,
that the agreement was not rescinded by the parties’ modifica-
tion in 2015 of the crops to be grown on the land, and that TNT
suffered $51,332.26 in damages as a result of Fife’s evicting
TNT from the Fife farm a year early.
Affirmed.
| {
"pile_set_name": "FreeLaw"
} |
No. 113,156
IN THE COURT OF APPEALS OF THE STATE OF KANSAS
WATCO COMPANIES, INC., d/b/a SOUTH KANSAS AND OKLAHOMA RAILROAD,
Appellant,
v.
SHANE CAMPBELL and JERRY STANDLEE,
Appellees.
SYLLABUS BY THE COURT
1.
Documents obtained through a request for production of documents may, in the
court's discretion, be relied upon as authentic for purposes of a summary judgment
motion because the method in which they are obtained lends them credibility.
2.
Where there is no factual dispute, appellate review of an order regarding summary
judgment is de novo.
3.
The district court's reasons for granting or denying summary judgment are
immaterial if the ruling was correct for any reason.
4.
Comparative implied indemnity or, as it is more accurately termed, postsettlement
contribution describes the cause of action initiated by a tortfeasor in a negligence lawsuit
to recover from a joint tortfeasor the share of the damages proportional to the joint
tortfeasor's fault.
1
5.
When total damages have not been fixed by judicial proceeding but by
compromise and settlement between the plaintiff and a defendant, the amount the
defendant has paid in full settlement for all damages is the maximum amount subject to
be apportioned among joint tortfeasors.
6.
A carrier against whom suit is brought under the Federal Employers' Liability Act
(FELA) for injuries sustained by an employee within Kansas has a right of contribution
or comparative implied indemnity against a third-party tortfeasor if (1) the third party's
negligence partially caused or contributed to the injury or damages, (2) the carrier had
some causal negligence, and (3) the injured employee's causal negligence is less than
50%.
7.
In order for a tortfeasor to pursue a claim of contribution or comparative implied
indemnity against a joint tortfeasor who was not sued by the plaintiff, the tortfeasor must
join the joint tortfeasor as a third party under K.S.A. 2015 Supp. 60-258a(c) and assert a
timely claim against the joint tortfeasor.
8.
Although the comparison of fault of all wrongdoers should be effected in the
original action, there is an exception when there has been no judicial determination of
comparative fault in the first action.
9.
Comparative implied indemnity, or postsettlement contribution, is an equitable
remedy.
2
10.
The clean hands doctrine bars a party from obtaining relief in equity with respect
to a transaction in which the party has been guilty of inequitable conduct.
11.
When a sliding-scale or "Mary Carter" settlement agreement is entered which calls
for the settling defendant to remain in the litigation, the existence and terms of the
agreement must be disclosed to the court and remaining litigants.
Appeal from Crawford District Court; JEFFRY L. JACK, judge. Opinion filed April 1, 2016.
Affirmed.
Kenneth E. Barnes and Kyle S. Belew, of The Barnes Law Firm, of Kansas City, Missouri, and
Daniel F. Church, of Morrow Willnauer Klosterman Church, LLC, of Kansas City, Missouri, for
appellant.
Dana M. Harris and Matthew W. Greenberg, of Harris & Hart, L.L.C., of Leawood, for
appellees.
Before HILL, P.J., MCANANY and ARNOLD-BURGER, JJ.
ARNOLD-BURGER, J.: To quote federal Magistrate Judge James O'Hara, who was
the judge to hear the federal court proceedings regarding this matter, "[t]his is a very
simple personal injury case gone seriously awry." Fox v. Watco. Companies, Inc., Case
No. 09-CV-2078-JPO, filed in United States District Court for the District of Kansas,
Order dated April 25, 2011 (entering consent judgment and dismissing federal case). The
case involves a collision between a truck and a train, where the train conductor was
injured. After Magistrate Judge O'Hara dismissed the federal case and Watco filed an
action in Crawford County for comparative implied indemnity, the district court
subsequently granted summary judgment in favor of the defendants Shane Campbell and
3
Jerry Standlee. The district court granted defendants' motion on two separate grounds,
finding that the plaintiff, Watco Companies, Inc. (Watco), came into the litigation with
unclean hands and it was not the real party in interest. Watco appeals. Because we find
that Watco's conduct justifies a finding of unclean hands, we affirm the district court's
dismissal of this action.
FACTUAL AND PROCEDURAL BACKGROUND
Jack Fox was working as a conductor on a train owned and operated by Watco.
Shane Campbell was driving a commercial water delivery truck owned by Jerry Standlee.
Campbell was looking at his phone as he approached the intersection with the railroad
tracks and failed to stop and yield to the approaching train, causing a collision. At the
time, Watco employees were involved in pushing freight cars through the intersection as
part of a switching and coupling operation. Fox was riding on a railcar as it approached
the tracks. He was injured in the collision and filed suit against Watco, in federal court,
under the Federal Employers' Liability Act (FELA). The suit alleged that Watco's
negligence in failing to provide proper working radios and flagmen at the crossing
contributed to Fox's damages. Watco then asserted a third-party claim against both
Campbell and Standlee. Watco claimed damages to its train and equipment, including
downtime as a result of Campbell's negligence. In addition, Watco sought judgment
against Campbell and Standlee (Defendants) in the amount of any judgment that Fox may
obtain against Watco, but Fox did not amend his complaint to assert claims against
Defendants and continued to assert claims solely against Watco.
Prior to trial in that case, Fox and Watco reached a settlement. As part of the
agreement, a consent judgment was entered against Watco in the amount of $962,037. In
addition to the consent judgment, Fox and Watco entered into an agreement to stay
execution of the judgment (Agreement). The terms of the Agreement required Watco to
pay Fox $200,000 in exchange for Fox's agreement not to execute on the remaining
4
outstanding amount of the consent judgment unless or until Watco was able to recover
from Defendants. The Agreement also established a payment schedule. If Watco was
only able to recover $100,000 or less, all monies recovered would, after expenses were
deducted, go straight to Fox. If Watco was able to recover more than $100,000 but less
than $300,000, Fox would receive the first $100,000 recovered and then Fox and Watco
would split the remainder evenly. If more than $300,000 was recovered, Watco would
keep the first $200,000, then Fox would receive the remainder. Under the Agreement,
there was no situation in which Watco would be required to pay Fox more than the
$200,000 it initially paid.
After the Agreement was entered, the federal district court dismissed the
remaining third-party claim between Watco and Defendants without prejudice. Watco
then filed the present action in state court seeking comparative implied indemnity from
Defendants for the amount of the consent judgment, $962,037, and $1,249.92 for
damages and downtime to its train.
Defendants filed a motion for summary judgment on the basis that Watco had
unclean hands, was barred from recovery by the doctrine of in pari delicto, was not the
real party in interest, and was not entitled to recovery because the Agreement violated
federal law. The district court granted Defendants' motion, finding Watco in violation of
the clean hands doctrine and finding that it was not the real party in interest. Watco now
appeals.
ANALYSIS
Standard of review
Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, show that there is no
5
genuine issue as to any material fact and that the moving party is entitled to judgment as
a matter of law. The district court is required to resolve all facts and inferences which
may reasonably be drawn from the evidence in favor of the party against whom the ruling
is sought. When opposing a motion for summary judgment, an adverse party must come
forward with evidence to establish a dispute as to a material fact. In order to preclude
summary judgment, the facts subject to the dispute must be material to the conclusive
issues in the case. On appeal, the same rules apply; summary judgment must be denied if
reasonable minds could differ as to the conclusions drawn from the evidence. Stanley
Bank v. Parish, 298 Kan. 755, 759, 317 P.3d 750 (2014). Where there is no factual
dispute, appellate review of an order regarding summary judgment is de novo. Martin v.
Naik, 297 Kan. 241, 246, 300 P.3d 625 (2013). In addition, the district court's reasons for
its decision on a summary judgment motion are immaterial if the ruling was correct for
any reason. Bomhoff v. Nelnet Loan Services, Inc., 279 Kan. 415, 421, 109 P.3d 1249
(2005) (citing Dickerson v. Kansas Dept. of Revenue, 253 Kan. 843, Syl. ¶ 3, 863 P.2d
364 (1993). There is no dispute regarding any genuine issue as to any material fact in this
case.
Consideration of certain evidence in support of summary judgment
As a preliminary matter, Watco argues that the district court should not have
considered the Agreement in rendering its decision. Specifically, Watco argues that
reliance on the Agreement was erroneous because the document was not properly
authenticated as required by K.S.A. 60-464 and was therefore inadmissible as evidence in
support of summary judgment. After a thorough review of the cases cited by Watco, we
reject its argument.
K.S.A. 2015 Supp. 60-256(c)(2) instructs that summary judgment is appropriate if
"the pleadings, the discovery and disclosure materials on file, and any affidavits or
declarations show that there is no genuine issue as to any material fact and the movant is
6
entitled to judgment as a matter of law." Kansas courts often restate the rule as:
"'"Summary judgment is appropriate when the pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits show that there is no
genuine issue as to any material fact and that the moving party is entitled to judgment as
a matter of law."'" Stanley Bank, 298 Kan. at 759. But we note that the phrase often
recited in Kansas cases does not contain an exclusive list of the evidence a court may
consider when ruling on a summary judgment motion. The statute indicates that in
addition to the evidence cited in Stanley Bank, courts may consider other discovery and
disclosure materials on file as well as "sworn or certified" copies of documents
referenced in affidavits or declarations. K.S.A. 2015 Supp. 60-256(c)(2), (e)(1). Clearly,
the Agreement was part of the discovery materials in the case, provided to Defendants
from Watco. It was attached as an exhibit to the Defendants' Answer, it weighed
prominently in federal Magistrate Judge O'Hara's order dismissing the case filed in
federal court, and Watco admitted in interrogatories filed in this case that it had provided
the Agreement to Defendants and would provide additional copies if needed. Watco has
never challenged the veracity of the multiple copies of the Agreement included in the
record, nor does it question its existence. We can conceive of no reason why the
Agreement would not be appropriate to consider in ruling on a summary judgment
motion.
Not to be deterred, Watco also argues that Kansas Supreme Court Rule 141(d)
(2015 Kan. Ct. R. Annot. 242) limits submissions in support of summary judgment to
material that is admissible in evidence by authorizing objection to material that is not
"presented in a form that would be admissible in evidence." K.S.A. 60-464 governs the
authentication of documents generally. The statute instructs that "[a]uthentication of a
writing is required before it may be received in evidence." K.S.A. 60-464. However, the
proper method for authenticating a document is vague. The statute merely states that
"[a]uthentication may be by evidence sufficient to sustain a finding of its authenticity or
by any other means provided by law." K.S.A. 60-464. Federal Rule of Evidence 901(a)
7
contains similar language stating that "[t]o satisfy the requirement of authenticating or
identifying an item of evidence, the proponent must produce evidence sufficient to
support a finding that the item is what the proponent claims it is." Federal courts have
recognized that documents obtained through a request for production of documents may,
in appropriate cases, be relied upon as authentic because the method in which they are
obtained lends them automatic credibility. See Anderson v. Cramlet, 789 F.2d 840, 845
(10th Cir. 1986); In re Greenwood Air Crash, 924 F. Supp. 1511, 1514 (S.D. Ind. 1995)
("Production of a document by a party constitutes an implicit authentication of that
document."). In this case, the district court had no reason to believe the Agreement was
not authentic. Nor do we.
Having established that the Agreement was properly considered by the district
court, we turn to the primary issue on appeal: whether the district court erred in granting
Defendants' motion for summary judgment.
Comparative implied indemnity in general
The current cause of action against the Defendants appears to be solely for
comparative implied indemnity for damages to its train and its employee Fox. So we
must first examine this legal concept and its origin.
Prior to the adoption of its current scheme of comparative fault, Kansas adhered to
the common-law rule of joint and several liability between tortfeasors and, with a few
exceptions, contributory negligence by a plaintiff was a complete bar to recovery when
pleaded and proved by a defendant. If a plaintiff sued and recovered against two
tortfeasors, plaintiff could collect the whole judgment from either. It would then be up to
the paying tortfeasor to bring an action against the nonpaying tortfeasor for contribution
of 50%. Brown v. Keill, 224 Kan. 195, 198, 580 P.2d 867 (1978). In 1974, the Kansas
Legislature adopted K.S.A. 60-258a which abolished contributory negligence as a bar to
8
recovery. Instead, the awarding of damages was to be based on the comparative fault of
all parties. The statute allowed a defendant to join any party to the action that the party
believed to have contributed to the injury or damages. Parties were only responsible for
damages related to their proportional share of the negligence. The statute required that the
plaintiff's negligence must be less than the causal negligence of the party or parties
against whom claim for recovery is made and the award of damages to any party must be
diminished in proportion to the amount of negligence attributed to such party. K.S.A.
2015 Supp. 60-258a(a). This is often called the 49% rule, meaning the plaintiff's
negligence must be 49% or less for recovery.
The term comparative implied indemnity was first coined by our Supreme Court in
Kennedy v. City of Sawyer, 228 Kan. 439, 618 P.2d 788 (1980). Kennedy owned pasture
land in the City of Sawyer (City), on which he grazed cattle. The City owned adjoining
property on which it sprayed arsenic-laced herbicide that resulted in the death and injury
of Kennedy's cattle. Kennedy sued the City for negligence. The City filed a third-party
petition against Continental Research Corporation, which sold it the herbicide, alleging
Continental negligently manufactured and distributed the herbicide, breached its implied
warranties to the City including the implied warranties of merchantability and warranty
of fitness for a particular purpose, and was strictly liable for shipping a dangerous and
defective chemical to the City. Continental then filed a third-party petition against Huge
Company, the actual manufacturer of the herbicide, essentially alleging the same
negligence the City alleged against Continental. The district court dismissed Continental
and Huge from the action and denied the City any claim for comparative fault. The City
appealed. During the pendency of the appeal, the City and Kennedy settled for $29,000.
Under the doctrine of strict liability, the liability of a manufacturer (Huge) and
those in the chain of distribution (Continental) extends to those individuals to whom
injury from a defective product may reasonably be foreseen. The court believed the
joinder of Continental and Huge certainly raised an issue of strict liability, but when
9
Kennedy dismissed the only claim he had, the one against the City, the court was
perplexed about how to treat the remaining third party and the strict liability and
indemnity claims. See Kennedy, 228 Kan. at 446. The court posed the question of
whether comparative negligence principles should be applied to strict liability actions and
whether indemnity might be recovered.
The court noted that with the settlement of Kennedy's claim, the comparative
negligence questions became secondary to the indemnity issue. 228 Kan. at 448. The City
sought indemnity from Continental, and Continental sought indemnity from Huge. They
were each seeking to be reimbursed for 100% of the damages. "Traditional implied
indemnity, such as that sought by the city in this case, implies a shifting of 100% of a loss
from the indemnitee to the indemnitor." 228 Kan. at 454. The court distinguished
indemnity from the theory of contribution. Contribution shifts only a part of the loss to
another. 228 Kan. at 454. Again, the court struggled with how to apply these traditional
indemnity concepts to a comparative fault scheme.
The court noted two types of indemnity, express and implied. Express indemnity is
when an express contract of indemnity, like a hold harmless agreement, exists. Implied or
constructive indemnity implies a contract of indemnity "when one is compelled to pay
what another party ought to pay." 228 Kan. at 454-55. The court used the example of the
liability of a principal for actions of an employee. But it also classified the case before it
as implied indemnity, i.e., "when the fault of one defendant may be classified as 'active'
and that of the other as 'passive.'" 228 Kan. at 455. The court noted that the City
classified itself as the passive or secondary negligent party, whereas Continental was the
active or primary negligent party. 228 Kan. at 455. But, the court opined, it is difficult to
determine the active/passive, primary/secondary dichotomy in any given case, and the
theory still distributes loss on an all or nothing basis. The court concluded that this
dichotomy no longer served any purpose in a comparative liability context. It was time to
10
adopt what it called comparative implied indemnity between joint tortfeasors and
described it as follows:
"When as here a settlement for plaintiffs' entire injuries or damages has been made by
one tortfeasor during the pendency of a comparative negligence action and a release of all
liability has been given by plaintiffs to all who may have contributed to said damages,
apportionment of responsibility can then be pursued in the action among tortfeasors." 228
Kan. at 460.
The court went on to outline how an action for comparative implied indemnity needed to
proceed. The same rules hold true today, with a few noted modifications.
The One-Action Rule—The comparison of fault of all wrongdoers should be
effected in the original action. 228 Kan. at 460; see also Gaulden v. Burlington
Northern, Inc., 232 Kan. 205, 214, 654 P.2d 383 (1982) (percentage of fault
should be submitted to the jury and determined in one lawsuit). But if settlement
occurs before a timely comparative negligence action has been filed, "the settling
tortfeasor may then and in that event file an action in court to have the degrees of
responsibility among joint tortfeasors determined, damages assessed and
apportionment decreed among them." Kennedy, 228 Kan. at 461; see also Mick v.
Mani, 244 Kan. 81, 93, 766 P.2d 147 (1988) (Although the determination of
contribution should be made in original action, plaintiff may pursue separate
actions against joined tortfeasors where there has been no judicial determination of
comparative fault. It is more accurately described as one-trial rule, instead of one-
action rule.).
Timely Claim Against Joined Party—The maintenance of a claim by the plaintiff
against a joined party "is not a prerequisite to securing comparison." Kennedy, 228
Kan. at 460. But the defendants have the responsibility "to bring into the action all
11
tortfeasors against whom comparative liability through indemnity is sought." 228
Kan. at 460-61. Once a third party is joined under K.S.A. 2015 Supp. 60-258a(c),
the defendant must assert a claim for contribution or comparative implied
indemnity against the third party before the running of the statute of limitations.
This requirement insures that the third party is aware that he or she may be
subjected to monetary liability and can appear and defend against the claim. Mere
joinder is not enough. In addition a timely claim must be asserted against the third
party. Gaulden, 232 Kan. at 214; see also Dodge City Implement, Inc. v. Board of
Barber County Comm'rs, 288 Kan. 619, 637, 205 P.3d 1265 (2009) (standard was
not whether the plaintiff could have brought an action against the joint tortfeasor
in the initial suit, but whether it had done so); Teepak, Inc. v. Learned, 237 Kan.
320, 325-26, 699 P.2d 35 (1985) (cannot make a claim for comparative implied
indemnity when person against whom defendant seeks contribution was not joined
as a party).
Settlement—The court must first determine the fault of the plaintiff to determine if
it is less than 50%. See K.S.A. 2015 Supp. 60-258a(a). If the plaintiff's causal
negligence is 50% or more, there is no right to recover against any of the joined
defendants because of a failure to establish actual legal liability. Kennedy, 228
Kan. at 461. If the total damages are less than the settlement amount, the judge
will determine the contribution. 228 Kan. at 461. If the "reasonable amount of
damages" are more than the settlement amount, "all tortfeasors will receive the
benefit of the bargain struck by the settling defendant." 228 Kan. at 461. The
amount the defendant has paid in full settlement is the maximum amount subject
to be apportioned. The settling tortfeasor is required to establish the
reasonableness of the amount of the settlement and that it represents "an actual
legal liability he or she could not be expected to successfully resist." 228 Kan. at
461. The settling tortfeasor may be required to establish his or her case against the
12
joint tortfeasors in the same way the plaintiff would have been obligated to do.
228 Kan. at 461. A settling defendant cannot create liability where this is none.
"One defendant in a comparative negligence action cannot settle a claim on
behalf of a party against whom the plaintiff could not recover and then seek
contribution from that party in proportion to the percentage of causal negligence
attributable to that party. The plaintiff may choose to forego any recovery from
other tortfeasors. In that event, a settling defendant has no claim to settle but his
own." Ellis v. Union Pacific R.R. Co., 231 Kan. 182, 192, 643 P.2d 158, aff'd on
rehearing 232 Kan. 194, 653 P.2d 816 (1982).
Over the next 25 years, additional clarifications were adopted by various Kansas
courts.
Postsettlement Contribution More Accurate Term—The term comparative implied
indemnity is not appropriate when the action is one for postsettlement
contribution, not indemnity. The term indemnity contemplates shifting 100% of
the loss from one tortfeasor to another, whereas contribution contemplates shifting
only a portion of the loss for one tortfeasor to another. The more accurate term is
postsettlement contribution. Ellis, 231 Kan. at 184-85; see also Dodge City
Implement, Inc., 288 Kan. at 632 ("comparative implied indemnity, or, as it is
more accurately termed, postsettlement contribution").
Right to Contribution in a FELA Case—A railroad's right to recover indemnity or
contribution from a third party for liability incurred under FELA depends entirely
on state law, and Kansas provides such a right to recovery. Gaulden, 232 Kan. at
211-12.
Procedure at Trial—Similar to the procedure set out in Kennedy for determination
of contribution when there is a settlement, in pursuing a claim for contribution the
13
defendant must establish (1) that the third party's negligence partially caused or
contributed to the injury and damages, (2) that the defendant has some causal
negligence, and (3) that the plaintiff's causal negligence is less than 50% of the
total causal negligence. See Gaulden, 232 Kan. at 214.
Statute of Limitations—A comparative implied indemnity claim must be made
within the 2-year statute of limitations set out in K.S.A. 60-513(a)(4). The time to
bring a claim begins running when the underlying fault cause of action accrues.
Reeve v. Union Pacific R. Co., 790 F. Supp. 1074, 1079 (D. Kan. 1992); see also
Med James, Inc. v. Barnes, 31 Kan. App. 2d 89, 99, 61 P.3d 86 (2-year statute of
limitations for comparative implied indemnity), rev. denied 275 Kan. 965 (2003).
Equitable Remedy—Comparative implied indemnity, or postsettlement
contribution, is an equitable remedy. Schaefer v. Horizon Bldg. Corp., 26 Kan.
App. 2d 401, 403, 985 P.2d 723 (1999).
We apply the principles of comparative implied indemnity, or postsettlement contribution,
to the facts of this case.
Watco sued Defendants in state court for the following: physical damage to
Watco's train and equipment, including downtime, and the amount of the consent
judgment entered in the United States District Court which it listed as $962,037, in
addition to interest and fees. Defendants were never sued by Fox; and in fact, at the time
of settlement any claim against them would have been barred by the statute of limitations.
The consent judgement entered in the United States District Court case only involved
Watco and Fox. The Agreement did not involve anyone except Watco and Fox. It did not
release anyone but Watco from liability if the terms of the Agreement were fulfilled.
Defendants did not challenge the Agreement in federal court, apparently because as a
nonparty to the Agreement they originally believed they had no standing to do so. The
14
Agreement specifically referred to the action of Watco v. Shane Campbell v. Jerry
Standlee, a case which only existed at the time of the settlement (March 7, 2011) in
federal district court.
In his order dismissing the federal action, Judge O'Hara noted that he could retain
supplemental jurisdiction over Defendants even though the federal claims were satisfied.
He noted that Defendants had requested he do so, but they subsequently asked that he
dismiss all claims against them based on the invalidity of the Agreement under FELA,
even though they had made no motion to set aside the Agreement. Watco and Fox, on the
other hand, argued that the federal court should retain supplemental jurisdiction. In April
2011, Judge O'Hara dismissed Watco's third-party action against Defendants. The
decision to exercise supplemental jurisdiction is a matter of the court's discretion. See
Nielander v Board of County Com'rs, 582 F.3d 1155, 1172 (10th Cir. 2009). There is no
indication that Watco or Fox appealed that decision.
We begin by determining the appropriateness of this action based on the legally
established rules regarding comparative implied indemnity set out in Kennedy and its
progeny.
Watco properly preserved its claim for comparative implied indemnity.
Kansas recognizes Watco's right to pursue contribution for suits brought under
FELA. See Gaulden, 232 Kan. at 211. Watco made a timely claim in federal court that
the negligence of Defendants partially contributed to the injury or damages. Watco's
claim for comparative implied indemnity was properly preserved.
15
Because there was no comparison of fault in the federal action, an action in state
court was proper.
Although judicial efficiency would have been better served by pursuing the issue
of comparative fault and contribution in the federal case, there is nothing untoward about
the way this matter landed in state court. Although our Supreme Court has held that the
comparison of fault of all wrongdoers should be effected in the original action, there is an
exception when there was no judicial determination of comparative fault in the first
action. Mick, 244 Kan. at 93. Because there was no comparison of fault in the federal
action, Watco was able to file this action in state court. Accordingly, Watco was the real
party in interest in the case.
This case was timely filed.
Although this action was not filed until July 1, 2011, well after the 2-year statute
of limitations for property damage, negligence, and comparative implied indemnity
contained at K.S.A. 60-513, K.S.A. 60-518 allows that "[i]f any action be commenced
within due time, and the plaintiff fail[s] in such action otherwise than upon the merits,
and the time limited for the same shall have expired, the plaintiff . . . may commence a
new action within six (6) months after such failure." The savings statute applies even if
the first action was not filed in a Kansas state court. Seabord Corporation v. Marsh Inc.,
295 Kan. 384, Syl. ¶ 2, 284 P.3d 314 (2012). The action was dismissed against
Defendants otherwise than on the merits and was dismissed without prejudice.
Accordingly, Watco's claims are timely, having been timely filed in the federal court and
then filed in the state court within 6 months of dismissal.
So that leaves us with the question of whether Defendants are entitled to summary
judgment in state court on Watco's claim of postsettlement contribution for any reason.
We believe they are.
16
The doctrine of clean hands bars any recovery by Watco.
Comparative implied indemnity, or postsettlement contribution, is an equitable
remedy. Schaefer, 26 Kan. App. 2d at 403. The clean hands doctrine bars a party from
obtaining "relief in equity with respect to a transaction in which he [or she] has, himself
[or herself], been guilty of inequitable conduct." Green v. Higgins, 217 Kan. 217, 220,
535 P.2d 446 (1975). The doctrine is not a binding rule, but it may be applied by the
district court at its discretion. 217 Kan. at 220. The clean hands doctrine should only be
applied to bar relief where a party has acted fraudulently, illegally, or unconscionably.
Additionally, application of the doctrine is only appropriate when the misconduct
"bear[s] an immediate relation to the subject-matter of the suit and in some measure
affect[s] the equitable relations subsisting between the parties to the litigation and arising
out of the transaction." 217 Kan. at 221.
"[I]n applying the clean hands maxim, courts are concerned primarily with their own
integrity. The doctrine of unclean hands is derived from the unwillingness of a court to
give its peculiar relief to a suitor who in the very controversy has so conducted himself as
to shock the moral sensibilities of the judge. It has nothing to do with the rights or
liabilities of the parties. In applying the unclean hands doctrine, courts act for their own
protection, and not as a matter of 'defense' to the defendant. [Citation omitted.]" 217 Kan.
at 221.
There can be no dispute in this case, no matter how hard Watco tries to create one,
that based on the Agreement the most Watco will ever have to pay to Fox for damages is
$200,000. And based on the amount of recovery Watco may not have to pay anything. As
we noted, the Agreement referred to a case that only existed in federal court, so the
application of the Agreement to this case is questionable, at best. But assuming it does
apply to recovery in this state court action, we know from Kennedy that the amount the
defendant has paid in full settlement for the claims against it is the maximum amount
subject to be apportioned. 228 Kan. at 461. This makes sense. The purpose of
17
comparative fault legislation is to equate recovery and duty to pay to degree of fault.
Brown, 224 Kan. at 203. In this case, Watco forcefully submits that the reasonable
amount of damages is $962,037. But to allow Watco to collect more from Defendants
than it would ever be required to pay itself runs afoul of the whole concept of
contribution.
We pause to note that there was nothing illegal about the settlement agreement
itself in this case. It can best be described as a sliding-scale, or "Mary Carter," agreement,
so named after the case Booth v. Mary Carter Paint Co., 202 So. 2d 8 (Fla. Dist. App.
1967). This type of agreement has the effect of guaranteeing the plaintiff a minimum
recovery while limiting and potentially eliminating the settling defendant's liability. In re
Methyl Tertiary Butyl Ether Products, 578 F. Supp. 2d 519, 532 (S.D.N.Y. 2008). The
Tenth Circuit Court of Appeals outlined such agreements as follows:
"'A typical Mary Carter agreement usually has the following features:
A. secrecy
B. contracting defendant remains in the lawsuit
C. contracting defendant guarantees plaintiff a certain monetary recovery
D. contracting defendant's liability is decreased in direct proportion to the
increase in the non-agreeing defendants' liability.
"'It is the last element that is unique to the "Mary Carter" agreement and creates
the most unfair prejudice to the non-agreeing defendant and his right to a fair trial.
Plaintiff is guaranteed a certain amount from one defendant regardless of the outcome of
the verdict. In return that defendant receives the right to benefit from any joint verdict, or
a verdict solely against the non-agreeing defendants. The agreeing defendant therefore
partakes of direct interest in the outcome of the litigation. The normal adversary
relationship between plaintiff and defendant becomes distorted, if not destroyed.'" Hoops
v. Watermelon City Trucking, Inc., 846 F.2d 637, 640 (10th Cir. 1988) (quoting Cox v.
Kelsey–Hayes Co., 594 P.2d 354, 357-58 [Okla. 1978]).
18
As the Fifth Circuit Court of Appeals noted however, "[t]he variety amongst
different Mary Carter agreements is limited only by the creativity of defense lawyers."
Wilkins v. P.M.B. Systems Engineering, Inc., 741 F.2d 795, 798 n.2 (5th Cir. 1984).
In Ratterree v. Bartlett, 238 Kan. 11, 707 P.2d 1063 (1985), the only Kansas case
examining these types of agreements, our Supreme Court approved the use of a Mary
Carter agreement similar to the one at issue here. There, Ratterree sued multiple
defendants for injuries she sustained in a car accident. Prior to trial, Ratterree entered into
a settlement agreement with one of the defendants. Although the terms of the settlement
agreement were not disclosed prior to trial, on appeal the appellants contended that the
terms of the agreement were that the settling defendant would pay the plaintiff $50,000;
however, if Ratterree were able to recover more than $150,000 from the remaining
defendants at trial, the settling defendant's obligation to Ratterree would be reduced
"dollar for dollar regardless of the actual verdict returned" against the defendant. 238
Kan. at 24. Additionally, the defendant agreed to remain in the litigation and appear as a
defendant at trial.
Although there were some questions about the use of Mary Carter agreements in
comparative fault situations as opposed to their more typical application in joint and
several liability cases, the court approved the use of the sliding-scale agreement generally
but was concerned about the potential for collusion and jury confusion when a defendant
enters into such an agreement and remains in the case as a defendant at trial. In such a
case the defendant's interests are more aligned with that of the plaintiff than with his or
her codefendants. See 238 Kan. at 26-29. In order to reduce the risk of injustice, the court
adopted the rule that when a sliding-scale settlement agreement is entered which calls for
the settling defendant to remain in the litigation, the existence and terms of the agreement
must be disclosed to the court and remaining litigants. 238 Kan. at 29. If the court feels it
is necessary to prevent prejudice, it may then disclose the existence of the agreement to
the jury. 238 Kan. at 29. The agreement would show bias both on the part of the injured
19
party and the settling defendant. They have a financial incentive to assist each other in
pushing off as much liability as possible on the nonsettling defendants. Because there was
no such disclosure in Ratterree, the court reversed the jury verdict and remanded the case
for a new trial. 238 Kan. at 30. There have been no other Kansas cases dealing with such
agreements.
In this case, the issue of damages has not yet gone to trial. There has not been a
jury determination of damages or fault. Instead, Watco—without revealing the existence
of the Agreement in its pleading—sought to recover contribution for damages that it
knew it would never have to pay. The Agreement, by its terms, was secret. Watco agreed
to a judgment against it for the full amount requested by Fox, even though the last joint
settlement offer prior to entry of the consent judgment, as revealed in documents
produced by Watco, was $175,000 and Fox had offered to settle for $425,000. Although
Fox did not assign his rights to Watco (because he had no cause of action against
Defendants to assign, the statute of limitations had run), the agreement provided that
Fox's attorney would step in and represent Watco in the case, with the benefits of any
excess judgement going to Fox. As Judge O'Hara noted in his order dismissing the case,
this arrangement "raises a host of practical and ethical issues that Fox, Watco and,
perhaps most importantly, their experienced trial lawyers, do not appear to have fully and
carefully evaluated."
Moreover, rather than revealing the existence of the Agreement to the court from
the outset as it was required to do under Ratterree, Watco fought its disclosure to the
state court, including arguing in this appeal that it should not have been considered in
ruling on the summary judgment motion. It filed a lawsuit seeking contribution for
damages it would never be required to pay, as well as contribution for damages it may
not have to pay at all. Although it was eventually, and understandably, brought to the
court's attention by the defense, that does not cure Watco's misdeeds in this case.
20
After interpreting and analyzing the terms of the Agreement the district court held:
"7. The language of the Agreement between Watco and Fox undermines the
public policy of Kansas as set forth in the comparative negligence statute, which is
intended to allocate payment of damages in proportion to a Defendant's proportionate
share of liability. Watco's agreement with Fox, through which it seeks comparative
implied indemnity from Defendant, is the product of inequitable, unfair, and deceitful
conduct, as it is designed to minimize and potentially eliminate Watco's liability under
Kansas tort law by manufacturing an artificial stipulation of damages. Under the
inequitable agreement, Watco would never be liable for anything more than $200,000 to
Fox, and would potentially pay Fox nothing.
"8. Such an agreement wherein a party settles with the injured party
essentially for $200,000, and yet seeks $962,037.00 from another party through
comparative implied indemnity, is against public policy such that the application of the
[clean] hands doctrine bars Plaintiff from recovery."
We agree that Watco's actions in this case are inequitable and unconscionable.
Since the $175,000 settlement offer was a joint offer among all defendants in the federal
case, it is hard to imagine there would have been a challenge by Defendants to the
reasonableness of the $200,000 settlement payment, nor much of a dispute over
contribution. But by seeking a clearly inflated amount of damages Watco has forced
Defendants to litigate this case based on damages that are four times what Watco will
ever have to pay and double what Fox offered to accept in settlement of his claims. It is
clear that the sole purpose of these shenanigans was to erase its own liability rather than
properly apportioning liability against joint tortfeasors and, through collusion with Fox's
attorney, to assist Fox in getting a recovery for which he would otherwise not be entitled.
If this were not enough, Watco's action of failing to advise the court of the agreement
from the outset while continuing to seek the full $962,037 is the type of behavior that the
clean hands doctrine was meant to address. Accordingly, the decision of the district court
21
dismissing the comparative implied indemnity (or postsettlement contribution) claim is
affirmed.
Affirmed.
22
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505 F.2d 730
Levinv.International Business Machines Corporation
74-1304
UNITED STATES COURT OF APPEALS Third Circuit
10/31/74
1
D.N.J.
AFFIRMED
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696 S.E.2d 889 (2010)
Pierce Butler IRBY, III, and wife, Cindy Baker Irby,
v.
Gail Wilkins FREESE f/k/a Gail Brinn Wilkins, and Joseph P. Clark, Trustee for Truliant Federal Credit Union.
No. COA09-1224.
Court of Appeals of North Carolina.
August 17, 2010.
*890 Kenneth T. Davies, Charlotte, for Plaintiffs.
K&L Gates LLP, Charlotte, by Roy H. Michaux, Jr., for Defendants.
STEPHENS, Judge.
This matter arises out of a 12 February 2008 action brought by Plaintiffs to enforce certain restrictive covenants encumbering Defendant Gail Wilkins Freese's ("Freese") property and seeking damages for violations of those restrictions. Following a bench trial, on 4 May 2009, the trial court entered judgment denying Plaintiffs' claims and dismissing Plaintiffs' action with prejudice, concluding that Plaintiffs' action was barred by the equitable doctrine of laches. For the reasons set forth below, we reverse and remand.
I. Factual Background and Procedural History
Pierce Butler Irby, III and his wife, Cindy Baker Irby ("Plaintiffs"), filed a complaint on 12 February 2008 seeking a declaratory judgment that restrictive covenants encumbering the neighboring residential lot owned by Freese and Joseph P. Clark, as Trustee for Truliant Federal Credit Union (collectively, "Defendants"), were valid and enforceable. Plaintiffs also sought damages for Defendants' alleged breach of such restrictions, as well as preliminary and permanent injunctive relief prohibiting Freese from further construction in breach of the covenants and requiring Freese to reconstruct the residence on the lot to comply with the covenants.[1] Defendants filed an answer on 15 April 2008 asserting affirmative defenses, including the equitable defense of laches. On or about 11 December 2008, Plaintiffs filed an amended complaint adding allegations that Freese violated side setback restrictions, in addition to violating the front setback restrictions alleged in the original complaint. Defendants filed an answer to the amended complaint on 5 February 2009 reasserting laches as a defense.
This matter came on for trial during the 9 February 2009 Civil Session of Mecklenburg County Superior Court, the Honorable Jesse B. Caldwell, III presiding. The findings of fact contained in the trial court's judgment are not in dispute and are summarized below. See Koufman v. Koufman, 330 N.C. 93, 97, 408 S.E.2d 729, 731 (1991) (Findings of fact which are not contested are "presumed to be supported by competent evidence and [are] binding on appeal.").
Freese[2] is the record owner of a portion of Lot 5, Block 3B ("Freese Property") located at 717 Queens Road in the Myers Park neighborhood in Charlotte, North Carolina. Plaintiffs are the owners of Lot 7, Block 3B of Myers Park, which is located approximately 100 feet from the Freese Property.
Restrictive covenants (the "Restrictions") applicable to Lot 5 first appeared in a deed from The Stephens Company, recorded 17 May 1915. The Restrictions include a provision that "[n]o residence erected on the property shall be nearer the property line adjoining Queens Road than Fifty (50) feet, nor ... nearer either of the side property lines than Fifteen (15) feet." Similar restrictions are applicable to all of the lots in Blocks 3A and 3B pursuant to a uniform scheme of development and run with the land. The deed to the Freese Property makes no reference to the Restrictions. Plaintiffs, however, were given a copy of deed restrictions applicable to their property at the time they purchased it.
*891 In September 2007, Freese and her husband, Howard Freese (collectively, the "Freeses"), commenced construction of an addition to the east side of their home on Lot 5 consisting of a two-story living area and a garage with living area over it (the "Addition"). The Freeses did not have actual knowledge of the Restrictions when they began construction, and they did not consult with an attorney or an architect. Grading and ground level site work on the Addition took place in October and November 2007, and vertical construction was commenced on 1 December 2007. As of the end of November 2007, the Freeses had expended $180,489.57 in connection with construction of the Addition.
The vertical framing on that portion of the Addition in front of the existing house reflected a structure that was obviously closer than 50 feet to Queens Road and was observed by Plaintiffs at least by the middle of December 2007. Vertical construction of the Addition was also noticed by Dr. Tom Masters, the president of the Myers Park Homeowners Association ("HOA") at the time, in December 2007.
Plaintiff Pierce Irby ("Irby") contacted the Charlotte City Planning & Zoning Office and the Building Inspections Department, and learned in early January 2008 that the Addition conformed to all zoning requirements and that he should consider investigating any violation of any restrictive covenants that may be applicable to the Freese Property. On 14 January 2008, Anne Schout ("Schout") of the HOA notified Irby that properties in Myers Park had deed restrictions that were "policed" by other neighbors in the subdivision and that each resident in the subdivision could bring an action to make the offending property owner comply with the deed restrictions. These restrictions were found in the original deeds generated in the sale of the property from the developer to the first owners. On 17 January 2008, Irby learned that the restrictions applicable to the Freese Property included a front setback requirement of 50 feet and a side setback requirement of 15 feet, and that the Addition was "definitely in violation of the front setback with their Addition started in the front yard."
Between 17 January and 15 February 2008, the Board of Directors of the HOA agreed that the HOA would fund a portion of this litigation. During the last week of January 2008, Plaintiffs first met with an attorney and Schout to discuss their right to enforce the Restrictions on the Freese Property. They were advised that they had the right to enforce the Restrictions and agreed to bring the current action. This was the first time Plaintiffs had sufficient knowledge to make an informed decision on their available remedies and how to proceed.
Even though the Addition clearly was in violation of the front setback Restrictions, the Freeses did not have actual notice that the Addition was objectionable or that it might be in violation of the Restrictions until Plaintiffs' complaint was served on 15 February 2008. At that time, the project was completely dried in, the interior framing had been completed with the stairwell and walls in place, and the electrical and rough plumbing were complete. The heating system and duct work were in place, and the garage portion of the Addition and the living area above were within two weeks of completion. Work was on schedule, and the residential portion was to be completed by the end of April 2008.
From 1 December 2007 to 15 February 2008, the Freeses had expended $305,087.56 on the Addition. Another $115,000.00 was due by 1 March 2008 for work under contract and materials already purchased. On 29 March 2008, Plaintiffs' counsel and representatives of the HOA met with the Freeses and Defendants' attorney. Plaintiffs and the HOA observed that the Addition on the east side of Lot 5 appeared to be closer than 15 feet to a wall located across the rear of the adjoining Lot 4. Plaintiffs' counsel requested the right to have the Freese Property surveyed, which was granted. The survey was delivered to Plaintiffs on or about 4 May 2008 and showed that the Addition was slightly over 20 feet from Queens Road and within six to seven feet from the rear line of Lot 4 in Block B. The survey also reflected that the Addition conformed to the setbacks *892 imposed on the Freese Property under the applicable City of Charlotte zoning regulations.
In a letter to Defendants dated 20 May 2008, Plaintiffs alleged a side yard violation under the Restrictions. Approximately seven months later, in December 2008, Plaintiffs sought and obtained leave to amend their complaint to assert an additional claim regarding the side yard setback violation. As of 20 May 2008, the contractor's work on the Addition was substantially complete, and as of 21 May 2008, the amount expended on the Addition totaled $504,418.12.
The living area above the garage and the garage portion of the Addition are parts of integrated electrical, plumbing, and HVAC systems, part of an integrated roof system, and portions of the living area extend slightly beyond the front wall of the original home, including an internal stairwell in the residential portion that cannot be moved and meet building code requirements. The garage structure and the living area above cannot be segregated from the remainder of the Addition due to the integrated components including the roof system, load bearing foundations, and the heating, cooling, electrical, and plumbing systems, all of which would have to be torn out and replaced at substantial expense.
The trial court concluded that although Freese had constructive notice of the Restrictions, Plaintiffs failed to act timely to notify Defendants of their concerns regarding the Addition after Plaintiffs knew or should have known that they had a legal right to object. Therefore, the trial court ruled that Plaintiffs' claim was barred by the equitable doctrine of laches. On 4 May 2009, the trial court entered judgment denying Plaintiffs' claim for injunctive relief and dismissing Plaintiffs' action with prejudice. From this judgment, Plaintiffs appeal.
II. Standard of Review
"[W]hen the trial court sits without a jury, the standard of review on appeal is whether there was competent evidence to support the trial court's findings of fact and whether its conclusions of law were proper in light of such facts." Shear v. Stevens Bldg. Co., 107 N.C.App. 154, 160, 418 S.E.2d 841, 845 (1992). Where, as in the present case, the trial court's findings are not contested, the findings are "presumed to be supported by competent evidence and [are] binding on appeal." Koufman, 330 N.C. at 97, 408 S.E.2d at 731. The trial court's conclusions of law are reviewable de novo. Shear, 107 N.C.App. at 160, 418 S.E.2d at 845.
III. Equitable Defense of Laches
Plaintiffs argue that the trial court erred in concluding that their claims are barred by the equitable defense of laches. Specifically, Plaintiffs contend they acted promptly to enforce their rights after becoming aware of their right to enforce the Restrictions against Defendants and that any delay was not unreasonable. We agree.
To establish the affirmative defense of laches, our case law recognizes that 1) the doctrine applies where a delay of time has resulted in some change in the condition of the property or in the relations of the parties; 2) the delay necessary to constitute laches depends upon the facts and circumstances of each case; however, the mere passage of time is insufficient to support a finding of laches; 3) the delay must be shown to be unreasonable and must have worked to the disadvantage, injury or prejudice of the person seeking to invoke the doctrine of laches; and 4) the defense of laches will only work as a bar when the claimant knew of the existence of the grounds for the claim.
MMR Holdings, LLC v. City of Charlotte, 148 N.C.App. 208, 209-10, 558 S.E.2d 197, 198 (2001). The burden of proof is on the party who pleads the affirmative defense of laches. Taylor v. City of Raleigh, 290 N.C. 608, 622, 227 S.E.2d 576, 584 (1976).
It is undisputed in the present case that Plaintiffs became concerned about the construction of the Addition as early as 1 December 2007, but did not file their complaint until 12 February 2008. The determination of whether Plaintiffs' delay in acting on their concern was unreasonable so as to constitute laches depends on the facts and circumstances specific to this matter. Teachey v. Gurley, 214 N.C. 288, 294, 199 S.E. 83, 88 (1938) (The determination of what delay will *893 constitute laches depends on the facts of each case.). We find instructive to our determination the holdings of the following cases:
In East Side Builders v. Brown, 234 N.C. 517, 67 S.E.2d 489 (1951), the defendants altered the construction of their single-family residence in late 1940 or early 1941 and converted it into a two-family residence in violation of applicable restrictions. Id. at 518-19, 67 S.E.2d at 489-90. The defendants claimed that they had no knowledge of the violations or that the violations were objectionable until served with plaintiffs' complaint seeking to enforce the restrictions on 12 September 1950. Our Supreme Court held that the plaintiffs' claim was not barred by laches despite the nine-to-ten-year delay in filing the complaint after defendants violated the restrictions. Id. at 521, 67 S.E.2d at 491-92. The Court concluded that because the plaintiffs did not learn of the conversion until after it was completed, the plaintiffs' delay in bringing the action did not prejudice defendants. Thus, the defendants "were not entitled to a judgment as of nonsuit on the ground of laches." Id. at 521, 67 S.E.2d at 491; see Phoenix Ltd. P'ship v. Simpson, ___ N.C.App. ___, ___, 688 S.E.2d 717, 726 (2009) (Plaintiff's claim for specific performance of contract for defendants to sell certain real property to plaintiff was not barred by defense of laches based on plaintiff's three-year delay in asserting claim where defendants were prejudiced only by the increase in value of the property); Sunbelt Rentals, Inc. v. Head & Engquist Equip., L.L.C., 174 N.C.App. 49, 63, 620 S.E.2d 222, 232 (2005) (Where plaintiff commenced an action for misappropriation of trade secrets on 13 July 2000 despite having knowledge of the defendants' improper conduct as early as November 1999, there was no unreasonable delay in bringing the action.); but see Farley v. Holler, 185 N.C.App. 130, 132, 647 S.E.2d 675, 678 (2007) (Owners of roadfront lots brought action against other subdivision residents, seeking relief in equity to reopen a different street in order to diffuse extra flow of traffic on road from new development; owners' claim was barred by laches after a nine-year delay in bringing the claim resulted in both a change in the condition of the property through $100,000.00 in repairs to the closed street and a change in the relations of the parties through the changing of the owners of the lots in the subdivision; there was no justification, explanation, or reason for the delay, and lot owners were aware of the existence of their claim when the street was closed.).
In the present case, the trial court found the following in determining that Plaintiffs' delay was unreasonable: (1) that Plaintiffs reside approximately 100 feet from the Freese Property and observed construction in the front of the residence by the middle of December 2007; (2) that before 25 December 2007, Irby contacted the Charlotte City Planning & Zoning Office and the Building Inspections Department and learned that the Addition conformed to all zoning requirements and that he should consider investigating any violation of applicable restrictive covenants that may encumber the Property; (3) that on 14 January 2008, a representative of the HOA notified Irby that properties in Myers Park were subject to deed restrictions that are enforced through legal action by other neighbors in the subdivision; (4) that on 17 January 2008, Irby was advised that the Restrictions applied to the Freese Property, including the front and side setback requirements; (5) that between 17 January and 15 February 2008, the HOA agreed to fund a portion of this litigation; (6) that Plaintiffs first met with an attorney in January 2008; and (7) that the Freeses first received actual notice that the Addition was considered to be in violation of the Restrictions when served with Plaintiffs' complaint on 15 February 2008.
These facts do not support the trial court's conclusion that Plaintiffs' action was barred by laches. On the contrary, these facts establish that Plaintiffs acted promptly and without undue delay once learning of the existence of the grounds for their claim. See MMR Holdings, 148 N.C.App. at 210, 558 S.E.2d at 198 ("[T]he defense of laches will only work as a bar when the claimant knew of the existence of the grounds for the claim."). In December 2007, after observing the construction in the front of the Freese Property that appeared to violate the front setback requirements, Plaintiffs took reasonable *894 steps in order to ascertain what claim, if any, they may have against Defendants. Plaintiffs inquired with the Charlotte City Planning & Zoning Office, the Building Inspections Department, the HOA, and their attorney, and filed their complaint, all in a matter of two months. Moreover, Plaintiffs filed their action within one month of receiving confirmation on 17 January 2008 that the Addition violated the setback requirements. Thus, any delay by Plaintiffs in bringing this action was not unreasonable.
In addition, our Courts have found that the statute of limitations applicable to a given action can be informative in answering the issue of whether delay in asserting an action is unreasonable. See, e.g., Creech v. Creech, 222 N.C. 656, 24 S.E.2d 642 (1943). In Creech, our Supreme Court stated that "the tendency is to measure laches by the pertinent statute of limitations wherever the latter is applicable to the situation and not to regard the delay of the actor to assert the right within that period effective as estoppel, unless upon special intervening facts demanding that exceptional relief." Id. at 663, 24 S.E.2d at 647. In Teachey, the Court stated:
Whenever the delay is mere neglect to seek a known remedy or to assert a known right, which the defendant has denied, and is without reasonable excuse, the courts are strongly inclined to treat it as fatal to the plaintiff's remedy in equity, even though much less than the statutory period of limitations, if an injury would otherwise be done to the defendant by reason of the plaintiff's delay.
Teachey, 214 N.C. at 294, 199 S.E. at 88 (emphasis added).
The applicable statute of limitations in the present case is six years. N.C. Gen.Stat. § 1-50(a)(3) (2009) (The statute of limitations to bring an action for "injury to any incorporeal hereditament" is six years.); see Hawthorne v. Realty Syndicate, Inc., 43 N.C.App. 436, 440, 259 S.E.2d 591, 593 (1979) (stating that statute of limitations for enforcing a restrictive covenant is six years). Although compliance with the statute of limitations is not determinative on the issue of laches, the fact that Plaintiffs filed their complaint well within the applicable statute of limitations provides further support for their position. We conclude that once Plaintiffs confirmed Freese's violation of the Restrictions and knew they had the legal right to enforce the Restrictions against Freese, Plaintiffs did not neglect to pursue their remedy and to assert their rights.
We hold that Plaintiffs' claim was not barred by the equitable defense of laches. Accordingly, we reverse and remand this matter to the trial court for a determination on the merits.
Plaintiffs also contend that because Freese had constructive notice of the violations, she was a knowing wrongdoer and is barred from asserting an equitable defense by the doctrine of unclean hands. See Hurston v. Hurston, 179 N.C.App. 809, 814, 635 S.E.2d 451, 454 (2006) ("[H]e who comes into equity must come with clean hands; otherwise his claim to equity will be barred by the doctrine of unclean hands."). Because of our holding that Plaintiffs' action is not barred by laches, we need not address Plaintiffs' remaining argument.
REVERSED and REMANDED.
Judges CALABRIA and GEER concur.
NOTES
[1] At trial, however, Plaintiffs elected to pursue only injunctive relief and offered no evidence of monetary damages.
[2] Freese's former name, Gail Brinn Wilkins, is the name on the recorded deed.
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491 P.2d 59 (1971)
The PEOPLE of the State of Colorado, Plaintiff-Appellant,
v.
Steve A. MAES, also known as Steve Alvin Maes, Defendant-Appellee.
No. 25247.
Supreme Court of Colorado, En Banc.
December 6, 1971.
*60 Carl Parlapiano, Dist. Atty., Cecil L. Turner, Chief Deputy Dist. Atty., Tenth Judicial Dist., Pueblo, for plaintiff-appellant.
Rollie R. Rogers, Colo. State Public Defender, J. D. MacFarlane, Chief Deputy State Public Defender, Denver, J. E. Losavio, Jr., Asst. State Public Defender, Pueblo, for defendant-appellee.
KELLEY, Justice.
This is an interlocutory appeal by the People from an adverse ruling of the District Court of Pueblo County sustaining a motion to suppress evidence seized under a search warrant. We reverse the ruling.
The trial court found that the search warrant did not sufficiently identify the premises to be searched, as required by the Constitutions of the United States and of the state of Colorado.
The warrant described the premises as "basement apartment at 502 Morrison Avenue, Pueblo, Colorado." There was no reference in the warrant to the name of the occupant or tenant of the particular apartment sought to be searched. Consequently, a "particularity" problem under both the federal and state constitutions arises, because there were two "basement apartments" at that address. Defendant contends that the failure to describe the place to be searched with particularity invalidated the warrant.
The question for our determination is whether under the circumstances here the premises were described with sufficient particularity. The Fourth Amendment to the Constitution of the United States and art. II, § 7 of our state constitution were designed primarily to prevent unreasonable intrusions into the sanctity and privacy of the home. The Ventresca philosophy, expressed in this language, should guide us in answering the question:
"* * * [W]hen a magistrate has found probable cause, the courts should not invalidate the warrant by interpreting the affidavit in a hypertechnical, rather than a commonsense, manner. Although in a particular case it may not be easy to determine when an affidavit demonstrates the existence of probable cause, the resolution of doubtful or marginal cases in this area should be largely determined by the preference to be accorded to warrants." United States v. Ventresca, 380 U.S. 102, 85 S.Ct. 741, 13 L.Ed.2d 684.
We have two cases which bear upon the problem. The first is People v. Avery, Colo., 478 P.2d 310, in which Mr. Justice Lee, in construing the provisions of the Fourth Amendment and art. II, § 7 of our constitution, observed:
"Immediately apparent from a reading of these constitutional provisions are the requirements that the house or home to be searched must be particularly described or described as near as may be. It is difficult to lay down any test as to the sufficiency of a description which can invariably be applied to all situations and all circumstances. However, certain overriding considerations have evolved which may generally control and guide the magistrate in issuing the warrant, depending upon the nature and character of the place to be searched. A basic consideration is that general or blanket searches are forbidden, such being the very evil sought to be protected against by the adoption of the constitutional provisions against unreasonable searches and seizures."
Avery, on the facts, is distinguishable from this case. In Avery the warrant described "the entire multiple-occupancy structure by street address only." An examination of the testimony of Officer Koncilja in this case suggests that from his surveillance and the information furnished by his informant that he had no *61 knowledge of the fact nor any reason to believe that there was more than one basement apartment. He could not determine from his observations whether the people entering the house lived in the basement or upstairs, because
"* * * there is a high block wall I would see people go into a side door on what would be the north side of the house, but I could not tell whether they went upstairs or walked up a few steps to the main floor or where. Likewise with the back door, I couldn't see adequately whether it went downstairs. My informant told me it was the downstairs apartment where Mr. Maes was living; * *" (Emphasis added.)
The officer testified he had never been in the basement before. The record is also clear that this was not a general exploratory search which is the evil the constitutions were designed to protect against. The officers went into Maes' basement apartment with him. They searched only the apartment which he shared with another individual. The actual search was limited to Maes' bedroom and the rooms which he shared in common with the other individual.
This case falls within the spirit of the exception of People v. Lucero, Colo., 483 P.2d 968, the second case, wherein Mr. Chief Justice Pringle said:
"* * * We hold that the rule in Avery is subject to an exception, among others, where the officers did not know nor did they have reason to know that they were dealing with a multi-family dwelling when obtaining the warrant, and providing that they confine the search to the area which was occupied by the person or persons named in the affidavit. For a collection of cases, see Annot., 11 A.L.R.3d 1330, 1334 (§ 8) (1967, Supp. 1970)."
Here the police officer in obtaining the warrant and the judge in issuing the warrant acted in the utmost good faith in attempting to conform to the constitutional mandate. The place searched was the place specifically designated in the affidavit and generally described in the warrant. Here the officer described the place as nearly as he could.
The fact that the apartment was occupied by Steven Maes was relevant to the probable cause, as that related to the requirement for the issuance of the warrant. However, at the time the warrant was issued, on the basis of the information then available to the officer, it would have appeared to constitute superfluous description. In short, Officer Koncilja did not know nor did he have reason to believe that the basement contained more than one apartment at the time the warrant was issued. People v. Lucero, supra.
It is conceded here that the affidavit sufficiently described the place to be searched because it identified it as "Maes apartment." The warrant, admittedly lacked this specificity. But that deficiency did not result in the illegal search of the other basement apartmentnor of any of the quarters occupied by others on the main or second floor of the house.
Under the circumstances here, where the police officer who was the affiant in the affidavit which identified the premises to be searched as "Maes apartment," also executed the warrant resulting in a search limited, in fact, to Maes' apartment, the warrant was sufficient.
Ruling reversed.
GROVES, J., concurs in the result.
LEE and ERICKSON, JJ., respectfully dissent.
LEE, Justice (dissenting):
I respectfully dissent.
The trial court was of the opinion this case was governed by the rule announced by unanimous decision of this Court in People v. Avery, Colo., 478 P.2d 310. Accord, People v. Alarid, Colo., 483 P.2d 1331. I agree with the trial court and would affirm its ruling granting the motion to suppress.
*62 In Avery this Court held that when authority is desired to search a particular apartment within an apartment building, or a particular room within a multi-occupancy structure, the warrant must describe the apartment or subunit to be searched "either by number or other designation, or by the name of the tenant or occupant" of the apartment or subunit.
Here, the warrant merely described the premises to be searched as "basement apartment at 502 Morrison Avenue, Pueblo" Colorado," without designating which basement apartment was to be searched. Nowhere in the warrant was there any reference to the name of the occupant or tenant (Maes) of the particular apartment, although this was clearly known to the officer whose supporting affidavit contained this information. Nor was there reference in the warrant to any other designation, fact or circumstance by which the apartment might be further identified.
This failure to specify with particularity by name or otherwise the apartment sought to be searched, in my view renders the warrant fatally defective and to uphold it does violence to the unequivocal mandate of both the federal and state constitutions that the warrant "particularly describe the place to be searched" and that it describe the place "as near as may be."
The Supreme Court of the United States has many times declared that the Fourth Amendment right against unreasonable searches should be liberally interpreted in favor of the citizen, most recently in Coolidge v. New Hampshire, 403 U.S. 443, 91 S.Ct. 2022, 29 L.Ed.2d 564. In Gouled v. United States, 255 U.S. 298, 41 S.Ct. 261, 65 L.Ed. 647, it was stated:
"* * * It has been repeatedly decided that these Amendments [the Fourth and Fifth] should receive a liberal construction, so as to prevent stealthy encroachment upon or `gradual depreciation' of the rights secured by them, by imperceptive practice of courts or by wellintentioned but mistakenly overzealous executive officers."
To honor the warrant in this case would appear to contribute to the gradual depreciation and erosion of that right.
The view espoused here does not impose any undue burden upon law enforcement. It would have been a simple matter for the officer, whose affidavit of probable cause supported the warrant and whose informant advised that defendant Maes was engaged in illegal conduct at Maes' basement apartment, to insert Maes' name in the warrant so as to particularly identify the place to be searched.
To quarrel with my brethren at any length concerning the factual setting in which this controversy arose, as shown by the record, would serve no constructive purpose, other than to note, as often repeated, that it ill-behooves this Court on review to indulge in the luxury of finding facts and drawing inferences contrary to those implicit in the trial court's findings and order. The majority opinion would seem to indulge in that luxury.
ERICKSON, J., authorizes me to state that he joins in this dissent.
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44 So.3d 107 (2010)
LAWTON
v.
McNEIL.
No. SC10-1199.
Supreme Court of Florida.
August 16, 2010.
Decision Without Published Opinion Habeas Corpus dismissed.
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Case: 09-20805 Document: 00511271226 Page: 1 Date Filed: 10/22/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 22, 2010
No. 09-20805
Summary Calendar Lyle W. Cayce
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
JOSE SANTO PEREZ PANIAGUA, also known as Edwardo Chavez, also known
as Jose Santo Felepe Paniag Perez, also known as Eduardo Chavez, also known
as Jose Santo Perez, also known as Jose Perez,
Defendant-Appellant
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:09-CR-281-1
Before REAVLEY, DENNIS, and CLEMENT, Circuit Judges.
PER CURIAM:*
Jose Santo Perez Paniagua (Perez Paniagua) pleaded guilty to illegally
reentering the United States and was sentenced to a prison term of 33 months,
at the bottom of the guidelines range, to be followed by three years of supervised
release. He appeals his sentence, arguing that the district court improperly
determined that his second state conviction for simple drug possession was an
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
Case: 09-20805 Document: 00511271226 Page: 2 Date Filed: 10/22/2010
No. 09-20805
aggravated felony for purposes of U.S.S.G. § 2L1.2(b)(1)(C)’s eight-level offense-
level enhancement.
In his opening brief, Perez Paniaugua correctly conceded that this
argument was foreclosed by our then-current precedent. Shortly after Perez
Paniagua filed his brief, however, the Supreme Court decided
Carachuri-Rosendo v. Holder, 130 S. Ct. 2577 (2010), holding that a second state
offense for simple drug possession is not an aggravated felony where that
conviction “has not been enhanced based on the fact of a prior conviction.”
Carachuri-Rosendo, 130 S. Ct. at 2589. In its brief, the Government
acknowledges that the record does not establish that Perez-Paniagua’s second
simple drug-possession conviction was based on his prior simple possession
offense. The Government thus concedes that the case should be remanded for
resentencing.
Accordingly, Perez Paniagua’s sentence is VACATED and the case is
REMANDED FOR RESENTENCING.
2
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
HARRISON ORR, No. 16-15014
Plaintiff-Appellee,
D.C. No.
v. 2:14-cv-00585-
WBS-EFB
PLUMB, Officer, California Highway
Patrol,
Defendant-Appellant, OPINION
and
BRAME, Officer, California
Highway Patrol; STATE OF
CALIFORNIA; CALIFORNIA HIGHWAY
PATROL,
Defendants.
Appeal from the United States District Court
for the Eastern District of California
William B. Shubb, District Judge, Presiding
Argued and Submitted August 18, 2017
San Francisco, California
Filed March 12, 2018
2 ORR V. PLUMB
Before: Johnnie B. Rawlinson and Jacqueline H. Nguyen,
Circuit Judges, and Sarah S. Vance,* District Judge.
Opinion by Judge Nguyen;
Dissent by Judge Rawlinson
SUMMARY**
Civil Rights
The panel dismissed, for lack of jurisdiction, a
defendant’s appeal from the district court’s judgment on a
jury’s special verdict in a 42 U.S.C. § 1983 action.
The panel held that the appeal was not timely filed under
28 U.S.C. § 2107, Federal Rule of Appellate Procedure 4,
and Federal Rule of Civil Procedure 58. The panel held that
because the district court never entered a separate judgment
pertaining to the jury’s verdict, Rule 58(c)’s alternative
provision for entry of judgment kicked in after 150 days.
The panel determined that the special jury verdict in this case
was a full adjudication of the issues and therefore entry of
the jury special verdict started the 150-day countdown to
November 16, 2015. Defendant then had 30 days to appeal.
He did not file the notice of appeal of the jury special verdict
until 49 days later, on January 4, 2016, rendering the appeal
untimely.
*
The Honorable Sarah S. Vance, United States District Judge for
the Eastern District of Louisiana, sitting by designation.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
ORR V. PLUMB 3
Dissenting, Judge Rawlinson stated that she disagreed
with the majority’s conclusion that defendant’s appeal of the
jury’s special verdict was untimely. Judge Rawlinson stated
that defendant’s “untimely” appeal was the result of a
procedural morass not of his making, and should not result
in the loss of his right to appeal.
COUNSEL
Krista Dunzweiler (argued) and Stephen C. Pass, Deputy
Attorneys General; Peter A. Meshot, Supervising Deputy
Attorney General; Kristin G. Hogue, Senior Assistant
Attorney General; Office of the Attorney General,
Sacramento, California; for Defendant-Appellant.
Michael J. Haddad (argued), Julia Sherwin, and T. Kennedy
Helm, Haddad & Sherwin LLP, Oakland, California;
Richard M. Pearl (argued), Law Offices of Richard M. Pearl,
Berkeley, California; for Plaintiff-Appellee.
Peter J. Eliasberg, ACLU Foundation of Southern
California, Los Angeles, California; Carol A. Sobel, Law
Office of Carol A. Sobel, Santa Monica, California; for
Amici Curiae ACLU of Southern California, ACLU of
Northern California, ACLU of San Diego and Imperial
County, and National Police Accountability Project.
4 ORR V. PLUMB
OPINION
NGUYEN, Circuit Judge:
Terrence Plumb appeals the district court’s judgment on
the jury’s special verdict in this § 1983 case.1 The threshold
issue is whether his appeal is timely under 28 U.S.C. § 2107,
Federal Rule of Appellate Procedure 4 (“Rule 4”), and
Federal Rule of Civil Procedure 58 (“Rule 58”). We
conclude that it isn’t. Because the district court never
entered a separate judgment, Rule 58(c)’s alternative
provision for entry of judgment kicked in after 150 days.
Plumb didn’t file his notice of appeal until more than 30 days
thereafter. Consequently, his appeal of the special verdict is
untimely, and we lack jurisdiction to consider it.
I.
Harrison Orr was driving five miles per hour below the
highway’s posted limit. He was 76 years old, and his license
plates indicated that he had a disability. California Highway
Patrol (“CHP”) officer Jay Brame observed Orr’s vehicle
drift halfway into the next lane. Brame pulled him over,
suspecting that he was driving under the influence of alcohol
or drugs. Although Orr was cooperative and answered
Brame’s questions, his pupils were constricted, his speech
was slurred, and he couldn’t maintain his balance unassisted.
Orr explained that his trouble balancing was due to a
brainstem stroke that he had suffered.
1
We resolve Plumb’s appeal of the district court’s denial of his
motion for judgment as a matter of law, no. 15-16514, and plaintiff’s
appeal of the partial denial of his motion for attorney’s fees, no.
16-15109, in a concurrently filed memorandum disposition.
ORR V. PLUMB 5
A second officer, Plumb, came to assist. A breath test
ruled out alcohol intoxication. Orr agreed to go with the
officers to the station for drug testing but told them he
couldn’t be handcuffed because he needed the use of his
hands and arms for balance and control. Orr passively
resisted being handcuffed by folding his arms across his
chest and twisting his upper torso back and forth. When
Brame wasn’t looking, Plumb punched Orr in the stomach.
Orr fell to the ground, and the officers handcuffed him. At
the station, they determined he wasn’t under the influence of
drugs. Orr was charged with resisting arrest but later
released. The district attorney declined to prosecute Orr due
to insufficient evidence.
Orr sued the two officers and the CHP on various federal
and state law grounds regarding the arrest, the amount of
force used, and defendants’ alleged failure to accommodate
his disability. On June 17, 2015, the jury returned a special
verdict that was entirely favorable to Brame and the CHP.
But the jury found that Plumb used excessive force in
arresting Orr and awarded $125,000 in damages. The same
day, the clerk entered the special verdict into the docket
along with a minute order stating, “verdict returned, read and
filed in favor of plaintiff.”
The following week, Plumb moved for judgment as a
matter of law (“JMOL”) under Federal Rule of Civil
Procedure 50(b). The district court denied the motion in a
July 8, 2015 order. Plumb filed a notice of appeal later that
month. The notice specified that he was appealing the
JMOL ruling and gave no indication that he intended to
appeal anything else.
In August 2015, Orr moved for attorneys’ fees. In
December, while the fee motion was under submission,
6 ORR V. PLUMB
Plumb submitted his opening brief in the appeal of the JMOL
order. Like the notice of appeal, the opening brief contained
no hint that Plumb planned to appeal anything else. In fact,
Plumb stated that the JMOL order “was the district court’s
final one on the issues of [his] liability.” On December 22,
2015, the district court partially granted Orr’s request for
attorneys’ fees.
Plumb filed a second notice of appeal on January 4,
2016, stating that the appeal was “from Judgment based on
the Special Verdict.” He asserted that the judgment “was
entered as a matter of law pursuant to [Rule] 58(c)(2)(B) 150
days after the [JMOL order].” Orr appealed the order
regarding attorneys’ fees on January 18, 2016.
On February 1, 2016, the district clerk signed and
entered a document captioned “Judgment in a Civil Case.”
The clerk’s judgment ordered “that judgment is hereby
entered in accordance with the jury verdict rendered
6/17/2015.”
After the briefing in Plumb’s appeal of the JMOL order
was complete, we consolidated the three appeals. The
parties then submitted a second round of briefing addressing
this appeal and Orr’s appeal of the fee order.
II.
A.
Unless the district court extends the deadline within the
prescribed time, “the timely filing of a notice of appeal in a
civil case is a jurisdictional requirement.” Bowles v. Russell,
551 U.S. 205, 214 (2007)); see Hamer v. Neighborhood
Hous. Servs. of Chicago, 138 S. Ct. 13, 21 (2017). Whether
a notice of appeal is timely filed depends on when the order
ORR V. PLUMB 7
or judgment appealed from is entered. A notice of appeal
generally must be filed “within thirty days after the entry.”
28 U.S.C. § 2107(a); accord Fed. R. App. P. 4(a)(1)(A).
Rule 58 sets forth the framework for determining when
and how an appealable order or judgment is entered. Since
its adoption in 1938, the rule has been consistent in two
respects. It requires prompt entry of judgment,2 and it
distinguishes between the “uncomplicated” judgments that
are normally issued by the clerk without further direction
from the court and the more complex ones that require the
court’s involvement. See Fed. R. Civ. P. 58, advisory
committee’s note to 1963 amendment. In particular,
judgments on general jury verdicts may be entered by the
clerk without the court’s direction, but the court must
“approve the form of the judgment” on a jury special verdict.
Fed. R. Civ. P. 58(b).
Notwithstanding this consistency, Rule 58 has
undergone two significant changes. In 1963 it was amended
to require that every judgment “be set forth on a separate
document.”3 Fed. R. Civ. P. 58(a). The “sole purpose” of
2
The current version of Rule 58 requires both court and clerk to act
“promptly.” Originally, the rule stated that the judge should
“promptly . . . approve the form of the judgment,” if required, and the
clerk should in all cases enter the judgment “forthwith.” Fed. R. Civ. P.
58 (1938). To give a sense of what the rule meant by “promptly” and
“forthwith,” the original Advisory Committee Notes reference the time
periods established in various states, which ranged from 24 hours (Idaho
and Montana) to one week (Connecticut).
3
The 1963 amendment largely prohibited attorneys from submitting
the separate documents. See Fed. R. Civ. P. 58 (1963) (“Attorneys shall
not submit forms of judgment except upon direction of the court, and
these directions shall not be given as a matter of course.”). This
prohibition was “to avoid the delays that were frequently encountered by
8 ORR V. PLUMB
requiring a separate document for the court’s judgment “was
to clarify when the time for appeal . . . begins to run.”
Whitaker v. Garcetti, 486 F.3d 572, 579 (9th Cir. 2007)
(omission in Whitaker) (quoting Bankers Tr. Co. v. Mallis,
435 U.S. 381, 384 (1978) (per curiam)). Prior to this
amendment, parties frequently had difficulty ascertaining
whether a court’s ruling contained all of the elements of a
judgment and thus whether it started the time limits for post-
trial motions and appeals. See Fed. R. Civ. P. 58, advisory
committee’s note to 1963 amendment. The confusion could
have harsh consequences, particularly with the rule then in
effect that a premature notice of appeal was ineffectual if
certain post-decision motions were also filed. See Fed. R.
Civ. P. 73(a) (1946); Otis v. City of Chicago, 29 F.3d 1159,
1166 (7th Cir. 1994) (en banc) (discussing the “trap that
caused appeals filed before the disposition of a motion for
reconsideration to self-destruct and thereby cost many
parties, who were not keenly aware of the niceties of
appellate practice, any opportunity for review”).4
The use of a separate document to signify that a
judgment was ripe for appeal, while largely eliminating
the former practice of directing the attorneys for the prevailing party to
prepare a form of judgment, and also to avoid the occasionally inept
drafting that resulted from attorney-prepared judgments.” Fed. R. Civ.
P. 58, advisory committee’s note to 2002 amendment. It was replaced
by Rule 58(d), which “allow[s] any party to move for entry of judgment
on a separate document” and was designed to “protect all needs for
prompt commencement of the periods for motions, appeals, and
execution or other enforcement.” Id.
4
This trap was eliminated in the 1979 and 1993 amendments to Rule
4, the “theme” of which “is that decisions may become final and
appealable after their announcement or entry, and that to preserve the
right of appellate review courts should permit parties to appeal either
before or after the technical date of ‘finality.’” Otis, 29 F.3d at 1166.
ORR V. PLUMB 9
uncertainty, created its own set of problems. Courts often
neglected to enter judgment on a separate document, with
the result that the time to appeal never began to run. To
address the “many and horridly confused problems” created
by these lapses, Rule 58 was amended in 2002 “to ensure
that appeal time does not linger on indefinitely.” Fed. R.
Civ. P. 58, advisory committee’s note to 2002 amendment.
Currently, for purposes of appeal and post-decision
motion deadlines, final judgments are entered “the earlier
of” the date that the decision is set out in a separate document
and 150 days after it is entered in the docket. Fed. R. Civ. P.
58(c)(2). In other words, if both “court and clerk fail to
comply with [the] simple requirement” of entering final
judgment on a separate document, then judgment is
constructively entered on the 150th day. Fed. R. Civ. P. 58,
advisory committee’s note to 2002 amendment. For orders
resolving certain separately appealable post-decision
motions, including JMOL motions under Federal Rule of
Civil Procedure 50(b), no separate document is required;
“judgment” on these orders occurs when they are entered in
the docket. Fed. R. Civ. P. 58(a), (c)(1).
B.
The term “judgment” is defined broadly to include “any
order from which an appeal lies.” Fed. R. Civ. P. 54(a). In
other words, it is a final order or decision. E.g., Bankers Tr.
Co., 435 U.S. at 384 n.2; United States v. Martin, 226 F.3d
1042, 1048 (9th Cir. 2000). In determining whether a
disposition is final, we employ “‘a practical rather than a
technical’ analysis.” Bishop Paiute Tribe v. Inyo County,
863 F.3d 1144, 1151 n.2 (9th Cir. 2017) (quoting Gillespie
v. U.S. Steel Corp., 379 U.S. 148, 152 (1964)); see Rule 58,
advisory committee’s note to 2002 amendment (“The . . .
10 ORR V. PLUMB
definition of the entry of judgment must be applied with
common sense . . . .”).
A jury verdict is not directly appealable because a
separate document is required—with the court’s approval in
the case of a special verdict—in order to constitute a formal
judgment. Fed. R. Civ. P. 58(a), (b)(2)(A); see In re Rhone-
Poulenc Rorer, Inc., 51 F.3d 1293, 1297 (7th Cir. 1995)
(“[A] verdict as such is not an appealable order.”). However,
a verdict is “final,” and eventually appealable after actual or
constructive judgment is entered, if it “ends the litigation on
the merits and leaves nothing for the court to do but execute
the judgment.” Klestadt & Winters, LLP v. Cangelosi, 672
F.3d 809, 813 (9th Cir. 2012) (quoting Catlin v. United
States, 324 U.S. 229, 233 (1945)); cf. Casey v. Long Island
R.R., 406 F.3d 142, 147–48 (2d Cir. 2005) (assuming that
after the 2002 amendments to Rule 58, a jury special verdict
would trigger the 150-day alternative date for entry of
judgment).
The special verdict here was “a full adjudication of the
issues.” Van Dusen v. Swift Transp. Co., 830 F.3d 893, 896
(9th Cir. 2016) (quoting Nat’l Distrib. Agency v. Nationwide
Mut. Ins., 117 F.3d 432, 433 (9th Cir. 1997)). It established
that Plumb is liable to Orr for $125,000 and the other
defendants are not liable. There was nothing further for the
court to do other than enter a separate judgment
memorializing the jury’s findings. That the special verdict
left nothing to be decided is evident both from Plumb’s
decision to appeal it before a separate judgment was entered,
and from the clerk’s judgment, which purported to enter
judgment “in accordance with the jury verdict” without
further explanation.
ORR V. PLUMB 11
Therefore, entry of the jury special verdict started the
150-day countdown to November 16, 2015,5 when an
appealable judgment on the jury special verdict was
constructively entered due to the district court’s inaction. By
allowing the jury special verdict to stand without modifying
or vacating it prior to the constructive entry of judgment, the
district judge “clearly evidence[d] [his] intention that it be
the court’s final act in the matter.” Van Dusen, 830 F.3d at
896 (quoting Nat’l Distrib. Agency, 117 F.3d at 433). Plumb
then had 30 days to appeal. He did not file the notice of
appeal of the jury special verdict until 49 days later, on
January 4, 2016, rendering the appeal untimely.
C.
Plumb argues that the special verdict’s entry in the
docket couldn’t have triggered the 150-day period
culminating in the entry of judgment because the district
court didn’t approve its form and the clerk didn’t enter it on
a separate document as required by Rule 58(b)(2). Rule
58(b) describes how the separate judgment must be prepared
and entered, but only if one is necessary. Rule 58(c) clarifies
that entry of a separate judgment, even if required under
Rule 58(a), is not necessary to start the time to appeal, which
occurs automatically after 150 days.6 In adopting the 2002
5
The 150th day fell on a Saturday. Judgment on the special verdict
was constructively entered on the following Monday pursuant to Federal
Rule of Civil Procedure 6.
6
In relevant part, Rule 58 provides:
(a) Separate Document. Every judgment and
amended judgment must be set out in a separate
document, but a separate document is not required
for an order disposing of a motion:
12 ORR V. PLUMB
(1) for judgment under Rule 50(b);
(2) to amend or make additional findings under
Rule 52(b);
(3) for attorney’s fees under Rule 54;
(4) for a new trial, or to alter or amend the
judgment, under Rule 59; or
(5) for relief under Rule 60.
(b) Entering Judgment.
(1) Without the Court’s Direction. Subject to
Rule 54(b) and unless the court orders
otherwise, the clerk must, without awaiting
the court’s direction, promptly prepare, sign,
and enter the judgment when:
(A) the jury returns a general verdict;
(B) the court awards only costs or a sum
certain; or
(C) the court denies all relief.
(2) Court’s Approval Required. Subject to Rule
54(b), the court must promptly approve the
form of the judgment, which the clerk must
promptly enter, when:
(A) the jury returns a special verdict or a
general verdict with answers to written
questions; or
(B) the court grants other relief not described
in this subdivision (b).
(c) Time of Entry. For purposes of these rules,
judgment is entered at the following times:
(1) if a separate document is not required, when
the judgment is entered in the civil docket
under Rule 79(a); or
(2) if a separate document is required, when the
judgment is entered in the civil docket under
Rule 79(a) and the earlier of these events
occurs:
(A) it is set out in a separate document; or
(B) 150 days have run from the entry in the
civil docket.
ORR V. PLUMB 13
amendments, Congress “decided that ensuring finality
eventually becomes more important than strictly enforcing
Rule 58’s separate document requirement.” Harmston v.
City & County of San Francisco, 627 F.3d 1273, 1280 (9th
Cir. 2010).
The Fifth Circuit has characterized Plumb’s argument
“as diametrically contrary to the text, purpose and design of
the integrated system established by [Federal Rules of Civil
Procedure] 58 and 79 and [Federal Rule of Appellate
Procedure] 4.” Burnley v. City of San Antonio, 470 F.3d 189,
196 (5th Cir. 2006).7 We agree. As Burnley observed, such
a reading of Rule 58(b) “would render the 150-day cap
required by [Rule 58(c)] meaningless and defeat the purpose
of the 2002 amendments.” Id. Under Rule 58(c)(2)(B), “the
cap only begins to run upon the clerk’s entry of judgment in
the civil docket; if the clerk cannot make a valid entry of
judgment when the Court defaults on its duty, as [Plumb]
contends, the cap could never begin to run in the very cases
in which it was intended to apply.” Id.
Plumb suggests two alternative dates as having triggered
the time to appeal the jury special verdict. First, he asserts
that the district court’s order denying his JMOL motion was
“the only ‘judgment’ for purposes of Rule 58 that could start
the 150 day period running under . . . Rule 58(c)(2).” Under
this theory, the 150-day period ran from entry of the JMOL
order and ended on December 7, 2015; Plumb’s notice of
appeal, filed less than 30 days later, was timely.
7
Burnley involved a general verdict accompanied by
interrogatories, which is treated the same as a special verdict. See Fed.
R. Civ. P. 58(b)(2)(A).
14 ORR V. PLUMB
Plumb’s theory fails to account for Rule 4(a)(4) and Rule
58(a)(1) and (c)(1). Rule 4(a)(4)(A) pertains to six post-
decision motions, including one for JMOL under Rule 50(b).
Fed. R. App. P. 4(a)(4)(A)(i). It provides that if a party
timely files one of these motions, then “the time to file an
appeal runs . . . from the entry of the order disposing of the
last such remaining motion.” Id. R. 4(a)(4)(A). Rule 58 is
in accord. It provides that “an order disposing of a motion”
for JMOL under Rule 50(b) does not require a separate
document setting out the judgment, Fed. R. Civ. P. 58(a)(1),
and judgment on the JMOL order therefore occurs “when the
judgment [i.e., the order] is entered in the civil docket.” Id.
R. 58(c)(1). There is no basis for imputing entry of an
unnecessary separate judgment 150 days after entry of the
JMOL order. Moreover, Plumb’s theory conflicts with our
previous holding that when the district court rules on a Rule
50(b) motion before entering final judgment in the case, the
time to appeal runs from the entry of final judgment. See
ABF Capital Corp. v. Osley, 414 F.3d 1061, 1064–65 (9th
Cir. 2005).
Plumb also suggests that the clerk’s judgment entered on
February 1, 2016, started his time to appeal. There are
several problems with this theory. To begin with, “[t]he
rules plainly provide that judgment is entered when it is set
forth on a separate document or when 150 days have run,
whichever is earlier.” Stephanie-Cardona LLC v. Smith’s
Food & Drug Ctrs., Inc., 476 F.3d 701, 704 (9th Cir. 2007).
“Because more than 150 days passed before the [clerk], for
whatever reason, issued a judgment on a separate document,
the 30 days in which to file a notice of appeal had been
running from November [16, 2015], the end of the 150-day
period.” Id. “[I]f, after filing a final disposition, a court files
a more formal judgment, the latter does not constitute a
second final disposition or extend the appeal period.” S.L.
ORR V. PLUMB 15
ex rel. Loof v. Upland Unified Sch. Dist., 747 F.3d 1155,
1161 (9th Cir. 2014) (quoting In re Slimick, 928 F.2d 304,
307 (9th Cir. 1990)).
Moreover, by filing the notice of appeal before the clerk
entered judgment in a separate document, Plumb waived any
reliance on it. “A failure to set forth a judgment or order on
a separate document when required by Federal Rule of Civil
Procedure 58(a) does not affect the validity of an appeal
from that judgment or order.” Fed. R. App. P. 4(a)(7)(B).
Consequently, “when the parties treat a fully dispositive
summary judgment order as if it were a final judgment, the
requirement in Federal Rule of Civil Procedure 58 that the
judgment ‘be set forth on a separate document’ can be
waived.” Whitaker, 486 F.3d at 579–80 (quoting Casey v.
Albertson’s Inc., 362 F.3d 1254, 1256 (9th Cir. 2004)); see
Bankers Tr. Co., 435 U.S. at 384–88.
Even if, for the sake of argument, we accept Plumb’s
position that compliance with Rule 58(b)(2) was necessary,
the clerk’s verdict did not meet that standard because the
district court was required to “approve the form of the
judgment.” Fed. R. Civ. P. 58(b)(2). That means, at a
minimum, that the district judge must sign the judgment. See
Steccone v. Morse-Starrett Prods. Co., 191 F.2d 197, 200
(9th Cir. 1951); see also Levin v. Wear-Ever Aluminum, Inc.,
427 F.2d 847, 849 (3d Cir. 1970) (concluding that separate
judgment on jury special verdict must be “prepared and
signed” to comply with Rule 58); cf. United States v. F. &
M. Schaefer Brewing Co., 356 U.S. 227, 235–36 (1958)
(construing judge’s “signing and filing the formal
‘judgment’” as evidence of judge’s intent that it “constitute
his final judgment in the case”).
16 ORR V. PLUMB
Plumb is not, as he claims, being “penalized . . . because
the district court created uncertainty.” He could have
“request[ed] that judgment be set out in a separate document
as required by Rule 58(a).” Fed. R. Civ. P. 58(d). There’s
no penalty for filing a premature notice of appeal. See Fed.
R. App. P. 4(a)(2). “[I]f the judge does nothing further in
the case for 150 days, then it should occur to even the most
inattentive of appellate counsel that it is time either to seek
clarification from the judge or to file an appeal.” 16A
Charles Alan Wright et al., Federal Practice & Procedure
§ 3950.2 (4th ed. 2017).
D.
Pointing to the fact that “the appeals are now
consolidated,” Plumb asserts that “as a practical matter” he
is “not in violation of the single appeal rule.” Under the final
judgment rule, “a party must ordinarily raise all claims of
error in a single appeal following final judgment on the
merits.” Flanagan v. United States, 465 U.S. 259, 263
(1984) (quoting Firestone Tire & Rubber Co. v. Risjord, 449
U.S. 368, 373 (1981)). That rule is not violated when a party
appeals the final judgment in the case, which encompasses
all of the interlocutory orders that preceded it, and separately
appeals an appealable post-decision order. See Fed. R. App.
P. 4(a)(4)(B)(ii) (“A party intending to challenge an order
disposing of any motion listed in Rule 4(a)(4)(A) . . . must
file a notice of appeal, or an amended notice of
appeal . . . .”).
But our consolidation of the three appeals in this case for
administrative convenience makes no difference to the
timeliness inquiry. Timeliness is evaluated for each appeal
when the notice of appeal is filed. We may consolidate
appeals for a decision on the merits only if each of the
ORR V. PLUMB 17
separate notices of appeal is timely and the appeals are
subject to our jurisdiction. See Fed. R. App. P. 3(b)(2);
United States v. Washington, 573 F.2d 1121, 1123 (9th Cir.
1978). Our consolidation order denied Orr’s motion to
dismiss this appeal “without prejudice to renewing the
arguments in the answering brief.” We thus deferred
consideration of the jurisdictional question.
To the extent we have discretion to treat the arguments
in this untimely appeal of the jury verdict as part of Plumb’s
timely appeal of the JMOL order, we decline to do so. A
notice of appeal must “designate the judgment, order, or part
thereof being appealed.” Fed. R. App. P. 3(c). Plumb’s
timely notice of appeal indicated that he was appealing only
the denial of his JMOL motion.
Although “a mistake in designating the judgment
appealed from should not result in loss of the appeal as long
as the intent to appeal from a specific judgment can be fairly
inferred from the notice and the appellee is not misled by the
mistake,” El-Shaddai v. Zamora, 833 F.3d 1036, 1041 n.1
(9th Cir. 2016) (quoting Munoz v. Small Bus. Admin., 644
F.2d 1361, 1364 (9th Cir. 1981)), that was not the case here.
In Plumb’s timely appeal, he affirmatively represented in his
reply brief that he was “not appealing the propriety of the
jury instructions at this time.” Plumb first challenged the
jury instructions in this appeal. His other contention in this
appeal, that he was denied a fair trial due to allegedly biased
statements by the district court, was not raised below. Orr
had no notice of the issue while briefing Plumb’s timely
appeal.
The usual rule is that arguments raised for the first time
on appeal or omitted from the opening brief are deemed
forfeited. E.g., Butler v. Curry, 528 F.3d 624, 642 (9th Cir.
18 ORR V. PLUMB
2008). There is no reason to depart from that rule here,
which would in effect waive a jurisdictional bar.
III.
Judgment on the special verdict was constructively
entered 150 days after the special verdict was entered on the
docket. Because Plumb appealed the judgment on the
special verdict more than 30 days after its entry, his appeal
is untimely. Therefore, we lack jurisdiction to reach its
merits.
DISMISSED.
RAWLINSON, Circuit Judge, dissenting:
I respectfully dissent from my colleagues’ conclusion
that Plumb’s appeal of the jury’s special verdict was
untimely. Unfortunately, Plumb’s “untimely” appeal was
the result of a procedural morass not of Plumb’s making, and
should not result in the loss of his right to appeal.
A chronology of the pertinent proceedings provides
context for my analysis. On July 8, 2015, the district court
denied Plumb’s motion filed pursuant to Rule 50(b) of the
Federal Rules of Civil Procedure. On July 27, 2015, Plumb
filed a notice of appeal from the district court’s denial of his
Rule 50(b) motion. On December 22, 2015, the district court
entered its order awarding Orr attorneys’ fees and costs. On
January 4, 2016, Plum filed a notice of appeal of the jury’s
special verdict. Almost thirty days subsequent to the filing
of Plumb’s notice of appeal, the district court belatedly
entered final judgment “in accordance with the [special] jury
verdict rendered 6/17/2015.”
ORR V. PLUMB 19
Pursuant to Rule 58 of the Federal Rules of Civil
Procedure:
Every judgment and amended judgment must
be set out in a separate document, but a
separate document is not required for an
order disposing of a motion . . . for judgment
under Rule 50(b) . . .
Fed. R. Civ. P. 58(a)(1). Consequently, the court was not
required to separately enter judgment for its order denying
Plumb’s motion filed pursuant to Rule 50(b). However, the
same is not true as to the special verdict. Addressing that
“form of judgment,” Rule 58 provides in pertinent part:
[T]he court must promptly approve the form
of the judgment, which the clerk must
promptly enter, when . . . (A) the jury returns
a special verdict with answers to written
questions . . .
Fed. R. Civ. P. 58(b)(2) (emphases added).
This provision is in stark contrast to Rule 58(b)(1), which
provides in relevant part:
[T]he clerk must, without awaiting the
court’s direction, promptly prepare, sign, and
enter the judgment when . . . (A) the jury
returns a general verdict . . .
Fed. R. Civ. P. 58(b)(1) (emphasis added).
Thus, the federal rules direct the clerk to promptly enter
judgment without any action on the part of the court if a
general verdict is rendered. See Fed. R. Civ. P. 58(b)(1). In
20 ORR V. PLUMB
contrast, if a special verdict is rendered, the clerk may enter
“the form of judgment” only after approval by the court.
Fed. R. Civ. P. 58(b)(2). The heading for Rule 58(b)(2) says
it all: “Court’s Approval Required.” Fed. R. Civ. P.
58(b)(2).
It is undisputed that a special verdict was rendered in this
case on June 17, 2015. It is also undisputed that the district
court failed to promptly approve the special verdict form,
belatedly approving the special verdict form on February 1,
2016, after Padgett filed two notices of appeal, including one
challenging the special verdict.1
Although Padgett’s notice of appeal was filed prior to the
district court’s approval of the special verdict, the majority
nevertheless concludes that Padgett’s appeal was untimely.
See Majority Opinion, p. 15. To reach this result, the
majority maintains that judgment on the jury special verdict
was “constructively entered.” Majority Opinion, p. 11
(emphasis added). However, the rule governing special
verdicts makes no allowance for the “constructive” entry of
judgment. Rather, the rule imposes an affirmative
requirement on the judge to approve the special verdict
before it is filed. See Fed. R. Civ. P. 58(b)(2).
Interestingly, the majority seeks to subtly shift the blame
to Plumb by suggesting that he could have “requested that
judgment be set out in a separate document.” Majority
Opinion, p. 16 (quoting Fed. R. Civ. P. 58(d)). There are
two problems with the majority’s suggestion: 1) compliance
1
This interpretation of the facts gives the district court the benefit of
the doubt. If, as the majority notes, the district court judge was required
to sign the judgment, Rule 58(b)(2) is yet unsatisfied. See Majority
Opinion, p. 15.
ORR V. PLUMB 21
with Rule 58(d) does not eliminate the court’s failure to
comply with Rule 58(b)(2), and 2) it should not be the
responsibility of a party to remind the court to adhere to the
rules.
The majority’s reliance on the Fifth Circuit’s opinion in
Burnley v. City of San Antonio, 470 F.3d 189 (5th Cir. 2006)
is misplaced in my view. In its analysis, the Fifth Circuit
completely ignored the language of Federal Rule of Civil
Procedure 58(b)(2), which explicitly references a special
verdict and relied instead on the language of Rule 58(b)(1),
which addresses only general verdicts. See id. at 195. This
faulty analysis is singularly unpersuasive and encourages
noncompliance with the procedural rules. In the twelve
years since this case was decided, no other circuit has
adopted this wayward analysis of Rule 58, which completely
reads Rule 58(b)(2) out of the procedural rules.
Because the district court failed to approve the special
verdict form before Plumb filed his notice of appeal, the
appeal was timely.2 We should decide Plumb’s appeal of the
special verdict on the merits.
2
As the majority noted, “[t]here’s no penalty for filing a
premature notice of appeal.” Majority Opinion, p. 16.
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874 F.2d 883
29 ERC 1833, 57 USLW 2723, 19 Envtl.L. Rep. 21,046
STATE OF MAINE, et al., Plaintiffs, Appellants,v.Lee M. THOMAS, etc., et al., Defendants, Appellees.
No. 88-1983.
United States Court of Appeals,First Circuit.
Heard Feb. 6, 1989.Decided May 18, 1989.As Amended June 1, 1989.
Gregory W. Sample, Asst. Atty. Gen., with whom James E. Tierney, Atty. Gen., State of Me., Augusta, Me., Jeffrey L. Amestoy, Atty. Gen., J. Wallace Malley, Jr., Asst. Atty. Gen., State of Vt., Montpelier, Vt., Robert Abrams, Atty. Gen., David R. Wooley, Asst. Atty. Gen., State of N.Y., Albany, N.Y., James M. Shannon, Atty. Gen., Janet G. McCabe, Asst. Atty. Gen., Boston, Mass., Com. of Mass., Cary Edwards, Atty. Gen., Paul Schneider, Deputy Atty. Gen., State of N.J., Trenton, N.J., Joseph I. Lieberman, Atty. Gen., New Haven, Conn., Brian Comerford, Asst. Atty. Gen., State of Conn., James E. O'Neil, Atty. Gen., Gary Powers, Asst. Atty. Gen., State of R.I., Providence, R.I., Howard I. Fox, Washington, D.C., Sierra Club Legal Defense Fund, James Tripp, Environmental Defense Fund, and Armond Cohen, Conservation Law Foundation of New England, were on brief for appellants.
John C. Harrison, Dept. of Justice, Washington, D.C., with whom Roger J. Marzulla, Asst. Atty. Gen., Richard S. Cohen, U.S. Atty., David C. Shilton, Dept. of Justice, Washington, D.C., and Gregory B. Foote, Office of General Counsel, E.P.A., were on brief for defendants, appellees.
Henry V. Nickel with whom Michael L. Teague, Norman W. Fichthorn, Hunton & Williams, Washington, D.C., John B. Weldon, Jr., Elizabeth Ann Rieke, and Jennings, Strouss & Salmon, Phoenix, Ariz., were on brief, for intervenors, appellees Alabama Power Co., et al.
Before SELYA, Circuit Judge, ALDRICH and COFFIN, Senior Circuit Judges.
SELYA, Circuit Judge.
1
The Clean Air Act, 42 U.S.C. Sec. 7401 et seq. (Act), embodies one of this nation's greatest aspirations, attempting to reconcile the polity's desire for pristine air with its equally fervent desire for the benefits of life in a modern industrial economy. Congress recognized that the reconciliation of these often-conflicting desires required resources, time, and institutional commitment. Having codified the goal ("to protect and enhance the quality of the Nation's air resources so as to promote the public health and welfare and the productive capacity of its population," 42 U.S.C. Sec. 7401(b)(1)), Congress entrusted the mandate of the Act to the Environmental Protection Agency (EPA or the Agency).1
2
At the same time, Congress empowered the citizenry to superintend the Agency's progress toward meeting the Act's objectives by means of (i) citizen suits to compel observance of nondiscretionary duties, 42 U.S.C. Sec. 7604(a)(2), and (ii) petitions to review final Agency action, 42 U.S.C. Sec. 7607. The specifications which Congress set for these remedial vehicles necessitate that they be driven in different lanes; whereas citizen suits are prosecutable in federal district courts, 42 U.S.C. Sec. 7604(a), jurisdiction over review petitions lies exclusively with the courts of appeal. As to "nationally applicable" regulations, review petitions can only be brought in the United States Court of Appeals for the District of Columbia; as to regulations of local concern, such petitions are prosecutable in other "appropriate circuit [courts]"). 42 U.S.C. Sec. 7607(b).2
3
Unsurprisingly, this jurisdictional dichotomy has created a confused class of circumforaneous litigants, wandering perplexedly from forum to forum in search of remediation. In this case, seven northeastern states and several environmental groups (collectively, appellants) filed suit in the United States District Court for the District of Maine to compel EPA to promulgate regulations designed to deal with the atmospheric blight known as "regional haze." Sixty-four electric utilities and a trio of trade associations intervened as defendants. The district court ruled that it did not have jurisdiction to hear the complaint. Maine v. Thomas, 690 F.Supp. 1106 (D.Me.1988). We believe that the right result was reached and, although our reasoning is somewhat different, we affirm.
4
* "Regional haze" (sometimes called "uniform haze") is "widespread, regionally homogeneous haze from a multitude of sources which impairs visibility in every direction over a large area." 45 Fed.Reg. 80,084, 80,085 (1980). It may cover broad expanses, move over long distances, linger unduly, and reduce visibility in places which have few (if any) manmade emission sources. EPA's mandate to control the vexing problem of regional haze emanates directly from the Clean Air Act, which "declares as a national goal the prevention of any future, and the remedying of any existing, impairment of visibility in mandatory class I Federal areas which impairment results from manmade air pollution." 42 U.S.C. Sec. 7491(a)(1).3
5
Congress did not leave "progress toward meeting the national goal" entirely to the Agency's discretion. 42 U.S.C. Sec. 7491(a)(4). Quite the contrary: it charted an administrative course to guide EPA in its endeavors. The first way station relevant to this case is the August 1979 deadline requiring the Agency to "promulgate regulations to assure" that "reasonable progress" would indeed be made "toward meeting the national goal...." Id. Congress' cartographical projections from that point forward were considerably less precise. But, the "reasonable progress" stipulation also referred to "compliance with the requirements of [section 7491]," id., including the requirement which constitutes the second relevant way station. That pit stop was inexactly placed, requiring that state implementation plans include a "strategy for making reasonable progress toward meeting the national goal" within "ten to fifteen years." 42 U.S.C. Sec. 7491(b)(2)(B). Construing the ten to fifteen year requirement as dating from the 1979 deadline, and not the 1977 enactment of the Act itself, the next statutory deadline would have to be met between 1989 and 1994. EPA played the laggard. It was not until after it had been sued for recalcitrance and entered a settlement and consent decree4 that it issued regulations. See 45 Fed.Reg. at 80,084-95. The 1980 regulations classified air pollution impairing visibility as either plume blight ("[s]moke, dust, colored gas plumes, or layered haze ... which obscure the sky or horizon and are relatable to the single source or a small group of sources") or regional haze, id. at 80,085, and treated the two categories separately.
6
The rules and orders which EPA promulgated to control plume blight proved uncontroversial, and are not in issue in this case. As to regional haze, the rulemaking amounted to the Agency's promise to deal substantively with the matter in future rules and orders. At the time, EPA argued that technology and knowledge were not sufficiently sophisticated to allow it to monitor, model, and fully understand regional haze. 45 Fed.Reg. at 80,085-86. Accordingly, the Agency announced that "[f]uture phases [of its regulations] will extend the visibility program by addressing more complex problems such as regional haze...." Id. at 80,086. Appellants--and other concerned parties--grudgingly accepted the olive branch, wispy though it was. They did not ask for review of the Agency action under section 7607, but countenanced EPA's open-ended assurances rather than rush to the courthouse.
7
Six years elapsed without further rulemaking. Calendar pages had yellowed by the thousands, but EPA still had not produced the promised regulations. Notwithstanding the counsel of the Greek philosophers that "[h]ealing is a matter of time," Hippocrates, Precepts, and that "[t]ime eases all things," Sophocles, Oedipus Rex, in this instance the inordinate delay, understandably, rubbed salt in an open wound. Appellants' patience worn wafer-thin, they sued to compel fulfillment of the lapsed promise. Asserting that the Agency's 1980 rulemaking was not a "final action taken" under 42 U.S.C. Sec. 7607(b),5 appellants eschewed either an administrative filing or an attempted review petition. Instead, citing EPA's alleged disregard of what appellants characterized as a nondiscretionary duty to combat visibility impairment (embodied in 42 U.S.C. Sec. 7491), they premised jurisdiction on 42 U.S.C. Sec. 7604 and went directly to the district court. The reception was frosty; the court ruled that promulgation of the earlier (1980) regulations--called by the parties in interest the "Phase 1 regulations"--constituted final action, reviewable only in a court of appeals under 42 U.S.C. Sec. 7607(b). Maine v. Thomas, 690 F.Supp. at 1110-12. Following dismissal of their case on jurisdictional grounds, plaintiffs appealed.
II
8
The threshold question, of course, is whether EPA's 1980 promise comprised a "final action taken" for purposes of 42 U.S.C. Sec. 7607(b). No one questions that the aspects of the Phase 1 regulations which dealt with plume blight were final in the classical sense: they brought definition to, and controlled, one facet of visibility impairment. But, the remaining aspect of the regulations--the promise to act in futuro--may also be a final action taken; and if so, would be subject to review only in the Court of Appeals for the District of Columbia Circuit--and then, only within 60 days of the date of the regulatory enactment. See id.
9
At this juncture, we resist the temptation to become too "abstract and conceptual," Natural Resources Defense Council, Inc. v. Train, 510 F.2d 692, 714 (D.C.Cir.1974), or to elevate "form over substance." Environmental Defense Fund, Inc. v. Costle, 448 F.Supp. 89, 93 (D.D.C.1978). We attempt instead to glean the essence of, and the rationale for, EPA's Phase 1 regulations. The result, we think, is clear: Phase 1 represented EPA's assessment of what might reasonably be done in 1980. Its assessment of its capacity to understand the problem of regional haze went unreviewed, as did its decision to bifurcate the visibility problem (plume blight being treated one way, regional haze another), because neither was challenged within the 60-day period provided by section 7607. As the district court correctly noted, not only were the plume blight regulations properly developed, but the decision to postpone regional haze regulations "was based on an extensive and published administrative record which reflects citizen and agency concerns, the intent to defer, and a rationale based on [the lack of adequate] technological and scientific information." Maine v. Thomas, 690 F.Supp. at 1111-12.6
10
We find no error in the district court's reading of the record in this regard. Vis-a-vis regional haze, Phase 1 was a final action in the relevant sense, that is, when the regulations were promulgated in December 1980, all proper procedures had been followed for rulemaking and the resultant announcement satisfied (albeit 18 months after the statutory deadline) the requirement for making "reasonable progress toward meeting the national goal...." 42 U.S.C. Sec. 7491(a)(4). While "reasonable progress" is not the only, or even the definitive, test for finality, it is an excellent proxy. Furthermore, we deem it open to take the inaction of appellants, and others, in the 60 days after Phase 1 was promulgated as an informal confirmation that EPA's action was final. Bluntly put, if any citizen felt that EPA's promise (1) masked its capacity to take action, (2) would serve as grounds for future delay, or (3) simply left the regulatory pace too unsure, that was the time to challenge Phase 1, in part or in whole. We are more than a little skeptical that veterans of the legal skirmishes which have regularly marked the development of the American administrative apparatus would have placed absolute faith in the goodwill of any agency regularly named by them as a defendant. Promissory or not, the 1980 disposition of the regional haze problem met the statutory test for regulatory action and could have been challenged within 60 days of promulgation had any citizen felt that Phase 1 failed to observe the statutory mandate.
11
Especially significant, and in our view controlling, is that Phase 1 made a "change in the status quo itself ...," thus rendering the regulation ripe for review. Roosevelt Campobello Int'l Park Comm'n v. United States Envtl. Protection Agency, 684 F.2d 1034, 1040 (1st Cir.1982). A challenge to Phase 1 would neither have forced a court to entangle itself "in abstract disagreement over administrative policies ...," nor have subjected EPA to "judicial interference [before] an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties." Abbott Laboratories v. Gardner, 387 U.S. 136, 148-49, 87 S.Ct. 1507, 1515-16, 18 L.Ed.2d 681 (1967). While the plume blight regulations are paradigmatic examples of an order ripe for review, the temporizing "promise" anent uniform haze, given the congressional mandate and the state of the art, was a bit greener at the edges--but also ripe.
12
We also take cognizance that at the time Phase 1 was promulgated, Congress and the courts had acted in ways suggestive, explicitly and implicitly, that a decision to postpone action constituted a final action for purposes of 42 U.S.C. Sec. 7607. For instance, Congress amended the Clean Air Act in 1977 to add the words "final action" to 42 U.S.C. Sec. 7607. It did so to clarify "whether there could be concurrent jurisdiction in the court of appeals and the district court when the Administrator had acted, though allegedly not far enough, in a way which constituted a refusal to perform a mandatory duty." Environmental Defense Fund, 448 F.Supp. at 92. In that case, EPA postponed implementing certain regulations developed under amendments to the Act, regulations which had emerged after appropriate administrative proceedings. Id. at 93. The court emphasized the breadth of the "final action" taxonomy. Id. at 92. Having determined that EPA gave the public adequate notice that the deferral was a final action because "in the preamble the Administrator clearly states and explains his decision to defer ...," id. at 93, the court held that "the Administrator had taken a final action as to the issue of whether Sec. 165 [of the Act] was to be immediately effective." Id.
13
This case involves far fewer ambiguities than Environmental Defense Fund. There, EPA set out the deferral and explanation in the regulatory preamble, a dubious method at best. Id. at 93 & n. 11. Here, EPA announced Phase 1 as a regulatory scheme, fully explained and defended in the text setting out the regulations. Furthermore, the administrative proceedings had directly addressed the possibility that regional haze rules and orders might be delayed. To mince no words, the decision to defer constituted a fully developed part of the final action taken on the statutory mandate. Indeed, it is no exaggeration to say that EPA announced this final action--the phased approach--as its response to Congress' command. Because a final action need not consist solely of standard rules or orders, we agree "that EPA intended to limit the [1980] regulations to plume blight." Vermont v. Thomas, 850 F.2d 99, 103 (2d Cir.1988). Nonetheless, the final action taken has legal effect and establishes procedural requirements, such as substantive conditions and consequent deadlines, for establishing future phases.
14
There is a second furculum to the threshold question, but it points in the same direction. Appellants argue not only that the Court of Appeals for the District of Columbia Circuit lacked jurisdiction (because EPA's "promise" was not a "final action"), but that the district court possessed jurisdiction (because the statute imposed a nondiscretionary duty on the Agency immediately to regulate visibility-impairing pollution, which duty was ignored). In this case, these arguments are necessary corollaries of each other--so it is unsurprising that the imagined duty did not exist in the stated terms. The statute merely imposed a requirement to regulate for "reasonable progress" and in "compliance with the requirements of this section." 42 U.S.C. Sec. 7491(a)(4). The "requirements" included "a long-term (ten to fifteen years) strategy for making reasonable progress toward meeting the national goal...." 42 U.S.C. Sec. 7491(b)(2)(B). The organic statute thus required regulatory provisions embodying a combination of actual rules and orders and a plan for implementing future rules and orders. The 1980 regulations, covering plume blight completely and announcing a plan of study and a promise of future rules and orders to deal with regional haze, albeit bereft of details, complied fully with EPA's nondiscretionary duty to take regulatory action.
15
To be sure, appellants argue that a nondiscretionary duty must contain an element whereby a court, or other reviewing authority, may test whether the duty has been fulfilled. As we have noted, that element is encompassed only in part in the substantive action required of EPA. Having discerned who was required to take what action, we believe that the appropriate check is to ask when the duty must be fulfilled. Our belief is apparently shared by the District of Columbia Circuit: "Although a date-certain deadline ... may or may not be nondiscretionary, it is highly improbable that a deadline will be nondiscretionary, i.e. clear-cut, if it exists only by reason of an inference drawn from the overall statutory framework." Sierra Club v. Thomas, 828 F.2d 783, 791 (D.C.Cir.1987). If we return for a moment to the organic statute, we note that between the initial 1979 deadline, 42 U.S.C. Sec. 7491(a)(4), and the next (1989-94) deadline, 42 U.S.C. Sec. 7491(b)(2)(B), no other deadlines exist (and the 1989-94 deadline is only one for a "strategy," not for meeting the national goal itself). In short, by 1979 EPA was to have announced a plan of progress that would have its impact upon the states' implementation plans by the end of the 1989-94 time frame. While the second deadline looms near, the first has long since passed. No interim nondiscretionary duties exist. Accordingly, the district court lacked subject matter jurisdiction.7
III
16
We consider two other lines of attack which appellants doggedly pursue.
17
First, they argue that the Phase 1 regulations, insofar as they affect regional haze, were essentially unreviewable, ergo, those regulations could not be tantamount to final action. Appellants are wrong. If challenged, the premises for postponed regulation could well have been reviewed by the District of Columbia Circuit.
18
EPA asserted, after all, scientific and technological incapacity, and did so not only after fulfilling the requirements of its regulatory apparatus but also in response to a settlement agreement. See supra at 885 & note 4. Surely a court could have assessed whether the record adequately supported EPA's decisions and decided whether the promise of future regulation adequately harmonized with the Agency's nondiscretionary duty to progress toward the national goal. Such a challenge would have presented claims against a backdrop "sufficiently concrete to allow for focus and intelligent analysis ...," and would not have forced the court to decide "issues unnecessarily, wasting time and effort." Roosevelt Campobello, 684 F.2d at 1040.
19
The flip side of the coin betokens the same result. EPA could hardly have regarded review in 1980 as "premature," because it made its promise precisely in order "to refine, revise [and] clarify the particular ... matter at issue ... thus creating a consensus among the parties [and] avoiding the need for court proceedings." Id. We would fashion a perverse paradox were we to posit that a promise which arose out of wrangling in court, a promise made in order to avoid more such wrangling, a promise which actually represented the consensus of litigant-adversaries, was not a final administrative action and therefore not subject to review. For, if it were not subject to review, then it would in turn simply spawn more section 7604 actions, each resolvable, ultimately, by an unreviewable promise. Even Kafka would have found it difficult to devise a more twisted antilogy.
20
The other proposition advanced by appellants is that Congress could not have intended persons confronted by a governmental promise of some future action to rush headlong to a federal court, or else forever hold their peace. The sovereign's word, they contend, should be its bond; and if its word proves to be mendacious, then reliant citizens should not be left holding an empty bag. The asseveration has a certain appeal--but the claim of massive inequity cannot withstand scrutiny. Appellants, even at this late date, are not remediless. While the district court lacks jurisdiction, and a frontal challenge in the court of appeals is no longer timely, compliance with the promise can be enforced.
21
EPA remains under a double-barreled duty, statutory and self-imposed under the terms of the promised (phased) rulemaking, 45 Fed.Reg. at 80,084-86, to deal with regional haze. By failing to contest the Agency's assurance when given, appellants to some extent left the timetable in EPA's own hands. But, appellants retain an entitlement to petition EPA for action "based solely on grounds arising after ..." the time for challenging the 1980 promise had expired. 42 U.S.C. Sec. 7607(b)(1). If EPA refuses to act on the new grounds, appellants may yet obtain judicial review before the District of Columbia Circuit if they choose to follow the entrenched precedent which precisely details the steps to be taken in order to compel the Agency to revise, and thereby fulfill, Phase 1. Let us explain.
22
In announcing Phase 1, EPA restricted its own discretion. The regulation describing "future phases" was phrased in mandatory, not discretionary, terms:
23
We will propose and promulgate future phases when improvement in monitoring techniques provides more data on source-specific levels of visibility impairment, regional scale models become refined, and our scientific knowledge about relationships between emitted air pollutants and visibility impairment improves.
24
45 Fed.Reg. at 80,086 (emphasis supplied). We agree with the Second Circuit that the mandatory language neither allows nor compels the states to develop implementation plans "for the evolution of long-term strategies combating regional haze." Vermont v. Thomas, 850 F.2d at 103. The effect of the language on EPA, however, is quite another matter.
25
The Clean Air Act specifically provides that its rulemaking provisions shall apply to "revision of regulations ... relating to prevention of significant deterioration of air quality and protection of visibility[.]" 42 U.S.C. Sec. 7607(d)(1)(I).8 Without fully recapitulating the exhaustive study of legislative history undertaken by the District of Columbia Circuit, we simply note our agreement in the conclusion that Congress intended citizens to have an ability to confront EPA with new information arguably sufficient to merit revision of extant regulations. See Group Against Smog & Pollution, Inc. v. United States Envtl. Protection Agency, 665 F.2d 1284, 1289-90 (D.C.Cir.1981). We approve the procedures suggested by the Agency and "explicitly endorsed" by our sister circuit:
26
(1) The person seeking revision of a standard of performance, or any other standard reviewable under Sec. 307, should petition EPA to revise the standard in question. The petition should be submitted together with supporting materials, or references to supporting materials.
27
(2) EPA should respond to the petition and if it denies the petition, set forth its reasons.
28
(3) If the petition is denied, the petitioner may seek review of the denial in [the D.C. Circuit] pursuant to Sec. 307.
29
Id. at 1290 (footnote omitted); see also Oljato Chapter of Navajo Tribe v. Train, 515 F.2d 654, 666 (D.C.Cir.1975); Union Electric Co. v. Environmental Protection Agency, 515 F.2d 206, 220 (8th Cir.1975), aff'd, 427 U.S. 246, 96 S.Ct. 2518, 49 L.Ed.2d 474 (1976).
30
Here, EPA bound itself to "propose and promulgate future phases" anent uniform haze when improved monitoring techniques yield data, when models become refined, and when scientific knowledge improves. 45 Fed.Reg. at 80,086. If appellants have collected evidence sufficient to demonstrate that those conditions are now satisfied, they need only petition EPA to trigger new rulemaking. So long as the evidence suffices, the Agency--given the phrasing of the Phase 1 regulations--could reject such a petition only if it rescinded those aspects of Phase 1 binding it to rulemaking based on a limited set of factors. (Any such rescission, of course, would require implementation of a full and appropriate rulemaking procedure.)
31
Though the question of the binding force of regulations and procedures9 on the promulgating agency has never arisen under the Clean Air Act to our knowledge, we find that question to be easily answerable by analogous precedent. EPA's very claim that Phase 1 was final when issued, and thus possessed a stipulated jurisdictional effect, is equivalent to a claim sotto vocce that Phase 1 from the outset had the force of law, affecting the rights of citizens to enforce statutory duties. And it is settled that:
32
Where the rights of individuals are affected, it is incumbent upon agencies to follow their own procedures. This is so even where internal procedures are possibly more rigorous than otherwise would be required.
33
Morton v. Ruiz, 415 U.S. 199, 235, 94 S.Ct. 1055, 1074, 39 L.Ed.2d 270 (1974) (citations omitted) (discussing self-imposed procedures of Board of Immigration Appeals). Other examples are legion. See, e.g., United States v. Nixon, 418 U.S. 683, 695-96, 94 S.Ct. 3090, 3101-02, 41 L.Ed.2d 1039 (1974) (agency may "den[y] [it]self the authority to exercise the discretion delegated ... and ... could reassert it by amending the regulations"); Kelly v. Railroad Retirement Bd., 625 F.2d 486, 492, 491-92 (3d Cir.1980) ("Failure to comply with its regulations renders the agency's act null."); North Georgia Bldg. & Constr. Trades Council v. Goldschmidt, 621 F.2d 697, 710 (5th Cir.1980); Mead Data Cent., Inc. v. United States Dep't of Air Force, 566 F.2d 242, 258 (D.C.Cir.1977); Doraiswamy v. Secretary of Labor, 555 F.2d 832, 843 (D.C.Cir.1976); Cruz-Casado v. United States, 553 F.2d 672, 675, 213 Ct.Cl. 498 (1977); Nader v. Nuclear Regulatory Comm'n, 513 F.2d 1045, 1051 (D.C.Cir.1975); Schatten v. United States, 419 F.2d 187, 191 (6th Cir.1969); Pacific Molasses Co. v. Federal Trade Comm'n, 356 F.2d 386, 389-90 (5th Cir.1966); Elmo Div. of Drive-X Co. v. Dixon, 348 F.2d 342, 346 n. 5 (D.C.Cir.1965) (per curiam).
34
EPA has, in a final action, met the mandatory burden of 42 U.S.C. Sec. 7491(g)(1) that "[i]n determining reasonable progress there shall be taken into consideration the costs of compliance, the time necessary for compliance, and the energy and nonair quality environmental impacts of compliance, and the remaining useful life of any existing source subject to such requirements[.]" In the process, the Agency committed itself to promulgating new regulatory phases based on a certain set of conditions. The content of those phases may well be affected by the requirements of section 7491(g)(1), but EPA, in light of its earlier promise, cannot now reject a rulemaking petition on such grounds. For that reason, appellants' portrayal of the inequities of their plight strikes us as overblown.
IV
35
We summarize our journey through the labyrinth. EPA's actions in 1980 represented a rulemaking consensus that it could deal substantively with plume blight but not with regional haze. The Phase 1 regulations, though entirely promissory in respect to regional haze, nevertheless amounted to "final action taken" within the ambit of 42 U.S.C. Sec. 7607(b)(1). It necessarily follows that no citizen suit lies under 42 U.S.C. Sec. 7604, and that appellants incorrectly attempted to invoke the jurisdiction of the district court in their challenge to the lengthy period of dormancy which followed EPA's announcement of the Phase 1 regulations. Although we believe that there is a route whereby citizens may require EPA to act on self-imposed duties when self-imposed conditions have been met, see supra Part III, that route does not pass through the district court.
36
We need go no further. Because plaintiffs' present peregrinations have wandered far from the proper path, the district court's dismissal of the action for want of subject matter jurisdiction must be
37
Affirmed.
APPENDIX A
38
NOTE: OPINION CONTAINS TABLE OR OTHER DATA THAT IS NOT VIEWABLE
TABLE
1
Although the Act refers to the Administrator of the EPA as nominally responsible for Agency action, 42 U.S.C. Sec. 7602(a), we do not stand on ceremony. For the sake of simplicity, we refer to rulemaking action as that of EPA itself
2
Because the jurisdictional interplay between these statutes is intricate, and because the core dispute in this case involves their applicability, or not, to the idiocratic situation at hand, we attach the full text of 42 U.S.C. Secs. 7604, 7607 as an appendix
3
A "Class I Federal area" is defined as an international park, a national wilderness or memorial park area which exceeds 5,000 acres, or a national park spanning more than 6,000 acres. 42 U.S.C. Sec. 7472(a)
4
The consent decree was entered in the United States District Court for the District of Columbia. See Friends of the Earth v. Costle, No. 79-3211 (D.D.C.1979)
5
Appellants concede that, if section 7607 applied and their remedy was by petition for review in a designated court of appeals, then section 7604 would have no pertinence, and there would be no hook upon which district court jurisdiction might be hung. Finality-based jurisdiction under section 7607 and district court jurisdiction under section 7604 are mutually exclusive. Environmental Defense Fund, Inc. v. Costle, 448 F.Supp. 89, 92-93 (D.D.C.1978)
6
While the district court apparently thought the existence of an adequate administrative record to be virtually decisive, we are not inclined to attach the same degree of significance to the determination. Had the district court found the record inadequate, it could have "compile[d] a record limited to reconstructing, as distinct from supporting or refuting, the agency's reasoning process." Bethlehem Steel Corp. v. United States Envtl. Protection Agency, 782 F.2d 645, 656 (7th Cir.1986)
7
This is not a case of "[r]ecalcitrance in the face of duty." Sierra Club, 828 F.2d at 793-94. EPA fulfilled its statutory duty here; its recalcitrance, if any, lies not in its failure to meet a deadline imposed by Congress, but rather in a failure to meet self-imposed regulatory deadlines, premised on event-specific and technological happenings, regulatory deadlines which the Agency created in the course of meeting the statutory deadline. Such regulatory duties are perhaps nondiscretionary, but they are not statutory nondiscretionary duties; hence, they are not proper grist for the section 7604 mill
8
The district court did, at one point, indicate that a petition for rulemaking under the Administrative Procedure Act (APA), specifically 5 U.S.C. Sec. 553(e), might lie. See Maine v. Thomas, 690 F.Supp. at 1111 n. 19. Although we agree that a petition for rulemaking may be a proper antidote for the ailment which grips appellants presently, the district court was wrong in suggesting that the APA would apply. The Clean Air Act is generally a self-contained statute and all relevant rulemaking must be conducted according to the procedures which the Act prescribes. See 42 U.S.C. Sec. 7607(d)(1); see also 42 U.S.C. Sec. 7607(c) (Clean Air Act's review procedure is exclusive). In those few instances when the APA is relevant to rulemaking under the Clean Air Act, its procedures are specifically adopted by reference, e.g., 42 U.S.C. Sec. 7607(d)(3) (setting out notice procedure by reference to APA)
9
We need not trifle with semantics. Whether EPA's promise to act constituted a regulation or a procedure is, in this instance, of no moment. Under either rubric, the promise had the force of law and, because the mandatory language removed any discretion (EPA must act when certain conditions take place), the cognomen which we append to the promise is immaterial. Formalistic labeling plays no legitimate part in analyzing actual rights and duties under the Act. See, e.g., Environmental Defense Fund, 448 F.Supp. at 93
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"pile_set_name": "FreeLaw"
} |
98 F.3d 1376
321 U.S.App.D.C. 213
COLD SPRING GRANITE COMPANY, Petitioner,v.FEDERAL MINE SAFETY AND HEALTH REVIEW COMMISSION, et al., Respondents.
No. 95-1186.
United States Court of Appeals,District of Columbia Circuit.
Argued Sept. 4, 1996.Decided Nov. 1, 1996.
On Petition for Review of an Order of the Federal Mine Safety and Health Review Commission.
Warren M. Davison, Washington, DC, argued the cause for petitioner. With him on the briefs were Earl M. Jones, III and Steven R. McCown, Dallas, TX.
Jerald S. Feingold, Attorney, U.S. Department of Labor, Arlington, VA, argued the cause for respondents. With him on the brief was Walter C. Schumann Washington, DC, of counsel. Norman M. Gleichman, Takoma Park, MD, entered an appearance.
[321 U.S.App.D.C. 214] Before: EDWARDS, Chief Judge, WILLIAMS and RANDOLPH, Circuit Judges.
Opinion of the Court filed by Circuit Judge RANDOLPH.
RANDOLPH, Circuit Judge:
1
The Secretary of Labor, through the Mine Safety and Health Administration, filed a proposed civil penalty assessment against Cold Spring Granite Company for violating a mine safety regulation. After an evidentiary hearing, an administrative law judge ruled in the Secretary's favor and imposed a $157 penalty. The ALJ's decision became the final decision of the Federal Mine Safety and Health Review Commission and is the subject of the company's petition for judicial review.
2
* Cold Spring mines granite at its quarries in northern New York State. Huge chunks of the stone, weighing 700,000 pounds or more, are blasted from the quarry walls, split into rough rectangular or cubical pieces and then moved to Cold Spring's nearby finishing yard, where the pieces are squared off.
3
In late winter 1993, Joseph C. Cayea, a rock driller, began trimming operations in the Cold Spring finishing yard. Along the top edges of five-foot high, 25 ton granite blocks were straight lines of predrilled holes, rather like perforations along the margins of a piece of paper. Cayea's job was to drive wedges into the holes from the top of the block, separating the smaller slabs--or "grout" or "roughback"--from the larger pieces. After Cayea had completed the splitting operation on Block A, the grout--measuring 28" wide at the bottom and 16.5" wide at the top, and weighing nearly 10 tons--remained upright instead of falling to the ground. Cayea then climbed onto an adjacent piece of predrilled stone, Block B, and split it with his wedges. The resulting top-heavy grout, measuring 34" wide at the bottom and 51" at the top, also stayed in an upright position. In the meantime, a forklift removed the finished Block A, leaving behind the still-upright grout. As Cayea began splitting a nearby third block, Block C, he realized that he needed additional wedges. He jumped down from Block C, and retrieved his wedges, which were lying in front of the grout from Block A. At that moment, the grout from Block B, toppled over, crashing onto the grout from Block A, which in turn fell on Cayea. Cayea suffered severe injuries, requiring the amputation of both of his legs.
4
Several days after the accident, Mine Safety and Health Administration Inspector Edward M. Blow investigated the site. Blow thought the two pieces of grout might not have initially fallen over when Cayea split them from Blocks A and B because a layer of frost caused them to adhere to the ground, although "only God knows what really did happen." Blocks A and C had been resting directly on the ground when Cayea worked on them. The ground on which Block B rested was uneven and so, to level the stone, a small piece of wood, 6" X 6" X 10", had been placed at one end, directly under the slab Cayea later cut away.
5
Blow issued a citation for violation of 30 C.F.R. § 56.16001 ("Supplies shall not be stacked or stored in a manner which creates tripping or fall-of-material hazards."). An administrative law judge granted the Labor Solicitor's motion to amend the standard allegedly violated to 30 C.F.R. § 56.3400, which reads:
6
Prior to secondary breakage operations, material to be broken, other than hanging material, shall be positioned or blocked to prevent movement which would endanger persons in the work area. Secondary breakage shall be performed from a location which would not expose persons to danger.
7
After an evidentiary hearing, the ALJ held Cold Spring liable for violating the first sentence of § 56.3400 by failing to "block" the grout from Block B--failing, that is, to position wood underneath in order to prevent this slab from falling over as it did. On the Commission's refusal to grant Cold Spring's petition for review, the ALJ's decision became the Commission's final decision. See 30 U.S.C. § 823(d)(1) & (d)(2)(A)(i).[321 U.S.App.D.C. 215] II
8
The first of Cold Spring's four arguments is that § 56.3400 did not apply to its operations in the finishing yard. No "secondary breakage operations"--a phrase undefined in § 56.3400--could have occurred there, the company says, because the granite had already been broken at least twice in the quarry. This presumes that a "secondary" operation denotes only the second step of a process rather than, as the Secretary believes, subordinate steps occurring after the primary one. There is nothing to commend Cold Spring's reading over the Secretary's. The standard embodied in § 56.3400 deals with safety. Why the safety measures contained in the regulation ought to be deployed only when the granite is broken for the second time is not apparent. The Secretary's plausible and sensible reading of his own regulation would prevail even if the company had presented an equally plausible alternative construction, which it has not. S.G. Loewendick & Sons, Inc. v. Reich, 70 F.3d 1291, 1294 (D.C.Cir.1995); see also Energy West Mining Co. v. FMSHRC, 40 F.3d 457, 462 (D.C.Cir.1994).
9
Cold Spring's next point focuses on the "[p]rior to secondary breakage" language of § 56.3400. According to the company, the words "prior to" specify only what must transpire before splitting operations commence. In other words, if the granite was not in danger of moving before Cayea began breaking off a slab, Cold Spring was in compliance. The argument is misconceived. Suppose a law required an automobile driver to fasten his seat belt "prior to" putting his vehicle in motion. Only a fool would think he could undo his seat belt as soon as his car started moving. "Prior to" in this context, and in the context of § 56.3400, includes "during." Otherwise the law is nonsensical.
10
Cold Spring's third point is that Cayea's injury did not occur during secondary breakage operations, as the Secretary maintains. The company reads the regulation to mean that after an employee splits one stone, the requirements of § 56.3400 are suspended until the employee begins splitting the next stone. It is hard to see the sense in this. The regulation is concerned with preventing danger to "persons in the work area." Cayea was such a person, when he was on top of a stone pounding his wedges and when he was gathering his wedges on the ground. The Secretary interprets the regulation to encompass not only the actual splitting of the granite but also the preparations needed to accomplish that task. This reading fits comfortably within the terms of § 56.3400 and is compatible with its purpose. Cold Spring's construction, while linguistically possible, is implausible. Cayea was therefore engaged in secondary breakage operations when, as he was retrieving his wedges, the slab of granite fell on him.
11
Cold Spring's fourth and final point is telling. Before us, and in the administrative proceedings, the company maintained that when a rock driller splits off a slab, the slab is supposed to fall over, that the large blocks of granite are positioned so that this occurs, that this is the customary practice in the industry, that it is a safe way of conducting finishing operations, and that it would in fact be unsafe if the company tried to prevent these heavy, irregularly-shaped waste pieces of granite from toppling. Inspector Blow, in his June 1993 report, wrote:
12
I now understand more of how it [the accident] actually occurred. During the splitting process the rough back is really encouraged to tip over for easier handling by the forklift. In this case, two (2) seperate [sic] rough backs failed to tip over. No problem except the victim for some unknown reason placed himself in the path the blocks tipped. A rake or poker could have been used to recover the wedges.
13
MSHA Form 7000-12 (June 14, 1993). When he testified in the hearing, Blow agreed that after splitting the grout, it normally falls over and that this "is what you want to have happen." Blow also said that Cayea had actually tried to tip over the grout by pushing or prying it with a wedge. Blow suggested that rather than using a wedge, Cayea should have used a large crow bar.
14
We agree with the company's point, made succinctly in its Petition for Discretionary Review filed with the Commission:[321 U.S.App.D.C. 216] The substantial evidence shows that the Company blocks the piece of granite so that the "rough back," when split, will separate away from the finished block of granite.... In other words, the process is designed so that the natural weight of the rough back will fall away after being split.
15
Petition for Discretionary Review at 5 (filed Feb. 17, 1995). In holding that grout must somehow be prevented from falling, the ALJ enhanced not safety but danger: "This would require a worker to remove the blocking once the splitting process was completed, thereby putting the worker directly in the path of the rough back of every stone split." Id. at 5 n. 3. Rather than falling harmlessly to the ground, these multi-ton slabs of granite would perch precariously on timbers as the rock driller went about his business, moving from one unfinished piece of granite to another.
16
The Labor Secretary was hard put to defend the ALJ's decision. "Normally," the Secretary agreed, "the grout falls over onto its side into a stable position when it is split from the block." Brief for the Secretary of Labor at 5. If it falls immediately, there would be no violation of § 56.3400, according to what the Secretary told us at oral argument. One would think, then, that everything should be done to ensure that the grout does what it is supposed to do--fall. The ALJ's decision commands the opposite. And it may command the impossible, given the geometrically uneven shapes of these slabs. In terms of § 56.3400, it is not the grout's "movement which would endanger persons in the work area," but its lack of movement upon splitting. Perhaps Cayea should have called for assistance to push the slabs over; perhaps the company should have been alert to the problem on its own. Those are not questions before us. As to the only question we may answer, we hold that the ALJ erred in ruling that Cold Spring violated § 56.3400 by failing to block the grout from Block B to prevent it from moving.
17
The petition for review is granted and the Commission's order is vacated.
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506 F.2d 1052
Pennsylvania Pressed Metals, Inc.v.Tenneco Chemicals, Inc.
74-1445
UNITED STATES COURT OF APPEALS Third Circuit
11/25/74
M.D.Pa., 366 F.Supp. 139
AFFIRMED
| {
"pile_set_name": "FreeLaw"
} |
515 F.2d 1181
10 Fair Empl.Prac.Cas. 1481
dDawkinsv.Nabisco, Inc.
73-3992
UNITED STATES COURT OF APPEALS Fifth Circuit
6/30/75
1
N.D.Ga.
2
AFFIRMED***
***
Opinion contains citation(s) or special notations
| {
"pile_set_name": "FreeLaw"
} |
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
CARBON FUEL COMPANY, a West
Virginia corporation,
Plaintiff-Appellant,
v.
USX CORPORATION, a Delaware
corporation; U. S. STEEL MINING
CO., INC., a Delaware corporation,
No. 95-2471
Defendants-Appellees,
v.
ARCH MINERAL CORPORATION; ARCH
MINERALS OF KENTUCKY;
CONSOLIDATION COAL COMPANY; OLD
BEN COAL COMPANY,
Third Party Defendants.
CARBON FUEL COMPANY, a West
Virginia corporation,
Plaintiff-Appellee,
v.
USX CORPORATION, a Delaware
corporation; U. S. STEEL MINING
CO., INC., a Delaware corporation,
Defendants-Appellants,
No. 95-2496
v.
ARCH MINERAL CORPORATION;
CONSOLIDATION COAL COMPANY; OLD
BEN COAL COMPANY,
Third Party Defendants-Appellees,
and
ARCH MINERALS OF KENTUCKY,
Third Party Defendant.
2
CARBON FUEL COMPANY, a West
Virginia corporation,
Plaintiff-Appellee,
v.
USX CORPORATION, a Delaware
corporation; U. S. STEEL MINING
CO., INC., a Delaware corporation,
Defendants-Appellees,
No. 95-2522
v.
ARCH MINERAL CORPORATION; OLD
BEN COAL COMPANY,
Third Party Defendants-Appellants,
and
ARCH MINERALS OF KENTUCKY;
CONSOLIDATION COAL COMPANY,
Third Party Defendants.
3
CARBON FUEL COMPANY, a West
Virginia corporation,
Plaintiff-Appellee,
v.
USX CORPORATION, a Delaware
corporation; U. S. STEEL MINING
CO., INC., a Delaware corporation,
Defendants-Appellees,
No. 95-2523
v.
CONSOLIDATION COAL COMPANY,
Third Party Defendant-Appellant,
and
ARCH MINERAL CORPORATION; ARCH
MINERALS OF KENTUCKY; OLD BEN
COAL COMPANY,
Third Party Defendants.
Appeals from the United States District Court
for the Southern District of West Virginia, at Charleston.
Charles H. Haden II, Chief District Judge.
(CA-93-1073-2)
Argued: June 3, 1996
Decided: November 18, 1996
Before MURNAGHAN and WILLIAMS, Circuit Judges, and
MACKENZIE, Senior United States District Judge for the Eastern
District of Virginia, sitting by designation.
_________________________________________________________________
Affirmed in part and remanded in part by published opinion. Judge
Murnaghan wrote the opinion, in which Senior Judge MacKenzie
joined. Judge Williams wrote an opinion concurring in the judgment.
4
COUNSEL
ARGUED: James Knight Brown, Sr., JACKSON & KELLY,
Charleston, West Virginia, for Appellant. James Michael Jarboe, USX
CORPORATION, Pittsburgh, Pennsylvania; Anthony J. Polito,
POLITO & SMOCK, P.C., Pittsburgh, Pennsylvania; John Allen
Lucas, HUNTON & WILLIAMS, Richmond, Virginia, for Appellees.
ON BRIEF: W. Henry Jernigan, Jr., JACKSON & KELLY, Charles-
ton, West Virginia; Larry L. Roller, CARBON FUEL COMPANY,
Chesapeake, West Virginia, for Appellant. Gregory B. Robertson,
Bruin S. Richardson, III, HUNTON & WILLIAMS, Richmond, Vir-
ginia; Charles L. Woody, SPILMAN, THOMAS & BATTLE,
Charleston, West Virginia, for Appellees.
_________________________________________________________________
OPINION
MURNAGHAN, Circuit Judge:
The instant appeal and cross-appeal concern the financial responsi-
bility for premiums assessed against coal mine operators under the
Coal Industry Retiree Health Benefits Act of 1992 ("the Coal Act" or
"the Act"), 26 U.S.C. §§ 9701-9722, to finance health care for retired
United Mine Workers of America ("UMWA") miners and their
dependents. Plaintiff-Appellant Carbon Fuel Company ("Carbon")
filed a lawsuit against USX Corporation and U.S. Steel Mining Co.
("USX") seeking a decree that under a settlement agreement and lease
between the two companies, USX was required to pay for certain of
Carbon's Coal Act premiums. USX filed a counterclaim against Car-
bon seeking a declaration of all the parties' rights and obligations
under the Coal Act and initiated a third-party lawsuit against Arch
Minerals Corporation ("Arch"), Old Ben Coal Company ("Old Ben"),
and Consolidation Coal Company ("Consol"), contending that, under
sales agreements with those companies, they were all liable to pay for
certain of USX's Coal Act premiums. On cross motions for summary
judgment, the district court held that the Coal Act abrogated all pre-
Act contracts transferring obligations to finance health care for retired
miners. Carbon Fuel Co. v. USX Corp., 891 F. Supp. 1186 (S.D.W.
Va. 1995). Alternatively, the district court stated that if the agree-
5
ments were applied, they would not transfer any Coal Act obligations
or allow for indemnification. For the following reasons, we affirm in
part. We remand so that the district court may determine whether
USX must reimburse Arch, Consol, and Old Ben for attorney's fees.
I
All five mining companies involved in this lawsuit were parties to
pre-Act commercial transactions involving the sale or lease of coal
mines. Supporting agreements and contracts in those transactions con-
tained provisions regarding the assumption of liabilities imposed by
collective-bargaining agreements with the United Mine Workers of
America ("UMWA") and cross-indemnification clauses. In particular,
those agreements transferred liability to funds established through
collective bargaining to provide UMWA retirees health benefits. Sub-
sequent to the execution of the agreements, the United States Con-
gress, however, enacted the 1992 Coal Act which created a new
mechanism for allocating the costs of health benefits for UMWA
retirees. We are confronted with the question of whether the various
agreements obligate parties to them to reimburse other parties for
assessed premiums under the Coal Act. In addressing that question,
we find that it is helpful to have a reference framework, which
includes some details of the events leading up to the Coal Act, the Act
itself, and the agreements.
A. 1992 Coal Act's Predecessors
In 1946, the members of UMWA went on a nationwide strike over
health and retirement benefits. The crisis led to the nationalization of
the coal mines by President Truman, and eventually a collective-
bargaining agreement establishing health and retirement benefits
funded by an industry-wide royalty on tons of coal produced for use
or sale. When the coal mines were returned to their owners in 1947,
UMWA and the Bituminous Coal Operators Association, Inc.
("BCOA") agreed upon the first in a series of National Bituminous
Coal Wage Agreements ("NBCWAs"). The 1950 NBCWA estab-
lished a multiemployer fund to provide welfare and retirement bene-
fits to active and retired miners and their dependents.1 The 1950 Fund
_________________________________________________________________
1 Multiemployer plans are characteristically maintained to fulfill the
terms of collective-bargaining agreements. A group of employers makes
6
was established as an irrevocable trust to be financed on a pay-as-
you-go basis. Each mining company's contributions were calculated
based on tons of coal mined. The basic contours of that agreement
continued through subsequent NBCWAs until the early 1970s.
In the early 1970s, UMWA and BCOA realized that their system
of funding the welfare and retirement fund needed an overhaul in
light of the Employment Retirement Income Security Act of 1974
("ERISA"), 29 U.S.C. §§ 1001-1461, and changing demographics.
The 1974 NBCWA, therefore, divided the 1950 Plan into several sep-
arate multiemployer plans. It established a 1950 Pension Plan and
Benefit Plan and a 1974 Pension Plan and Benefit Plan. The 1950
Benefit Plan provided health-care benefits to miners who retired prior
to January 1, 1976, and their dependents. The 1974 Benefit Plan pro-
vided health-care benefits to miners who were active, or who retired
on or after January 1, 1976, and their dependents. Importantly, the
1974 NBCWA provided that the benefits would be guaranteed for the
life of the covered retirees. Mining companies who signed the 1974
agreement agreed to fund both the multiemployer 1950 and 1974
Benefit Plans based on cumulative hours worked as opposed to tons
of coal mined.
In 1978, the NBCWA shifted away from the multiemployer funded
plans to a decentralized system under which each mining company
financed its own health benefit plan through individual employer
plans ("IEPs"). The 1978 NBCWA provided that miners and their
dependents who retired prior to January 1, 1976, would still receive
benefits from the 1950 Benefit Plan. A miner retiring on or after Janu-
ary 1, 1976, however, would receive health-care benefits from an IEP
operated by his or her last employer. Signatory coal companies to the
1974 Benefit Plan would continue to fund the 1974 Plan in order to
provide benefits for those miners retiring on or after January 1, 1976,
who were "orphaned" because their last employer was no longer in
the coal mining business or participating in the Plan. Very signifi-
_________________________________________________________________
contributions to a multiemployer plan. The plan pools those funds into
a general fund available to pay any benefit obligation of the plan.
Concrete Pipe & Prods. of Cal., Inc. v. Construction Laborers Pension
Trust for S. Cal., 508 U.S. 602, 605 (1993).
7
cantly, the 1978 NBCWA also contained an "evergreen clause" which
imposed a perpetual obligation on mining companies to continue their
contributions to the 1950 and 1974 Benefit Plans. See UMWA 1974
Pension v. Pittston Co., 984 F.2d 469, 471-76 (D.C. Cir. 1993), cert.
denied, 509 U.S. 924 (1993).
The Benefit Plans came under great strain in the 1980s. Numerous
mining companies left the mining business, leaving their "orphaned"
retirees to be covered by the 1974 Benefit Plan. Other mining compa-
nies who failed to sign successor NBCWAs were able to discontinue
their IEPs and shift the responsibility for paying"orphaned" retirees'
benefits to the 1974 Benefit Plan. A shrinking number of signatories
to the NBCWAs thus came to carry the responsibility for an increas-
ing number of orphan retirees. That problem was exacerbated by
increasing costs of health care in the 1980s, thereby creating a finan-
cial crisis in the Benefit Plans.
In 1989, the threat of insolvency in the 1950 and 1974 Benefit
Plans led to a multi-month coal strike by the UMWA at the Pittston
Coal Company, which was only settled after the intervention of the
Secretary of Labor. That settlement resulted in the creation of an
Advisory Coal Commission on UMWA retiree health benefits. The
Coal Commission found that UMWA members had received a com-
mitment of health-care benefits for life and had traded lower pensions
over the years for better health-care benefits, but that the funds to
finance those benefits were in grave danger of insolvency absent leg-
islative action. It further found that collective bargaining was no lon-
ger capable of solving the problem of financing the Benefit Plans and
recommended a legislative solution. See Coal Commission Report: A
Report to the Secretary of Labor and the American People vii-viii, 1-
5, 58-60 (Nov. 1990).2
_________________________________________________________________
2 Further details regarding the events leading up to the enactment of the
Coal Act are recounted elsewhere. See, e.g., Blue Diamond Coal Co. v.
Shalala (In re Blue Diamond Coal Co.), 79 F.3d 516, 518-20 (6th Cir.
1996); Davon, Inc. v. Shalala, 75 F.3d 1114, 1117-18 (7th Cir. 1996),
pets. for cert. filed, 64 U.S.L.W. 3741, 3742 (Apr. 22 & 23, 1996); LTV
Steel Co. v. Shalala (In re Chateaugay Corp.), 53 F.3d 478, 481-86 (2d
Cir.), cert denied, ___ U.S. ___, 116 S. Ct. 298 (1995); Templeton Coal
Co. v. Shalala, 882 F. Supp. 799, 806-09 (S.D. Ind. 1995), aff'd, 75 F.3d
8
B. 1992 Coal Act
The Commission's report helped spur Congressional investigation
of UMWA's retiree benefits and the enactment of the 1992 Coal Act,
Pub. L. No. 102-486, 106 Stat. 2776, 3036-56 (codified at 26 U.S.C.
§§ 9701-9722). The Act sought to remedy the problems with the pro-
vision and funding of health-care benefits to UMWA retirees by plac-
ing funding responsibility on the "persons most responsible for plan
liabilities." Coal Act, 106 Stat. 3037 § 19142.
To effect its purpose, the Act established a new funding mecha-
nism for health-care benefits for those who received benefits from the
1950 and 1974 Benefit Plans by creating a new Combined Fund,
which merged both the 1950 and 1974 Benefit Plans' funds. 26
U.S.C. § 9702. In order to ensure its sound financial health, the Act
changed the basic method of funding from an operation-based for-
mula (e.g., calculated according to tons of coal produced or hours
worked) to one where specific beneficiaries would be assigned to
mining companies which they had worked for in the past--"signatory
operators" that "remain[ ] in business." Id. § 9706.3"A signatory oper-
ator" is a company that was a signatory to a coal wage agreement. Id.
§ 9701(c)(1). Signatory operators are considered to be "in business"
if they conduct business and derive revenues from any business activ-
ity, regardless of whether that activity is in the coal industry. Id.
§ 9701(c)(7). Orphaned employees are apportioned among the signa-
tory operators. Id. § 9704(d).
The Act provides that the Commissioner of Social Security ("the
Commissioner") will make all assignments. Id. § 9706.4 The Act pro-
_________________________________________________________________
1114 (7th Cir. 1996), pets. for cert. filed, 64 USLW 3741, 3742 (April
22 & 23, 1996); UMWA v. Nobel, 720 F. Supp. 1169, 1173-78 (W.D. Pa.
1989), aff'd, 902 F.2d 1558 (3d Cir. 1990), cert. denied, 499 U.S. 904
(1991).
3 The Act also continued the IEPs established in the 1978 NBCWA and
created a new 1992 UMWA Benefit Fund. Those financing mechanisms
are not relevant to the instant lawsuit.
4 Effective March 31, 1995, Pub. L. 103-296, Title I, §§ 108(h)(9)(B),
110(a), August 15, 1994, 108 Stat. 1487, 1490, amended 26 U.S.C.
§ 9706, by replacing the Secretary of Health and Human Services ("the
Secretary") with the Commissioner of Social Security. The assignments
contested here were made by the Secretary.
9
vides that the Commissioner shall assign each retiree covered by the
Combined Fund to a signatory operator in the following order: (1)
first, to the signatory operator which was a signatory to the 1978
NBCWA and the most recent signatory operator to employ the retiree
in the coal industry for at least two years; (2) second, to the signatory
operator which was a signatory to the 1978 NBCWA and was the
most recent signatory operator to employ the retiree in the coal indus-
try; and (3) third, to the signatory operator which employed the retiree
in the coal industry for a longer period of time than any other signa-
tory operator prior to the effective date of the 1978 NBCWA. Id.
§ 9706(a).
By holding all signatory operators to NBCWAs--which the Coal
Commission found had fostered an expectation of life benefits and
benefitted from UMWA concessions in exchange for better health-
care benefits--the Act placed responsibility on the "persons most
responsible for plan liabilities." In order to do that, the Conference
Report expressed Congress's view that it would "reach back" to those
operators who "had bargained out of their funding obligations." 138
Cong. Rec. S17566-01, 17603.
The Act also provides that assignment of eligible beneficiaries can
be transferred to successors of assigned operators"after the enactment
date" provided that the assigned operator who transferred the benefi-
ciary assignment remains the guarantor of the benefits provided to
that beneficiary under the Act. 26 U.S.C. § 9706(b)(2) (emphasis
added). Thus, the Act allows post-Act contracts to reallocate assign-
ments under the Act, although it requires that ultimate financial
responsibility not be reallocated. The Act contains no similar provi-
sion regarding pre-Act contracts, which is not surprising given that
Congress expressly intended to "reach back" and impose obligations
on signatories to the NBCWAs notwithstanding that many companies
had "bargained out of their funding obligations." 138 Cong.Rec.
S17566-01, S17603.5
_________________________________________________________________
5 Additionally, in § 9706, the Act includes a provision for private civil
actions that can be brought against another person for responsibility for
assigned premiums, notwithstanding any prior decision by the Commis-
sioner. 26 U.S.C. § 9706(f)(6).
10
The Act mandates that as of February 1, 1993, "[a]ll liability for
contributions to the Combined Fund shall be determined exclusively
under [the Act], including all liability for contributions to the 1950
UMWA Benefit Plan and the 1974 UMWA Benefit Plan." 26 U.S.C.
§ 9708 (emphasis added). The Act cautions, however, that the Act
shall have no effect on claims, obligations, or subrogation rights aris-
ing in connection with the 1950 and 1974 Benefit Plans as of Febru-
ary 1, 1993. Id.6
C. Lease and Sales Contracts
In question here is the liability to the Combined Fund for the pre-
1976 retirees assigned to USX and to Carbon by the Secretary. Car-
bon and USX both contend that certain lease or sales contracts and
accompanying agreements may impact their liability to the Combined
Fund or allow indemnification for their payments to the Fund. The
relevant provisions of those agreements are as follows.
1. USX and Carbon Fuel's Agreements
In a 1982 Settlement Agreement, dated June 11, and a Lease and
Sublease, dated June 12, Carbon sold its mining equipment to USX
and leased or subleased all of its coal properties to USX for a 15-year
_________________________________________________________________
6 Section 9708 in its entirety provides:
All liability for contributions to the Combined Fund that arises
on or after February 1, 1993, shall be determined exclusively
under this chapter, including all liability for contributions to the
1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan
for coal production on and after February 1, 1993. However,
nothing in this chapter is intended to have any effect on any
claims or obligations arising in connection with the 1950
UMWA Benefit Plan and the 1974 UMWA Benefit Plan as of
February 1, 1993, including claims or obligations based on the
"evergreen" clause found in the language of the 1950 UMWA
Benefit Plan and the 1974 UMWA Benefit Plan. This chapter
shall not be construed to affect any rights of subrogation of any
1988 agreement operator with respect to contributions due to the
1950 UMWA Benefit Plan or the 1974 UMWA Benefit Plan as
of February 1, 1993.
11
term.7 All coal mine employees were transferred to USX as well. As
required by a successorship clause in the 1981 NBCWA, the Settle-
ment Agreement provided:
9.9(a) Effective at the Closing, [USX] hereby assumes the
National Bituminous Coal Wage Agreement of 1981, effec-
tive, June 8, 1981, (the "UMW Agreement") applicable to
the operations which are the subject of this Agreement or
the Coal Lease ("Covered Operations"), and[USX] will
assume and agree to perform, pay and discharge Carbon's
obligations under such collective bargaining agreement to
the extent such obligations arose with respect to any period
after the Closing. . . . Pursuant to [USX's] assumption of the
UMW Agreement as provided elsewhere herein, and in
accordance with the requirements of the 1950 Plan and the
1974 Plan, [USX] agrees that on and after the Closing Date
it shall, with respect to the Covered Operations, be a signa-
tory to the UMW Agreement and succeed to Carbon's obli-
gations under the UMW Agreement to make contributions
to the 1950 Plan and to the 1974 Plan in the amount and at
the rate required by the UMW Agreement for the duration
thereof.
The 1982 settlement agreement also provided that USX agreed to
assume and perform all of Carbon's contractual obligations which
relate to Carbon's performance of a 1974 agreement between Carbon
and USX. That included USX's agreeing to pay certain unbilled costs
such as "[p]ayments of health and medical benefits for bargaining and
non-bargaining employees and related administrative costs." Thus,
USX assumed Carbon's obligations under the NBCWAs to make all
contributions arising after closing to the 1950 and 1974 Benefit Plans
and to pay health and medical costs insofar as they related to the per-
formance of a 1974 agreement between Carbon and USX.
Disagreements between USX and Carbon resulted in a subsequent
settlement agreement in 1987, which terminated the lease and sub-
lease. The 1987 agreement provided that "all remaining or continuing
_________________________________________________________________
7 The agreement resulted from disputes arising out of a prior 15-year
contract in which Carbon had agreed to supply USX with coal.
12
obligations" under the 1982 settlement agreement"shall remain in full
force and effect." Carbon, however, did not resume its mining opera-
tions on the land previously leased to USX. Despite Carbon's failure
to re-open the covered operations and notwithstanding the terms of its
settlement agreements, the Secretary assigned to Carbon UMWA
retirees who had worked at the "covered operations" as Carbon's
employees and retired prior to 1976.8
_________________________________________________________________
8 Carbon and USX also included several indemnification provisions in
their agreements. Carbon agreed to indemnify USX,
its officers, stockholders and directors against, and hold each of
them harmless from, any and all claims . . . resulting from or
arising out of the operation, administration and funding of Car-
bon's employee benefit plans by Carbon prior to the Closing
date, including but not limited to any taxes, penalties, liens or
liabilities imposed or assessed by any governmental authority, or
agency, under any statute, rule or regulation applicable to the
operation, administration and funding of such plans.
USX agreed to indemnify Carbon,
its stockholders and directors against, and hold each of them
harmless from, any and all claims . . . resulting from or arising
out of the operation, administration and funding of[USX's]
employee benefit plans by USX for all periods on and after the
Closing Date.
USX also agreed more generally to indemnify Carbon
from and against any claim, loss, damage, cost, or expense of
any kind or character arising out of or resulting from . . . any
claims, causes of action, debts, liabilities and obligations,
incurred in connection with the assets . . . and arising out of
[USX's] operation, ownership or leasehold of such assets on or
after the Closing Date.
Carbon, in turn, agreed to indemnify USX
from and against any claims, loss, damages, cost or expense of
any kind or character arising out of or resulting from . . . any
debts, liabilities and obligations incurred or which may be
incurred with respect to any of the Excluded Assets . . . [and] any
debts . . . being identified as being for the account of Carbon.
Another indemnification clause provided for cross-indemnification
relating to claims for the "death of, disease incurred by or injury to per-
sons or destruction or damage to property," any public or private nui-
sance, and restoration, repair or reclamation of any area, required by law
or as provided in the Agreements.
13
2. USX and Other Companies' Agreements
In the early 1980s, USX sold off a large portion of its mining oper-
ations to Arch, Old Ben, and Consol. USX had contributed to both the
1950 and 1974 Benefit Plans based on the operations in the mines it
sold. Evergreen clauses in the NBCWAs required that each new buyer
covenant to provide funding to the 1950 and 1974 Benefits Plans.
Thus, under their sales agreements, each purchasing company agreed
in some fashion to assume USX's duties under the then existing
NBCWA to contribute to the 1950 and 1974 Trusts. 9 And, in fact,
_________________________________________________________________
9 The Arch Sales Agreement with USX provides:
A[rch] will assume US[X]'s obligations under the collective bar-
gaining agreement dated June 7, 1981, then in effect between
US[X] and the UMWA applicable to such employees. A[rch]
will discharge all of US[X]'s obligations under such collective
bargaining agreement to the extent that such obligations arise
with respect to the period after Closing.
The Consol Sales Agreement with USX provides:
Consol will assume as of Closing US[X]'s obligations under the
collective bargaining agreement dated June 7, 1981, then in
effect between US[X] and the UMWA applicable to such
employees. Subject to Article IV(b), Consol will discharge all of
US[X]'s . . . obligations under such collective bargaining agree-
ment to the extent that such obligations arise with respect to
events occurring in the period after Closing . . . it being the
intention of the Parties that Consol have no liability or responsi-
bility for any benefits due or that may become due in the future
to employees of US[X] . . . who have retired prior to Closing,
unless and until any such retired employee may be subsequently
employed by Consol at its discretion outside its obligations pur-
suant to this Agreement.
The Old Ben Sales Agreement with USX provides:
[Old Ben] will assume the collective bargaining agreements then
in effect, if any, between [USX] and the UMWA applicable to
these bargaining units. [Old Ben] will discharge all of [USX]'s
obligations under such collective bargaining agreements, includ-
ing obligations to make contributions to the 1950 Pension Plan,
the 1950 Benefit Plan, the 1974 Pension Plan, and the 1974 Ben-
14
each company made its obligatory contributions to the Plans until the
enactment of the Coal Act's new funding system. 10
Each of the sales agreements also contained cross indemnification
provisions very similar, if not identical, to that included in the Old
Ben agreement:
Buyers expressly assume and agree in due course to pay,
perform, fulfill and discharge and to indemnify and hold
harmless [USX], its officers, directors and shareholders, and
their successors, heirs, administrators and assigns, from and
against any claim, loss, damage, cost, or expense of any
kind or character arising out of or resulting from:
(i) Any claims, causes of action, debts, liabilities
and obligations incurred in connection with the
Acquired Assets or arising out of the ownership or
operation of the Acquired Assets on or after the
Business Closing, or from acts, omissions or activ-
ities of Buyers in the ownership or operation of the
Acquired Assets on or after the Business Closing.
...
In return, USX agreed to indemnify Buyers.
[USX] expressly assumes and agrees in due course to pay,
perform, fulfill and discharge and to indemnify and hold
harmless BUYERS, their officers, directors and sharehold-
_________________________________________________________________
efit Plan, to the extent that such obligations arose with respect to
a period after the Business Closing. Except as otherwise pro-
vided in this Agreement, [USX]'s obligation to make contribu-
tions to the above employee benefit plans shall be limited to the
obligations set forth in the 1978 National Bituminous Coal Wage
Agreement or its successor to make contributions for hours
worked or tons of coal mined prior to the Business Closing.
10 Employees at the mines sold who retired after January 1, 1976,
received and continued to receive health benefits directly from USX
under an IEP.
15
ers, and their successors, heirs, administrators and assigns,
from and against any claim, loss, damages, cost or expense
of any kind or character arising out of or resulting from the
following:
(i) Any claims or causes of action against or
debts, liabilities and obligations of [USX] incurred
in connections with the Acquired Assets or arising
out of the ownership or operation of the Acquired
Assets prior to the Business Closing, or from the
acts, omissions, or activities of [USX] in the own-
ership and operation of the Acquired Assets prior
to the Business Closing;
***
(iii) Any claims, causes of action, debts, obliga-
tions and liabilities of any kind or character
(including, but not limited to workers' compensa-
tion claims) and any related cost or expenses, to
employees of [USX], former employees of [USX],
actual or potential applicants for employment at
[USX], any beneficiaries of the above or any other
person asserting a claim on their behalf, arising out
of or resulting from any incident or event which
occurs prior to the Business Closing or any claim
for employee benefits related to an employee's or
former employee's period of service with [USX]
prior to the Business Closing.
Thus, USX agreed to indemnify Buyers for liability arising out of the
operation of the mines prior to closing and the Buyers agreed to
indemnify USX for liabilities arising on or after closing.
The Secretary assigned to USX a number of UMWA retirees who
worked for USX at the operations transferred to Old Ben, Consol, and
Arch and retired prior to 1976.
D. Lawsuit
In the spring of 1994, Carbon filed a lawsuit in federal court based
on diversity jurisdiction which sought declaratory and injunctive
16
relief against USX. Carbon sought to hold USX liable based on the
1982 settlement agreement for the assigned retirees who had worked
at the operations which were covered by the lease. Carbon specifi-
cally relied on the provisions where USX agreed to assume Carbon's
obligations under the 1981 NBCWA collective-bargaining agreement
and successor agreements and where USX agreed to assume unbilled
medical costs arising out of Carbon's performance of the 1974 agree-
ment.
USX filed a counterclaim against Carbon seeking"a declaration of
the rights and obligations of the parties . . . under the [Coal Act]" and
initiated a third party complaint against Arch, Consol, and Old Ben
("counterdefendants"). USX argued that, under Carbon's interpreta-
tion of the Coal Act, Arch, Consol, and Old Ben should pay for, reim-
burse, or indemnify it for the retirees who worked at the operations
sold to those companies. USX relied on the provisions where those
companies agreed to assume all liability arising under the collective-
bargaining agreements which arose after closing. USX also relied on
the indemnification provisions in those agreements. The counterde-
fendants filed a counterclaim seeking indemnification from USX for
any liabilities imposed upon them or, alternatively, if no liabilities
were imposed, attorney's fees and costs under the indemnification
provisions in their sales contracts.
Each party filed a motion for summary judgment. After briefing
and oral argument, the district court ruled that the 1992 Coal Act, in
providing that, as of February 1, 1993, all contributions to the Com-
bined Fund "shall be determined exclusively" under the Act, explic-
itly abrogated all pre-Act private party agreements as to financial
responsibilities for pre-1976 UMWA retirees. The district court fur-
ther found that the private agreements at issue would provide for the
same result because they would not allow transfer of the obligations
or allow for indemnification as to any of the contested assignments.
Carbon has appealed. USX has cross-appealed. The cross-
defendants have appealed the district court's failure to grant them
attorney's fees under the cross-indemnification provisions in the sales
agreements.
17
II
A. Standard of Review
We review a district court's summary judgment ruling under a de
novo standard of review. Henson v. Liggett Group, Inc., 61 F.3d 270,
274 (4th Cir. 1995); Jackson v. Kimel, 992 F.2d 1318, 1322 (4th Cir.
1993). Under Rule 56(c) of the Federal Rules of Civil Procedure,
summary judgment is appropriate only where there are no genuine
issues of material fact. In conducting our analysis, we review the
record in the light most favorable to the nonmoving party.
B. Coal Act's Impact on Pre-Act Contractual Agreements
Carbon and USX argue that the Coal Act does not abrogate their
pre-Act contracts reallocating their obligations to the pre-Act Benefit
Plans. They contend that the Act recognizes and incorporates their
pre-Act contracts. They also contend that the Coal Act's Combined
Fund is essentially a codification of their obligations to the pre-Act
Benefit Plans. Therefore, they argue that they may bring a civil action
based on their pre-Act agreements for reimbursement or indemnifica-
tion for their contributions to the Combined Fund which are based on
assignments of retirees who worked at the mining operations they
sold or leased to others. We disagree. As explained below, the Coal
Act established a new funding method for financing UMWA retirees'
health-care benefits that expressly created new obligations on Carbon
and USX to a new and distinct fund--the Combined Fund--
notwithstanding their prior contracts. Under the Act "ALL" liability is
determined by the Act, regardless of prior private agreements. Fur-
thermore, we agree with the district court that, in any event, the con-
tracts relied upon do not require reimbursement for Coal Act
premiums paid to the Combined Fund.
Under the most basic canon of statutory construction, we begin
interpreting a statute by examining the literal and plain language of
the statute. William v. United States Merit Sys. Protection Bd., 15
F.3d 46, 49 (4th Cir. 1994); United States v. Allen, 2 F.3d 538, 539
(4th Cir. 1993). Absent explicit legislative intent to the contrary, the
statute should be construed according to its plain and ordinary mean-
ing. Id.
18
The Coal Act changed the entire mechanism for funding retirement
benefits and required that "[a]ll liability for contributions to the Com-
bined Fund that arises on and after February 1, 1993, . . . be deter-
mined exclusively under [the Coal Act], including all liability for
contributions to the 1950 UMWA Benefit Plan and the 1974 UMWA
Benefit Plan for coal production on and after February 1, 1993." 26
U.S.C. § 9708 (emphasis added). While the Act made clear that obli-
gations, claims, and subrogation rights arising in relation to the 1950
and 1974 Benefit Plans as of February 1, 1993, were not affected, the
Act's new method became the exclusive method for determining lia-
bility to the Combined Fund on and after February 1, 1993. Id. Only
liabilities imposed after February 1, 1993, to the Combined Fund are
the subject of this lawsuit.
In providing that all liability for contributions to the Combined
Fund, including all liability to the 1950 and 1974 Benefit Plans be
determined exclusively under the Coal Act, Congress "upset[ ] other-
wise settled expectations," and "impose[d] a new duty or liability
based on past acts" for some coal operators. LTV Steel Co. v. Shalala
(In re Chateaugay Corp.), 53 F.3d 478, 489 (2d Cir.) (citation omit-
ted), cert denied, ___ U.S. ___, 116 S. Ct. 298 (1995). While the Coal
Act maintained similar benefits to those provided previously, it
entirely changed the mechanism for funding those benefits by impos-
ing what we have termed a tax. See 1992 UMWA Benefit Plan v.
Leckie Smokeless, No. 96-1708, Slip op. at 19-20, ___ F.3d ___, ___
(4th Cir. Oct. 29, 1996). That tax rejected the previous methods for
funding health-care benefits based on operational formulas (e.g., tons
of coal mined, hours worked) achieved through collective bargaining
in favor of statutory assessments which in certain instances "reached
back" to companies that had left the coal business or bargained out
of their prior obligations.11 Those companies were the ones that
_________________________________________________________________
11 "The essence of the Conference Agreement [wa]s that those compa-
nies which employed the retirees in question, and thereby benefitted
from their services, will be assigned responsibility for providing the
health care benefits promised in their various collective bargaining
agreements." 138 Cong.Rec. S17566-01, 17603. The Conference Report
expressed the intent of Congress to "reach back" to those companies who
"had bargained out of their funding obligations." Congress believed that
"an equitable solution . . . require[d] that such companies remain obli-
gated to help fund the benefit program which covers retired persons who
worked for those companies." Id.
19
entered into the collective bargaining agreements and promised the
UMWA members life benefits. Those companies were the ones that
had benefitted from the retirees' work and efforts. Those companies
were the ones that had achieved concessions from the miners in
exchange for better health benefits. Those companies that bargained
out of their obligations and left the mining business helped, in part,
to cause near financial collapse of the Benefit Plans by causing a
small number of signatory companies to shoulder the entire burden.
Thus, Congress reasoned that an equitable solution would permit
reaching back to place responsibility on those companies which the
miners had worked for, notwithstanding their bargaining out of their
obligations.
Thus, to characterize the Act, as Carbon and USX do,"as merely
an `adjustment' to signatory operators' existing or pre-existing con-
tractual obligations to fund health care benefits for UMWA miners
and retirees," see Templeton Coal, 882 F. Supp. at 815, is not entirely
accurate. While the Coal Act continued signatory operators' pre-
existing contractual obligations to provide health-care benefits, it also
"reached back" to impose new obligations on companies that had bar-
gained out of their obligations and, in doing so, fundamentally
changed the method for funding UMWA retirees' health benefits. For
those reasons, we find that the Coal Act was not a mere codification
of pre-existing NBCWAs as Carbon and USX claim, but rather an
imposition of new obligations on certain NBCWA signatory opera-
tors.
Carbon and USX argue, however, that the Coal Act allows for their
pre-Act contracts to be enforced.12 Carbon and USX assert that 26
U.S.C. § 9706(f)(6), which provides for private civil actions to
enforce responsibility of assigned premiums notwithstanding the Sec-
retary's assignment, recognizes their ability to enforce pre-Act con-
tracts assigning liability to the 1950 and 1974 Benefit Plans.13 We
disagree for the reasons that follow.
_________________________________________________________________
12 The dissent also contends that the pre-Act contracts transferring obli-
gations to the 1950 and 1974 Benefit Plans allow for private civil law-
suits to seek reimbursement for premiums paid to the Coal Act.
13 Section 9706(f)(6) states:
Nothing in this section shall preclude the right of any person to
bring a separate civil action against another person for responsi-
bility for assigned premiums, notwithstanding any prior decision
by the Commissioner.
20
First, the express language of the statute requires that "All liability
for contributions to the Combined Fund that arises on and after Febru-
ary 1, 1993, . . . be determined exclusively under [the Coal Act]." 26
U.S.C. § 9708 (emphasis added). We interpret Congress to mean pre-
cisely what it said--that "All liability" to the Combined Fund be
determined by the Coal Act and not prior private agreements unless
expressly provided for in the Act. The Act contains no provisions that
expressly provide for the enforcement of pre-Act agreements.
Second, the private agreements USX and Carbon seek to enforce
were based upon and entered into under a system of funding benefits
that Congress expressly abrogated because of, in part, the signatory
operators' ability to contract out of their funding obligations. Con-
gress intended the Coal Act to reach back and impose liability on the
signatory operators who had contracted out of their obligations to
fund retiree benefits. Allowing the enforcement of those contracts
expressly undermines the intent and purpose of the Coal Act as
expressed in the Conference Agreement "that those companies which
employed the retirees in question, and thereby benefitted from their
services . . . be assigned responsibility for providing the health care
benefits promised." 138 Cong.Rec. S17566-01, 17603. While the Act
expressly recognizes that post-Act contracts may be entered into in
order to transfer that liability as long as the original assignee remains
the guarantor of the premiums, the Act contains no similar provisions
for pre-Act contracts.
Third, we do not read § 9706 as Carbon, USX, and the dissent read
it, to allow for private enforcement of pre-Act contracts. To do so
would allow those companies who had contracted out of their funding
obligations to, in effect, avoid their obligations, notwithstanding any
sort of primary liability to the Combined Fund. Instead, we read the
private action provision, as the district court did, to refer to an earlier
subsection of § 9706 which provides that post-Act private agreements
and contracts can reallocate responsibility for assigned retirees' bene-
fits to the Combined Fund to successor operators of mines, provided
that the operator transferring the assignment remains a guarantor of
the payments to the Fund.14
_________________________________________________________________
14 Section 9706(b)(2) states:
21
Carbon and USX argue, however, that disallowing pre-Act con-
tracts renders the section allowing for private contracts superfluous.
We do not think so. In allowing for reassignment under post-Act con-
tracts, the statute states that the assigned operators shall notify the
Trustees of the Combined Fund of the change in assignment. 26
U.S.C. § 9706(b)(2). The change is not made through the Commis-
sioner. In the event of a problem, § 9706(b)(2) does not state how the
problem is to be resolved. The operator who transferred its assign-
ment remains ultimately liable as the guarantor to the trustees of the
Fund. Id. All assignments by the Commissioner within a certain time
limit, or, if a request for review is filed within the time limit, after his
or her reconsideration, are final--they are not subject to judicial
review. Id. at 9706(f). Thus, recourse may not be had with the Com-
missioner. The private action section makes clear that the assignor in
the post-Act contract may bring a private civil action seeking reim-
bursement for the premiums it has paid. Id.§ 9706(f)(6).15
_________________________________________________________________
If a person becomes a successor of an assigned operator after the
enactment date, the assigned operator may transfer the assign-
ment of an eligible beneficiary under subsection (a) to such suc-
cessor, and such successor shall be treated as the assigned
operator with respect to such eligible beneficiary for purposes of
[the Coal Act]. Notwithstanding the preceding sentence, the
assigned operator transferring such assignment (and any related
person) shall remain the guarantor of the benefits provided to the
eligible beneficiary under [the Coal Act]. An assigned operator
shall notify the trustees of the Combined Fund of a transfer
described in this paragraph.
(emphasis added).
15 Carbon and USX also rely on the Conference Report's description of
the private action section. The Conference Report states that:
The section on private actions provides that if parties have com-
mercial contracts relate[d] to acquisition or disposition of coal
bearing properties or facilities which delineate their respective
responsibilities concerning the obligation of retiree health care,
the parties may enter into private litigation to enforce such con-
tracts for indemnification or any other form of payment alloca-
tion as may be appropriate under their private contract.
Otherwise, this language does not create new private rights of
22
The dissent argues that the private agreements reallocating respon-
sibility to the Benefit Funds may be litigated by drawing a distinction
between primary responsibility to the Combined Fund and secondary
liability under a private agreement to reimburse those primarily liable
to the Combined Fund. Again, we must disagree. Congress expressly
stated that "All liability" should be determined as provided for by the
Act. Congress made no distinction between primary and secondary
liability. And, contrary to the dissent's assertion that "[i]t is not sur-
prising . . . that a statute enacted in 1992 fails to authorize parties to
enter into contracts prior to 1992," Congress was well aware that sig-
natory operators had "bargained out of their funding obligations." 138
Cong.Rec. S17566-01, 17603. If Congress had intended signatory
operators to continue to be able to enforce some type of secondary lia-
bility under the private agreements it could have so stated. Indeed,
Congress did allow for "a type of" secondary liability with respect to
post-Act contracts. However, Congress did not provide for any liabil-
ity other than that created by the Act. And Congress made clear that
the Act would "expressly" determine all liability. The failure to allow
for secondary liability based on pre-Act private contracts is not sur-
prising given Congress' expressed intent to "reach back" and impose
the obligation to fund retirement benefits on those signatory operators
who had "bargained out of their funding obligations." 138 Cong.Rec.
S17566-01, 17603.
C. Agreements and Contracts
In any event, as the district court recognized, the agreements and
contracts USX and Carbon rely upon would not allow reimbursement.
_________________________________________________________________
action where they would not exist in the absence of this provi-
sion.
138 Cong.Rec. S17566-01, S17605-06. We read "have" as ambiguous as
to whether it relates to post- or pre-Act contracts. Thus, we do not view
this section of the legislative history as dispositive or as expressing a
clear intent to allow private pre-Act contracts. In light of the express lan-
guage of the Act stating that all contributions shall be determined exclu-
sively under the Act and the legislative history indicating that the Coal
Act was intended to correct the problem of operators contracting out of
their obligations to the 1950 and 1974 Benefit Plans, we find that the
ambiguous "have" in the legislative history is not strong enough to create
an enforcement right for pre-Act contracts.
23
Under the Carbon/USX settlement agreement, USX agreed to "as-
sume and . . . to perform, pay and discharge Carbon's obligations
under [the NBCWA of 1981] collective bargaining agreement [--
which included the 1950 and 1974 Benefit Plans contributions--] to
the extent such obligations arose with respect to any period after the
Closing." (Emphasis added). Arch, Old Ben, and Consol also all
agreed to assume under their sales agreements with USX all of USX's
"obligations under [the NBCWA of 1981] collective bargaining
agreement [--which included the 1950 and 1974 Benefit Plans
contributions--] to the extent that such obligations arise with respect
to the period after Closing." (Emphasis added).
Those provisions are inapplicable to the assignments by the Secre-
tary or Commissioner for several reasons. First, while the obligation
to assume all collective-bargaining agreements, including health-care
benefits guaranteed in those agreements under the 1950 and 1974
Benefit Plans, was transferred to the successor interests, the Coal Act
is not a collectively bargained agreement. Rather, it is a legislatively
imposed tax. Furthermore, as explained previously, the obligations
assumed under the collective-bargaining agreements are not coexten-
sive with those imposed by the Coal Act.
Second, the obligations imposed under the 1992 Coal Act do not
arise from the acquired assets in and of themselves or from events on
or after the date of closing of each agreement. Although the Com-
bined Fund and the obligations thereunder did not exist prior to the
enactment of the Coal Act in 1992, the obligations the Act imposes
are based on events that occurred prior to the closing date in all the
transactions at issue. The new liability created by"the Coal Act links
operator liability to previous employment relationships," i.e. the hir-
ing and firing of workers, the signing of NBCWAs, the promise of
lifetime benefits, and the benefits and concessions the companies
received from those workers in the past. In re Chateaugay Corp., 53
F.3d at 489; cf. Davon, Inc. v. Shalala, 75 F.3d at 1114, 1126 (7th Cir.
1996) (discussing retroactive aspects of tax imposed under the Coal
Act). Significantly, USX must have interpreted the agreements in this
same fashion for some time because it did not seek to avoid its assess-
ments under the 1992 Coal Act until Carbon sued it.
In addition to assuming liability under the NBCWA collective-
bargaining agreements, the sales agreements USX entered into with
24
Old Ben, Consol, and Arch all contained cross-indemnification provi-
sions. Each of the Buyers agreed to assume and hold harmless USX
for all claims and the like arising in connection with the Acquired
Assets "on or after the Business Closing." USX in turn agreed to
assume and hold harmless the Buyers from all claims and the like
arising in connection with the Acquired Assets "prior to Business
Closing" and to assume all claims and the like"to employees of
[USX] [and] former employees of [USX] . . . arising out of or result-
ing from any incident or event which occurs prior to the Business
Closing or any claim for employee benefits related to any employee's
or former employee's period of service with [USX] prior to the Busi-
ness Closing." (Emphasis added).
While the Coal Act's obligations are new ones, they are based on
and arise from employment relations that were initiated and ended
long before the closing in any of the sales agreements. Thus, in no
sense can the Buyers be held liable under the indemnification provi-
sion for the Coal Act's obligations.
Furthermore, USX agreed to hold harmless Buyers from any claim
for employee benefits related to any employee's or former employ-
ee's period of service with USX prior to the closing. USX argues that
this provision only relates to claims for employee benefits by employ-
ees themselves. However, we do not read the relevant contract clause
in that fashion. We read USX as agreeing to hold harmless all claims,
costs, or expenses "to former employees of [USX], . . . or any claim
for employee benefits related to an employee's or former employee's
period of service with [USX] prior to the Business Closing." We read
the "or" as being disjunctive. We therefore read the last clause of the
sentence to apply to all claims for employee benefits related to an
employee's or former employee's period of service with USX prior
to the closing.
The Secretary's assignments under the Coal Act are claims for
employee benefits related to former employees' periods of service
with USX prior to the closing. We read USX as agreeing to hold
harmless Arch, Old Ben, and Consol for all such employee benefits--
excluding those imposed through the NBCWA collective bargaining
process. Thus, under the indemnification clauses, for that reason as
25
well, Arch, Old Ben, and Consol are not obligated to indemnify USX
for the Secretary's assessments under the Coal Act.
Similarly, indemnification provisions in the USX/Carbon Agree-
ments do not require that USX reimburse Carbon for its Coal Act pre-
mium assessments. Indeed, in the Carbon/USX agreement Carbon
expressly agreed to indemnify USX for any "claims. . . resulting from
or arising out of the operation, administration and funding of Car-
bon's employee benefit plans by Carbon prior to the Closing Date,
including but not limited to any taxes . . . imposed or assessed by any
governmental authority, or agency, under any statute, rule or regula-
tion applicable to the operation, administration and funding of such
plans." As explained previously, the Coal Act premiums are taxes
imposed under the Coal Act based upon Carbon's operation, adminis-
tration and funding of its employee benefit plan prior to the Closing
Date. Thus, we disagree with the dissent's assertion that if we permit-
ted Carbon and USX to proceed with their lawsuit based on the con-
tracts, remand would be necessary. The contracts are in the record.
We have reviewed the contracts, the district court's findings and the
parties' arguments, and conclude that the contracts do not allow for
the reimbursement sought. Remand would therefore be unwarranted
in any event.
D. Constitutionality
We recognize that USX and Carbon both likely understood when
they entered into the relevant agreements that they were negotiating
out of any obligations to fund health-care benefits for pre-1976
UMWA retirees. Thus, we briefly address the constitutionality of the
Coal Act imposing new duties on Carbon and USX based on past
acts, thereby upsetting settled transactions and settled expectations. In
re Chateaugay, 53 F.3d at 489.
The Supreme Court has expressly held that private contracts do not
present a due process bar to otherwise legitimate Congressional
action. Concrete Pipe & Prods. of Cal., Inc. v. Construction Laborers
Pension Trust for S. Cal., 508 U.S. 602, 639-41 (1993); Pension Ben-
efit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 733 (1984).
"[F]ederal economic legislation, which is not subject to the con-
straints coextensive with those imposed upon the States by the Con-
26
tract Clause of Art. I, § 10, of the Federal Constitution . . . , is subject
to due process review only for rationality." Concrete Pipe, 508 U.S.
at 640-41 (citations omitted); see also Connolly v. Pension Benefit
Guar. Corp., 475 U.S. 211, 223-224 (1986) ("Contracts, however
express, cannot fetter the constitutional authority of Congress. Con-
tracts may create rights of property, but when contracts deal with a
subject matter which lies within the control of Congress, they have a
congenital infirmity. Parties cannot remove their transactions from the
reach of dominant constitutional power by making contracts about
them."); Gray, 467 U.S. at 732-33 ("We have never held, however,
that the principles embodied in the Fifth Amendment's Due Process
Clause are coextensive with prohibitions existing against state impair-
ments of pre-existing contracts.").
All economic legislation can be said to upset settled economic
expectations of someone. "[L]egislation readjusting rights and bur-
dens is not unlawful solely because it upsets otherwise settled expec-
tations." Usery v. Turner Elkhorn Mining Co. , 428 U.S. 1, 16 (1976).
That principle holds true "even though the effect of the legislation is
to impose a new duty or liability based on past acts." Id.
The Coal Act burdens no fundamental rights. It is"`a classic exam-
ple of an economic regulation' and is subject only to the minimum
scrutiny rational basis test." In re Chateaugay, 53 F.3d at 486 (quot-
ing Duke Power Co. v. Carolina Envtl. Study Group, Inc., 438 U.S.
59, 83 (1978)); see also Davon, 75 F.3d at 1121 (reaching same con-
clusion as to level of scrutiny applicable to due process challenge to
Coal Act). We therefore accord Congress's directives under the Coal
Act strong deference as economic legislation and review it only for
having a rational basis. Carbon and USX bear a difficult and heavy
burden to demonstrate that a piece of economic legislation is not
rational. See, e.g., Davon, 75 F.3d at 1121-22.
We find that the Coal Act was a rational congressional response to
a serious problem. NBCWA signatory operators through the 1970s
created and fostered an expectation of lifetime health-care benefits.
Templeton Coal, 882 F. Supp. at 816-17; Coal Commission Report,
at vii, 1. While perhaps not the fairest scheme, the one selected by
Congress for ensuring that those benefits are delivered is not irratio-
nal. The "Coal Act's financing scheme is one of proportionality. Sig-
27
natory operators bear the financial responsibility for the health care
costs of assigned Combined Fund beneficiaries and their pro rata
share of any `orphaned' beneficiaries." Id. at 819. The Supreme Court
has upheld retroactive cost-spreading statutes where a rational con-
nection exists between a legitimate legislative purpose and the means
chosen by Congress on a number of occasions. Concrete Pipe, 508
U.S. at 636-41; Gray, 467 U.S. at 730; Turner Elkhorn, 428 U.S. at
18-19. In doing so, the Court has opined that "the imposition of liabil-
ity for effects of disabilities bred in the past is justified as a rational
measure to spread the costs of the employees' disabilities to those
who have profited from the fruits of their labor--the operators and the
coal consumers." Turner Elkhorn, 428 U.S. at 18 (upholding statute
addressing black lung benefits). Likewise, the imposition of liability
for promised health-care benefits on those who made the promises in
the past and where the current carriers of the burden can no longer
sustain the benefits, is a rational measure to spread the costs on those
who benefited from the labor and concessions given in return for the
promised benefits.
Numerous courts considering the constitutionality of the Coal Act
have upheld it under rational Due Process review. See, e.g., Davon,
75 F.3d at 1121-26 (upholding "reach back" provisions of Coal Act
under rational review analysis); In re Chateaugay, 53 F. 3d at 486-91
(same); Templeton Coal, 882 F. Supp. at 811-21 (same). As the Sec-
ond Circuit reasoned in In re Chateaugay as to one coal company
who left the coal mining business, and challenged the constitutionality
of the Act's application to itself, that coal company
might well have expected that other coal operators would be
required to pay for [the benefits of its retirees, but the com-
pany] also could reasonably have anticipated that the 1950
and 1974 Benefit [Plans] would not be able to support the
financial burdens imposed upon them as a result of escalat-
ing health care costs, the aging of the beneficiary population
and the "dumping" of beneficiaries into the 1974 Benefit
[Plan].
53 F.3d at 490-91. We find that Congress's solution, which seeks to
reach back and impose the obligations to fund retirees' benefits on
those who benefited from the retirees' work and who made the prom-
28
ises of lifetime benefits as signatories to the NBCWAs, is rationally
related to its purpose of assuring health-care benefits to those retirees
who were given a promise of life-time benefits."It is surely proper
for Congress to legislate retrospectively to ensure that costs of a pro-
gram are borne by the entire class of persons that Congress rationally
believes should bear them." United States v. Sperry Corp., 493 U.S.
52, 65 (1989). Furthermore, evidence indicated that mandatory contri-
butions from all NBCWA signatory operators were necessary to
secure adequate financing for the Combined Fund. Davon, 75 F.3d at
1125-26.
For those same reasons, we reject USX and Carbon's contention
that the Coal Act's disparate treatment of pre-Act and post-Act con-
tracts violates their constitutional due process and equal protection
rights. Congress had rational reasons for rearranging the financing
scheme for UMWA retirees' health-care benefits. It had rational rea-
sons for imposing new obligations on coal operators who had con-
tracted out of their obligations to the 1950 and 1974 Benefit Plans
because those operators had helped foster the expectation of life-time
benefits and by imposing the burden of orphan employees on a smal-
ler and smaller number of coal operators helped jeopardize the finan-
cial health of the Benefit Plans. Under the Coal Act, those operators
remain the guarantors for those life-time benefits even if they enter
into post-Act contracts with successors. The Coal Act enables a "fresh
start" on funding UMWA retirees' benefits. Thus, we do not find it
irrational that Congress decided to allow post-Act contracts, but not
pre-Act contracts.
E. Attorney's Fees
One final matter remains--the counterdefendants' motion for attor-
ney's fees. The counterdefendants argue that the indemnification pro-
visions in their asset sales agreements require that USX reimburse
them for their attorney's fees in this lawsuit. The district court did not
specifically address attorney's fees. The district court merely dis-
missed all pending motions as moot when it entered its summary
judgment order.
Counterdefendants Old Ben, Arch, and Consol filed counterclaims
seeking indemnification from USX from any and all costs and attor-
29
ney's fees they incurred in the defense of USX's counterclaim. USX
failed to respond to the counterclaims on time. The district court
denied USX's motion to enter an untimely answer. Thus, the clerk of
the court entered a default judgment against USX on April 28, 1995.
It therefore appears that the district court's failure to award attorney's
fees is an oversight. If not an oversight, the district court's reasons for
not awarding fees after the entry of a default judgment are unclear to
us. We therefore remand solely on the question of the counterdefen-
dants' attorney's fees.
Accordingly, we
AFFIRM IN PART AND REMAND IN PART.
WILLIAMS, Circuit Judge, concurring in the judgment:
I agree that "the agreements and contracts USX and Carbon rely
upon would not allow reimbursement." Majority Op. at 23. Because
the agreements and contracts of Carbon and USX do not allow for
reimbursement or indemnification, we need not reach in Part II.B. the
question of whether the Coal Act precludes the enforcement of such
contracts. The majority's holding on this issue is simply dictum. See
Bettius & Sanderson, P.C. v. Nat'l Union Fire Ins. Co., 839 F.2d
1009, 1019 n.3 (4th Cir. 1988) (Murnaghan, J., concurring in part and
dissenting in part) (stating that "[t]o reach out and decide what need
not be decided is frequently denigrated as dictum."). Furthermore, I
disagree with the majority's dictum that pre-Act contracts cannot be
enforced to indemnify or reimburse a party for its liability under the
Act for payments to the Combined Fund. See Majority Op. at 18-23.
Because I believe that the Act does not preclude the enforcement of
such contracts, I limit my participation in the majority opinion to con-
curring in the judgment.
I.
I agree with the majority that the "Coal Act established a new fund-
ing method for financing UMWA retirees' health-care benefits that
expressly created new obligations on Carbon and USX . . . notwith-
standing their prior contracts." Majority Op. at 18. Under the Act,
30
Congress provided that all liability for contributions to the Combined
Fund shall be determined exclusively under the Act through a statu-
tory assessment imposed on signatory operators by the Commis-
sioner. See id. at 19. I also agree that Congress intended that these
statutory assessments would "reach back" to companies that had left
the coal business or bargained out of their prior obligations. See id.
at 19-20 & n.11.
The express language of the Act states that "[a]ll liability for con-
tributions to the Combined Fund . . . shall be determined exclusively
under [the Coal Act]." 26 U.S.C.A. § 9708 (West Supp. 1996). The
majority interprets this provision as abrogating all"prior private
agreements unless expressly provided for in the Act." Majority Op. at
21. However, nothing in the statute warrants this interpretation.
Indeed, while I agree that "`[a]ll liability' to the Combined Fund
[must] be determined by the Coal Act," id. (emphasis supplied), I can-
not find anything in the Act abrogating the liabilities of parties to
each other under an agreement for reimbursement, indemnification,
or the like, regardless of the date of the agreement. Nowhere does the
Act preclude the enforcement of pre-Act contracts. Cf. id. at 21 ("The
Act contains no provisions that expressly provide for the enforcement
of pre-Act agreements."). As a result, while I agree that the Coal Act
imposes new duties and liabilities on Carbon and USX, I disagree
with the majority's conclusion that the companies' pre-Act contracts
are abrogated by the Act, and cannot be enforced to indemnify or
reimburse them for their liability for payments to the Combined Fund.
See id. at 20-23.
The Act specifically states that post-Act, mine operators may real-
locate responsibility for assigned retirees' benefits to the Combined
Fund to successor operators by private agreement or contract, pro-
vided that the operator transferring the assignment notifies the trust-
ees of the Combined Fund and remains a guarantor of the payments
to the Fund. See 26 U.S.C.A. § 9706(b)(2) (West Supp. 1996).1 The
majority correctly asserts that § 9706(b)(2) authorizes mine operators
_________________________________________________________________
1 I agree with the majority that no pre-Act agreement is protected by
this provision, but note that parties contracting prior to 1992 could not
have anticipated the Act and thus, absent clairvoyance, would not have
contracted in a way that would meet the requirements of § 9706(b)(2).
31
to transfer Combined Fund liability to successor operators by contract
after the Act's enactment date, see Majority Op. at 21-22, but then
opines that "[i]f Congress had intended signatory operators to con-
tinue to be able to enforce some type of secondary liability under
[pre-Act] private agreements it could have so stated." Id. at 23. It is
not surprising, however, that a statute enacted in 1992 fails to autho-
rize parties to enter into contracts prior to 1992. As Congress surely
realized, mine operators were able to, and did, freely and lawfully
reallocate responsibility for retirees' benefits to successor operators
by private agreement or contract prior to 1992. Indeed, it is precisely
because operators were able to lawfully bargain out of their prior
employee benefit obligations, and because successor operators pro-
ceeded to default on the employee benefit obligations they assumed,
that Congress enacted the Coal Act. See id. at 19 (citing legislative
history).
In asserting that all pre-Act contracts are abrogated by the Act, the
majority confuses the status of guarantor operators under § 9706(b)(2)
with that of operators assigned primary liability to the Combined
Fund under § 9706(a) who retain pre-Act contractual rights of
indemnification.2 An operator assigned Coal Act liability by the Com-
_________________________________________________________________
2 The majority confuses the distinction between primary liability to the
Combined Fund (created by the Coal Act), and secondary liability among
parties (created by private contracts) when it argues that because the Act
does not expressly provide an analogue to § 9706(b)(2) for pre-Act con-
tracts, all pre-Act contracts must therefore be abrogated. In making this
argument, the majority makes an analytical leap that is unwarranted. The
Coal Act does not provide a companion to § 9706(b)(2) for pre-Act con-
tracts because the Act is expressly designed to reinstate the primary lia-
bility of the assigned operator, unless and until a post-Act transfer of
liability takes place. Obviously, affording a § 9706(b)(2) transfer right to
operators pursuant to their pre-Act contracts would defeat the Act's pur-
pose of assigning primary liability to signatory operators. However, rein-
stating this primary liability to signatory operators is not inconsistent
with allowing such operators private contractual recourse against the par-
ties with whom they have contracted.
The majority asserts that "Congress made no distinction between pri-
mary and secondary liability." Majority Op. at 23. As evidence of this
proposition, the majority chants repeatedly the mantra that "Congress
32
missioner is primarily liable and must pay into the Combined Fund,
regardless of the operator's private, pre-Act contractual rights. I agree
that under the Act, the Commissioner's assignments of liability to the
Combined Fund are final. See Majority Op. at 22. In contrast, an
assigned operator who has entered into a post-Act assignment of its
primary liability will be liable as a guarantor to the Fund only if the
successor operator does not satisfy the obligation. See § 9706(b)(2).
Additionally, the Act's express preservation of a broad right of
"separate" civil litigation for determining responsibility for assigned
premium payments, see 26 U.S.C.A. § 9706(f)(6) (West Supp. 1996),
undermines the majority's conclusion that pre-Act contracts are abro-
gated by the Act. Although pre-Act contracts cannot function to trans-
fer primary liability for employee benefit obligations under the Act,
§ 9706(f)(6) preserves the right of private civil action for determining
responsibility for assigned premiums as between contracting parties.
The majority, in order to explain the very existence of § 9706(f)(6),
asserts that in the event of a "problem" with payment by a post-Act
successor, § 9706(b)(2) does not provide a resolution. See Majority
Op. at 22. Section 9706(f)(6) exists, the majority claims, for the sole
purpose of enabling the transferring operator, pursuant to its post-Act
agreement, to seek indemnification (or such other payment allocation
provided in the post-Act agreement) from the successor company. See
id. at 22 ("The private action section [§ 9706(f)(6)] makes clear that
the assignor in the post-Act contract may bring a private civil action
seeking reimbursement for the premiums it has paid.").
I agree that § 9706(f)(6) enables operators who have transferred
their Combined Fund liability via post-Act contractual agreements to
sue for reimbursement or indemnification for the premiums they have
_________________________________________________________________
expressly stated that `All liability' should be determined as provided for
by the Act." Id. at 23; see also id. at 23 ("Congress made clear that the
Act would `expressly' determine all liability."). Again, the majority
looks beyond the mark. Congress did expressly state in the Act that all
liability to the Combined Fund is determined by the Act. Congress, how-
ever, said nothing to abrogate the right of parties to enforce pre-Act pri-
vate contracts for indemnification.
33
paid. However, I cannot find anything in § 9706(f)(6) that limits that
section's preservation of private civil litigation to post-Act contracts
only. The specific application of the provision to post-Act reimburse-
ment actions says nothing about the provision's broader implications.
In its entirety, § 9706(f)(6) states:
Private actions. -- Nothing in this section shall preclude
the right of any person to bring a separate civil action
against another person for responsibility for assigned premi-
ums, notwithstanding any prior decision by the Commis-
sioner.
In my view, the Act preserves the right of parties to engage in private
civil litigation for the purpose of determining responsibility for pre-
mium payments, irrespective of whether their agreements were con-
summated pre-Act or post-Act.3 This reading of the Act differs from
_________________________________________________________________
3 The Conference Report's description of the private action section sup-
ports this conclusion:
The section on private actions provides that if parties have com-
mercial contracts related[d] to acquisition or disposition of coal
bearing properties or facilities which delineate their respective
responsibilities concerning the obligation of retiree health care,
the parties may enter into private litigation to enforce such con-
tracts for indemnification or any other form of payment alloca-
tion as may be appropriate under their private contract.
Otherwise, this language does not create new private rights of
action where they would not exist in the absence of this provi-
sion.
138 Cong. Rec. S17566-01, S17605-06 (1992).
The majority contends that this section of the legislative history is not
persuasive because it is "ambiguous" about whether § 9706(f)(6) relates
to pre- or post-Act contracts. See Majority Op. at 22 n.15. The majority
asserts that
[i]n light of the express language of the Act stating that all con-
tributions shall be determined exclusively under the Act and the
legislative history indicating that the Coal Act was intended to
correct the problem of operators contracting out of their obliga-
tions to the 1950 and 1974 Benefit Plans, we find that the ambig-
34
the majority's only in that it declines to disturb the private contractual
rights of parties with regard to matters beyond the concern of the Coal
Act.
Thus, an operator who has been assigned primary liability by the
Commissioner under the Act for employee benefit premiums to be
paid into the Combined Fund may, pursuant to its pre-Act agreement,
seek indemnification (or such other form of reimbursement payment
as is provided in the agreement) from the successor company, "not-
withstanding any prior decision by the Commissioner." § 9706(f)(6).
In such a case, the Combined Fund is assured of payment regardless
of whether the operator bearing primary liability successfully obtains
reimbursement from the successor operator because, under the Act,
the Commissioner's assignments of liability to the Fund are final. See
Majority Op. at 22.
II.
Although the Act does not preclude the enforcement of pre-Act
contracts, I agree with the majority that "the agreements and contracts
USX and Carbon rely upon would not allow reimbursement." Major-
ity Op. at 23. As a result, I agree that the agreements and contracts
_________________________________________________________________
uous . . . legislative history is not strong enough to create an
enforcement right for pre-Act contracts.
Id. at 23 n.15.
In discussing the "express language of the Act," the majority again
confuses the distinction between contributions to the Combined Fund
(which are determined exclusively under the Act), and liabilities owed by
parties to each other (which may be allocated by contract). Despite the
resulting confusion, I agree with the majority that the express language
of § 9706(f)(6) (confused or not), coupled with the legislative history
(ambiguous or otherwise), does not "create new private rights of action
where they would not exist in the absence of" the section. See 138 Cong.
Rec. S17566-01, S17605-06 (1992). However, I find that the right to
engage in private civil litigation to enforce a contract existed prior to and
independent of the passage of the Act, and that nothing in the Act pre-
cludes parties like Carbon and USX from engaging in such private litiga-
tion to enforce their pre-Act contracts.
35
in question do not obligate USX, Arch, Consol, and Old Ben to
assume the Combined Fund liability of Carbon and USX. Accord-
ingly, I concur in the judgment of the court.
36
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Matter of Olewuenyi (2016 NY Slip Op 02181)
Matter of Olewuenyi
2016 NY Slip Op 02181
Decided on March 24, 2016
Appellate Division, First Department
Per Curiam
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on March 24, 2016
SUPREME COURT, APPELLATE DIVISION
First Judicial Department
Peter Tom, Justice Presiding,
Richard T. Andrias
Paul G. Feinman
Judith J. Gische
Barbara R. Kapnick,Justices.
M-5886
[*1]In the Matter of Chris C. Olewuenyi (admitted as Chris Chukolems Olewuenyi), an attorney and counselor-at-law: Departmental Disciplinary Committee for the First Judicial Department, Petitioner, Chris C. Olewuenyi, Respondent.
Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, Chris C. Olewuenyi, was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the First Judicial Department on September 27, 1999.
Jorge Dopico, Chief Counsel, Departmental
Disciplinary Committee, New York
(Kathy W. Parrino, of counsel), for petitioner.
Respondent pro se.
Per Curiam
Respondent, Chris C. Olewuenyi, was admitted to the practice of law in the State of New York by the First Judicial Department on September 27, 1999, under the name Chris Chukolems Olewuenyi. At all times relevant herein, respondent maintained a registered address within the First Department.
On August 9, 2005, respondent pleaded guilty in the United States District Court for the District of New Jersey to conspiracy to defraud a financial institution in violation of 18 USC § [*2]371, a federal felony. Respondent's conviction stemmed from his involvement in 2003 in a mortgage fraud scheme as part of which he prepared and submitted documents to a mortgage lender, a bank insured by the FDIC, which contained materially false statements upon which the bank relied in closing a mortgage loan transaction.
On May 4, 2007, respondent was sentenced to 33 months incarceration, three years of supervised release, and ordered to pay $131,489 in restitution to the bank.
By order filed September 30, 2005, the Supreme Court of New Jersey temporarily suspended respondent, based on his August 2005 federal conviction, pending the conclusion of disciplinary proceedings against him (185 NJ 165, 883 A2d 345 [2005]).
On April 12, 2007, respondent pleaded guilty in New Jersey Superior Court, Essex County, to second degree conspiracy to commit identity theft, in violation of NJ Stat Ann 2C:5-2, 2C:21-17, a felony, involving a real estate transaction different than the one underlying his federal conviction. Respondent's conviction stemmed from his participation in a real estate transaction involving a straw buyer, which respondent knew to be illegal. On or about June 4, 2007, respondent was sentenced to three years imprisonment to run concurrent with his federal sentence, which was imposed on May 4, 2007.
Nearly seven years following this state conviction, by order filed February 7, 2014, the Supreme Court of New Jersey suspended respondent for two years retroactive to the date of his temporary suspension (September 30, 2005) for violating New Jersey RPC 8.4(b) (commission of a criminal act that reflects adversely on his honesty, trustworthiness or fitness as a lawyer) (216 NJ 576, 83 A3d 402 [2014]).
Respondent did not report his convictions and discipline in New Jersey to the Departmental Disciplinary Committee (Committee) until March 2015. In June 2015, the Committee first moved to strike respondent's name from the roll of attorneys on the ground that he was automatically disbarred because his federal conviction would constitute the New York felonies of conspiracy in the fourth degree and grand larceny in the second degree. By unpublished order entered September 28, 2015, this Court denied the Committee's petition without prejudice to further proceedings.
Now, by notice of petition dated November 19, 2015, the Committee again seeks an order striking respondent's name from the roll of attorneys.[FN1]
The Committee contends that "automatic" disbarment is warranted here because respondent's federal conviction for conspiracy to defraud the United States would constitute three New York felonies if committed within this State, namely, scheme to defraud in the first degree (Penal Law § 190.65[1][b]; forgery in the second degree (Penal Law § 170.10[1]); and conspiracy to commit identity theft in the second degree (Penal Law §§ 105.05 and 190.79[1]).
Respondent opposes the Committee's petition and requests that it be denied on the grounds of collateral estoppel or res
judicata, or, in the alternative, that this Court either disbar him, effective nunc pro tunc to August 9, 2005, the date of his federal conviction, or impose a two-year reciprocal suspension, effective nunc pro tunc to September 30, 2005, based on his two-year suspension in New Jersey. Respondent also apologizes and offers excuses for his criminal conduct, and requests this Court show him leniency.
A conviction of a federal felony does not trigger automatic disbarment, no matter how serious the felony is, unless the federal felony at issue would constitute a felony under New York Penal Law (Judiciary Law § 90[4][e]; Matter of Rosenthal, 64 AD3d 16, 18 [1st Dept 2009]).
For a determination that a federal felony has a New York analogy, the federal felony does not have to be a "mirror image" of a New York felony, but must be "essentially similar" (Matter of Margiotta, 60 NY2d 147, 150 [1983]). If this initial analysis is inconclusive, "essential similarity" can be established by admissions made under oath during a plea allocution, read in conjunction with the indictment or information (see Matter of Adams, 114 AD3d 1, 2-3 [1st Dept 2013]; Matter of Lin, 110 AD3d 186, 187 [1st Dept 2013]; Matter of Sorin, 47 AD3d 1, 3 [1st Dept 2007]).
The Committee concedes that there is no direct felony analogue for conspiracy to defraud the United States. However, respondent's admissions, made during his plea allocution, that he prepared and oversaw the execution of a deed by a person he knew to be misrepresenting herself as the owner of the property being sold, and then forwarded the fraudulently executed deed to the bank to potentially influence its decision to make a mortgage loan, read in conjunction with the superceding information to which he pled guilty, correspond to Penal Law § 170.10(1) and, therefore, his conviction is a proper predicate for automatic disbarment under Judiciary Law §§ 90(4)(b) and (e).
While there is no case directly on point, plea admissions similar to those made by respondent have been found to establish "essential similarity" between convictions under 18 USC § 371 and other New York felonies, and there is no reason not to do so here (see e.g. Matter of David, 102 AD3d 23 [1st Dept 2012] [conviction for conspiracy to commit immigration fraud found "essentially similar" to New York felony of offering a false instrument for filing in the first degree (Penal Law § 175.35) based on the respondent's plea admissions that he conspired to file more than 100 false immigration documents with the U.S. Department of Labor and U.S. Citizenship and Immigration Services]; Matter of Sorin, 47 AD3d at 3-4 [conviction for conspiracy to commit securities fraud found "essentially similar" to convictions under Penal Law §§ 190.65(1)(b) and 175.35 based on the respondent's plea admissions that he, inter alia, approved proxy statements and SEC filings that contained false information]; Matter of Harnisch, 7 AD3d 58 [1st Dept 2004] [conviction for conspiracy to commit mail fraud found "essentially similar" to conviction under Penal Law § 190.65(1)(b) based on the respondent's plea admissions that he, inter alia, submitted false and fraudulent documents to the New York State Department of Labor]; Matter of Kim, 209 AD2d 127 [1st Dept 1995] [conviction for conspiracy to commit bank fraud found "essentially similar" to convictions under New York Penal Law §§ 105.10(1) and 190.65 based on plea admissions that the respondent, inter alia, personally borrowed $200,000 from a bank under false pretenses by using a false nominee on a loan application]).
The Committee also argues that this Court should not make respondent's disbarment effective nunc pro tunc to the date of his federal conviction (August 9, 2005), because he failed to timely notify the Committee of his two convictions, as required by Judiciary Law § 90(4)(c) and 22 NYCRR 603.12(f), or his discipline in New Jersey, as required by 22 NYCRR 603.3(d).
Respondent had an obligation to report to the Committee his 2005 federal conviction, his 2007 state conviction, and his New Jersey discipline, and thus, as we decided in Matter of Zichettello (12 AD3d 128 [1st Dept 2004]), his disbarment should be made effective as of the date of the Committee's first petition to strike, namely, May 18, 2015.
Accordingly, the Committee's petition should be granted to the extent of striking respondent's name from the roll of attorneys and counselors-at-law in the State of New York pursuant to Judiciary Law § 90(4)(b), effective May 18, 2015.
All concur.
Order filed. [March 24, 2016]Tom, J.P., Andrias, Feinman, Gische, and Kapnick, JJ.
Respondent disbarred and his name stricken from the roll of attorneys and counselors-at-law in the State of New York, nunc pro tunc to May 18, 2015. Opinion Per Curiam. All concur.
Footnotes
Footnote 1:In the alternative, the Committee requests that this Court issue an order determining that the federal crime of which respondent was convicted is a "serious crime" (Judiciary Law § 90[4][d], Rules of App Div, 1st Dept (22 NYCRR) § 603.12[b]); immediately suspending him from the practice of law (Judiciary Law § 90[4][f]); and directing respondent to show cause before a referee or hearing panel why a final order of censure, suspension or disbarment should not be made (Judiciary Law § 90[4][g]).
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940 P.2d 357 (1997)
The PEOPLE of the State of Colorado, Petitioner,
v.
Mark Anthony GARCIA, Respondent.
No. 96SC206.
Supreme Court of Colorado, En Banc.
June 23, 1997.
As Modified on Denial of Rehearing August 4, 1997.
*358 Gale A. Norton, Attorney General, Martha Phillips Allbright, Chief Deputy Attorney General, Richard A. Westfall, Solicitor General, John Daniel Dailey, Deputy Attorney General, Robert Mark Russel, First Assistant Attorney General, M. Catherine Duba, Assistant Attorney General, Criminal Enforcement Section Denver, for Petitioner.
Newell and Martens, Steven P. Martens, Kevin C. Massaro, Denver, for Respondent.
Justice MULLARKEY delivered the Opinion of the Court.
We granted certiorari to consider whether the court of appeals erred in People v. Garcia, 920 P.2d 878 (Colo.App.1996), in reversing the first degree criminal trespass conviction of Mark Anthony Garcia (Garcia). Because Garcia was not charged with first degree criminal trespass and because the jury was instructed on that crime at the prosecution's request and over the defendant's objection, the court of appeals reasoned that first degree criminal trespass could be submitted to the jury only if it were a lesser included offense of the charged crime, second degree burglary. After finding that first degree criminal trespass is not such a lesser included offense, the court of appeals held that first degree criminal trespass could not be submitted to the jury over the defendant's objection and reversed Garcia's conviction. We reverse the court of appeals.
For the purpose of due process notice, the distinction between a sentence enhancement factor and a statutory element of an offense is irrelevant when the factor is specifically alleged in the charging document. Under such circumstances, an uncharged offense may be submitted to the jury over the defendant's objection if either (1) the uncharged offense is a lesser included offense of the charged offense, or (2) the offense as *359 charged gives fair notice to the defendant that he may be required to defend against the uncharged offense. Thus, we hold that, because Garcia was charged with second degree burglary of a dwelling in the complaint and information, he had proper notice of the lesser charge of first degree criminal trespass. We therefore reverse the court of appeals' decision and remand the case to that court.
I.
Garcia was charged with class three felony second degree burglary,[1] arising from an alleged burglary of Maria Casillas's (Casillas) apartment, which was located across the hall from his apartment. Casillas alleged that on April 3, 1994, she returned to her apartment in the afternoon and was unable to turn her key in her deadbolt lock to unlock it. However, she was able to unlock the lock on her doorknob. She testified that she felt that someone was holding the deadbolt lock from the inside and that she heard someone in her apartment. She further alleged that she then walked away from the doorway to her apartment and down the hallway, from where she kept an eye on her apartment vestibule. Because her apartment door was recessed from the hallway, she was unable to see her apartment door from her vantage point. She testified that she saw Garcia peek his head out from the recess in the hallway which enclosed her apartment door. She also testified that Garcia then saw her, shrugged his shoulders, and walked across the hall into his apartment.
Garcia was initially charged with class three felony second degree burglary. At trial, the People requested and received, over Garcia's objection, an instruction on first degree criminal trespass as a lesser included offense, and Garcia was convicted of the lesser offense. He appealed his conviction to the court of appeals, arguing that the trial court's submission of first degree criminal trespass over his objection violated his due process right to notice of the charges against him because first degree criminal trespass contained an element not shared by second degree burglary. The defendant contended that the lack of notice denied him the opportunity to prepare a defense to the charge submitted to the jury.
The court reversed Garcia's conviction on the grounds that first degree criminal trespass is not a lesser included offense of second degree burglary. See Garcia, 920 P.2d at 879. The court of appeals arrived at its decision by applying the test for determining lesser included offenses as laid out in Armintrout v. People, 864 P.2d 576 (Colo.1993). See Garcia, 920 P.2d at 879. This test requires a comparison of the elements of the statutes involved, rather than the evidence produced at trial, and omits sentence enhancement factors from consideration. See Armintrout, 864 P.2d at 579.
Section 18-4-203, 8B C.R.S. (1986), provides in relevant part:
Second degree burglary. (1) A person commits second degree burglary, if he knowingly breaks an entrance into, or enters, or remains unlawfully in a building or occupied structure with intent to commit therein a crime against a person or property.
(2) Second degree burglary is a class 4 felony, but it is a class 3 felony if:
(a) It is a burglary of a dwelling; ....
§ 18-4-203, 8B C.R.S. (1986) (emphasis added).
Section 18-4-502, 8B C.R.S. (1994 Supp.), provides in relevant part:
First degree criminal trespass. A person commits the crime of first degree criminal trespass if such person knowingly and unlawfully enters or remains in a dwelling of another ...
§ 18-4-502, 8B C.R.S. (1994 Supp.) (emphasis added).
Comparing the statutory definitions of second degree burglary and first degree criminal trespass, the court of appeals found that first degree criminal trespass requires that a person break, enter, or remain unlawfully in a "dwelling of another," while second degree burglary only requires that the unlawful entry be of a "building or occupied structure." *360 See Garcia, 920 P.2d at 879. The court of appeals observed that in our decision in Armintrout, we stated that, although second degree burglary becomes a class three felony where the "building or occupied structure" which is entered is a "dwelling," the element of "dwelling" functions as a sentence enhancer for second degree burglary rather than an essential element. See id. Further relying on Armintrout for the proposition that sentence enhancers are not to be considered in determining lesser included offenses, the court concluded that first degree criminal trespass was not a lesser included offense of second degree burglary because it contained the additional element of entry of a "dwelling." See id. Relying on dicta of another panel of the court of appeals in People v. Skinner, 825 P.2d 1045 (Colo.App.1991),[2] the court of appeals in this case concluded that the trial court erred in submitting an instruction on first degree criminal trespass over Garcia's objection, because "[i]t is solely the prerogative of the defendant to request that a lesser non-included offense be submitted to the jury." Garcia, 920 P.2d at 880.
II.
We begin our analysis by reviewing the law on lesser included offenses and the situations in which this court has addressed the issue. There are several generally recognized approaches for determining lesser included offenses. See State v. Meadors, 121 N.M. 38, 908 P.2d 731, 735 (1995); Edward G. Mascolo, Procedural Due Process and the Lesser-Included Offense Doctrine, 50 Alb. L.Rev. 263, 273 (1985). The most common approaches for determining lesser included offenses include the following: (1) the statutory or strict elements test; (2) the indictment or pleading theory; (3) the inherent relationship test; and (4) the cognate-evidence test. See Meadors, 908 P.2d at 735. The most restrictive approach is the statutory or strict elements test, which involves solely a comparison of the statutory elements of the two offenses. Under this test, one offense is a lesser included of another offense when all of the essential elements of the lesser offense comprise a subset of the essential elements of the greater offense, such that it is impossible to commit the greater offense without also committing the lesser. See Schmuck v. United States, 489 U.S. 705, 716, 109 S.Ct. 1443, 1450-51, 103 L.Ed.2d 734 (1989); United States v. Browner, 937 F.2d 165, 167-68 (5th Cir.1991); People v. Rivera, 186 Colo. 24, 26, 525 P.2d 431, 433 (1974).
Under the indictment or pleading theory, one offense is the lesser included of another when the allegations of the greater offense as charged, if taken as true, would prove all of the essential elements of the lesser offense. See Browner, 937 F.2d at 168; Meadors, 908 P.2d at 735. The inherent relationship test provides that one offense is included in another when "the facts as alleged in the indictment and proved at trial support the inference that the defendant committed the less serious offense, and an `inherent relationship' exists between the two offenses." Schmuck v. United States, 489 U.S. at 708-09, 109 S.Ct. at 1447. An inherent relationship is found when the two offenses "relate to the protection of the same interests and the proof of the greater offense can generally be expected to require proof of the lesser offense." Id. at 709, 109 S.Ct. at 1447.
The cognate-evidence approach involves a consideration of both the statutory elements and the evidence adduced at trial. This test provides that one offense is the lesser included of another when, under the facts of the specific case, "the lesser offense is sufficiently related to the charged offense to warrant a jury instruction on the former." Meadors, 908 P.2d at 735.
The determination of lesser included offenses has arisen in three different contexts *361 in Colorado: (1) double jeopardy/statutory merger claims; (2) a defendant's request for an instruction on a lesser offense; and (3) the prosecution's request for an instruction on a lesser offense. This case involves the last issue: the prosecution's entitlement to an instruction on a lesser offense over the defendant's objection, which implicates a defendant's due process right to notice of the charges against him. See Meadors, 908 P.2d at 735.
In the context of double jeopardy claims, we have held that a defendant may not be convicted of both a greater offense and an offense which is a lesser included offense of the greater offense under the statutory test. See Armintrout, 864 P.2d at 578-79. Applying the same reasoning to merger claims, we have held that where a defendant is convicted of both a greater offense and an offense which is lesser included under the statutory test, the rule of merger limits multiple punishments for the same crime and requires the merger of a lesser included offense into the greater offense.[3]See Boulies v. People, 770 P.2d 1274, 1282 (Colo.1989). Thus, in both double jeopardy cases and merger cases, we have followed the statutory or strict elements test.
In the context of a defendant's entitlement at trial to an instruction on a lesser offense, however, we have held that the determination of whether the lesser offense is included in the greater offense under the statutory test is not dispositive. See Rivera, 186 Colo. at 28, 525 P.2d at 434. A defendant is entitled to an instruction on a lesser offense as a theory of the case instruction, see id., as long as there is "a rational basis in the evidence to support a verdict acquitting him of the greater offense ... and convicting him of the lesser offense," People v. Bartowsheski, 661 P.2d 235, 242 (Colo.1983). The rationale for allowing such an instruction is to ensure that a jury does not convict a defendant of an offense greater than the one actually committed merely because the greater offense is the only crime charged and the jury is aware that some crime was committed. See Rivera, 186 Colo. at 29, 525 P.2d at 434. In addition, providing such an instruction at the defendant's request does not violate his due process right to notice, because the request "is tantamount to a defendant's consent to an added count being charged against him." Id. at 28-29, 525 P.2d at 434.
The case now before us presents the issue of the prosecution's entitlement to an instruction on a lesser offense over the defendant's objection. In contrast to double jeopardy and statutory merger claims or a defendant's entitlement to an instruction, this issue implicates a defendant's due process right to notice of the charges against him. See U.S. Const. amend. VI ("In all criminal prosecutions, the accused shall enjoy the right ... to be informed of the nature and cause of the accusation."). We therefore turn to a consideration of the test to be applied in this situation.
III.
Garcia argues that, because first degree criminal trespass contains the element "dwelling of another," which is not an element of second degree burglary according to our holding in Armintrout, first degree criminal trespass is not a lesser included offense of second degree burglary. Garcia therefore contends that he was not given sufficient notice of the need to defend on the first degree criminal trespass offense. The People argue, on the other hand, that because the determination of whether the prosecution is entitled to a jury instruction on a lesser, uncharged offense implicates a defendant's right to notice of the charges against him, that analysis is distinguishable from determining lesser included offenses for the purpose *362 of double jeopardy or statutory merger claims. We agree with the People.
We find as an initial matter that the court of appeals was correct that under the statutory test applied in Armintrout, first degree criminal trespass is not a lesser included offense of second degree burglary. In Armintrout, we considered whether a defendant was properly convicted of both first degree burglary and second degree burglary based on the same incident. We began our analysis in that case by noting that "a court is prohibited from imposing multiple punishments for a greater and lesser included offense by the Double Jeopardy Clauses of the federal and state constitutions ..., by statute..., and by the judicially-created rule of merger." Armintrout, 864 P.2d at 578-79. In that context, we applied the statutory test, comparing the elements of first and second degree burglary.
We found that the "dwelling" factor of class three felony second degree burglary functioned as a sentence enhancer, rather than an essential element of the offense. See id. at 579. We noted that a statutory enhancement factor is not an element of the offense charged because "[a] defendant still may be convicted of the underlying offense without any proof of the sentence enhancer." Id. at 580. Stating that our decisions in People v. Henderson, 810 P.2d 1058 (Colo. 1991), and People v. Powell, 716 P.2d 1096 (Colo.1986), demonstrate that we do not consider statutory enhancement factors when determining whether one offense is a lesser included of another for purposes of merger, we concluded that second degree burglary was a lesser included offense of first degree burglary. See Armintrout, 864 P.2d at 580-81.
If the case before us involved a claim of double jeopardy or statutory merger, the determination that first degree criminal trespass is not a lesser included offense of second degree burglary would be the end of our inquiry. However, this case must be distinguished from Armintrout because here the defendant claims a deprivation of his due process right to notice of the crime of which he was convicted. Although as a matter of law a defendant is given proper notice of a lesser uncharged offense that meets the definition of a lesser included offense, a determination that a lesser uncharged offense does not meet that definition is not ultimately dispositive of the notice question.
We first dealt with the tension between the prosecution's entitlement to an instruction on a lesser offense over a defendant's objection and a defendant's due process right to notice of the charges against him in People v. Cooke, 186 Colo. 44, 525 P.2d 426 (1974). In Cooke, the defendant was charged with possession of narcotics for sale. See id. at 45, 525 P.2d at 427. At the close of evidence, the People requested an instruction on the lesser included offense of possession of a narcotic drug. See id. The defendant objected to the instruction, and the trial court denied the People's request. See id.
In overruling the trial court, we considered the due process notice which must be given to a defendant and looked to the charging document to determine if it had been satisfied. See id. at 46, 525 P.2d at 428. We stated that "[t]he right of an accused to notice of the charges which have been made against him constitutes a fundamental constitutional guarantee and lies at the foundation of due process of law." Id. at 46, 525 P.2d at 428. We further explained that "[t]he notice given must be sufficient to advise the accused of the charge, to give him a fair and adequate opportunity to prepare his defense, and to ensure that he is not taken by surprise because of evidence offered at the time of trial." Id.
We then looked to the information that had been filed in Cooke to determine if it satisfied the due process notice test. Finding that "the information charging possession with the intent to sell was sufficient to advise the defendant that he must be prepared to controvert evidence of possession and to defend on that charge," we concluded that his due process rights had not been violated. Id. We ultimately held that
where ... the lesser included offense upon which the prosecution requested an instruction is (1) easily ascertainable from the charging instrument, and (2) not so remote in degree from the offense charged *363 that the prosecution's request appears to be an attempt to salvage a conviction from a case which has proven to be weak, the prosecution may obtain a lesser included offense instruction over the defendant's objection.
Id. at 48, 525 P.2d at 429.
The Cooke test recognizes that due process is a flexible concept, and its exact contours must be determined by the facts of each case. Although the Cooke case involved an instruction on a lesser included offense, the court's consideration of the defendant's due process right to notice included an analysis of the offense as charged in the particular information involved in that case. The Cooke approach thus closely resembles the indictment/pleading theory of determining lesser included offenses by directing the trial court to look at the allegations of the offense as charged.
Although the lesser offense in the case now before us is not an included offense of the offense charged, we find the Cooke rationale is applicable and requires us to look to the charging document when a question of due process notice is raised. Therefore, to decide whether a defendant has notice that he might have to defend against a lesser uncharged offense, we must consider the greater offense as charged.
In this case, the felony complaint listed the charge as "SECOND DEGREE BURGLARY (F-3) COUNT ONE." The information further stated that Garcia "did unlawfully, feloniously and knowingly break an entrance into and enter and remain unlawfully in the dwelling of [the victim]." (emphasis added). Felony class three second degree burglary is second degree burglary of a dwelling. See § 18-4-203(2)(a), 8B C.R.S. (1986). Therefore, because the listed charge was second degree burglary, felony class three, Garcia had notice that the prosecution sought to prove burglary of a dwelling. Moreover, the information specifically alleged that the breaking and entering was of a "dwelling." Thus, Garcia clearly had notice through the charging instruments of the prosecution's intent to prove that the unlawful entry was of a "dwelling." Under such circumstances, it was not error on the part of the trial court to instruct the jury on first degree criminal trespass over the defendant's objection.
In reaching our decision, we are persuaded by our cases analyzing the distinction between elements and sentence enhancement factors in the context of the burden of proof. In Beigel v. People, 683 P.2d 1188 (Colo. 1984), we addressed the question of whether the court of appeals erred in upholding the trial court's failure to include "physically aided or abetted" as an element in the definitional jury instruction of first degree sexual assault. At that time, the first degree sexual assault offense, section 18-3-402(2)(a), 8B C.R.S. (1978), provided in relevant part that "[s]exual assault in the first degree is a class 3 felony, but it is a class 2 felony if: (a) In the commission of the sexual assault the actor is physically aided or abetted by one or more other persons." § 18-3-402, 8B C.R.S. (1978).
In upholding the district court's failure to provide "physically aided and abetted" as an element which must be proved beyond a reasonable doubt, the court of appeals held that the instructions were sufficient because the disputed provision was a sentence enhancer rather than an essential element of the crime. Beigel, 683 P.2d at 1190-91. Reversing the court of appeals, we found that "the result in th[e] case is the same whether [it] is labeled an element or a sentence enhancer." Id. at 1191. We emphasized that, regardless of whether the section functioned as a sentence enhancer, it still had to be proved beyond a reasonable doubt. See id.
By the same reasoning, where the issue is notice, factors announced in the charging instrument effectively place a defendant on notice, regardless of whether those factors are labeled as sentence enhancers or elements.[4] To hold otherwise would *364 be to elevate form over substance because each must be proved beyond a reasonable doubt. Thus, although a defendant is presumed to have notice of the possibility of conviction of an offense which is a lesser included offense of the offense charged, we hold that the inquiry does not necessarily end there. For purposes of due process notice, where the prosecution seeks an instruction on a lesser nonincluded offense of an offense charged, the court must examine the charging documents involved in the case at hand to determine if the offense as charged alleges the existence of a sentence enhancement factor which provides the defendant with sufficient notice of the lesser offense.
IV.
In the context of due process right to notice, much like the standard of proof context, we find that the distinction between an essential element and a statutory enhancement factor is not dispositive for determining whether a defendant has notice of lesser included offenses against which he must defend. Because the charging instrument in this case put Garcia on notice that the second degree burglary charge was premised on the burglary of a dwelling, we hold that the court of appeals erred in reversing Garcia's conviction. We remand the case to that court for further proceedings consistent with this opinion.
NOTES
[1] § 18-4-203, 8B C.R.S. (1986).
[2] The question in Skinner was whether the trial court properly characterized as lesser included offenses two crimes which had been submitted to the jury at the defendant's request. See Skinner, 825 P.2d 1045, 1046 (Colo.App.1991). Therefore, the issue of the prosecution's entitlement to an instruction on a lesser non-included offense was not properly before the court of appeals, and its statements on this issue were dicta. Although the Skinner court cited our decision in People v. Rivera, 186 Colo. 24, 525 P.2d 431 (1974), in support of its statements, our comments in Rivera regarding the prosecution's entitlement to such an instruction were likewise dicta. See Rivera, 186 Colo. at 28, 525 P.2d at 434.
[3] In Colorado, section 18-1-408(5), 8B C.R.S. (1986), provides a statutory basis for merger and states in relevant part:
A defendant may be convicted of an offense included in an offense charged in the indictment or the information. An offense is so included when:
(a) It is established by proof of the same or less than all the facts required to establish the commission of the offense charged;....
§ 18-1-408(5), 8B C.R.S. (1986). We have found that this section requires the application of the statutory test for determining lesser included offenses. See People v. Raymer, 662 P.2d 1066, 1069 (Colo.1983).
[4] The jury instruction given in this case was taken from CJI-Crim. 14:03 and treated the sentence enhancer as an element for purposes of proof:
The elements of the crime of Second Degree Burglary are:
1. That the defendant,
2. in the State of Colorado, at or about the date and place charged,
3. knowingly,
4. unlawfully entered or remained in a dwelling,
5. with intent to commit therein the crime of Theft as defined in Instruction No. 7.
After considering all of the evidence, if you decide the prosecution has proven each of the elements beyond a reasonable doubt, you should find the defendant guilty of Second Degree Burglary.
After considering all of the evidence, if you decide the prosecution has failed to prove each of the elements beyond a reasonable doubt, you should find the defendant not guilty of Second Degree Burglary.
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62 Cal.App.2d 233 (1944)
WILETTA LAY, Respondent,
v.
PACIFIC PERFORATING COMPANY, LTD. (a Corporation) et al., Appellants.
Civ. No. 3121.
California Court of Appeals. Fourth Dist.
Jan. 8, 1944.
Sidney A. Moss for Appellants.
Claflin & Chain for Respondent.
GRIFFIN, J.
On February 16, 1943, plaintiff and respondent Mrs. Lay, accompanied by her husband and a four-year-old boy, left their residence in Bakersfield at about 2:30 p.m. to go to a lunch room about five blocks away. They proceeded on the sidewalk, which was about three feet wide and ran immediately in front of the plant of the defendant company. As they were about to pass those premises, about fifteen feet ahead of them they saw a small pool of oil on the sidewalk, which had been allowed to escape from the premises of the defendant company. In this respect Mr. Lay testified that just ahead of them he noticed "a considerable amount of shavings" and "there was some oil, just how much, I didn't pay any attention"; that as to whether the oil he then noticed was at the "same place that the oil was that your wife fell in," he answered: "I am not sure that it was." On this subject Mrs. Lay testified that on the way over to the restaurant while passing defendants' premises, she noticed some oil on the sidewalk. She did not testify that she observed the exact character of the oil spot or the extent of its coverage at that time. Defendant Guerin testified that at the spot where plaintiff fell he found "loose oil," "dirt" and a few "steel shavings." *235 He was asked if a person walked on those steel shavings saturated with oil whether it would be slippery, and he replied: "No, it would be just like walking on a cinder path." Instead of passing through the escaping oil, plaintiff and her husband crossed the street to the lunch room, which was a more direct route. About a half hour later, they returned to the sidewalk, and passed in front of defendants' premises on their way home. Mr. and Mrs. Lay were conversing about the type of work being conducted and maintained by defendant company in its yard. They were looking through a wire fence at the plant maintained by it. As they thus proceeded, Mrs. Lay's foot slipped from under her in a pool of oil, which was about 12 inches wide and 18 inches in length. She fell directly upon her hip and received an injury to her coccyx. She was taken to the hospital. The following day she was released and was later treated by the company doctor for a period of over one and a half months. At the time of the trial she was still undergoing treatment for traumatic arthritis claimed to have been caused by the injury.
Defendants defended the action, denied negligence on their part, and pleaded contributory negligence on the part of the plaintiff. A trial by jury resulted in a verdict for plaintiff for $7,500 which, on a motion for new trial, was conditionally reduced to $4,500 by the trial court. Defendant company and defendant Guerin, as supervisor of the company's plant, appealed from the judgment in the lesser amount.
Defendants first claim that there was no act of negligence on their part established by the evidence. They concede that the evidence sufficiently establishes that "the oil came in some manner from the premises of the defendant company," but contend that there was no evidence from which the jury could conclude that the defendants themselves actually placed the oil on the sidewalk or that they engaged in any activity by which it accumulated there with their knowledge. In other words, it is claimed that where the plaintiff cannot show that the defendants' activity is responsible for placing the obstruction or foreign substance on the sidewalk the plaintiff has a definite burden of proof of showing (1) that the accident was occasioned by a condition which was actually known to the defendants; or (2) that the oil in question had remained on the sidewalk for so long a time before the occurrence of the accident that it would have charged the defendants, in the exercise of reasonable care, with notice of its existence, *236 citing such cases as Crawford v. Pacific States Savings & Loan Co., 22 Cal.App.2d 448 [71 P.2d 333]; Matherne v. Los Feliz Theatre, 53 Cal.App.2d 660 [128 P.2d 59] and Mona v. Erion, 223 App.Div. 526 [228 N.Y. S. 533].
[1] The evidence clearly shows that the defendants were in the habit of keeping large quantities of the same character of oil on their premises and that such oil was used in the perforation of pipe, and that there was a quantity of that character of oil on the premises on the day in question; that the premises of defendant company which abutted the sidewalk were approximately one foot higher than the elevation of the sidewalk; that oil similar to the oil on the sidewalk was, on the day of the injury, traced back from the pool on the sidewalk into the bank on defendants' property; that defendants maintained an oil sump on the premises in connection with their work; that on the day of the injury the soil on defendants' premises was "saturated in oil" and "filled with shavings cut from pipe"; that defendants had knowledge that such oil and pipe shavings had accumulated on the sidewalk near the same area in the past; that defendants had on occasions prior to February 16, 1943, steam-cleaned oil, oil marks and pipe shavings from the sidewalks; that the last occasion of cleaning occurred about February 13, 1943; and that the sidewalk was inspected by defendants once each week to determine the necessity of steam-cleaning the oil from it; that defendant Guerin told plaintiff's husband, right after the fall, that they "had had some trouble with that oil overflowing through the rain" and he also said "the city had said something to them more than once before and he had had some men to work on it that morning, but they had not gotten to cleaning off the sidewalk yet." Guerin denied such a conversation. However, the constable who served defendant Guerin testified that after Guerin read the complaint he remarked: "That is one thing they told the truth on was the small amount of oil running out of the yard onto the sidewalk." The evidence clearly establishes that the defendants were under a duty to refrain from doing any affirmative act that would render the sidewalk dangerous for public travel and that defendants' act in permitting oil to run from defendants' premises to the sidewalk and in not keeping the sidewalk free and clear from such oil after knowledge of the conditions, was the doing of an affirmative act that rendered the *237 sidewalk dangerous to pedestrians who had the lawful right to use the walk and the right to assume that it was free and clear of any and all such dangerous conditions which might interfere with their safe passage thereon.
The facts of this case come clearly within the rule announced in Barton v. Capitol Market, 57 Cal.App.2d 516 [134 P.2d 847], which was an action for personal injuries sustained through a fall on a slippery sidewalk bordering defendants' place of business. There defendants' employees used some substance to spray the corner of their building. When so sprayed a stain ran down from the building across the sidewalk. When wet, the stain became yellow, greasy and slippery. Under such circumstances it was there held that in the absence of statute, there is no affirmative obligation on an abutting property owner to keep a sidewalk in a safe condition, but if the abutting owner by positive action creates a condition which is likely to cause harm to persons lawfully using the sidewalk and a person is injured as a proximate result thereof, the property owner is liable.
Defendants' main argument is directed to their contention that the undisputed evidence shows that the plaintiff was aware of the dangerous condition, and the dangerous condition itself being plainly observable to anyone who cared to observe it, she was guilty of contributory negligence as a matter of law. They cite many cases beginning with Davis v. California St. C. R. R. Co., 105 Cal. 131 [38 P. 647], and such cases as Dunn v. Wagner, 22 Cal.App.2d 51 [70 P.2d 498] and Blodgett v. B. H. Dyas Co., 4 Cal.2d 511 [50 P.2d 801], which in effect hold that where the uncontradicted testimony shows that the injured party had notice of a known danger and negligently walked into it without looking and without using ordinary care for his own personal safety, he cannot recover on account of any resulting injury. The question here presented under the evidence is by far the closest question presented on this appeal.
[2] It is a general rule that a plaintiff, like a defendant, is held to exercise only that amount of care which would be exercised by a person of ordinary prudence in the same circumstances. [3] It is ordinarily a question for the jury whether or not a plaintiff has been guilty of contributory negligence. (Jamison v. San Jose & S. C. R. R. Co., 55 Cal. 593.)
The rule with reference to forgetfulness of a known danger has been declared by our Supreme Court in Giraudi *238 v. Electric Imp. Co., 107 Cal. 120, 125-126 [40 P. 108, 48 Am. St.Rep. 114, 28 L.R.A. 596], as follows:
"It is said that, if one was aware of a fact which should have put him upon his guard, he cannot rebut the presumption of contributory negligence by showing that he momentarily forgot it. This is true as a general proposition, but, like all other rules upon this subject, it must have a reasonable construction. To forget is not negligence, unless it shows a want of ordinary care, and it is a question for the jury."
This rule was cited in Meindersee v. Meyers, 188 Cal. 498 [205 P. 1078], where plaintiff fell in an open ditch during the nighttime, having had knowledge of its condition the preceding day. There the court said:
"Whether or not the information possessed by the plaintiffs was sufficient to impress upon their minds the danger incident to a use of the accustomed pathway in the dark, was a question for it to decide. We are unable to say, as a matter of law, and against the testimony of the plaintiffs, that they had such notice, and did appreciate such danger. Even assuming that their observation of the work done was more or less extensive during the day, it was for the jury to say whether it was a want of ordinary care for Mrs. Meindersee not to have the open excavation in mind when she returned home at 11:00 o'clock that night, for it has been repeatedly held that even with full knowledge of such danger one may be injured and yet be in the exercise of due care."
To the same effect are Hall v. Barber Door Co., 218 Cal. 412 [23 P.2d 279]; Christy v. Ulrich, 113 Cal.App. 338 [298 P. 135] and McStay v. Citizens National T. & S. Bank, 5 Cal.App.2d 595 [43 P.2d 560], in which latter case plaintiff walked down several steps, where no hand rails were constructed, to enter the foyer of a hotel. The foyer was unlighted and in darkness. After standing there a while she retraced her steps and misstepped from a platform which she apparently had just previously crossed. In considering the question of her contributory negligence as a matter of law, based upon her previous knowledge of the condition of the steps, the court said at page 600:
"... it is clear that whether or not the information possessed by Mrs. McStay was sufficient to impress upon her mind the danger incident to the use of the platform and steps in question was for the jury to decide as an issue of fact ... Even forgetfulness of a known danger will not always operate *239 to prevent a recovery, for to forget is not negligence unless it shows a want of ordinary care. ... And it has been repeatedly held that mere abstraction on the part of the injured person does not constitute contributory negligence as a matter of law. ... The question of contributory negligence was, therefore, properly submitted to the jury." (Citing cases.)
To the same effect are Wise v. Maxwell Hardware Co., 94 Cal.App. 765 [271 P. 918]; Du Val v. Boos Bros. Cafeteria Co., 45 Cal.App. 377 [187 P. 767]; Perkins v. Sunset Tel. & Tel. Co., 155 Cal. 712 [103 P. 190]; Felker v. Redlands West Coast Corp., 17 Cal.App.2d 551 [62 P.2d 406]; Hechler v. McDonnell, 42 Cal.App.2d 515 [109 P.2d 426]; Jacobson v. Oakland Meat etc. Co., 161 Cal. 425 [119 P. 653, Ann.Cas. 1913B 1194].
One of the latest expressions of the amount of knowledge of a known danger necessary to render a person negligent as a matter of law may be found in Ridge v. Boulder Creek Union Junior-Senior H. S. Dist., 60 Cal.App.2d 453 [140 P.2d 990]. In that case a high school boy was operating a power saw without a guard or a fence around it. The evidence showed that guards were ordinarily used to prevent injury but others in the class used the saws without safety devices. The question of the boy's previous knowledge of the purpose and use of the saefty devices and his use of the saw without them was set up as a claim of contributory negligence as a matter of law. In discussing this subject the court said (from syllabus):
"Knowledge that danger exists is not knowledge of the amount of danger necessary to charge a person with negligence in assuming the risk caused by such danger. The doing of an act with appreciation of the amount of danger, in addition to mere appreciation of the danger, is necessary in order to say as a matter of law that a person is negligent."
[4] So it may be said in the instant case. Plaintiff's casual observation of the substance which she took to be oil on the sidewalk on her first approach to it without walking through it, may not have been sufficient knowledge that a danger actually existed or may not have been sufficient knowledge to charge her with negligence in assuming the risk caused by such danger. While no particularly glaring conflicts are present, different conclusions as to the knowledge and conduct of the plaintiff may be reasonably drawn by different minds from the same evidence, and whether or not the information *240 possessed by plaintiff was sufficient to impress upon her mind the danger incident to a customary use of the sidewalk was a question for the jury. We are unable to say, as a matter of law, that plaintiff had such notice and did appreciate such danger.
[5a] Defendants next claim that the sum of $4,500 as damages is excessive. In addition to the evidence above recited, the evidence discloses that at the time of the fall plaintiff's lower limbs were momentarily paralyzed. She was taken on a stretcher, placed in an ambulance, and taken to the hospital. On her release from the hospital she was taken home. She was treated from that time on by the company's doctor at his office up until the time of the trial of this action which was on May 12, 1943. She testified that she suffered severe pains in the area of her back in the immediate vicinty of her coccyx, and also suffered severe headaches; that she experienced pains while sitting and reclining, both day and night; that it pained her to stoop and that her injuries were of such a permanent nature that she, according to the statement of the company doctor, might expect to experience them for the next ten or twelve years or "probably for life." Mrs. Lay was, at the time of trial, 20 years of age. [6] The question of excessive damages is primarily directed to the trial court. [7] The power of the appellate courts to reverse a judgment because of excessive damages exists only when the facts are such as to suggest that the verdict was the result of passion, prejudice or corruption on the part of the jury. We have found nothing in the record which suggests such to us. [5b] The evidence discloses substantial injuries, and considerable pain and suffering which may be permanent. (Burke v. John E. Marshall, Inc., 42 Cal.App.2d 195 [108 P.2d 738]. The judgment in the reduced amount cannot be held to be excessive. (Hamelin v. Foulkes, 105 Cal.App. 458 [287 P. 526].)
Judgment affirmed.
Barnard, P. J., and Marks, J., concurred.
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433 F.2d 582
Billy Joe SMITH, Petitioner-Appellant,v.Lamont SMITH, Warden, Georgia State Prison, Respondent-Appellee.
No. 29803 Summary Calendar.*
United States Court of Appeals, Fifth Circuit.
October 30, 1970.
Billy Joe Smith, pro se.
Arthur K. Bolton, Atty. Gen., Harold N. Hill, Jr., Executive Asst. Atty. Gen., Dorothy T. Beasley, Marion O. Gordon, Asst. Attys. Gen., Atlanta, Ga., for respondent-appellee.
Before GEWIN, GOLDBERG and DYER, Circuit Judges.
GEWIN, Circuit Judge:
1
This appeal is taken from an order of the district court denying the petition of a Georgia state convict for the writ of habeas corpus. We affirm.
2
Appellant Billy Joe Smith, on the advice of court-appointed counsel, pled guilty to twelve charges of rape and was sentenced in October 1967 by the Superior Court of Fulton County to serve twelve concurrent sentences of life imprisonment. In April 1969 he filed a pro se petition for habeas corpus in the Tattnall County Superior Court of Georgia urging that the judgments be invalidated on two grounds: (1) his court-appointed attorney failed to render effective assistance; and (2) he was not provided counsel at a police line up. After an evidentiary hearing, the state habeas court denied the petition. No appeal was perfected to the Georgia Supreme Court.
3
In November 1969 appellant filed a habeas corpus petition in the United States District Court for the Northern District of Georgia. The petition was denied on January 23, 1970 without a hearing on the basis of the state habeas corpus record. This practice is authorized by 28 U.S.C. § 2254(d) which provides that the determination of the state court in a habeas corpus proceeding "shall be presumed to be correct," unless the factual determination is not fairly supported by the record.1
4
Our independent examination of the record, including the transcript of the arraignment and sentencing proceedings, has convinced us that appellant voluntarily entered his guilty plea upon the advice of competent counsel with full understanding of his rights and full awareness of the consequences of his course of conduct. Smith testified at the state habeas corpus hearing that he pled guilty because his counsel advised him that the case against him was very strong and that he was risking the death penalty if he went to trial. While we realize that petitioner was faced with a difficult choice, we do not feel that this vitiated the voluntariness of the guilty plea,2 nor do we think that Smith was incompetently advised by his attorney on this matter. As the Supreme Court stated in McMann v. Richardson:3
5
That a guilty plea must be intelligently made is not a requirement that all advice offered by the defendant's lawyer withstand retrospective examination in a post-conviction hearing. * * * In our view a defendant's plea of guilty based on reasonably competent advice is an intelligent plea not open to attack on the grounds that counsel may have misjudged the admissibility of the defendant's confession.
6
Appellant next contends that his court-appointed attorney failed to render effective assistance in that there was a complete lack of pretrial preparation. Appellant bases this allegation on the fact that counsel spoke to him for the first time ten minutes prior to arraignment. However, the state habeas court held there was no merit in this contention in light of the attorney's affidavit which reads in part as follows:
7
Deponent shows that he undertook to represent said defendant, that he did study the law relative to said case, that he went out on four separate occasions to investigate the said case and to talk with witnesses about various phases of the crimes. That after studying the law and investigating the case and considering the facts involved, that he prepared a Motion to Quash the Indictment and a Challenge to Qualifications of Panels, and Challenge to Polls and Array, and he did prepare himself to defend the said Billy Joe Smith in the Fulton Superior Court since it was the defendant's desire that such defense be made in his behalf.
8
The district court in turn examined the state habeas record and found that the evidence clearly supported the finding that counsel was a qualified member of the bar and that he represented Smith in a capable, competent, professional manner. From this determination, the district court independently concluded that Smith's constitutional rights had not been violated. We find no error in the district court's ruling that appellant was not denied effective assistance of counsel.4
9
Finally, appellant alleges additional error because he did not have assistance of counsel either at pre-trial interrogation by police or at a pre-trial line up identification. We note, however, that the judgment of conviction was based upon appellant's valid plea of guilty. In this situation, it is well settled that a valid plea of guilty constitutes a waiver of all nonjurisdictional defects in the prior proceedings, including deficiencies in the line up procedure:
10
This is so because the plea, if voluntarily and understandingly made, is conclusive as to the defendant's guilt, admitting all the facts charged and waiving all non-jurisdictional defects in the prior proceedings against him. The judgment and sentence which follow a plea of guilty are based solely upon the plea and not upon any evidence which may have been acquired improperly by the prosecutor.5
11
Since appellant's specifications of error are based on alleged non jurisdictional defects in the pre-trial proceedings, such claimed departures were waived by his valid plea of guilty. We have considered all of appellant's contentions and find no error in the judgment or proceedings below.
12
The judgment is affirmed.
Notes:
*
[1] Rule 18, 5th Cir.; See Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York, et al., 5th Cir. 1970, 431 F. 2d 409
1
See: Shank v. Smith, 426 F.2d 1344 (5th Cir. 1970)
2
See: Brady v. United States, 397 U.S. 742, 90 S.Ct. 1463, 25 L.Ed.2d 747, 760 (1970); Parker v. North Carolina, 397 U.S. 790, 90 S.Ct. 1458, 25 L.Ed.2d 785, 791 (1970); Busby v. Holman, 356 F.2d 75, 77 (5th Cir. 1967); Cooper v. Holman, 356 F.2d 82, 85 (5th Cir. 1966), cert. den. 385 U.S. 855, 87 S.Ct. 103, 17 L.Ed.2d 83
3
397 U.S. 759, 90 S.Ct. 1441, 25 L.Ed. 2d 763, 773 (1970)
4
Quarles v. Dutton, 379 F.2d 934, 936 (5th Cir. 1967); Williams v. Beto, 354 F.2d 698, 702 (5th Cir. 1965); Gray v. United States, 112 U.S.App.D.C. 86, 299 F.2d 467 (1962)
5
Busby v. Holman, 356 F.2d 75 (5th Cir. 1966) at 78. See: Farmer v. Beto, 421 F.2d 184 (5th Cir. 1969); File v. Smith, 413 F.2d 969, 970 (5th Cir. 1969)
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235 S.W.3d 597 (2007)
Charles GLASPERIL, Appellant,
v.
STATE of Missouri, Respondent.
No. ED 89173.
Missouri Court of Appeals, Eastern District, Division Three.
October 16, 2007.
Maleaner Harvey, St. Louis, MO, for appellant.
Jeremiah W. (Jay) Nixon, Atty. Gen., Karen L. Kramer, Jefferson City, MO, for respondent.
Before ROY L. RICHTER, P.J., CLIFFORD H. AHRENS, J., and GLENN A. NORTON, J.
ORDER
PER CURIAM.
Charles Glasperil ("movant") appeals the judgment of the trial court denying his motion for post-conviction relief pursuant to Missouri Supreme Court Rule 29.15 without an evidentiary hearing. Movant claims the motion court clearly erred in denying his motion because he was denied effective assistance of counsel.
We have reviewed the briefs of the parties and the record on appeal and find no error of law. No jurisprudential purpose would be served by a written opinion. However, the parties have been furnished with a memorandum opinion for their information only, setting forth the facts and reasons for this order.
*598 The judgment of the trial court is affirmed in accordance with Rule 84.16(b).
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IN THE
SUPREME COURT OF THE STATE OF ARIZONA
THE STATE OF ARIZONA,
Appellee,
v.
JOHNATHAN IAN BURNS,
Appellant.
No. CR-11-0060-AP
Filed March 10, 2015
Appeal from the Superior Court in Maricopa County
The Honorable Karen L. O’Connor, Judge
No. CR2007-106833
AFFIRMED
COUNSEL:
Mark Brnovich, Arizona Attorney General, John R. Lopez IV, Solicitor
General, Jeffrey A. Zick, Chief Counsel, Jeffrey L. Sparks (argued), Assistant
Attorney General, Capital Litigation Section, Phoenix, for State of Arizona
David Goldberg (argued), Attorney at Law, Fort Collins, CO, for Johnathan
Ian Burns
JUSTICE BRUTINEL authored the opinion of the Court, in which CHIEF
JUSTICE BALES, VICE CHIEF JUSTICE PELANDER, and JUSTICES
BERCH and TIMMER joined.
JUSTICE BRUTINEL, opinion of the Court:
STATE V. BURNS
Opinion of the Court
¶1 This automatic appeal arises from Johnathan Ian Burns’
conviction and death sentence for the murder of Jackie H. We have
jurisdiction under Article 6, Section 5(3) of the Arizona Constitution and
A.R.S. § 13-4031.
I. FACTUAL BACKGROUND1
¶2 On January 27, 2007, Jackie and Burns met at a gas station and
went out on a date. Later that evening, Jackie called her sister Randi. Jackie
sounded “a little off” and “nervous” and asked Randi to meet her at the gas
station as quickly as possible. Randi promptly went to the gas station and
waited for Jackie. Two hours later, Jackie called Randi and said she was
lost. Jackie sounded confused and could not describe where she was. Burns
eventually took the phone and told Randi he was lost, but said he and Jackie
would arrive within fifteen minutes. Randi waited for several hours, but
Jackie never arrived. Later that day, Randi told her parents that Jackie was
missing.
¶3 The next day, a maintenance worker found, in an apartment
complex dumpster, Jackie’s purse and the blouse, bra, panties, and sandals
she was wearing the previous evening. The blouse and bra were torn, and
the blouse was stained with Jackie’s blood and had two bullet holes from a
close-range firearm discharge. Semen on the panties matched Burns’ DNA.
¶4 Police arrested Burns and searched his home and vehicles. In
the trunk of Burns’ Honda Civic, police found a pair of men’s jeans stained
with Jackie’s blood. In Burns’ truck, which he was driving the night Jackie
disappeared, officers discovered Jackie’s blood and an earring she had
worn. Inside Burns’ home, police found a case for a Springfield 9mm
handgun, but no gun. Mandi Smith, Burns’ fiancée at the time, had
purchased the gun for Burns, who was a prohibited possessor (Smith later
pleaded guilty to misconduct involving a weapon based on her purchase of
the gun).
¶5 Almost three weeks later, Jackie’s body was discovered in the
Sycamore Creek area. Jackie had suffered two fatal gunshot wounds to her
head and several skull fractures from blunt force impacts on her left temple,
1 The facts are presented in the light most favorable to sustaining the
verdict. State v. Garza, 216 Ariz. 56, 61 n.1, 163 P.3d 1006, 1011 n.1 (2007).
2
STATE V. BURNS
Opinion of the Court
on top of her head, and under her right eye. She also had vaginal bruising
likely caused by blunt force. Sperm on an anal swab taken from Jackie’s
body matched Burns’ DNA. The medical examiner determined that wild
animals had severed Jackie’s head postmortem. Burns’ cellphone records
indicated that he drove to the Sycamore Creek area the night Jackie
disappeared and stayed there for several hours.
¶6 Shortly before his arrest, Burns had disposed of the
Springfield 9mm handgun Mandi had purchased for him. Police later
located the handgun. A ballistics expert determined that it had fired a
bullet found in the sand beneath where Jackie’s head had been.
¶7 The State charged Burns with sexual assault, kidnapping,
first-degree murder, and misconduct involving weapons; a jury found
Burns guilty on all counts.
¶8 During the aggravation phase of the trial, the jury found two
aggravating circumstances: (1) Burns had a prior or contemporaneous
felony conviction under A.R.S. § 13-751(F)(2); and (2) the murder was
especially cruel, heinous, or depraved under A.R.S. § 13-751(F)(6). After the
penalty phase, the jury determined that Burns should be sentenced to
death. In addition to imposing the death sentence for the murder, the trial
court sentenced Burns to consecutive prison terms totaling sixty-eight years
for the other three convictions.
II. ISSUES ON APPEAL
¶9 Burns raises twenty-six issues on appeal. For the reasons
stated below, we affirm his convictions and sentences.
Continuance
¶10 Burns contends the trial court abused its discretion by
denying his motions to continue the guilt and penalty phases of his trial.
We will not find that a trial court abused its discretion in denying a
continuance unless the defendant shows prejudice. State v. Barreras, 181
Ariz. 516, 520, 892 P.2d 852, 856 (1995); see also State v. Lamar, 205 Ariz. 431,
437 ¶ 32, 72 P.3d 831, 837 (2003). Burns argues he was prejudiced because
(1) he could not produce the results of a functional MRI exam; (2) Dr. Wu,
Burns’ neuropsychiatrist, could not analyze Burns’ PET scan; (3) Dr.
Cunningham, Burns’ expert on developmental psychology and prison
3
STATE V. BURNS
Opinion of the Court
violence, could not present Burns’ risk assessment for violence in prison;
and (4) Burns could not rebut the testimony of Dr. Kirkley, the State’s
psychological expert.
¶11 At Burns’ request, the superior court continued the guilt
phase of the trial three times, adding more than a year to counsel’s
preparation time. One of these continuances was due to Burns’ refusal to
cooperate with counsel’s efforts to prepare mitigation evidence, while the
other two were granted because Burns’ counsel needed additional time to
prepare. Burns moved to continue the guilt phase three more times, but the
trial court denied those motions. After the jury found Burns guilty, Burns
asked for a month-long recess, which the court also denied.
¶12 Continuances “shall be granted only upon a showing that
extraordinary circumstances exist and that delay is indispensable to the
interests of justice.” Ariz. R. Crim. P. 8.5(b). In considering such a request,
a trial court must “consider the rights of the defendant and any victim to a
speedy disposition of the case.” Id.
¶13 Although denying counsel adequate time to prepare a case for
trial may deny the defendant a substantial right, State v. Narten, 99 Ariz.
116, 120, 407 P.2d 81, 83 (1965), time constraints by themselves do not create
prejudice. See State v. Salinas, 129 Ariz. 364, 367, 631 P.2d 519, 522 (1981). In
determining whether a defendant’s rights were violated, this Court looks
to the totality of the circumstances. See Barreras, 181 Ariz. at 520, 892 P.2d
at 856.
¶14 Because Burns has failed to show prejudice, we cannot
conclude that the trial court abused its discretion. The court gave defense
counsel more than another year to prepare, and Burns’ trial did not begin
for three-and-a-half years after indictment. Further, all of the evidence
Burns claims he was unable to present pertains to the mitigation stage of
the trial, which did not commence until four years after indictment. Despite
the trial court’s refusal to grant additional continuances, Burns was able to
present twelve days’ worth of mitigation that included much of the
information he alleges he could not offer because of time constraints.
¶15 For example, Dr. Wu testified at length about Burns’ low
frontal-lobe activity and showed Burns’ PET scans to the jury. The court
precluded only a few portions of Dr. Wu’s testimony relating to the analysis
4
STATE V. BURNS
Opinion of the Court
Dr. Wu failed to disclose during a pre-trial interview that took place after
his report was complete and that was disclosed mere days before he
testified. Similarly, Dr. Cunningham’s rebuttal testimony was not timely
disclosed and was therefore precluded, but was also irrelevant for the
purpose offered.2
¶16 Additionally, Burns fails to explain how a functional MRI
scan would have aided his mitigation.3 Because Burns has not provided
any basis for this argument, he has failed to demonstrate prejudice.4 State
v. VanWinkle, 230 Ariz. 387, 391 ¶¶ 10–13, 285 P.3d 308, 312 (2012).
Similarly, Burns was able to meaningfully rebut Dr. Kirkley’s testimony
through his own experts, and thus was not prejudiced.
¶17 Notably, Jackie’s family repeatedly voiced frustration at the
delays in the trial. Under Rule 8.5(b), the trial court must consider the
victims’ right to a timely resolution of the charges and did not err by
proceeding with the trial after three-and-a-half years. Ariz. R. Crim. P.
8.5(b); State v. Dixon, 226 Ariz. 545, 555 ¶ 56, 250 P.3d 1174, 1184 (2011).
¶18 The trial court did not abuse its discretion in denying the
continuance motions.
Limitation of Defense Counsel’s Voir Dire
¶19 Burns contends the trial court erred in preventing defense
counsel from asking prospective jurors if they would consider a life
sentence for a defendant convicted of sexual assault and kidnapping in
addition to murder. “We review a trial court’s ruling on voir dire for an
2 The preclusion of Dr. Wu’s and Dr. Cunningham’s testimony is fully
discussed in our analysis of a different issue in Section P, infra.
3 We found only one reference to the functional MRI in the more than
10,000-page record. Defense counsel indicated only that, due to time
constraints, a functional MRI could not be completed.
4 Burns argues that, because it is unknown what the functional MRI
would have shown, he was prejudiced because he lost his chance to show
the jury whatever the MRI might have shown. But to demonstrate
prejudice, a defendant must do more than merely speculate that relevant
mitigation may have been uncovered with more time. See State v.
VanWinkle, 230 Ariz. 387, 392 ¶ 12, 285 P.3d 308, 312 (2012).
5
STATE V. BURNS
Opinion of the Court
abuse of discretion.” State v. Patterson, 230 Ariz. 270, 273 ¶ 5, 283 P.3d 1, 4
(2012).
¶20 In capital cases, a trial court must permit a defendant to ask
potential jurors whether they would automatically vote for the death
penalty. Morgan v. Illinois, 504 U.S. 719, 729–33 (1992). But we have rejected
the argument that Morgan entitles a defendant to ask prospective jurors
whether they will vote for death based on specific aggravating factors. State
v. (Joe C.) Smith, 215 Ariz. 221, 231 ¶ 42, 159 P.3d 531, 541 (2007).
¶21 The trial court’s rulings complied with Morgan. Burns was
permitted to ask prospective jurors in both the juror questionnaires and
during voir dire whether they would automatically vote for the death
penalty. But he was not entitled to ask whether they would impose the
death penalty based on the specific facts of his case. Under Smith, the trial
court properly stopped this line of questioning and did not abuse its
discretion. 215 Ariz. at 231 ¶ 42, 159 P.3d at 541.
Jurors Struck for Cause
¶22 Burns argues the trial court unconstitutionally struck three
jurors―68, 186, and 198―for cause because of their views on the death
penalty. We review a trial court’s rulings on strikes for cause for an abuse
of discretion, giving deference to the judge who was able to observe the
potential jurors. State v. Glassel, 211 Ariz. 33, 47 ¶ 46, 116 P.3d 1193, 1207
(2005).
¶23 A court may not strike a juror merely because he or she
“voiced general objections to the death penalty or expressed conscientious
or religious scruples against its infliction.” State v. Prince (Prince II), 226
Ariz. 516, 528 ¶ 27, 250 P.3d 1145, 1157 (2011) (internal quotation marks
omitted). But a judge “may strike a juror whose views about capital
punishment would prevent or substantially impair the performance of his
duties as a juror in accordance with his instructions and his oath.” Id.
(internal quotation marks omitted). A trial judge must consider the entirety
of a prospective juror’s demeanor and behavior; if a juror’s promise to
uphold the law is coupled with ambiguous statements and uncertainty, the
trial judge may strike the juror for cause. State v. Lynch, 225 Ariz. 27, 35 ¶
28, 234 P.3d 595, 603 (2010); State v. Roque, 213 Ariz. 193, 204–05 ¶¶ 18–20,
141 P.3d 368, 379–80 (2006). A potential juror need not object to the death
6
STATE V. BURNS
Opinion of the Court
penalty in every possible case to warrant a dismissal for cause. Prince II,
226 Ariz. at 528 ¶ 29, 250 P.3d at 1157.
1. Juror 68
¶24 During voir dire, Juror 68 said she had “mixed feelings” about
the death penalty because she felt “that life sentencing is bad enough.” She
also indicated that her religious beliefs would interfere with her ability to
impose the death penalty. Nonetheless, during defense counsel’s
questioning, Juror 68 said she could vote to impose the death penalty in the
proper case. The trial judge struck Juror 68 for cause.
¶25 The trial court did not abuse its discretion by striking Juror
68. There was an adequate basis for the trial judge to determine that Juror
68’s performance could be substantially impaired by her feelings about
capital punishment.
2. Juror 186
¶26 During voir dire, Juror 186 said that the death penalty should
be reserved for people with a violent criminal history “like serial killers”
and that he could not impose the death penalty unless a defendant had a
violent criminal past.
¶27 The trial court did not abuse its discretion by striking Juror
186. A juror does not have to object to the death penalty in every
conceivable case to be excluded for cause. Id. The trial court had an
adequate basis for determining that Juror 186’s feelings about capital
punishment would have substantially impaired his ability to serve fairly
and impartially.
3. Juror 198
¶28 Juror 198’s juror questionnaire revealed that she feared dying,
could not vote for a death sentence, and could not look at “photos of death.”
When the State asked if her fear of dying might interfere with her ability to
impose the death penalty, Juror 198 replied, “I don’t know. It depends how
I felt after I’ve seen all of the evidence.” The court struck Juror 198 for cause.
Based on Juror 198’s inability to say whether she could follow the law
notwithstanding her fear of death, the trial court did not abuse its discretion
in striking her.
7
STATE V. BURNS
Opinion of the Court
Failure to Sever Charges
¶29 Burns argues the trial court erred in denying his motion to
sever the charges. We review for an abuse of discretion, and reverse only
if the defendant can show “compelling prejudice against which the trial
court was unable to protect.” State v. Murray, 184 Ariz. 9, 25, 906 P.2d 542,
558 (1995) (quoting State v. Cruz, 137 Ariz. 541, 544, 672 P.2d 470, 473 (1983)).
¶30 The State charged Burns with sexual assault, kidnapping,
misconduct involving weapons, and first-degree murder under both
premeditated- and felony-murder theories. Before trial, Burns moved to
sever all charges and proceed to trial only on the premeditated-murder
charge. After an evidentiary hearing, the trial court denied the motion,
finding the charges sufficiently intertwined and related to consolidate them
for trial.
¶31 The state may join charges that are of the same or similar
character, are based on the same conduct, or are alleged as part of a
common scheme or plan. Ariz. R. Crim. P. 13.3(a). But a trial court must
grant a motion to sever charges if “necessary to promote a fair
determination of the guilt or innocence of any defendant of any
offense . . . .” Ariz. R. Crim. P. 13.4(a).
¶32 Joinder is permitted if separate crimes arise from a series of
connected acts and are provable by overlapping evidence. State v. Prince
(Prince I), 204 Ariz. 156, 160 ¶ 17, 61 P.3d 450, 454 (2003); see also State v.
Prion, 203 Ariz. 157, 162 ¶ 32, 52 P.3d 189, 194 (2002). A common scheme or
plan, under Rule 13.3(a)(3), is a “particular plan of which the charged crime
is a part.” State v. Hausner, 230 Ariz. 60, 74 ¶ 45, 280 P.3d 604, 618 (2012)
(quoting State v. Ives, 187 Ariz. 102, 109, 927 P.2d 762, 769 (1996)).
¶33 The sexual assault, kidnapping, and murder were properly
joined as part of a “common scheme or plan” under Rule 13.3(a). The State
alleged that Burns kidnapped Jackie intending to sexually assault her,
sexually assaulted her, and then murdered her to prevent discovery of the
kidnapping and sexual assault. Much of the same evidence that proved the
murder also proved the sexual assault and kidnapping. The court did not
abuse its discretion in consolidating these charges.
8
STATE V. BURNS
Opinion of the Court
¶34 We are troubled, however, by the failure to sever the
misconduct-involving-weapons charge. The State prosecuted Burns for
that charge under A.R.S. § 13-3102(A)(4), alleging that he possessed a
firearm the night of the murder and was a prohibited possessor because he
had two prior felony convictions for burglary. See A.R.S. § 13-3101(A)(7)(b).
To prove the misconduct-involving-weapons charge, the State had to
introduce evidence of Burns’ prior felony convictions. The State notified
Burns that, unless he was willing to stipulate to his prohibited-possessor
status, it would introduce evidence of these prior felonies. Burns declined
to stipulate, and the State introduced this evidence through a sanitized
affidavit from the superior court clerk and testimony from Mandi Smith.
¶35 But for joinder of the misconduct-involving-weapons charge,
the evidence of Burns’ prior felony convictions would not have been
admissible during the guilt phase. Burns did not testify at trial, and any
attempt to introduce the convictions would have been impermissible
character evidence. See Ariz. R. Evid. 404(b). Simply put, trying the
misconduct charge with the other charges permitted the jury to hear, during
the guilt phase of the trial, that Burns was a convicted felon.
¶36 We conclude that denial of the motion to sever was an abuse
of discretion. Although Burns’ possession of the murder weapon was cross-
admissible for the murder and the weapons charge, his prior conviction was
not and its admission created a serious risk of prejudice. See United States
v. Nguyen, 88 F.3d 812, 815 (9th Cir. 1996) (noting uniform agreement
among the federal circuit courts that introduction of prior convictions
creates a dangerous potential for misuse of that information by the jury).
There was no connection between Burns’ illegal possession of the murder
weapon and the murder, kidnapping, or sexual assault. That he had a gun
was relevant: that it was illegal was not.
¶37 Although the trial court instructed the jury that it must
consider each offense separately, we are not persuaded that the instruction
alone is sufficient in this context. Such an instruction requires the jury to
ignore prior felony convictions in a capital criminal prosecution. We agree
with the D.C. Circuit that this asks jurors “to act with a measure of
dispassion and exactitude well beyond moral capacities.” United States v.
Daniels, 770 F.2d 1111, 1118 (D.C. Cir. 1985). Because Burns’ prior felony
conviction was prejudicial and irrelevant to the other charges, severance
9
STATE V. BURNS
Opinion of the Court
“was necessary to promote a fair determination” of Burns’ guilt or
innocence under Arizona Rule of Criminal Procedure 13.4(a).
¶38 Nevertheless, on this record we find that the trial court’s error
was harmless. See State v. Henderson, 210 Ariz. 561, 567 ¶ 18, 115 P.3d 601,
607 (2005) (“Harmless error review places the burden on the state to prove
beyond a reasonable doubt that the error did not contribute to or affect the
verdict or sentence.”). Evidence of Burns’ guilt was overwhelming: He was
the last person seen with Jackie, her blood was found in his truck and on a
pair of jeans in the trunk of his Honda, his cellphone records indicated he
was in the area where Jackie’s body was found, his DNA matched sperm
found in Jackie’s body, and he possessed and disposed of the murder
weapon. Moreover, the State did not emphasize Burns’ conviction during
closing argument, mentioning it only in the context of the weapons charge.
There is nothing to indicate that the jury considered his prior convictions in
contravention of the guilt-phase jury instructions, and this evidence was
properly introduced in the penalty phase. Thus, we are satisfied that the
failure to sever the misconduct charge did not affect the jury’s verdicts or
sentences.
¶39 We take this opportunity, however, to emphasize that trial
courts should prevent this situation. Evidence of prior felony convictions
has a potential to create prejudice, which is precisely the reason previous
criminal convictions are generally inadmissible under Rule 404(b). Absent
an appropriate factual nexus, trial courts generally should not join a
misconduct-involving-weapons charge, or any charge that requires
evidence of a prior felony conviction, unless the parties have stipulated to
a defendant’s status as a prohibited possessor. Alternatively, the court
could conduct a bifurcated trial to adjudicate any charge that requires
evidence of a prior felony conviction. Likewise, the State should avoid the
risk of reversal by refraining from joining charges that require proof of a
defendant’s prior convictions. But, for the reasons stated above, we do not
find prejudice on this record.
Duplicitous Charges
¶40 Burns next contends that, because the felony-murder
indictment alleged both kidnapping and sexual assault as predicate
felonies, it was duplicitous. Burns argues that this deprived him of a
unanimous verdict regarding the felony-murder charge. We disagree.
10
STATE V. BURNS
Opinion of the Court
¶41 “An indictment is duplicitous if it charges more than one
crime in the same count.” State v. Anderson, 210 Ariz. 327, 335 ¶ 13, 111 P.3d
369, 377 (2005). Duplicitous indictments are prohibited in part because they
present the chance for non-unanimous jury verdicts. Id. But, we have held
that if substantial evidence supports each alleged predicate offense, a
felony-murder conviction should be upheld since a defendant is not
entitled to a unanimous verdict on precisely how the murder was
committed. State v. Hardy, 230 Ariz. 281, 288 ¶¶ 29–30, 283 P.3d 12, 19
(2012).
¶42 Burns was convicted of sexual assault and kidnapping, both
of which are predicates for felony murder. See A.R.S. § 13-1105(A)(2).
Substantial evidence supported his convictions on both charges. Burns was
not entitled to a unanimous jury finding that the murder furthered a
particular felony, only a unanimous agreement that the murder furthered a
predicate felony. See Hardy, 230 Ariz. at 288 ¶¶ 29–30, 283 P.3d at 19.
Moreover, this point is moot because the jury unanimously found Burns
guilty of premeditated murder in addition to felony murder. See Anderson,
210 Ariz. at 343 ¶ 59, 111 P.3d at 385 (reasoning that when a jury returns
guilty verdicts for both felony and premeditated murder, a first-degree
murder conviction would stand even absent a felony-murder predicate).
First-Date Testimony
¶43 Burns contends the trial court erred by allowing the State to
elicit, and use in its opening statement and closing argument, testimony
that Jackie had never dated anyone before and was on her “first date.”
Burns argues this testimony violated Arizona’s Rape Shield Law, A.R.S. §
13-1421, by impermissibly commenting on Jackie’s chastity. This type of
evidence, however, is not prohibited by § 13-1421, which states:
A. Evidence relating to a victim’s reputation for chastity
and opinion evidence relating to a victim’s chastity are
not admissible in any prosecution for any offense in this
chapter. Evidence of specific instances of the victim’s
prior sexual conduct may be admitted only if a judge
finds the evidence is relevant and is material to a fact in
issue in the case and that the inflammatory or prejudicial
nature of the evidence does not outweigh the probative
11
STATE V. BURNS
Opinion of the Court
value of the evidence, and if the evidence is one of the
following:
1. Evidence of the victim’s past sexual conduct with
the defendant.
2. Evidence of specific instances of sexual activity
showing the source or origin of semen, pregnancy,
disease or trauma.
3. Evidence that supports a claim that the victim has
a motive in accusing the defendant of the crime.
4. Evidence offered for the purpose of impeachment
when the prosecutor puts the victim’s prior sexual
conduct in issue.
5. Evidence of false allegations of sexual misconduct
made by the victim against others.
¶44 We recognize the potential for misuse of a victim’s reputation
for chastity in a murder trial. See Michelle J. Anderson, From Chastity
Requirement to Sexuality License: Sexual Consent and a New Rape Shield Law, 70
Geo. Wash. L. Rev. 51, 104–07 (2002) (detailing studies of juror bias based
on perceived promiscuity or virginity of rape victims). But evidence of how
many “dates” someone has had does not necessarily reflect on that person’s
chastity. See Richardson v. State, 581 S.E.2d 528, 640–41 (Ga. 2003) (“Evidence
merely that the victim has or had a romantic relationship with another man
does not reflect on her character for sexual behavior.”); Banks v. State, 366
S.E.2d 228, 230 (Ga. Ct. App. 1988) (holding evidence that victim was “going
steady” did not open the door to evidence of sexual experience); State v.
Miller, 870 S.W.2d 242, 245 (Mo. Ct. App. 1994) (refusing to endorse the
“cynical notion” that dating is synonymous with sexual activity). While
one could infer that a victim who has never gone on a date before is more
likely to be a virgin than someone who has, we do not believe that the
relationship between the use of the term “first date” in this case and sexual
conduct is so close that it falls into the ambit of § 13-1421.
¶45 Burns also argues that this testimony warranted a mistrial
under Arizona Rule of Evidence 403. Because Burns failed to object on this
12
STATE V. BURNS
Opinion of the Court
ground at trial, we review only for fundamental error. Henderson, 210 Ariz.
at 567 ¶ 19, 115 P.3d at 607. “Fundamental error is error going to the
foundation of the case . . . of such magnitude that defendant could not
possibly have received a fair trial.” State v. Rutledge, 205 Ariz. 7, 13 ¶ 32, 66
P.3d 50, 56 (2003) (quoting State v. Hughes, 193 Ariz. 72, 86 ¶ 62, 969 P.2d
1184, 1198 (1998)). We find no error here. Evidence that Jackie’s date with
Burns was her first date helped to place her actions in context and thus was
probative. And because Burns has not shown that the evidence posed a
danger of unfair prejudice under Rule 403, he cannot show error, much less
fundamental error.
Presence of GHB in the Victim’s Organs
¶46 Before trial, Burns moved to preclude any evidence regarding
the presence of gamma-hydroxybutyric acid (“GHB”) in Jackie’s liver
tissue. At a pretrial hearing, an expert for the State testified that GHB is
often used as a date-rape drug that causes confusion and unconsciousness,
but is also produced by the body in small amounts. The expert further
testified that the small amount of GHB found in Jackie’s liver tissue could
have been from natural causes, but it could also have shown that Jackie was
drugged with GHB before her death. The trial court found the evidence
relevant and that its probative value outweighed any prejudice. The court
permitted the State to present essentially the same evidence at trial,
although it disallowed use of the term “date-rape drug.” Burns contends
that the trial court erred in allowing evidence of the GHB in Jackie’s liver
because its origin was unknown. We review the trial court’s ruling for an
abuse of discretion. State v. Dann, 220 Ariz. 351, 365 ¶ 66, 207 P.3d 604, 618
(2009).
¶47 Evidence is relevant if “it has any tendency to make a fact
more or less probable than it would be without the evidence.” Ariz. R. Evid.
401(a). The State’s theory was that Burns killed Jackie to keep her from
telling the police that she was raped. On the night she was murdered, Jackie
sounded confused and disoriented when she spoke on the telephone to
Randi. Confusion and disorientation are side effects of ingested GHB.
Thus, the testimony that the GHB in Jackie’s liver tissue could have
naturally occurred or resulted from someone giving Jackie a dose of the
drug to subdue her was relevant to whether the sexual intercourse between
Burns and Jackie was consensual. That the GHB might have been naturally
present went to the weight of the evidence rather than its admissibility. See
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Opinion of the Court
State v. Lacy, 187 Ariz. 340, 349, 929 P.2d 1288, 1297 (1996) (holding that a
lack of certainty regarding the source of admitted evidence goes to the
weight of the evidence, not to its admissibility). Thus, the trial court did
not abuse its discretion in admitting the GHB evidence.
¶48 Burns also argues the trial court abused its discretion by
instructing the jury that “without consent” means that “the victim is
incapable of consent by reason of mental disorder, mental defect, drugs,
alcohol, sleep, or any other similar impairment.” A party is entitled to any
jury instruction reasonably supported by the evidence. State v. Trostle, 191
Ariz. 4, 15, 951 P.2d 869, 880 (1997). That GHB was found in Jackie’s liver
tissue and she sounded confused the night of the murder indicate Jackie
might have been drugged with GHB. Because the jury instruction was
supported by the evidence, we find no error.
Mandi’s Testimony that She Feared Burns
¶49 During an interview with the State, Mandi said she feared
Burns, and he had previously threatened to kill her. The trial court initially
precluded evidence of any specific threats made by Burns. It did, however,
allow Mandi to testify on direct examination to her general feelings toward
Burns. Burns’ counsel spent much of his cross-examination attempting to
establish that Mandi, not Burns, had killed Jackie. Burns’ counsel also
attempted to impeach Mandi’s testimony that she feared Burns by eliciting
testimony that Mandi never told the police that she was afraid of Burns.
After cross-examination, the State asked the court to reconsider its previous
ruling that Mandi could not testify as to specific acts by Burns that caused
her to fear him, arguing that Burns had opened the door by implying that
Mandi’s testimony was recently fabricated. Over Burns’ objection, the court
allowed the State on redirect to question Mandi about specific threats Burns
allegedly made on her life and Mandi’s assertions that she planned to
remove all the guns from her house because she feared Burns.
¶50 Burns contends the trial court erred in permitting Mandi’s
testimony because it was irrelevant, unduly prejudicial, and was other-act
evidence prohibited under Rule 404(b).5 Burns also argues he should have
5 Burns also argues that Mandi’s testimony was not timely disclosed
and should have been precluded, but does not support this claim with any
argument or citation to the record. He has, therefore, waived this claim.
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Opinion of the Court
been permitted to re-cross-examine Mandi on certain subjects. We review
for an abuse of discretion. Dann, 220 Ariz. at 365 ¶ 66, 207 P.3d at 618.
¶51 Mandi’s testimony that she feared Burns, that she planned to
remove all the guns from their shared home, and that Burns threatened to
kill her one week before Jackie’s murder are all relevant to rebut Burns’
contention that her testimony was a recent fabrication. See Ariz. R. Evid.
401(a)–(b). The probative value of this evidence was not substantially
outweighed by any prejudicial effect. See State v. Martinez, 230 Ariz. 208,
213 ¶ 21, 282 P.3d 409, 414 (2012) (noting that not all harmful evidence is
unfairly prejudicial, only that evidence which suggests a decision based on
an improper basis such as emotion, sympathy, or horror).
¶52 Burns’ Rule 404 argument also lacks merit. Under Arizona
Rule of Evidence 404(b), other wrongs or acts are not admissible to show
that a person acted in conformity with his or her character. They may,
however, be admissible for other purposes, such as rebutting an attempt to
impeach a witness. See State v. Williams, 183 Ariz. 368, 376, 904 P.2d 437,
445 (1995) (“Evidence which tests, sustains, or impeaches the credibility or
character of a witness is generally admissible, even if it refers to a
defendant’s prior bad acts.”) (internal quotation marks omitted). Rule
404(b) does not apply to Mandi’s testimony that she feared Burns or
planned to remove guns from their home, because that testimony involves
no other act by Burns. Mandi’s testimony that Burns threatened to kill her
before Jackie’s murder was inadmissible to show that Burns was more
likely to have killed Jackie, because it involved a specific threat made by
Burns. That evidence, however, was properly admitted to rebut Burns’
attempt to show that Mandi was not credible when she testified that she
feared Burns. Thus, Burns’ 404(b) argument fails.
¶53 Burns’ argument that he should have been permitted to re-
cross-examine Mandi is also without merit. Burns asserts that he should
have been allowed to question Mandi about a recorded phone conversation
in which Mandi told Burns’ co-worker that she was not afraid of Burns and
that Burns was never violent with women. A trial court may, in its
See State v. Carver, 160 Ariz. 167, 175, 771 P.2d 1382, 1390 (1989) (“[O]pening
briefs must present significant arguments, supported by authority, setting
forth an appellant’s position on the issues raised. Failure to argue a claim
usually constitutes abandonment and waiver of that claim.”).
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STATE V. BURNS
Opinion of the Court
discretion, permit re-cross-examination on any new issue raised on re-
direct. State v. (Robert D.) Smith, 138 Ariz. 79, 81, 673 P.2d 17, 19 (1983).
Defense counsel, however, asked about this conversation on cross-
examination, and no new issue arose during re-direct examination that
would have warranted re-cross-examination. Thus, the trial court did not
abuse its discretion.
Jail Calls
¶54 Burns contends the trial court erred in admitting recordings
of sixteen “irrelevant and prejudicial” phone calls that he made while in jail.
We review the trial court’s admission of this evidence for an abuse of
discretion. Dann, 220 Ariz. at 372 ¶ 117, 207 P.3d at 625. In these calls, Burns
spoke with Mandi and asked about the search for Jackie’s body, whether
his brother had cleaned out Burns’ Honda, and whether Mandi would stay
with him “no matter what.” Over Burns’ objection, the trial court allowed
the recordings to be played to the jury and permitted testimony about the
content of the calls.
¶55 The phone calls are clearly relevant. The conversations all
tend to show that Burns was involved in Jackie’s disappearance. The
probative value of the statements is not substantially outweighed by any
danger of unfair prejudice. Martinez, 230 Ariz. at 213 ¶ 21, 282 P.3d at 414.
We find no abuse of discretion.
Testimony Regarding Knives in Burns’ Home
¶56 Burns contends the trial court erred in denying a mistrial after
it inappropriately admitted evidence that the police found numerous
“folding knives” inside Burns’ home. We review the admission of evidence
and the denial of a mistrial for an abuse of discretion. See State v. Villalobos,
225 Ariz. 74, 80 ¶ 18, 235 P.3d 227, 233 (2010); State v. Kuhs, 223 Ariz. 376,
380 ¶ 18, 224 P.3d 192, 196 (2010).
¶57 Before trial, Burns moved to exclude evidence of any weapons
found in his home besides the murder weapon, a 9mm handgun. The trial
court did not rule on the motion, but noted that the State had stipulated not
to introduce evidence of any other weapons. But at trial, when asked by
the State what was found in Burns’ home, a detective testified that several
folding knives were found. Burns moved for a mistrial. The prosecutor
avowed on the record that the State had intended that the detective testify
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Opinion of the Court
about the 9mm handgun case and not the knives. The court denied the
mistrial motion.
¶58 “When unsolicited prejudicial testimony has been admitted,
the trial court must decide whether the remarks call attention to
information that the jurors would not be justified in considering for their
verdict, and whether the jurors in a particular case were influenced by the
remarks.” State v. Jones, 197 Ariz. 290, 304 ¶ 32, 4 P.3d 345, 359 (2000). In
this case, the detective briefly remarked that he had found knives, common
household items, in Burns’ home. These remarks would not have
influenced the jury’s verdict when viewed in context with the evidence that
was properly before the jury. The court, therefore, did not err by denying
Burns’ request for a mistrial.
Photographs of Jackie’s Body
¶59 Burns contends that the trial court erred when it admitted
photographs of Jackie’s body as it was discovered in the desert, as well as
images of Jackie’s skull. Before trial, Burns moved to preclude
photographic evidence of Jackie’s body. He contended that the photos and
descriptions of Jackie’s remains were not relevant, were unduly prejudicial,
and only served to inflame the jury because Jackie’s remains were in an
advanced state of decomposition and wild animals had severed her head.
The trial court denied Burns’ motion, as well as several objections to specific
photographs. The court found that the photographs had probative value,
including the photographs of Jackie’s skull, which helped explain the
testimony of a forensic anthropologist, Dr. Fulginiti, who based her
conclusions on an examination of the skull.
¶60 Trial courts have broad discretion in admitting photographs.
State v. Spreitz, 190 Ariz. 129, 141, 945 P.2d 1260, 1272 (1997).
¶61 In State v. Murray, we set forth a three-part test for
determining whether photographs of a murder victim are admissible:
whether the photograph is relevant, whether it has “the tendency to incite
passion or inflame the jury,” and its probative value versus its potential to
create unfair prejudice. 184 Ariz. 9, 28, 906 P.2d 542, 561 (1995). The trial
court here properly applied this test.
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Opinion of the Court
¶62 First, the photographs are relevant. A photograph of the
deceased in any murder case is relevant to assist a jury in understanding an
issue because the fact and cause of death are always relevant in a murder
prosecution. Spreitz, 190 Ariz. at 142, 945 P.2d at 1273. The photographs
show where the body was found and how it was hidden, and they helped
the jury understand the expert testimony in the case. Although the
photographs are gruesome, and thus had some potential to inflame the jury,
their probative value outweighs any danger of unfair prejudice.
Ballistic Expert Testimony
¶63 Burns contends the trial court erred in admitting the
testimony of the State’s ballistics expert, Christian Gunsolley, who
identified Burns’ 9mm handgun as the murder weapon. Because Burns did
not object at trial, we review for fundamental error. State v. Valverde, 220
Ariz. 582, 585 ¶ 12, 208 P.3d 233, 236 (2009).
¶64 Burns contends that Daubert v. Merrell Dow Pharm., Inc., 509
U.S. 579 (1993), and amended Rule of Evidence 702 applied to his case and
that the trial court erred by not holding a Daubert hearing. But, because the
current version of Rule 702 is not a new constitutional rule, it does not apply
to trials that ended before the new rule became effective on January 1, 2012.
State v. Miller, 234 Ariz. 31, 41 ¶¶ 28–31, 316 P.3d 1219, 1228 (2013). Because
the guilt phase of Burns’ trial concluded on December 16, 2010, Daubert and
new Rule 702 did not apply to his case.
¶65 Burns argues that, even if Daubert does not apply, Gunsolley’s
testimony should still have been precluded under Frye. See Frye v. United
States, 293 F. 1013 (D.C. Cir. 1923). But, because Gunsolley’s testimony did
not rely on any novel theory or process, it was also not subject to Frye. See
Logerquist v. McVey, 196 Ariz. 470, 480 ¶ 31, 1 P.3d 113, 123 (2000) (holding
that Frye applies only to expert testimony based on “novel scientific
principles”). Thus, Burns has not established that the trial court erred in
admitting Gunsolley’s testimony, much less that it constituted fundamental
error.
Burns’ Hearsay Statement about Consensual Sex
¶66 Burns argues the trial court deprived him of his right to
present a complete defense by refusing to allow testimony about his
statements to police that he had consensual sex with Jackie. We disagree.
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Opinion of the Court
¶67 After Jackie’s disappearance, Burns told police during an
interview that he and Jackie had consensual sex in his truck. At trial,
defense counsel asked the court to permit him to elicit testimony about this
statement. The trial court refused because Burns’ statements were hearsay.
¶68 Burns admits that his statements were hearsay but contends
that they should have been admitted under the residual hearsay exception,
which is now contained in Arizona Rule of Evidence 807. Rule 807 provides
that hearsay that does not fall into any other exception may be admitted if
(1) the statement has equivalent guarantees of trustworthiness, (2) it is
offered as evidence of a material fact, (3) it is more probative than any other
evidence that the proponent can obtain through reasonable efforts, and (4)
admitting it will best serve the purposes of the rules and the interests of
justice.
¶69 The residual hearsay exception “require[s] the out of court
statement to have equivalent circumstantial guarantees of
trustworthiness,” and absent such guarantees, self-serving hearsay is
inadmissible. (Robert D.) Smith, 138 Ariz. at 84, 673 P.2d at 22 (internal
quotation marks omitted). When deciding if a statement is trustworthy, we
consider “the spontaneity, consistency, knowledge, and motives of the
declarant . . . to speak truthfully,” among other things. State v. Allen, 157
Ariz. 165, 174, 755 P.2d 1153, 1162 (1988).
¶70 Burns’ statements did not have circumstantial guarantees of
trustworthiness. The statements were not spontaneous but were made in
response to police questioning two days after Jackie’s disappearance.
Further, Burns was not motivated to speak truthfully. He was at a police
station, speaking to police officers in an interview room about a murder
investigation, a condition that does not necessarily elicit trustworthy
answers. Cf. United States v. Morgan, 385 F.3d 196, 209 (2d Cir. 2004) (noting
statements in response to police questioning and addressed to law
enforcement officers lack equivalent guarantees of trustworthiness).
¶71 Burns also contends that his testimony was alternatively
admissible under Arizona Rule of Evidence 106, which states that “[i]f a
party introduces all or part of a writing or recorded statement, an adverse
party may require the introduction, at that time, of any other part—or any
other writing or recorded statement—that in fairness ought to be
considered at the same time.” But the State did not introduce any writings
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Opinion of the Court
or recorded statements about Burns and Jackie having non-consensual sex.
Burns’ statements were therefore not “necessary to qualify, explain or place
into context the portion already introduced . . . .” State v. Cruz, 218 Ariz.
149, 162 ¶ 58, 181 P.3d 196, 209 (2008) (citation and internal quotation marks
omitted). Thus, the trial court did not abuse its discretion by excluding the
statements.
Evidence Supporting Burns’ Convictions
¶72 Burns claims (1) there was insufficient evidence to support the
finding that he sexually assaulted Jackie; (2) there was insufficient evidence
to find that he kidnapped Jackie; (3) sexual assault and kidnapping cannot
serve as predicate offenses for felony murder; and (4) there was no evidence
of premeditation to support the first-degree murder conviction. We review
the facts in the light most favorable to sustaining the verdicts and resolve
inferences against the defendant. State v. Davolt, 207 Ariz. 191, 212 ¶ 87, 84
P.3d 456, 477 (2004). We determine de novo whether the evidence
introduced at trial is sufficient to support a conviction. State v. West, 226
Ariz. 559, 562 ¶ 15, 250 P.3d 1188, 1191 (2011). “Substantial evidence” to
support a conviction exists when “reasonable persons could accept [it] as
adequate and sufficient to support a conclusion of defendant’s guilt beyond
a reasonable doubt.” Id. at 562 ¶ 16, 250 P.3d at 1191.
1. Evidence that Burns used immediate force to coerce sexual
intercourse
¶73 The State presented sufficient evidence to support the jury’s
finding that Burns coerced sexual intercourse with Jackie: Jackie’s bra and
blouse were ripped, and her blood was found in Burns’ truck. Jackie
suffered facial and skull fractures, and her vagina was bruised. She had
GHB in her system and was confused and disoriented when she spoke to
Randi on the phone. This evidence was sufficient for a reasonable person
to conclude that Burns sexually assaulted Jackie.
2. Evidence of kidnapping
¶74 Sufficient evidence also existed to support the jury’s finding
that Burns kidnapped Jackie. Kidnapping occurs when a person knowingly
restrains another with the intent to inflict death, physical injury, or a sexual
offense on the victim. A.R.S. § 13-1304(A)(3). “Restrain” means “to restrict
a person’s movements without consent, without legal authority, and in a
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STATE V. BURNS
Opinion of the Court
manner which interferes substantially with such person’s liberty, by either
moving such person from one place to another or by confining such
person.” A.R.S. § 13-1301(2). A person may restrain another by “[p]hysical
force, intimidation or deception.” Id.
¶75 Having found sufficient evidence to support the jury’s
finding that Jackie was sexually assaulted, we look to see if she was
restrained against her will for the sexual assault to be accomplished. As
noted above, there was evidence that Jackie’s clothes were torn and that she
was drugged with GHB. Additionally, Burns was carrying a gun that could
have been used to confine Jackie in his truck. And Jackie never made it to
the gas station where she told Randi to meet her. Accordingly, the State
presented sufficient evidence to support Burns’ conviction for kidnapping.
3. Evidence of kidnapping or sexual assault as a predicate
offense for felony murder
¶76 Burns argues that Jackie’s murder could not have occurred in
furtherance of the sexual assault because the assault, if it occurred, was
completed at a time and place remote from Jackie’s murder.
¶77 For felony murder, the state must prove that the defendant
caused the victim’s death “in the course of and in furtherance of . . . or
immediate flight from” the underlying offense. A.R.S. § 13-1105(A)(2). “A
death is in furtherance of an underlying felony if the death resulted from
an action taken to facilitate accomplishment of the felony.” State v. Jones,
188 Ariz. 388, 397, 937 P.2d 310, 319 (1997).
¶78 There is sufficient evidence that Burns killed Jackie in
furtherance of or during immediate flight from the kidnapping or sexual
assault. The evidence that proves the kidnapping and sexual assault also
proves the predicate felonies. Even if several hours passed between the
attack and the murder, the evidence supports a finding that Burns never let
Jackie out of his presence before driving Jackie to the desert and shooting
her. The jury could have reasonably found that the murder was perpetrated
in order to prevent Jackie from reporting the sexual assault or kidnapping.
¶79 Burns’ argument that the kidnapping merged into the murder
is also without merit. He asserts there is no evidence that Jackie was ever
restrained until just before her death; thus, the intent to kill “merged” with
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Opinion of the Court
the intent to restrain. But Jackie’s facial fractures, the GHB in her liver, and
her failure to arrive at the gas station where she told Randi to meet her all
suggest that Burns restrained Jackie in some manner in the hours
proceeding her death. Jackie’s body was found face down clutching a tree
branch and a bullet was found where her head would have been,
suggesting that she was ordered to lie down on her stomach and then shot.
We have held that even mere moments between restraint and murder
permits a finding that two offenses occurred. See State v. Herrera, 176 Ariz.
9, 16, 859 P.2d 119, 126 (1993) (holding kidnapping and murder were two
distinct acts and did not merge where victim was ordered to lie on the
grounds and then shot moments later).
¶80 Moreover, Burns was convicted of premeditated murder,
which cannot merge with kidnapping. Two crimes do not merge when
“[e]ach of the offenses . . . requires proof of a different element.” Blockburger
v. United States, 284 U.S. 299, 304 (1932); see also Parker v. United States, 692
A.2d 913, 916 (D.C. 1997). Premeditated murder obviously requires proof
that the defendant killed with premeditation, whereas kidnapping requires
restraining the victim. See A.R.S. §§ 13-1105(A)(1), -1304(A). Thus, even if
we accept Burns’ view of the evidence as true, the kidnapping did not
merge with the murder.
4. Evidence of premeditation
¶81 Finally, there was sufficient evidence to allow the jury to find
Burns guilty of premeditated murder. To establish premeditation, the state
must be able to “convince a jury beyond a reasonable doubt that the
defendant actually reflected” before the murder. State v. Thompson, 204
Ariz. 471, 479 ¶ 31, 65 P.3d 420, 428 (2003).
¶82 The State presented evidence that Burns brought a gun on a
“date.” He picked up Jackie, left Chandler, stopped for gas, and then drove
to a remote location in the desert where he shot and killed Jackie. Sometime
during the night, he sexually assaulted her. This provides sufficient
circumstantial evidence to demonstrate premeditation. See id. (noting that
the defendant’s acquiring of a weapon before the killing is evidence of
premeditation); State v. Grell, 205 Ariz. 57, 60 ¶ 21, 66 P.3d 1234, 1237 (2003)
(holding that “driving to a remote area,” among other facts, supported
finding of premeditation). Additionally, the fact that Burns positioned
Jackie on the ground before shooting her twice in the back of the head and
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Opinion of the Court
then hid her body shows that Burns actually reflected on whether to kill
her.
Multiplicity and Double Jeopardy
¶83 Burns argues that using his sexual assault and kidnapping
convictions both as predicate felonies and to satisfy the (F)(2) aggravator
violates the Double Jeopardy Clause. Further, Burns argues the trial court
erred by not instructing the jury that his multiple felony convictions only
counted as one aggravator. Whether charges are multiplicitous is a matter
of law, which we review de novo. See State v. Boggs, 218 Ariz. 325, 334 ¶ 38,
185 P.3d 111, 120 (2008) (noting that we review legal issues de novo). We
also review de novo whether the trial court properly instructed the jury. See
Glassel, 211 Ariz. at 53 ¶ 74, 116 P.3d at 1213.
1. Multiplicitous charges
¶84 Burns argues that, because the State submitted both his sexual
assault and kidnapping convictions as (F)(2) aggravators, the (F)(2)
aggravator was multiplicitous and was improperly given additional
weight. He did not raise this argument below, so we review for
fundamental error. See Henderson, 210 Ariz. at 568 ¶ 22, 115 P.3d at 608.
¶85 The (F)(2) aggravating factor requires the trier of fact to
consider whether a defendant has been previously convicted of a serious
offense. A.R.S. § 13-751(F)(2). Convictions for serious offenses committed
at the same time as the homicide, or those consolidated for trial with the
homicide, are considered prior convictions. The state may use multiple
contemporaneous convictions to prove an (F)(2) aggravator. Martinez, 230
Ariz. at 213–214 ¶¶ 16–23, 282 P.3d at 414–15. Burns has not established
fundamental error on this point.
2. Double jeopardy
¶86 Burns also argues that it was improper for him to be convicted
of kidnapping and sexual assault, and then for those offenses to be used to
satisfy the serious offense requirement of A.R.S. § 13-751(J)(5) and (10), and
to establish the (F)(2) aggravator. He claims that using the convictions in
this manner resulted in multiple punishments, since he was sentenced to
prison for the same felonies that were used as felony murder predicates and
as capital aggravators.
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Opinion of the Court
¶87 We need not address this claim. Burns’ double-jeopardy
claims relate only to his conviction for felony murder. But because the jury
also unanimously found Burns’ first-degree murder conviction supported
by a premeditated-murder theory, Burns’ first-degree murder charge
would stand regardless of whether the felony-murder conviction exists,
and the kidnapping and sexual assault charges were independent of the
premeditated murder. Anderson, 210 Ariz. at 343 ¶ 59, 111 P.3d at 385.
¶88 Burns’ claim also fails on its merits. We have held, as Burns
acknowledges, that an element of a crime may also be used as a capital
aggravator. Cruz, 218 Ariz. at 169 ¶ 130, 181 P.3d at 216 (citing State v. Lara,
171 Ariz. 282, 284–85, 830 P.2d 803, 805–06 (1992)). We decline to overrule
these cases.
3. Jury instruction on the (F)(2) aggravator
¶89 Burns argues the trial court failed to cure the errors
enumerated above by not informing the jury that his prior convictions
counted toward only one aggravating factor, the (F)(2) factor requiring
proof of conviction of a prior serious offense. It does not appear that Burns
requested this instruction below, and so we review for fundamental error.
Henderson, 210 Ariz. at 568 ¶ 22, 115 P.3d at 608.
¶90 A prior conviction may be used to establish more than one
aggravating factor, so long as the jury does not consider the conviction
more than once in assessing the aggravating and mitigating circumstances.
State v. Chappell, 225 Ariz. 229, 241 ¶ 48, 236 P.3d 1176, 1188 (2010). The trial
court did not instruct the jury during the penalty phase that it could only
consider the convictions once, although it did give this instruction in the
aggravation phase. However, the instruction was unnecessary. Burns’
prior convictions were only used to prove the (F)(2) aggravator. The state
may present more than one prior conviction to satisfy the (F)(2) factor.
Martinez, 230 Ariz. at 213–214 ¶¶ 16–23, 282 P.3d at 414–15. Moreover, the
jury was instructed that it could only consider the aggravating factors that
it found during the aggravation phase. Thus, Burns has not established
fundamental error on this point.
Preclusion of Burns’ Expert Testimony
¶91 Burns asserts that the trial court erred in precluding
testimony from some of his expert witnesses. “We review the trial court’s
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Opinion of the Court
decision to exclude evidence for abuse of discretion.” Villalobos, 225 Ariz.
at 82 ¶ 33, 235 P.3d at 235; State v. Jackson, 186 Ariz. 20, 24, 918 P.2d 1038,
1042 (1996) (reviewing a court’s “imposition and choice of sanction” for an
abuse of discretion). While trial courts may preclude or limit a witness’
testimony as a sanction for disclosure violations, doing so should be a
remedy of last resort. Ariz. R. Crim. P. 15.7(a); State v. Moody, 208 Ariz. 424,
454 ¶ 114, 94 P.3d 1119, 1149 (2004).
¶92 To determine whether witnesses should be precluded from
testifying, courts should assess four criteria: “(1) how vital the witness is to
the case, (2) whether the opposing party will be surprised, (3) whether the
discovery violation was motivated by bad faith, and (4) any other relevant
circumstances.” State v. (Joe U.) Smith, 140 Ariz. 355, 359, 681 P.2d 1374, 1378
(1984).
1. Dr. Wu
¶93 Under Arizona Rule of Criminal Procedure 15.2(d), a
defendant must disclose witnesses forty days after arraignment or ten days
after the state’s disclosure. Parties have an ongoing duty to disclose new
information as it is discovered. Ariz. R. Crim. P. 15.6(a). Yet less than one
week before the penalty phase began, Burns provided notice that Dr. Joseph
Wu, a mitigation witness, would testify regarding results of a PET scan of
Burns’ brain. In response, the State moved to preclude Dr. Wu’s testimony
and the results of the PET scan. The trial court ultimately allowed Dr. Wu
to testify after Burns disclosed the reports.
¶94 The State objected on lack-of-disclosure grounds when Burns’
counsel questioned Dr. Wu about a quantitative measurement of Burns’
PET scans. One week before he testified, Dr. Wu told the State he had not
performed a quantitative analysis. The court ruled that the State should
have the opportunity to have its expert review the PET scan findings and
would not allow the line of questioning until it could be determined
whether there was adequate time for the results to be examined.
Ultimately, Dr. Wu was not allowed to testify about the quantitative
analysis. Dr. Wu did testify at length that, in his opinion, Burns had
diminished frontal-lobe activity, rendering him less culpable for his actions.
¶95 Based on the Smith factors, the trial court did not abuse its
discretion by precluding Dr. Wu’s quantitative analysis. Dr. Wu’s
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Opinion of the Court
testimony was not critical to Burns’ defense. Dr. Wu testified at length that
Burns had diminished frontal-lobe activity and explained that this could
affect Burns’ impulse control, judgment, and emotional regulation. Burns
has not identified what the quantitative analysis would have additionally
shown. Second, the prosecution was unfairly surprised by the evidence, as
Dr. Wu had stated just one week earlier that he had not performed a
quantitative analysis. There is no indication of bad faith, so the third Smith
factor is inapplicable. Finally, the trial court did not preclude the testimony
entirely, but instead imposed a less-burdensome alternative: it required
Burns to wait to delve into the quantitative analysis until the State’s expert
had a chance to review it. By the conclusion of Dr. Wu’s testimony, the
State’s expert, Dr. Waxman, had not received the data in a useable format.
And Burns never attempted to recall Dr. Wu after Dr. Waxman had
accessed the files. Under the Smith test, the trial court did not abuse its
discretion by precluding the quantitative analysis evidence.
2. Dr. Cunningham
¶96 The court sustained an objection on non-disclosure grounds
to Dr. Cunningham’s direct examination testimony regarding “the rates of
violence in prison, factors that are predictive of violence in prison, and how
capital offenders behave in prison.” At the conclusion of Dr. Cunningham’s
testimony, Burns’ counsel said he intended to recall Dr. Cunningham as a
rebuttal witness. The State objected, arguing that Burns did not disclose to
the State that it intended to call Dr. Cunningham as a rebuttal witness and
that Dr. Cunningham’s purported testimony on the likelihood of violence
in prison among capital offenders was not relevant to the State’s rebuttal
evidence. The trial court ruled that if the State presented evidence on the
likelihood of violence in prison, “then Dr. Cunningham will be allowed to
testify” as a rebuttal witness.
¶97 A few days later, a State expert, Dr. Kirkley, discussed Burns’
past misconduct to support her conclusion that Burns exhibited antisocial
personality disorder. Burns then moved to recall Dr. Cunningham to
address antisocial personality disorder and to explain the statistical analysis
on the risk of inmate prison violence based upon his own research and other
research presented in Burns’ case-in-chief. The trial court precluded this
testimony because it “was not timely disclosed.” Further, the court found
that the State did not inject the issue by its questioning of Dr. Kirkley and
that the offered testimony was not relevant as rebuttal evidence.
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Opinion of the Court
¶98 Burns’ offer of proof disclosed that Dr. Cunningham would
have offered a statistical analysis showing that violent offenders do not
necessarily commit acts of violence while incarcerated. Burns argues that
this testimony would have rebutted the “[S]tate’s position that [Burns]
could not be safely housed for life in ADOC” as well as Dr. Kirkley’s
opinion that Burns’ antisocial personality disorder and history meant he
had a high probability of future dangerousness in prison. We find no abuse
of discretion.
¶99 Under the Smith factors, Dr. Cunningham’s testimony that
Burns could safely be incarcerated for life was cumulative and therefore not
vital to his mitigation evidence. Another defense expert, James Aiken, had
already testified that an inmate like Burns could be safely housed in prison.
Second, the fact that Dr. Cunningham had testified in other trials does not
mean that the State was prepared to effectively deal with his late-disclosed
testimony in Burns’ case. The fact that the State had virtually no notice that
Burns intended to call Dr. Cunningham as a rebuttal witness weighs in
favor of preclusion. As with Dr. Wu’s testimony, there is no evidence of
bad faith in the defense’s late disclosure, and so the third Smith factor is
inapplicable here.
¶100 Ultimately, Burns cannot establish that he was prejudiced by
the preclusion of Dr. Cunningham’s testimony because the proffered
testimony was largely cumulative. We find no abuse of discretion in the
trial court’s refusal to allow Dr. Cunningham’s rebuttal testimony.
Impeachment of Burns’ Experts
¶101 Burns next argues the trial court erred by not limiting the
State’s cross-examination of Dr. Wu and Burns’ prison expert, James Aiken.
We review a trial court’s ruling regarding the scope of cross-examination
for an abuse of discretion. State v. Ellison, 213 Ariz. 116, 132 ¶ 52, 140 P.3d
899, 915 (2006).
¶102 On direct examination during the penalty phase, Mr. Aiken
testified that Burns could be safely managed in the Arizona prison system.
The State then cross-examined Mr. Aiken regarding recent inmate crimes
and escape attempts in a private prison facility in Kingman, the murder of
a detention officer inside the prison, a hostage crisis at an Arizona prison,
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Opinion of the Court
and other matters. The trial judge allowed the cross-examination over
Burns’ objection.
¶103 Burns also objected to the State’s cross-examination of Dr. Wu
regarding his evaluation of the PET scans. Burns again objected when the
State asked Dr. Wu about several other cases, listed in his PowerPoint
presentation, from other jurisdictions where courts precluded PET scan
evidence. The trial court overruled the objection, and Dr. Wu responded
that he was unsure what the courts had concluded.
¶104 We find nothing improper with the State’s cross-
examinations of Burns’ experts. The cross-examinations were relevant to
impeach each expert. See Ariz. R. Evid. 401(a) (“Evidence is relevant if [] it
has any tendency to make a fact more or less probable than it would be
without the evidence . . . .”); Ariz. R. Evid. 611(b) (“A witness may be cross-
examined on any relevant matter.”).
Jurors’ Concern for Courtroom Safety
¶105 Burns contends the trial court violated his right to a fair trial
when it denied his motions for a mistrial after the jurors expressed concern
about their safety. Trial court rulings on motions for mistrial are reviewed
for an abuse of discretion. State v. Lehr (Lehr III), 227 Ariz. 140, 150 ¶ 43, 254
P.3d 379, 389 (2011).
¶106 During the guilt-phase deliberations, the jury sent the
following question to the judge:
We are concerned about the juror’s [sic] safety. In other
words, are people going to be able to access our personal
information—name, employer, address, etc.? Since [the]
foreperson had to sign their actual name[,] will [the]
foreperson be safe? Is there a way that we can keep our
personal information private/safe from the public?
Defendant’s family etc.? We are concerned about our
safety . . . also media etc.
The judge responded that the juror information would be sealed by the
court and unavailable to the general public. Burns moved for a mistrial,
arguing that the jurors’ concern for their safety could have “played a role
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Opinion of the Court
in [their] deliberative process.” The trial court denied Burns’ motion for a
mistrial.
¶107 The next day, defense counsel asked the court to question the
jurors individually to ensure that their concerns would not affect their
impartiality. Instead of asking each juror individually, the judge asked the
jury as a group whether any juror would be unable to keep an open mind
during the next phase of the trial. No juror responded.
¶108 During the penalty phase, the jurors submitted a written
request asking the trial judge to ensure that a guard be posted by Burns at
all times because some jurors were feeling “uncomfortable.” Burns moved
for a mistrial, and the judge asked defense counsel if there was a question
he would like the court to ask the jury. Defense counsel responded that the
court needed to follow up on the jury’s question and ask each juror whether
he or she was afraid of Burns and whether the courtroom security was
insufficient.
¶109 The trial judge denied the mistrial motion. The court noted
that one of the deputies who usually sat by Burns had to leave for a personal
emergency, leaving only one deputy in the courtroom instead of two. The
trial court addressed the jury and asked whether anyone could not keep an
open mind based on of anything that occurred in the guilt phase. No juror
responded. The trial judge planned to ask any juror who raised a hand
additional questions outside the presence of the other jurors. In the penalty-
phase jury instructions, the trial judge reminded the jurors that “any belief
or feeling you have about courtroom security or other security matters shall
not be part of your decision making process.”
¶110 A trial court must ensure that the jury is capable of rendering
a fair and impartial verdict. See State v. Detrich, 188 Ariz. 57, 67, 932 P.2d
1328, 1338 (1997). A trial court has broad discretion in selecting methods to
detect and protect against potential juror bias. See Trostle, 191 Ariz. at 12,
951 P.2d at 877 (finding no abuse of discretion where trial court elected not
to conduct individual or small-group voir dire to screen for bias).
¶111 Here, the trial court did not abuse its discretion when it
denied Burns’ motions for a mistrial. When the jurors raised a concern
about their personal information becoming public, the court appropriately
reassured them that their information would remain sealed. The court then
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STATE V. BURNS
Opinion of the Court
verified that the jurors’ concern had not affected their ability to decide the
case fairly and impartially. It did so again when the jurors expressed their
discomfort during the penalty phase. The trial court did not abuse its
discretion in addressing the issue as it did.
Juror Misconduct
¶112 Burns argues that the trial court erred when it failed to declare
a mistrial after Juror 11 investigated a fellow juror’s anti-death-penalty
political activity and shared this information with other jurors. “A trial
court’s decision to grant or deny a new trial based on alleged jury
misconduct generally will not be reversed absent an abuse of discretion.”
State v. Hall, 204 Ariz. 442, 447 ¶ 16, 65 P.3d 90, 95 (2003). Juror misconduct
warrants a new trial only if a defendant shows actual prejudice or if
prejudice may be fairly presumed from the facts. State v. Miller, 178 Ariz.
555, 558, 875 P.2d 788, 791 (1994). Because Burns failed to raise this issue at
trial, however, we review for fundamental error. Rutledge, 205 Ariz. at 13 ¶
29–30, 66 P.3d at 56.
¶113 On the second day of jury deliberations in the penalty phase,
Juror 11 sent a note to the judge that stated, “I believe we have a stealth
juror in the jury.” Juror 11 expressed concerns about Juror 2’s
unwillingness to deliberate and personal feelings about sexual assault.
Juror 11 explained how he had taken it upon himself to research Juror 2 on
the Internet and had uncovered contributions to political parties and
candidates that oppose the death penalty. Juror 11 attached the results of
his various Internet searches to the note he sent to the judge.
¶114 Defense counsel asked that the court talk to Juror 11 to see if
he had shared the research he had conducted on Juror 2 with the other jury
members. The parties and court agreed to release Juror 11 for violating the
admonition after he admitted that he told a “couple of the jurors” about the
information he had discovered. After dismissing Juror 11, the court called
in the remaining jurors and advised them that she had dismissed Juror 11,
but not to “question why that happened.” The court also asked the jurors
if Juror 11 had shared information about any of the other jurors with any of
them. No juror responded to the question. The court then replaced Juror
11 with the last remaining alternate, Juror 17.
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Opinion of the Court
¶115 The next trial day, Juror 8 sent a note to the judge indicating
that she had spoken with Juror 11 about the contents of his letter. The court
then questioned Juror 8, who confirmed that Juror 11 had told her and other
jurors what he discovered on the Internet about the “stealth juror’s” views
on the death penalty and political contributions. The court asked Juror 8 if
she believed that she would be able to put aside that information to
deliberate and decide the case solely on the evidence and jury instructions
provided. Juror 8 responded, “Absolutely.”
¶116 The court also questioned Juror 15, who explained that he saw
Juror 11 writing his note to the judge. Juror 15 explained that Juror 11
identified the juror who was the subject of his note, but did not indicate
what information he possessed. Juror 15 assured the court that he could
remain fair and impartial.
¶117 The court next questioned Juror 6, who explained that
throughout the trial, Jurors 2 and 11 had politically opposite views and
argued a lot. Juror 6 thought that Juror 11 “wanted to remove himself from
the jury” once the penalty phase began. Juror 6 explained that she did not
want to know what Juror 11 told the court and that she could put the
incident aside, follow the jury instructions, and decide the issues based on
the evidence presented.
¶118 The court then questioned Juror 4, who heard Juror 11
explaining that he had “Googled” a member of the jury, discovering
political affiliations. Juror 4 explained that he was not paying that much
attention to Juror 11, that he was not concerned with what Juror 11 had
found, and that he would be able to follow the jury instructions as given.
¶119 Finally, the court brought in the entire jury, explained that
Juror 11 had been replaced with Juror 17, and told jurors not to worry about
the reasons for Juror 11’s replacement. The court explained that the jurors
were still under the admonitions and that they were not permitted to do
any outside research on the Internet or otherwise. The court further
explained that the jury must begin the penalty-phase deliberations anew.
¶120 Burns asserts the trial court failed to adequately investigate
this issue by refusing to question all twelve jurors individually and, because
of the limited nature of the court’s questioning, it cannot be concluded
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Opinion of the Court
beyond a reasonable doubt that the prior guilt- and aggravation-phase
verdicts in the case were not coerced and were truly unanimous.
¶121 Burns, however, failed to object or otherwise raise any
concerns to the trial court about its handling of this matter. After receiving
Juror 11’s note, the trial judge met with Burns’ counsel and the prosecutor,
and Burns’ counsel stated that he agreed with the court’s planned response.
Burns’ counsel only asked that Juror 11 identify which jurors he had shared
the information with (Juror 11 was unable to accurately do so without using
their names on the record). Counsel did not ask the court to question all
jurors individually, object to the court’s plan to discuss the situation with
the jury as a whole, or move for a mistrial.
¶122 Burns has not established error, much less fundamental error.
In State v. Garcia, a juror told other jurors about alleged improper contact
initiated by the defendant’s family during the aggravation phase of the trial.
224 Ariz. 1, 11 ¶ 29, 226 P.3d 370, 380 (2010). The trial court interviewed all
the jurors, and no juror expressed a concern that the incident would affect
his or her deliberations. Id. at 11 ¶ 30, 226 P.3d at 380. After the interviews
concluded, defense counsel moved for a mistrial of the aggravation phase,
which the trial court granted. Id. We held that the trial court did not err by
failing to grant a mistrial on the already completed guilt phase because “the
trial court’s decision to grant a mistrial as to the aggravation phase alone
was sufficient in light of the limited nature of the potential prejudice.” Id.
at 11 ¶ 31, 226 P.3d at 380. We have explained that when confronting issues
of juror misconduct, “the court’s response should be commensurate with
the severity of the threat posed.” Id. (quoting Miller, 178 Ariz. at 557, 875
P.2d at 790).
¶123 Burns cannot show error because the jurors who spoke to
Juror 11 about his letter indicated to the judge that they received no specifics
from Juror 11 regarding his concerns about Juror 2, and all assured the court
that they had no difficulty setting aside what happened and following the
jury instructions. Here, unlike the jurors in Garcia, the jurors remaining on
the jury panel had no information regarding the content of Juror 11’s letter
to the court. Burns’ contention that “it is now unknown” what impact Juror
11’s conduct had on the remaining jurors is insufficient to demonstrate
fundamental error.
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STATE V. BURNS
Opinion of the Court
Sentencing on the Non-Capital Counts
¶124 Burns contends the trial court erred by refusing to sentence
him on the non-capital counts within thirty days of his conviction in
violation of Arizona Rule of Criminal Procedure 26.3. Burns asserts that,
because he was not sentenced on his non-capital convictions, he was
deprived of the right to have the jury consider his terms of imprisonment
on those charges during the penalty phase. We review a trial court’s
interpretation of the Arizona Rules of Criminal Procedure de novo. State v.
Manuel, 229 Ariz. 1, 3 ¶ 5, 270 P.3d 828, 830 (2011).
¶125 Under Rule 26.3, a court is obligated to sentence a defendant
between fifteen and thirty days after conviction. Ariz. R. Crim. P. 26.3. But
“[u]nder both Arizona’s superseded and current capital sentencing
schemes, a defendant’s [capital] trial consists of two phases: a guilt phase
and a penalty phase.” State v. Ring, 204 Ariz. 534, 554 ¶ 50, 65 P.3d 915, 935
(2003). Thus, waiting until the end of the proceeding to determine Burns’
sentences for both non-capital and capital convictions is both logical and
within the plain language of Rule 26.3. We hold that, in a capital
proceeding, the thirty-day sentencing period does not begin to run until
after the conclusion of the penalty phase.
¶126 Burns next argues that he should have been permitted to
argue to the jury that his consecutive sentences on his non-capital
convictions would require him to spend the rest of his life in prison. But
Burns had no right to present evidence of his effective life sentence to the
jury because it would have been irrelevant as a mitigating factor. See State
v. Benson, 232 Ariz. 452, 465 ¶¶ 52–57, 307 P.3d 19, 32 (2013) (refusing to
allow defendant to present evidence that he was unlikely to be paroled or
would stipulate to ineligibility for parole not an abuse of discretion); Dann,
220 Ariz. at 372–73 ¶¶ 122–24, 207 P.3d at 625–26 (refusing to instruct jury
that defendant would waive parole eligibility if not sentenced to death not
an abuse of discretion). The trial court did not err in so ruling.
Evidence of Burns’ Gang Affiliation, Attitude, and Other
Misconduct
¶127 Burns argues that evidence of his jail calls, religious beliefs,
tattoos, and gang membership were improperly admitted in violation of his
First, Eighth, and Fourteenth Amendment rights. This Court reviews the
admission of evidence in the penalty phase for an abuse of discretion. State
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Opinion of the Court
v. Nordstrom, 230 Ariz. 110, 114 ¶ 8, 280 P.3d 1244, 1248 (2012). So long as
rebuttal evidence is relevant to the thrust of a defendant’s mitigation and is
not unduly prejudicial, we defer to the trial court’s finding of admissibility.
VanWinkle, 230 Ariz. at 394 ¶ 28, 285 P.3d at 315.
¶128 During the penalty phase, the court admitted evidence of
Burns’ other acts. This included testimony regarding alleged uncharged
sexual assaults committed by Burns and testimony about Burns’ fifteen
prior police reports, beginning when he was thirteen years old and ending
with his possession of a homemade handcuff key while awaiting trial in this
case. The State also offered testimony about Burns’ white-supremacist
views, the significance of Burns’ tattoos (many of which were connected
with white-supremacist gangs or ideology), and Burns’ Asatru religion.
The court also permitted testimony about letters and jail calls in which
Burns described committing acts of racially motivated violence in prison,
made derogatory comments about individuals involved in the case, and
discussed his former cellmate killing someone to join Burns in prison.
¶129 Burns argues this rebuttal evidence was irrelevant to specific
mitigation evidence and the trial court erred by failing to analyze this
evidence under Rules of Evidence 401–403 or 404(b). We disagree.
¶130 The Rules of Evidence do not apply to the admission of
evidence during the penalty phase of a capital trial. Chappell, 225 Ariz. at
239 ¶ 35, 236 P.3d at 1186; A.R.S. §§ 13–751(C), –752(G). Thus, evidence that
is inadmissible during the guilt phase may be admissible during the penalty
phase if it rebuts the defendant’s mitigation and is not unfairly prejudicial.
See Chappell, 225 Ariz. at 239 ¶¶ 35–36, 236 P.3d at 1186. Trial courts,
however, should exclude evidence that is irrelevant in order to prevent the
penalty phase from devolving into a “limitless and standardless assault on
the defendant’s character and history.” State v. Hampton, 213 Ariz. 167, 180
¶ 51, 140 P.3d 950, 963 (2006).
¶131 Burns first contends that evidence of his prior arrests, other
criminal acts, and alleged sexual assaults should not have been admitted.
This evidence, however, was directly relevant to rebut Mr. Aiken’s
testimony that Burns would not pose a danger in the prison system and
could be effectively and safely housed there. The court did not abuse its
discretion in allowing this evidence.
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Opinion of the Court
¶132 Burns next challenges the admissibility of evidence regarding
his white-supremacist beliefs. Mr. Aiken testified that, after reviewing the
police reports from the department of corrections, he did not see anything
to validate Burns as a gang member. Evidence of Burns’ Skinhead
affiliation, including his tattoos, statements of his beliefs, interest in the
Asatru religion, and documentation by police as a Skinhead member, was
directly relevant to rebut Mr. Aiken’s testimony suggesting that Burns was
not a gang member and that he could safely be controlled in prison.
¶133 Burns also contends that his derogatory comments toward the
prosecutor and the State’s witnesses should not have been admitted into
evidence because their only purpose was “to inflame the jury.” Burns
described the individual who brought Mandi to court to testify as “a big fat
Mexican dude,” and referred to Mandi as a “race [traitor] bitch.” This
provides evidence of his Skinhead beliefs and rebuts Mr. Aiken’s testimony
that Burns could be controlled in prison because he was not a member of a
gang. Burns also commented that the assistant prosecutor looked like she
had “Down’s Syndrome.” This was evidence of Burns’ anti-social behavior,
supporting the findings of Dr. Kirkley.
¶134 Burns finally contends that his calls with his former cellmate
were improperly admitted as evidence because the calls injected the
cellmate’s “behavior and attitudes” into the trial. Again, the calls were
relevant because they demonstrated that Burns was involved in misconduct
while incarcerated, directly rebutting Mr. Aiken’s testimony that Burns
could safely be managed in prison.
¶135 Because all the proffered evidence was relevant to rebut
Burns’ mitigation evidence, the trial court did not abuse its discretion by
admitting it during the penalty phase.
Victim Impact Evidence
¶136 Burns contends “[t]he trial court violated Arizona Rule of
Criminal Procedure 19.1(d)” and his constitutional rights by admitting
more than two hours of victim impact evidence. Burns also argues that the
victim impact evidence was not admissible because some of the testimony
speculated about what Jackie’s final moments were like rather than
describing how her murder affected her family. We review the trial court’s
decision whether to grant a mistrial based on the admission of victim
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Opinion of the Court
impact testimony for an abuse of discretion. State v. Gallardo, 225 Ariz. 560,
567 ¶ 26, 242 P.3d 159, 166 (2010).
¶137 During the penalty phase, thirteen family members either
presented their own statements or had the victim’s advocate read prepared
statements. The State also showed an eight-minute video from Jackie’s
memorial services, which contained approximately 110 pictures of Jackie.
The State also showed the jury Jackie’s “senior project,” a nine-page
PowerPoint presentation containing thirteen photographs of Jackie and her
written reflections on growing up. At the end of the presentation, Burns
moved for a mistrial, which the trial court denied.
¶138 Victim impact evidence is admissible during the penalty
phase of a capital trial to rebut a defendant’s mitigation evidence. A.R.S. §
13-752(R); Ariz. R. Crim. P. 19.1(d)(3); Dann, 220 Ariz. at 369 ¶ 100, 207 P.3d
at 622. “Even if victim impact statements are not offered to rebut any
specific mitigating fact, they are ‘generally relevant to rebut mitigation’ and
thus admissible in the penalty phase.” Gallardo, 225 Ariz. at 567 ¶ 28, 242
P.3d at 166 (quoting Garza, 216 Ariz. at 69 ¶ 60 n.12, 163 P.3d at 1019 n.12).
Although victim impact testimony may not request imposition of a
particular sentence, it may properly describe the victim and the impact of
the murder on family members. Id. at 567 ¶ 27, 242 P.3d at 167.
¶139 That is not to say, however, that a trial judge must permit all
victim impact testimony. A trial court must exclude victim impact evidence
if it is so “unduly prejudicial that it renders the trial fundamentally unfair.”
Id. at 567 ¶ 25, 242 P.3d at 166. We have repeatedly recognized the potential
“danger that photos of the victims may ‘be used to generate sympathy for
the victim and his or her family.’” State v. Rose, 231 Ariz. 500, 511 ¶ 50, 297
P.3d 906, 917 (2013) (quoting Ellison, 213 Ariz. at 141 ¶ 115, 140 P.3d at 924).
Nonetheless, we have declined to impose a per se bar on the use of
photographs in victim impact presentations, instead relying on trial judges
to exercise their discretion to weigh a photograph’s potential for unfair
prejudice against its probative value. See id.; Ellison, 213 Ariz. at 141 ¶ 115,
140 P.3d at 924. Thus, a trial judge must take an active role in reviewing
victim impact evidence to screen for potential unfair prejudice. See Rose,
231 Ariz. at 511 ¶ 47, 297 P.3d at 917.
¶140 On the record before us, we cannot say that the trial court
abused its discretion. The statements from Jackie’s family focused on the
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Opinion of the Court
type of person Jackie was and the family’s sense of loss. This is acceptable
victim impact evidence. Gallardo, 225 Ariz. at 567 ¶ 27, 242 P.3d at 166.
Similarly, the photos here were relatively benign, including depictions of
graduations, birthdays, and vacations. The photos fell within bounds and
did not render the trial “fundamentally unfair.” See id. at 567 ¶ 28, 242 P.3d
at 166. The trial court gave the jury a limiting instruction, cautioning jurors
that they could consider the victim impact statements only to the extent that
they rebutted mitigation and could not consider the victim impact evidence
as an aggravating circumstance. Because the statements and photographs
in this case were not unfairly prejudicial, and the trial court gave an
appropriate limiting instruction, the court did not abuse its discretion in
permitting the victim impact evidence.
¶141 Burns’ contention that victim impact statements may not
speculate about how the victim may have felt during the crime is similarly
without merit. We have previously held a family member’s brief remarks
about the impact of remembering or visualizing a victim’s final moments
were not unduly prejudicial. See, e.g., Glassel, 211 Ariz. at 53 ¶ 79, 116 P.3d
at 1193 (holding that victim impact statement that described how husband
felt while victim begged for help was not unduly prejudicial); Prince II, 226
Ariz. at 535 ¶¶ 71–73, 250 P.3d at 1164 (mother’s victim impact statement
that described how she still hears victim crying as she was thrown across
the floor not unduly prejudicial). We again caution victims and prosecutors
to exercise restraint when presenting this type of victim impact evidence.
But, on the record before us, we find no error. The trial court did not abuse
its discretion in denying Burns’ motion for a mistrial.
¶142 Nevertheless, we are troubled with the volume and type of
materials presented as victim impact evidence in this case. The jury heard
more than a dozen victim impact statements, some of which came from
people who had never met Jackie. Jackie’s school work was displayed to
the jury. While we understand the strong emotions that senseless murders
generate in surviving family members and communities, we again caution
victims and prosecutors about piling on impact evidence “lest they risk a
mistrial.” Rose, 231 Ariz. at 511 ¶ 47, 297 P.3d at 917. The trial court should
take an active role in pre-screening the nature and scope of victim impact
evidence to ensure it does not “cross the line.” Cf. id.
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Opinion of the Court
Penalty-Phase Jury Instructions
¶143 Burns contends that the trial court’s penalty-phase jury
instructions were erroneous in two respects. First, Burns argues the court
instructed the jury to consider in mitigation only evidence presented during
the mitigation phase, and not evidence presented during other phases of
the trial. This argument is without merit. The thrust of the challenged jury
instruction was to prevent sympathy unrelated to the defendant’s
character, not to limit the factors that the jury could consider. The jury was
instructed that it could consider any facts that it found relevant.
¶144 Second, Burns argues that the jury instructions restricted the
type of evidence that the jury could consider as mitigating in violation of
Lockett v. Ohio, 438 U.S. 586 (1978), and Tennard v. Dretke, 542 U.S. 274 (2004).
We disagree. The trial court instructed the jury that it could consider any
factors that “relate to any sympathetic or other aspect of the defendant’s
character, propensity or record, or circumstances of the offense.” We have
approved similar jury instructions as complying with Lockett. See State v.
Velazquez, 216 Ariz. 300, 311 ¶ 44, 166 P.3d 91, 102 (2007). The jury
instructions in this case allowed the jury to consider any relevant mitigation
evidence. We find no error.
Prosecutorial Misconduct
¶145 Burns contends that the prosecutor engaged in misconduct
throughout the trial, which deprived Burns of his right to due process
under the Fourteenth Amendment.
¶146 We review a trial court’s denial of a motion for mistrial for
prosecutorial misconduct for an abuse of discretion. State v. Lehr (Lehr I),
201 Ariz. 509, 522 ¶ 56, 38 P.3d 1172, 1185 (2002). When a defendant fails to
object at trial, however, “we review only for fundamental error.” Roque, 213
Ariz. at 228 ¶ 154, 141 P.3d at 403. “To prevail on a claim of prosecutorial
misconduct, a defendant must demonstrate that the prosecutor’s
misconduct so infected the trial with unfairness as to make the resulting
conviction a denial of due process.” Hughes, 193 Ariz. at 79 ¶ 26, 969 P.2d
at 1191 (internal quotation marks and citation omitted). We look to the
“cumulative effect of the misconduct” on the trial. Id.
¶147 The prosecutorial misconduct that Burns complains of falls
into two categories: those actions that he objected to at trial, which we
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Opinion of the Court
review for an abuse of discretion, and those to which he did not object,
which we review only for fundamental error.
1. Conduct objected to during trial
¶148 Burns objected to eight actions by the prosecutor at trial that
he claims constituted prosecutorial misconduct. He argues that the
prosecutor committed misconduct by (1) repeatedly eliciting testimony that
this was Jackie’s first date after promising to not comment on her chastity;
(2) arguing without any evidence that Burns gave Jackie GHB; (3) infecting
the entire penalty phase with irrelevant testimony regarding Burns’
religion, white supremacist beliefs, Skinhead affiliations, and prior acts of
violence and sexual misconduct; (4) showing the jury gruesome
photographs of the victim’s body for no substantive reason; (5) eliciting
testimony that various knives were found at Burns’ home despite having
promised to not inquire into them; (6) commenting on Burns’ refusal to
answer police questions; (7) arguing in closing of both trial phases that
Burns’ motive for killing the victim was to prevent her from reporting him
for committing sexual assault and to avoid going back to prison; and (8)
arguing several times that to “do justice” required that the jury think about
what Burns’ conduct did to Jackie’s family.
¶149 We have already rejected most of Burns’ arguments
underlying his assertion of prosecutorial misconduct. The trial court did
not err in admitting, and the prosecutor therefore did not commit
misconduct by commenting upon, evidence concerning Jackie’s being on
her first date, the presence of GHB in her liver, Burns’ religious and white-
supremacist beliefs, photographs of Jackie’s body, the knives found in
Burns’ house, and the impact of Jackie’s death on her family.6
¶150 Burns is also unpersuasive in contending that the prosecutor
committed misconduct when (1) he elicited testimony that Burns was silent
when asked after his arrest about Jackie’s body, and (2) argued during
closing argument that Burns killed Jackie so she would not report the sexual
assault. A prosecutor may not make any comments calculated to point out
a defendant’s invocation of his Fifth Amendment right. Id. at 87 ¶ 64, 969
P.2d at 1199. This Court examines a comment on a defendant’s silence in
the context of the proceedings as a whole to determine whether the jury
6 See supra Sections F, G, U, K, J, and V.
39
STATE V. BURNS
Opinion of the Court
would perceive them to be a comment on a defendant’s failure to testify.
Id. But comments and evasive answers made before invoking the right to
remain silent are admissible. See State v. Parker, 231 Ariz. 391, 406 ¶ 65, 296
P.3d 54, 69 (2013).
¶151 Burns objects to a detective’s testimony about Burns’ conduct
during police questioning. The detective stated that, when the police asked
for the location of Jackie’s body, Burns did not say where Jackie’s body was
located, but just got “real quiet, clos[ed] his eyes, and just sh[ook] his head.”
This exchange occurred before Burns invoked his right to remain silent,
making the testimony admissible. See id.
¶152 The prosecutor did not commit misconduct by arguing that
Burns murdered Jackie to prevent her from disclosing the sexual assault. A
prosecutor may make arguments and may draw inferences that are
reasonably supported by the evidence. Hughes, 193 Ariz. at 85 ¶ 59, 969
P.2d at 1197. Here, the evidence reasonably supported the prosecutor’s
arguments.
2. Conduct not objected to during trial
¶153 Burns also now claims that the prosecutor committed
misconduct by (1) arguing that Jackie did not consent to sexual intercourse,
(2) arguing that Burns’ allocution should be given little weight because it
was not under oath or subject to cross-examination, and (3) “belittl[ing] the
integrity of” Dr. Cunningham.
¶154 The prosecutor’s reference to Jackie’s lack of consent during
the guilt-phase closing argument was not misconduct because evidence
supports this inference. See supra Section N.1. Nor did the prosecutor
improperly inflame the jury by commenting in his closing that Burns
treated Jackie “like trash” and has a low regard for women. Although the
brief comments were unnecessary, they were supported by the evidence
and, when viewed in context, were not improperly inflammatory.
¶155 Nor did the prosecutor commit misconduct by noting that
Burns’ allocution was not under oath or subject to cross-examination. A
sentencing judge or jury may properly consider the fact that an allocution
was not under oath or subject to cross-examination when weighing a
40
STATE V. BURNS
Opinion of the Court
defendant’s credibility. State v. McCall, 160 Ariz. 119, 124, 770 P.2d 1165,
1170 (1989).
¶156 Finally, Burns has not shown that the prosecutor committed
misconduct by “belittl[ing]” Dr. Cunningham. It is improper for a
prosecutor to argue, without evidentiary support, that an expert acted
unethically. State v. Bailey, 132 Ariz. 472, 479, 647 P.2d 170, 177 (1982); see
also Hughes, 193 Ariz. at 86 ¶ 61, 969 P.2d at 1198 (holding that “arguing that
all mental health experts are fools or frauds who say whatever they are paid
to say” was prosecutorial misconduct). However, a prosecutor may
properly inquire into an expert’s credentials and employment for
impeachment purposes. Bailey, 132 Ariz. at 478, 647 P.2d at 176. Here, the
State argued that the jury should give little weight to Dr. Cunningham’s
testimony because he (1) did not interview the defendant, yet was willing
to opine as to a causal link between mitigating factors and the murder; and
(2) is exclusively employed as an expert witness and does not have a clinical
practice. The prosecutor did not impugn Dr. Cunningham’s integrity, but
merely questioned his credentials and familiarity with this case.
¶157 Because we have found no prosecutorial misconduct, we need
not analyze whether any errors deprived Burns of a fair trial or whether he
suffered any prejudice.
Jury Coercion
¶158 Burns contends that the trial court coerced a death verdict
when it granted a break over the weekend and required further
deliberations after the jury advised the court that it was deadlocked. “In
determining whether a trial court has coerced the jury’s verdict, this court
views the actions of the judge and the comments made to the jury based on
the totality of the circumstances and attempts to determine if the
independent judgment of the jury was displaced.” State v. Huerstel, 206
Ariz. 93, 97 ¶ 5, 75 P.3d 698, 702 (2003). Improperly coercing a verdict from
the jury constitutes reversible error. State v. McCrimmon, 187 Ariz. 169, 172,
927 P.2d 1298, 1301 (1996).
¶159 On February 15, 2011, at 3:51 p.m., the jury began penalty-
phase deliberations. Deliberations continued for approximately a day and
a half before the jury had to restart deliberations when the trial judge
41
STATE V. BURNS
Opinion of the Court
dismissed Juror 11 and substituted an alternate juror.7 On February 22, the
newly composed jury began deliberations. On the afternoon of February
23, the jury notified the court that it could not reach a unanimous verdict,
and the trial court gave an impasse instruction. One juror responded to that
instruction by saying that more information would be helpful. Burns
moved for a mistrial, and the trial court denied that motion. The jury
resumed deliberations. Later in the afternoon, the trial court asked if any
of the jurors would object to recessing for the day and returning to
deliberate on Monday. Some jurors indicated that they felt it would be
pointless, but two responded that taking the weekend to “cool off” would
be helpful. The trial court again denied Burns’ motion for a mistrial. The
following Monday afternoon, the jury returned a death verdict.
¶160 We have held that “[j]ury coercion exists when the trial
court’s actions or remarks, viewed in the totality of the circumstances,
displaced the independent judgment of the jurors or when the trial judge
encourages a deadlocked jury to reach a verdict.” Davolt, 207 Ariz. at 213 ¶
94, 84 P.3d at 478 (internal quotation marks and citations omitted). Whether
jury coercion occurs is fact intensive and requires a case-by-case analysis.
State v. Roberts, 131 Ariz. 513, 515, 642 P.2d 858, 860 (1982) (citations
omitted). A trial judge may coerce a verdict by focusing jury instructions
on a holdout juror in a way that suggests that the juror should reconsider
his or her views. Huerstel, 206 Ariz. at 100–01 ¶ 23, 75 P.3d at 705–06.
¶161 With these principles in mind, we conclude that the trial court
did not coerce a verdict. After it began deliberations anew, the
reconstituted jury had deliberated for only one and one half days when it
advised the court it was deadlocked. The court gave the impasse
instruction after which the jury continued to deliberate. When the jury had
not reached a decision by the weekend break, the judge asked if continuing
deliberations after the weekend might help. Some jurors thought that
taking a break and having the jury reconvene would be helpful.
¶162 The court never forced the jury to come to a consensus. The
judge never knew how near the jury was to reaching a unanimous verdict
or whether they were leaning toward a life or death verdict. The trial judge
also did not know who the holdout juror or jurors were and did nothing to
get the holdouts to change their votes. We find no coercion.
7 See supra Section S.
42
STATE V. BURNS
Opinion of the Court
Death Verdict
¶163 The jury found two aggravating circumstances in Burns’ case:
the murder was especially cruel under A.R.S. § 13-751(F)(6), and Burns had
previously been convicted of a serious offense under A.R.S. § 13-751(F)(2).
Regarding the aggravating circumstances, Burns contends that (1)
“substantial evidence did not support the jury’s verdicts on the (F)(6)
aggravating circumstances”; (2) “[t]he (F)(2) aggravator was entitled to
minimal weight”; and (3) the jury abused its discretion by imposing a death
sentence.
¶164 We “review all death sentences to determine whether the trier
of fact abused its discretion in finding aggravating circumstances and
imposing a sentence of death.” A.R.S. § 13-756(A). A jury does not abuse
its discretion in reaching a death verdict “if there is ‘any reasonable
evidence in the record to sustain’ those conclusions.” Villalobos, 225 Ariz.
at 83 ¶ 41, 235 P.3d at 236 (quoting State v. Morris, 215 Ariz. 324, 341 ¶ 77,
160 P.3d 203, 220 (2007)).
1. The (F)(6) aggravator
¶165 Under A.R.S. § 13-751(F)(6), a jury must consider whether the
defendant committed the murder in an especially cruel, heinous, or
depraved manner. A.R.S. § 13-751(F)(6). We have explained that “[a]
murder is especially cruel under A.R.S. § 13–751(F)(6) when the victim
consciously ‘suffered physical pain or mental anguish during at least some
portion of the crime and [] the defendant knew or should have known that
the victim would suffer.’” Dixon, 226 Ariz. at 556 ¶ 61, 250 P.3d at 1185
(quoting Morris, 215 Ariz. at 338 ¶ 61, 160 P.3d at 217).
¶166 There was substantial evidence supporting a finding that
Jackie was conscious and that she suffered mental and physical pain. The
skull fractures, blood and earring in Burns’ truck, as well as Jackie’s ripped
bra and top all suggest a struggle and sexual assault. See State v. Amaya-
Ruiz, 166 Ariz. 152, 177, 800 P.2d 1260, 1285 (1990); State v. Schackart, 190
Ariz. 238, 249, 947 P.2d 315, 326 (1997). The blood spatter and the bullet
found in the sand established that Jackie was shot after being taken out of
the truck. When her body was found, she appeared to be clutching a
branch, which further suggests that she was still conscious when she was
shot and would have been aware of what was happening to her. See Prince
II, 226 Ariz. at 540 ¶ 98 n.7, 250 P.3d at 1169 n.7; State v. Hargrave, 225 Ariz.
43
STATE V. BURNS
Opinion of the Court
1, 17 ¶ 72, 234 P.3d 569, 585 (2010). Burns knew or should have known that
his actions would cause Jackie to suffer. Therefore, reasonable evidence in
the record supports the jury’s conclusions that the murder was especially
cruel. The jury did not abuse its discretion when it found the (F)(6)
aggravator.
2. The jury’s application of the (F)(2) aggravator
¶167 Under A.R.S. § 13-751(F)(2), an aggravating circumstance
exists if:
[T]he defendant has been or was previously convicted of a
serious offense, whether preparatory or completed.
Convictions for serious offenses committed on the same
occasion as the homicide, or not committed on the same
occasion but consolidated for trial with the homicide, shall be
treated as a serious offense under this paragraph.
Thus, convictions for crimes that occurred contemporaneously with the
capital offense may be considered for (F)(2) purposes. State v. Carreon, 210
Ariz. 54, 66 ¶ 59, 107 P.3d 900, 912 (2005).
¶168 Burns argues that, because his two prior burglary convictions
were non-violent offenses, the jurors should have given the (F)(2)
aggravator little consideration. Burns does not contend, however, that the
State failed to prove that he had two prior convictions for burglary or that
he was contemporaneously convicted of sexual assault and kidnapping.
The jury found the (F)(2) aggravator. Having made this finding, it was up
to each juror to individually consider the aggravator in light of the
mitigation presented. State ex rel. Thomas v. Granville (Baldwin), 211 Ariz.
468, 472–73 ¶ 17–18, 123 P.3d 662, 666–67 (2005). We do not find an abuse
of discretion in applying the aggravator.
3. The death verdict
¶169 The jurors did not abuse their discretion in determining that
the mitigating evidence was insufficient to warrant leniency. During the
penalty phase, Burns presented mitigation evidence regarding his difficult
childhood, his dysfunctional family, his diagnosed learning disabilities, his
impulsivity, the personality disorders from which he suffered, and whether
he would be able to be safely housed in prison while serving a life sentence.
44
STATE V. BURNS
Opinion of the Court
¶170 “We must uphold a jury’s determination that death is the
appropriate sentence if any ‘reasonable juror could conclude that the
mitigation presented was not sufficiently substantial to call for leniency.’”
State v. Naranjo, 234 Ariz. 233, 250 ¶ 89, 321 P.3d 398, 415 (2014) (quoting
Gallardo, 225 Ariz. at 570 ¶ 52, 242 P.3d at 169). Even if we assume that
Burns proved all his proffered mitigating factors, we cannot say the jurors
abused their discretion in concluding that the mitigation did not warrant
leniency.
III. CONCLUSION
¶171 For the reasons stated we affirm Burns’ convictions and
sentences, including his death sentence.8
8 Burns raises thirty-two additional constitutional claims that he
acknowledges this Court has previously rejected but that he wishes to
preserve for federal review. We decline to revisit these claims.
45
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Filed 4/10/15 P. v. Goldberg CA2/2
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION TWO
THE PEOPLE, B257232
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. LA073080)
v.
SAMUEL GOLDBERG,
Defendant and Appellant.
THE COURT:*
Defendant Samuel Goldberg appeals his judgment of conviction and 14-year
sentence for two counts of robbery and one count of attempted robbery. His appointed
counsel filed a brief pursuant to People v. Wende (1979) 25 Cal.3d 436 (Wende), raising
no issues. On November 20, 2014, we gave notice to defendant that his counsel had
failed to find any arguable issues and that defendant had 30 days within which to submit
by brief or letter any grounds of appeal, contentions, or arguments he wished this court to
consider. Defendant filed a brief in which he requests that this court address the
following: (1) Was there sufficient evidence that he aided and abetted in the commission
*
ASHMANN-GERST, Acting P.J., CHAVEZ, J., HOFFSTADT, J.
of the offenses; and (2) Did the court err in denying his Romero1 motion to strike his
prior “strike” conviction. We have reviewed the record and affirm the judgment.
BACKGROUND
A. Factual Background
1. Prosecution Evidence
Around midnight on December 14, 2012, defendant who was accompanied by Joe
Luis Carranza, pulled his vehicle up beside three men who were standing outside an
apartment complex in Studio City. Carranza, wearing a cap and gloves got out of the
vehicle, pointed a semiautomatic handgun at the three men and demanded their wallets.
Two of the victims turned over credit cards, cash, a watch, and a cell phone, while the
third victim had his wallet with him but refused to give it to Carranza. Carranza got back
into the vehicle on the passenger side and appellant drove away. One of the victims
recorded the vehicle’s license plate number and the police issued a warrant for the
vehicle.
Approximately one month later police stopped a vehicle being driven by
defendant’s mother that matched the description in the warrant. Defendant was located at
the family home and a search of defendant’s bedroom uncovered the watch taken from
one of the robbery victims. Defendant was arrested, informed of his Miranda2 rights, and
agreed to talk to police investigators. The audio recording of defendant’s statement was
admitted into evidence and played for the jury. Defendant stated that on the night of the
robbery he and Carranza drank some beers and drove around. Carranza asked if
defendant wanted to get some money and defendant responded that he did. Carranza told
defendant to stop the car when they saw a group of men standing on the street.
Defendant watched as Carranza put on gloves, pulled out a gun and jumped out of the
car. Defendant saw Carranza rob the men at gunpoint. After Carranza got back into the
1 People v. Superior Court (Romero) (1996) 13 Cal.4th 497 (Romero).
2 Miranda v. Arizona (1966) 384 U.S. 436.
2
vehicle, defendant drove away. Carranza gave defendant some of the cash taken from the
victims and left the watch in the vehicle’s center console.
2. Defendant’s Evidence
Defendant did not testify or present any evidence in his defense.
B. Procedural Background
Following trial, the jury found defendant guilty of two counts of robbery (Pen.
Code, § 211),3 and one count of attempted robbery (§§ 664, 211), with findings that a
principal was armed with a handgun in the commission of the offenses (§ 12022,
subd. (a)(1)). In a separate proceeding, the jury found to be true allegations that
defendant had suffered two prior convictions—one being a “strike”—and had served two
prior prison terms. The trial court denied defendant’s Romero motion and sentenced
defendant to 14 years in state prison. Defendant filed a timely notice of appeal.
DISCUSSION
I. Sufficiency of the Evidence
Defendant contends that his cooperation with the police following his arrest
showed that his “participation in this robbery was not [his] intention.” He contends he
was not the aggressor and does not “have the heart to take anything by force from
anybody.” On appeal, we review the entire record in the light most favorable to the
judgment to determine whether it discloses evidence that is reasonable, credible, and of
solid value such that a reasonable jury could find the defendant guilty beyond a
reasonable doubt. (People v. Rountree (2013) 56 Cal.4th 823, 852-853.)
The jury here was instructed that a person may be guilty of a crime by aiding and
abetting a perpetrator, and the prosecutor argued this theory to the jury as establishing
defendant’s guilt. Section 31, which governs aider and abettor liability, provides in
relevant part: “All persons concerned in the commission of a crime, whether it be felony
or misdemeanor, and whether they directly commit the act constituting the offense, or aid
3 All further statutory references are to the Penal Code unless otherwise indicated.
3
and abet in its commission . . . are principals in any crime so committed.” “An aider and
abettor is one who acts ‘with knowledge of the criminal purpose of the perpetrator and
with an intent or purpose either of committing, or of encouraging or facilitating
commission of, the offense.’” (People v. Chiu (2014) 59 Cal.4th 155, 161.)
Ample evidence supported the jury’s finding that defendant had foreknowledge of
Carranza’s criminal purpose and an intent to facilitate commission of the robberies.
Defendant and Carranza discussed “getting money” as they drove around together in
defendant’s vehicle; defendant stopped the vehicle beside three men on the street and
watched as Carranza put on gloves and pulled out a gun; defendant watched as Carranza
robbed the victims at gunpoint; and defendant quickly drove away when Carranza
reentered the vehicle effectuating their escape from the scene of the crime. Defendant
also presented no evidence that his participation in the crimes was under circumstances of
duress or coercion, and his cooperation with the police investigation following his arrest
is unrelated to his culpability as an aider and abettor.
II. The Trial Court Properly Exercised Its Discretion in Denying Defendant’s
Motion to Dismiss His Prior Strike
In ruling on a Romero motion, the trial court “must consider whether, in light of
the nature and circumstances of his present felonies and prior serious and/or violent
felony convictions, and the particulars of his background, character, and prospects, the
defendant may be deemed outside the scheme’s spirit, in whole or in part, and hence
should be treated as though he had not previously been convicted of one or more serious
and/or violent felonies.” (People v. Williams (1998) 17 Cal.4th 148, 161.)
We review the trial court’s decision of whether to strike a prior conviction under
the abuse of discretion standard. (People v. Carmony (2004) 33 Cal.4th 367, 374
(Carmony).) Dismissal of a strike is a departure from the sentencing norm. Accordingly,
in reviewing a ruling on a Romero motion, we will not reverse for abuse of discretion
unless the defendant shows that the decision was “so irrational or arbitrary that no
reasonable person could agree with it.” (Carmony, at p. 377.) Reversal is justified where
4
the trial court was unaware of its discretion to strike a prior strike or refused to do so, at
least in part, for impermissible reasons. (Id. at p. 378.) But we will affirm ‘“[w]here the
record demonstrates that the trial court balanced the relevant facts and reached an
impartial decision in conformity with the spirit of the law . . . .’” (Ibid., quoting People v.
Myers (1999) 69 Cal.App.4th 305, 310.)
Here, the record reflects that the trial court indicated that it reviewed the probation
report; gave due consideration to the age of the strike prior and the testimony of the
victim of that crime; reviewed defendant’s criminal history; and considered counsels’
arguments. The court concluded that the “totality of [the circumstances]” showed that
defendant was not “outside the spirit of the three strikes law.”
The record supports this conclusion. There is no showing that the trial court was
either unaware of its discretion or considered impermissible factors. We cannot say that
its ruling was irrational or arbitrary. Thus, we conclude the trial court did not abuse its
discretion in declining to strike defendant’s prior strike conviction.
III. Review
In addition to reviewing and addressing the matters raised in defendant’s letter
brief, we have made an independent examination of the entire record to determine if there
are any other arguable issues on appeal. Based on that review, we have determined that
there are no other arguable issues on appeal. We are therefore satisfied that defendant’s
counsel has fully complied with her responsibilities under Wende, supra, 25 Cal.3d. 436.
The judgment is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS.
5
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772 F.2d 902
*Johntonv.Ochsner Med Foundation
84-3891
United States Court of Appeals,Fifth Circuit.
8/28/85
1
E.D.La.
AFFIRMED
2
---------------
* Fed.R.App.P. 34(a); 5th Cir.R. 34.2
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918 So.2d 301 (2005)
KING v. STATE.
No. 2D04-2922.
District Court of Appeal of Florida, Second District.
December 28, 2005.
Decision without published opinion. Affirmed.
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583 F.2d 765
99 L.R.R.M. (BNA) 3226, 84 Lab.Cas. P 10,906
BANDAG, INCORPORATED, Petitioner, Cross-Respondent,v.NATIONAL LABOR RELATIONS BOARD, Respondent, Cross-Petitioner.
No. 76-2755.
United States Court of Appeals,Fifth Circuit.
Nov. 9, 1978.
Joseph P. Parker, Fort Worth, Tex., for petitioner, cross-respondent.
John S. Irving, Gen. Counsel, John E. Higgins, Jr., Deputy Gen. Counsel, Carl L. Taylor, Assoc. Gen. Counsel, Paul J. Spielberg, Asst. Gen. Counsel, Christine W. Peterson, Atty., Elliott Moore, Deputy Assoc. Gen. Counsel, N.L.R.B., Washington, D. C., for respondent, cross-petitioner.
George Kaufmann, Ruth Weyand, Washington, D. C., for Local 1016, affiliated with Int. Union of Elec., Radio, etc.
Petition for Review and Cross Application for Enforcement of an Order of the National Labor Relations Board.
Before WISDOM, GODBOLD and CLARK, Circuit Judges.
GODBOLD, Circuit Judge:
1
The employer has filed a petition to review Board orders and the Board has cross-petitioned for enforcement.
2
In an election, held January 23-24, 1975, at the company's plant in Abilene, Texas,1 15 votes were cast for the union and 28 against. Before the election, by December 19, the union had a card majority, 27 out of a unit of 48 employees. The union filed objections to the election, the Regional Director made an investigation and filed a complaint, and the ALJ conducted a hearing. He found that in a period immediately preceding the election the company had interrogated employees concerning their union sentiments, threatened employees with reprisals for engaging in union activities, promised benefits for voting against the union, and maintained unlawful no-solicitation and no-distribution rules. He also found that soon after the election and because of their union activities the company had discharged Carlos Rodriguez, the union's prime in-house organizer, and had suspended for three days union committeeman Scott Hayes.
3
The ALJ recommended a cease-and-desist order with respect to the 8(a)(1) violations and reinstatement and back pay for Rodriguez and Hayes. He also recommended a Gissel2 order requiring the company to recognize and bargain with the union.
4
The Board entered an order adopting the ALJ's findings and recommendations on the 8(a)(1) violations and the discharges. By a 3-2 vote, and relying on Irving Air Chute Co., Inc., 149 N.L.R.B. 627 (1964), the Board declined to adopt the recommendation for a bargaining order, and it certified the results of the election, with the result that the union was not the bargaining agent. The Board held that it could not enter a bargaining order because the union had withdrawn its objections and there was not before the Board any meritorious objection to the election. The two dissenters urged that the pendency of a meritorious objection was not prerequisite to a bargaining order.
5
The General Counsel moved for reconsideration, and the Board entered a supplemental order in which it found that there had been a meritorious objection pending which was the predicate for a bargaining order, and it adopted in toto the remedial order originally recommended by the ALJ.
6
I. The 8(a)(1) violations.
7
We need not discuss the findings of many instances of coercive interrogation, threats of reprisals, and promises of benefits. They are described at more length in the ALJ's order, quoted in part III below. The employer does not even contest many of them, recognizing that they rest on credibility choices. The Board also found a "multitude" of other acts displaying antiunion animus of the company and its supervisors (including distribution of improper preelection literature) which, though not alleged as independent violations, were relevant in assessing the violations that were alleged. The evidence supports these findings also.
8
Until November 15, 1974, the company had a no-solicitation rule published in its employee handbook forbidding:
9
Circulating petitions, distributing any written or printed matter, or posting same such matter of any description on Company premises, including parking lots, without prior approval of Plant Manager.
10
The company admits that this rule was overbroad because it did not distinguish between working and nonworking time. See Mason & Hanger-Silas Mason, Inc., v. NLRB, 405 F.2d 1, 4 (CA5, 1968); NLRB v. Walton Manufacturing Co., 289 F.2d 177, 180-81 (CA5, 1961). The rule was presumptively invalid, and the company has not advanced any compelling business justification that might make it valid. See Walton Manufacturing Co., supra.
11
Effective November 15 the company adopted a new rule forbidding:
12
Circulating petitions, distributing any written or printed matter, soliciting, or posting same such matter of any description during working time in plant without prior approval of Plant Manager.
13
This limited the previous proscription to "in plant" and "during working time," but it broadened the old rule to include "soliciting." The Board acknowledges that the new rule is facially valid, but its orders require the company to cease and desist from maintaining or giving effect to it. The Board relies upon cases holding that discontinuance of an unfair practice is not a defense where other unfair practices indicate that the coercive effect of discontinued conduct has not been dissipated. The company insists that it committed no unfair practice with respect to solicitation rules because the old rule, though too broad, was never enforced. The evidence reveals that no one paid much attention to the old rule. But the mere existence of such a rule may violate the Act because of the possibility that it may chill the exercise of rights guaranteed by § 7. Utrad Corp. v. NLRB, 454 F.2d 520, 523-24 (CA7, 1971); See Walton Manufacturing Co., supra. Accepting Arguendo the Board's theory that despite its moribund nature the old rule still might have a chilling effect, we nevertheless decline to enforce the part of the order forbidding maintenance or enforcement of the new rule.
14
Witnesses described in-plant solicitations carried on during the organizational campaign, such as United Fund, solicitation for a Christmas present for a supervisor, sale of oranges for the Future Farmers of America, and an informal 25cents football pool participated in by numerous persons (including plant manager McGlothin). McGlothin described these solicitations as morale builders, participated in by all, and done with his advance permission.3 The Board found that nonunion solicitations such as these continued after adoption of the new rule. In explaining the new rule to employees, McGlothin said this:
15
Look, this is for the protection of not only you, but the company too. . . . It's for both our benefits. . . . The main reason for it is I'm not going to tolerate people circumventing rules and situations just to gain favor for something they want, when it's not something the company wants. We're just not going to tolerate it. That's all there is to it. . . .
16
This does not mean you can't talk on the job. . . . As long as you keep up your job pace and the quality level of your job and work at it safely without your attention on something else, and not, you know, disrupting or anything work or anything, fine. That's exactly what the rule means. If you want to sell something here, if you want to sell a car or something; if you want to put it on the bulletin board, give it to me and I'll let you put it on the bulletin board.
17
Elsewhere in his speech he pointed out that the company would not put up with badgering employees, cursing them, threatening them and disruption of work.
18
The Board drew the inference that there was a company design to deny advance approval, and to prevent, union solicitations, while permitting nonunion work interruptions, which kept alive the presumptive chilling effect of the old rule. These inferences are not supported by substantial evidence. There was no evidence that either of the rules had been selectively applied or enforced. The new rule constricted the geographical and temporal scope of the former rule to in-plant work time. It broadened the scope of activities governed by bringing in solicitation. Nonunion solicitations had been approved, but the union had never asked permission to solicit. When McGlothin described the new rule to an employees' meeting he spoke of the rule's being circumvented, and he made clear that the company would insist that it be obeyed. He neither said nor implied that the union, if it asked permission to engage in activities for which permission was required, would be turned down. McGlothin's discussion of talking on the job related to "solicitation," but what he said was less restrictive than the new rule itself.4
19
II. The discharges.
20
We consider the discharge of Rodriguez and the three-day suspension of Hayes.5
21
When all the facts are laid out, the discharge of Rodriguez is seen to be a garden-variety mixed-motive firing. Rodriguez had been a leading in-house organizer for another union in an unsuccessful campaign at the same plant in 1972, and these activities had been known to the company. In the fall of 1974 he became the leader of the second organizational effort. He wore a special union button identifying him as a member of the organizing committee. Rodriguez, like other employees in the small plant, enjoyed an open and friendly relationship with manager McGlothin. Before the election Rodriguez discussed the campaign with McGlothin, who told him, "This time it was going to be different because this time he (Rodriguez) was going to get in trouble."
22
Rodriguez told McGlothin that he had applied for a job with another employer in the same city, and the manager threatened to tell the other employer that Rodriguez was a troublemaker, and he told Rodriguez that he would not be able to get a job anywhere in the city. Later McGlothin accused Rodriguez of spreading a false rumor that McGlothin was in favor of the union, and he warned Rodriguez that if the rumor didn't stop Rodriguez would have to get an attorney to defend himself. McGlothin acknowledged that he was trying to frighten Rodriguez. In the same conversation Rodriguez told McGlothin that he had gotten into the campaign reluctantly but would "take it all the way this time." The election took place January 23-24. On one of these days a supervisor told Rodriguez the company had "plenty of money to fire him."
23
On February 5 the crew operating the machine to which Rodriguez was assigned was shorthanded, and Rodriguez was given additional duties to perform. A dispute arose between him and his foreman. The company took the position that Rodriguez refused to obey orders of the foreman, while Rodriguez insisted that he had merely suggested an alternate work procedure which would benefit everyone. Rodriguez is illiterate. His native language is a Spanish dialect spoken in the Southwest. He speaks and understands English but not very well. The foreman testified that Rodriguez directly refused an order to assist with heavy unloading work. On credibility grounds the Board rejected this as part of "a contrived script."6 The Board found that the foreman had seized upon an opportunity to treat as insubordinate poorly expressed suggestions from Rodriguez and a justified inquiry from Rodriguez concerning being assigned two jobs at once on the machine. Substantial evidence justified the Board's conclusion that the asserted reason for Rodriguez's discharge was pretextual. The conclusion is nailed tighter by the justified findings concerning the company's antiunion animus and other antiunion actions. The provision of the order requiring that Rodriguez be reinstated with back pay must be enforced.
24
The three-day suspension of Hayes is a closer question. He was a member of the organizing committee. In a brief, informal discussion during break, Hayes asked employee Gray to sign a union card, and Gray demurred saying he wanted to find out both sides of the question before committing himself. In the ensuing conversation Hayes described a scab as "a low life mother fucking son of a bitch." Later Gray asked a supervisor, what he thought of someone calling him a "skag." Gray was not familiar with the word "scab" until he talked to the supervisor. Gray related Hayes' definition of scab, and the supervisor reported the story to McGlothin. McGlothin called in Hayes and asked him if he had Called Gray a scab. Hayes admitted his obscene definition of the term, but he denied Calling Gray a scab. McGlothin related to Hayes his own definition of scab: "A person who has the courage of his convictions to cross a picket line and go to work and earn money for his family."McGlothin told Hayes he was suspended for three days for three reasons for badgering Gray, for calling Gray a scab, and for defining scab as he did. The record does not support that Hayes "badgered" Gray. In Gray's version of the brief one-time dialogue there is no description of undue pressure. In his testimony Gray did not say that Hayes Called him a scab but rather that Hayes asked "if I knew what a scab was." As the Board recognized, the story had grown in the re-telling. What began as an obscene reference in the third person expanded to McGlothin's ultimate understanding that both the term scab and Hayes' definition of it had been directed at Gray himself. Thus, of the three grounds given for Hayes' suspension two related to the organizational campaign badgering Gray and calling him a scab and both were erroneous. The third ground was the use of the obscene definition. Uniformly, the testimony was that language of the nature used by Hayes was not uncommon in the plant. The Board found, and we cannot disagree, that McGlothin was not acting to clean up Hayes' language but to counter his "hard-sell" approach to union organization. We thus conclude that the order of reinstatement and back pay for Hayes must be enforced.
25
III. The bargaining order.
26
The company contends that, as found by the Board in the original order, there was no meritorious objection before the Board to support a bargaining order. The union-filed objections on January 31 consisted of five specific and numbered points concerning written materials distributed by the company and allegedly containing false statements. Copies of the materials were attached. The specific objections were preceded by this statement:
27
The above named employer through his plant manager, supervisors, and other nonbargaining unit employees engaged in improper conduct and or unfair labor practices as defined in Section 8(a) 1 of the Act. In so doing, the Employer destroyed the laboratory conditions affording a free choice.
28
This was followed by the five enumerated objections, and after them was this statement:
29
By the above and other acts, the above-named Employer has interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in Section 7 of the Act.
30
The Regional Director commenced an investigation which turned up information tending to show that there had been pre-election threats and promises made to influence the outcome of the election, all extrinsic to the contents of the literature described in the five specific objections. On March 19 the Regional Director approved the union's withdrawal of the five numbered objections and ordered a hearing on additional misconduct he had discovered during his investigation. The Board's supplemental order pointed to the catch-all objection, which had not been withdrawn, and found that the union had not renounced its interest in disputing the results of the election. We agree that the viable general objection supported the Regional Director's inquiry into matters beyond the scope of the numbered and withdrawn objections so that, under Irving Air Chute, as construed by the majority, the Board could consider and rule on the validity of the election.7 NLRB v. Allis-Chalmers Corp., 563 F.2d 674, 676 (CA5, 1977).
31
In NLRB v. American Cable Systems, Inc., 414 F.2d 661 (CA5, 1969), Cert. denied, 400 U.S. 957, 91 S.Ct. 356, 27 L.Ed.2d 266 (1970) (American Cable I ), we discussed in detail the circumstances under which the Board may appropriately issue a Gissel bargaining order. We stated:
32
Under the Gissel holding a bargaining order may issue where: (a) the union had valid authorization cards from a majority of the employees in an appropriate bargaining unit; (b) the employer's unfair labor practices, although not "outrageous" and "pervasive" enough to justify a bargaining order in the absence of a card majority, were still serious and extensive; (c) "the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies, though present, is slight"; and (d) employee sentiment can best be protected in the particular case by a bargaining order.
33
Id. at 668-69. We find that in the instant case the Board has made such findings and that they are supported by substantial evidence. See NLRB v. Orlando Paper Co., 480 F.2d 1200, 1202 (CA5, 1973); NLRB v. Kaiser Agricultural Chemicals, 473 F.2d 374, 385 (CA5, 1973).
34
The first two requirements of American Cable I are clearly met here. Before the election, by December 19, the union had a card majority, 27 cards in a unit of 48 employees. Most of them had been signed during October and November 1974. Moreover, the anti-union activities found by the ALJ, and supported by the evidence were serious. They included threats to curtail plant expansion and to close the plant, a threat (carried out) to discharge the union's leader and to blacklist him in the community, threats to reduce benefits if the union won and promise to grant a wage increase if it lost, maintenance of an invalid no-solicitation rule, suspension of a member of the organizing committee, and repeated employee interrogation. We have not discussed these § 8(a)(1)'s at length because most of them are not even contested by the company in this court. These numerous violations, tending to dissipate the union's card majority, cannot be trivialized on the ground that the union did not specifically plead them when it objected to the election. The evidence is in the record regardless of what brought it to the surface. The company's violations here are similar to, and no less serious than, those found sufficient to justify Gissel orders in NLRB v. WKRG-TV, Inc., 470 F.2d 1302 (CA5, 1973), and NLRB v. Kaiser Agricultural Chemicals, supra. We pointed out in Kaiser:
35
At the outset, we note that the board has broad powers in fashioning a remedy under section 10(c) to effectuate the policy of the Act. 29 U.S.C. § 160(c). The close relationship between labor policy and choice of remedy, coupled with the board's competence and expertise in the field of labor relations, dictate that the board's judgment be given "special respect by reviewing courts." NLRB v. Gissel Packing Co., supra, 395 U.S. 575, at 612, 89 S.Ct. 1918, 23 L.Ed.2d 547. Our task is not to make a de novo determination of the facts. Fibreboard Paper Products Corp. v. NLRB, 1964, 379 U.S. 203, 85 S.Ct. 398, 13 L.Ed.2d 233. Rather, the board's order must be upheld unless it can be shown that the board either abused its discretion or exceeded its statutory authority.
36
473 F.2d at 381-82 (footnotes omitted).
37
These thoughts on the appropriate standard of review are also relevant to our consideration of parts (c) and (d) of the four-part American Cable I test, regarding the unlikelihood of a fair election and the protection of employee sentiment. The Board addressed those issues in adopting the ALJ's findings,8 and these findings are supported by substantial evidence indicative of an extensive investigation and evaluation of conditions in the shop.
38
Judge Clark's disagreement with the Board's conclusion that a bargaining order is appropriate rests primarily on the ground that the Board should have considered evidence of employee turnover in the period of time between the unfair labor practices and the Board's order. While events subsequent to an unfair labor practice are normally not considered in our review of a Board order, NLRB v. Katz, 369 U.S. 736, 748 n. 16, 82 S.Ct. 1107, 1114 n. 16, 8 L.Ed.2d 230, 239 n. 16 (1962), we have held that because of the unusual nature of a Gissel bargaining order the Board should look to subsequent events to determine the appropriateness of the order. American Cable II, 427 F.2d at 448; J. P. Stevens & Co. v. NLRB, 441 F.2d 514, 525 (CA5, 1971).
39
This case, however, presents a narrower question, since the Board did not stop its inquiry at the time of the unfair labor practices. Here the only possible error is that the Board failed to accept evidence of employee turnover in the period between the hearings and findings of the ALJ and that of its own review.9 While the Board is free to reopen the record of a case, its normal procedure is to review the record of the ALJ's proceeding much as an appellate court reviews a trial court proceeding.10 This court should be cautious in considering whether to impose upon the Board a requirement that would so seriously interfere with its established procedures.11
40
While there may be situations in which the Board would be compelled to reopen a record in order to proceed fairly, we cannot say on the facts before us that this is such a case. Here there was adequate evidence for the Board to find that a fair election could not be held at the plant regardless of employee turnover since the time of hearing. The Board's experience and expertise put it in a better position than we to evaluate the seriousness of the unfair practices and their impact on the plant. Practices may live on in the lore of the shop and continue to repress employee sentiment long after most, or even all, original participants have departed. The Board is not compelled to infer that past practices have attenuated, especially practices striking directly at the heart of the security of the employees, such as threats to close the plant, blacklisting, and the like. Employee turnover between unfair labor practices and bargaining order is a relevant consideration for the Board in such a case. See NLRB v. Gibson Products Co., 494 F.2d 762 (CA5, 1974); J. P. Stevens & Co. v. NLRB, supra. In this case, however, the Board could find that regardless of turnover the taint of the practices would continue. We cannot say, therefore, that the Board erred in adopting the ALJ's findings and conclusions without reopening the record.
41
It might be argued that while the Board was justified in making finding (c) as required by American Cable I, it could not reasonably have made finding (d), that "employee sentiment can best be protected in the particular case by a bargaining order," without considering the proffered evidence of employee turnover. In considering this issue we must first determine precisely what finding the Board is required to make by this language in American Cable I. According to one plausible reading, it requires the Board to determine that the actual present sentiment of the majority of the work force favors the union. If this were the required finding, evidence of substantial turnover in the time since the existence of a card majority would be critical evidence that could not be ignored. This is essentially the reasoning of Judge Clark in dissent.
42
We believe, however, that American Cable I does not place so heavy a burden on the Board. If the Board were required to determine present majority sentiment in each case, an election would almost always be the appropriate remedy. This would ignore the teaching of Gissel. A better reading of part (d) of the four-part American Cable I test can be gleaned from the passage of Gissel quoted just prior to the statement of that test:
43
If the Board finds that the possibility of erasing the effects of past practices and of ensuring a fair election (or a fair rerun) by the use of traditional remedies, though present, is slight and that Employee sentiment once expressed through cards, would on balance, be better protected by a bargaining order, then such an order should issue . . .
44
414 F.2d at 668, quoting 395 U.S. at 614-15, 89 S.Ct. at 1940, 23 L.Ed.2d at 578 (emphasis added).
45
The fourth finding required of the Board by American Cable I is, then, that employee sentiment can best be protected in the long run by issuing a bargaining order. Many factors are relevant to such a determination, including past union activity, employer responses to such activity, and expressions of employee sentiment such as the signing of union cards. While substantial employee turnover is relevant to this inquiry, we cannot say that it is so crucial that the Board erred by following its usual practice of adopting the ALJ's findings without reopening the record.
46
In enforcing this order we are not encouraging the Board to use bargaining orders as a punishment for employer misconduct. Such orders are always remedial and are designed simply to set matters as they would have been in the absence of employer misconduct. The Supreme Court held in Gissel that at times the best such remedy is to order bargaining with the union that had a majority and to let it " 'function for a reasonable period in which it can be given a fair chance to succeed.' " If Bandag's new employees are dissatisfied with the union, they will be free later to seek a decertification election.
47
Except with respect to the new distribution and solicitation rule, the Board order must be enforced.
48
Enforcement is GRANTED in part, DENIED in part.
49
CHARLES CLARK, Circuit Judge, concurring in part and dissenting in part:
50
I concur with part I of the majority opinion and I concur in the result reached in part II. I respectfully dissent, however, from that portion of part III of the majority opinion which affirms the Board's conclusion that a Gissel bargaining order is necessary in this case. I do not agree that we can imply a Board finding that employee sentiment can best be protected in this particular case by a bargaining order. Yet this finding is one of the four that must be made to determine that a bargaining order is appropriate. NLRB v. American Cable Systems, Inc., 414 F.2d 661, 668-69 (5th Cir. 1969) (American Cable I ).
51
After enumerating the § 8(a)(1) violations found, the ALJ concluded:
52
Such conduct by the Respondent makes it highly unlikely that a rerun election can be utilized in the foreseeable future as an accurate indicator of employee sentiment. By this conduct the Respondent has forfeited a right which it might otherwise have to insist that the question concerning representation herein be resolved by use of ballots rather than designation cards.
53
This determination was affirmed by the Board, which states only the following with respect to the appropriateness of the bargaining order:
54
We also find, in agreement with the Administrative Law Judge, that the 8(a)(1) and (3) violations herein called for a remedial bargaining order.
55
. . . (I)n cases such as this, where the respondent has committed violations of Section 8(a)(1) and (3) which preclude the holding of a fair rerun election, we will issue a remedial bargaining order.
56
Although it is clear that the ALJ felt a bargaining order appropriate since the company had forfeited its right to demand an election, and although the ALJ and Board felt it unlikely that a fair rerun election could be held, there is nothing to show that either the ALJ or the Board gave any consideration to the sentiments of the present work force.
57
I don't see how this appellate court could imply that the Board must have concluded that employee sentiment could best be protected in this particular case by a bargaining order. At the time the bargaining order issued, only 15 of the company's then 43 employees had been with the company in January 1975. This means that 28 employees were then new to the time of the unfair labor practices found and the solicitation of cards. The Board, however, refused to consider this evidence. In its Supplemental Decision and Order issuing the bargaining order, the Board justified this refusal as follows:
58
Following the hearing (before the ALJ) in this case, Respondent filed a motion to reopen the record in order that the Board consider evidence of employee turnover since the election and its effect on the efficacy of issuing a bargaining order in lieu of directing a second election. In view of our disposition of the case in the previously issued decision, we denied the motion because the evidence sought to be admitted was irrelevant. In view of our disposition of the proceeding in this Supplemental Decision, Respondent's motion is denied as lacking in merit. It is well settled that the Board is not precluded from issuing a bargaining order even though time has passed and a substantial turnover of personnel has occurred since the commission of the unfair labor practices. N. L. R. B. v. Benne Katz d/b/a Williamsburg Steel Products Co., 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962); New Alaska Development Corp., Alaska Housing Corporation, 180 NLRB 971 (1970).
59
The relevant time-period for determining whether a bargaining order is required is when the matter is before the Board for remedial action. Although it is inappropriate for this court to consider changes occurring after the date of the Board's order, the Board should consider the current situation in the plant at the time it issues a bargaining order. J. P. Stevens & Co. v. N. L. R. B., 441 F.2d 514, 524-25 & n.16 (5th Cir. 1971). See N. L. R. B. v. Gibson Products Co., 494 F.2d 762 (5th Cir. 1974); N. L. R. B. v. American Cable Systems, Inc., 427 F.2d 446 (5th Cir. 1970) (American Cable II ). If conditions at the plant at the time of the Board proceedings are such that employee sentiment can be expressed in an election, the Board should not enter a bargaining order. J. P. Stevens & Co. v. N. L. R. B., supra. The majority cautions noninterference with the Board's practice of accepting without further investigation the ALJ's findings, likening our role there to review of trial proceedings. However, it seems to me that the Board's responsibility to view the situation existing at the time of its order makes the analogy inappropriate. While apropos to the proposition that the ALJ's findings regarding witness credibility should stand, I cannot accept its application to factual findings which may have changed prior to the relevant time of inquiry.
60
I respectfully disagree with the majority's statement that the Board extensively investigated and evaluated the conditions in the shop at the time the order was under consideration. As I read the record, it appears that the Board, without any objective evidence before it, simply concluded Ipse dixit that the sentiment of this work force, the overwhelming majority of which have never been exposed to any proven unfair labor practice, could best be protected by a bargaining order. The bottom-line reason for this conclusion is revealed in the ALJ's order: the company has "forfeited" its right to demand an election because of its prior misdeeds. By focusing on protecting employee sentiment "in the long run" rather than at the time of the Board's order, the majority accepts that rationale. Such use of a bargaining order to punish an offending company has been rejected by our cases; the only legitimate occasion to use such a remedy is when its therapeutic value is necessary because the electoral atmosphere continues to be contaminated and its use would best protect the sentiment of the work force. N. L. R. B. v. Gibson Products Co., 494 F.2d at 770; American Cable II, 427 F.2d at 448.
61
Bargaining orders are not traditional remedies. The Board's increasing resort to this extraordinary procedure is disquieting. In what is an obvious effort to punish Bandag for its past violations by making it bargain with the offended union, the Board has ignored the interests of employees who would be forced into accepting this bargaining agent whether they like it or not. This court has recently recognized that "it is indisputable that the thrust of the NLRA is not the protection of the union, not the protection of the employer, but rather the protection of the employee." Mosher Steel Co. v. N. L. R. B., 568 F.2d 436, 442 (5th Cir. 1978). Gissell was designed to protect employee sentiment which may have become overborne by an employer's past anti-union activities. But where, as here, it is not clear whether at the time of the Board's order such practices clouded that sentiment or whether natural attrition itself was responsible for a legitimate change in sentiment, a bargaining order no longer serves that purpose, I say only that it is the Board's responsibility to make that determination. To carry out that responsibility, it need not in every case require an election as the majority asserts.
62
American Cable I teaches that it is inappropriate for this court to make a finding on the question of whether the sentiment of these 28 employees would best be protected by a bargaining order. None of these 28 had ever signed cards, and none of them was in the plant when the practices found to forfeit the company's right to protest a bargaining order took place. In the absence of any specific finding as to their views or the impact, if any, of past practices on their present ability to protect themselves in another election, this court should not imply that past practices live on in the lore of the shop and thus require a bargaining order for their protection.
63
If the interests of the present employees in this case, who are being forced into collective bargaining with an unchosen union as their representative, are not to be jeopardized, we should remand so that the Board may determine whether it can make the necessary finding on protection of employee sentiment, just as was done in American Cable I.
1
The plant produces tire tread for auto and truck tires
2
NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969)
3
Arguably these were not within the old rule at all, since it did not mention "solicitation."
4
Elsewhere in its findings the Board noted that under the uncontradicted evidence employees frequently spoke to each other on nonwork-related matters during working hours. The record contains numerous instances of in-plant discussion of union activities and of the organizational campaign
5
The Board found that the suspension of another employee, Hill, was not discriminatory, because his remark concerning the danger of persons having sugar put in their gas tanks was unprotected activity
6
Rodriguez's previous foreman testified that in the two years Rodriguez had worked for him, he never refused an order, including orders to assist with the same kind of work as the extra work he was told to do in this instance
7
Thus it is not necessary that we decide the dispute between the majority and the dissenters over whether a pending meritorious objection is essential to the Board's ruling on the validity of an election
8
The language of the ALJ's findings relating to these issues was that "conduct by the Respondent makes it highly unlikely that a rerun election can be utilized in the foreseeable future as an accurate indicator of employee sentiment." App. at 236. While not precisely echoing our language in American Cable I, it does address both issues, the unlikelihood of a fair election and the protection of employee sentiment. The exact language used is unimportant, moreover, as long as the findings were based on substantial evidence regarding both issues. What we require of the Board is an investigation of these issues, not "a litany, reciting conclusions by rote." NLRB v. American Cable Systems, Inc., 427 F.2d 446, 449 (CA5, 1970) (American Cable II )
9
The instant case is thereby distinguished from American Cable II. In that case we held that when we remand a case involving a Gissel order to the Board because of inadequate findings the first time, it must consider all available evidence on remand. That is, the appropriateness of a Gissel order was to be decided as of the time when the Board made adequate findings and entered a proper order rather than as of an earlier time when it made an inadequate and abortive order. These considerations are not present in this case
10
See NLRB Statements of Procedure Series 8, § 102.48. We have recognized the propriety of Board deference to the findings of an ALJ, and indeed have insisted that it give weight to his credibility determinations. NLRB v. Aycock, 377 F.2d 81, 87 (CA5, 1967)
11
This consideration is underscored by the Supreme Court's recent reaffirmation of the general principle that courts of appeal should not interfere with agency procedure. Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978). While Vermont Yankee involves another agency, its rationale was applied in a very similar situation in Kenworth Trucks of Philadelphia v. NLRB, 580 F.2d 55, 84 L.C. P 10,766 (CA3, 1978). There the Third Circuit reversed its earlier ruling that in issuing a Gissel bargaining order the Board must make its own statement of findings rather than relying upon those of an ALJ
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359 F.2d 386
Earl X. SMOAKE, Appellant,v.J. T. WILLINGHAM, Warden, United States Penitentiary,Leavenworth, Kansas, Appellee.
No. 8553.
United States Court of Appeals Tenth Circuit.
April 7, 1966.
1
Sam A. Crow, Topeka, Kan., for appellant.
2
Ben Franklin, Topeka, Kan., for appellee.
3
Before HILL AND SETH, Circuit Judges, and BOHANON, District Judge.
4
BOHANON, District Judge.
5
Petitioner is presently incarcerated in the United States Penitentiary, Leavenworth, Kansas, from a sentence imposed by the United States District Court, Southern District of New York, for the sale of narcotics. He was sentenced February 20, 1962, for a term of five years, and Petitioner here seeks relief by writ of habeas corpus.
6
The learned District Judge denied the application for writ, without a hearing.
7
Petitioner's contention is that 148 days of good time was cancelled or taken from him for an alleged violation of prison rules while he was incarcerated at the United States Penitentiary, Lewisburg, Pennsylvania. It appears from the record that Petitioner had his good time taken from him as a result of an alleged assault upon another inmate. He was tried in a State Court of Pennsylvania and found not guilty. From this not guilty finding Appellant reasons and urges that the prison authorities acted illegally in forfeiting his good time of 148 days. We do not agree.
8
Petitioner does not allege that he did not violate a prison regulation, and based upon the record in the case there was no factual issue to be determined by the Trial Court. Consequently, there was no error in not granting an evidentiary hearing.
9
It is a generally recognized rule that an Appellant, such as Petitioner here, must first exhaust his administrative remedies by applying to the Director of the Bureau of Prisons. Lloyd v. Heritage, 199 F.Supp. 46 (D.C.Ga.1961). The Appellant here does not allege nor contend that he has exhausted his administrative procedures or remedies. The District Court was therefore without jurisdiction to entertain his Petition for Writ of Habeas Corpus. 18 U.S.C.A. 4166; McCormick v. Heritage, 216 F.Supp. 222 (D.C.Ga.1962); Powell v. Hunter (10 Cir.), 172 F.2d 330.
10
The Petitioner does not allege any facts which show or tend to show that the prison authorities in cancelling his good time acted arbitrarily or capriciously. Petitioner simply is requesting this Court to interfere with the treatment and discipline of a prisoner, while serving a sentence in a Federal Institution. Such Court interference would be taking from the Attorney General the authority delegated to him by law.
11
Section 4001, Title 18 U.S.C.A., provides in part as follows:
12
'The control and management of Federal penal and correctional institutions, except military and naval institutions, shall be vested in the Attorney General.'
And Section 4165 provides:
13
'If during the term of imprisonment the prisoner commits any offense or violates the rules of the institution, all or any part of his earned good time may be forfeited.'
And Section 4166 provides:
14
'The Attorney General may restore any forfeited or lost good time or such portion thereof as he deems proper upon recommendation of the Director of the Bureau of Prisons.'
15
The matter of granting or withholding or cancelling good time of a Federal prisoner is a matter for the determination of the prison authorities, subject to the supervision of the Attorney General of the United States, and the decision of the prison authorities or the Attorney General is conclusive in the absence of a showing of abuse of discretion, that is, that the decision was arbitrary or capricious. The fact that the Petitioner was tried and acquitted of a criminal charge, which occurrence resulted in the forfeiture of his good time by the prison authorities, is not sufficient to establish that the action was arbitrary or capricious, or an abuse of discretion. Violation of prison rules, although not a violation of a criminal law, may well be sufficient to warrant disciplinary measures against the prisoner or the cancellation of good time earned, and is conclusive on the Courts in the absence of a showing of an abuse of discretion. Berndt v. Looney, 114 F.Supp. 21 (W.D.Ark.1953).
The Judgment of the District Court is
16
Affirmed.
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644 So.2d 45 (1994)
Eric ALLEN
v.
STATE.
CR 92-2033.
Court of Criminal Appeals of Alabama.
April 15, 1994.
Dan C. Totten, Athens, for appellant.
James H. Evans, Atty. Gen., and Gilda Williams, Asst. Atty. Gen., for appellee.
BOWEN, Presiding Judge.
This is an appeal from a revocation of probation. The appellant, Eric Allen, pleaded guilty and was convicted of theft of property in the first degree in November 1992. In February 1993, his ten-year sentence was suspended and he was placed on probation for two years. In August 1993 his probation was revoked and the following order was entered on the case action summary.
"Ordered, upon hearing, the Court hears evidence and finds from the evidence that the Defendant has been charged with possession of cocaine, kidnapping and assault, 2nd, while on probation, and the Court finds that he has violated the terms of his probation, is delinquent thereon, and that there is nothing but penitentiary punishment [that] would serve the ends of justice in this cause. It is, therefore, Ordered that the Defendant's probation be and hereby is revoked and the Defendant is Ordered to serve the sentence heretofore imposed by this Court." C.R. 4.
At the conclusion of the revocation hearing, the trial judge stated: "Mr. Allen, I find that you have been charged with possession of cocaine and assault and kidnapping while on probation, and that is a violation of the terms of your probation.... [Y]ou've been charged with these offenses and statements have been made, and that in itself is a violation of probation in this case." R. 19.
On this appeal from that revocation, the appellant contends that the order of the circuit court is insufficient "as to the evidence relied on and the reasons for revoking probation." Appellant's brief at 6.
"The judge shall make a written statement or state for the record the evidence relied upon and the reasons for revoking probation." Rule 27.6(f), A.R.Crim.P. This rule is "intended to comply with Armstrong v. State, 294 Ala. 100, 312 So.2d 620 (1975), and Gagnon v. Scarpelli, 411 U.S. 778 [93 S.Ct. 1756, 36 L.Ed.2d 656] (1973)." Committee Comments to Rule 27.6.
"Section (f) is included to give a reviewing court a basis for evaluating the revocation hearing and decision. Both Gagnon, supra, and Armstrong, supra, require that a written statement be made as to the evidence relied upon and the reasons for revoking probation. A written judgment entry would constitute a sufficient written statement." Id.
We find that the reasons given by the trial judge are not sufficient to support the revocation of probation. A "mere arrest" or *46 the filing of charges is an insufficient basis for revoking one's probation. Roberson v. State, 572 So.2d 1323, 1325 (Ala.Cr.App. 1990); Free v. State, 392 So.2d 857, 859 (Ala.Cr.App.1980), cert. denied, 392 So.2d 859 (Ala.), cert. denied, 451 U.S. 990, 101 S.Ct. 2329, 68 L.Ed.2d 850 (1981). See also Gates v. State, 629 So.2d 719, 720 (Ala.Cr.App.1993) ("[t]he appellant admitted at the hearing that he had been arrested in Georgia; however, a `mere arrest' or the filing of charges is an insufficient basis for revoking probation").
"This court has previously held that a probation revocation hearing is not criminal in nature, and therefore neither formal procedures nor formal rules of evidence need be followed by the trial court. Armstrong, supra; Thompson v. State, 356 So.2d 757 (Ala.Cr.App.1978); Goodrum v. State, 418 So.2d 942 (Ala.Cr.App.1982). Stemming from this authority, it is clear that a `mere arrest' or the filing of charges in themselves would be insufficient grounds for the revocation of probation. Free v. State, 392 So.2d 857 (Ala.Cr.App.1980), writ denied, 392 So.2d 859 (Ala.1981); Bullock v. State, 392 So.2d 848 (Ala.Cr.App.1980), writ denied, 392 So.2d 852 (Ala.1981); Hill v. State, 350 So.2d 716 (Ala.Cr.App.1977). It is equally clear that no final conviction of a probationer on the offense charged is required before his probation may be revoked. Free v. State, supra; Fiorella v. State, 40 Ala.App. 587, 121 So.2d 875 (1960); Dixon v. State, 42 Ala.App. 341, 164 So.2d 509 (1964). All that is required of the trial judge in a probation revocation hearing is that the court be reasonably satisfied therefrom of the truth of the charge. Armstrong, supra; Goodrum, supra; Carter v. State, 389 So.2d 601 (Ala.Cr. App.1980)."
Smith v. State, 445 So.2d 573, 574-75 (Ala. Cr.App.1984). The record contains no statement by the trial judge that he was reasonably satisfied that the appellant was guilty of the charged offenses. In fact, the record indicates that the trial judge considered the fact that the appellant had been charged with an offense to be a sufficient basis for the revocation.
Therefore, the order of the circuit court revoking the appellant's probation is reversed and this cause is remanded for further proceedings.
REVERSED AND REMANDED.
All Judges concur.
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527 F.2d 752
UNITED STATES of America, Plaintiff-Appellee,v.David Marshall OLOF, Defendant-Appellant.
No. 73--1078.
United States Court of Appeals,Ninth Circuit.
Dec. 31, 1975.
James M. McCabe (argued), Deutsch, Parziale & McCabe, San Diego, Cal., for defendant-appellant.
E. MacAmos, Jr., Asst. U.S. Atty. (argued), San Diego, Cal., for plaintiff-appellee.
OPINION
Before BROWNING and ELY, Circuit Judges, and SOLOMON,* District Judge.
PER CURIAM:
1
We reversed appellant's conviction on the ground that evidence admitted at his trial was obtained in a search in violation of the rule of Almeida-Sanchez v. United States, 413 U.S. 266, 93 S.Ct. 2535, 37 L.Ed.2d 596 (1973). The Supreme Court later held the rule of Almeida-Sanchez was to be applied prospectively only. United States v. Peltier, 422 U.S. 531, 95 S.Ct. 2313, 45 L.Ed.2d 374 (1975). The search of appellant's van antedated Almeida-Sanchez. We therefore granted the government's petition for rehearing.
2
Appellant also argued that reversal was required because of the admission of a statement taken from appellant in violation of Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). We agree.
3
Appellant was arrested and advised of his rights under Miranda. He refused to make a statement. Three hours later he was again interviewed, while still in custody and handcuffed. One of the two agents present knew of appellant's prior refusals to give a statement. He was again advised of his Miranda rights. The interviewing agent urged appellant to cooperate and told him his cooperation would be called to the attention of the United States Attorney. (A permissible tactic, 'standing alone,' at least when employed prior to an initial refusal. United States v. Glasgow, 451 F.2d 557, 558 (9th Cir. 1971).) The interrogating agent then confronted appellant with a description of federal prison. The interrogating agent's version was that appellant was told that prison was a 'dark place,' where they 'pump(ed) air' to the prisoners. Appellant's version was that he was told that unless he cooperated he would be put in a concrete room and air would be pumped to him through a pipe. The interrogation then proceeded, and appellant gave the statement admitted against him.
4
There were two hearings. Appellant and the interrogating agent testified at the first hearing. The trial court concluded that appellant's story regarding the implied threat was false. The motion to suppress was later renewed. The second agent testified at this hearing, corroborating appellant's story to the extent indicated above. The trial judge again denied the motion to suppress, stating, 'I can't find that the statement wasn't voluntarily made.' The trial judge later said he was 'thinking, very seriously, of throwing out the statement . . .. It's awfully close based upon (the) record.'
5
We conclude that the statement should have been suppressed. Appellant had indicated his desire to exercise his Fifth Amendment rights. Since the interrogation nonetheless continued and a statement was taken, the question is whether the government discharged its 'heavy burden . . . to demonstrate that the defendant knowingly and intelligently waived his privilege . . ..' Miranda v. Arizona, supra, 384 U.S. at 475, 86 S.Ct. at 1628. The government did not carry that burden. The agents did not reinterview appellant 'for the limited purpose of finding out whether the suspect has changed his mind.' United States v. Jackson, 436 F.2d 39, 41 (9th Cir. 1970). Appellant was confronted with the description of unpleasantness of prison 'for the obvious purpose of getting (appellant) to abandon (his) self-imposed silence . . . in flagrant violation of . . . Miranda.' United States v. Barnes, 432 F.2d 89, 91 (9th Cir. 1970).
6
The Supreme Court's recent decision in Michigan v. Mosley, 423 U.S. 96, 96 S.Ct. 321, 46 L.Ed.2d 313 (1975), is not to the contrary. Under Mosley, the test for 'the admissibility of statements obtained after the person in custody has decided to remain silent depends under Miranda on whether his 'right to cut off questioning' was 'scrupulously honored." Michigan v. Mosley, supra, at 326. The Court specified that Mosley was
7
. . . not a case, therefore, where the police failed to honor a decision of a person in custody to cut off questioning, either by refusing to discontinue the interrogation upon request or by persisting in repeated efforts to wear down his resistance and make him change his mind. In contrast to such practices, the police here immediately ceased the interrogation, resumed questioning only after the passage of a significant period of time and the provision of a fresh set of warnings, and restricted the second interrogation to a crime that had not been a subject of the earlier interrogation.
8
Id. In this case. Olof's right to cut off questioning was not 'scrupulously honored.' The two interrogations were based on the same crime and the object of the second interrogation was to wear down Olof's resistance and make him change his mind.
9
Reversed.
*
Honorable Gus J. Solomon, United States Senior Judge, District of Oregon, sitting by designation
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164 F.2d 966 (1947)
THORP'S ESTATE et al.
v.
COMMISSIONER OF INTERNAL REVENUE.
No. 9389.
Circuit Court of Appeals, Third Circuit.
Argued October 13, 1947.
Decided December 2, 1947.
W. Denning Stewart, of Pittsburgh, Pa. (Charles M. Thorp, Jr., Lee W. Eckels and Thorp, Bostwick, Reed & Armstrong, all of Pittsburgh, Pa., on the brief), for petitioners.
Morton K. Rothschild, of Washington, D. C. (Sewall Key, Acting Asst. Atty. Gen. and Lee A. Jackson, Special Asst. to the Atty. Gen., on the brief), for respondent.
Before ALBERT LEE STEPHENS, GOODRICH and O'CONNELL, Circuit Judges.
*967 O'CONNELL, Circuit Judge.
Questions concerning the interpretation and applicability of Section 811 (d) (2) of the Internal Revenue Code, 26 U.S.C.A.Int. Rev.Code, § 811 (d) (2), form the basis of taxpayer's appeal.
In 1918, Charles M. Thorp, the decedent, created an inter vivos trust, of which his wife was made trustee and life beneficiary of the trust income. Paragraphs 5 and 6 of the trust indenture read as follows:
"5. After the death of Jessie B. Thorp [wife of decedent], said income shall be paid to our six children [naming children] * * * in equal shares, during their respective lives. Unless sooner terminated as hereinafter set forth the trust shall continue until the death of the last survivor of said six children. Upon the death of each child during the continuance of the trust the income previously paid to him or her shall thereafter be paid to his or her children, if any, and if there be none then to my surviving children and grandchildren per stirpes. Upon the death of the last surviving one of my said six children the trust shall cease absolutely, and all property held in trust shall be assigned, transferred and delivered to my grandchildren then living and the children then living of any grandchildren then dead, per stirpes, absolutely free and clear of all trusts and conditions.
"6. The trust may, however, be wholly terminated at any time, or in part from time to time, in the following manner. If all the beneficiaries hereinabove named, that is, my wife and my six children, or said children alone after my wife's death, or the survivors of them, shall request a termination in writing directed to the trustees and to me, and I shall in writing delivered to the trustees consent thereto, the trust shall, upon delivery of such request and consent to the trustees, be terminated either wholly or in part, or as to the interest in whole or in part of any of said beneficiaries, in accordance with such request and consent, and the trust property shall be released in whole or in part accordingly, and the portion so released shall be assigned, transferred and conveyed to the beneficiary or beneficiaries designated in said written request to be his or her absolute property, free and clear of all trusts and conditions * * *."
Decedent's wife predeceased him, as did one child, who left no issue. Between 1918 and December 14, 1942, when decedent died, the trust beneficiaries did not request a termination as to all or any part of the trust.
Was the right of decedent a "power * * to alter, amend, or revoke"?[1] Was it exercisable in conjunction with persons "having no substantial adverse interest or interests" in the transferred property?[2] Is taxation of this interest permitted by the Fifth Amendment? The Tax Court has resolved all three issues in the affirmative. 7 T.C. 921 (1946).
The result in this case will be the same whichever of two theories concerning it is adopted. If it falls within the interpretation of Dobson v. Commissioner, 1943, 320 U.S. 489, 64 S.Ct. 239, 88 L.Ed. 248, which we applied in Commissioner v. Henry's Estate, 3 Cir., 1947, 161 F.2d 574, the decision of the Tax Court must be affirmed. If the facts be construed as not to bring the case within the Dobson rule and examination is made on the merits, the Tax Court's decision must be upheld as correct.
It is clear that a power of termination is included within the phrase "power * * * to alter, amend, or revoke," and also that "decedent's failure to reserve for himself any beneficial interest or power to recapture one is not controlling." Commissioner v. Estate of Holmes, 1946, 326 U.S. 480, 66 S.Ct. 257, 261, 90 L.Ed. 228. Taxpayer argues, however, that decedent could take no action of any kind to effect a termination until the life tenants requested a termination, and that consequently decedent merely reserved a kind of veto privilege. We pass the question whether the trust agreement expressly or impliedly prevented decedent from suggesting to the life tenants that they request termination of the trust; for, regardless of who could set in motion the termination machinery, the trust could be terminated only by the action of the decedent *968 in conjunction with others. As a practical matter, to interpret the statutory provision as applying solely when the settlor can take the first step toward terminating the trust would be to sanction "elusive and subtle casuistries which may have their historic justification but possess no relevance for tax purposes." Helvering v. Hallock, 1940, 309 U.S. 106, 118, 60 S.Ct. 444, 450, 84 L.Ed. 604, 125 A.L.R. 1368. We believe the Tax Court to have been fully justified in treating the reserved right of decedent as the kind of "power" contemplated by Section 811 (d) (2) of the Internal Revenue Code. See Paul, Federal Estate and Gift Taxation, § 7.11, pages 326-327.
Decedent, then, at the time of his death had a power of termination[3] which, by the terms of the trust, could be exercised only in conjunction with the five surviving children. If the children had "no substantial adverse interest or interests," inclusion of the remainder interests in decedent's gross estate was required by Section 81.20 (b) (1) of Treasury Regulations 105. On the question whether the interests of the five children were "substantially adverse," the Tax Court said, "Here the persons in whom the right to terminate was reserved were obviously not adversely interested in the exercise of that right as to the remainder which is the only matter basing the present controversy." Bearing in mind that by exercising their power of termination the children would have received "absolute property" in the corpus, rather than merely the income therefrom, and also the fact that there was a close family relationship,[4] we are not prepared to say that the Tax Court erred in choosing from conflicting inferences the conclusion that their interests were not "substantially adverse." See Commissioner v. Scottish American Co., 1944, 323 U.S. 119, 123-125, 65 S.Ct. 169, 89 L.Ed. 113. It is true that, if one of the beneficiaries[5] died childless, the surviving children and grandchildren would receive a larger share of the income during the continuance of the trust; but the possibility of such expansion of their interests does not compel the conclusion that their position was "substantially adverse."
Taxpayer's further contention that a beneficiary of a trust is "adverse to the grantor * * * regardless of whether a change would benefit or injure him" not only rejects the ordinary meaning of the word "adverse,"[6] but also meets such insurmountable obstacles as Helvering v. City Bank Co., supra, 296 U.S. 85 at page 90, 56 S.Ct. 70, 80 L.Ed. 60, and the express language of the Tax Court in Lit v. Commissioner, 1933, 28 B.T.A. 853, 860, 861, affirmed by this court in 1934, 72 F.2d 551. A previous decision of our court has explained why Reinecke v. Northern Trust Co., 1929, 278 U.S. 339, 49 S.Ct. 123, 73 L.Ed. 410, 66 A.L.R. 397, upon which taxpayer relies, is not to the contrary. In Blunt v. Kelly, 3 Cir., 1942, 131 F.2d 632, 634, we pointed out that, in the Reinecke case, the "interest retained by the settlor depended upon the uncontrolled decision of the beneficiary to relinquish his interest in favor of the settlor," a factor which was not present in the case at bar. See also Reinecke v. Smith, 1933, 289 U.S. 172, 176, 53 S.Ct. 570, 77 L.Ed. 1109. We conclude, therefore, that the *969 Tax Court was within its proper scope in deciding that the instant trust comes within the provisions of Section 811 (d) (2) of the Internal Revenue Code and Section 81.20 (b) (1) of Treasury Regulations 105.
Finally, taxpayer urges that application of Section 811 (d) (2) of the Internal Revenue Code to this trust is forbidden by the due process clause, because the statutory provision was enacted subsequent to the creation of the trust. Taxpayer places great reliance upon Helvering v. Helmholz, 1935, 296 U.S. 93, 56 S.Ct. 68, 80 L.Ed. 76, and White v. Poor, 1935, 296 U.S. 98, 56 S.Ct. 66, 80 L.Ed. 80. We need not decide to what extent, if any, the Helmholz case has survived the impact of the principles enunciated in such cases as Helvering v. Hallock, supra, and Commissioner v. Estate of Holmes, supra.[7] It is sufficient to note that, in Union Trust Co. v. Driscoll, 3 Cir., 1943, 138 F.2d 152, 155, certiorari denied, 1944, 321 U.S. 764, 64 S.Ct. 521, 88 L.Ed. 1061, a tax imposed upon a power the settlor gave herself as trustee was upheld by this court, although the trust was created prior to the passage of the provision involved in the case at bar. That Helvering v. Helmholz was carefully considered in the Union Trust case is evident from the fact that it is cited in the dissenting opinion. Likewise, the Union Trust case distinguished White v. Poor, supra, because the settlor "acquired power to terminate the trust not by any reservation of her own but by the action of the trustees," who elected her to fill a trustee vacancy. See also Howard v. United States, 5 Cir., 1942, 125 F.2d 986, 989. In view of our affirmance of the Tax Court findings that decedent did have a power of termination and that the interest of the beneficiaries was not substantially adverse, the Union Trust case becomes indistinguishable from that at bar; for in both cases the power was to be exercised in conjunction with persons not substantially adverse, and in both cases the trust was created prior to the passage of the statutory provision. The Supreme Court has cited with apparent approval the Union Trust case in Commissioner v. Estate of Holmes, supra, 326 U.S. at page 489, 66 S.Ct. 257, 90 L.Ed. 228. We are not disposed to consider anew the issue decided in the Union Trust case.
As a practical matter, decedent in the case at bar could have released his power at any time prior to the passage of the gift tax statute in 1932 without incurring any tax liability therefor. Avoidance of Section 811 (d) (2) lay completely within his control. Instead, he chose to retain his power, by means of which the enjoyment of the property by his grandchildren was not placed beyond his recall until the power was extinguished by his death. Imposition of the tax on a power reserved by him and still existing up to his death does not appear to us unreasonably harsh, oppressive, or an arbitrary ignoring of recognized rights. See Helvering v. City Bank Co., supra, 296 U.S. at page 90, 56 S.Ct. 70, 80 L.Ed. 60; United States v. Jacobs, 1939, 306 U.S. 363, 367, 59 S.Ct. 551, 83 L.Ed. 763; McCaughn v. Fidelity Trust Co., 3 Cir., 1929, 34 F.2d 443; Wilgard Realty Co. v. Commissioner, 2 Cir., 1942, 127 F.2d 514, 517, certiorari denied 1942, 317 U.S. 655, 63 S.Ct. 52, 87 L.Ed. 527; and Union Trust Co. of Pittsburgh v. Driscoll, supra, 138 F.2d at page 154.
For the reasons stated, the judgment of the Tax Court will be affirmed.
NOTES
[1] Section 811(d) (2), Internal Revenue Code, 26 U.S.C.A. Int.Rev.Code, § 811(d) (2).
[2] Section 81.20(b) (1), Treasury Regulations 105.
[3] We note further that conceivably decedent might have survived all remaindermen. As to the taxability of such an interest, see Commissioner v. Church's Estate, 3 Cir., 1947, 161 F.2d 11, certiorari granted 331 U.S. 803, 67 S.Ct. 1738.
[4] See Helvering v. Clifford, 1940, 309 U. S. 331, 335, 60 S.Ct. 554, 84 L.Ed. 788, and Helvering v. City Bank Co., 1935, 296 U.S. 85, 90, 56 S.Ct. 70, 80 L.Ed. 60.
[5] We use the word "beneficiaries" as synonymous with "children" in the case sub judice, in accordance with the manner in which decedent used the word in paragraph 6 of the trust instrument.
[6] "Adverse" is defined in Webster's New International Dictionary (2d Ed.), as follows: 1. Acting against, or in a contrary direction; opposed; antagonistic, as adverse winds; a spirit adverse to distinctions of caste. 2. In hostile opposition to one's interests; hence, unpropitious; calamitous; afflictive; as, circumstances adverse to success; adverse fortune. 3. Opposite. "Calpe's adverse height." Byron. 4. Bot. * * * 5. Law. Having opposing interests; having interests for the preservation of which opposition is essential.
[7] See Hurd v. Commissioner, 1 Cir., 1947, 160 F.2d 610, 612, 613. We have been unable to find any citation of the Helmholz case by the Supreme Court since the decision in Helvering v. Hallock, 1940, 309 U.S. 106, 60 S.Ct. 444, 84 L.Ed. 604, 125 A.L.R. 1368.
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269 Neb. 114
BODIE J. WEEDER, APPELLANT,
v.
CENTRAL COMMUNITY COLLEGE, A POLITICAL SUBDIVISION, AND MIKE SWANSON, INDIVIDUALLY AND AS AN EMPLOYEE OF CENTRAL COMMUNITY COLLEGE, APPELLEES.
No. S-03-1174.
Supreme Court of Nebraska.
Filed January 14, 2005.
Dean J. Sitzmann and Nichole S. Bogen, of Wolfe, Snowden, Hurd, Luers & Ahl, L.L.P., for appellant.
Lucy Higgins Sinkular and David C. Huston, of Huston & Higgins, for appellees.
HENDRY, C.J., WRIGHT, CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.
HENDRY, C.J.
I. INTRODUCTION
Bodie J. Weeder brought an action against Central Community College and its employee Mike Swanson (collectively CCC) pursuant to the Political Subdivisions Tort Claims Act (the Act). CCC filed a motion to dismiss Weeder's petition. The district court for Buffalo County granted CCC's motion. Weeder appeals. We moved the case to our docket pursuant to our authority to regulate the caseloads of this court and the Nebraska Court of Appeals. See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995).
II. FACTUAL BACKGROUND
The pleadings indicate that on April 11, 2002, Weeder sent by certified mail a letter to the board of governors of the college. In that letter, which Weeder stated was to serve as notice of the filing of a tort claim against CCC pursuant to the Act, Weeder alleged that on April 18, 2001, he was injured while demonstrating welding techniques at an off-campus recruitment project. Weeder's letter contended that at the time he suffered his injury, he was being supervised by Swanson, who was a welding instructor at the college. Thereafter, on July 18, 2002, Weeder sent a second letter to CCC withdrawing the claim and notifying CCC that his attorney was authorized to commence a lawsuit against CCC on Weeder's behalf. On April 18, 2003, Weeder filed suit against CCC.
In response to Weeder's "petition," CCC filed a motion entitled "Motion to Dismiss for Failure to Comply With the Political Subdivisions Tort Claims Act Filing Requirements," which motion we will refer to as a "motion to dismiss." In that motion to dismiss, CCC, "pursuant to the Nebraska Rules of Pleading in Civil Action, Rule Nos. 8(c) and 12(b)," moved the district court as follows:
1. To dismiss the action against the Defendant Mike Swanson on the grounds that no claim was filed against him with the governing body of the political subdivision. Neb. Rev. Stat. §13-920 [(Reissue 1997)].
2. To dismiss the action on the grounds that . . . Weeder failed to comply with the Political Subdivisions Tort Claims Act requirement that he withdraw his claim before commencing suit. Neb. Rev. Stat. §13-906 [(Reissue 1997)].
3. To dismiss the action on the grounds that . . . Weeder failed to comply with the Political Subdivisions Tort Claims Act requirement that he file his petition against these defendants within two years after his claim accrued. Neb. Rev. Stat. §13-919 [(Reissue 1997)].
The district court granted CCC's motion to dismiss in a detailed journal entry. In that journal entry, the court initially addressed paragraph 1 of CCC's motion regarding defendant Swanson and Swanson's specific argument that "it [the claim] fails to specifically request a recovery against the employee [Swanson]." Finding that the claim sufficiently requested a recovery against Swanson, the district court denied the motion to dismiss, based on paragraph 1. Neither the college nor Swanson cross-appealed from this ruling.
The court next addressed paragraph 2 of CCC's motion, which asserted that Weeder failed to comply with the Act by withdrawing his claim before commencing suit. Finding in favor of CCC, the court reasoned:
The record as presented by the parties and noted before indicates that [Weeder] filed his claim with the political subdivision on April 11, 2002 and withdrew the claim on July 18, 2002 prior to the expiration of the 6 month period that the subdivision is allowed pursuant to the statutes to consider a claim. The petition was then filed with the Court on April 18, 2003. . . .
Political subdivisions as well as the State itself are immune from tort claims except to the extent the State allows itself to be sued. Sections 13-901 et seq of the Nebraska Statute creates the substantive and procedural rules by which the State allows itself to be sued. Both sections 13-906 and 13-920 are specific in directing that "no suit shall be permitted on a claim" unless the political subdivision has denied the claim or has had a 6 month opportunity to consider the claim. The clear and precise meaning of the statutes of this State prohibit the filing of a claim that has not been denied prior to the running of the 6 month period. This Court therefore finds that the premature filing of this litigation is in fact a nullity and this Court is without jurisdiction to consider the claim as presented. [CCC's] motion to dismiss is therefore sustained.
In its ruling, the district court made no findings with respect to paragraph 3 of CCC's motion to dismiss, and neither party asserts any error in that regard.
Weeder filed a motion for new trial, asking the district court to "reexamine its decision to dismiss . . . and reinstate the action as previously filed." The district court denied Weeder's motion, and Weeder appeals.
III. ASSIGNMENTS OF ERROR
On appeal, Weeder argues that the district court erred in (1) finding that it was without jurisdiction to consider Weeder's claim and (2) sustaining CCC's motion to dismiss.
IV. STANDARD OF REVIEW
[1] A district court's grant of a motion to dismiss for failure to state a claim under Neb. Ct. R. of Pldg. in Civ. Actions 12(b)(6) (rev. 2003) is reviewed de novo, accepting all the allegations in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party. Kellogg v. Nebraska Dept. of Corr. Servs., ante p. 40, ___ N.W.2d ___ (2005) (adopting federal standard of review for motions to dismiss and stating that this court will look to federal court decisions for guidance regarding pleading rules, as Nebraska's rules are now modeled after federal rules). See, also, Chepstow Ltd. v. Hunt, 381 F.3d 1077 (11th Cir. 2004) (specifically applying de novo standard of review to trial court's grant of rule 12(b)(6) motion); Brown v. Nationsbank Corp., 188 F.3d 579 (5th Cir. 1999) (same).
V. ANALYSIS
1. Weeder's Motion for New Trial
[2] Before reaching the legal issues presented for review, it is the duty of an appellate court to determine whether it has jurisdiction over the matter before it. Webb v. American Employers Group, 268 Neb. 473, 684 N.W.2d 33 (2004). At issue is whether Weeder's notice of appeal was timely filed.
The district court sustained CCC's motion to dismiss and entered judgment on August 14, 2003. Thereafter, Weeder filed a pleading entitled "Motion for New Trial" on August 22. That motion was overruled on September 11, and Weeder filed his notice of appeal on October 8.
[3] A new trial is a reexamination in the same court of an issue of fact after a verdict by a jury, report of a referee, or a trial and decision by the court. Neb. Rev. Stat. § 25-1142 (Cum. Supp. 2002); Central Neb. Pub. Power v. Jeffrey Lake Dev., 267 Neb. 997, 679 N.W.2d 235 (2004). In this case, we are presented with a court granting a motion to dismiss. Such action is not a verdict by a jury or a trial and decision by the trial court. As a result, Weeder's motion for new trial was not a proper motion and would not toll the time for filing a notice of appeal.
[4] However, we have stated that a postjudgment motion must be reviewed based on the relief sought and not based on its title. See, Central Neb. Pub. Power v. Jeffrey Lake Dev., supra; State v. Bellamy, 264 Neb. 784, 652 N.W.2d 86 (2002). As a result, the issue is whether Weeder's August 22, 2003, motion could be viewed as a motion to alter or amend the judgment pursuant to Neb. Rev. Stat. § 25-1329 (Cum. Supp. 2002), which would toll the time for filing a notice of appeal.
[5] In order to qualify for treatment as a motion to alter or amend the judgment, the motion must be filed no later than 10 days after the entry of judgment, as required under § 25-1329, and must seek substantive alteration of the judgment. See, Central Neb. Pub. Power v. Jeffrey Lake Dev., supra; State v. Bellamy, supra. In this case, Weeder's August 22, 2003, motion for new trial was filed within 10 days of the district court's grant of the motion to dismiss on August 14. Furthermore, in his August 22 motion, Weeder asked the district court, inter alia, to "reexamine its decision to dismiss . . . and reinstate the action as previously filed." We conclude that this language seeks substantive alteration of the judgment of the district court dismissing Weeder's action. As a result, Weeder's August 22 motion qualifies as one to alter or amend the judgment under § 25-1329, and tolled the time for filing a notice of appeal. Weeder's appeal was timely, and we have jurisdiction over this matter.
We pause briefly to note that since Neb. Rev. Stat. § 25-1912(3) (Cum. Supp. 2002) was amended in 2000, see 2000 Neb. Laws, L.B. 921, this court or the Court of Appeals, on repeated occasions, has found it necessary to determine whether an improperly filed motion for new trial could be viewed as one to alter or amend a judgment. See, Diversified Telecom Servs. v. Clevinger, 268 Neb. 388, 683 N.W.2d 338 (2004); Central Neb. Pub. Power v. Jeffrey Lake Dev., supra; DeBose v. State, 267 Neb. 116, 672 N.W.2d 426 (2003); State v. Bellamy, supra; Vesely v. National Travelers Life Co., 12 Neb. App. 622, 682 N.W.2d 713 (2004). In the future, we request the practicing bar to carefully consider the nature of the proceeding prior to filing any motion calling into question a court's judgment.
We now turn to Weeder's assignments of error.
2. District Court's Finding That It Lacked Jurisdiction
In Weeder's first assignment of error, he contends the district court erred in concluding that it was without subject matter jurisdiction to consider his action. The district court's determination that it lacked subject matter jurisdiction was premised upon its conclusion that Weeder's tort claim was not properly presented. In its brief, CCC appears to concede that the district court possessed subject matter jurisdiction.
[6] This court has held that the filing of a tort claim, rather than being jurisdictional in nature, is a condition precedent to instituting a suit against a political subdivision. See, Keller v. Tavarone, 262 Neb. 2, 628 N.W.2d 222 (2001); Millman v. County of Butler, 235 Neb. 915, 458 N.W.2d 207 (1990). See, also, Cole v. Isherwood, 264 Neb. 985, 653 N.W.2d 821 (2002) (applying rationale of Keller and Millman to State Tort Claims Act). Thus, we concur with Weeder that the district court erred in determining that it lacked subject matter jurisdiction. However, this conclusion is not dispositive of this appeal, as we must now determine, given the grounds stated in paragraph 2 of CCC's motion, whether the court properly dismissed the action.
3. Effect of Nebraska Rules of Pleading in Civil Actions
[7] Having concluded that Weeder's alleged failure to comply with the Act is not jurisdictional but a condition precedent, our case law would require that such noncompliance be raised as an affirmative defense in either a demurrer or answer, or it is waived. See, Big Crow v. City of Rushville, 266 Neb. 750, 669 N.W.2d 63 (2003); Cole v. Isherwood, supra (decided under State Tort Claims Act); Millman v. County of Butler, supra. However, effective January 1, 2003, this court, pursuant to authorization granted by Neb. Rev. Stat. § 25-801.01 (Cum. Supp. 2002), promulgated the new Nebraska Rules of Pleading in Civil Actions. These rules were in effect at the time Weeder filed this action. Under the new rules, the demurrer has been abolished. See Neb. Ct. R. of Pldg. in Civ. Actions 7(c) (rev. 2004). See, also, § 25-801.01(2)(c). Thus, we must decide whether CCC's motion to dismiss was an appropriate method in which to raise this affirmative defense under our civil pleading rules.
As an initial matter, we note that CCC entitled its motion a "Motion to Dismiss for Failure to Comply With the Political Subdivisions Tort Claims Act Filing Requirements." Prior Nebraska case law has held that a pretrial motion to dismiss was generally not a permissible pleading. See, e.g., Anderson v. Matthis, 246 Neb. 215, 518 N.W.2d 94 (1994); In re Application of City of Lincoln, 243 Neb. 458, 500 N.W.2d 183 (1993); Pappas v. Sommer, 240 Neb. 609, 483 N.W.2d 146 (1992); Cool v. Sahling Trucks, Inc., 237 Neb. 312, 466 N.W.2d 71 (1991); United States Fire Ins. Co. v. Affiliated FM Ins. Co., 225 Neb. 218, 403 N.W.2d 383 (1987); Voyles v. DeBrown Leasing, Inc., 222 Neb. 250, 383 N.W.2d 36 (1986). However, these opinions predate Nebraska's new civil pleading rules.
[8-10] Federal courts routinely refer to federal rule 12(b) motions as motions to dismiss, see, e.g., Maki v. Allete, Inc., 383 F.3d 740 (8th Cir. 2004); Strand v. Diversified Collection Service, 380 F.3d 316 (8th Cir. 2004); and Iowa Network Services, Inc. v. Qwest Corp., 363 F.3d 683 (8th Cir. 2004), while treatises on federal civil procedure also use that term in reference to federal rule 12(b) motions. See, e.g., 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure §§ 1349 to 1359 (2d ed. 1990 & Supp. 2002). See, also, Kellogg v. Nebraska Dept. of Corr. Servs., ante p. 40, ___ N.W.2d ___ (2005); Bailey v. Lund-Ross Constructors Co., 265 Neb. 539, 657 N.W.2d 916 (2003) (recognizing that Nebraska courts will look to federal decisions interpreting corresponding federal rules for guidance in interpreting similar Nebraska pleading rules); Gernstein v. Lake, 259 Neb. 479, 610 N.W.2d 714 (2000) (same). As such, we conclude that a rule 12(b) motion can properly be entitled as a motion to dismiss. To the extent our prior case law holds there is no pretrial motion to dismiss, that case law has been abrogated by the Nebraska Rules of Pleading in Civil Actions.
(a) Asserting Affirmative Defenses in Rule 12(b)(6) Motion to Dismiss
We now turn to whether a rule 12(b)(6) motion to dismiss is a proper method by which to raise the affirmative defense in question. As rule 12(b) is substantially identical to Fed. R. Civ. P. 12(b), we again look to federal cases interpreting similar federal rules for guidance. See, Bailey v. Lund-Ross Constructors Co., supra; Gernstein v. Lake, supra.
Nebraska's rule 12(b) states:
Every defense, in law or fact, to a claim for relief in any pleading . . . shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion:
(1) lack of jurisdiction over the subject matter;
(2) lack of jurisdiction over the person;
(3) [reserved]
(4) insufficiency of process;
(5) insufficiency of service of process;
(6) that the pleading fails to state a claim upon which relief can be granted;
(7) failure to join a necessary party.
It is common practice under the federal rules of civil procedure to allow an affirmative defense to be asserted in a rule 12(b)(6) motion when, on the face of the complaint, allegations are included which could be the subject of an affirmative defense. See, Varner v. Peterson Farms, 371 F.3d 1011 (8th Cir. 2004); Hafley v. Lohman, 90 F.3d 264 (8th Cir. 1996); Weaver v. Clarke, 45 F.3d 1253 (8th Cir. 1995); 2 James Wm. Moore, Moore's Federal Practice § 12.34[4][b] (3d ed. 2004); 5A Wright & Miller, supra, § 1357. Such practice is similar to our prior demurrer jurisprudence. See, L.J. Vontz Constr. Co. v. Department of Roads, 232 Neb. 241, 440 N.W.2d 664 (1989); Card v. Card, 174 Neb. 124, 116 N.W.2d 21 (1962); In re Estate of McCleneghan, 145 Neb. 707, 17 N.W.2d 923 (1945). Cf., Houska v. City of Wahoo, 227 Neb. 322, 417 N.W.2d 337 (1988); Marsh-Burke Co. v. Yost, 102 Neb. 814, 170 N.W. 172 (1918).
[11] A rule 12(b)(6) motion is generally considered to be the modern day equivalent of the demurrer. Tregenza v. Great American Communications Co., 12 F.3d 717 (7th Cir. 1993). See, also, 5A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1355 (2d ed. 1990 & Supp. 2002) (citing various cases stating relationship between demurrer and rule 12(b)(6) motion). Weeder's "petition" alleged that he submitted his claim to CCC on April 11, 2002, and that he gave notice he was withdrawing his claim on July 18. In our de novo review, we determine that the "petition," on its face, included allegations which could be the subject of an affirmative defense under Neb. Rev. Stat. § 13-906 (Reissue 1997). Thus, we conclude that CCC could properly assert an affirmative defense of failure to comply with the Act in its motion to dismiss.
(b) CCC's Failure to Specifically Refer to Rule 12(b)(6) in Its Motion to Dismiss
[12] In its motion to dismiss, CCC raised three affirmative defenses without specifically referring to subsection (6) of rule 12(b). Instead, CCC's motion to dismiss referred only to Neb. Ct. R. of Pldg. in Civ. Actions 8(c) (rev. 2003) and rule 12(b). We conclude, however, that CCC's failure to specifically reference subsection (6) of rule 12(b) is not fatal. See, generally, State of Louisiana v. United States, 656 F. Supp. 1310 (W.D. La.1986) (court treated motion under rule 12(b)(2) as one under rule 12(b)(6), reasoning that substance of 12(b) motion controls over its form); Hankins v. Fansteel Metals, Inc., 452 F. Supp. 509, 511 (E.D. Okla. 1978) (court treated motion for summary judgment as motion to dismiss under rule 12(b)(1), since "`label attached to a motion is unimportant'"); 5A Wright & Miller, supra, § 1347 at 186 ("technical accuracy in the designation of the specific rule under which the defense, motion, or objection is asserted, is [not] critical to its presentation and determination"). We now turn to the issue of whether CCC's motion to dismiss properly presented the affirmative defense upon which the district court dismissed Weeder's action.
Weeder argues that paragraph 2 of CCC's motion to dismiss did not assert the affirmative defense upon which the district court based its ruling. Paragraph 2 of CCC's motion asserts that Weeder's complaint should be dismissed "on the grounds that . . . Weeder failed to comply with the Political Subdivisions Tort Claims Act requirement that he withdraw his claim before commencing suit. Neb. Rev. Stat. §13-906 [(Reissue 1997)]." (Emphasis supplied.)
A review of the district court's journal entry supports Weeder's argument. It is clear from this review that the district court's basis for dismissing the action was not that Weeder failed to withdraw his claim before commencing suit, but that Weeder failed to allow CCC 6 months to consider the claim before withdrawing it and commencing this action. CCC does not specifically contend otherwise, but argues its affirmative defense was sufficiently raised by its citation generally to § 13-906 in paragraph 2 of its motion to dismiss. In response, Weeder states:
Surely [CCC is] not allowed to argue one way in their Motion to Dismiss that [Weeder] failed to withdraw his claim, and then for the first time on appeal argue that [Weeder] was aware of their affirmative defense that he withdrew his claim too early. It would be manifestly unfair to [Weeder] for this Court to affirm the decision of the District Court because [Weeder] was never given adequate notice of the affirmative defense nor an opportunity to present evidence to rebut it.
Reply brief for appellant at 4-5.
With the adoption of our new civil pleading rules, we must determine the appropriate standard to utilize when deciding whether an affirmative defense has been adequately asserted. We again look to federal cases interpreting those federal rules for guidance. See Bailey v. Lund-Ross Constructors Co., 265 Neb. 539, 657 N.W.2d 916 (2003).
The federal rules were designed to liberalize pleading requirements. See, Swierkiewicz v. Sorema N. A., 534 U.S. 506, 122 S. Ct. 992, 152 L. Ed. 2d 1 (2002); Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957). This liberalization extends to the pleading of affirmative defenses. See, Hassan v. U.S. Postal Service, 842 F.2d 260, 263 (11th Cir. 1988) ("liberal pleading rules established by the Federal Rules of Civil Procedure apply to the pleading of affirmative defenses"); Barnwell & Hays, Inc. v. Sloan, 564 F.2d 254, 256 (8th Cir. 1977) (noting that federal rules were intended to liberalize pleading requirements and that failure to use term "waiver" in answer "impose[d] a requirement of undue formalism . . . inconsistent with that liberal purpose"); American Motorists Ins. Co. v. Napoli, 166 F.2d 24 (5th Cir. 1948) (liberal rules of pleading not premised on extensive factual allegations and thus simply pleading contributory negligence was sufficient to preserve defense).
In considering liberalization of our pleading rules ushered in by this court's adoption of its new rules of civil pleading, the inquiry is whether Weeder was afforded fair notice of the nature of the defense. See, Perez v. U.S., 830 F.2d 54 (5th Cir. 1987) (purpose of federal rules requiring pleading of affirmative defense is to prevent unfair surprise; instead, pleading of affirmative defenses should provide fair notice of defense to plaintiff); 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1274 at 455-56 (2d ed. 1990) ("[a]n affirmative defense may be pleaded in general terms and will be held to be sufficient . . . as long as it gives plaintiff fair notice of the nature of the defense"). Cf. Conley v. Gibson, 355 U.S. at 47 ("all the Rules require is `a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests").
[13] Thus, while the Nebraska Rules of Pleading in Civil Actions, like the federal rules, have a liberal pleading requirement for both causes of action and affirmative defenses, the touchstone is whether fair notice was provided. Based on our de novo review, we conclude that Weeder was not given fair notice of the nature of CCC's defense.
Although it is true that CCC cited generally to § 13-906, paragraph 2 of its motion to dismiss specifically asserted that Weeder had failed to "comply with the . . . requirement that he withdraw his claim." (Emphasis supplied.) The language chosen by CCC did more than, in CCC's words, "[refer] to the provisions for withdrawing a claim [in § 13-906]." Brief for appellees at 3. Indeed, the language it chose specifically referred to only that portion of § 13-906 requiring any claim to be withdrawn before suit is instituted. The chosen language did not make any reference to the 6-month period to which CCC was entitled to consider Weeder's claim before Weeder could have withdrawn it from CCC's consideration and filed suit.
Had the district court ruled on the affirmative defense asserted by CCC in paragraph 2 of its motion to dismiss, the district court would have had no option but to deny CCC's motion. The face of Weeder's "petition" alleged in part that "[o]n July 18, 2002 . . . notice of withdrawal of the Claim was mailed . . . withdrawing the Claim from further consideration . . . ."
Under these circumstances, the language chosen by CCC provided Weeder with notice only of CCC's claim that Weeder had failed to withdraw his claim. Such did not provide Weeder with notice of CCC's claimed affirmative defense that Weeder had, in fact, withdrawn that claim prematurely. In reaching this determination, we note that no record was made of the proceedings held on June 26, 2003, the date the district court heard CCC's motion to dismiss. We therefore have no means of knowing whether CCC's argument at the hearing was more expansive than that which we have determined was set forth in paragraph 2.
[15] Finally, although CCC relied on both rules 8(c) and 12(b), rule 8(c) does not govern a defendant's right to assert an affirmative defense in a motion to dismiss. Rather, rule 8(c) provides that a defendant has the burden of pleading an affirmative defense in a responsive pleading. See 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure §§ 1270 and 1277 (2d ed. 1990 & Supp. 2002). As discussed, whether an affirmative defense may be raised in a motion to dismiss is governed by rule 12(b). Therefore, we need not further discuss the relevance of rule 8(c) to this appeal.
Upon our de novo review, we conclude that the district court erred in granting CCC's motion to dismiss.
VII. CONCLUSION
The district court's order granting CCC's motion to dismiss is reversed, and the cause remanded for further proceedings.
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.
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FILED
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
April 17, 2013
FOR THE TENTH CIRCUIT
Elisabeth A. Shumaker
Clerk of Court
ROBERT D. BLAUROCK,
Plaintiff-Appellant,
v. No. 12-3241
(D.C. No. 5:08-CV-03116-SAC)
KANSAS DEPARTMENT OF (D. Kan.)
CORRECTIONS; ROGER WERHOLTZ,
Secretary of Corrections, Kansas
Department of Corrections, in his official
and individual capacity; SAM CLINE,
Warden, Hutchinson Correctional
Facility, in his official and individual
capacity; (FNU) KROEKER, Unit Team
Manager, Hutchinson Correctional
Facility, in her official and individual
capacity; (FNU) HOOKS, Sargent, I.G.U.
Supervisor, Hutchinson Correctional
Facility, in his official and individual
capacity; CORRECT CARE
SOLUTIONS, Medical Provider
Contracted by the Kansas Department of
Corrections; (FNU) BUMGARTNER,
Chief Physician, Correct Care Solutions,
Hutchinson Correctional Facility, in his
official and individual capacity;
(FNU) GOFF, H.R.N., Assistant to
Dr. Bumgartner, Correct Care Solutions,
Hutchinson Correctional Facility, in his
official and individual capacity,
Defendants-Appellees.
ORDER AND JUDGMENT*
Before HARTZ, EBEL, and GORSUCH, Circuit Judges.
Robert D. Blaurock, a Kansas state prisoner proceeding pro se and in forma
pauperis, appeals the dismissal of his claims under 42 U.S.C. § 1983 alleging that
various persons at the Hutchinson Correctional Facility (HCF) of the Kansas
Department of Corrections (KDOC) violated the Eighth Amendment by denying
necessary medical care and making him perform work beyond his physical capacity.
He also appeals the dismissal of his amended complaint, in which he attempted to
revive claims against prison officials at the Ellsworth Correctional Facility (ECF).
We have jurisdiction under 28 U.S.C. § 1291 and affirm.
I. BACKGROUND
Mr. Blaurock sued KDOC and various prison officials. He also sued the
prison medical care provider, Correct Care Solutions (CCS), a contractor providing
medical care to inmates at Kansas correctional facilities, and two CCS employees.
He alleged that the prison defendants were deliberately indifferent to injuries that had
*
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of this
appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. 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.
-2-
been inflicted on him by other inmates at ECF (before his transfer to HCF) and to
further injury caused by being required to perform prison work duties beyond his
physical capabilities. He also alleged that he was denied adequate medical care in
violation of the Eighth Amendment.
The district court reviewed the complaint before service and determined that it
failed to state a claim. See 28 U.S.C. § 1915(e)(2)(B)(ii) (district court may dismiss
a case if it determines that the action “fails to state a claim on which relief may be
granted”). The court held that (1) the claims against KDOC and the prison personnel
in their official capacities were barred by the Eleventh Amendment, (2) the complaint
failed to allege against Secretary Werholtz and HCF Warden Cline the personal
participation necessary for liability, (3) the complaint failed to allege a CCS policy or
custom that directly caused a violation of Mr. Blaurock’s rights, see Dubbs v. Head
Start, Inc., 336 F.3d 1194, 1216 (10th Cir. 2003), and (4) the complaint failed to
allege a cognizable Eighth Amendment claim for failure to provide medical care.
The court ordered the complaint dismissed unless Mr. Blaurock filed an amended
complaint that corrected the deficiencies identified by the court. Mr. Blaurock timely
filed an amended complaint, in which he renewed his claims based on his medical
condition and prison work duties. He also included claims against prison personnel
at ECF based on his treatment there.
-3-
The district court reviewed the amended complaint, first addressing
Mr. Blaurock’s claims against those responsible for his care at ECF. Mr. Blaurock
had previously dismissed a separate action bringing those claims, and by the time he
filed the amended complaint in this case, the two-year limitations period had expired.
Accordingly, the district court held that those claims were time-barred. The court
further determined that the proposed new claims could not relate back under Federal
Rule of Civil Procedure 15(c)(1)(B) to when the original complaint was filed, nor
could the ECF defendants and claims be added under Rules 18 (joinder of claims) or
20 (joinder of parties). The court then evaluated whether the amended complaint
cured the deficiencies previously identified in the original complaint, and concluded
that it did not, but merely reiterated essentially the same allegations. The court
therefore dismissed the amended complaint for failure to state a claim under
§ 1915(e)(2)(B)(ii). Mr. Blaurock appeals.
II. DISCUSSION
We review de novo the district court’s dismissal under § 1915(e)(2)(B)(ii) for
failure to state a claim. See Kay v. Bemis, 500 F.3d 1214, 1217 (10th Cir. 2007). We
accept as true the factual allegations in the complaint, as well as any reasonable
inferences, construing them in the light most favorable to the plaintiff. See id. The
complaint must make “specific allegations . . . [that] plausibly support a legal claim
for relief.” Id. at 1218 (internal quotation marks omitted). Because Mr. Blaurock is
-4-
proceeding pro se, we liberally construe his pleadings. See Knox v. Bland, 632 F.3d
1290, 1292 (10th Cir. 2011).
For substantially the same reasons stated by the district court, we affirm the
dismissal of Mr. Blaurock’s claims against KDOC and the prison officials in their
official capacities, his claims based on his treatment at ECF,1 the claims against CCS,
and the claims against Secretary Werholtz and Warden Cline. These rulings involve
the straightforward application of settled law to undisputed facts. The other
allegations deserve some additional analysis.
As for Mr. Blaurock’s allegations that prison personnel failed to provide
proper medical treatment, we recognize that the conditions of prisoner confinement
can create an Eighth Amendment obligation on the state to provide adequate health
care for prisoners. See Estelle v. Gamble, 429 U.S. 97, 103 (1976). But a plaintiff
must establish “both elements of an Eighth Amendment claim—the objective prong
of sufficiently serious deprivation and the subjective prong of deliberate
indifference.” Gee v. Pacheco, 627 F.3d 1178, 1189 (10th Cir. 2010). To qualify as
sufficiently serious, a medical need must be “one that has been diagnosed by a
1
Even if Mr. Blaurock’s allegations of inadequate medical care at ECF arose
from “a common core of operative facts uniting the original and newly asserted
claims,” Mayle v. Felix, 545 U.S. 644, 659 (2005) (internal quotation marks omitted)
(stating standard for relation back under Rule 15(c)), the amended complaint did not
identify any individual who allegedly failed to provide medical care at ECF.
Therefore, Mr. Blaurock cannot obtain relief because the amended complaint failed
to assert the requisite “personal involvement in the alleged constitutional violation.”
Gallagher v. Shelton, 587 F.3d 1063, 1069 (10th Cir. 2009) (internal quotation marks
omitted).
-5-
physician as mandating treatment or one that is so obvious that even a lay person
would easily recognize the necessity for a doctor’s attention.” Id. at 1192 (internal
quotation marks omitted). “To prevail on the subjective component, the prisoner
must show that the defendants knew he faced a substantial risk of harm and
disregarded that risk, by failing to take reasonable measures to abate it.” Callahan v.
Poppell, 471 F.3d 1155, 1159 (10th Cir. 2006) (internal quotation marks omitted).
We assume for purposes of resolving this appeal that Mr. Blaurock has alleged the
objective component for those claims and we consider whether he has satisfied the
subjective component.
Mr. Blaurock asserted that Dr. Bumgartner failed to treat properly his neck,
back, and shoulder injuries sustained at ECF.2 He alleged that upon his arrival at
HCF on May 22, 2007, his vital signs were checked, but his request for an X-ray was
declined. He received a neck X-ray on January 14, 2008. Beginning in January
2008, Dr. Bumgartner administered chiropractic adjustments and prescribed Tylenol,
Prednisone, and a steroid injection to treat Mr. Blaurock’s neck injury and the related
pain and numbness. Mr. Blaurock asserted that the chiropractic adjustments were
sporadic and the other treatment did not relieve his symptoms or pain. In addition, he
2
Mr. Blaurock also sued defendant Goff as an assistant to Dr. Bumgartner. But
the only allegation against Mr. Goff is found in the original complaint, which was
superseded by the amended complaint. See Mink v. Suthers, 482 F.3d 1244, 1254
(10th Cir. 2007) (“[A]n amended complaint super[s]edes an original complaint and
renders the original complaint without legal effect.” (internal quotation marks
omitted)). No claim was stated against Mr. Goff in the amended complaint.
-6-
alleged that he had requested a medical mattress. By May or June of 2011, however,
he had been granted a medical lay-in status, a bottom bunk restriction, permission to
refrain from exercise, and a lifting restriction of 10 to 15 pounds.
Mr. Blaurock’s claim that he was not treated properly for his neck, back, and
shoulder injuries (and the resulting pain) asserted only a disagreement with
Dr. Bumgartner’s choice of treatment and, at most, a claim that the doctor’s actions
were negligent. But “a complaint that a physician has been negligent in diagnosing
or treating a medical condition does not state a valid claim of medical mistreatment
under the Eighth Amendment.” Callahan, 471 F.3d at 1159 (internal quotation marks
omitted).
Next, for his claim that he was required to perform work beyond his
capabilities, Mr. Blaurock asserted that his prison job supervisor, defendant Kroeker,
assigned him a laundry porter job, even though he could not physically do the job and
his hernia worsened as a result of his efforts.3 His allegations that his work
assignments violated the Eighth Amendment must “show a genuine issue as to the
defendants’ culpable state of mind, and an unnecessary and wanton infliction of
pain.” Handy v. Price, 996 F.2d 1064, 1067 (10th Cir. 1993). “In the work
assignment context, prison officials are deliberately indifferent when they knowingly
3
Mr. Blaurock also sued defendant Hooks as a prison job supervisor, but, as
with Goff, the only allegation against him is found in the original complaint, which
was superseded by the amended complaint, and the latter articulated no claims
against him. See Mink, 482 F.3d at 1254.
-7-
compel convicts to perform physical labor which is beyond their strength, or which
constitutes a danger to their health, or which is unduly painful.” Choate v. Lockhart,
7 F.3d 1370, 1374 (8th Cir. 1993) (internal quotation marks and alterations omitted).
An attachment to Mr. Blaurock’s complaint shows that Ms. Kroeker responded to
Mr. Blaurock’s grievance concerning his job assignment by pointing out that he had
no medical restrictions on work assignments, a statement he does not challenge.
Therefore, even if Mr. Blaurock adequately alleged the infliction of pain, he did not
raise a genuine issue about Ms. Kroeker’s culpable state of mind.
Finally, there are two allegations in the amended complaint that were not
addressed by the district court. One is Mr. Blaurock’s allegation that the defendants
generally did not respond to his grievances in accordance with the prison grievance
procedures set forth in Kan. Admin. Regs. §§ 44-15-101, 102 & 106. It is unclear
whether he is seeking relief for violation of the regulations. It appears that he is
noting the violations to support his assertion that he exhausted administrative
remedies. In any event, he is not entitled to relief. None of his claims have been
dismissed for failure to exhaust. And his allegations cannot support a claim against
any defendant because they fail to assert the requisite “personal involvement in the
alleged constitutional violation.” Gallagher v. Shelton, 587 F.3d 1063, 1069
(10th Cir. 2009) (internal quotation marks omitted); see id. (holding that “a denial of
a grievance, by itself without any connection to the violation of constitutional rights
alleged by plaintiff, does not establish personal participation under § 1983”).
-8-
Therefore, any claim raised by Mr. Blaurock based on errors in grievance procedures
was not improperly dismissed. See Dummar v. Lummis, 543 F.3d 614, 618 (10th Cir.
2008) (“We may affirm a district court decision on any grounds for which there is a
record sufficient to permit conclusions of law, even grounds not relied upon by the
district court.” (internal quotation marks omitted)).
The other unaddressed allegation is that Mr. Blaurock was a third-party
beneficiary of the contract to provide medical services to prisoners between CCS and
KDOC, and that he can therefore assert claims for breach of contract for failure to
provide him medical care. The district court’s omission is inconsequential, however,
because this state-law claim “is best left for a state court’s determination.” Brooks v.
Gaenzle, 614 F.3d 1213, 1230 (10th Cir. 2010). Generally, “if federal claims are
dismissed before trial, leaving only issues of state law, the federal court should
decline the exercise of [pendent] jurisdiction by dismissing the case without
prejudice.” Id. at 1229 (internal quotation marks and brackets omitted). We direct
the district court on remand to dismiss this claim without prejudice.
III. CONCLUSION
The judgment of the district court is affirmed, but we remand for the district
court to modify the judgment to state that Mr. Blaurock’s state-law claim is
-9-
dismissed without prejudice. Mr. Blaurock is reminded of his obligation to continue
making partial payments until he has paid the entire appellate filing fee.
Entered for the Court
Harris L Hartz
Circuit Judge
- 10 -
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UNITED STATES COURT OF APPEALS
For the Fifth Circuit
No. 01-30108
Summary Calendar
RAWBOE PROPERTIES LLC; ROGER T. BOES,
Plaintiffs-Appellants,
VERSUS
WESTCHESTER FIRE INSURANCE COMPANY; ET AL,
Defendants
WESTCHESTER FIRE INSURANCE COMPANY
Defendant-Appellee
Appeal from the United States District Court
For the Eastern District of Louisiana, New Orleans
(00-CV-196-T)
June 19, 2001
Before SMITH, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:*
Appellants Rawboe Properties, L.L.C., and Roger T. Boes appeal
the district court’s grant of summary judgment on claims for
damages under a fire insurance policy.
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.
No. 01-30108
--2--
Appellee Westchester issued a fire insurance policy to Rawboe,
which, inter alia, required all claims to be submitted within two
years of knowledge of loss. The insured property was damaged as a
result of a fire, and Westchester received two estimates on the
damage, both of which were for $26,710.60. The Appellants signed
a Proof of Loss for that amount minus a deductible cost and a
subrogation receipt, stating that payment was received in full
settlement of all claims. After the two year prescription period,
the Appellants filed suit for additional damages, but the district
court granted summary judgment to the Appellee.
This court reviews a grant of summary judgment de novo,
applying the same standards as the district court. Sherrod v. Am.
Airlines, Inc., 132 F.3d 1112, 1119 (5th Cir. 1998). Summary
judgment is granted if there is no genuine issue of material fact
and the moving party is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 327
(1986).
Under Louisiana law, when the insured and insurer reasonably
disagree as to the amount of loss, the insurer may refuse to pay
and not be subject to penalties. Sibley v. Insured Lloyds, 442 So.
2d 627, 632 (La. App. 1st Cir. 1983). However, if part of the claim
is not disputed, the insurer may avoid penalties by unconditionally
tendering payment as to the undisputed part. Id. Rawboe has
failed to present evidence that the claim was in dispute at the
No. 01-30108
--3--
time of the settlement. Since there was no dispute, Westchester
was not compelled to make an unconditional offer. Furthermore,
under the plain terms of the contract, Rawboe’s claims prescribed.
Accordingly, we AFFIRM the judgment of the district court.
AFFIRMED.
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FILED
JUN 2 5 2013
C|erk, U.S. District & Bankruptcy
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
HEYWARD CARZELL SANDERS, ) Courts for the District of Columbia
)
Plaintiff, )
)
v ) Civil Action No. f q ' j
) 13 <@
DISTRICT OF COLUMBIA, )
)
Defendant. )
MEMORANDUM OPINION
This matter comes before the Court on review of the plaintiffs application to proceed in
forma pauperis and pro se civil complaint. The Court will grant the application, and dismiss the
complaint.
Plaintiff alleges that the District of Columbia has violated the Racketeer lnfluenced and
Corrupt Organization Act ("RICO") by conspiring with others to cause him to "lose all of his
real estate properties." Compl. at 3. Plaintiff alleges that some of these properties were sold at
tax sale at prices below market value and transferred to new owners without court intervention
and in a manner inconsistent with established procedures for tax sales. See generally ia’. at 4-9.
According to plaintiff, "[s]omeone in the District Govemment had to be pushing all their illegal
paperwork," ia'. at 9, and he blames the District "for letting all parties enjoy the benefit of doing
unethical real estate, which put plaintiff s good properties in a bad way to be lost, which effected
his way of life, financially, physically and more." Ia'. at 13. But the gravamen of plaintiffs
complaint appears to be that the D.C. government passively allowed others to commit crimes by
allowing "illegal paperwork" to be filed concerning real estate transactions.
A plaintiff establishes a RICO violation by showing "(l) conduct (2) of an enterprise (3)
through a pattern (4) of racketeering activity." W. Ass0cs. Ltd. P ’ship v. Market Square Assocs.,
235 F.3d 629, 633 (D.C. Cir. 200l) (citing 18 U.S.C. § l96l(l)(B)). A "pattern ofracketeering
activity requires at least two acts of racketeering activity," 18 U.S.C. § 1961(5), and these
predicate acts include a host of offenses punishable under certain state and federal statutes, see
18 U.S.C. § l96l(l)(B). These predicate acts must be "related, and . . . pose a threat to
continued criminal activity." H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 239 (l989). RICO has
a four-year statute of limitations that commences on the date the plaintiff discovered or should
have discovered the injury. Rotella v. Wooa', 528 U.S. 549, 553 (2000).
The Court finds that the complaint fails to state a RICO claim upon which relief can be
granted. Although plaintiff lists several acts which may qualify as predicate acts, see Compl. at
2, it is unclear which and whether the District of Columbia is alleged to have violated these
provisions. Nor is it clear that there is a pattern of racketeering activity insofar as plaintiff is
alleged to be the sole injured party. See W. Ass0cs. Lla'. ex rel. Ave. Ass0cs. Ltd. v. Mkt. Square
Ass0cs., 235 F.3d 629, 634 (D.C. Cir. 200l) (plaintiff failed to allege a "pattern of racketeering
activity" where plaintiff only alleges "a single scheme, a single injury, and a single victim");
Zernik v. U.S. Dep ’t of Justice, 630 F. Supp. 2d 24, 27 (D.D.C. 2009). Moreover, although
plaintiff generally alleges that the D.C. government conspired with a number of other parties, he
fails to allege who within the D.C. government engaged in such conspiracy, or allege sufficient
facts conceming any meeting of the minds between anyone within the D.C. government and the f
other alleged co-conspirators. See Roa’riguez v. Ea'itor in Chiej: Legal Times, 285 F. App’x 756,
759 (D.C. Cir. 2008) (per curiam) (affirrning dismissal of conspiracy claim where plaintiffs
"allegations include no facts suggesting ‘unity of purpose’ or a ‘meeting of the minds’ among the
defendants, a necessary element of a conspiracy"). Lastly, because the complaint is silent as to
the dates of the alleged predicate acts, it is not clear that the complaint is timely filed within the
four-year statute of limitations. For these reasons, the complaint will be dismissed without
prejudice.
An Order accompanies this Memorandum Opinion.
/C%ai:
United Statbs District Judge
DATECVlT/FLO 03
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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
ALLISTER A. FREEMAN,
Appellant,
v.
STATE OF FLORIDA,
Appellee.
No. 4D13-811
[April 29, 2015]
Appeal from the Circuit Court for the Nineteenth Judicial Circuit,
Indian River County; Robert L. Pegg, Judge; L.T. Case No.
312011CF001413A.
Carey Haughwout, Public Defender, and Nan Ellen Foley, Assistant
Public Defender, West Palm Beach, for appellant.
Pamela Jo Bondi, Attorney General, Tallahassee, and Richard
Valuntas, Assistant Attorney General, West Palm Beach, for appellee.
DAMOORGIAN, C.J.
Following a jury trial, Allister Freeman was adjudicated guilty of one
count of battery, one count of trespass, and one count of robbery. The
court sentenced him to time served on the battery and trespass counts
and to concurrent Prison Releasee Reoffender (fifteen years with credit
for time served) and Habitual Felony Offender (fifteen years six months
with credit for time served) sentences on the robbery count. Pursuant to
section 960.293 of the Florida Statutes, the court also imposed a civil
lien against Appellant for incarceration costs. We affirm in all respects
and write to address the propriety of the amount of the lien.1
Section 960.293(2) of the Florida Statutes provides that “[u]pon
conviction, a convicted offender is liable to the state and its local
1 Appellant also takes issue with the trial court’s limitation of his counsel’s
questions during voir dire, the constitutionality of section 960.293, and the
constitutionality of his Prison Releasee Reoffender and Habitual Felony Offender
sentences. We affirm on these issues without further comment.
subdivisions for damages and losses for incarceration costs and other
correctional costs.” § 960.293(2), Fla. Stat. (2013). Section 960.293(2)(b)
specifies that:
If the conviction is for an offense other than a capital or life
felony, a liquidated damage amount of $50 per day of the
convicted offender’s sentence shall be assessed against the
convicted offender and in favor of the state or its local
subdivisions. Damages shall be based upon the length of the
sentence imposed by the court at the time of sentencing.
§ 960.293(2)(b), Fla. Stat. (2013).
Based on this statute, the court imposed a $282,750 civil lien against
Appellant which breaks down to $50 per day for the entirety of his fifteen
year and six month sentence, including the days he was credited for
time-served. Appellant challenges the amount of the lien, arguing that
he cannot be charged for days he was incarcerated but not yet
sentenced. We disagree.
Although no Florida court has considered whether a convicted
offender is liable for incarceration costs associated with time-served
under section 960.293(2)(b), the Eleventh Circuit has held that “[s]ection
960.293(2) does not limit costs to those incurred after conviction.”
Riggins v. Beseler, 568 Fed.Appx. 850, 854 (11th Cir. 2014). In arriving
at its conclusion, the court reasoned that a contrary “interpretation
would undermine the stated ‘intent of the statute . . . [to] fully
compensat[e] . . . the state[] and its local subdivisions for damages and
losses incurred as a result of criminal conduct.’” Id. (quoting §
960.29(3)(a), Fla. Stat. (2013)) (alterations in original). We agree with the
Eleventh Circuit, and adopt the reasoning set forth in Riggins.
Affirmed.
TAYLOR and MAY, JJ., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
2
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299 F.2d 353
Irwin H. LAWHORN, Appellant,v.The ATLANTIC REFINING COMPANY, Appellee.
No. 18960.
United States Court of Appeals Fifth Circuit.
February 14, 1962.
H. G. Rawls, Albany, Ga., Albert Mims Wilkinson, Jr., Bruce B. Edwards, Atlanta, Ga., for appellant.
James V. Davis, Albany, Ga., Charles J. Bloch, Ellsworth Hall, Jr., Bloch, Hall, Groover & Hawkins, Macon, Ga., Leonard Farkas, Farkas, Landau and Davis, Albany, Ga., for appellee.
Before TUTTLE, Chief Judge, and CAMERON and BROWN, Circuit Judges.
JOHN R. BROWN, Circuit Judge.
1
This appeal brings into focus the relationship between F.R.Civ.P. 12(b)1 and 13(a), 28 U.S.C.A.,2 and it also raises the recurring problem of whether summary judgment was the proper remedy. The primary question is whether a compulsory counterclaim must be asserted, or lost, by the party whose motion to dismiss is successful because of a failure to state a claim upon which relief could be granted. The District Court said no. We agree. Summary judgment was then inevitable. We accordingly affirm.
2
Two suits are involved — the first brought by Lawhorn, and the second, by Atlantic Refining. While this appeal tests only the validity of the rulings in the second suit, the rulings of the first suit are of controlling importance and so vital to the understanding of those questioned here that a summary of Lawhorn's original suit is essential.
3
Lawhorn was a "jobber" for Atlantic in Georgia. This relationship was to continue from July 1, 1959 to June 30, 1962, and thereafter from year to year unless terminated by either party at the end of the original term or of any subsequent contract year. This contract contemplated that Lawhorn would purchase petroleum products from Atlantic to be distributed to various retail outlets in a specified territory. The price provided in the written contract was flexible, but was apparently to be the same for Lawhorn as for Atlantic's other distributors.3
4
All went well until February 25, 1960, when Lawhorn filed the first suit against Atlantic for $168,330.00 damages. The basis for this first suit was that Atlantic had breached the distributorship contract, as modified by contemporaneously executed supplemental agreements which would give him a lower price than other distributors enjoyed.4 His pleadings asserted that after he had received and paid for 390,000 gallons of gasoline "* * * at the price fixed and agreed upon in said supplemental memorandum agreements, * * *" Atlantic notified him on February 3, 1960 that "* * * all price support on gasoline prices * * are withdrawn * * *."
5
Atlantic filed a motion to dismiss for failure to state a claim upon which relief could be granted, F.R.Civ.P. 12(b) (6). This motion was granted sustaining Atlantic's theory that because of the parol evidence rule Lawhorn could not prevail on his claim for breach of a written contract as modified by the alleged parol agreements. The suit was dismissed on August 15, 1960. Atlantic filed no pleadings other than the motion to dismiss. No appeal was taken from that judgment.
6
The second stage of this litigation, and the initial step in this case, began on December 8, 1960, when Atlantic filed the second suit in the Middle District of Georgia against Lawhorn for $17,378.78 on an open account. Other relief not in issue here was also requested. Summary judgment for Atlantic was entered for $17,378.78.
7
The accuracy of the open account relating to products sold by Atlantic to Lawhorn was sworn to by Atlantic's Credit Manager. Lawhorn denied without sworn verification or affidavit that he owed Atlantic anything, and as a second defense, he denied being indebted to Atlantic because the products listed in the account were inferior in quality to that specified in the contract. His third defense was a counterclaim for $72,000 as damages for Atlantic's breach of contract. Atlantic moved to strike Lawhorn's second and third defenses because those claims had been previously adjudicated in favor of Atlantic in the prior (first) suit.
8
Both parties, with supporting affidavits, moved for summary judgment. Atlantic's motion was granted and Lawhorn's motion denied. The judgment reciting that "* * * the matter contained [in those defenses] having been previously adjudicated," Lawhorn's second and third defenses were dismissed. To Lawhorn's contention that the first suit had likewise foreclosed Atlantic since it had not therein filed its open account demand as a counterclaim, the trial Judge ruled that Atlantic was not required to assert this present open account claim as a compulsory counterclaim in the prior suit "* * * inasmuch as no answer was ever filed by the Atlantic in the other [first] case and that other [first] case was controlled solely on the basis of a motion to dismiss."
9
From those rulings Lawhorn appeals.
10
So far as we can ascertain no Court of Appeals has yet decided the question whether a 13(a) compulsory counterclaim must be filed where a 12(b) (6) motion to dismiss the complaint for failure to state a claim has been granted. The two federal District Courts that have considered the question have reached opposite answers.5 We therefore write on a clean slate.
11
Undoubtedly, the general rule — as F.R.Civ.P. 13(a) plainly implies — is that one who has a counterclaim arising out of the same transaction or occurrence and does not advance it will be thereafter precluded from asserting it. This rule is predicated on the policy that all such related disputes between the parties should be settled in a single lawsuit.6 This policy is usually effectuated by relying on notions of res judicata, waiver or estoppel. We find no necessity in this case of bringing into play these specific legal concepts because the Rules themselves, under a fair construction, bring about the same result.
12
Taking the Rules at face value, it is clear that a plaintiff must have a claim before a defendant is required to assert a compulsory counterclaim. A counterclaim must be pressed only when it is related to the "* * * subject matter of the opposing party's claim * * *." F.R.Civ.P. 13(a) (emphasis added). That is what makes it a counterclaim. And it is only to such a counterclaim that the Rule attaches a compulsory character. When Atlantic's motion to dismiss was successful, it was a judicial determination that Lawhorn had no claim upon which relief could be granted. If there was no claim, no counterclaim was required.
13
But going further, if the counterclaim is one which must be asserted, i. e. is compulsory, then it must be set forth in a pleading. Rule 12(b) makes a clear distinction between a pleading and certain motions, including a motion to dismiss. The Rule gives the party the option of asserting this defense by way of a pleading or a motion in these words: "* * * except that the following defenses may at the option of the pleader be made by motion: * * * (6) failure to state a claim upon which relief can be granted, * * *." But if a motion is used, there is no doubt as to the proper sequence since "a motion making any of these defenses shall be made before pleading if a further pleading is permitted." (Emphasis added.)
14
After such a motion to dismiss for failure to state a claim is made, there is no reason to file any other pleadings until the motion is acted upon. If the motion is granted, no further pleadings will be necessary. If the motion is denied, time is allotted in which to file an answer.
15
This is borne out by Rule 12(a) which provides that the ordinary time periods are altered when the motions allowed in 12(b) are used. The Rule prescribes that "* * * if the court denies the motion or postpones its disposition until the trial on the merits, the responsive pleading shall be served within 10 days after notice of the court's action; * * *." (emphasis supplied). Therefore, if the motion to dismiss had been denied, Atlantic would still have had 10 days in which to file its counterclaim or other pleadings. But in this case the motion was granted, which amounted to a judicial declaration that Lawhorn had no claim. The failure of Atlantic to file its "counterclaim" at the time of its motion to dismiss did not then precipitate the coercive sanctions of Rule 13(a) since Rule 12(a) authorizes the postponement of all "responsive" pleadings. And once the motion to dismiss was sustained there was no suit or claim or demand to which any "responsive" pleading had to be filed.
16
Furthermore, the principle back of Rule 13(a) of concluding all related controversies in one suit must take into some account the equally valid and general proposition that a claimant should be able to choose his own forum.7 If one hauled into Court as a defendant has a claim but the adversary plaintiff has not, the nominal defendant ought to be allowed to name the time and place to assert it. He should not be forced into court by a would-be plaintiff and forced to assert, or lose, a claim which he may choose not to litigate at all, or which he may choose to assert at another time and place. It is one thing to concentrate related litigation once it is properly precipitated. It is quite another thing for the Rules to compel the institution of litigation. The Rules should be construed in such a manner as to do substantial justice. Under the pain of foregoing permanently a valid "counterclaim" by such a putative defendant, the Rules ought not to be construed in any such barratrous fashion.
17
When it comes to the subsidiary question whether summary judgment was proper, Atlantic's supporting affidavit was sufficient to show the accuracy and validity of the open account. It was stated in the form required by Rule 56(e) as though the employee in charge of the books, records and accounts were testifying on the stand. It made a prima facie case showing that there was no genuine issue of fact concerning dates, times and quantities, prices charged and payments made. Lawhorn's reply affidavit did not undertake to set forth any factual details as to any such facets. It was a mere paper denial and as such was insufficient to avoid summary judgment. Bruce Construction Corp. v. United States, 5 Cir., 1957, 242 F.2d 873. So far as the controverting affidavit undertook, in like conclusory terms, to assert that the gasoline was inferior in quality, no different result is required. As the affidavit itself states in so many words, supplying gasoline of inferior quality was not what Lawhorn contracted to purchase or Atlantic to sell. In short, this showed a breach of contract by Atlantic. But this issue was no longer open since res judicata forecloses not merely what was actually involved in the prior (first) suit, but all that might have been.8
18
Affirmed.
Notes:
1
F.R.Civ.P. 12(b). "Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim, or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: * * * (6) failure to state a claim upon which relief can be granted, * * *. A motion making any of these defenses shall be made before pleading if a further pleading is permitted. * * *"
2
F.R.Civ.P. 13(a). "A pleading shall state as a counterclaim any claim which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject matter of the opposing party's claim * * *."
3
"Price. The price shall be determined as follows:
"Atlantic agrees to bill and Buyer agrees to pay for Atlantic Imperial at Atlantic's contract price for distributors as posted for these products on date of shipment at Jacksonville, Florida District Office for delivery to ............, Georgia.
"For example, Atlantic's contract price for distributors as posted at Jacksonville, Florida, District office today 4 June 1959 for delivery to Sylvester, Georgia is 14.15¢ per gallon for Atlantic Regular and 17.15¢ per gallon for Atlantic Imperial, exclusive of all taxes."
4
Plaintiff alleged in this first suit that "* * * at the time of the negotiation of said contract on behalf of said defendant by the said Charles M. English the parties agreed that the contract price for distributors would be stated in the contract for public consumption but that the actual price at which petroleum products would be sold by the defendant to the plaintiff would be 6¢ per gallon below the normal tank-wagon price of Worth County Georgia, f. o. b. Southeastern Terminal, Albany, Georgia, and any variation in price parties would use Platt's Oil Gram as a guide. This for regular gas. On Imperial gas the price would be 6/46¢ per gallon (profit) below normal tank-wagon price, f. o. b. Jacksonville, Florida Terminal, and said gasoline in both instances was thereafter invoiced at said prices, including Imperial gasoline at 14.84¢ per gallon, and the said Charles M. English did then and there deliver in his own handwriting to plaintiff the price at which gasoline would be sold to plaintiff under the terms of said contract in truth and in fact. * * *"
5
See Schott v. Colonial Baking Co., W.D. Ark., 1953, 111 F.Supp. 13, and Douglas v. Wisconsin Alumni Research Foundation, N.D.Ill., 1948, 81 F.Supp. 167
6
An excellent analysis of the problems involving compulsory counterclaims can be found in Wright, Estoppel by Rule: The Compulsory Counterclaim Under Modern Pleading, 38 Minn.L.Rev. 423 (1954). See also 1A Barron & Holtzoff, Federal Practice and Procedure § 394.1 (1960 Wright ed.); Annot., 22 A.L.R.2d 621 (1952)
7
See the Supreme Court's statement that "* * * unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Gulf Oil Corp. v. Gilbert, 1947, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055. The principle that a defendant should not be able to control the place of litigation is similarly applied in a 28 U.S.C.A. § 1404(a) context in Hoffman v. Blaski, 1960, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254
8
See Baltimore S.S. Co. v. Phillips, 1927, 274 U.S. 316, 47 S.Ct. 600, 71 L.Ed. 1069; Alexander v. Commissioner, 5 Cir., 1955, 224 F.2d 788; Mullen v. Fitz Simons & Connell Dredge & Dock Co., 7 Cir., 1948, 172 F.2d 601. See also, 2 Moore, Federal Practice § 12.14, at 2267 (2d ed. 1961); 50 C.J.S. Judgments § 716 (1947). See also the following Georgia materials: Ga.Code § 110-501; Baker v. Decatur Lumber & Supply Co., 211 Ga. 510, 87 S.E.2d 89; Perry v. McLendon, 62 Ga. 598
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MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2019 ME 147
Docket: Som-19-152
Submitted
On Briefs: September 10, 2019
Decided: September 17, 2019
Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, and HJELM, JJ.
IN RE CHILDREN OF BENJAMIN W.
HJELM, J.
[¶1] Benjamin W. appeals from a judgment entered by the District Court
(Skowhegan, Benson, J.) terminating his parental rights to his two youngest
children.1 See 22 M.R.S. § 4055(1)(B)(2)(a), (b)(i), (ii), (iv) (2018). He asserts
that the court erred by denying his motion to continue when he was absent
during the second day of the hearing because he had been arrested at the
courthouse shortly before the proceedings began, and he challenges the court’s
conclusion that termination of his parental rights was in the children’s best
interests. We affirm the judgment.
I. BACKGROUND
[¶2] In April of 2018, the Department of Health and Human Services filed
a petition for a child protection order and preliminary protection order for the
1 The father also has two older children. The termination petition filed by the Department does
not encompass either of them, although one is also the subject of a child protection action.
2
two children at issue here, who were then ten and four years old. 22 M.R.S.
§§ 4032, 4034 (2018). The petition alleged that between 2015 and 2018, the
Department had received reports that the children were at risk due to both
parents’ substance use, the presence of dangerous individuals in their home,
and neglect. The Department further alleged that the father had exposed the
children to extreme violence. On the same day the petition was filed, the court
(Fowle, J.) entered a preliminary protection order, placing the children in the
Department’s custody. Id. § 4034(2). The parents later waived the opportunity
for a summary preliminary hearing. See id. § 4034(4).
[¶3] In August of 2018, the court (Benson, J.) entered an agreed-to
jeopardy order as to both parents, see 22 M.R.S. § 4035 (2018), based in
relevant part on the father’s “significant substance abuse, as well as severe
violence,” including domestic violence he had perpetrated against the
children’s mother. At the end of 2018, the Department petitioned to terminate
both parents’ parental rights, 22 M.R.S. § 4052 (2018), and in March of 2019 the
court held a two-day contested hearing on the termination petition as to the
father.2
2 Over the Department’s objection, the court continued the hearing as to the mother to allow her
to participate in a diagnostic evaluation. Her parental rights were not adjudicated in the judgment
that led to this appeal.
3
[¶4] The father completed his testimony on the first day of the hearing.
Two weeks later, on the morning of the second day of the hearing and just
before the hearing began, the father was arrested following an altercation in
the courthouse lobby.3 After the arrest, his attorney moved the court to
continue the second day of the hearing until the father was available. The court
denied the motion, finding that the father’s absence was the result of his own
voluntary conduct. See In re A.M., 2012 ME 118, ¶ 19, 55 A.3d 463. In the
resulting termination judgment, the court also noted that the father failed to
make any post-trial offer of proof as to what “additional relevant information
[he] might have . . . provided.”
[¶5] After the hearing proceeded and the parties completed the
presentation of evidence, the court orally stated its findings and its ultimate
conclusion that it would grant the termination petition. The court subsequently
issued a written judgment that contained the following findings, which the
court stated were based on clear and convincing evidence and which are
supported by competent evidence in the record. See 22 M.R.S. 4055(1)(B)(2)
(2018); Vibert v. Dimoulas, 2017 ME 62, ¶ 15, 159 A.3d 325.
3 During the colloquy about the effect of the father’s arrest on the scheduled hearing, the mother’s
attorney and the children’s guardian ad litem reported to the court that the father was taken into
custody after he threatened the mother that he would “smash her face into a million f-ing pieces.”
4
[A]side from attending [the court-ordered diagnostic evaluation,
the father] has not engaged in any service requested by the
Department or [o]rdered by this Court. He failed . . . to attend
random drug screens requested by the Department; he failed to
attend a certified Batterer’s Intervention Program; he failed to
engage in any meaningful individual mental health treatment; he
failed to engage in any parenting education classes; he failed to
maintain safe and stable housing that is free from domestic
violence, drugs, and alcohol; and he failed to refrain from criminal
activity.
[The father] can charitably be described as an
extraordinarily difficult individual to work with. In this case, the
Department went to heroic lengths in its attempts to work with
[the father], . . . in spite of the father’s penchant for vulgar behavior
and language at the very least, and proclivity and potential for
violence at the worst.
[The father] has simply refused to engage in a single service
outside of the medication assisted treatment he was receiving on
his own . . . before the Department became involved. The Court
finds that even this purported engagement in substance abuse
treatment is incredible. It also finds that [the father] went out of
his way to obstruct the Department from obtaining even those
treatment records. [The father] flatly, frequently, and offensively[]
refuses to entertain the reality that he has any issues to address as
a parent.
[T]he Department’s repeated efforts to engage [the father] in
reunification and rehabilitation services have come to nothing.
[The father] made it clear during his testimony that he was still
unwilling to engage in services . . . . Rather, he asserted he was
being railroaded and wished to make it clear he was requesting an
appeal before the hearing started.
During this . . . proceeding the children’s addresses needed to
be kept confidential to protect the children from the threat their
father poses to their physical, psychological and emotional
5
well-being. [One child] has been in crisis on more than one
occasion during this action and has required in-patient mental
health treatment. In fact, [that child] went into a crisis unit the
night before the second day of the termination hearing and this
Court concludes that this fact is strongly indicative of a need for
permanency.
After almost a year in foster care with no engagement in
services in any measurable amount by their father, the clock has
run out and it is time for [the children] to have the permanency
they deserve.
[¶6] Based on these findings, the court concluded that the father was
unwilling or unable to protect the children from jeopardy and unwilling or
unable to take responsibility for the children and that those circumstances
were unlikely to change within a time reasonably calculated to meet their
needs; that the father failed to make a good-faith effort to rehabilitate and
reunify with the children; and that termination of his parental rights was in the
best interest of each child. See 22 M.R.S. § 4055(1)(B)(2)(a), (b)(i), (ii), (iv).
[¶7] The father filed a timely appeal. See 22 M.R.S. § 4006 (2018); M.R.
App. P. 2B(c)(1).
II. DISCUSSION
A. Denial of the Father’s Motion to Continue
[¶8] We review the denial of a motion to continue for an abuse of
discretion, In re A.M., 2012 ME 118, ¶ 14, 55 A.3d 463, and review de novo
6
“whether an individual was afforded procedural due process,” In re Adden B.,
2016 ME 113, ¶ 7, 144 A.3d 1158.
[¶9] In the context of a hearing on termination of parental rights, “‘due
process requires: notice of the issues, an opportunity to be heard, the right to
introduce evidence and present witnesses, the right to respond to claims and
evidence, and an impartial factfinder.’” In re A.M., 2012 ME 118, ¶ 16, 55 A.3d
463 (quoting In re Kristy Y., 2000 ME 98, ¶ 7, 752 A.2d 166 (footnotes omitted)).
A parent’s voluntary absence from the termination hearing does not, by itself,
constitute the denial of that parent’s due process. Id. ¶ 19; see also In re Adden
B., 2016 ME 113, ¶¶ 8-9, 144 A.3d 1158.
[¶10] The father did not attend the second day of the termination hearing
because he had been arrested at the courthouse shortly before the hearing was
to begin. The father’s attorney requested that the court continue the hearing,
but the court denied the motion, finding that the father’s absence was voluntary
because he had chosen to engage in the conduct that led to his arrest. We have
held in a termination case, however, that when a parent is arrested the night
before the hearing and is not brought to the courthouse the following day, the
resulting “absence cannot be regarded as . . . entirely voluntary.” In re A.M.,
2012 ME 118, ¶ 19, 55 A.3d 463. Yet because a parent does not have the
7
unqualified right to be physically present at a termination hearing, the
dispositive question is not whether the parent’s absence is voluntary but,
rather, whether that absence results in a deprivation of the parent’s right to due
process. Id.
[¶11] There was no such deprivation here. The father testified
extensively during the first day of the hearing, and all parties completed their
examination of him. On the second and final hearing day, after the court ruled
that it would proceed with the hearing, the father did not ask the court to
provide an alternative mechanism for him to be able to participate. Id. ¶ 20
(“When a parent is known to be incarcerated in advance of a hearing, the court
must, upon request by the parent, provide a meaningful opportunity for the
parent to participate in the hearing whether in person, by telephone or video,
through deposition, or by other means that will reasonably ensure an
opportunity for the parent to be meaningfully involved in the hearing.”
(Emphasis added.)).
[¶12] Further, the father did not pursue any number of additional
processes that were available to protect any due process right that he now
claims was at stake. For example, he did not request that the court leave the
record open, see M.R. Civ. P. 43(j); he did not seek to augment the record with
8
additional evidence, see id.; and he did not make an offer of proof describing
any additional relevant information he might have provided on the second day
of the trial—a point particularly salient here because of the extensive testimony
he provided on the first hearing date, ending with all parties stating to the court
that they had no further questions to ask him, see In re A.M., 2012 ME 118, ¶ 23,
55 A.3d 463. And on appeal he has not explained how his absence on the second
day affected the court’s findings, which were supported by abundant evidence.
See id. ¶ 24.
[¶13] For these reasons, the resumption of the termination hearing when
the father was not present did not deprive him of his right to due process.
B. Best Interests of the Children
[¶14] The father next challenges the court’s conclusion that termination
of his parental rights was in the children’s best interests and will provide the
children with “permanence and stability.”4 Adoption of Isabelle T., 2017 ME 220,
¶ 49, 175 A.3d 639. We review a trial court’s “factual findings related to the
child’s best interest for clear error, and its ultimate conclusion regarding the
4 The father does not challenge the court’s conclusion that the Department had proved, by clear
and convincing evidence, three kinds of parental unfitness. See 22 M.R.S. § 4055(1)(B)(2)(b)(i), (ii),
(iv) (2018). On this record, such a challenge would be unavailing. See In re M.B., 2013 ME 46, ¶ 37,
65 A.3d 1260 (“Where the court finds multiple bases for unfitness, we will affirm if any one of the
alternative bases is supported by clear and convincing evidence.”).
9
child’s best interest for an abuse of discretion.” In re Children of Nicole M., 2018
ME 75, ¶ 12, 187 A.3d 1 (citations omitted) (quotation marks omitted).
[¶15] In determining whether termination of parental rights is in a
child’s best interest, the court must consider “the needs of the child, including
the child’s age, the child’s attachments to relevant persons, periods of
attachments and separation, the child’s ability to integrate into a substitute
placement or back into the parent’s home and the child’s physical and
emotional needs.” 22 M.R.S. § 4055(2) (2018). Other factors relevant to the
best interest determination are “the harm the children may suffer if the parent’s
rights are not terminated, as well as the children’s need for permanence and
stability.” Adoption of Isabelle T., 2017 ME 220, ¶ 49, 175 A.3d 639. Thus, a
court’s factual findings “that bear on parental unfitness may also be relevant to
the question of whether termination is in the child’s best interest.” In re
Children of Christopher S., 2019 ME 31, ¶ 8, 203 A.3d 808.
[¶16] Here, much of the evidence demonstrating the father’s parental
unfitness also bore on the children’s best interests. With support in the record,
the court found, for example, that the father had not made even marginal
progress toward reunification, that he was not receptive to the services he
needs to become a safe and nurturing parent, and that he posed a threat to the
10
physical, psychological, and emotional well-being of the children, one of whom
is particularly fragile.5 See In re Hope H., 2017 ME 198, ¶¶ 9-10, 170 A.3d 813.
While this evidence supported the court’s determination of parental unfitness,
it also demonstrated that the children should be freed from the father’s
parental bonds. The court’s best interest determination was well within its
discretion.
The entry is:
Judgment affirmed.
Wayne Doane, Esq., Exeter, for appellant father
Aaron M. Frey, Attorney General, and Zach Paakkonen, Asst. Atty. Gen., Office of
the Attorney General, Augusta, for appellee Department of Health and Human
Services
Skowhegan District Court docket number PC-2018-34
FOR CLERK REFERENCE ONLY
5We are not persuaded by the father’s argument that the court’s best interest determination
should be affected by the pendency of the termination petition as to the mother. See In re Children of
Christopher S., 2019 ME 31, ¶ 10, 203 A.3d 808.
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28 Ill.2d 15 (1963)
191 N.E.2d 65
BOARD OF EDUCATION OF GARDENER SCHOOL DISTRICT NO. 112, PEORIA COUNTY, Appellant,
v.
COUNTY BOARD OF SCHOOL TRUSTEES OF PEORIA COUNTY et al., Appellees.
No. 37345.
Supreme Court of Illinois.
Opinion filed March 27, 1963.
Rehearing denied June 18, 1963.
*16 ROBERT L. BURHANS, of Peoria, for appellant.
DAVIS, MORGAN & WITHERELL, of Peoria, for appellees.
Reversed and remanded.
Mr. CHIEF JUSTICE SOLFISBURG delivered the opinion of the court:
These proceedings originated with the filing with the County Board of School Trustees of Peoria County of a petition to detach certain territory from Gardener School District No. 112, Peoria County, and annex the same to Peoria Heights School District No. 120, Peoria County. On January 17, 1962, the County Board of School Trustees granted the petition detaching the territory from plaintiff District No. 112 and annexing it to defendant District No. 120. A copy of this decision was served upon plaintiff on January 18, 1962.
Thereafter, on February 20, 1962, plaintiff filed its complaint in the circuit court of Peoria County under the *17 provisions of the Administrative Review Act. (Ill. Rev. Stat. 1961, chap. 110, pars. 264-279). Motions to dismiss the complaint were filed by defendants on the ground that it had not been filed within 10 days after the date that a copy of the decision was served upon the party affected thereby, as required by section 4B-5 (new section 7-7) of the School Code (Ill. Rev. Stat. 1961, chap. 122, par. 7-7) and section 4 of the Administrative Review Act.
On April 17, 1962, the circuit court allowed the motions for dismissal, and on April 20, 1962, the order of the circuit court finding the filing of the complaint within the 10-day period to be a condition precedent to the exercise of the court's jurisdiction, and dismissing the plaintiff's complaint and cause of action, was entered. It is from this order of April 20, 1962, that this appeal is taken.
The plaintiff contends the provisions of the School Code and the Administrative Review Act relating to review of decisions of a county board of school trustees are in violation of the Illinois constitution, and particularly article IV, section 22, and article VI, section 29. The jurisdiction of this court on direct appeal rests upon the fact that the validity of a statute is involved.
Prior to 1955 all administrative decisions under the School Code, as well as others under various other statutes now numbering approximately 95, were reviewable on the same basis: e.g. upon complaint in the circuit court filed within 35 days from the date of service of a copy of an administrative decision upon the party thereby affected. In 1955 the General Assembly adopted Senate Bill 469, an amendment to the Administrative Review Act, and Senate Bill 470, an amendment to the School Code, which reduced the time within which complaints for review of decisions of county boards of school trustees could be filed to 10 days from the date of service of a copy of the board's decision.
This appeal then resolves itself into a consideration of whether the 10-day limitation on filing a complaint to review *18 a final administrative decision of the county board of school trustees, as distinguished from the 35-day limitation applicable to all other reviews of administrative decisions under the School Code is a "local or special law" in violation of article IV, section 22, of the constitution, or provides for proceedings and practice in the circuit and superior courts which are not uniform, in violation of article VI, section 29. People ex rel. Reilly v. City of Chicago, 337 Ill. 100, at 105; Keig Stevens Baking Co. v. City of Savanna, 380 Ill. 303, at 310.
The right of appeal is not essential to due process, and is one which may or may not be granted in a given situation as the legislature deems appropriate. (Bagdonas v. Liberty Land and Investment Co. 309 Ill. 103, 108, and cases there cited.) However, defendants' conclusion that since the right may be denied completely, it may also be granted on any terms and subject to any conditions which the legislature may deem appropriate does not necessarily follow. Rather, the legislature, once it undertakes to grant or deny the right, must do so without sacrificing uniformity as to proceedings and practice, and without enacting special legislation. This court has sustained legislation affecting the courts which was attacked on the grounds of lack of uniform application or as being special legislation by finding "rational differences" in the classification of the parties, (Bagdonas case; Saylor v. Duel, 236 Ill. 429; McGinnis v. McGinnis, 289 Ill. 608); and by finding a "reasonable basis" for the classification (Bagdonas case, p. 110; Stewart v. Brady, 300 Ill. 425); and by finding the classification was not "arbitrary". (Bagdonas case; Stewart v. Brady; Louisville, New Albany and Chicago Railway Co. v. Wallace, 136 Ill. 87.) It has been said that "The legislature is not required to be scientific, logical or consistent in its classification". Bagdonas v. Liberty Land and Investment Co. 309 Ill. 103, 109.
But this legislative power is not unbounded, and a *19 reasonable basis for discrimination or classification must be found to exist in order to validate such legislative actions. (Donoho v. O'Connell's, Inc., 18 Ill.2d 432, at 437; People ex rel. Adamowski v. Public Building Com. 11 Ill.2d 125, at 148 and 149.) Obviously the 10-day period is an exceedingly brief time within which to secure from a school board the necessary consideration and action preliminary to filing a complaint to review an adverse decision. The legislative history of these provisions yields no clue to the need for summary action. No reasons have been suggested to us which necessitate such discrimination against those desiring judicial review of a decision of a county board of school trustees. Even in disconnection proceedings changing school district boundaries, any decision by the county board becoming final between September 1 and June 30 of any year does not affect the administration of or attendance at the schools until the following July 1. (Ill. Rev. Stat. 1961, chap. 122, par 7-9.) Defendants call our attention to the 5-day requirement applicable to the filing of notices of appeal under the forcible entry and detainer statute, (Ill. Rev. Stat. 1961, chap. 57, par. 19) as evidence of the legislative authority to differentiate between appeal periods in different types of proceedings. While no constitutional question has been before us on that section, we can conceive of substantial reasons for providing short appeal periods in forcible detainer matters not the least of which may be the possibility of serious or irreparable damage by irresponsible tenants who might otherwise remain longer in possession.
Defendants call our attention to the decision of this court in Board of Education v. Brittin, 11 Ill.2d 411, and of the Appellate Court in Hailey v. County Board of School Trustees, 21 Ill. App.2d 105, as the only two reported cases in which the 10-day filing requirement is mentioned. However, as defendants concede, no question was raised in either case as to the constitutionality of the amendments, and we *20 do not regard these cases as controlling or persuasive on this issue.
The difficulty here lies, not in the absence of legislative power to provide differing periods within which review may be perfected, but in the absence of any "reasonable basis" or "rational difference" for the apparently arbitrary classification here present. Finding no reasonable basis for the restrictive provisions of either of the 1955 amendments, we hold unconstitutional the portions of each requiring the complaint for review to be filed within 10 days following service of a copy of the decision sought to be reviewed upon the party seeking review.
The order of the circuit court of Peoria County of April 20, 1962, is accordingly reversed, and the cause remanded with directions to proceed with a hearing on the merits.
Reversed and remanded, with directions.
Mr. JUSTICE SCHAEFER, dissenting:
It is interesting to note that in none of the cases cited by the majority was the statute involved held invalid. The settled principle that has always governed the decision of cases like this one is stated as follows in Bagdonas v. Liberty Land and Investment Co. 309 Ill. 103, 109-110. "The legislature is not required to be scientific, logical or consistent in its classifications. In order to authorize a judicial review of such classifications it must clearly appear that there is no fair reason for the law that would not require with equal force its extension to others not included. The legislature may determine upon what differences a distinction may be made for the purpose of statutory classification, between provisions otherwise having resemblance, if such power is not arbitrarily exercised and the distinction has a reasonable basis. (Stewart v. Brady, 300 Ill. 425; International Harvester Co. v. Missouri, 234 U.S. 199.) The burden rests upon one attacking the classification in a *21 law to show that it does not rest upon a reasonable basis but that it is arbitrary. A distinction in legislation is not arbitrary if any state of facts can reasonably be conceived that would sustain it, and the existence of such a state of facts at the time the law was enacted must be assumed. Lindsley v. Natural Carbonic Gas Co. 220 U.S. 61; Stewart v. Brady, supra; Louisville, New Albany and Chicago Railway Co. v. Wallace, 136 Ill. 87."
For some reason this settled principle is not applied to this case. The opinion of the majority indicates an awareness of the principle in its discussion of the five-day limitation upon notice of appeal in forcible entry and detainer cases, saying, "While no constitutional question has been before us on that section, we can conceive of substantial reasons for providing short appeal periods in forcible detainer matters not the least of which may be the possibility of serious or irreparable damage by irresponsible tenants who might otherwise remain longer in possession."
But when it deals with the statute actually before the court, the majority puts the burden of establishing the validity of the legislative classification upon the litigant who seeks to sustain the validity of the legislation. The complications that attend delay in settling school district boundaries are obvious. Until the boundaries are settled neither school district can know the number of pupils that will attend, the number of teachers and classrooms that will be required, or the number of school buses and drivers of school buses that will be needed. Changes in tax rates may be required, and it may be necessary to issue bonds to provide essential facilities. Yet the majority refuses to conceive of any substantial reasons that justify an unusually expeditious appeal.
These same complications account for the legislative provision that defers the effective date of a change in school district boundaries during the school year. This provision is referred to by the majority as a reason for invalidating *22 the expeditious-appeal provision actually before us. Yet this provision is itself a deviation from the kind of rigid uniformity that the majority demands, for other school administrative decisions become effective at once. It can be sustained only by exactly the same considerations that are held insufficient to sustain the expeditious appeal.
The majority opinion can only serve to cast doubt upon a large number of familiar procedural departures from absolute uniformity. The development of the Administrative Review Act, for example, was a slow process. Originally, in 1945, the decisions of 49 administrative agencies were made reviewable under the act. In 1949, 34 more agencies were added (Davis, Review of Administrative Action, 44 Ill. L. Rev. 565, 627) but even today there are agencies whose administrative decisions are not reviewable by this "uniform" method. See e.g. (Commerce Commission) Ill. Rev. Stat. 1961, chap. 111 2/3, par. 72; (Industrial Commission) Ill. Rev. Stat. 1961, chap. 48, par. 138.19.
The constitutional provisions here invoked were not intended to operate as a straitjacket to preclude this kind of gradual procedural development. As we said in Donoho v. O'Connell's, Inc. 18 Ill.2d 432, 437, "the validity of legislation does not depend upon complete comprehensiveness, nor does the constitution require that it conform to an ideal pattern of orderliness." So it is that the Civil Practice Act is applicable to "all civil proceedings, both at law and in equity, in courts of record, except in attachment, ejectment, eminent domain, forcible entry and detainer, garnishment, habeas corpus, mandamus, ne exeat, quo warranto, replevin, foreclosure of mortgages or other proceedings in which the procedure is regulated by separate statutes." Ill. Rev. Stat. 1961, chap. 110, par. 1; see, City of Breese v. Abel, 359 Ill. 579; Toledo, Peoria and Western Railroad v. Illinois Commerce Com. 375 Ill. 35.
I do not understand what is meant by the statement in the opinion that "The legislative history of these provisions *23 yields no clue to the need for summary action." In this State, in the absence of a statutory preamble, or the report of a legislative commission, there simply is no legislative history to explain the purpose of legislation. And instances in which bills contain preambles, or in which there are reports of commissions, are rare exceptions, and not the rule.
Surely the majority cannot mean to hold that the validity of legislation depends upon an existence of some kind of legislative history apart from the ordinary legislative record contained in the Journals of the House and Senate. It may be that the majority has been misled by suggestions contained in the brief of the appellant. It is there stated: "There is no report of any of the Committees evidencing any reason given before a Committee for the change in practice affected by the measures. The Committee records are silent with respect to the substance of any testimony given for or against the Bills." It is difficult to understand what is meant by the appellants' statement that no report of any committee of the House or Senate gave any reasons for the change effected by the bills. Reports of legislative committees do not give reasons. They consist of a simple recommendation that the bill do pass or that the bill do not pass.
Mr. JUSTICE HERSHEY joins in this dissent.
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RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 16b0003p.06
BANKRUPTCY APPELLATE PANEL
OF THE SIXTH CIRCUIT
_________________
In re: BYRON G. JACKSON, ┐
Debtor. │ No. 15-8037
>
│
┘
Appeal from the U.S. Bankruptcy Court - Cleveland
No. 14-13977—Jessica E. Price Smith, Judge.
Decided and Filed: August 4, 2016
Before: DELK, HUMPHREY and OPPERMAN, Bankruptcy Appellate Panel Judges.
_________________
COUNSEL
ON BRIEF: Erika R. Finley, Joseph E. DiBaggio, KAMAN & CUSIMANO, Cleveland, Ohio,
for Appellant. Byron G. Jackson, Shaker Heights, Ohio, pro se.
OPINION
GUY R. HUMPHREY, Bankruptcy Appellate Panel Judge. This appeal concerns
whether the bankruptcy court abused its discretion in determining that a condominium
association violated a debtor’s Chapter 7 discharge in re-scheduling a sheriff’s sale in a pre-
petition foreclosure action upon issuance of the discharge and closing of the case and in
assessing fees associated with the re-scheduling of the foreclosure sale. For the reasons that
follow, the panel finds that the court abused its discretion in sanctioning the association for
violating the debtor’s discharge.
STATEMENT OF ISSUES
The issues on appeal are whether the bankruptcy court abused its discretion in
determining a condominium association violated the chapter 7 discharge order entered in an
individual debtor’s case through the scheduling of a sheriff’s sale to complete a pre-petition
1
No. 15-8037 In re Jackson Page 2
foreclosure, awarding monetary sanctions against the condominium association, and enjoining
the condominium association from re-scheduling the sheriff’s sale.
JURISDICTION AND STANDARD OF REVIEW
The Bankruptcy Appellate Panel of the Sixth Circuit has jurisdiction to decide this
appeal. The United States District Court for the Northern District of Ohio has authorized appeals
to the Panel, and neither party has timely elected to have these appeals heard by the district court.
28 U.S.C. §§ 158(b)(6), (c)(1). A bankruptcy court’s final order may be appealed as of right
pursuant to 28 U.S.C. § 158(a)(1). For purposes of appeal, an order is final if it “ends the
litigation on the merits and leaves nothing for the court to do but execute the judgment.” Midland
Asphalt Corp. v. United States, 489 U.S. 794, 798, 109 S. Ct. 1494, 1497 (1989) (citation and
quotation marks omitted). An order sanctioning a party and imposing a sum certain amount in
damages is a final order. See Church Joint Venture, L.P. v. Blasingame (In re Blasingame),
525 B.R. 675, 678 (B.A.P. 6th Cir. 2015).
A bankruptcy court’s decision to sanction is reviewed for an abuse of discretion.
Badovick v. Greenspan (In re Greenspan), 464 B.R. 61, 2011 WL 310703, at *1 (B.A.P. 6th Cir.
Feb. 2, 2011) (table) (citing B-Line, LLC v. Wingerter (In re Wingerter), 594 F.3d 931, 936 (6th
Cir. 2010)). See also Mayor and City Counsel of Baltimore v. W. Va. (In re Eagle Picher Indus.,
Inc.), 285 F.3d 522, 527 (6th Cir. 2002) (equitable determinations subject to an abuse of
discretion standard) (citations omitted). “An abuse of discretion is defined as a ‘definite and firm
conviction that the [court below] committed a clear error of judgment.’” Id. at 529 (internal
citation omitted). The particular factual findings of the bankruptcy court are reviewed for “clear
error.” Behlke v. Eisen (In re Behlke), 358 F.3d 429, 433 (6th Cir. 2004) (citations omitted).
Sanctions premised “upon an erroneous view of the law or an erroneous assessment of the
evidence are necessarily an abuse of discretion.” In re Royal Manor Mgmt. Inc., 525 B.R. 338,
346 (B.A.P. 6th Cir. 2015) (citing Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.
Ct. 2447, 2461 (1990)).
No. 15-8037 In re Jackson Page 3
FACTS
On June 19, 2014 the debtor Byron Jackson (“Jackson”) filed, pro se, a petition for relief
under Chapter 7 of the Bankruptcy Code. On July 9, 2014 mortgagee Bank of America
(“BOA”), moved for relief from stay and for abandonment of real property located at 16100 Van
Aken Boulevard #402, Shaker Heights, Ohio (the “Condominium”). The Condominium was
listed on Jackson’s petition as his residence. In addition to seeking relief from the stay, BOA
sought in rem relief for two years under 11 U.S.C. § 362(d)(4)(B), alleging a substantial
arrearage on the mortgage loan and also noting prior bankruptcy filings, either by Jackson or one
of his parents, that included the Condominium as scheduled property. Jackson’s objection to the
motion was overruled and the relief was granted through an order entered on August 19, 2014.
However, BOA and Jackson entered into a loan modification agreement relating to the
Condominium and the court approved it.1
The Carlton House Condominium Unit Owners Association of Cuyahoga County
(“Carlton House”) filed a similar motion to the BOA motion, seeking relief from the stay,
abandonment, and in rem relief. The significant difference was it sought a permanent in rem
order. At the hearing, Carlton House stated it was seeking in rem relief because of the multiple
bankruptcy filings related to the Condominium. The bankruptcy court stated that the post-
petition amounts were current “and the issue seems to be the desire to move forward with the
foreclosure for the outstanding [pre-petition] approximately $5,900 is what I’m going to take into
consideration . . . .” September 9, 2014 Hr’g Tr. 8:20-23, ECF No. 121. After a hearing, the
bankruptcy court denied Carlton House’s motion for a permanent in rem order for lack of cause.
The language of the court’s order suggests that the court found the two year in rem bar sufficient:
1
This apparent contradiction in BOA’s approach to this mortgage loan is explained in that the loan
modification was based upon a settlement BOA entered with the Justice Department. As stated by BOA counsel at
the relief from stay hearing:
The modification had to be offered to the Debtor, because this is a Fannie Mae loan. And
due to the mortgage settlement through the Department of Justice it had to be offered to him as a
streamlined modification. It has been approved. However, notwithstanding the approval, Bank of
America is of a position that this motion isn’t necessarily based on the status of the mortgage . . . .
Our fear is that even with a loan modification the Debtor can default next month, and we would be
back to square one and starting this process all over again and trying to get this property liquidated
for another eight-plus years.
July 22, 2014 Hr’g Tr. 3:10-22, ECF No. 119.
No. 15-8037 In re Jackson Page 4
“[t]he Court previously entered a two year in rem sanction with respect to the same property
. . . .” Order, Dec. 9, 2014, ECF No. 84.
Jackson received his Chapter 7 discharge on December 9, 2014 and the case was closed.
Almost immediately thereafter Carlton House filed a praecipe in the state court foreclosure
action to schedule a sheriff’s sale on the Condominium. This was the final step in a foreclosure
action commenced in the Cuyahoga County Court of Common Pleas in January 2008 by
Countrywide Home Loans, BOA’s predecessor. Carlton House and Countrywide previously
obtained a decree of foreclosure in July of 2009.2 Carlton House Condo. Unit Owners Ass’n of
Cuyahoga County’s Response in Opposition to Debtor’s Motion to Reopen Bankruptcy Case at
16-20, Jan. 27, 2015, ECF No. 97. The judgment stated that “upon issuance of a Praecipe for
Order of Sale by Plaintiff’s attorney and/or Defendant Carlton House’s attorney, the Clerk of
Court must issue an order of Sale to the Sheriff commanding him to . . . sell the premises as upon
execution and according to law, free and clear of the interest of all parties to this action.” Id. at
19.
On January 21, 2015 Jackson moved to re-open his bankruptcy case for two reasons. The
first was to avoid Carlton House’s liens pursuant to 11 U.SC. § 522(f)(1)(A). The court rejected
this reason at the hearing on the motion to re-open, recognizing that Carlton House’s liens were
statutory under Ohio law, not judicial, and therefore could not be avoided pursuant to that section
of the Bankruptcy Code.3 The second asserted reason was that Carlton House was attempting to
collect discharged debts. Jackson wanted the bankruptcy court to “vacate and or stay the Sheriff
Sale set for February 9, 2015” on the Condominium. Motion to Reopen Case No. 14-13977
Under 11 U.S.C. 350(b) and to Vacate/Stay Sheriff Sale Set for February 9, 2015 and Request to
Expedite Emergency Hearing at 2, Jan. 21, 2015, ECF No. 93.
At a January 28, 2015 hearing the bankruptcy court expressed its concern that Carlton
House’s continuation of the foreclosure lacked a legitimate purpose because Carlton House was
2
Carlton House was a necessary party to the foreclosure. Ohio Rev. Code § 5311.18(B)(3).
3
The statutory lien extends to all “expenses that are chargeable against the unit and that remain unpaid for
ten days after any portion has become due and payable.” Ohio Rev. Code § 5311.18(A)(1). The lien becomes
effective upon the date a certificate of lien is filed with the county recorder in the county where the property is
situated. Ohio Rev. Code § 5311.18(A)(3).
No. 15-8037 In re Jackson Page 5
unlikely to receive funds from a sheriff’s sale. Counsel for Carlton House told the bankruptcy
court:
[s]o the Board of Directors, they have an obligation, a duty, to stop the bleed, to
get a new homeowner into this property who is going to have the intent to pay
fees. Whereas, the current owner, as evidenced by the total delinquency, has not
expressed that desire or intent to resolve this matter with the Association.
Therefore, it is the only judicial remedy at this point in time.
Jan. 28, 2015 Hr’g Tr. 9:10-17, ECF No. 122. The court responded that:
Okay. But – and, again, the last statement that you made about expressing an
intent to resolve this makes it seem[] like the point of this foreclosure is to get the
payment part of it resolved, because there actually isn’t the possibility for
payment in this foreclosure. That’s what I’m concerned with.
Id. at 9:18-24. The court acknowledged that the state court previously granted a decree of
foreclosure and Carlton House was not required to show any equity under state law but
nevertheless was concerned that “the purpose [is] to really force payment as opposed to foreclose
and obtain in rem relief[.]” Id. at 10:19-20. The court entered an order re-opening the case to
determine whether the foreclosure was a disguised in personam action against Jackson, in
contempt of the discharge order.
The contempt hearing was scheduled on an expedited basis.4 Carlton House appeared at
the hearing through counsel and sought admission of one exhibit, a statement of fees owed.
Carlton House did not have a witness to authenticate the document and the bankruptcy court
determined that, without admissible evidence, Carlton House was “in violation of the show cause
order.” Feb. 6, 2015 Hr’g Tr. 4:2, ECF No. 123. Further, the court ordered that “[t]he sale that
is scheduled for Monday [February 9, 2015] is ordered to be stopped, and we will have a further
hearing on whether additional sanctions are appropriate.” Id. at 4:3-5. The bankruptcy court
further stated it was “perplexed” why “the condo association didn’t just recertify the post-
petition, post-discharge liens and proceed in a new [foreclosure] action and thereby making this
4
Prior to the reopening of the case, Jackson did not file a separate contempt motion. After the hearing was
re-scheduled from February 6 to March 3, 2015, Jackson filed a sanctions motion and the clerk issued a deficiency
notice for a lack of notice. The bankruptcy court never directly addressed the sanctions motion in its written
decision.
No. 15-8037 In re Jackson Page 6
not even an issue, as opposed to moving forward under questionable circumstances and then not
showing up.” Id. at 4:24-5:5. The hearing was continued to March 3, 2015.
The contempt hearing proceeded on March 3rd. Transactions relating to the ownership of
the Condominium from June 2007, when Jackson acquired it, were reviewed. Exhibit Tender
Sheet, Joint Ex. B, ECF No. 112, Mar. 03, 2015.5 In May 2009 Jackson quitclaimed the
Condominium to his parents. Joint Ex. C. In March 2014 Jackson’s parents quitclaimed the
Condominium back to him, but that deed was not recorded until September 2014, after the
bankruptcy was filed. Joint Ex. D.
Scott Sauter, the chief operating officer of Continental Management, testified on behalf
of Carlton House as its management agent. Sauter testified concerning a post-petition account
statement for condominium fees owed by Jackson (the “Account Statement”). Joint Ex. A. The
statement ran from July 2014, after the petition date, through February 28, 2015. Sauter stated
the pre-petition account statement was not used, so Continental Management was only
addressing the post-petition fees due. Referencing the Account Statement, Sauter testified that
Jackson made three post-petition payments and at the time of the hearing the delinquent post-
petition balance was $3,300.76.
Sauter also explained the charges on the Account Statement, including a $390.81 “A1”
charge entered each month for Carlton House’s maintenance fee, various $25 administrative fees
for late monthly payments, and a monthly $83.29 “C1” charge for reserves for long-term repairs.
He testified that the Account Statement also includes a January 7, 2015 $802.95 charge for post-
petition “attorney fees.” Of the $802 charged, Sauter testified that “about 600, $612” was for
filing a praecipe to schedule the sheriff’s sale. Mar. 3, 2015 Hr’g Tr. 12:22, ECF No. 124. There
was no testimony as to the remaining $200.
Additionally, Sauter testified that Carlton House pays for water, sewer, and gas for all the
units. However, each unit must reimburse Carlton House for the cost of gas. If a unit owner
does not pay, the other unit owners are responsible for paying those costs from their assessments.
5
All the admitted exhibits may be found in the Exhibit Tender Sheet, ECF No. 112, Mar. 3, 2015.
No. 15-8037 In re Jackson Page 7
The next witness was Charles Burkett, Jr., the Treasurer of the Carlton House Board.
Burkett was asked about the previously scheduled sheriff sale.
Q. And were you aware that Carlton House Condominium Association ordered a
sheriff’s sale on this property?
A. Yes.
Q. And why did the Association order a sheriff’s sale?
A. Because we were legally entitled to do so. And as part of our collection policy,
we pursue all options that we’re legally entitled to take. It’s fairly
straightforward, and that’s a policy that’s in force regardless of who the person is
who may be delinquent. If I were to fall delinquent, I would expect that my
colleagues would enforce the same procedure against me.
Q. And does the board have any duty to do that?
A. Absolutely.
Q. Could you explain?
A. We have a fiduciary responsibility to the rest of the unit owners, many of
whom are elderly people on fixed incomes. And to the degree that one unit owner
doesn’t pay, then the other unit owners have to pay, which means that
maintenance fees go up. And for people who are on fixed incomes, as we
discussed at our last annual meeting, that can be very concerning. Because for
many of the retired people, their income doesn’t go up. So if we have to raise
fees, then that poses a real hardship.
...
Q. And what contributing factors, if any, in terms of finances have led to any
financial deficiencies?
A. The foreclosures that have occurred in the building, unit owners who don’t pay
is really the Achilles heel. And in this case it’s gone on since 2007, so it’s been
detrimental to the financial health of the building.
Mar. 3, 2015 Hr’g Tr. 16:9-17:8; 18:3-9, ECF No. 124 (emphasis added).
Jackson testified on his own behalf at the hearing. He stated that he made payments
which were not included on the Account Statement. Jackson agreed $474.10 was listed as a
payment made on November 4, 2014, but indicated he made additional payments between
September 4, 2014 and November 2014. He later indicated that the additional payment may
have been late October or early November, but had no receipt for that additional payment.
No. 15-8037 In re Jackson Page 8
Jackson testified that he received the post-petition statement by mail but could not recall the date.
Id. at 23-27.
At the conclusion of the hearing, the court ruled in favor of Jackson in an oral decision.
The court stated that:
Taking a look at the posture of this case, where we have the value of the property
being significantly lower than what the first lien on the property is and the value
of the condominium association liens, which would have come after, that coupled
with the testimony with respect to the shortfall in the accounts leads me to the
conclusion that the purpose of moving forward with the foreclosure was an
attempt to force payment of the outstanding amounts.
Id. at 59:15-24. The court further noted that:
And though I understand the condominium association followed its counsel in
believing that it was appropriate to continue the foreclosure, I find that the
continuation of the previous foreclosure is a violation of the discharge.
In addition to that finding, having reviewed the documents with respect to what
was paid and what was believed to have been paid, I make the following findings:
The statement credits that were presented by the condominium association show
that as of March 1, 2015, there was $5,138.65 that was due. That amount
included $2,132.95 for attorney’s fees. The testimony presented demonstrated
that based upon the receipts that were presented and the recollection of Mr.
Jackson that there would have been $2,434.29 that was paid.
Reviewing all the information, I make the following determination: The sanctions
in this case will be as follows. For violation of the discharge injunction, the
attorney’s fees of $2,132.95 shall be waived and removed from the outstanding
balance due by Mr. Jackson. By continuing the initial foreclosure, which created
the $800 charge, that was the initial violation. And then the continuing fees
which accrued in connection with defending this action and stopping that
foreclosure would be a continuation of that violation. And so those are all
removed.
There is an additional sanction of $474.10 recognized for the October payment
that was alleged to be made but does not appear to be on the statement, and then a
credit of $25 for the September payment, where the money order shows that it
would have been purchased before the September 10 date for the assessment of a
late fee but was not applied until November of 2015.
There is credit given for the $482.89 payment that was made in February but has
not yet been received. So at present there would be an outstanding balance due to
the condo association of $2,497.81. It is – that still is the amount due. That
amount is going to remain due and owing. And as [to] what I believe should have
No. 15-8037 In re Jackson Page 9
occurred in this case, the condo association is within its right if that amount is not
paid to begin the foreclosure again.
So as a recap, this continuation of the foreclosure should not have happened. You
have a situation here where you have on-going post-petition fees that can be
certified, and that foreclosure can be done. There was a modification in the
original case that concluded the underlying foreclosure. And although I
appreciate the condo association and their counsel intending to ride the coattails
of that action, because of the nature of the action and the – what appears to have
been the intent of this action, the appropriate action would have been to institute
your own foreclosure for the post-petition amounts that were not paid, not to
continue the pre-petition amount . . .
Id. at 60:2-62:7 (emphasis added).
On September 25, 2015 the bankruptcy court entered its “Memorandum of Opinion and
Order.” ECF No. 125 (In re Jackson, 539 B.R. 327 (Bankr. N.D. Ohio 2015)). The bankruptcy
court re-stated its legal conclusion that the foreclosure by Carlton House was an attempt to
coerce Jackson to pay the pre-petition fees owed on the Condominium. The court noted that
Carlton House stated it had no intention of resolving the payment issue and therefore “compelled
[Jackson] to resolve the issue by entering into payment arrangements for the discharged debt, or
lose his home. Based on these facts, I find that Carlton House scheduled the foreclosure sale in
order to induce Debtor to pay a debt for which he is no longer personally liable.” Id. at 332.
DISCUSSION
I. The Bankruptcy Court’s Conclusion that the Foreclosure was a “Disguised”
In Personam Collection of Discharged Debts was an Abuse of Discretion
While a debtor may not pursue a private right of action for a violation of the discharge by
a creditor under § 524 of the Bankruptcy Code, he may pursue a motion for contempt of the
discharge order. Pertuso v. Ford Motor Credit Co., 233 F.3d 417, 421 (6th Cir. 2000).
Contempt is a violation of “a definite and specific order of the court requiring him to perform or
refrain from performing a particular act or acts with knowledge of the court’s order.” Elec.
Workers Pension Trust Fund of Local Union # 58, IBEW v. Gary’s Elec. Serv. Co., 340 F.3d
373, 379 (6th Cir. 2003) (internal citation omitted). It was Jackson’s burden to show, by clear
and convincing evidence, that Carlton House knowingly violated the discharge order. In re
Franks, 363 B.R. 839, 843 (Bankr. N.D. Ohio 2006) (citations omitted). Carlton House does not
No. 15-8037 In re Jackson Page 10
dispute it was aware of the discharge order and that its representatives intended their actions, but
only whether those actions did in fact violate the discharge order.
The discharge of personal obligations through a Chapter 7 discharge does not terminate a
secured creditor’s in rem rights unless the creditor’s lien was avoided during the bankruptcy.
Carlton House’s Ohio statutory lien continued post-discharge. Thus, while Carlton House was
not entitled to proceed in personam against Jackson for discharged pre-petition debts, it could
proceed in rem against the Condominium for all sums secured by the lien, both prepetition and
post-petition.
The bankruptcy court stated that “[r]eviewing the testimony of witnesses, and noting that
none of Carlton House’s witnesses stated that replacing Debtor with a paying unit owner was a
motivating factor in scheduling the sheriff’s sale, the Court finds that Carlton House scheduled
the sale of the condominium unit in order to obtain the funds it needed to maintain and repair the
property.” In re Jackson, 539 B.R. 327, 332 (Bankr. N.D. Ohio 2015). However, the testimony
of Burkett was clear that Carlton House was struggling to address concerns arising out of home
owners being delinquent on their condominium assessments and fees. The delinquency owed to
Carlton House for the Condominium had been an issue since 2007. Burkett’s testimony was
consistent with Carlton House’s legal position that the foreclosure was in order to “stop the
bleed” and have a reliable, paying owner take title to the Condominium.6
The bankruptcy court concluded that “[b]ut, by scheduling the sheriff’s sale, [Jackson] is
compelled to resolve the issue by entering into payment arrangements for the discharged debt, or
lose his home.” Id. at 332. The court concluded that the foreclosure sale was scheduled to
induce payment of discharged pre-petition condominium fees. However, all foreclosure litigation
potentially can induce payments of discharged debt to avoid a foreclosure sale, since a lien, like
the statutory lien of Carlton House, applies to all the underlying indebtedness – whether
discharged personally as to the property owner or not. The evidence is that Carlton House
6
It appears that the bankruptcy court gave significant weight to a statement of Carlton House’s counsel
during the hearing on the motion to reopen: The contempt decision stated that Carlton House alleges that “[Jackson]
had expressed no intent to resolve the payment issue, and that it was its policy to reject current payments without a
payment arrangement, because there was a foreclosure pending.” In re Jackson, 539 B.R. 327, 330 (Bankr. N.D.
Ohio 2015). But the evidence at the contempt hearing showed that such a policy was based on the conclusion that
unless the arrearages could be paid, the best decision for Carlton House was to foreclose to “stop the bleed.”
No. 15-8037 In re Jackson Page 11
wanted Jackson removed from the Condominium due to the arrears owed and Jackson’s history
of failing to reliably pay the dues and assessments owed. The only legal redress available to
Carlton House was completing the long delayed foreclosure by scheduling the sheriff’s sale. The
bankruptcy court’s reasoning, left to stand, would allow bankruptcy courts to second-guess a
state court foreclosure order, conducted in compliance with state law (as further addressed
below), as a disguised effort to collect discharged debts.
The bankruptcy court appeared to give little weight to the unique situation of a
condominium (or similar) association. Carlton House is not a garden variety mortgagee or lien
holder. It has statutory obligations to other unit owners under Ohio law. See Ohio Rev. Code
§ 5311.041(B) (stating that common expenses such as administration, maintenance, security, and
recreation facilities shall be determined on a per unit basis). Carlton House had reason to be
concerned that, without a foreclosure sale, Jackson may not pay the ongoing post-petition fees
and assessments or the arrears that existed at the time of discharge. The bankruptcy court also
did not consider how the multiple prior bankruptcy filings and transfers of the Condominium to
insiders informed Carlton House’s decision-making process.
The court focused on the lack of equity in the Condominium due to the primacy of the
mortgagee’s lien. The bankruptcy court did not consider that: (1) the costs of completing the
foreclosure would be paid to Carlton House;7 (2) that the burden was on Jackson to show
contempt; and (3) that the sale price for a foreclosure cannot be known until the sale actually
occurs. By not considering such factors, the bankruptcy court effectively imposed an “equity
requirement” that is not part of the Ohio foreclosure sale process and, again, misunderstands the
motivation of Carlton House. The conclusion that Carlton House was pursuing this matter as a
disguised in personam action is an abuse of discretion.
7
The foreclosure decree provided that the sheriff would pay the costs of the action, including the costs
Carlton House spent scheduling the multiple sheriff sales in the past. Carlton House Condo. Unit Owners Ass’n of
Cuyahoga County’s Response in Opposition to Debtor’s Motion to Reopen Bankruptcy Case, Ex. C, ECF No. 97,
Jan. 27, 2015.
No. 15-8037 In re Jackson Page 12
II. The Injunction Prohibiting Carlton House from Enforcing the Prepetition
Foreclosure Judgment was an Abuse of Discretion
As part of its remedy, the bankruptcy court erroneously enjoined Carlton House from
further enforcement of its prepetition foreclosure judgment: “Carlton House may not proceed
with any further action to prosecute the pre-petition foreclosure or the attendant sale.” In re
Jackson, 539 B.R. 327, 333 (Bankr. N.D. Ohio 2015). However, due to the doctrine of lis
pendens, codified at Ohio Revised Code § 2703.26, it may be legally impossible for Carlton
House to exercise the option the bankruptcy court suggested, a new post-petition foreclosure,
because an action is already pending. See Avco Fin. Servs. Loan, Inc. v. Hale, 520 N.E.2d 1378
(Ohio Ct. App. 1987) (“[W]hile the foreclosure action . . . is pending, no other action may be
commenced concerning the property.”); Martin, Rochford & Durr v. Lawyer’s Title Ins. Corp.,
619 N.E.2d 1130, 1131 (Ohio Ct. App. 1993) (lis pendens applies between the time of the
foreclosure judgment and the sheriff’s sale).
Regardless, mandating that Carlton House pursue a separate post-petition foreclosure is
inconsistent with the state court foreclosure decree. Rather than confine the contempt remedy to
addressing any improper in personam collection, the bankruptcy court effectively permitted a
collateral attack on that state court foreclosure judgment in not allowing that judgment to be
effectuated by Carlton House under any circumstances. The foreclosure judgment is a property
interest which replaced its lien and it is entitled to enforcement as part of Carlton House’s in rem
rights.
Finally, while the court acknowledged that a creditor such as Carlton House retains its in
rem rights if the creditor’s lien is not avoided in the bankruptcy, the court refused to allow
Carlton House to exercise those in rem rights as to the prepetition amounts owed. The stated
rationale was that Carlton House was only enforcing its in rem rights to coerce the Debtor into
paying the prepetition fees owed. As explained, the record does not support that conclusion, but,
looking beyond this fact pattern, such a standard would chill secured creditors’ exercise of their
in rem rights. Again, any exercise of in rem rights includes either the intended or unintended
consequence of requiring the debtor to voluntarily cure arrearages, including prepetition
arrearages, or face the loss of the collateral. A foreclosure does not distinguish between
No. 15-8037 In re Jackson Page 13
prepetition and post-petition amounts owed. While such a distinction is, of course, crucial if a
creditor is attempting to collect from the debtor personally and not against the property, for in
rem purposes, the creditor may enforce its lien as to all sums due, not just post-petition arrears.
III. The Bankruptcy Court Abused its Discretion in Determining That Carlton
House’s Post-Petition Assessment of “Attorney Fees” Related to the
Scheduling of the Foreclosure Sale Violated Jackson’s Discharge
The bankruptcy court found that the $802 in post-petition “attorney fees”8 should not
have been charged to Jackson, but only in rem to the Condominium as part of the state court
foreclosure. Jackson, 539 B.R. at 333 . The court found the attempt to collect these fees was an
attempt to setoff discharged pre-petition obligations. Id.9
As an initial matter, Carlton House may charge reasonable attorney fees under state law
to collect delinquent obligations. See Nottingdale Homeowners’ Assoc., Inc. v. Darby,
514 N.E.2d 702, 707 (Ohio 1987) (requiring unit owner to pay attorney fees associated with a
foreclosure action is not void as against public policy, if the fees are “fair, just and reasonable”);
See also Ohio Rev. Code § 5311.18(A)(2)(c) (unit owners’ association’s lien includes delinquent
collection costs and attorney fees). Carlton House cannot charge attorney fees to collect
discharged in personam debts, however, because that would violate the debtor’s discharge.
The bankruptcy court believed that Carlton House was required to initiate a new post-
petition foreclosure to collect attorney fees because the scheduling of the foreclosure sale was an
attempt to collect a pre-petition debt. The bankruptcy court cited Siegel v. Fed. Home Loan
Mortg. Corp., 143 F.3d 525 (9th Cir. 1998). In Siegel, a debtor pursued a post-petition tort and
breach of contract action against a mortgagee related to foreclosures upon two properties in
which he had an ownership interest. The action was barred by res judicata because the debtor
8
As noted, about $600 of the $802.95 in attorney fees was the court fee for the post-petition, post-discharge
praecipe required by the state court to schedule the sheriff’s sale.
9
The evidence of the attempt to collect from Jackson, beyond the foreclosure itself being interpreted as a
“disguised” in personam action, was the single Account Statement sent to Jackson post-discharge. The $802.95 in
“attorney fees” was included in that Account Statement. It was unclear from the record if the Statement was sent as
a routine matter of collection, condominium policy, or as part of the foreclosure procedure. Neither party addressed
at the hearing the reason Carlton House sent it despite the fact it is the only possible evidence of a post-discharge
attempt to collect funds from Jackson. Ultimately, the bankruptcy court’s decision is mostly based on the
conclusion that the foreclosure was a disguised in personam action.
No. 15-8037 In re Jackson Page 14
failed to object to the mortgagee’s proof of claim during the bankruptcy. Relevant to the instant
case, the mortgagee was awarded attorney fees in defending the tort and breach of contract
action. The debtor argued that the attorney fee claim was discharged in the bankruptcy, along
with the pre-petition note. The Ninth Circuit found that the debtor did not have any personal
liability for the pre-petition note or related attorney fees or costs. However, because the debtor
pursued a separate post-petition action, the mortgagee defendant could be awarded attorney fees.
In this appeal, the bankruptcy court construed the post-discharge foreclosure sale and the
sending of the Account Statement that included all post-petition costs, including the $802, as
impermissible because it was an attempt to offset the costs of collecting a pre-petition debt. The
court seemed to suggest if the fees were related to a post-petition foreclosure, the fees would be
acceptable: “[h]ere, the attorney fees charged to [Jackson] were not incurred by his initiating
new, post-petition litigation on pre-petition claims of Carlton House.” Jackson, 539 B.R. at 333.
However, the fees are not a setoff of any discharged obligation, but instead a post-petition charge
owed by Jackson, as a unit owner of Carlton House. Further, the bankruptcy court, citing Siegel,
stated that “[w]hen the possibility of a claim against the debtor was fixed and entirely out of his
hands before he entered bankruptcy and liability was contingent upon what others might do, the
debt is discharged.” Id. Jackson voluntarily continued to maintain his interest in the
condominium post-petition and Carlton House had ongoing post-petition obligations that are not
related to the in personam collection of a pre-petition debt. Siegel is inapposite.
The effect of a Chapter 7 discharge on the post-petition obligations owed to
condominium associations is addressed by Bankruptcy Code § 523(a)(16):
A discharge under section 727 . . . does not discharge an individual from any debt—
...
for a fee or assessment that becomes due and payable after the order for relief to a
membership association with respect to the debtor’s interest in a unit that has
condominium ownership . . . for as long as the debtor or the trustee has a legal,
equitable, or possessory ownership interest in such unit . . . but nothing in this
paragraph shall except from discharge the debt of a debtor for a membership
No. 15-8037 In re Jackson Page 15
association fee or assessment for a period arising before entry of the order for
relief in a pending or subsequent bankruptcy case.10
11 U.S.C. § 523(a)(16). This section resolves any issue as to Carlton House’s fees or
assessments being deemed pre-petition as long as those fees or assessments are “due or payable”
post-petition regardless of when the claim arose. See In re Barr, 457 B.R. 733, 737 (Bankr. N.D.
Ill. 2011) (“The special Assessment was made two months after the petition date and did not
become due or payable until after that date. This result is in conformity with the legislative
intent of the statute because the Debtors have enjoyed the benefits of post-petition ownership and
possession.”); In re Langenderfer, 2012 Bankr. LEXIS 1809, at *4-8, Case No. 10-31741
(Bankr. N.D. Ohio Apr. 23, 2012) (debtor with legal title to the condominium could not
discharge post-petition fees or assessments). Neither the parties nor the bankruptcy court in its
oral or written decision addressed § 523(a)(16). However, under its plain meaning, the court fee
of $600 for the praecipe and the balance of $202 in unspecified post-petition attorney fees are
each a “fee.” See In re Burgueno, 451 B.R. 1, 4 (Bankr. D. Ariz. 2011) (post-petition attorney
fees constitute a “fee” within the meaning of § 523(a)(16)); Oakland Ridge Homeowners Assoc.
v. Braverman (In re Braverman), 463 B.R. 115 n. 5 (Bankr. N.D. Ill. 2011) (citing In re
Burgueno, 451 B.R. at 4-5) (“Even if the Declaration did not specifically make the Association’s
attorney’s fees an assessment, the fees are at least arguably a “fee” for purposes of section
523(a)(16).”). The record does not provide any evidence that the $802.95 in charges are
inconsistent with Jackson’s continuing, post-petition obligation to pay fees and assessments to
Carlton House. Those charges were not discharged because they were “due or payable” post-
petition and cannot be a basis for finding Carlton House violated Jackson’s discharge.
10
Liability of Chapter 13 debtors for post-petition condominium association fees and assessments has
generated a fair amount of case law. The reason is that § 1328 does not list § 523(a)(16) debts as an exception to a
Chapter 13 discharge. See, e.g. Foster v. Double R Ranch Assoc. (In re Foster), 435 B.R. 650, 658-59 (B.A.P. 9th
Cir. 2010) (§ 523(a)(16) discharge exception does not apply to the chapter 13 discharge under § 1328(a)). See also
Maple Forest Condo. Ass’n v. Spencer (In re Spencer), 457 B.R. 601 (E.D. Mich. 2011) (reviewing the past case law
theories and deciding, whether viewed as a contractual right or a property right, assessments of condominium fees
post-petition are post-petition claims that are not subject to the debtor’s discharge); In re Kahn, 504 B.R. 409
(Bankr. D. Md. 2014) (stay lifted in Chapter 13 due to unpaid post-petition assessments; however, court noted, upon
plan consummation, all assessments would be discharged and the condominium association would be limited to in
rem relief). The Panel expresses no opinion on the dischargeability of condominium fees and assessments in
Chapter 13.
No. 15-8037 In re Jackson Page 16
CONCLUSION
For the reasons stated, the bankruptcy court’s decision is reversed and the sanctions order
is vacated in its entirety.
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64 F.3d 657
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.Timothy LAYTON, Plaintiff-Appellant,v.EASTERN REGIONAL JAIL; Jerry L. Detrick, JailAdministrator; Billy B. Burk; Edward J. Rudolph;Correctional Officer Reed, # 1,Defendants-Appellees.
No. 95-6582.
United States Court of Appeals, Fourth Circuit.
Aug. 11, 1995.Submitted: July 25, 1995Decided: August 11, 1995
Timothy Layton, Appellant Pro Se.
Chad Marlo Cardinal, Asst. Atty. Gen., Jeffrey K. Matherly, Darrell V. McGraw, Jr., Office of the Atty. Gen. of West Virginia, Charleston, WV, for Appellees.
Before WILKINS, NIEMEYER, and MICHAEL, Circuit Judges.
PER CURIAM:
1
Appellant appeals from the district court's order denying relief on his 42 U.S.C. Sec. 1983 (1988) complaint. 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. Layton v. Eastern Regional Jail, No. CA-91-25-2 (N.D.W. Va. May 10, 1993; Apr. 7, 1995). 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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805 F.2d 517
124 L.R.R.M. (BNA) 2126, 105 Lab.Cas. P 12,113,22 Fed. R. Evid. Serv. 100
UNITED STATES of America, Plaintiff-Appellee,v.Freeman LAVERGNE and Mose Collins, Defendants-Appellants.
No. 86-4212.
United States Court of Appeals,Fifth Circuit.
Nov. 24, 1986.
John D. Giulio, Baton Rouge, La., for Lavergne.
Anthony J. Marabella, Jr., Rosemary A. Bickford, Baton Rouge, La., for Collins.
Joseph S. Cage, U.S. Atty., Dosite H. Perkins, Jr., Asst. U.S. Atty., Shreveport, La., Thomas B. Thompson, Asst. U.S. Atty., Lafayette, La., for the U.S.
Appeals from the United States District Court for the Western District of Louisiana.
Before GEE, POLITZ and WILLIAMS, Circuit Judges.
JERRE S. WILLIAMS, Circuit Judge:
1
Appellants Freeman Lavergne and Mose Collins appeal their convictions for conspiracy and embezzlement stemming from their activities as business manager and secretary/treasurer, respectively, of the local chapter of a labor union in Lake Charles, Louisiana. We affirm their convictions.
I.
2
Appellants Lavergne and Collins were members of the Construction and General Laborer's Local Union No. 207 of the Laborer's International Union of North America [hereinafter "Local 207"], located in Lake Charles, Louisiana. Lavergne served as Local 207's Business Manager and Collins served as its Secretary/Treasurer, both for almost twenty years. Appellants' responsibilities entailed in part travelling to various locations nationwide to carry out the general business affairs of Local 207.
3
Lavergne occupied a position of trust in the union. He was responsible for the management of the local, and he performed his duties subject to approval by the membership of Local 207. Collins was entrusted with the receipt of all monies payable to Local 207 and to its members as a group, and he had the authority to sign all checks on Local 207's account. He was also responsible for keeping proper financial records and minutes of meetings and for providing the membership with a monthly report detailing the financial condition of the local.
4
Appellants were indicted with twelve counts of conspiracy and embezzlement in violation of 29 U.S.C. Sec. 501(c) and 18 U.S.C. Sec. 2. Count I of the indictment asserted that from February 1967 through June 1984 appellants used their positions of authority within the union to conspire to embezzle, steal, abstract and convert to their own uses monies, funds, securities, and assets of Local 207. Counts II through VI alleged misuse of appellants' weekly expense allowances and travel advances for expenses when they left town. Instead of using these funds to pay for their expenses, appellants allegedly had credit cards issued to them on behalf of Local 207, without the knowledge or consent of the membership, and used those credit cards to pay for their expenses, pocketing the funds they withdrew from the treasury for expenses.
5
Counts VII through XI specified that appellants orchestrated a pay raise for themselves of three percent of the gross monthly income of Local 207 while giving members the impression that the raise was merely an increase of three percent of their salary.
6
Finally, in Count XII the government alleged that appellant Lavergne used a union credit card to pay $100.00 to Michael Pete, an employee of Calcasieu Truck Lines. Calcasieu is a trucking company owned in part by Lavergne's son Lynn. On August 13, 1981, Comdata, a money wiring service, issued a check for $100.00 to Pete and charged the payment to Local 207's Master Card. Local 207 paid the charge.
7
Appellants moved for a bill of particulars on Counts II through XI, and the district court denied the motion. After denying appellants' subsequent motions for judgments of acquittal, both appellants were tried and convicted by a jury on all counts. Lavergne and Collins were both sentenced to serve five years in prison on each of Counts I through VI, to be served concurrently, and five years of post-imprisonment probation on Counts VIII through XI. In addition, each appellant was fined $10,000.00 on Count VII and ordered to make restitution payments of $82,256.15. Finally, appellant Lavergne was found guilty on Count XII, for which the five year probationary period served as punishment.
8
Appellants appeal their convictions, claiming: (1) the district court committed reversible error in failing to grant their motion for a bill of particulars; (2) that the district court failed to instruct the jury properly on the correct use of the summarizing testimony presented by a government witness and also improperly limited appellants' cross-examination of that witness; (3) the district court incorrectly instructed the jury on the element of fraudulent intent; (4) there was insufficient evidence to support appellants' guilt beyond a reasonable doubt; and (5) the district court improperly denied appellant Lavergne's motion to acquit as to Count XII of the indictment.
II.
9
Appellants argue that the district court committed reversible error in failing to grant their motion for a bill of particulars. Demonstrating reversible error in the denial of such a motion is a heavy burden:
10
The denial of a bill of particulars is within the sound discretion of the trial judge; this Court can reverse only when it is established that defendant was actually surprised at trial and therefore was prejudiced in his substantial rights.
11
United States v. Montemayor, 703 F.2d 109, 117 (5th Cir.1983), cert. denied, 464 U.S. 822, 104 S.Ct. 89, 78 L.Ed.2d 97.
12
Here appellants complain that Counts II through XI of the indictment "merely track the language of the statutes allegedly violated, without giving any hint as to the factual details of the charges." Appellants argue that without a bill of particulars the indictments were so devoid of information that they violated due process. While we note that the specificity of the indictments is disappointing, we find that appellants' rights were not prejudiced by the denial of their motion.
13
On their face, Counts II through XI simply recite that appellants embezzled a certain amount of money during a particular period of time. The time frames set out in some of the counts overlap with time frames in other counts. Not one of Counts II through XI contains a description of the acts by which the described embezzlement was accomplished.
14
An examination of the proof as to counts II through VI, however, reveals that the amounts and dates set out in the indictment correspond to amounts detailed in the list of overt acts in Count I. Each of these five counts corresponds with one of the business trips taken by appellants on which they double-billed their expenses. The time period set out in each count extends from the time when the first advances were given to appellants until the time when the union's credit card bill for the same trip was paid.1 An examination of Counts VII through XI is similarly revealing:2 the allegations recited in those counts are based on appellants' fraudulent three percent increase in salary, recounted in Count I as overt acts 15 through 17.
15
The fact that the indictments are only thus decipherable falls short of the precision desirable in an indictment. But a finding that no bill of particulars was needed also rests on the fact appellants have not made the requisite showing of surprise under the Montemayor test. In fact, appellants have made no claim that they were surprised and thus prejudiced by the facts used to support the government's charges. The government points out that "on at least three occasions, the evidence used at trial and other items were made available for inspection and copying by Appellants' investigators or attorneys." Appellants thus have failed to demonstrate prejudice in their claim of reversible error in the district court's refusal to grant their motion for a bill of particulars.
16
Underlying appellants' argument regarding the bill of particulars is the claim that without such a bill the indictments insufficiently set out the facts and circumstances of the offenses charged. The sufficiency of an indictment is judged by whether (1) each count contains the essential elements of the offense charged, (2) the elements are described with particularity, without any uncertainty or ambiguity, and (3) the charge is specific enough to protect the defendant against a subsequent prosecution for the same offense. United States v. Gordon, 780 F.2d 1165, 1171-72 (5th Cir.1986). Thus, while a defendant is "entitled to a plain concise statement of the essential facts constituting the offenses charged, the indictment need not provide him with the evidentiary details by which the government plans to establish his guilt." Id.
17
The indictment of appellants satisfies this standard. It is true that Counts II through XI allege no facts other than the conclusion that appellants embezzled a particular sum of money during a particular time frame. Taken alone, such charges skirt uncomfortably close to failing the third prong of Gordon 's test. But these facts are not taken alone. In the first place Count I supplies the requisite particularity. Also, Gordon held that a defendant could "rely upon other parts of the present record in the event that future proceedings should be taken against him." Id. By relying on the evidence in the record detailing exactly which charges constituted embezzlement, appellants Lavergne and Collins can avoid a subsequent prosecution for these same offenses. These indictments satisfy the conditions for sufficiency we laid out in Gordon. Appellants' claim of error in the failure of the district court to grant their motion for a bill of particulars must be denied.
III.
18
Appellants' second claim is that the district court failed to instruct the jury properly on the weight of the summarizing testimony presented by a government witness, and also improperly limited appellants' cross-examination of that witness. Under Fed.R.Evid. 1006,3 "one witness's summary of evidence already presented by prior witnesses" is admissible to aid the jury, as long as limiting instructions accompany the summarizing testimony. United States v. Lemire, 720 F.2d 1327, 1347 (D.C.Cir.1983). The witness presenting such testimony is often referred to as a "summary witness." Id. at 1346. In the instant case, the district court's limiting instructions, to which appellants object, contained the following warning to the jury: "[The witness's] summary is not the evidence, the evidence is the documents themselves that he has been referring to."
19
At trial, the district court specifically asked appellants' counsel if the above instruction was satisfactory, to which counsel replied, "That's fine." Beyond appellants' failure to object to the instruction when given is the fact that the charge comports exactly with the directions handed down by this Court in United States v. Diez, 515 F.2d 892, 905 (5th Cir.1975), cert. denied, 423 U.S. 1052, 96 S.Ct. 780, 46 L.Ed.2d 641: "The court should instruct the jury that 'summaries do not, of themselves, constitute evidence in the case but only purport to summarize the documented and detailed evidence already submitted.' " The district court satisfied the Diez standard precisely. Appellants' claim that the district court gave an improper cautionary instruction to the jury is denied.
20
As for the claim that appellants' cross-examination of the summary witness was improperly restricted, we find that the court was well within its discretion. The right of cross-examination is not unlimited, and the trial court has broad discretion to determine what is relevant and material to the issues of credibility and bias. The record discloses that appellants' projected questioning was directed at the number of people involved in investigating appellants. This inquiry was properly ruled not relevant to the guilt or innocence of the accused. Further, the court properly ruled that inquiry as to the presence of the summary witness in the courtroom during part of the trial when the witness had the right to be in the courtroom was an attempt to mislead the jury.
21
In denying a similar claim, this Court held that "[i]nitially, the proponent of the evidence must show that the cross-examination is relevant. [The appellant] failed to make a threshold showing that the evidence ... was relevant ... and we hold that the trial court did not abuse its discretion in prohibiting cross-examination on this subject." United States v. Love, 599 F.2d 107, 109 (5th Cir.1979), cert. denied, 444 U.S. 944, 100 S.Ct. 302, 62 L.Ed.2d 312. Similarly, appellants in this case failed to make a showing of relevance. The district court fairly and efficiently exercised its discretion in limiting appellants' counsel's cross-examination.
IV.
22
Appellants' third claim is that the district court failed to instruct the jury properly on the element of fraudulent intent. Appellants assert that their good faith belief that their actions benefitted the union should completely absolve them of guilt, and that the district court's failure so to instruct constitutes reversible error. Again, however, this objection was not made at trial.
23
Appellants' contention is wrong, for the district court had no duty to instruct the jury on the good faith defense. Appellants were charged with violating 29 U.S.C. Sec. 501(c) for the unauthorized use of Local 207's funds. There are two types of offenses under Sec. 501(c): those involving the misuse of authorized funds, and those involving the unauthorized use of funds. United States v. Dixon, 609 F.2d 827, 829 (5th Cir.1980). In cases of misuse of authorized funds the government must rebut a defendant's good faith defense. But where unauthorized use of funds is involved the government needs only to prove criminal intent. Id. Since appellants here were charged with the unauthorized use of funds,4 the lack of a good faith defense was not an essential element in the prosecution's case.
24
We have recently held that where a charge of improper jury instruction is made,
25
we may reverse only if the defendant was improperly denied the chance to convey his case to the jury; in other words, an abuse of discretion occurs only when the failure to give a requested instruction serves to prevent the jury from considering the defendant's defense.
26
United States v. Hunt, 794 F.2d 1095, 1097 (5th Cir.1986). In the instant case, appellants' primary defense was their good faith belief that their actions were lawful. The substance of that defense was before the jury throughout the entire trial, including at closing argument. Further, the district court's instruction functionally required consideration of the defense of good faith by requiring to the jury to find:
27
that the defendant acted with the specific intent to deceive or cheat for the purpose of either causing some financial loss to another, or bringing about some financial gain to oneself [sic] ...
28
A finding of specific intent to deceive categorically excludes a finding of good faith on the part of appellants. Since the jury was not prevented from considering appellants' good faith, no reversible error could have occurred, whether or not the funds were authorized.
V.
29
Appellants' fourth claim is that the evidence introduced at trial was insufficient to support their guilt beyond a reasonable doubt. When evaluating the sufficiency of the evidence to support a conviction, the evidence must be interpreted in the light most favorable to the government. United States v. Cook, 793 F.2d 734 (5th Cir.1986). Applying that standard to a conviction under Sec. 501(c), we will uphold the conviction only if we find that the evidence "tend[s] inexorably to support an inference of guilt [and is not] equally capable of supporting [a] theory of innocence." United States v. Belt, 574 F.2d 1234, 1239 (5th Cir.1978).
30
We find that the record contains sufficient evidence to uphold appellants' convictions. The government presented witnesses and documents sufficient to establish that appellants Lavergne and Collins controlled the business activities of Local 207 and were entrusted with the Local's funds. The government proved that appellants issued themselves travel advances for expenses, subsequently billed their expenses on the union's credit card, and then used union funds to pay the credit card charges. The jury certainly could conclude that these actions were undertaken with fraudulent intent. Cf. United States v. Durnin, 632 F.2d 1297, 1300 (5th Cir.1980).
31
As for appellants' salary increases, the government offered testimony that the purported authorization by the membership for those increases was not knowingly and intelligently given, and that appellants failed to disclose material information concerning the specific amounts involved in the raises. Both of these evidentiary proofs could properly be considered by the jury in weighing the validity of the authorization relied on by appellants. See, e.g., Ray v. Young, 753 F.2d 386, 392 (5th Cir.1985); United States v. Rubin, 591 F.2d 278, 282 (5th Cir.1979), cert. denied, 444 U.S. 864, 100 S.Ct. 133, 62 L.Ed.2d 87. The jury was presented with testimony sufficient to support a finding that appellants' pay raises were not authorized, but rather were fraudulent exercises of their power as officers of Local 207.
VI.
32
Appellant Lavergne's final argument concerns the sufficiency of the evidence to uphold his conviction on Count XII for violating 29 U.S.C. Sec. 501(c) and 18 U.S.C. Sec. 2 by authorizing the payment of $100.00 to Michael Pete, a driver for Calcasieu Truck Lines.
33
Appellant focuses on the fact that the prosecution never introduced testimony that appellant himself authorized Comdata's issuance of the check to Pete. It is true that neither of the prosecution's two witnesses whose testimony related to Count XII could directly connect appellant with ordering the payment. James Feron Jackson, an employee of Calcasieu, who eventually became the company's Terminal Manager, had no knowledge of the payment at issue. John Ray Hasselbacher, the Director of Corporate Security for Comdata, when asked if he knew who made the phone call to Comdata authorizing the transaction in the instant case, admitted, "I have no idea."
34
Nevertheless, viewing the evidence in the light most favorable to the government, see Glasser v. United States, 315 U.S. 60, 62 S.Ct. 457, 86 L.Ed. 680 (1942), we find that the prosecution presented evidence which a reasonable trier of fact could conclude established guilt beyond a reasonable doubt. United States v. Hernandez, 731 F.2d 1147 (5th Cir.1984). First, Hasselbacher detailed the security procedures used by Comdata to ensure that those who order checks drawn on a credit card are actually authorized to use that credit card. Although he could not testify that he knew that appellant personally ordered the check, Hasselbacher did testify that those security procedures were in place at the time the check was issued. A jury could find with reasonable certainty that Hasselbacher's testimony established that no unauthorized person could have successfully ordered the check through Comdata.
35
Second, as witness Hasselbacher pointed out, had a third party fraudulently ordered the check Comdata would have eventually learned of the fraud when the customer refused to pay the credit card charge. In this case, the customer, Local 207, never complained of any irregularity and in fact paid the credit card bill for the check. Since Lavergne and Collins were the only two members of Local 207 authorized to use the credit card, and were responsible for paying the Local's credit card bills, the jury could conclude beyond a reasonable doubt that appellant Lavergne ordered the payment.
36
Finally, the prosecution did offer a motive for appellant's improper payment: Jackson, the truck line employee, indicated in his testimony that appellant would sometimes provide financial assistance to his son's business. Together, these facts provide a sound basis for the jury to conclude beyond a reasonable doubt that appellant Lavergne illegally authorized the $100.00 payment to Michael Pete.
CONCLUSION
37
Appellants Lavergne and Collins have not shown that the district court committed reversible error in denying their motion for a bill of particulars, in instructing the jury on the use of the summary witness's testimony, in limiting appellants' cross-examination of that witness, or in failing to instruct the jury on the element of fraudulent intent. Appellants have likewise failed to demonstrate that the evidence was insufficient to support their convictions, including Lavergne's conviction as to Count XII of the indictment.
38
AFFIRMED.
1
Count I, the conspiracy count, lists eight specific trips taken by appellants on which they both billed their expenses to Local 207 and received advances intended to cover the same expenses. The facts relating to each trip are grouped by number in the list of overt acts. Then each separate act relating to one trip is assigned a letter in the enumeration. For example, number 7 in the list of overt acts relates to appellants' trip to Hollywood, Florida in 1981. Number 7a details the advance payment of appellants' room deposits. Number 7b details cash advances given to appellants before their trip. Number 7c details the expenses billed by appellants on that trip, for which they had already received advances. The total of these amounts is set out in Count II, and the dates in that count correspond to the same trip to Hollywood
Similarly, Count IV corresponds to the dates and amounts set out in overt act number 11 for appellants' trip to San Francisco; Count V corresponds to the dates and amounts set out in overt act number 12 for appellants' trip to Houston and Las Vegas; and Count VI corresponds to the dates and amounts set out in overt act number 13 for appellants' trip to Baton Rouge.
Count III generally corresponds to the dates and amounts set out in overt act number 10 for appellants' trip to Palm Springs, although there is a slight discrepancy in the indictment. In Count I, overt act number 10c, the indictment alleges that appellants embezzled a total of $901.92. In Count III, the indictment alleges that appellants embezzled $902.12. We find this 20 cent difference to be de minimus, and, further, that it did not cause surprise or otherwise prejudice appellants in any way. See infra Part II.
There is no indication of why the indictment did not include counts relating to overt act number 6 (appellants' 1980 trip to Columbus), number 8 (appellants' June 1981 trip to New Orleans), number 9 (appellants' October 1981 trip to New Orleans), or number 14 (appellants 1983 trip to New Orleans).
2
Count I recites that appellants Lavergne and Collins received an additional $217,103.76 in compensation after they fraudulently increased their salaries. By totalling the amounts allegedly embezzled in Counts VII through XI, the same figure of $217,103.76 is reached. The charge of embezzlement in each of Counts VII through XI, then, is based on appellants' receipt of their salaries during the particular period of time set out in the count
3
Fed.R.Evid. 1006 provides:
The contents of voluminous writings, recordings or photographs which cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation. The originals, or duplicates, shall be made available for examination or copying, or both, by other parties at a reasonable time and place. The court may order that they be produced in court.
4
While appellants claim that their use of the union's fund was authorized, Dixon teaches that "Authorization which is improperly or fraudulently obtained is also treated as lack of authorization." 609 F.2d at 829
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510 U.S. 869
Cowhigv.Stone, Secretary of the Army, et al.
No. 93-200.
Supreme Court of United States.
October 4, 1993.
1
Appeal from the C. A. 1st Cir.
2
Certiorari denied. Reported below: 980 F. 2d 721.
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FILED
United States Court of Appeals
UNITED STATES COURT OF APPEALS Tenth Circuit
FOR THE TENTH CIRCUIT November 4, 2015
Elisabeth A. Shumaker
Clerk of Court
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v. No. 15-8043
(D.C. Nos. 2:07-CV-00322-ABJ &
STEVEN BRADLEY JONES, SR., 2:05-CR-00078-ABJ-5)
(D. Wyo.)
Defendant - Appellant.
ORDER DENYING CERTIFICATE OF APPEALABILITY*
Before HARTZ, O’BRIEN, and BACHARACH, Circuit Judges.
Steven Bradley Jones, Sr. seeks to appeal from the district court’s dismissal of
his “Subject-Matter Jurisdictional Challenge Pursuant to Fed. R. Civ. P. 12(b)(1)” for
presenting unauthorized second or successive 28 U.S.C. § 2255 claims. We deny a
certificate of appealability (COA) and dismiss this matter.1
In 2005, a jury convicted Mr. Jones of conspiracy to possess with intent to
distribute, and to distribute, cocaine base (crack cocaine), and conspiracy to use a
*
This order 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.
1
Mr. Jones did not explicitly request a COA, but because he must have one to
appeal, the court has construed his notice of appeal as a request for a COA.
place where crack cocaine is manufactured, distributed, and used, in violation of
21 U.S.C. §§ 841, 846, and 856. He was sentenced to 300 months’ imprisonment.
After this court affirmed on direct appeal, see United States v. Jones, 468 F.3d 704,
711 (10th Cir. 2006), Mr. Jones unsuccessfully pursued a § 2255 motion, see United
States v. Jones, 437 F. App’x 639, 640-41 (10th Cir. 2011). As relevant to this
appeal, in January 2015, he filed his “Subject-Matter Jurisdictional Challenge
Pursuant to Fed. R. Civ. P. 12(b)(1),” in which he asserted that the district court
lacked jurisdiction to conduct the criminal proceedings against him. He argued that
the indictment was unconstitutionally duplicitous and that the United States had no
standing to respond to his original § 2255 motion (and, by extension, to prosecute
him) because the evidence at his criminal trial was insufficient to show the
United States had suffered an injury in fact. Concluding that the filing was the
equivalent of a § 2255 motion, and therefore was subject to the restrictions on second
or successive § 2255 motions, the district court dismissed it for lack of jurisdiction.
See 28 U.S.C. § 2255(h) (limiting second or successive motions); In re Cline,
531 F.3d 1249, 1251 (10th Cir. 2008) (per curiam) (holding that district court has no
jurisdiction to decide unauthorized second or successive § 2255 claims).
To appeal, Mr. Jones must obtain a COA. See United States v. Harper,
545 F.3d 1230, 1233 (10th Cir. 2008). For a COA, he must show “that jurists of
reason would find it debatable whether the petition states a valid claim of the denial
of a constitutional right and that jurists of reason would find it debatable whether the
-2-
district court was correct in its procedural ruling.” Slack v. McDaniel, 529 U.S. 473,
484 (2000). We need not examine the first Slack prong because Mr. Jones fails to
establish the second prong.
“[A] second or successive § 2255 motion cannot be filed in district court
without approval by a panel of this court.” United States v. Nelson, 465 F.3d 1145
1148 (10th Cir. 2006); see also 28 U.S.C. §§ 2255(h), 2244(b)(3). “It is the relief
sought, not [the] pleading’s title, that determines whether the pleading is a § 2255
motion.” Nelson, 465 F.3d at 1149.
A § 2255 motion is one “claiming the right to be released upon the
ground that the sentence was imposed in violation of the Constitution or
laws of the United States, or that the court was without jurisdiction to
impose such sentence, or that the sentence was in excess of the
maximum authorized by law, or is otherwise subject to collateral
attack.”
Id. at 1148 (quoting 28 U.S.C. § 2255(a)) (emphasis added). Mr. Jones’ filing
alleged that the district court lacked jurisdiction, and therefore the district court
properly treated the filing as the equivalent of a § 2255 motion.
Mr. Jones invokes Fed. R. Civ. P. 15(c), asserting that his claims should relate
back to his original § 2255 proceeding. And he states that his “instant filing seeks to
amend, clarify, and amplify his original § 2255.” Aplt. Br. at v. In Nelson, however,
this court concluded that a post-judgment Rule 15 motion seeking to amend a § 2255
motion was subject to the restrictions on second or successive § 2255 motions.
465 F.3d at 1148-49; see also Gonzalez v. Crosby, 545 U.S. 524, 532 & n.4 (2005)
(stating that a Fed. R. Civ. P. 60(b) motion that seeks to add a new claim or to
-3-
re-litigate a previously raised claim qualifies as a second or successive 28 U.S.C.
§ 2254 application). We see no reason to treat Mr. Jones’ motion differently than the
motion at issue in Nelson.
As stated, Mr. Jones already pursued relief under § 2255. “And because
judgment has been entered on [his] first § 2255 motion, it cannot be disputed that this
is a second or successive § 2255 motion.” Nelson, 465 F.3d at 1149. Further, it is
clear that “if the prisoner’s pleading must be treated as a second or successive § 2255
motion, the district court does not even have jurisdiction to deny the relief sought in
the pleading.” Id. at 1148. For these reasons, no reasonable jurist could debate the
propriety of the district court’s dismissal, for lack of jurisdiction, of Mr. Jones’
“Subject-Matter Jurisdictional Challenge Pursuant to Fed. R. Civ. P. 12(b)(1).”
Mr. Jones’ motion to proceed without prepayment of costs and fees is granted;
however, he is still responsible for filing and docketing fees in the amount of
$505.00. Payment must be made to the clerk of the district court. A COA is denied
and this matter is dismissed.
Entered for the Court
ELISABETH A. SHUMAKER, Clerk
-4-
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 18-4602
UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
CORY RAY CHRISTIE, a/k/a Corey Ray Christie,
Defendant - Appellant.
Appeal from the United States District Court for the District of South Carolina, at
Charleston. Richard Mark Gergel, District Judge. (2:17-cr-00016-RMG-1)
Submitted: March 28, 2019 Decided: April 16, 2019
Before NIEMEYER, KING, and QUATTLEBAUM, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Jill E.M. HaLevi, MEDIATION & LEGAL SERVICES, LLC, Charleston, South
Carolina, for Appellant. Sherri A. Lydon, United States Attorney, Columbia, South
Carolina, Emily Evans Limehouse, Assistant United States Attorney, OFFICE OF THE
UNITED STATES ATTORNEY, Charleston, South Carolina, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Cory Ray Christie pled guilty, without a written plea agreement, to bank robbery
by force, violence, and intimidation, in violation of 18 U.S.C. § 2113(a) (2012). On
appeal, Christie argues that his resulting 240-month sentence is substantively
unreasonable.
At the time Christie committed the charged offense, he was serving a term of
supervised release following a 137-month term of imprisonment for 16 bank robbery
convictions. Based on numerous previous convictions for bank robbery, the probation
officer classified Christie as a career offender. With a total offense level of 26 and a
criminal history category of VI, Christie’s advisory Guidelines range was 120 months to
150 months. See U.S. Sentencing Guidelines Manual ch. 5, pt. A (sentencing table)
(2016).
Before the sentencing hearing, the district court notified the parties that it was
considering an upward variance from the Sentencing Guidelines range. At the hearing,
after adopting the presentence report with minor changes not relevant here, the court
varied upward and sentenced Christie to 240 months’ imprisonment, followed by 3 years
of supervised release. Although it acknowledged Christie’s arguments for mitigation, the
court explained that it did not consider the offense level established by the Guidelines
sufficient “to administer justice fairly, responsibly” while still “protect[ing] the public . . .
from further crimes.” (J.A. 43).
We review a sentence for reasonableness, applying “a deferential abuse-of-
discretion standard.” United States v. Ketter, 908 F.3d 61, 67 (4th Cir. 2018) (internal
2
quotation marks omitted). We must first “ensure that the district court committed no
significant procedural error,” such as improperly calculating the Guidelines range,
inadequately considering the sentencing factors, or insufficiently explaining the chosen
sentence. Gall v. United States, 552 U.S. 38, 51 (2007). If we find no procedural error,
we also must consider the substantive reasonableness of the sentence, “examin[ing] the
totality of the circumstances to see whether the sentencing court abused its discretion in
concluding that the sentence it chose satisfied the standards set forth in § 3553(a).”
United States v. Mendoza-Mendoza, 597 F.3d 212, 216 (4th Cir. 2010). To be
substantively reasonable, the selected sentence must be “sufficient, but not greater than
necessary,” to satisfy the statutory purposes of sentencing. 18 U.S.C. § 3553(a).
In determining whether Christie’s above-Guidelines sentence is substantively
reasonable, we “consider whether the sentencing court acted reasonably both with respect
to its decision to impose such a sentence and with respect to the extent of the divergence
from the sentencing range.” United States v. Washington, 743 F.3d 938, 944 (4th Cir.
2014) (internal quotation marks omitted). “While a district court’s explanation for the
sentence must support the degree of the variance, it need not find extraordinary
circumstances to justify a deviation from the Guidelines.” United States v. Spencer, 848
F.3d 324, 327 (4th Cir. 2017) (citation and internal quotation marks omitted).
“The farther the court diverges from the advisory [G]uideline[s] range, the more
compelling the reasons for the divergence must be.” United States v. Hampton, 441 F.3d
284, 288 (4th Cir. 2006). However, because our review is ultimately for an abuse of
discretion, we accord “due deference to the district court’s decision that the § 3553(a)
3
factors, on a whole, justify the extent of the variance.” United States v. Zuk, 874 F.3d
398, 409 (4th Cir. 2017). “This deference is due in part because the sentencing judge is
in a superior position to find facts and judge their import and the judge sees and hears the
evidence, makes credibility determinations, has full knowledge of the facts and gains
insights not conveyed by the record.” United States v. Diosdado-Star, 630 F.3d 359, 366
(4th Cir. 2011) (alterations and internal quotation marks omitted). Thus, even if we
“might reasonably conclude that a different sentence is appropriate, that conclusion,
standing alone, is an insufficient basis to vacate the district court’s chosen sentence.”
Zuk, 874 F.3d at 409 (alterations and internal quotation marks omitted).
Here, the district court carefully analyzed the § 3553(a) factors, focusing
particularly on the need to promote respect for the law, provide just punishment for the
offense, and—most importantly—afford an adequate deterrent to criminal conduct and
protect the public from further crimes. Although Christie’s sentence represented a
substantial upward variance, we find that the court did not abuse its “extremely broad
discretion” in weighing the § 3553(a) factors. See United States v. Jeffery, 631 F.3d 669,
679 (4th Cir. 2011).
Accordingly, we affirm the district court’s judgment. We dispense with oral
argument because the facts and legal contentions are adequately presented in the
materials before this court and argument would not aid the decisional process.
AFFIRMED
4
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785 F.2d 720
5 Fed.R.Serv.3d 232, 20 Fed. R. Evid. Serv. 654
Perry D. JENKINS, Annabelle Jenkins, and Stuart A. Kaneko asSpecial Administrator of the Estate of JeffreyScott Jenkins, Deceased,Plaintiffs-Appellees-Cross-Appellants,v.WHITTAKER CORPORATION, d/b/a Bermite Corporation, a divisionof Whittaker Corporation, a Californiacorporation, Defendant-Appellant-Cross-Appellee.
Nos. 84-2012, 84-2084.
United States Court of Appeals,Ninth Circuit.
Argued and Submitted Dec. 9, 1985.Decided March 24, 1986.
John D. Thomas, Jr., Cronin, Fried, Sekiya & Kekina, Honolulu, Hawaii, Allan S. Haley, Nevada City, Cal., for plaintiffs-appellees-cross-appellants.
Burnham H. Greeley, Carlsmith, Carlsmith, Wichman & Case, Honolulu, Hawaii, Ronald M. Greenberg, Beverly Hills, Cal., for defendant-appellant-cross-appellee.
Appeal from the United States District Court for the District of Hawaii.
Before TANG and WIGGINS, Circuit Judges, and WILLIAMS,* District judge.
WIGGINS, Circuit Judge.
1
Defendant Whittaker Corporation ("Whittaker") appeals a judgment of $300,000 against it following a jury verdict in a wrongful death action by the parents and the administrator of the estate of decedent Jeffrey Scott Jenkins (collectively "plaintiffs"). Whittaker alleges the district court erred in various jurisdictional, choice of law, evidentiary, and substantive rulings. Plaintiffs cross-appeal the district court's denial of their motion for prejudgment interest. We have jurisdiction over the appeals under 28 U.S.C. Sec. 1291 (1982). We affirm in part, reverse in part, and remand.
FACTS AND PROCEDURAL HISTORY
2
Before entering the military, decedent Specialist Fourth Class Jeffrey Scott Jenkins was domiciled in Indiana, and he intended to return there after his enlistment. While in the service, Jenkins lived on a military base on federal government property within the state of Hawaii. Plaintiffs Perry and Annabelle Jenkins, Jenkins's parents, are residents and domicilaries of Indiana. Stuart A. Keneko, a Hawaii citizen, is administrator of Jenkins's estate, which is being probated in Hawaii.
3
Defendant Whittaker Corporation ("Whittaker") is a California corporation with its principal place of business in Los Angeles. It is a billion-dollar-a-year corporation, with between one and two percent of its revenues coming from its Bermite division. It has no offices, employees, or agent for service of process in Hawaii, nor is it licensed to do business there.
4
In the early 1970's, Whittaker's Bermite division contracted to supply atomic simulators to the Army, based on the Army's design.1 Whittaker assembled and delivered one lot of simulators to the Army in Saugus, California, in mid-1974.
5
On May 11, 1978, as part of demolition training for soldiers at the Pohakuloa Training Area on the island of Hawaii, Jenkins and other personnel of the 65th Engineer Batallion set up two atomic simulators about 50 feet apart. One of these simulators was from the lot provided by Whittaker (the "Whittaker simulator"); the other was manufactured by Pace Corporation (the "Pace simulator").
6
The Whittaker simulator was set off first and seemed to detonate normally. Engineer personnel then tried several times to detonate the Pace simulator, without success. After waiting between 10 and 30 minutes, Jenkins, Capt. William P. Fitzgerald, and another soldier approached the discharged (but still burning) Whittaker simulator to remove the ignition wires and transfer them to the Pace simulator.
7
As the party approached the still-burning Whittaker simulator, Jenkins expressed concern about the fire and suggested using a fire extinguisher. Fitzgerald said the fire extinguisher was unnecessary and might be needed later, and Jenkins agreed. While they were transferring the wires, a second explosion occurred, lifting the soldiers off their feet and throwing them back. Jenkins was critically injured and died that evening.
8
Jenkins's parents brought suit against Whittaker for themselves and on behalf of Jenkins's estate. The jury returned a verdict of $300,000 for the plaintiffs on August 12, 1983, and judgment was entered in that amount on August 29. On September 30, plaintiffs moved for prejudgment interest. The trial court eventually denied the motion as untimely.2I.
PERSONAL JURISDICTION
9
Whittaker argues that the trial court in the district of Hawaii had no personal jurisdiction over it.3 A district court's jurisdiction over the person is a question of law, reviewable de novo by this court. Cubbage v. Merchent, 744 F.2d 665, 667 (9th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 1359, 84 L.Ed.2d 380 (1985). The trial court's findings of fact are reviewed under the clearly erroneous standard. United States v. McConney, 728 F.2d 1195, 1200 (9th Cir.) (en banc), cert. denied, --- U.S. ----, 105 S.Ct. 101, 83 L.Ed.2d 46 (1984).
10
Personal jurisdiction requires a two-part showing: (1) that the forum state has an applicable statute conferring jurisdiction on nonresidents, and (2) that the assertion of jurisdiction under the statute comports with constitutional requirements of due process. Colonial Leasing Co. v. Pugh Brothers Garage, 735 F.2d 380, 383 (9th Cir.1984). Hawaii law gives jurisdiction to the full extent allowed by the Constitution, Cowan v. First Insurance Co. of Hawaii, 61 Hawaii 644, 649, 608 P.2d 394, 399 (1980), so the only issue we need address is whether Hawaii's jurisdiction over Whittaker comports with due process.
11
Whittaker concedes that a manufacturer that sells its products to a distributor with knowledge that the distributor will distribute the product on a nationwide basis may be sued in any jurisdiction in which the product is disseminated. See World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297-98, 100 S.Ct. 559, 567-68, 62 L.Ed.2d 490 (1980). Whittaker asserts, however, that a different standard should apply to manufacturers of military products, limiting suit to the site of manufacture or sale, relying on McKay v. Rockwell International Corp., 704 F.2d 444, 452-53 (9th Cir.1983), cert. denied, 464 U.S. 1043, 104 S.Ct. 711, 79 L.Ed.2d 175 (1984). That case, however, deals with the appropriateness of applying the ordinary consumer's expectation of safe product design to users of military products. Id. It in no way suggests that a manufacturer of military products who places those products in a nationwide distribution system has different "contacts" with a destination state than an ordinary manufacturer. See World-Wide Volkswagen, 444 U.S. at 291, 100 S.Ct. at 564.
12
In light of the findings of fact, which are not disputed here, the trial court properly asserted personal jurisdiction over Whittaker.
II.
CHOICE OF LAW
13
Whittaker argues that the district court erred in applying Hawaii law.4 Choice of law is a question of law reviewable de novo by this court. See In re McLinn, 739 F.2d 1395, 1398 (9th Cir.1984).5 Findings of fact by the district court, however, may be reversed by this court only if they are clearly erroneous. McConney, 728 F.2d at 1200.
14
Both parties correctly note that choice of law is controlled by Peters v. Peters, 63 Hawaii 653, 634 P.2d 586 (1981), the only Hawaii case on the issue.6 Peters creates a presumption that Hawaii law applies unless another state's law "would best serve the interests of the states and persons involved." Id. at 660, 634 P.2d at 591.7 Peters involved a suit by a nonresident wife against her nonresident husband for injuries she sustained in Hawaii while riding in a rented car he was driving. Id. at 655, 634 P.2d at 588. The law of their domicile permitted interspousal tort actions; Hawaii law did not. Id. at 656-60, 634 P.2d at 588-91. The Peters court noted Hawaii's unique geographic and economic position and found that:
15
Our visitors are domiciled throughout the United States and in many foreign countries, and a reliance on the law of the domicile to determine the viability of interspousal actions would neither provide predictability of result nor simplify the judicial task. More importantly, any resulting significant increase in the number of tort actions entertained by our courts will adversely affect premiums indirectly payable by residents of Hawaii who lease "U-Drive" cars, though Hawaii couples remain bound by interspousal immunity and will not benefit from the judicial expansion of compulsory insurance coverage which would be responsible for the premium increase.
16
Id. at 666, 634 P.2d at 594-95.
17
The first portion of the Peters court's discussion applies to military personnel as well as tourists.8 Because of Hawaii's unique strategic position, much of its economy and population depends on the military, just as another large portion depends on tourism. Military personnel, like tourists, are likely to be domiciled throughout the United States. In view of the Hawaii court's articulated concern with predictability of result and simplification of the judicial task, this fact supports the application of Hawaii law in this case. See Jenkins v. Whittaker Corp., 545 F.Supp. 1117, 1118 (D.Hawaii 1982) (district court's order relying on this ground).
18
In addition, the accident here actually took place in the state of Hawaii, albeit on federal land, and Hawaii has an interest in protecting those within its borders from injury from defective products imported into the state. Whittaker argues that because Jenkins lived and worked on federal land, he was not actually "in Hawaii" for purposes of a choice-of-laws interest analysis. See Foster v. Day & Zimmermann, Inc., 502 F.2d 867, 870-71 (8th Cir.1974). This is too extreme and technical an approach to the choice-of-laws question, however, especially because the occurrence of the accident "in Hawaii" is what requires application of Hawaii choice-of-law rules in the first place. See 16 U.S.C. Sec. 457 (1982).
19
Whittaker claims that California or Indiana law should be applied. Whittaker never specifies, however, any strong interest of those states that would best be served by applying their laws.9 See Peters, 63 Hawaii at 660, 634 P.2d at 591. Nor does Whittaker identify what interests of the parties would be served by applying Indiana or California law, id., aside from the obvious difference in ultimate result favoring Whittaker.10
20
Under Peters, Hawaii has an interest in the case and Whittaker has failed to show any compelling interest of another state requiring application of different law. The trial court was correct in applying Hawaii law.
III.
EVIDENTIARY RULINGS
A. Standard of Review
21
We review trial court evidentiary rulings for abuse of discretion. Pierce Packing Co. v. John Morrell & Co., 633 F.2d 1362, 1364 (9th Cir.1980).
22
B. Conclusions and Opinions in the Government Reports
23
Following the accident, army personnel prepared several reports. The first of these, the "Picatinny Arsenal Report" ("PAR"), was a technical analysis focused on the atomic simulator itself. It concluded that the second explosion resulted from an old unexploded demolition item on the range and that the possibility of a second explosion in the Whittaker simulator itself was "remote." It recommended continued use of other simulators in the same lot.
24
The second report, the "White Report," was an investigative report focused on whether army personnel complied with applicable rules and regulations. The first five paragraphs of the report consisted of observations by White of the accident area made the day after the accident. Paragraph 6 listed various "shortcomings" concerning the setup and firings of the two simulators, and paragraph 7 concluded that unauthorized operations had occurred and that the ammunition should have functioned correctly if set up correctly.
25
Plaintiffs moved in limine to exclude the opinions and conclusions in the PAR and the White report. The court excluded the opinions and conclusions in both reports11 and sustained that decision at trial.
26
Whittaker contends that the trial court abused its discretion in excluding the conclusions and opinions12 in the PAR and White Report.13 It asserts that the opinions and conclusions were admissible under the business and public records exceptions to the hearsay rule, Fed.R.Evid. 803(6) and (8)(C).14 Whittaker correctly notes that both reports resulted from investigations made under authority of law,15 and it argues that these conclusions and opinions were admissible as factual findings unless they were untrustworthy. Conclusions and opinions do not render reports ipso facto inadmissible. Miller v. New York Produce Exchange, 550 F.2d 762, 769 (2d Cir.), cert. denied, 434 U.S. 823, 98 S.Ct. 68, 54 L.Ed.2d 80 (1977); see Ellis v. International Playtex, Inc., 745 F.2d 292, 301-02 (4th Cir.1984) (exclusion of two government epidemilogical studies on toxic shock syndrome was improper despite tentative conclusions included in studies). Whittaker argues that nothing here indicated the reports were not trustworthy and that the trial court based its exclusion solely on the ground that Rule 803(6) or (8) did not allow for opinions or conclusions as exceptions to the hearsay rule.
27
Contrary to Whittaker's assertion, the district court did not base its decision on that ground alone. The discussions of the exclusion, both in limine and during trial, show that the court addressed several other concerns in keeping the reports out.
28
First, the court was clearly concerned about the competence and trustworthiness of the reports. Plaintiffs' counsel noted that Mr. Labudzinski, the PAR author, had no competence or experience with atomic simulators, arrived at the accident scene over a week after the accident, never talked to any of the personnel involved, and for those very reasons had not been qualified as an expert by Whittaker. Plaintiffs' counsel also added that Mr. White, author of the White report, was even less qualified than Labudzinski.16 Whittaker's counsel did not dispute any of these assertions, and the court ruled to exclude Labudzinski's and White's opinions immediately thereafter. The trial court is generally the best judge of the trustworthiness and reliability of such reports, see Denny v. Hutchinson Sales Corp., 649 F.2d 816, 821 (10th Cir.1981), and the circumstances surrounding the reports in question support the trial court's judgment.
29
The trial court was also concerned about cumulative evidence.17 The PAR and the White report would have put into evidence opinions and conclusions of nonexperts who could not be cross-examined, although Whittaker also intended to call an expert, Mr. Kadlec, to testify to those same opinions and conclusions at trial. Such an expert is both more trustworthy (because of his expertise) and subject to cross-examination, making his opinions far more useful to the jury than the same opinions in the reports.18
30
In summary, in light of the suspect reliability of the offered reports and the cumulative effect of their relevant passages, the district court did not abuse its discretion in excluding them from evidence.
C. LoFiego's Expert Opinion
31
At trial, Whittaker offered the testimony of Louis LoFiego, Vice President and Technical Director of Whittaker's Bermite division, a chemical engineer with experience with black powder and explosives of the type involved in the simulators. LoFiego had not been noticed to plaintiffs as an expert witness before trial. He testified, over plaintiffs' objections, to his education and experience, the general nature and characteristics of the explosives involved, the specific design of the Whittaker simulator, and the fact that he had never personally witnessed an ignition of confined black powder in which less than all of the powder ignited. He was not, however, allowed to express an opinion on whether less than all the black powder in an atomic simulator will ignite during what appears to experienced observers to be a normal ignition.19
32
Whittaker claims that the trial court abused its discretion in refusing to allow LoFiego to give his opinion on plaintiffs' "two explosions" theory. Whittaker argues that LoFiego clearly qualified as an expert and that, as the representative of a party, he had a right to testify as to the party's theory of how the accident happened.
33
The trial court properly exercised its discretion in excluding LoFiego's expert testimony, however, because Whittaker gave the plaintiffs no advance notice of the fact and substance of his expert testimony and therefore no opportunity to prepare to meet it. The plaintiffs' third set of interrogatories specifically asked for the names, credentials, and the substance and basis of the testimony of all testifying experts, as allowed by Fed.R.Civ.P. 26(b)(4)(A)(i). Whittaker named no independent experts in its response, for reasons not relevant here, but added: "Whittaker may call Bermite personnel, some of whom have been deposed, but is unsure whether the Court would treat their testimony as expert."20 In addition, Whittaker apparently never supplemented its answer to this question as required by Fed.R.Civ.P. 26(e)(1).
34
Whittaker argues that parties who are also experts do not fall within the scope of Rule 26(b)(4)(A)(i), citing Baran v. Presbyterian University Hospital, 102 F.R.D. 272, 273-74 (W.D.Pa.1984). Baran relies on the advisory committee notes to the Rules:
35
It should be noted that the subdivision does not address itself to the expert whose information was not acquired in preparation for trial but rather because he was an actor or a viewer with respect to transactions or occurrences that are part of the subject matter of the lawsuit. Such an expert should be treated as an ordinary witness.
36
Fed.R.Evid. 26(b)(4) advisory committee notes.
37
The language quoted does not apply to LoFiego. He was not a viewer or actor with regard to the disputed question; in fact, he could not be, because the question posed was hypothetical, in the traditional form of expert interrogation. The question clearly called for an opinion based on LoFiego's expertise rather than his observation of a specific incident.
38
Moreover, Whittaker failed adequately to state the substance of LoFiego's testimony even as an ordinary witness in its Pretrial Statement.21 Whittaker's entry on LoFiego read:
39
15. Louis LoFiego: Whittaker employee to testify as to the manufacture of the Whittaker simulator and Whittaker's dealing with the government and Army.
40
This summary gives no indication that LoFiego will testify to his opinions about plaintiffs' theory of the explosion.
41
In light of the lack of notice to the plaintiffs and the cumulative nature of the opinion, the trial court did not abuse its discretion in excluding LoFiego's opinion on the "two explosions" theory.
42
D. Relevance of Various Facts Surrounding the Accident
43
Whittaker also claims that the district court abused its discretion in excluding evidence of various facts that show contributory negligence by Jenkins and other army personnel. The excluded facts pertain to the Pace simulator, the simulator that did not explode.22 Nevertheless, Whittaker claims, these incidents not only were relevant to Jenkins' death but proximately caused that death. In essence, Whittaker's theory is: but for various acts of negligence with respect to the Pace simulator, Jenkins would not have been in the area of the Whittaker simulator when the second explosion occurred and thus would not have been killed. Even assuming this statement is true, however, it resolves only the issue of actual cause and not, as Whittaker argues, proximate cause.
44
Proximate cause is lacking because the alleged negligence with respect to the Pace simulator has no connection with the actual injury. The acts asserted, however much they may have increased the risk of injury from an explosion of the Pace simulator, had absolutely no relation to the risk that actually matured, the second explosion at the Whittaker simulator.23 The duty breached by the alleged negligence did not encompass the hazard that actually came about, and any such negligence is therefore irrelevant to the issue of proximate cause. See W. Keeton, Prosser and Keeton on Torts Sec. 42 (5th ed. 1984).
45
For this reason, the trial court did not abuse its discretion in excluding evidence of negligence in the operation of the Pace simulator.
IV.
DIRECTED VERDICT
A. Standard of Review
46
Whittaker claims that Capt. Fitzgerald's action in having the soldiers approach the simulators constitutes a superseding cause of the accident as a matter of law. In effect, Whittaker claims that the evidence compels the conclusions that Fitzgerald's actions were negligent, immediately caused the accident, and were not foreseeable to Whittaker. The jury instructions allowed such findings and the jury did not make them, so error exists only if the findings were legally compelled. This amounts to an argument that the court should have directed a verdict for Whittaker based on superseding cause. The standard for reviewing the propriety of a directed verdict is the same for this court as for the court below. We must view the evidence in the light most favorable to the nonmoving party and draw all possible inferences in favor of that party. Blanton v. Mobil Oil Corp., 721 F.2d 1207, 1219 (9th Cir.1983), cert. denied, --- U.S. ----, 105 S.Ct. 1874, 85 L.Ed.2d 268 (1985).
B. Merits
47
Viewed in a light most favorable to plaintiffs, the evidence does not compel the conclusions Whittaker urges, and a directed verdict was therefore not appropriate. Contrary to Whittaker's assertion, there is no evidence that Fitzgerald "ordered" Jenkins to approach the burning simulator. Furthermore, although Fitzgerald's expertise was in issue at trial, the jury could reasonably have found that his behavior was not negligent, especially in view of the general agreement that the simulator was not supposed to explode twice. In addition, the jury had sufficient evidence to conclude that Whittaker could reasonably foresee personnel approaching the simulator after detonation, again because the simulator was not supposed to explode twice. In light of these reasonable conclusions, the evidence did not compel a finding that Fitzgerald's actions were a superseding cause of Jenkins' injuries and a directed verdict was not appropriate.
V.
JURY INSTRUCTIONS
A. Standard of Review
48
In assessing jury instructions, we consider the charge as a whole to determine whether it is misleading or misstates the law to the prejudice of the objecting party. Smiddy v. Varney, 665 F.2d 261, 265 (9th Cir.1981), cert. denied, 459 U.S. 829, 103 S.Ct. 65, 74 L.Ed.2d 66 (1982). "We will not reverse a judgment because of a mistake in jury instructions if the instructions fairly and adequately cover the issues presented." Coursen v. A.H. Robins Co., 764 F.2d 1329, 1337, corrected, 773 F.2d 1049 (9th Cir.1985). An error in jury instructions in a civil trial does not require reversal if it is more probably harmless than not. Haddad v. Lockheed California Corp., 720 F.2d 1454, 1459 (9th Cir.1983).24
B. Res Ipsa Loquitur
49
Whittaker asserts that the trial court erred in allowing the jury to apply res ipsa loquitur to the negligence count.25 Whittaker claims that a res ipsa loquitur instruction would have been permissible only if the jury could have found that Whittaker had "control and management" of the simulator at the time of the accident. Under Hawaii law, however, res ipsa loquitur requires a finding of exclusive control and management of the injury-producing instrumentality only at the time of the negligence, not at the time of the resultant injury. See Guanzon v. Kalamau, 48 Hawaii 330, 337, 402 P.2d 289, 294 (1965); Ciacci v. Woolley, 33 Hawaii 247, 258-59 (1934).
50
Whittaker also claims that a res ipsa loquitur instruction was improper because evidence at trial permitted an inference that the second explosion did not come from the Whittaker simulator. Whittaker misconstrues the point at which res ipsa loquitur is applicable in this case; the jury instruction explicitly made the application of res ipsa loquitur conditional on other findings. Specifically, before the jury was permitted to infer Whittaker's negligence under res ipsa loquitur, it was required to find by a preponderance of the evidence that the accident was caused by the Whittaker simulator. This requirement allowed the jury to weigh Whittaker's evidence concerning the source of the second explosion. The instruction permitted the jury to find negligence under res ipsa loquitur only if it found Whittaker's evidence of a second explosion outside the barrel unpersuasive.26
51
Under Hawaii law, the trial court gave the correct res ipsa loquitur instruction.
C. Strict Liability
52
Whittaker also claims that the trial court erred in its jury instruction on strict liability.27 Whittaker argues that the trial court's jury instruction on strict liability amounted to a res ipsa loquitur instruction and that res ipsa is inapplicable to strict liability. The Hawaii Supreme Court stated that state's rule of strict liability as follows:
53
[O]ne who sells or leases a defective product which is dangerous to the user or consumer or to his property is subject to liability for physical harm caused by the defective product to the ultimate user or consumer, or to his property, if (a) the seller or lessor is engaged in the business of selling or leasing such product, and (b) the product is expected to and does reach the user or consumer without substantial change in its condition after it is sold or leased.
54
Stewart v. Budget Rent-A-Car Corp., 52 Hawaii 71, 75, 470 P.2d 240, 243 (1970) ("essentially" adopting Second Restatement of Torts, Sec. 402A). In the present case, Whittaker does not dispute that it was in the business of selling atomic simulators. A second element, the absence of substantial change, is clearly required by the jury instruction given by the trial court.28
55
The trial court's jury instructions also adequately required the jury to find the remaining elements of liability: defect and cause. These elements may be proved by purely circumstantial evidence. Stewart v. Budget Rent-A-Car, 52 Hawaii at 77, 470 P.2d at 243-44; accord, McCrossin v. Hicks Chevrolet, Inc., 248 A.2d 917, 920 (D.C.App.1969). In most jurisdictions, purely circumstantial evidence of a defect will suffice to take the case to the jury provided that the plaintiffs have introduced evidence on two other points. "First, plaintiff must present evidence which would tend to negate causes for an accident other than a defect in the product." Stewart v. Ford Motor Co., 553 F.2d 130, 137 (D.C.Cir.1977) (collecting cases); see also Wakabayashi v. Hertz Corp., 66 Hawaii 265, 271, 660 P.2d 1309, 1313 (1983) (allowing case to go to jury based on purely circumstantial evidence of defect where plaintiff presented evidence tending to negate plaintiff's actions as cause of accident). "Second, plaintiff must present proof which would suggest that whatever defect might have existed was one introduced into the product by the defendant." Stewart v. Ford Motor Co., 553 F.2d at 137 (collecting cases); cf. Guanzon, 48 Hawaii at 337, 402 P.2d at 294 (requiring control and management of the injury-producing instrumentality at the time of the negligence for application of res ipsa loquitur ). The amount of evidence necessary to meet these two requirements is not great. Stewart v. Ford Motor Co., 553 F.2d at 137 (collecting cases).
56
In the present case, plaintiffs provided evidence on both these points. In response to Whittaker's only alternative theory of the accident, the explosion of a "dud" already present on the range, plaintiffs introduced evidence that the range was inspected for duds before the atomic simulators were set up and that the ground near the Whittaker simulator was smooth and undisturbed by potholes after the second explosion. On the issue of Whittaker's responsibility for the defect, plaintiffs presented evidence suggesting that the atomic simulator was in substantially the same condition at the time of the accident as it had been when Whittaker delivered it to the army. See Lindsay v. McDonnell Douglas Aircraft Corp., 460 F.2d 631, 637-38 & n. 4 (8th Cir.1972) (allowing recovery under strict liability without proof of specific defect where airplane "was substantially in the same condition at the time of the crash as when it was delivered by McDonnell to the Navy [and] that it was being used for its intended purposes"). This evidence met the requirements and allowed the jury to find the existence of a defect based on circumstantial evidence alone.
57
Whittaker's reliance on California cases, e.g., Barrett v. Atlas Powder Co., 86 Cal.App.3d 560, 565, 150 Cal.Rptr. 339, 342 (1978), that disallow res ipsa loquitur -type instruction for strict liability is inappropriate. The procedural effects of res ipsa loquitur in California and Hawaii are quite different, and that difference goes to the heart of the reasoning that led California courts to forbid the doctrine in strict liability cases. See Tresham v. Ford Motor Co., 275 Cal.App.2d 403, 408, 79 Cal.Rptr. 883, 885-86 (1969). Under California law, the application of res ipsa loquitur shifts the burden of production29 to the defendant; unless the defendant then comes forward with evidence suggesting that it was not negligent or that its negligence did not proximately cause the injury, the jury is required to find that the accident resulted from the defendant's negligence. Cal.Evid.Code Sec. 646 Law Revision Commission Comment (Deering 1985 Supp.). The doctrine of res ipsa loquitur raises a rebuttable presumption of negligence, entitling the plaintiff to a directed verdict in the absence of contrary evidence.
58
Such a presumption, the California courts hold, is inappropriate in imposing strict liability. To avoid a directed verdict, a defendant would need to come forward with evidence that the product in question was not defective or did not proximately cause the injury. This is a much more difficult burden than producing proof of the exercise of due care to rebut a presumption of negligence. In many strict liability cases, the product involved will be damaged or destroyed, making proof of the lack of a defect virtually impossible. To avoid this presumption and avoid putting defendants in this untenable position, California does not allow res ipsa -type instructions on strict liability issues.30 Tresham, 275 Cal.App.2d at 408, 79 Cal.Rptr. at 885-86.
59
Under Hawaii law, application of res ipsa loquitur raises no presumption of negligence. The doctrine merely establishes a prima facie case of negligence; it allows the case to go to the jury. It permits but does not compel a finding of negligence, even in the absence of contrary evidence.31 Turner v. Willis, 59 Hawaii 319, 324-25, 582 P.2d 710, 714 (1978); Cozine v. Hawaiian Catamaran, Ltd., 49 Hawaii 77, 87-88, 412 P.2d 669, 678 (1966) (citing Guanzon v. Kalamau, 48 Hawaii 330, 335 n. 3, 402 P.2d 289, 292 n. 3 (1965).32 As a result, a defendant need not come forward with rebuttal evidence to avoid a directed verdict.
60
Because the doctrine raises no presumption, the reasoning underlying the California courts' refusal to extend the doctrine to strict liability does not apply. The burden of production does not shift, and the Hawaii defendant faces no burden of obtaining often unobtainable rebuttal evidence. The defendant is free to argue that, despite the fact that the accident in question was one which does not normally occur in the absence of a defect, there was in fact no defect in this case, even if the defendant cannot otherwise account for the accident.
61
Consequently, nothing bars application of the res ipsa loquitur theory to strict liability. Stewart v. Ford Motor Co., 553 F.2d at 138. This is reflected in Hawaii cases that permit recovery in strict liability based on res ipsa -like theories of circumstantial evidence. See Wakabayashi, 66 Hawaii at 270, 660 P.2d at 1313-14; Stewart v. Budget Rent-A-Car, 52 Hawaii at 75, 470 P.2d at 243-44. In fact, the Stewart court in dictum approved a finding of defect based on evidence far less direct than that allowed by the jury instruction in the present case:
62
In the most extreme circumstances a court might hold that where no specific defect can be shown, recovery is to be allowed anyway as a carefully driven vehicle does not leave the road in the absence of a defect in the car. See Vanek v. Kirby, Ore. , 450 P.2d 778 (1969). See Note, Proof of Defect in a Strict Products Liability Case, 22 Me.L.Rev. 189 (1970).
63
Stewart v. Budget Rent-A-Car, 52 Hawaii at 76 n. 5, 470 P.2d at 244 n. 5.
64
Moreover, the instructions given are very similar to strict liability instructions approved in product liability cases in other jurisdictions. See, e.g., Stewart v. Ford Motor Co., 553 F.2d at 136; Dennis v. Ford Motor Co., 332 F.Supp. 901, 903 (W.D.Pa.1971), aff'd, 471 F.2d 733, 735 (3d Cir.1973); cf. Chestnut v. Ford Motor Co., 445 F.2d 967, 971 (4th Cir.1971) (finding error in instruction that did not reflect this theory); Moraca v. Ford Motor Co., 132 N.J.Super. 117, 332 A.2d 607, 610 (1974), aff'd, 66 N.J. 454, 332 A.2d 599 (1975) (same).
65
In summary, we find that the trial court's interpretation of Hawaii law was correct, and the instructions given by the trial court were appropriate.
VI.
BASIS OF JURY VERDICT
A. Standard of Review
66
A jury's verdict may not be disturbed by this court if it is supported by substantial evidence. Mosesian v. Peat, Marwick, Mitchell & Co., 727 F.2d 873, 877 (9th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 329, 83 L.Ed.2d 265 (1984).
B. Necessity of Expert Witnesses
67
Whittaker in effect claims that the jury's conclusion that the accident involved here "is of a type that does not ordinarily occur in the absence of negligence" is unsupported by substantial evidence. Because the product and issues involved were of a technical nature, Whittaker argues, the jury could not have reached that conclusion on its own, cf. Lyu v. Shinn, 40 Hawaii 198, 202 (1953) (in medical malpractice actions, res ipsa loquitur does not apply where the common knowledge or experience of the jury does not allow it to conclude that a patient's condition would not have existed but for the defendants' negligence), and plaintiffs failed to supply any expert evidence to show how a second explosion in the barrel could have occurred. We need not determine whether expert testimony was required here, however, because in any event it was provided on the key issue: that the atomic simulator was designed to explode only once.33
68
In the ordinary application of res ipsa loquitur, jurors know the normal operation of the injury-producing instrumentality. For example, in Wakuya v. Oahu Plumbing & Sheet Metal, Ltd., 2 Hawaii App. 373, 636 P.2d 1352 (1981), aff'd, 65 Hawaii 592, 656 P.2d 84 (1982), the plaintiff was injured by a vault door handle that came off in her hand as she opened the vault. In holding that the jury should have been instructed on res ipsa loquitur, the Hawaii court noted:
69
Here, [defendant] Oahu had the responsibility, by contract, for what is described therein as "preventive maintenance" of the instrumentality, including the vault door handle. Obviously, one of the purposes of the handle on the vault door was that it was to be used in opening the vault door. This required someone turning and then pulling on the handle. Obviously, such handles are not supposed to come off in the course of doors being opened in the absence of negligence, particularly where, as here, ordinary wear and tear on the mechanism is to be dealt with by "preventive maintenance" by Oahu.
70
Id. at 381, 636 P.2d at 1358 (emphasis added); accord, Winter, 57 Hawaii at 281, 554 P.2d at 1139 (holding that car does not normally fail to negotiate gentle curve, cross center line, travel on opposite shoulder parallel to pavement for 225 feet and hit utility pole in absence of driver's negligence); Cozine, 49 Hawaii at 83, 412 P.2d at 676 ("It requires no expert testimony to enable a jury to infer that in the ordinary course of events and if due care is used the mast of an excursion boat does not snap off, otherwise the patrons of such boats would be few."); see also Kicklighter v. Nails by Jannee, Inc., 616 F.2d 734, 741 (5th Cir.1980) (Georgia law looks to "common human experience" to determine whether an event is of a type not normally occurring absent negligence).
71
Few lay jurors, it is true, would have in their accumulated experience any knowledge of the technical details of an atomic simulator. This case, however, does not require such knowledge; it merely requires that the jury be informed of what was "obvious" to the jury in Wakuya: the normal operation of the injury producing instrumentality, a single explosion. Eyewitness testimony supports the jury's finding that the second explosion came from the Whittaker simulator. Because the jury knew that the simulator was designed to explode only once and reasonably found that it exploded twice, the jury could also reasonably have found that a second explosion would not ordinarily occur in the absence of negligence.34 See Ciacci, 33 Hawaii at 257-58; Wakuya, 2 Hawaii App. at 381-82, 636 P.2d at 1358-59.
72
Whittaker claims that more is needed, that expert testimony must show how a second explosion could have occurred or how Whittaker's negligence could have caused it.35 Such a showing would of course be helpful to plaintiffs, but it is not required. For example, the Wakuya court approved a res ipsa loquitur instruction notwithstanding its observation that "[h]ow or why the handle came off is not explained by the evidence." Wakuya, 2 Hawaii App. at 382, 636 P.2d at 1359; cf. also Wakabayashi, 66 Hawaii at 269-71, 660 P.2d at 1313 (holding in strict liability context that testimony of eyewitnesses provided sufficient evidence of defect to go to jury without any direct evidence, expert or otherwise, of any specific defect).
C. Control and Management
73
Whittaker also argues that no substantial evidence supports the jury's conclusion, implicit in its finding of negligence based on res ipsa loquitur, that the Whittaker simulator was substantially unchanged from the time Whittaker delivered it to the Army to the time of the accident. Whittaker points out that the simulator was unpacked several times and stored in an outdoor area, arguing that this shows something could have happened to it after delivery.
74
Whittaker's evidence does not preclude a finding that the simulator was "substantially unchanged," however; it merely weighs against that finding. "[I]t is enough [to justify the res ipsa loquitur instruction] if the plaintiff produces sufficient evidence of careful handling in general, and of the absence of unusual incidents, to permit reasonable persons to conclude that, more likely than not, the event was due to defendant's negligence." W. Keeton, Prosser and Keeton on Torts, Sec. 39 (5th ed. 1984); accord, Ciacci, 33 Hawaii at 258-59.
75
Here, plaintiffs presented evidence that the simulator had been stored and inspected by the army, and there was no evidence of unusual incidents. The jury's finding that the atomic simulator was substantially unchanged from the time it left Whittaker's hands to the time of the accident is therefore supported by substantial evidence.
VII.
CONSISTENCY OF JURY VERDICT
A. Standard of Review
76
Whether a verdict is consistent is a question of law reviewable de novo by this court. See McConney, 728 F.2d at 1201.B. Consistency
77
Whittaker argues that the jury's verdict is inconsistent because it found a manufacturing defect but not a design defect. The jury instructions told the jury that it could not find Whittaker liable for a design defect if the government designed the simulator, Whittaker built it according to the government's design, and Whittaker warned the government about any patent errors in the design or dangers from the product.36 The jury found Whittaker was not liable for a design defect; therefore, Whittaker argues, it must have concluded that Whittaker built the simulator according to the government's design, which is inconsistent with its finding of a manufacturing defect.37
78
Whittaker's logic is flawed. The "design defect" instruction Whittaker points to only serves to absolve it of liability once a design defect is established. In this case, the jury never even considered Whittaker's liability for a design defect because it concluded that there was no design defect. There is no inconsistency, therefore, with the jury's finding of a manufacturing defect arising from Whittaker's failure to conform to the government design. Whittaker's proposed result would be absurd, as it would never allow the finding of a manufacturing defect without a simultaneous design defect.
VIII.
MOTION FOR PREJUDGMENT INTEREST
A. Standard of Review
79
Interpretation of the Federal Rules of Civil Procedure is a pure question of law, reviewable de novo by this court. Liberty Mutual Insurance Co. v. Equal Employment Opportunity Commission, 691 F.2d 438, 440 (9th Cir.1982).
B. Applicability of Rule 59(e)
80
Plaintiffs claim that the district court erred in ruling that plaintiffs' motion for prejudgment interest was a Rule 59(e) motion to alter or amend a judgment, which must "be served not later than 10 days after entry of the judgment." Fed.R.Civ.P. 59(e). They claim that their motion was brought under Fed.R.Civ.P. 7(b),38 the general motions rule, and therefore is not subject to Rule 59(e)'s time limitations.39 This is an issue of first impression in this circuit.
81
Rule 59(e) was intended to deal with the correction of error, not the initial granting of relief. See 6A J. Moore, J. Lucas & G. Grotheer, Moore's Federal Practice p 59.03 (2d ed. 1985). The Supreme Court described this role in White v. New Hampshire Department of Employment Security, 455 U.S. 445, 102 S.Ct. 1162, 71 L.Ed.2d 325 (1982), in which it considered whether attorney's fee awards were within the Rule's scope:
82
[Rule 59(e)'s] draftsmen had a clear and narrow aim. According to the accompanying Advisory Committee Report, the Rule was adopted to "mak[e] clear that the district court possesses the power" to rectify its own mistakes in the period immediately following the entry of judgment....
83
Consistently with this original understanding, the federal courts generally have invoked Rule 59(e) only to support reconsideration of matters properly encompassed in a decision on the merits.... By contrast, a request for attorney's fees under [42 U.S.C.] Sec. 1988 raises legal issues collateral to the main cause of action--issues to which Rule 59(e) was never intended to apply.
84
Section 1988 provides for awards of attorney's fees only to a "prevailing party." Regardless of when attorney's fees are requested, the court's decision of entitlement to fees will therefore require an inquiry separate from the decision on the merits--an inquiry that cannot even commence until one party has "prevailed." Nor can attorney's fees fairly be characterized as an element of "relief" indistinguihshable from other elements. Unlike other judicial relief, the attorney's fees allowed under Sec. 1988 are not compensation for the injury giving rise to an action. Their award is uniquely separable from the cause of action to be proved at trial....
85
As the Court of Appeals for the Fifth Circuit recently stated:
86
"[A] motion for attorney's fees is unlike a motion to alter or amend a judgment. It does not imply a change in the judgment, but merely seeks what is due because of the judgment. It is, therefore, not governed by the provisions of Rule 59(e)."
87
Id. at 450-52, 102 S.Ct. at 1165-67 (emphasis added; footnotes and citations omitted).40
88
All the emphasized passages apply to a postjudgment first-time motion for prejudgment interest as well as to one for attorney's fees. Such a prejudgment interest motion does not ask the court to reconsider or correct its own mistakes, because the court has not previously considered or decided the issue.41 The motion addresses an issue collateral to the main cause of action, requiring an inquiry unrelated to the merits that cannot be made until the moving plaintiff has "prevailed" on the merits.42 Prejudgment interest compensates not for the injury giving rise to the action, but for the delay between injury and judgment. See, e.g., Lucas v. Liggett & Myers Tobacco Co., 51 Hawaii 346, 348-49, 461 P.2d 140, 143 (1969). Both attorney's fees and prejudgment interest seek what is due because of the judgment, the former in terms of money expended, the latter in terms of time. In light of these factors, White strongly suggests that a postjudgment first-time motion for prejudgment interest is not covered by Rule 59(e).
89
Furthermore, the consequences to litigants of a contrary result are potentially severe. If a motion for prejudgment interest must be made under Rule 59(e), prevailing parties will have only a ten-day window for requesting what may be a major portion of their ultimate losses. Moreover, because the actual entry of judgment is often a clerical function, a prevailing party may often not be able to anticipate exactly when the "window" will open.
90
Elias v. Ford Motor Company, 734 F.2d 463 (1st Cir.1984), which Whittaker cites for the motion's inclusion under Rule 59(e), is factually distinguishable. Although the Elias court states that prejudgment interest is not a "collateral matter" like attorney's fees, the original judgment in that case actually included prejudgment interest, and the prevailing plaintiff had and declined the opportunity to appeal the award. Elias, 734 F.2d at 464-65. The disputed motion in Elias asked the court to reconsider a decision it had already made and was therefore, the court concluded, a Rule 59(e) motion.43
91
In light of White and the policy underlying Rule 59(e), we hold that a postjudgment first-time motion for prejudgment interest is not a Rule 59(e) motion to alter or amend the judgment but a general motion subject to the general constraints of Rule 7. The motion for prejudgment interest is remanded to the district court for the exercise of its discretion.44
92
AFFIRMED IN PART, REVERSED IN PART, and REMANDED.
93
Plaintiffs (appellees/cross-appellants) shall be awarded their costs on appeal.
*
Honorable David W. Williams, Senior United States District Judge for the Central District of California, sitting by designation
1
An atomic simulator is a 55-gallon steel drum packed with explosive powder that, when detonated, simulates the visual and aural effects of a nuclear blast on the ground. It is not radioactive
2
The procedural posture of plaintiff's cross-appeal is somewhat complicated. The district court originally denied plaintiffs' motion for prejudgment interest on the ground that Hawaii law required pleading and proof of prejudgment interest as an element of damages at trial, relying on McKeague v. Talbert, 3 Hawaii App. 646, 658 P.2d 898 (1983). After defendant Whittaker appealed the jury verdict against it, plaintiffs timely cross-appealed the denial of their motion for prejudgment interest. While the appeal was pending in this court but before it was calendared, the district court concluded it had misread McKeague and, through various contacts with counsel, invited plaintiffs to move the district court to reconsider under Fed.R.Civ.P. 60(b)(6) its denial of plaintiffs' motion for prejudgment interest. Plaintiffs made this motion, and the district court indicated that it was willing to entertain and inclined to grant the motion. See Long v. Bureau of Economic Analysis, 646 F.2d 1310, 1318 (9th Cir.) (suggesting this procedure), vacated on other grounds, 454 U.S. 934, 102 S.Ct. 468, 70 L.Ed.2d 242 (1981). Plaintiffs then sought and received a limited remand from this court, allowing the district court to consider the motion for reconsideration. The district court reconsidered its denial of plaintiffs' motion for prejudgment interest and concluded that, despite its error in interpreting McKeague, denial was still required because the motion was untimely under Rule 59(e) and the court thus had no jurisdiction to entertain it (hearing held February 28, 1985; order entered, March 18, 1985). Plaintiffs then sought to amend their notice of appeal in this court to include the March 18 order and to amend the record on appeal to include the transcript of the February 28 hearing. This court denied those requests, but allowed copies of the transcript to be lodged with the clerk
To remedy this procedural inconsistency and allow us to deal with the current ground for the denial, untimeliness under Rule 59(e), we announced at oral argument our consideration of the Rule 59(e) ground and our addition of the Feb. 28 hearing transcript to the record on appeal.
3
Plaintiffs assert that Whittaker waived any objection to personal jurisdiction at trial. They argue that Whittaker objected to their questioning of a Whittaker employee and to their introduction of an advertisement alleged to bear on personal jurisdiction. In seeking to exclude the ad on relevancy grounds, Whittaker's counsel said, "There is no jurisdictional issue in this trial at this time. Therefore, I would object on those grounds of relevancy." After the court overruled its objection, Whittaker sought a running objection. The court replied, "All right. Your running objection is noted. Of course it is mooted if you raise the jurisdictional issue again, but why don't [plaintiffs] proceed." Plaintiffs note that jurisdiction was never raised again until this appeal
Plaintiffs argue that in light of Whittaker counsel's comment and attempt to exclude evidence relevant to jurisdiction, it would be unfair to allow Whittaker to argue here that the plaintiffs have not met their burden of proof.
Although Whittaker may have misled the court on this issue, plaintiffs ultimately suffered no prejudice from Whittaker's actions. Whittaker's objections were overruled and plaintiffs were allowed to submit the evidence and make their record. In light of this, we do not view Whittaker's actions as waiving the issue.
4
The laws that are colorably applicable are Hawaii, Indiana, California, or "federal common law." The differences in the laws would significantly affect major issues in the case, including the statute of limitations, comparative negligence, recovery for pain and suffering and lost earnings, and the standard for res ipsa loquitur
5
This circuit no longer gives deference to a district court judge's interpretation of the law of the state in which he or she sits. McLinn, 739 F.2d at 1397-1403
6
Hawaii choice-of-law rules apply as a result of 16 U.S.C. Sec. 457 (1982), which provides:
In the case of the death of any person by the neglect or wrongful act of another within a national park or other place subject to the exclusive jurisdiction of the United States, within the exterior boundaries of any State, such right of action shall exist as though the place were under the jurisdiction of the State within whose exterior boundaries such place may be; and in any action brought to recover on account of injuries sustained in any such place the rights of the parties shall be governed by the laws of the State within the exterior boundaries of which it may be.
See Vasina v. Grumman Corp., 644 F.2d 112, 117 (2d Cir.1981) (applying situs state law to cause of action arising on military property based on this section).
7
The full passage reads:
[W]e would not be obliged to apply the law of Hawaii if our conflict-of-laws analysis indicates that resort to New York law [the law of plaintiff's and defendant's domicile] would best serve the interests of the states and persons involved.
Peters, 63 Hawaii at 660, 634 P.2d at 591; see also DeRoburt v. Gannett Co., 83 F.R.D. 574, 576-83 (D.Hawaii 1979) (anticipating the "interests analysis" approach of Peters ).
8
The second portion of the Peters discussion does not apply to the case at hand
9
Whittaker argues that California has an interest in limiting recovery on the contract because the contract was made and performed in California and Hawaii has no interest in it. See Hawaii Rev.Stat. Sec. 490:1-105(1) (1976) (Hawaii UCC). For this reason, Whittaker argues, California's one-year statute of limitations should apply and the breach-of-warranty action should be barred. See Becker v. Volkswagen of America, Inc., 52 Cal.App.3d 794, 802, 125 Cal.Rptr. 326, 331 (1975). However, the reason California imposes a one-year limitation on personal injury actions based on breach of warranty, rather than the four-year limit in the California Commercial Code, is that California does not regard such an action as resting on the contract at all but on strict liability. Id. It would be anomalous, therefore, to apply the one-year California limitation on the ground that the cause of action arises out of the California contract when California itself sets that limitation on the ground that the warranty action does not arise out of the contract
10
Whittaker cannot claim it relied on California law's limitations. It was only fortuity that the injured person was not a Hawaii citizen, a circumstance that clearly would have allowed application of Hawaii law
11
The court also excluded, on Whittaker's motion, a third government report on the accident. The third report, the Ganetti Report, was an "in-house" investigative report by Lt. Col. Albert Ganetti of the 65th Engineer Batallion, the unit involved in the accident. Ganetti based his report on interviews and sworn statements of witnesses, technical manuals, and photographs of the accident site, but conducted no on-site investigation. His report concluded that the source of the second explosion was inside the barrel and that, although base personnel had not followed procedures exactly, any violations had not contributed to the accident. The court considered the three reports together and excluded the opinions and conclusions of all three at the same time
12
Only the opinions and conclusions in the reports are contested on this appeal. The "pure facts" in both reports either came into evidence at trial or were explicitly not offered
13
Plaintiffs assert that Whittaker waived its objection to the exclusion of the entire White report by offering to take the conclusions out of the report before its admission and withdrawing the offer of the report's cumulative factual assertions. This contention of waiver is without merit. Under Fed.R.Evid. 103(a)(2), error is preserved if the substance of the evidence is offered or is apparent from context. Viewing the record as a whole, the court was certainly aware of the contents of the White report and of Whittaker's unrelenting wish to have it admitted in its entirety
14
This rule provides that records of regularly conducted activity and public records and reports are admissible, notwithstanding the hearsay rule, "unless the sources of information or other circumstances indicate lack of trustworthiness." Fed.R.Evid. 803(6), (8)(C)
15
Plaintiffs' assertion that the reports were properly excluded under Rule 803(8)(C) because they were not required by law is without merit. The plain language of the rule requires only that the report be authorized, not mandated, by law. Fraley v. Rockwell International Corp., 470 F.Supp. 1264, 1266 (S.D.Ohio 1979); see also Walker v. Fairchild Industries, Inc., 554 F.Supp. 650, 655 (D.Nev.1982)
16
White testified to his factual observations at trial. He was not qualified as an expert, however, and hence did not testify to his opinions or conclusions based on those observations. See Fed.R.Evid. 701 (lay opinion testimony limited to that "rationally based on the perception of the witness")
17
The court's general concern with unnecessary repetition is explicit in its treatment of the purely factual portions of the PAR. When Whittaker claimed that most of the facts in the PAR had already been admitted anyway, the court wondered why the same facts needed to come in again through the report, especially when it was based on hearsay
As plaintiffs point out, all the relevant admissible opinions in the two reports that Whittaker claims never reached the jury were in fact testified to at trial. Expert Kadlec testified that the explosion took place outside the barrel and that the Whittaker atomic simulator functioned normally. White himself testified to the color of the drum containing the spent Whittaker simulator and the presence of loose rock in the area. Although White did not testify to his opinions that a simulator does not generate enough heat to discolor the drum or that the drum had been subjected to excessive heat from outside, those opinions are similar to opinions specifically excluded at trial because of White's lack of expertise (RT 1085:18-1087:3 (White not qualified to give opinion about reason for burnt appearance of chipboard separator)). Finally, the White report's statements about the failure to allow 30 minutes after the misfire before approaching the unexploded Pace simulator and the failure to follow other misfire procedures are irrelevant to the issues in this case and therefore were not properly admissible from any source. See section III(D) infra.
18
Indeed, it would be anomalous if White's opinions were allowed into evidence as part of a report that is not subject to cross-examination when White himself lacked the expertise to testify to those same opinions at trial where he could be cross-examined
19
The question LoFiego was not allowed to answer was:
Mr. LoFiego, assume an ignition of an atomic simulator, assume further that a mushroom cloud is observed by persons who have had prior experience with atomic simulators, assume further that those persons perceived that ignition to be a normal ignition. Given those conditions, will less that all five bags which are contained in the smoke charge barrel ignite?
20
Whittaker argues that plaintiffs were in any event not prejudiced by the lack of notice because they in fact deposed LoFiego and thus had ample opportunity to probe and examine his opinions, expert or otherwise, about the cause of the second explosion. LoFiego was deposed on December 5, 1980 (deposition filed Feb. 25, 1982), however, well over a year before he was noticed even as an ordinary trial witness. Without such notice, the opportunity to depose does not remove the prejudice. See Fed.R.Civ.P. 26(b)(4) advisory committee notes ("The lawyer even with the help of his own experts frequently cannot anticipate the particular approach his adversary's expert will take or the data on which he will base his judgment on the stand.")
21
Under local district court rules, this statement must include:
(i) Witnesses to be called. A list of all witnesses likely to be called at trial, except for impeachment or rebuttal, together with a brief statement following each name describing the substance of the testimony to be given.
Hawaii L.R. 235-7(i) (1982).
22
Whittaker's brief specifically points out (as relevant facts excluded at trial) the unauthorized use of communications wire in connecting the Pace simulator and the failure of Jenkins's party to wait the recommended 30 minutes after the misfire of the Pace simulator before approaching it. Whittaker alludes to other acts of negligence and violations of military regulations but does not specify the other "excluded facts." Most of the facts identified here were in fact presented to the jury in one way or another
23
For example, the regulation requiring 30 minutes delay before approaching a misfired simulator was obviously designed to protect the operators from a delayed explosion of the misfired simulator, not to prevent them from coming into an area where a different, unrelated explosion might occur
24
Whittaker objects to the trial court's jury instructions on the issues of negligence, implied warranty, and strict liability. The jury found Whittaker liable under all three theories, and each independently supports the damages awarded. Because we approve the jury instructions on negligence and strict liability, and because the jury's verdicts on those issues are supported by substantial evidence, see below, we do not consider the propriety of the jury instruction on implied warranty
25
The disputed instruction is:
On the issue of negligence, one of the questions for you to decide in this case is whether the accident involved occurred under the following conditions:
First, that it is the kind of accident which ordinarily does not occur in the absence of someone's negligence;
Second, that it was caused by an agency or instrumentality in the exclusive control of the defendant originally, and which was not mishandled or otherwise changed after defendant relinquished control; and
Third, that the accident was not due to any voluntary action or contribution on the part of Jeffrey Scott Jenkins, which was the responsible cause of his injury.
If, and only in the event that you should find all these conditions to exist, you are instructed as follows:
From the happening of the accident involved in this case, you may draw an inference that a proximate cause of the occurrence was some negligent conduct on the part of the defendant.
However, you shall not find that a proximate cause of the occurrence was some negligent conduct on the part of the defendant unless you believe, after weighing all the evidence in the case and drawing such inferences therefrom as you believe are warranted, that it is more probable than not that the occurrence was caused by some negligent conduct on the part of the defendant. (RT 1548:4-1549:3)
26
Moreover, even if Whittaker's proffered evidence had tended to directly disprove its negligence, as Whittaker seems to argue it did, rather than to disprove the second explosion in the simulator, as it in fact did, the res ipsa loquitur instruction would still have been proper. Under Hawaii law, res ipsa loquitur merely allows an inference of negligence "in the absence of any explanation by the defendant tending to show that the injury was not due to his lack of care." Ciacci v. Woolley, 33 Hawaii 247, 257 (1934) (quoting Morgan v. Yamada, 26 Hawaii 17, 24 (1921)). The jury would still have been allowed to consider any contrary evidence Whittaker might have presented
27
The disputed instruction reads:
Plaintiffs claim damage for personal injuries alleged to have been caused by a defective condition in an M142 atomic simulator manufactured and sold by defendant Whittaker Corporation.
A product is in a defective condition if, because of its manufacture or design, the product does not meet the reasonable expectations of the ordinary consumer or user as to its safety.
In determining whether or not the M142 atomic simulator was defective, you are instructed that plaintiffs need not prove a specific defect. It is sufficient if you find from the evidence that the M142 atomic simulator exploded twice, causing the accident, as a result of some failure due to a defective condition in the M142 atomic simulator.
If you determine, after considering all of the evidence, direct and circumstantial, that the accident here would not have occurred in the ordinary course of events but for the existence of a defect in the M142 simulator, then you can infer that the cause of the accident arose from a defect in the simulator.
28
For example, the trial court's instructions provided at various points (emphasis added):
The manufacturer of an article is subject to liability for injuries proximately caused by a defect in manufacture of the article which existed when the article left possession of the manufacturer....
In order for plaintiffs to recover against Whittaker on their claim of manufacturing defect, the plaintiffs have the burden of establishing by a preponderance of the evidence all of the facts necessary to prove the following essential elements.
....
2
That the atomic simulator was expected to and did reach Jeffrey Scott Jenkins without substantial change in the condition in which Whittaker first sold it
....
The defendant Whittaker is liable only for defective conditions which were present at the time Whittaker sold the atomic simulator and parted with possession of it. Unless you find that Jeffrey Scott Jenkins' death was caused by a defective condition in the Whittaker atomic simulator which was in existence when it was first sold to the army in 1974, none of the plaintiffs are entitled to recover from Whittaker.
29
The application shifts only the burden of production, not the ultimate burden of persuasion. Frantz v. San Luis Medical Clinic, 81 Cal.App.3d 34, 42-43, 146 Cal.Rptr. 146, 152 (1978)
30
It would be possible, of course, to use similar wordings for the negligence and strict liability instructions and assign them different procedural effects. This would undoubtedly be confusing for the jury, however, especially because most products liability claims include both negligence and strict liability counts. The California court wisely chose to prevent the presumption in cases in which it is not appropriate by simply forbidding the language that would raise it
31
The circumstantial evidence supporting the application of the doctrine may, of course, be so great as to compel an inference of negligence, see, e.g., Winter v. Scherman, 57 Hawaii 279, 283, 554 P.2d 1137, 1140 (1976), but the application of res ipsa loquitur does not alone compel such a finding. Cozine v. Hawaiian Catamaran, Ltd., 49 Hawaii 77, 87-88, 412 P.2d 669, 678 (1966)
32
The jury here was not allowed to infer a defect simply from the fact of the accident. It was also required to find that the Whittaker simulator exploded twice, causing the accident. It was therefore the fact of the second explosion in the barrel that allowed inference of the defect, not the mere fact that the accident occurred. Hawaii law permits such an inference. See Stewart v. Budget Rent-A-Car, 52 Hawaii 71, 77, 470 P.2d 240, 244 (1970) (testimony of witness to events surrounding accident sufficient to allow inference of defect); see also Wakabayashi v. Hertz Corp., 66 Hawaii 265, 270, 660 P.2d 1309, 1313-14 (1983)
33
Not only was this point made explicitly several times during the trial, it was clearly a basic premise of both sides' arguments and certainly was never disputed by Whittaker
34
This finding alone would not be sufficient to attribute the negligence to Whittaker, as it does not provide a ground for determining whether the negligence was in the Army's design or Whittaker's manufacture. In the present case, however, Whittaker itself, in arguing its position that the second explosion did not and in fact could not have come from the Whittaker simulator, presented much evidence that the simulator as designed would explode only once. This evidence was sufficient for the jury to find that there was no defect in design, and, when combined with the finding that the second explosion would not ordinarily occur in the absence of negligence, supported the jury's finding that the Whittaker simulator was defective in manufacture. (The jury specifically found, on a jury form urged by Whittaker, that the simulator was not defective in design but was defective in manufacture.)
35
Plaintiffs' claim, that such testimony was provided when Whittaker's expert Dr. Kadlec testified that the explosion could have come from the simulator, takes that passage far out of context. Whittaker is correct in claiming that no expert discussed how a second explosion could have taken place in the Whittaker simulator
36
The relevant instruction was:
The defendant Whittaker is not subject to liability for a design defect in the atomic simulator if Whittaker establishes, by a preponderance of the evidence:
1
That the United States established, or approved, reasonably precise specifications for the atomic simulator;
2
That the atomic simulator conformed to those specifications; and
3
That Whittaker warned the United States about patent errors, if any, in the government's specifications, or about dangers, if any, in the use of the atomic simulator that were known to Whittaker but not to the United States
37
The jury returned a special verdict of a manufacturing defect based in part on the following instruction:
In order for the atomic simulator to be in a defective condition at the time of sale to the United States Army, it must have been manufactured in a way that did not conform with the plans and specifications furnished to Whittaker by the United States Army and it must have had a propensity for causing physical harm to the user beyond that which would be contemplated by the product's foreseeable and typical user who uses it, with the ordinary knowledge common to the foreseeable and typical user as to its characteristics.
38
Plaintiffs' moving papers in the district court indeed characterized the motion as a Rule 7(b) motion, but the substance of the motion rather than the form determines which Rule it falls under. See United States v. 1982 Sanger 24' Spectra Boat, 738 F.2d 1043, 1046 (9th Cir.1984)
39
Plaintiffs do not deny that the motion was untimely under Rule 59(e) or that timely compliance with Rule 59(e) is jurisdictional. See Fed.R.Civ.P. 6(b) and 59(e); Martin v. Wainwright, 469 F.2d 1072, 1073 (5th Cir.1972), cert. denied, 411 U.S. 909, 93 S.Ct. 1538, 36 L.Ed.2d 199 (1973)
40
This purpose is also suggested by the fact that Rule 59(e) sets the same ironclad 10-day time limit as other motions to reconsider the merits. See, e.g., Fed.R.Civ.P. 50(b) (j.n.o.v.), 52(b) (amend findings of fact), & 59(b) (new trial)
41
This assumes that an award of prejudgment interest is, as here, discretionary with the court. If an award is mandatory, the court has committed a clerical error in omitting it and a party may move for correction under Rule 60(a). See Glick v. White Motor Co., 458 F.2d 1287, 1293-94 (3d Cir.1972)
42
For example, in determining the appropriateness of prejudgment interest, a court may consider the timing and reasonableness of the parties' respective settlement offers and the amount and causes of delays in trial, as plaintiffs here argued below. Neither of these will be finally known until a decision on the merits has been reached
43
The other cases cited by Whittaker are even less on point. Another First Circuit case, decided just after White, mentions White but doesn't consider that case's effect on a prejudgment interest motion. See Goodman v. Heublein, Inc., 682 F.2d 44, 45-47 (2d Cir.1982). Spurgeon v. Delta Steamship Lines, Inc., 387 F.2d 358, 358-59 (2d Cir.1967), a pre-White case, relies heavily on the fact that the actual damage award entered in the judgment (and therefore subject to direct appeal) already included prejudgment interest. Finally, St. Mary's Hospital Medical Center v. Heckler, 753 F.2d 1362. 1365 (7th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 3502, 87 L.Ed.2d 633 (1985), merely holds that Rule 59(e) encompasses any motion that draws into question the correctness of the judgment. This again is addressed to error and, as discussed above, the trial court here could not have made an error as to prejudgment interest because it never considered the issue
44
Plaintiffs invite this court to award prejudgment interest itself rather than remand to the district court for such an award. They argue that such interest is routine in wrongful death cases and that the district court has already stated its intention to award such interest. They also note that over seven years has passed since the accident and further delay should be avoided
Plaintiffs cite no statute that gives this court the jurisdiction to make such an award. But cf. Lucas, 51 Hawaii at 351-52, 461 P.2d at 144 (Supreme Court of Hawaii awards interest itself to avoid further delay to plaintiff). Even assuming our power to address plaintiff's claims, however, it would be inappropriate for this court to award interest here. As is evident from the memorandum accompanying plaintiff's original motion for prejudgment interest, such an award requires consideration of factors beyond this court's knowledge, such as settlement attempts and responsibility for delays. For this reason, remand is necessary.
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797 F.Supp. 923 (1992)
Esther ZOLLMAN, Plaintiff,
v.
Ken W. MYERS, doing business as High Country Snowmobile Tours and Recreation Rentals, and Christopher Smith, an individual, Defendants.
Civ. No. 91-C-131A.
United States District Court, D. Utah.
August 24, 1992.
*924 Jeffrey D. Eisenberg, Wilcox, Dewsnup & King, Salt Lake City, Utah, for plaintiff.
Glen T. Hale, Dunn & Dunn, Salt Lake City, Utah, for defendant High Country.
Darwin C. Hansen, Morgan & Hansen, Salt Lake City, Utah, for defendant Smith.
ORDER DENYING HIGH COUNTRY'S MOTION FOR SUMMARY JUDGMENT AND ZOLLMAN'S MOTION FOR PARTIAL SUMMARY JUDGMENT
ALDON J. ANDERSON, Senior District Judge.
This matter came before the court on High Country Snowmobile's motion for summary judgment and Esther Zollman's motion for partial summary judgment. The court heard oral argument on August 17, 1992, and took the matters under advisement. Jeffrey D. Eisenberg of Wilcox, Dewnsup & King, Salt Lake City, Utah, represented Zollman. Glen T. Hale of Dunn & Dunn, Salt Lake City, Utah, represented High Country. Darwin C. Hansen of Morgan & Hansen, Salt Lake City, Utah, represented Smith. The court, having reviewed the record and the applicable law, denies both High Country's motion for summary judgment and Zollman's motion for partial summary judgment.
I. BACKGROUND
On January 23, 1991, Zollman suffered injuries when the snowmobile she was operating collided with a snowmobile operated by Smith. The collision occurred at High Country's snowmobile recreation park while Zollman and Smith operated snowmobiles rented from High Country. High Country operates its snowmobile recreation park to provide instruction in snowmobile operation and to give guided tours to its customers. High Country requires that each of its customers execute a release agreement which details some of the risks of snowmobiling and which seeks to exculpate High Country from liability for injuries resulting from its services, including those injuries resulting from High Country's negligence. Both Smith and Zollman executed these release agreements with High Country.
On the date of the accident, Zollman proceeded to the designated riding area under the direction of a guide provided by High Country. As Zollman approached the crest of a hill, the guide instructed Zollman to stop because another snowmobile was in the area but was out of view over the crest of the hill. After a ten minute wait, the guide directed Zollman to proceed over the hill. Zollman collided with Smith as she reached the crest. Zollman suffered numerous injuries, including facial injuries which she alleges are permanently disfiguring.
*925 On December 31, 1991, Zollman filed this suit alleging that High Country and Smith were negligent. Smith cross-claimed against High Country. High Country now moves for summary judgment, contending that the release agreements[1] between Smith and High Country and between Zollman and High Country constitute an express assumption of the risk and relieve High Country from liability. Zollman counters with her own motion for summary judgment in which she argues that the release agreement is unenforceable as a matter of law.
II. DISCUSSION
A. Summary Judgment Rule 56 of the Federal Rules of Civil Procedure "permits entry of summary judgment on a claim when there is no genuine issue of material fact outstanding." City Consumer Serv. Inc. v. Horne, 578 F.Supp. 283, 288 (D.Utah 1984) (citing Adickes v. S.H. Kress Co., 398 U.S. 144, 157-59, 90 S.Ct. 1598, 1608-09, 26 L.Ed.2d 142 (1970)). "As a matter of law, the movant must show entitlement to summary disposition beyond all reasonable doubt." Id. (citing Norton v. Liddel, 620 F.2d 1375, 1381 (10th Cir. 1980)). If the movant carries its burden, the burden shifts to the nonmoving party to "make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). In making this showing, Rule 56(e) "requires the nonmoving party to ... designate `specific facts showing that there is a genuine issue for trial.'" Id. at 324, 106 S.Ct. at 2553 (quoting Fed.R.Civ.P. 56(e)).
In assessing the sufficiency of the nonmovant's showing, the trial judge "must construe all pleadings, affidavits, and depositions liberally in favor of the party against whom the motion is made." Horne, 578 F.Supp. at 288 (citations omitted). "[T]he judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial.... [T]here is no issue for trial unless there is sufficient evidence favoring the nonmoving party for a jury to return a verdict for that party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 2511, 91 L.Ed.2d 202 (1986). "Where different inferences can be drawn from conflicting affidavits, depositions and pleadings, summary judgment should not be granted." Horne, 578 F.Supp. at 288 (citing United States v. Diebold, Inc., 369 U.S. 654, 82 S.Ct. 993, 8 L.Ed.2d 176 (1962)). Accordingly, if doubt arises regarding any issue, the court must resolve the doubt in favor of the nonmovant and deny the motion.
When the issue presented on a motion for summary judgment is a matter of contract interpretation, the court must determine whether the contract is ambiguous. "[T]he interpretation of a clear and unambiguous written agreement ... is one of law for the court and may be decided upon a motion for summary judgment." Hauser v. Western Group Nurseries, Inc., 767 F.Supp. 475, 484 (S.D.N.Y.1991) (citations omitted). However, "[s]ummary judgment is normally inappropriate when a contract term is ambiguous because a triable issue of fact usually exists as to its interpretation." Id. (citations omitted). "Thus, if there is conflicting evidence regarding the parties' intent, the district Court may only identify the issues at the summary judgment stage, not resolve them." Id. (citation omitted).
B. High Country's Motion for Summary Judgment High Country supports its motion with the following arguments: (1) that Utah law requires the enforceability of recreational liability release agreements;[2]*926 (2) that the release agreements do not violate public policy;[3] (3) that Zollman and Smith knowingly and intelligently executed the release agreements; and (4) that the allegedly negligent acts were within the scope of the risks set out in the release agreements.
Zollman, joined by Smith, argues that release agreements are not favored in Utah law;[4] that the release agreements are unenforceable due to failure of consideration;[5] that they did not expressly assume the risk of injury; that provisions of the release agreements are ambiguous and inconsistent; that the release agreements are overbroad and vague;[6] that the release agreement violates public policy;[7] and that summary judgment is premature because the parties have conducted only limited discovery.
"Parties can enter into an agreement, the result of which is that the purchaser consents that the seller shall be free of liability for the consequence of conduct which would otherwise be negligent." Rosen v. LTV Recreational Dev., Inc., 569 F.2d 1117, 1122 (10th Cir.1978) (citation omitted). "Usually such stipulations are not enforced in instances in which the seller is engaged in a business which has a public interest." Id. (citation omitted). Further, because of the one-sidedness of release agreements, the court will strictly construe the agreement against the drafter. Id. "[O]ne principle that permeates all of the cases which [the court] has examined is that a release, to be enforceable, must at a minimum be unambiguous, explicit, and unequivocal." Simonson v. Travis, 728 P.2d 999, 1002 (Utah 1986) (citations omitted). Therefore, if the agreement is ambiguous, the ambiguity will be resolved against High Country, Rosen, 569 F.2d at 1122, and consequently, High Country's motion for summary judgment will be denied.
Arguing the public interest exception, Zollman contends that the release agreement is void because High Country was involved in a business activity involving the public interest. She directs the court to the Off-Highway Vehicle Act ("Act") of the Utah Code. See Utah Code Ann. 41-22-1 to -33 (1988). In the Act, the Utah legislature declared that
*927 [i]t is the policy of this state to promote safety and protection for persons, property and the environment connected with the use, operation, and equipment of off-highway vehicles.
Zollman argues that because High Country's business involves off-highway vehicle training, ostensibly a public interest, then High Country cannot contract away its liability.
"`[P]ublic policy' is a vague and elastic term in need of limitation so as not to provide an arguable basis for [every] lawsuit." Hodges v. Gibson Prod. Co., 811 P.2d 151, 165 (Utah 1991). The Utah Supreme Court has defined public policy as "that principle of the law which holds that no subject can lawfully do that which has a tendency to be injurious to the public." Berube v. Fashion Centre, Ltd., 771 P.2d 1033, 1043 (Utah 1989) (quoting Townsend v. L.W.M. Management, Inc., 64 Md.App. 55, 494 A.2d 239, 243 (1985)). "Public policy is most obviously ... embodied in legislative enactments. Id.
Although no reported Utah cases have interpreted the Act, the court finds instructive a Utah case applying the public policy exception. See Lyman v. Taylor, 14 Utah 2d 362, 384 P.2d 401, 402 (1963). In Lyman, the Utah Supreme Court upheld the trial court's avoidance of a release contract between an unlicensed contractor and a homebuyer. Id. In avoiding the contract, the court relied on the statutory policy that contracts made by unlicensed contractors were unenforceable. Id.
Because snowmobile safety, as implemented through training and education, is a policy of the state, and because High Country operates a business involving snowmobile education, Zollman argues that High Country cannot seek to limit its liability. Two facts, however, persuade the court that the link between the Act and High Country's business activities is too attenuated to render the release agreement unenforceable under the public policy exception. First, the Act deals almost exclusively with the registration of and the restrictions on the operation of off-highway vehicles, such as snowmobiles. The Act deals little with instruction in snowmobile training and in no place suggests that parties providing such training cannot seek to limit their liability. The court will not strain to find such a reading of the release agreement. Second, elsewhere in the Utah Code, the legislature has expressly limited the liability of landowners who, without charging admission, make their land available to others for recreational purposes. See Utah Code Ann. § 57-14-1 to -7 (1988). This provision does not limit liability for those who charge admission to others for the recreational use of property under their control. Id. at § 57-14-6. Nevertheless, the legislature did not preclude such landowners from seeking to limit liability. Based on the foregoing provisions of Utah law, the court concludes that it is not the public policy of the state of Utah to prohibit a business such as High Country from seeking to limit its liability.
The court next must determine whether the exculpatory provision is ambiguous, and therefore, unenforceable. "`Whether an ambiguity exists in a contract is a question of law.'" Palmer v. Davis, 808 P.2d 128, 132 (Utah Ct.App. 1991) (quoting Jarman v. Reagan Outdoor Advertising, 794 P.2d 492, 494 (Utah Ct. App.1990)). "`[Q]uestions of whether a contract is ambiguous because of uncertain meaning of terms ... [is a] question[] of law that must be determined by the court.'" Id. (quoting Fitzgerald v. Corbett, 793 P.2d 356, 358 (Utah 1990)).
"`[A] cardinal rule in construing ... a contract is to give effect to the intentions of the parties.'" DeBry v. Occidental/Nebraska Fed. Sav. Bank, 754 P.2d 60, 62 (Utah 1988) (quoting Buehner Block Co. v. UWC Assoc., 752 P.2d 892, 895 (Utah 1988)). To assess whether a contract is ambiguous, and consequently, whether the intention of the parties is unclear, "`[t]he settled rule [for] interpreting a contract [is to] look to the four corners of the agreement to determine the intentions of the parties.'" Palmer, 808 P.2d at 132 (quoting Ron Case Roofing & Asphalt v. Bloomquist, 773 P.2d 1382, 1385 (Utah 1989).
*928 The release agreement contains six clauses. Three of the six clauses directly relate to this motion. In the second clause, the signer agrees to accept all of the risks associated with the outing. In this clause, High Country enumerates some of the risks involved in snowmobiling, including the failure to follow instructions. The third clause states in bold print that the signer will not hold High Country liable, even if High Country or its employees act negligently. Finally, in clause five, the signer agrees to stop and follow instructions if encountering a hazardous situation. Otherwise, the signer agrees to assume all risk.
Zollman argues, and the court agrees, that clause five renders the release ambiguous. Clause five is susceptible of a reasonable interpretation that if Zollman stops and awaits instructions when encountering a hazardous situation, she does not assume the risk of an accident. This impression is strengthened by clause two which expressly lists failure to follow instructions as a risk assumed by the signer of the contract. By giving special attention to this risk, High Country has created the impression that the signer does not assume the risk of an accident that occurs when the signer encounters a hazardous situation and follows High Country's instructions. This impression is sufficient to render the contract ambiguous. Accordingly, the court denies High Country's motion because there is a factual question concerning whether the risk of injuries suffered as a result of following High Country's instructions was a risk assumed by High Country or by Zollman.
C. Zollman's Motion for Partial Summary Judgment: The Exculpatory Clause Alternatively, Zollman and Smith move for partial summary judgment on grounds that the exculpatory clause violates public policy and is ambiguous.[8] It does not follow that by denying High Country's motion, the court must grant Zollman's motion. High Country has pled the release agreement as an affirmative defense to liability. In her motion for partial summary judgment, Zollman asks the court to strike this affirmative defense. Because the court, as expressed above, finds a factual question, Zollman's motion for partial summary judgment is denied.
III. CONCLUSION
The court denies High Country's motion for summary judgment and Zollman's motion for partial summary judgment, because, the release agreement is ambiguous. Consequently, there is a factual question regarding whether the parties intended that High Country be released from liability if Zollman suffered injuries while following High Country's instructions.
NOTES
[1] The last paragraph of clause 3 of the release agreements is printed in bold letters and capitalized. It reads as follows:
IN SIGNING THIS DOCUMENT, I FULLY RECOGNIZE THAT IF ANYONE IS HURT OR PROPERTY IS DAMAGED WHILE I AM ENGAGED IN THIS EVENT, I WILL HAVE NO RIGHT TO MAKE A CLAIM OR FILE A LAWSUIT AGAINST HIGH COUNTRY, OR ITS OFFICERS, AGENTS, OR EMPLOYEES, EVEN IF THEY OR ANY OF THEM NEGLIGENTLY CAUSED THE BODILY INJURY OR PROPERTY DAMAGE.
[2] High Country cites numerous cases from other jurisdictions in which exculpatory clauses used in release agreements in similar recreational activities were upheld. All parties acknowledge that Utah has no reported case involving a release agreement for a recreational activity.
[3] Hereinafter, the court will use the terms public interest and public policy interchangeably.
[4] See Union Pac. R.R. Co. v. El Paso Natural Gas Co., 17 Utah 2d 255, 408 P.2d 910 (1965).
[5] Without further discussion, the court finds that the release agreements were supported by adequate consideration. Consequently, the court rejects Zollman and Smith's argument that the release agreement was not supported by adequate consideration.
[6] Clause 5 of the release agreement is relevant to Zollman's and to Smith's arguments that they did not expressly assume the risk, that provisions of the release agreement are ambiguous and inconsistent, and that the release agreement is overbroad and vague. Clause 5 reads as follows:
I understand and acknowledge that I will be given proper and adequate training and instruction to operate a snowmobile; and, that if I encounter a situation or problem which was not covered by the training or instruction provided by HIGH COUNTRY, I hereby agree to stop my snowmobile and wait for proper instructions. Otherwise, I expressly agree to assume the risk presented by the situation or problem.
Zollman and Smith argue that clause 5 covers the present facts rather than clause 3 which was previously quoted. Under their interpretation of the agreement, they did not assume the risk because they collided after Zollman had stopped and had been instructed to proceed by High Country's instructors. Further, Zollman and Smith argue that clause 5 is inconsistent with clause 3 and that this inconsistency must be interpreted against High Country.
[7] This public policy is codified in Utah Code Ann. § 41-22-1 (1991), which reads as follows:
It is the policy of this state to promote safety and protection for persons, property, and the environment connected with the use, operation, and equipment of off-highway vehicles, to promote uniformity of law, to adopt and pursue a safety education program, and to develop trails and other facilities for the use of these vehicles.
[8] Zollman also argues that the release agreement was not supported by adequate consideration. Without further discussion, the court rejects this argument. See supra note 5.
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99 Ariz. 265 (1965)
408 P.2d 406
David R. SHROYER, Petitioner,
v.
The INDUSTRIAL COMMISSION of Arizona and Chicago Bridge and Iron Company, Respondents.
No. 8545.
Supreme Court of Arizona. En Banc.
December 9, 1965.
*266 A.D. Ward, Minne & Sorenson, Phoenix, for petitioner.
Courtney L. Varner, Industrial Commission, Joseph P. Ralston, Ryley, Carlock & Ralston, Phoenix, for respondents.
McFARLAND, Justice.
In the decision in this case, 98 Ariz. 388, 405 P.2d 875, on September 29, 1965, we set aside the award of the Industrial Commission. The respondents contend in their motion for rehearing that we did not consider the effect of our prior decision in Adkins v. Industrial Commission, 95 Ariz. 239, 389 P.2d 118, as set forth in the following quotation therefrom:
"* * * in Steward v. Industrial Commission, 69 Ariz. 159, 211 P.2d 217, on rehearing, this Court held:
"`That the commission retains jurisdiction of all compensation cases for the purpose of altering, amending, or rescinding its findings and awards at the instance of either the workman, the insurer or the employer (a) upon showing a change in the physical condition of the workman subsequent to said findings and award arising out of said injury resulting in the reduction or increase of his earning capacity; (b) upon a showing of a reduction in the earning capacity of the workman arising out of said injury where there is no change in his physical condition, subsequent to said findings and award; (c) upon a showing that his earning capacity has increased subsequent to said findings and award.' 69 Ariz. 180, 211 P.2d 231." 95 Ariz. at 245, 389 P.2d at 122.
While not cited by respondents in their brief, we were cognizant of what we said in Adkins v. Industrial Commission, supra. However, we did not then and do not now consider it applicable to the *267 facts in the instant case. We again say that the commission retains jurisdiction of all compensation cases, and that awards may in the future be decreased or increased under the conditions set forth in Steward v. Industrial Commission, 69 Ariz. 159, 211 P.2d 217, and Adkins, supra. However, the question presented in the instant case is the earning capacity of the workman at the time of the hearing and whether it has been decreased by reason of the injury. The commission may not base the earning capacity solely upon what a worker is receiving in his last employment, when the same is temporary, and when the chances of obtaining such a position are less than those for the occupation which he performed at the time he received the injury.
The petitioner was a journeyman boilermaker at the time of his injury. The evidence shows that he was no longer able to perform the heavier (or "bullgang") work of such a job. He could only perform the work in the lighter classifications of a journeyman boilermaker, or welding work, which reduced his chances of employment in this line of work. The evidence also showed that he was a good foreman, but his chances for employment as a foreman are substantially less than as a journeyman boilermaker.
The evidence shows that at the time of the industrial commission rehearing the petitioner had been working on a temporary job as a foreman for five months, but that this work would be finished within a short time. After the injury and up to the time of his employment as a foreman, he held numerous positions, and had to go from one place to another, and, as set forth in our decision, his average earnings were much less than that of a journeyman boilermaker.
In Magma Copper Co. v. Industrial Commission, 96 Ariz. 341, 395 P.2d 616, in defining earning capacity of a disabled man, we said the object "is to determine as nearly as possible whether in a competitive labor market the subject in his injured condition can probably sell his services and for how much." In making such a determination the commission may not consider solely the petitioner's earnings as a foreman on this temporary job, but should consider it along with the other evidence in fixing his earning capacity.
Rehearing denied.
LOCKWOOD, C.J., STRUCKMEYER, V.C.J., and BERNSTEIN and UDALL, JJ., concur.
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976 S.W.2d 824 (1998)
George R. NEELY, Appellant,
v.
COMMISSION FOR LAWYER DISCIPLINE, Appellee.
No. 01-98-00034-CV.
Court of Appeals of Texas, Houston (1st Dist.).
June 18, 1998.
*825 Warren W. Harris, Michael Kuhn, Houston, for Appellant.
Luis Andy Paredes, Houston, Linda A. Acevedo, Austin, Scott Rothenberg, Bellaire, for Appellee.
Before MIRABAL, HEDGES and ANDELL, JJ.
*826 OPINION
ANDELL, Justice.
This is an appeal from a summary judgment granted in favor of appellee, the Commission for Lawyer Discipline (the Commission), which resulted in appellant, George R. Neely, being suspended from the practice of law for three years and paying attorney's fees and costs. We reverse and remand.
FACTUAL BACKGROUND
The Commission alleged that certain of Neely's actions taken in a divorce proceeding constituted a violation of the Texas Disciplinary Rules of Professional Conduct (the Disciplinary Rules).[1]
The Divorce Proceeding
Neely represented Peggy Ann Glass in her divorce case (the Glass case). In August 1990, the Glass court signed an agreed decree of divorce. In September 1990, Neely filed a motion for new trial, a first amended original petition for divorce, a motion for sanctions and order for contempt, and an amendment and supplements to the motion for new trial. Dale Glass moved to strike the pleadings and asked for sanctions.
The presiding judge in the Glass case held a hearing in October 1990, and sanctioned both Neely and Peggy Glass under Texas Rule of Civil Procedure 13 for filing groundless pleadings. The court imposed a $64,600 monetary sanction against Neely and Peggy Glass, jointly and severally. The court also enjoined Peggy Glass from filing any more pleadings in any court in Texas until the monetary sanction was paid in full.
Neely and Peggy Glass appealed the sanctions order to the Texarkana Court of Appeals. The Texarkana court held that (1) the prohibition against court proceedings was unconstitutional; (2) Peggy Glass should not be sanctioned for her attorney's conduct; (3) attorney's fees may be awarded as sanctions even absent evidence that they are reasonable and necessary; and (4) based on the evidence, the trial court abused its discretion by awarding excessive attorney's fees. Glass v. Glass, 826 S.W.2d 683, 684-85 (Tex.App. Texarkana 1992, writ denied). The Texarkana court set aside the judgment against Peggy Glass and modified the remainder of the judgment to eliminate the excessive attorney's fees and the additional monetary sanctions. Id.
Neely unsuccessfully attempted to discharge the sanctions in personal bankruptcies. The sanctions have not yet been paid.
Commission's Allegation of Violation of the Disciplinary Rules
In February 1993, Neely's conduct in the Glass case was brought to the attention of the Commission. In July 1994, a state bar grievance committee proposed that Neely receive a public reprimand for violation of rule 3.01 of the Disciplinary Rules. The grievance committee was unable to negotiate a sanction, and Neely elected a trial de novo in district court pursuant to rules 2.13 and 2.14 of the Texas Rules of Disciplinary Procedure.[2]
The Commission filed a disciplinary petition in November 1995 alleging that Neely's actions in the Glass case violated Disciplinary Rules 3.01 and 8.04. Neely demanded a jury trial. In June 1997, the Commission filed a motion for partial summary judgment on its entire claim of professional misconduct, leaving the issue of sanctions for future determination. The Commission relied upon offensive collateral estoppel and asserted that the findings of fact and conclusions of law from the Glass case established, as a matter of law, that Neely violated Disciplinary Rules 3.01, 8.04(a)(1), (a)(3), (a)(4), and (a)(12).
The only summary judgment evidence offered by the Commission was a certified copy of its disciplinary petition, a certified copy of the findings of fact and conclusions of law from the sanctions hearing in the Glass case, and a copy of the Texarkana Court of Appeals's opinion. The pleadings and judgment from the Glass case, the postjudgment pleadings *827 filed by Neely in the Glass case, the motion for sanctions, and the sanctions order were not offered as summary judgment evidence. Neely objected to the Commission's summary judgment evidence, but the court did not rule on his objections.
In August 1997, the court granted the Commission's motion for summary judgment, finding Neely guilty of violating Disciplinary Rules 3.01 and 8.04(a)(1), (3), (4), and (12). The court later heard evidence on the sanctions to be imposed. In September 1997, the court suspended Neely from the practice of law for three years, the first 18 months being active suspension and the remaining 18 months being probated. As a condition of probation, Neely was ordered to pay $32,150 in restitution to two law firms as the sanctions from the Glass case. He was also ordered to pay the Commission $2,800 in attorney's fees and costs of court.
On appeal, Neely presents three issues for our consideration: (1) whether the trial court erred in granting summary judgment in the Commission's favor; (2) whether the Commission, relying solely on the prior rule 13 sanctions, can discipline an attorney without allowing the attorney to litigate in a trial de novo whether he should be sanctioned; and (3) whether the Commission can use an attorney disciplinary proceeding to collect a money judgment for a private party where there has been no misapplication of funds. We turn first to Neely's second issue.
WAS THE APPLICATION OF COLLATERAL ESTOPPEL APPROPRIATE?
The doctrine of collateral estoppel is designed to promote judicial efficiency, protect parties from multiple lawsuits, and prevent inconsistent judgments by precluding the relitigation of issues. Sysco Food Serv., Inc. v. Trapnell, 890 S.W.2d 796, 801 (Tex.1994). A party seeking to assert the bar of collateral estoppel must establish that (1) the facts sought to be litigated in the second action were fully and fairly litigated in the first action, (2) those facts were essential to the judgment in the first action, and (3) the parties were cast as adversaries in the first action. Id. Strict mutuality of parties is no longer required. Id. It is only necessary that the party against whom the doctrine is asserted was a party or in privity with a party in the first action. Id. at 802.
This case involves the use of collateral estoppel offensively. The Commission, as plaintiff below, used collateral estoppel to foreclose Neely, the defendant below, from litigating an issue he had (allegedly) previously litigated unsuccessfully in an action with another party. Neely asserts that to allow the Commission to use a finding of a violation of Tex.R. Civ. P. 13 offensively in an attorney disciplinary proceeding automatically subjects an attorney to discipline, including the possibility of suspension or disbarment, after only an evidentiary hearing on a motion for sanctions. There are significant differences between a rule 13 sanctions hearing and a trial on the issue of whether an attorney has violated the Disciplinary Rules, even when the attorney's conduct that precipitated the sanctions hearing underlie the disciplinary proceeding. The quality and extensiveness of the procedures followed by the two courts in determining the appropriate sanctions are different as well. In considering the appropriateness of allowing collateral estoppel to be used offensively, we must examine the nature of the two proceedings, the issues considered by the two courts, and the different consequences of a determination that sanctions should be imposed.
A Rule 13 Sanctions Hearing
Rule 13 authorizes the imposition of sanctions against an attorney, a represented party, or both, who files a pleading that is both groundless and brought in bad faith or to harass. TEX.R. CIV. P. 13. Rule 13 defines "groundless" as having no basis in law or fact and not warranted by good faith argument for the extension, modification, or reversal of existing law. Id.
Before a trial court may impose sanctions under rule 13, it must hold an evidentiary hearing. TEX.R. CIV. P. 13; Karlock v. Schattman, 894 S.W.2d 517, 523 (Tex. App.Fort Worth 1995, orig. proceeding). There is no right to a trial by jury on the issue of whether rule 13 has been violated. Brantley v. Etter, 662 S.W.2d 752, 756 (Tex. *828 App.San Antonio 1983) (determining that complaint regarding lack of jury at hearing on motion for sanctions had no merit), writ ref'd per curiam, 677 S.W.2d 503, 504 (Tex. 1984); cf. Union Pac. Fuels, Inc. v. Johnson, 909 S.W.2d 130, 135 (Tex.App.Houston [14th Dist.] 1995, no writ) (holding that a party is not entitled to a jury trial on fact issues arising from preliminary motions and pleas that do not involve the merits or ultimate dispositions of a case).
When determining whether sanctions are appropriate, the trial court must examine the facts available to the litigant and the circumstances existing when the litigant filed the pleading. Woodward v. Jaster, 933 S.W.2d 777, 782 (Tex.App.Austin 1996, no writ); New York Underwriters Ins. Co. v. State Farm Mutual Auto. Ins. Co., 856 S.W.2d 194, 205 (Tex.App.Dallas 1993, no writ). Rule 13 requires sanctions based on the acts or omissions of the represented party or counsel, and not merely on the legal merit of the pleading. New York Underwriters, 856 S.W.2d at 205. The trial court must hold an evidentiary hearing to make the necessary factual determinations about the motives and credibility of the person signing the groundless petition. Id.
Upon determining that rule 13 has been violated, the trial court may impose an appropriate sanction available under TEX.R. CIV. P. 215(2)(b)(1)-(8). Rule 215(2)(b) provides a variety of sanctions that the court may impose, ranging from disallowing discovery and charging of costs to striking of pleadings in part or in whole and rendering a default judgment against the disobedient party. TEX.R. CIV. P. 215(2)(b)(1)-(8). This rule does not provide for suspension or disbarment of the offending attorney.
A Disciplinary Action for Professional Misconduct
The Rules of Disciplinary Procedure establish the procedures to be used in the professional disciplinary and disability system for attorneys in Texas. TEX.R. DISCIPLINARY P. 1.02. An attorney is subject to disciplinary action for professional misconduct, which includes acts or omissions that violate one or more of the Disciplinary Rules. TEX.R. DISCIPLINARY P. 1.06(Q)(1). In a disciplinary action, the attorney has the right to a jury trial upon timely payment of the required fee and compliance with the provisions of Texas Rule of Civil Procedure 216. TEX.R. DISCIPLINARY P. 3.06. In its discretion, the trial court may hold a separate evidentiary hearing on the appropriate sanction to be imposed. TEX.R. DISCIPLINARY P. 3.10.
In determining the appropriate sanction for attorney misconduct, a trial court must consider the nature and degree of the sanctioned misconduct, the seriousness of the misconduct and the surrounding circumstances, the loss or damage to clients, the damage to the profession, the assurance that future clients will be insulated from this type of professional misconduct, the profit to the attorney, the avoidance of repetition, the deterrent effect on others, the maintenance of respect for the legal profession, the attorney's conduct during the course of the committee action, the trial of the case, and other relevant evidence concerning the attorney's personal and professional background. TEX.R. DISCIPLINARY P. 3.10; State Bar of Texas v. Kilpatrick, 874 S.W.2d 656, 659 (Tex.1994). The Rules of Disciplinary Procedure allow as sanctions: disbarment, resignation in lieu of disbarment, suspension, probation of suspension, reprimand, restitution, and payment of attorneys' fees and costs. TEX.R. DISCIPLINARY P. 1.06(T).
The Application of Collateral Estoppel Was Inappropriate
The Commission refers us to In re Humphreys, 880 S.W.2d 402 (Tex.1994) and Sanchez v. Board of Disciplinary Appeals, 877 S.W.2d 751 (Tex.1994), for the proposition that Neely does not have the right to a jury trial because all factual issues regarding his misconduct were decided in the Glass sanctions hearing. Both Humphreys and Sanchez involved the rules governing compulsory discipline under which an attorney convicted of an intentional crime can be disbarred or suspended from the practice of law without a trial. Humphreys, 880 S.W.2d at 404 (holding that a jury trial is not statutorily required in mandatory disbarment proceedings); Sanchez, 877 S.W.2d at 752 (rejecting argument that mandatory disbarment violated right to trial by jury). The differences *829 between mandatory disbarment resulting from conviction of an intentional crime and disciplinary proceedings arising from professional misconduct are obvious. We are unpersuaded that collateral estoppel can be used in this context.
Because of the differences in the factors to be considered in the two proceedings, an attorney faced with a rule 13 motion for sanctions is motivated by different concerns than when faced with the possible loss of his or her livelihood in a disciplinary action. Further, applying collateral estoppel here does not serve the purpose of conserving judicial resources because the factors a court is required to consider under TEX.R. DISCIPLINARY P. 3.10 are far more extensive than those considered under TEX.R. CIV. P. 13. We, therefore, find that the trial court abused its discretion in applying the doctrine of collateral estoppel. Accordingly, we do not address the other issues presented by Neely.
We reverse the judgment of the trial court and remand for proceedings consistent with this opinion. Pursuant to Neely's request, the right to file a motion for rehearing is denied. See TEX.R.APP. P. 28.1.
NOTES
[1] TEX. DISCIPLINARY R. PROF'L CONDUCT 3.01 & 8.04(a)(1), (3), (4), (12), reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G app. A (Vernon Supp.1998) (TEX. STATE BAR R. art. X, § 9).
[2] Reprinted in TEX. GOV'T CODE ANN., tit. 2, subtit. G app. A-1 (Vernon Supp.1998).
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100 S.W.3d 163 (2003)
Roger BERLIN, M.D., Appellant,
v.
William PICKETT, Respondent.
No. WD 60644.
Missouri Court of Appeals, Western District.
March 28, 2003.
*164 David J. Weimer, Kansas City, for appellant.
*165 David T. Greis, Kansas City, for respondent.
Before EDWIN H. SMITH, P.J., LOWENSTEIN and HARDWICK, JJ.
HAROLD L. LOWENSTEIN, Judge.
Dr. Roger Berlin appeals from the trial court's judgment for the defendants in Berlin's action on account against William H. Pickett and William H. Pickett, P.C. (collectively "Pickett"). The trial court, sitting as trier of fact, granted Pickett's oral motion for a "directed verdict and/or judgment"[1] without making any findings, though respondent Pickett had requested findings pursuant to Rule 73.01. Because the trial court violated Rule 73.01 and because this court is unable to provide meaningful review, the judgment is remanded.
Factual & Procedural History
On July 1, 1999, Dr. Roger Berlin filed an action on an open account, claiming that Pickett owed him $54,000, plus interest, for psychiatric services Berlin provided Pickett's clients since February 27, 1996.
Berlin testified as follows:
Starting in 1972, Berlin, at Pickett's request, interviewed and wrote psychiatric evaluations of over 150 of Pickett's clients. Berlin also gave depositions and trial testimony in many of the personal injury suits brought by Pickett's clients. He deposed and testified in personal injury suits involving many of these clients. He kept an itemized bill of his services, which he sent to Pickett. These bills were based on time cards on which Berlin recorded the date and nature of the services provided each client. Berlin applied Pickett's payments to individual services; Berlin did not keep a running ledger. Initially, Pickett paid Berlin, with checks drawn on the account of William H. Pickett, P.C., but eventually stopped paying for Berlin's services, though he continued requestingand Berlin continued providingthem. (Berlin did not testify that Pickett agreed to the creation of an open account.)
Berlin talked to Pickett about Pickett's arrearage and sent Pickett dunning letters. During one conversation, Pickett said, "Please, I got some money coming in.... I'll send you some in 30 days." Pickett did not make the promised payment. In February 1996, Berlin stopped providing services for Pickett, whose debt had grown to $55,225.
In July 1999, Berlin filed this action, seeking damages relating to services vis-a-vis thirty-six (later reduced to thirty-five) different clients. After filing suit, Berlin received four checks for $375, $300, $250, and $375, drawn on the account of William H. Pickett, P.C. In the memo section, each check indicated a client's name. Each check corresponded to services rendered on behalf of the named client. Berlin submitted an affidavit indicating that the payments were made to specific billed items.
In his answer, Pickett raised the statute of limitations as an affirmative defense. According to Pickett, some or all of Berlin's contractual "claims," which related to services provided more than five years before *166 Berlin filed his petition, were unenforceable because of the expirations of the limitations period provided in Section 516.120(1), RSMo (2000), which began to run on the date each individual service was provided. Consequently, only those services provided on or after July 1, 1994, were not time-barred. Pickett also claimed that each service was a separate contract and that only Pickett P.C. could be held liable.
Pickett moved for partial summary judgment, based on the limitations defense, as to claims representing $42,914 of the $54,000 sought by Berlin. In his suggestion in opposition to the motion, Berlin claimed that an action on account does not accrue until the date of the last service provided, citing Lowenstein v. Widdicomb, 52 S.W.2d 1044, 1046 (Mo.App.1932), for this proposition. The last service provided was October 1994, and, thus, Berlin claimed, the five-year statute of limitations did not bar any of his claims.
The trial court denied Pickett's motion. Just before the start of trial, and immediately after Berlin's counsel entered his first appearance, counsel for Pickett P.C. requested "complete findings of fact, written findings of fact and conclusions of law." The request was granted.
After Berlin made his case in chief, Pickett moved for a "directed verdict." Pickett based his motion on the expiration of the limitations period (raised in his previous motion for summary judgment), saying, "Certain matters ... clearly show ... before July of 1999 ... when this initial petition was filed ... five years had ran [sic ]." Pickett also claimed the evidence did not show the establishment of an ongoing account, but rather "a series of different contractual relationships of which he claims a breach." Even if an account had been properly pled, Pickett asserted Berlin had not offered sufficient evidence to establish the reasonableness of the charges.
The trial court granted Pickett's motion and entered judgment in his favor, granting Berlin nothing. It did not make any findings of fact or explain the grounds for its decision. Upon receiving the judgment, Berlin immediately reminded the court of the pre-trial request.
Berlin argues that the trial court erred for four reasons. First, Pickett's affirmative defense, if valid, only makes unenforceable some of Berlin's claims. Second, Pickett's statute-of-limitations argument was invalid. Third, Berlin was entitled to a directed verdict because his testimony, which went uncontradicted, proved by a preponderance of the evidence the elements for a successful action on an open account. Fourth, the trial court's failure to make findings of fact, as required by Rule 73.01(c), makes a remand necessary.
Rule 73.01
Berlin's last point is correct: This case must be remanded to the trial court because of its failure to give the grounds for its judgment despite Pickett's proper request for such grounds under Rule 73.01. Rule 73.01(c), which is applicable to this court-tried case, provides that:
[i]f a party so requests, the court shall dictate to the court reporter or prepare and file a brief opinion containing a statement of the grounds for the decision and the method of deciding any damages awarded. The court may, or if requested by a party shall, include in the opinion findings on the controverted fact issues specified by the party. Any request for an opinion or findings of fact shall be made on the record before the introduction of evidence at trial or at such later time as the court may allow.
Though Pickett did not use the phrase "grounds for the decision," his request for *167 "complete findings of fact, written findings of fact and conclusions of law" amounted to a request for the trial court to explain its decision. Cf. Hatfield v. Cristopher, 841 S.W.2d 761, 765 (Mo.App.1992) ("Since neither party requested findings of fact and conclusions of law in the case at hand, the trial court was not required to set forth grounds for its decision."). A request for complete and written conclusions of law and findings of fact is no way different than a request for "the grounds of the decision."
Pickett's request was also timely; it came immediately before trial and the trial court granted it. Rule 73.01(c). Without knowing the grounds for the judgment, this court cannot determine whether the trial court disbelieved Berlin's testimony (despite the post-petition payments by Pickett and the parties longstanding business relationship); whether it concluded that the statute of limitations precluded any recovery by Berlin (despite the possible divisibility of the action on account); or whether Berlin had failed to prove the reasonableness of his services. Accordingly, this court cannot provide meaningful review, and a remand is necessary. Smith v. Woodard, 15 S.W.3d 768, 774 (Mo.App. 2000).
It should be noted, however, that even if a request for findings of fact under Rule 73.01 is made, a trial court need not make findings of fact unless the movant clearly and unequivocally specifies the controverted fact issues. Hammons v. Ehney, 924 S.W.2d 843, 849 (Mo. banc 1996); In re Marriage of Colley, 984 S.W.2d 163, 171 (Mo.App.1998); Jefferson v. Bick, 872 S.W.2d 115, 121 (Mo.App.1994); Aviation Supply Corp. v. R.S.B.I. Aerospace, Inc., 868 S.W.2d 118, 119 (Mo.App.1993). Pickett's request did not specify any controverted findings of fact e.g., the reasonableness of Berlin's charges. See Thurman v. Crawford, 652 S.W.2d 240, 242 (Mo.App. 1983). Consequently, his request for findings of fact was facially deficient. See Hammons, 924 S.W.2d at 849. This does not necessarily mean, however, that the trial court had no obligation to give the reasons for its decision. See Dorman v. Dorman, 91 S.W.3d 167, 171 (Mo.App. 2002) (noting the distinction between a request for the grounds of the decision and request for findings of fact).
Berlin is correct to assume he has standing, an issue that this court has a duty to raise sua sponte. State ex rel. Mathewson v. Board of Election Comm'rs of St. Louis County, 841 S.W.2d 633, 634 (Mo. banc 1992). Unless aggrieved by a judgment, a party has no standing to appeal. Shelter Mut. Ins. Co. v. Briggs, 793 S.W.2d 862, 863 (Mo. banc 1990). Normally, such piggybacking on an opponent's argument as Berlin's is impermissible. See State v. Knese, 985 S.W.2d 759, 775 (Mo. banc 1999) (third party standing only if litigant has suffered a concrete injury, has a close relation to the third party, and there exists some hindrance to the third party's ability to protect its own interests) (quotations omitted). And, arguably, Berlin's failure to request findings of fact or the grounds of the decision indicates that the trial court's inaction did not harm Berlin. Rule 84.13(b), which states that "no appellate court shall reverse any judgment unless it finds that error committed by the trial court against the appellant materially affecting the merits of the action," (emphasis added), bolsters this conclusion, as Pickett argues.
But his argument is untenable. First and foremost, it would have been redundant for Berlin to request the grounds of the decision. The court had already granted Pickett's request. Second, such a request is not like the garden-variety requests made of trial courts presupposed by *168 Rule 84.13(b); it does not redound solely to the benefit of the movant. This is reflected in the fact that the case must be remanded only if the failure of the trial court to explain its judgment interferes with appellate review, Smith, 15 S.W.3d at 774, which could benefit either party. Most importantly, Rule 84.13(b) is not applicable; this case is not being reversed, only remanded. See Hammons v. Ehney, 924 S.W.2d 843, 850 (Mo. banc 1996) (normal remedy for failing to make findings required by Rule 73.01 is to remand case to trial court for it to make findings). Conversely, an objection to the admission of evidence an analogy raised by Pickett if sustained, will presumably help the objecting party and hurt the other party. Not so here. Unless they knew the basis of the judgment, or it was obvious, the parties and this court would be forced into a guessing game. The third flaw in Pickett's argument is that it proves too much, precluding any form of review; however, failure to raise an objection at the trial court level does not forfeit plain error review. Rule 84.13(c). See, e.g., C.L.S. v. C.L.S., 722 S.W.2d 116, 119 (Mo.App.1986) (reviewing for plain error even though objection was not raised before trial court).
This court holds that where the trial court does not give the grounds of its decision, even though properly and timely requested by a party under Rule 73.01 and acknowledged by the trial court, the non-moving party can raise the point on appeal. This holding is consistent with the caselaw. See Adelman v. Rosenblum (In re Adelman's Estate), 377 S.W.2d 549, 552 (Mo.App.1964) ("Rule 73.01 provides [that] unless one of the parties requests findings of fact and conclusions of law before final submission[,] the court need not make such specific findings . . . and conclusions of law.") (emphasis added). See also Cummings v. ACF Indus., 808 S.W.2d 33, 34 (Mo.App.1991).
Given the multitude of theories and defenses raised by Pickett, meaningful review cannot be provided without an explanation by the trial court of the basis for its judgment. The judgment is remanded to the trial court for it to give the grounds of its decision. Rule 73.01(c).
All concur.
NOTES
[1] In a non-jury case, a motion for a directed verdict submits the case for judgment on the merits. Temple v. McCaughen & Burr, Inc., 839 S.W.2d 322, 325 (Mo.App.1992); Rule 73.01(b), like a motion to dismiss at the close of the plaintiff's evidence, which requires the trial court to weigh the evidence and determine credibility. Morris v. Brown, 941 S.W.2d 835, 839 (Mo.App.1997). The standard of review is that of a court-tried case. Kamil, Decker & Co., P.C. v. SMC Props., Inc. 998 S.W.2d 818, 819 (Mo.App.1999); City of Hamilton v. Public Water Supply Dist. No. 2 of Caldwell County, 849 S.W.2d 96, 99 (Mo.App. 1993).
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116 F.3d 477
U.S.v.Harner**
NO. 96-11050
United States Court of Appeals,Fifth Circuit.
Apr 17, 1997
Appeal From: N.D.Tex. ,No.3:96CR131T
1
Dismissed.
**
Conference Calendar
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968 F.2d 92
296 U.S.App.D.C. 356
NOTICE: D.C. Circuit Local Rule 11(c) states that unpublished orders, judgments, and explanatory memoranda may not be cited as precedents, but counsel may refer to unpublished dispositions when the binding or preclusive effect of the disposition, rather than its quality as precedent, is relevant.Sidney Curtis DAVIS, Appellant,v.Walter RIDLEY.
Nos. 90-5207, 90-7115.
United States Court of Appeals, District of Columbia Circuit.
June 25, 1992.
Before MIKVA, Chief Judge, and HARRY T. EDWARDS and RUTH BADER GINSBURG, Circuit Judges.
ORDER
PER CURIAM.
1
Upon consideration of the motion for summary affirmance, the court's order to show cause filed May 4, 1992, and the response thereto, it is
2
ORDERED that the order to show cause be discharged. It is
3
FURTHER ORDERED that the motion for summary affirmance be granted, substantially for the reasons stated by the district court in its Memorandum Opinion and Order filed June 8, 1990. Appellant concedes that the issues raised on appeal are controlled by Poole v. Kelly, 954 F.2d 760 (D.C.Cir.1992) (per curiam), and that, accordingly, the motion for summary affirmance must be granted.
4
The Clerk is directed to withhold issuance of the mandate herein until seven days after disposition of any timely petition for rehearing. See D.C.Cir.Rule 15.
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662 F.3d 1328 (2011)
INTERVEST CONSTRUCTION OF JAX, INC., a Florida corporation, ICI Homes, Inc., a Florida corporation, Plaintiffs-Counter Defendants-Appellants,
v.
GENERAL FIDELITY INSURANCE COMPANY, Defendant-Counter Claimant-Appellee.
No. 10-12613.
United States Court of Appeals, Eleventh Circuit.
November 21, 2011.
Robert M. Dees, W. Braxton Gillam, IV, Milam, Howard, Nicandri, Dees & Gillam, PA, Jacksonville, FL, for Plaintiffs-Appellants.
Louis Schulman, Dutton Law Group, PA, Ronald Steven Rawls, Butler, Pappas, Weihmuller, Katz, Craig, LLP, Tampa, FL, for Defendant-Appellee.
Before TJOFLAT and CARNES, Circuit Judges, and MICKLE,[*] District Judge.
PER CURIAM:
CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT TO THE SUPREME COURT OF FLORIDA PURSUANT TO FLORIDA CONSTITUTION ARTICLE V, § 3(b)(6).
TO THE SUPREME COURT OF FLORIDA AND ITS HONORABLE JUSTICES:
This case involves unanswered questions of Florida law that are central to this appeal. Because these questions are determinative of the cause in this case and there are no controlling precedents from the Supreme Court of Florida, we respectfully certify these questions for resolution.
I.
This controversy exists between the insureds, Intervest Construction of Jax, Inc. and ICI Homes, Inc. (collectively "ICI"), and their insurer, General Fidelity Insurance Company, over whether General Fidelity breached its obligations under a commercial general liability insurance policy, number BAG0002112-00 (the "General Fidelity Policy"), that ICI had with General Fidelity at the time of the accident. The coverage dispute arose out of a personal injury lawsuit filed against ICI by an injured homeowner.
In 2000, ICI contracted with Custom Cutting, Inc. for Custom Cutting to provide trim work, including installation of attic stairs in a residence that ICI was in the process of building. The contract between Custom Cutting and ICI contained *1329 an indemnification provision requiring Custom Cutting to indemnify ICI for any damages resulting from Custom Cutting's negligence. In April 2007, Katherine Ferrin, the owner of a residence constructed by ICI, fell while using the attic stairs installed by Custom Cutting. This fall resulted in serious injuries. Ferrin then filed suit against ICI for her injuries; she did not file suit against Custom Cutting. In turn, ICI sought indemnification from Custom Cutting under the terms of the subcontract. At the time of the accident, Custom Cutting maintained a commercial general liability insurance policy with North Pointe Insurance Company. ICI was not an additional insured under Custom Cutting's policy with North Pointe. ICI, meanwhile, held the General Fidelity Policy at the time of the accident. Contained in the General Fidelity Policy was a Self-Insured Retention endorsement (the "SIR endorsement") in the amount of $1 million.
ICI, Custom Cutting, North Pointe, General Fidelity, and Ferrin participated in a mediation of Ferrin's suit. At the mediation, the parties agreed to a $1.6 million settlement of Ferrin's claim. As part of the settlement, North Pointe agreed to pay ICI $1 million to settle ICI's indemnification claim against Custom Cutting. ICI, in turn, would pay that $1 million to Ferrin. The instant dispute then arose as to whether ICI or General Fidelity was responsible for paying Ferrin the other $600,000.
Because of General Fidelity and ICI's disagreement over coverage, North Pointe paid the $1 million into the trust account of ICI's counsel; each party reserved all rights and claims against the other. Approximately one month later, both ICI and Custom Cutting paid $300,000 each to Ferrin, in addition to the $1 million from North Point, in order to settle her suit for the full $1.6 million. ICI filed suit in the Circuit Court of the Fourth Judicial Circuit of Florida for breach of contract and a declaratory judgment regarding ICI's rights under the General Fidelity Policy. General Fidelity then removed the case to the United States District Court for the Middle District of Florida.
II.
A.
The parties disagree about which provisions of the General Fidelity Policy are relevant; however, the crux of the dispute focuses on the SIR endorsement and the transfer of rights clause. The SIR endorsement states that General Fidelity will provide coverage only after the insured has exhausted the $1 million SIR.[1] The parties dispute the effect of the language in the SIR endorsement as applied to these facts. The transfer of rights clause, on the other hand, grants the insurer some subrogation rights, the extent of which are also disputed.[2]
ICI alleged in its complaint that General Fidelity failed to perform its obligation under the General Fidelity Policy by refusing to pay $600,000 of the $1.6 million settlement. In taking this position, ICI essentially maintained that North Pointe's *1330 contribution of $1 million to settle ICI's indemnification claim, which was then passed on to Ferrin, satisfied the SIR obligation in the General Fidelity Policy, and that General Fidelity was required to pay the remaining $600,000. General Fidelity argued that North Pointe's $1 million payment to settle the indemnity claim did not reduce the SIR because that payment originated from Custom Cutting, not ICI. As a result, General Fidelity maintained that the terms of the General Fidelity Policy required ICI to pay the additional $600,000 to settle Ferrin's claim.
To more narrowly frame this dispute, there can be no disagreement that had ICI borrowed the $1 million from a bank, deposited those funds, and then used those funds toward the settlement, that money would be credited toward the SIR. A more difficult question would be whether a separate insurance policy previously obtained by ICI to cover the retained amount could reduce the SIR. General Fidelity cites several cases to establish that money derived from additional insurance policies cannot be used to satisfy the SIR, and argues to this court that these decisions should be highly persuasive to this issue before us, just as they persuaded the district court. We are not completely convinced, however, that these cases are persuasive to the interpretation of the General Fidelity Policy before us today.
The particular language at issue in the General Fidelity Policy is different from the language in the policies at issue in the California cases cited by General Fidelity. These distinctions are potentially significant. Specifically, the policies in those cases are materially different for two reasons: (1) the General Fidelity Policy, unlike those policies examined by other courts, does not contain an explicit provision addressing the precise issue in question,[3] and (2) the language of the General Fidelity Policy is arguably less restrictive than the language of the policies at issue in those cases.[4]
Requiring that a payment be made from one's "own account" is not necessarily the same as requiring that the retained limit be paid "by you." Indeed, a strong argument could be made that ICI exhausted its SIR because it paid for the protection afforded in the indemnification clause; to wit, ICI paid for that indemnity protection in the purchase price of the Custom Cutting subcontract and therefore hedged its retained risk, just as it could have paid for a loan or paid a premium on an insurance policy. Thus, we are not fully convinced of *1331 the district court's analysis as to this issue of Florida law.
In sum, without the language found in the cases cited supra, ICI's indemnification clause appears on its face to be more permissive. The dispute here is, in the absence of any other provision requiring payments directly from the insured's own account or expressly prohibiting the use of indemnification payments to satisfy the SIR, can a bargained- and paid-for right to indemnification serve to satisfy the SIR? Both parties agree that this is an unsettled issue.
B.
Additionally, there is a related dispute between the parties as to whether the "made whole doctrine" applies or whether the parties contracted around that doctrine given the language of the transfer of rights provision.[5] Assuming that ICI could apply the funds it received to satisfy its SIR, the issue then becomes whether the transfer of rights provision in the General Fidelity Policy gave ICI or General Fidelity the priority to recover.[6]
The transfer of rights provision found in the General Fidelity Policy reads as follows:
If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring "suit" or transfer those rights to us and help us enforce them.
The language of this provision on its face is clearthe insurer has subrogation rights. Given that both ICI and General Fidelity have some rights, the language is still completely silent as to who has priority to recover when the indemnity amount is insufficient to "make whole" both parties. ICI's argument is essentially two-fold: first, General Fidelity is not entitled to recover under the subrogation agreement because the plain language of the transfer of rights provision allows General Fidelity to recover only for payments "we have made," and, at the time it received the indemnification payment from Custom Cutting, General Fidelity had not yet made any payment; second, even if the court disregards the tense of the language, the General Fidelity Policy did not abrogate the "made whole doctrine" and thus ICI has priority to receive any indemnification before General Fidelity. ICI, therefore, provides two different avenues that the court could take to rule in its favor as to this second issue. General Fidelity argues that the court cannot place excessive emphasis on the tense of the language, and further that the transfer of rights provision in the General Fidelity Policy abrogated the common law rule of the "made whole doctrine" by writing into the General Fidelity Policy priority rights for General Fidelity.
*1332 ICI cites a case from the State of Washington, Bordeaux, Inc. v. Am. Safety Ins. Co., 186 P.3d 1188 (Wash. Ct. App.2008), for the proposition that the specific language of the transfer of rights provision found in the General Fidelity Policy does not write out the "made whole doctrine," thereby preserving ICI's right of priority. Id. at 1192-93 (holding that "[t]he trial court properly ruled that [the insureds] were entitled to be made whole before any third-party recovery funds are paid to the insurers." (citing Polygon Nw. Co. v. Am. Nat'l Fire Ins. Co., 189 P.3d 777 (Wash. Ct. App.2008))). ICI further highlights that the Bordeaux court relied upon two Florida cases in crafting its analysis. Bordeaux first cited Zinke-Smith, Inc. v. Fla. Ins. Guar. Assn., 304 So.2d 507, 509 (Fla. 4th Dist.Ct.App.1974), cert. denied, 315 So.2d 469 (1975), to explain the distinction between self-insurance and primary insurance. See Bordeaux, 186 P.3d at 1192 n. 12 (citing Zinke-Smith, 304 So.2d at 509). Bordeaux then cites Young v. Progressive Se. Ins. Co., 753 So.2d 80, 85-86 (Fla.2000), to reinforce its reasoning that self-insurance and primary insurance are distinct concepts. See id. at 1192 n. 17 (citing Young, 753 So.2d at 85-86).
General Fidelity argues that Bordeaux is not on point, or, in any event, is not persuasive as to the ultimate issue. Instead, General Fidelity argues that the language of the transfer of rights provision is sufficient to give General Fidelity priority to receive indemnity for the amounts it may have paid. The parties do agree, however, that the Supreme Court of Florida has also not yet decided the precise issue as to whether the language found in the General Fidelity Policy displaces the background rule of the "made whole doctrine" under Florida law.
C.
After hearing arguments, the district court found in favor of General Fidelity, and ICI appealed to this court.[7] Relying on the express language of the General Fidelity Policy, the district court emphasized that the General Fidelity Policy required that the payments be made "by you [the insured]" and in other clauses required payments "by the insured." See Order at 6, Intervest Constr. of Jax Inc., v. Gen. Fid. Ins. Co., No. 3:09-cv-00894-HES-JRK (M.D.Fla. Apr. 22, 2010) (citing several California cases as persuasive authority, despite acknowledging that none of the cases it relies upon have the same policy language). The district court then concluded that, because the payments did not originate from ICI, Custom Cutting's contribution to the settlement did not count against ICI's self-insured retention. Id. at 8.
III.
Resolution of the contrasting interpretations of the policy language raised by the parties is determinative of the cause in this case. In light of the absence of controlling precedent from the Supreme Court of Florida, we decline to predict how these policy provisions would be construed under Florida law. Instead, we respectfully certify the following questions for resolution:
1. DOES THE GENERAL FIDELITY POLICY ALLOW THE INSURED TO APPLY INDEMNIFICATION PAYMENTS RECEIVED FROM A THIRD-PARTY TOWARDS SATISFACTION OF ITS $1 MILLION SELF-INSURED RETENTION?
2. ASSUMING THAT FUNDS RECEIVED THROUGH AN INDEMNIFICATION CLAUSE CAN BE USED TO OFFSET THE SELF-INSURED RETENTION, DOES THE TRANSFER *1333 OF RIGHTS PROVISION FOUND IN THE GENERAL FIDELITY POLICY GRANT SUPERIOR RIGHTS TO BE MADE WHOLE TO THE INSURED OR TO THE INSURER?
We do not intend the phrasing of these questions to limit the court in its consideration of the problem posed by the case. As we have previously noted:
[T]he particular phrasing used in the certified question is not to restrict the Supreme Court's consideration of the problems involved and the issues as the Supreme Court perceives them to be in its analysis of the record certified in this case. This latitude extends to the Supreme Court's restatement of the issue or issues and the manner in which the answers are given, whether as a comprehensive whole or in subordinate or even contingent parts.
Swire Pac. Holdings v. Zurich Ins. Co., 284 F.3d 1228, 1234 (11th Cir.2002) (alteration in original) (quoting Martinez v. Rodriquez, 394 F.2d 156, 159 n.6 (5th Cir. 1968)).
In order to assist the court's consideration of the case, the entire record, along with the briefs of the parties, shall be transmitted to the court.
QUESTION CERTIFIED.
EXHIBIT A
THIS ENDORSEMENT CHANGES THE POLICY.
PLEASE READ IT CAREFULLY
SELF-INSURED RETENTION
Per Occurrence
Self-Insured Retention: $1,000,000 Per Occurrence Including Loss Adjustment Expense
In consideration of the premium charged, it is agreed the insurance afforded by the policy to which this endorsement is attached is subject to the following additional terms, conditions and provisions. In the event of a conflict between any of the terms, conditions or provisions of the policy and this endorsement, this endorsement will control the application of insurance to which the policy applies.
Unless otherwise specified, all terms used in this endorsement have the meaning set forth in the policy.
1. The Self-Insured Retention, shown above, applies to each and every "occurrence" or offense made against any insured, to which this insurance applies, irrespective of the number of claims which may be joined in to any one "suit" or claim.
2. Our total liability will not exceed the Limits of Insurance as specified in the policy Declarations, Coverage Parts or endorsements. The Limits of Insurance will apply only in excess of the Self-Insured Retention, hereinafter referred to as the "Retained Limit."
3. We have no duty to defend or indemnify unless and until the amount of the "Retained Limit" is exhausted by payment of settlements, judgments, or "Claims Expense" by you.
4. Should any claim under this policy result in a settlement or judgment not exceeding the "Retained Limit," including "Claims Expense," then no "Claims Expense," damages or indemnity will be payable by us.
5. Should any claim arising under this policy result in a settlement or judgment, including "Claims Expense" *1334 incurred by the insured or on the insured's behalf, in excess of the "Retained Limit," we will pay those amounts in excess of the "Retained Limit" to which this insurance applies subject to the Limits of Insurance as specified in the Declarations.
6. The "Retained Limit" will only be reduced by payments made by the insured.
7. No "Claims Expense" will be incurred on our behalf without our prior consent, nor will the insured voluntarily enter into a settlement which is in whole or in part in excess of the "Retained Limit," without our express written approval.
8. Should any claim within the terms of the coverage be subject to a demand for settlement whether below the amount of the "Retained Limit," or in excess of it, and should the insured decline to settle such a claim or demand, or to tender the remainder of the "Retained Limit" to us, our maximum liability will be limited to the amount for which the claim could have been settled, but only for that portion of the settlement or judgment in excess of the "Retained Limit."
9. Based upon the unique nature of this program and the need to coordinate the warranty program with the general liability insurance program, the insured agrees to retain Bridgeworks Commercial Management as its self-insurance service company for the purposes of providing claims service at its expense. Bridgeworks Commercial Management will provide service and coordination for claims under the "Retained Limits" on behalf of the insured and under the control of the insured. However, this service will not be terminated or altered without our express written permission (or this policy will be declared null and void). The insured's agreement to enter into and abide by the terms and conditions of the contract with Bridgeworks Commercial Management, including payment and advance deposit of funds when a claim is reported, is a material representation under this policy.
10. Loss settlements made by the insured or its self-insurance company, in excess of the "Retained Limit," will not be binding against us.
11. With respect to any claim payable under this insurance and subject in whole or in part to the "Retained Limits" as provided in this endorsement, we will have the right, but not the obligation to assume the control of said claim and to pay any part of or all of the amount of any such loss including "Claims Expense" within the "Retained Limit" on behalf of and for the account of the insured to affect settlement of said claim. Amounts paid by us pursuant to this paragraph will be reimbursed to us by the insured within ten (10) days from the date of our written request to the insured. We will have the right to make partial recoveries from the insured when partial settlements or "Claims Expense" are incurred by us within the "Retained Limit" as provided by this endorsement.
12. We will have the right, but not the duty, to defend any "suit." The insured will have the obligation to defend any claim or "suit" which may involve this coverage without respect to the "Retained Limit," and to settle same within the "Retained Limit" where possible. Said obligation to defend continues until the "Retained Limit" has been exhausted by settlements *1335 or "Claims Expense," or until written permission to discontinue said defense is granted by us.
13. For purposes of this endorsement, the term "Claims Expense" will include all fees, costs, charges and expenses generated by attorneys designated to represent the insured, and all other costs, charges and expenses incurred in the investigation, adjustment, settlement, arbitration, defense or appeal of any claim to which this insurance otherwise applies. "Claims Expense" will not include the cost of investigating or adjusting a claim by salaried employees of the insured, the insured's self-insurance service company, wages or salaries of any employee of any insured and/or operating expense of any insured.
14. The insolvency, bankruptcy, receivership of the insured, or any refusal by or inability of the insured to satisfy its obligations pursuant to this endorsement will not reduce the "Retained Limit" as set forth in the endorsement, nor will it require us to pay any amounts within the "Retained Limit." The payment of the "Retained limits" by the insured is a condition precedent for our obligation to pay any sums either in defense or indemnity and we shall not pay any such sums until and unless the insured has satisfied its "Retained limits."
15. The "Retained limits" shall not be exhausted or satisfied by any payments or claims expenses for damages that would not have been covered by the terms of this policy. The "Retained limits" shall not be utilized in response to any "claims" that are not otherwise covered by the terms and conditions of this policy.
All other terms and conditions of the Policy remain unchanged. (emphasis added by the parties).
NOTES
[*] Honorable Stephan P. Mickle, Senior United States District Judge for the Northern District of Florida, sitting by designation.
[1] See Exhibit A for the text of the SIR endorsement.
[2] The text of the transfer of rights provision found in SECTION IVCOMMERCIAL GENERAL LIABILITY LIMITS, 8. Transfer Of Rights Of Recovery Against Others To Us, reads:
If the insured has rights to recover all or part of any payment we have made under this Coverage Part, those rights are transferred to us. The insured must do nothing after loss to impair them. At our request, the insured will bring `suit' or transfer those rights to us and help us enforce them.
[3] See Ins. Co. of the State of Pa. v. Acceptance Ins. Co., 2002 WL 32515066, at *1 (C.D.Cal. Apr. 29, 2002) ("The Endorsement additionally contains a provision that addresses the possibility that [the insured] has other insurance covering the same claims. This provision is at the crux of the dispute between the parties to this action." (emphasis added)); Forecast Homes, Inc. v. Steadfast Ins. Co., 105 Cal.Rptr.3d 200, 205 (Cal. Ct. App.2010) (including in the policy a provision stating, "[p]ayments by others, including but not limited to additional insureds or insurers, do not serve to satisfy the self-insured retention.").
[4] Compare Travelers Indem. Co. v. Arena Grp. 2000, L.P., 2007 WL 935611, at *5 (S.D.Cal. Mar. 8, 2007) ("More importantly, a policy may prohibit the use of other insurance to satisfy a retention by including a policy provision requiring the insured to personally pay the retained amount. Here, subsection K. 1, regarding `Other Insurance,' provides that the `Insured shall pay from its `own account' all amounts within the Retained Amount[.]'" (emphasis added) (internal citation omitted)) with Vons Cos. v. U.S. Fire Ins. Co., 92 Cal. Rptr.2d 597, 605 (Cal. Ct. App.2010) ("Nowhere does the SIR expressly state that [the insured party] itself, not other insurers, must pay the SIR amount. Because the SIR was subject to the other insurance provisions, which also made the [insured party's] policy excess if there were another policy covering the accident, [insured party] could read the policy as permitting the use of other insurance proceeds to cover the SIR amount.").
[5] The "made whole doctrine" provides, absent a controlling contract provision that states otherwise, that the insured has priority over the insurer to recover its damages when there is a limited amount of indemnification available. See Schonau v. GEICO Gen. Ins. Co., 903 So.2d 285, 287 (Fla. 4th Dist.Ct.App. 2005) ("Decisions applying the `made whole' doctrine essentially hold that where both the insurer and the insured simultaneously attempt to recover all of their damages from a tortfeasor who cannot (because of insolvency, limited insurance coverage, or other reasons) pay the full value of damages, the insured has priority of recovery over the insurer." (citing Fla. Farm Bur. Ins. Co. v. Martin, 377 So.2d 827, 828-30 (Fla. 1st Dist.Ct.App. 1979))).
[6] The implication of the answer to this question is that, even if ICI was able to count the amount it received in indemnification towards its SIR, that alone would be of little value if the General Fidelity Policy gave General Fidelity the priority to be made whole before ICI could use any of the indemnity payment towards the SIR.
[7] The District Court did not address the impact of the Bordeaux decision because ICI cited that decision for the first time in its reply brief to this court on appeal.
| {
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111 N.J. 67 (1988)
543 A.2d 34
SAINT BARNABAS MEDICAL CENTER, PLAINTIFF-RESPONDENT,
v.
COUNTY OF ESSEX, DEFENDANT, AND JESSIE WILLIAMS, DEFENDANT-APPELLANT.
The Supreme Court of New Jersey.
Argued December 1, 1987.
Decided June 29, 1988.
*70 H. Curtis Meanor, Acting Essex County Counsel, argued the cause for appellant (H. Curtis Meanor, attorney; Thomas M. Bachman, Asst. County Counsel, of counsel and on the briefs).
Barry H. Ostrowsky argued the cause for respondent (Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone, attorneys; Barry H. Ostrowsky and Todd C. Brower, on the brief).
The opinion of the Court was delivered by STEIN, J.
The novel question for decision in this case is the extent to which a county is responsible for the hospitalization costs of an indigent county jail inmate where the inmate remains hospitalized past the termination of his sentence. The Appellate Division held that an implied contract existed between the parties obligating defendant Essex County to pay to plaintiff, Saint Barnabas Medical Center (Saint Barnabas), the full amount owing for the inmate's hospitalization, here nearly $54,000, provided Saint Barnabas could prove that the entire duration of the patient's stay was necessary. We reverse. We find that no contract was formed, and hold that in the absence of a valid contractual arrangement the County is responsible only for the hospitalization costs incurred during the tenure of the inmate's sentence. The loss resulting from the unpaid portion of the bill is to be borne by Saint Barnabas, where, through administrative rate-setting procedures, and beginning in 1987 through the mechanism of the Uncompensated Care Trust Fund, it is spread out among all "payers" for hospital services.
I
On July 13, 1982, Jessie Williams was committed to the Essex County Jail Annex, located in Caldwell, to begin serving a fifteen-day sentence. On July 16, Williams set himself on fire and required emergency treatment. Although Essex County had an existing arrangement with University Hospital for the *71 treatment of its prisoners, corrections officers transported Williams to Saint Barnabas because of its specialized burn unit. The officers apparently told the hospital staff that they had brought Williams from the Essex County Jail, and gave them a phone number to call for information. However, there is no evidence of any discussion concerning responsibility for his medical bills.
Three days later, on July 19, 1982, Ray Grimm of Saint Barnabas phoned Elizabeth Neff in the Jail Annex's business office to confirm Williams' status as an inmate and to ascertain whether the County would be responsible for the treatment costs. Earlier that day, on the County's motion, the remaining eight days of Williams' sentence had been vacated by the Newark Municipal Court, R. 3:21-10(a), (b)(2). Accordingly, Neff informed Grimm that Williams was being "released," but acknowledged that the County would pay for the hospitalization costs incurred thus far, from Williams' admission to the hospital on the sixteenth through the end of the day. Her statements were based on the jail's customary method of handling such cases with University Hospital, with which the County had a contract for treating its prisoners when necessary, whereby the County would pay the hospital for the number of days the hospitalized inmate was still in the County's custody. In a letter to Grimm dated July 23, 1982, Neff confirmed her statement that the County would pay for Williams' medical care only through the nineteenth.
On August 10, 1982, Grimm responded by letter, informing Neff that Saint Barnabas considered the County "responsible for the total cost of the care for Mr. Williams." After roughly seven weeks of treatment, Williams was released from the hospital on September 2, 1982; the total cost of his treatment and hospitalization came to $53,725.59, and an invoice in that amount was forwarded to the County. Consistent with its stated position, the County refused to acknowledge liability except for the first four days of Williams' treatment, an amount stipulated to be $5,401.
*72 Saint Barnabas commenced this action against Williams and Essex County for the total cost of treatment. Williams was never served, and the case against him was subsequently dismissed without prejudice.[1]
In January 1986, cross motions for summary judgment were argued before the Law Division, and in a published opinion, the court granted plaintiff's motion, ruling that the County was liable for the full term of Williams' stay in the hospital. Saint Barnabas Medical Center v. Essex County, 211 N.J. Super. 488 (1986). The court found an implied agreement to pay, reasoning that "the hospital had a right to rely on the credit of the County." Id. at 493. The court also found that the County had a duty to obtain medical treatment for Williams, pursuant to applicable administrative regulations. It rejected the County's claim that its responsibility for treatment ended when Williams' sentence was vacated, ruling that the County was estopped from altering the terms of its implied agreement with the hospital. Id. at 494-96. The court did not, however, expressly assign any basis for the County's liability for the five-week period between the date Williams' sentence was originally scheduled to end, July 27, 1982, and his discharge from the hospital on September 2, 1982.
The Appellate Division recognized this gap in the trial court's ruling, noting in its opinion of March 23, 1987, that "even if the County had not obtained the order suspending Williams' sentence, his [jail] term would have expired before he was discharged from the hospital." 216 N.J. Super. 161, 164. The Appellate Division agreed that "an implied contract had been formed," citing Shapiro v. Solomon, 42 N.J. Super. 377, 383 *73 (App.Div. 1956), for the proposition that "the rendition of services at the request of another, under circumstances which negative the idea that they were gratuitous, creates an obligation implied from the request to pay what the services are reasonably worth." Id. at 164-65. This reasoning, said the court, was "clearly applicable" to the period after July 27 as well, observing that the fact that Williams' right to medical care at the County's expense ended with the termination of his sentence was "not germane." Id. at 165.
Although the Appellate Division ruled that the County's implied contractual obligation was sufficient to impose liability on it for the entire term of Williams' care, it remanded the case to the Law Division, in the interests of "fundamental fairness," and ordered that plaintiff prove it could not have lawfully discharged or transferred Williams prior to his actual release on September 2, 1982. Id. at 165-66. The Appellate Division's view was that the County's implied obligation to pay should go no further than the point at which Saint Barnabas could have effected a lawful termination of Williams' hospitalization.
We granted the County's petition for certification. 108 N.J. 186. St. Barnabas filed no cross petition from the Appellate Division's modification of the trial court ruling.
II
A.
The basic issue in this case can be stated simply: As between a county and a hospital, which entity should bear the cost associated with the medical treatment of an indigent initially requiring such treatment while a ward of the county? Its resolution derives partially from principles of contract law, but is based primarily on the legal duties imposed on counties, with respect to the health care of indigent county jail inmates, and on hospitals, with respect to the health care of indigents generally.
*74 As a matter of both state and federal law, defendant Essex County had an absolute duty to see that Williams received medical treatment for his injuries. Pursuant to regulations promulgated by the Commissioner of Corrections, see N.J.S.A. 30:1B-10, county prisoners, while confined, are classified as "wards of the county" with the "right to * * * proper medical care." N.J.A.C. 10:34-3.1(a), -3.2(5) (current version at N.J.A.C. 10A:31-3.15(a)). Counties must establish in-house medical facilities for their jails, but prison physicians are authorized to recommend that seriously ill inmates be transferred to a "civilian hospital." N.J.A.C. 10:34-3.5, -3.7(a)(6) (current versions at N.J.A.C. 10A:31-3.15(b), (b)(16), (b)(17)). These regulations implement the State's federal constitutional duty "to provide medical care for those whom it is punishing by incarceration." Estelle v. Gamble, 429 U.S. 97, 103, 97 S.Ct. 285, 290, 50 L.Ed.2d 251, 259 (1976) (eighth amendment proscribes "deliberate indifference to serious medical needs of prisoners"); see also Revere v. Massachusetts Gen. Hosp., 463 U.S. 239, 103 S.Ct. 2979, 77 L.Ed.2d 605 (1983) (fourteenth amendment due process clause mandates that injured pretrial detainees receive necessary medical care). Thus, having determined that Williams could not receive adequate care in the jail's own facilities, county corrections officials had a duty to obtain proper treatment elsewhere.
New Jersey counties are not, however, legally obligated to help finance the costs of providing medical care to indigent county citizens. Perth Amboy Gen. Hosp. v. Board of Chosen Freeholders, Middlesex County, 158 N.J. Super. 556, 563-67 (Law Div. 1978). Nor is there any statute expressly "requiring a county to pay for the medical treatment of county jail inmates received in civilian hospitals." Cooper Medical Center v. Johnson, 204 N.J. Super. 79, 84 (Law Div. 1985), aff'd o.b., 208 N.J. Super. 38 (App.Div. 1986). With respect to county residents in general, the Legislature has authorized, but not required, counties to contribute in various ways to the costs incurred by hospitals in providing unreimbursed health care. See N.J.S.A. *75 44:5-11 to -19[2]; Perth Amboy Gen. Hosp., supra, 158 N.J. Super. at 563 (statutes give counties "the right but not the duty to appropriate and apportion public funds"). And as far as funding the treatment of county prisoners is concerned, purely a state law question, Revere, supra, 463 U.S. at 245, 103 S.Ct. at 2983, 77 L.Ed.2d at 611 (state law governs issue of who pays for prisoner's or detainee's medical care), the regulations discussed above make no provision for payments of any sort when an inmate is transferred to a civilian hospital. N.J.A.C. 10:34-3.7 (current version at N.J.A.C. 10A:31-3.15(b)).
Consistent with defendant's obligation to obtain care for Williams, plaintiff, Saint Barnabas, was bound by state law to accept and treat him. Pursuant to rule-making authority granted by the Legislature, N.J.S.A. 26:2H-5, the Department of Health has promulgated regulations requiring all hospitals, as a condition of licensure, to treat indigent patients needing care. Moreover, the Administrative Code mandates that "all hospitals shall provide accident and emergency services and shall accept, when medically indicated, patients seeking such services without regard to their ability to pay." N.J.A.C. 8:43B-1.11(q)(7); see also N.J.A.C. 8:43B-1.11(i) ("all hospitals shall be expected to provide care for the needy sick * * *."). Indeed, in legislation enacted subsequent to the events at issue in this case, the Legislature has prescribed, inter alia, that "access to quality health care shall not be denied to residents of the State because *76 of their inability to pay for the care * * *." L. 1986, c. 204, § 1 (Jan. 5, 1987).
Furthermore, the Legislature has demonstrated its awareness of the costs involved in fulfilling this obligation, and has taken steps to alleviate the resulting financial burdens imposed on hospitals. In 1978 the Legislature established a comprehensive scheme of rate regulation for this state's hospitals, and directed the newly-established Hospital Rate-Setting Commission, in establishing payer reimbursement rates, to consider the costs involved in providing health care to indigent patients. See N.J.S.A. 26:2(h)-4.1, -18(d); see also N.J.A.C. 8:31B-3.41 (regulations implementing statutory directive); N.J.A.C. 8:31B-4.38 to -4.40 (same). See generally Riverside Gen. Hosp. v. New Jersey Hosp. Rate Setting Comm'n, 98 N.J. 458, 461-64 (1985) (explaining rate-setting process). As the Court noted in In re Barnert Memorial Hosp. Rates, 92 N.J. 31, 36 (1983), a fundamental aspect of the 1978 legislation was its attempt "to alleviate the single most pressing problem facing urban hospitals by requiring the cost of unreimbursed indigent care to be considered in the state-controlled hospital rate and charged to all payors." Most recently, in 1987, the Legislature established the "Uncompensated Care Trust Fund," which, through the equitable collection and distribution of monies generated by increasing the rates charged to payers at all New Jersey hospitals, seeks to spread the costs of indigent health care across the state. See L. 1986, c. 204; see also N.J.A.C. 8:31B-7.1 to -7.8 (implementing regulations).
B.
Against this background of legal obligations, it is not difficult to understand the failure of the parties' agents to negotiate a contract for Williams' medical treatment at the emergency room door. In dealing with the impending medical emergency, the corrections officials and hospital staff acted pursuant to mandatory legal duties and did not purport to negotiate a *77 binding agreement. We find that a contract was neither formed nor contemplated.
Nor did the parties' conduct give rise to an implied contractual arrangement. A true contract implied in fact "is in legal effect an express contract," and varies from the latter only insofar as the parties' agreement and assent thereto have been manifested by conduct instead of words. Saint Paul Fire & Marine Ins. Co. v. Indemnity Ins. Co. of N. America, 32 N.J. 17, 23 (1960); accord Restatement (Second) of Contracts § 4 comment a. Like express contracts, contracts implied in fact depend on "mutual agreement and intent to promise," West Caldwell v. Caldwell, 26 N.J. 9, 29 (1958) (quoting Williston on Contracts § 3 (Jaeger 3rd ed. 1981)), and can be established by objective proofs. Saint Paul, supra, 32 N.J. at 24 (inquiry is significance of parties' actions as viewed by reasonable person engaged in relevant custom or trade). Saint Barnabas, however, has pointed to no evidence of conduct by its or the County's agents manifesting either of these elements.
Even if the actions of plaintiff's agents are assumed to have manifested an objectively reasonable intent and expectation of receiving ordinary, complete compensation, Saint Barnabas could not, under the circumstances of this case, have reasonably inferred from the conduct of the County's agents an intent to pay for the services "requested." Defendant Essex County is subject to the strictures of the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -40, which seeks to protect public funds by ensuring that money is spent in an efficient manner, by those properly authorized to spend it. See Slurzberg v. Bayonne, 29 N.J. 106, 114-15 (1959) (public contracting laws further the "interest of efficient and economical local administration of government" through avoidance of "waste, extravagance and ill-considered spending"). Accordingly, the law presumes that public contractors operate with knowledge of relevant laws constraining the procedural and substantive discretion and authority of officials with whom they deal, see State v. *78 Erie R.R. Co., 23 N.J. Misc. 203, 212, 42 A.2d 759 (Sup.Ct. 1945), and where applicable provisions are not followed, any agreements entered into are unenforceable, absent lawful ratification. See Hudson City Contracting Co. v. Jersey City Incinerater Auth., 17 N.J. 297, 305 (1955); Scatuorchio v. Jersey City Incinerator Auth., 14 N.J. 72, 85-93 (1953); Bauer v. City of Newark, 7 N.J. 426, 432-34 (1951); City of Jersey City v. Roosevelt Stadium, 210 N.J. Super. 315, 327-29 (App.Div. 1986); 10 E. McQuillan, Municipal Corporations § 29.26 at 294-95 (3rd ed. 1981 rev.) (hereinafter E. McQuillan).
Here, the appropriate procedures were not complied with, see N.J.S.A. 40A:11-6 (emergency purchases and contracts), and plaintiff makes no assertion to the contrary. Defendant County's agents were without authority to contract on the County's behalf for Williams' treatment. Thus, even an express promise to pay for Williams' treatment would have been unenforceable. E.g., Scatuorchio, supra, 14 N.J. at 93. And inasmuch as the officials lacked authority to contract expressly for plaintiff's services, their "request" for those services cannot give rise to a contract implied in fact. See Bauer, supra, 7 N.J. at 434-35; Cooper Medical Center, supra, 204 N.J. Super. at 82; 10 E. McQuillan, supra, § 29.112 at 516 (if statute requires contracts to be made in certain way and impliedly forbids other methods, no contract can be implied if provisions have not been complied with); id., § 29.26 at 295) (where process was defective there can be no recovery against public entity in implied contract even if benefits have been received).
In Cooper Medical Center v. Johnson, supra, Pennsauken Township police took an injured arrestee to plaintiff hospital for treatment, and as here no arrangements for payment were made. The court rejected the hospital's contention that a contract implied in fact obligated the Township to pay for the arrestee's treatment, reasoning that the police were without authority to contract for such services, and that "the procedures for the formation of a valid contract were not followed." 204 N.J. Super. at 82 (citing N.J.S.A. 40A:11-3, -5, -6). The *79 court found it "well settled that a municipal corporation cannot be bound in contract, express or implied, unless the officer or employee has authority to enter into such a contract on behalf of the corporation." Id. (citing Giardini v. Town of Dover, 101 N.J.L. 444, 446 (Sup.Ct. 1925); Potter v. Metuchen, 108 N.J.L. 447, 451 (Sup.Ct. 1931)).
In terms of implied-in-fact contract doctrine, the unstated rationale for such a result is that where a public official requests services but lacks substantive or procedural authority to contract expressly for them, the provider of those services cannot reasonably infer an intent to pay for them. Thus, the Appellate Division erred in finding an implied contract in this case since the circumstances did not sufficiently "negative the idea that [the services] were gratuitous." 216 N.J. Super. at 165 (quoting Shapiro, supra, 42 N.J. Super. at 383). We hold that no liability to pay for Williams' care in part or in full can be imposed on defendant County based on a contract implied in fact.
C.
However, Saint Barnabas need not shoulder the entire burden of providing the indigent inmate with medical treatment. Because Saint Barnabas fulfilled the County's duty to provide or obtain treatment for Williams during the tenure of his sentence, the County has been enriched at plaintiff's expense. To the extent the County benefited from plaintiff's discharge of its duty, recovery may be had based on quasi-contract, or a contract implied-in-law.
As explained by the Court in Saint Paul Fire & Marine Ins. Co., supra, a quasi-contractual obligation is wholly unlike an express or implied-in-fact contract in that it is "imposed by the law for the purpose of bringing about justice without reference to the intention of the parties." 32 N.J. at 22; accord West Caldwell v. Caldwell, supra, 26 N.J. at 28-29; Restatement (Second) Contracts § 4 comment b. In the case of actual *80 contracts the agreement defines the duty, while in the case of quasi contract the duty defines the contract." Insulation Contracting & Supply v. Kravco, Inc., 209 N.J. Super. 367, 376 (App.Div. 1986) (citing Callano v. Oakwood Park Homes Corp., 91 N.J. Super. 105, 108 (App.Div. 1966)). The scope of the relevant duty is a question of law to be decided by the court, in this case to be inferred from the public policies implicit in the statutes and regulations discussed above, supra at 73-75. Cf. A.L. v. P.A., 213 N.J. Super. 391, 398 (App.Div. 1986) (denying recovery in quantum meruit based on public policies underlying relevant statutes), certif. denied, 107 N.J. 110 (1987); Restatement of Restitution § 113 comment b (where quasi-contractual obligation is imposed on public entity to pay for services rendered a third person fulfilling entity's noncontractual duty, scope of obligation turns on interpretation of relevant statutes). Since the procurement of medical services for inmates is within the scope of a county's contracting powers, the application of quasi-contract principles is not barred by defendant's mere failure to follow proper contracting procedures. See Hudson City Contracting Co., supra, 17 N.J. at 308-09 (if power to contract for services rendered "lies within the competence of the municipal corporation," recovery on theory of quantum meruit permissible despite failure to follow proper procedure); 10 E. McQuillin, supra, § 29.110 at 506 (municipal corporation may be held liable in quasi-contract).
The regulations governing the administration of county correctional facilities clearly imposed the responsibility for an inmate's health care on the county, but only during the period of incarceration. According to these regulations, "medical services include all measures needed to keep the inmate population in good health," and "[w]hile confined in such institutions, prisoners are wards of the counties." N.J.A.C. 10:34-3.1 (repealed). Depending on the size of the facility, N.J.A.C. 10:34-3.5 (repealed) required the establishment of either an on-premises hospital or infirmary. Today, N.J.A.C. 10A:31-3.15(a) mandates that:
*81 During the period of confinement, the inmate is a ward of the county and concern shall be shown for both his physical and mental well-being. While it would be unrealistic to burden the county jail with responsibility for all the inmates' health needs, essential medical, dental, and health service care shall be provided.
These regulations embody a custodial noncustodial distinction for purposes of health-care obligations. The county is the appropriate entity to cover the costs of providing custodial health care. Nothing, however, indicates that counties are to be treated as insurers for the future medical needs of indigent inmates any time a condition necessitating treatment arises during the period of confinement. Cf. Commonwealth v. Lyles, 77 Pa.Commw. 15, 464 A.2d 712, 714 (1983) ("correctional system is not a medical provider and should not be considered solely liable for the expense of treatment of every person who at some point is placed in the system"). The implausibility of imposing insurer-like duties on a county is evinced by positing the case of an indigent prisoner who, during the pendency of a county jail term, discovers he has cancer or AIDS, requiring extensive medical treatment for the rest of his life. In the absence of a tortious relationship between the county's incarceration of the inmate and the medical condition necessitating treatment, the existing legislative allocation of fiscal health care obligations compels the conclusion that county taxpayers are not the appropriate source of funding for such treatment. Cf. Perth Amboy Gen. Hosp. v. Board of Chosen Freeholders, Middlesex County, supra, 158 N.J. Super. at 563 (though it might be sensible to impose indigent health care costs on county taxpayers, "the law is otherwise").[3] The county's *82 fiscal responsibility for the medical treatment of its inmates ends with the inmates' sentence. That responsibility is unaffected by the fact that in this case the necessary treatment could not be provided by the jail's in-house medical facilities. We hold that where the county and hospital have not entered into a lawful, express contract for an indigent inmate's treatment, a quasi-contract, or contract implied-in-law, obligates the county to reimburse the hospital for the treatment costs incurred during the remainder of the prisoner's sentence.
From Saint Barnabas's perspective, it is entirely within the ambit of its legal and fiscal responsibilities to accept the costs associated with indigent health care. The Legislature has imposed the initial costs of such care on hospitals but has mandated that it be passed along to all purchasers of health care. As noted, prior to 1987 all New Jersey hospitals were permitted to "mark up" their rates prospectively based on the estimated amount of care to be provided indigents or patients otherwise unable to pay. N.J.S.A. 26:2H-18(d); N.J.A.C. 8:31B-3.41, -4.38 to 4.40; see Cooper Medical Center v. City of Camden, 214 N.J. Super. 493, 497 (App.Div. 1987) (hospitals are compensated for providing indigent health care by the incorporation of an uncompensated care factor into their rates). However, this hospital-specific method of distributing the costs of indigent health care impeded effective competition by forcing some hospitals, typically those serving inner city areas, to raise their rates much more than others. To remedy the situation, the Legislature established the Uncompensated Care Trust Fund and directed the computation of a uniform statewide "uncompensated care add-on" to be used in rate-setting at all hospitals. L. 1986, c. 204, § 6; N.J.A.C. 8:31B-7.3. Hospitals that collect more through the add-on than necessary to cover their uncompensated care costs then "remit the net difference to the Fund," while hospitals whose indigent health care costs *83 exceed the amount collected are authorized "to receive the net difference from the Fund." L. 1986, c. 204, § 7(b). Section 1 of the Act sums up the thrust of the legislation as follows:
The Legislature finds and declares that: access to quality health care shall not be denied to residents of the State because of their inability to pay for the care; there are many residents of the State who cannot pay for needed hospital care and in order to insure that these persons have equal access to hospital care it is necessary to establish a mechanism which will ensure payment of uncompensated hospital care; to protect the fiscal solvency of the state's general hospitals as provided for in [N.J.S.A. 26:2H-1 et seq.], it is necessary that all payers of health care services share in payment of uncompensated care on a Statewide basis; and, therefore, it is necessary to establish the "New Jersey Uncompensated Care Trust Fund." [L. 1986, c. 204, § 1.][4]
The Legislature has thus clearly established as the public policy of this State a system that imposes the costs of indigent medical care not on county taxpayers but on "all payers of health care services." Accordingly, we hold that the cost of the inmate's health care subsequent to the expiration of his sentence cannot be passed on to Essex County, but is to be borne by Saint Barnabas subject to its right to spread the loss through appropriate statutory and regulatory mechanisms. We recognize that this allocation of responsibility between a county and a private hospital does not follow inevitably from existing statutory or regulatory commands. It is significant, however, that in these cases the duration of the care may bear no relationship to the duration of the custodial term. We are convinced that our resolution of this issue is one that is both pragmatic and fully consistent with the public policies underlying the pertinent statutes and regulations.
Although Essex County concedes responsibility for the costs of hospital care until June 19, 1982, when Williams' sentence was vacated, it argues that it should not be liable for the remaining days Williams was scheduled to serve. Counsel *84 suggests that it is routine practice to vacate the sentence of a hospitalized county jail inmate, and represented at argument that in this case it was done to relieve the County of the three-thousand dollar per week expense of providing twenty-four hour armed guards at the hospital. We do not question the County's authority to move the municipal court to vacate the remainder of Williams' sentence. See R. 3:21-10(b)(2); N.J.A.C. 10:34-3.7(a)(7) (repealed). While we cannot fault the County for attempting to avoid the expense of guarding Williams while he was a patient at Saint Barnabas, we do not equate its authority to avoid that cost with the power unilaterally to alter the allocation of responsibility between it and Saint Barnabas for the cost of Williams' hospital care. The County's legal duty was to provide for Williams' health care while he was a prisoner; it should not be permitted to avoid that duty at Saint Barnabas's expense by prematurely terminating his prison term. Hence, we reject the County's argument that its financial responsibility terminated when Williams' sentence was vacated, and hold that it must pay for the number of days Williams would have served had he not injured himself. Counties remain free to seek the vacation of prisoners' sentences in such cases, but it will not affect their quasi contractual liability to the hospital if the inmate is indigent.
III
Essex County is liable in quasi-contract to Saint Barnabas for the expenses incurred in treating Williams during the period Williams would have been under sentence. On remand, unless the parties can stipulate to these matters, the Law Division should ascertain when Williams would have been released from the jail annex had he not been injured, and determine how much of the $54,000 total is attributable to that period. Accordingly, we affirm in part and reverse in part the judgment of the Appellate Division.
*85 POLLOCK, J., concurring.
On July 13, 1982, the Newark Municipal Court sentenced the defendant Williams to a fifteen-day term at the Essex County Jail. Three days later, he set himself on fire. Nothing in the record establishes that negligence of the County contributed to that event. Although the County had contracted with the University of Medicine and Dentistry to provide hospital care for prisoners, the prisoner's burns were sufficiently severe for the County to take him to Saint Barnabas Medical Center, which maintains a burn unit. Three days after he was admitted to Saint Barnabas, the Municipal Court vacated the balance of the sentence at the County's request. The prisoner remained at Saint Barnabas until September 2, 1982, incurring a hospital bill of $53,757.59, which he cannot pay because he is indigent. The issue is the allocation of the bill between the County and the hospital in the absence of a contract between them.
The Court concludes that Essex County is responsible for the medical care of the prisoner for a period of time co-extensive with the prisoner's original sentence, and that St. Barnabas is responsible for the balance of the prisoner's medical care. In reaching that result, the Court relies on the doctrine of quasi-contract or unjust enrichment and, in the absence of an express or implied contract, creates a contract between the parties. It is as if the parties had agreed that Essex County would pay for the prisoner's care during the term of his original sentence and that St. Barnabas had agreed to be responsible thereafter. The Court considers the costs of the prisoner's medical care and the consequences of the allocation of those costs. I concur. Courts should be aware of the costs and consequences of their decisions.
Implicit in the Court's opinion is recognition that the County is better able to control the risk of loss resulting from injuries to prisoners while they are in the County Jail. As between the County and St. Barnabas, the County, which maintains the jail, is better able to prevent prisoners from setting themselves on *86 fire. Furthermore, the Court considers whether the County or the hospital is better able to allocate the cost of that risk. The parties did not present facts on the economic aspects of the distribution of the risk of loss or of the cost of that risk. Nonetheless, the statutory scheme, L.1986, c. 204, § 6; N.J.A.C. 8:31B-7.3, makes clear that a hospital must provide emergency treatment to an indigent patient and that the cost of that treatment is to be spread among the ratepayers of other hospitals throughout the State. Here, the effect would be to spread the cost among citizens, albeit those who are hospital patients, located throughout New Jersey, not simply those who reside in Essex County. Arguably, a legislative scheme would be more equitable and efficient if it distributed the cost of treating indigent patients among all citizens of the State, not merely those who become hospitalized. Monmouth Medical Center v. State, 80 N.J. 299, 312 (1979); Star-Ledger, June 26, 1988, § 3, at 8, col 1. We are constrained, however, to accept the scheme as provided by the Legislature. In this context, the court sensibly concludes that the County should bear the cost of treatment during the period of the prisoner's original sentence and that the hospital should thereafter be responsible. Both entities can spread the risk of loss: the County by transmitting the risk to the taxpayers, and the hospital by transmitting the risk to other ratepayers.
To the extent that the Court considers the distribution of the risk of loss, its decision is consistent with other opinions of this Court. See, e.g., Spring Motors Distribs., Inc. v. Ford Motor Co., 98 N.J. 555, 567-68 (1985); Kelly v. Gwinnell, 96 N.J. 538, 550 n. 9 (1984); O'Brien v. Muskin Corp., 94 N.J. 169, 181-82 (1983); Trentacost v. Brussel, 82 N.J. 214, 226 (1980); Suter v. San Angelo Foundry & Mach. Co., 81 N.J. 150, 173 (1979); Monmouth Medical Center v. State, supra, 80 N.J. at 312; Cepeda v. Cumberland Eng'g Co., Inc., 76 N.J. 152, 174 (1978); Property Owners Ass'n of N. Bergen v. Township of N. Bergen, 74 N.J. 327, 337 (1977); Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 379 (1960). Likewise, the consideration *87 of the ability of a party to control the risk of loss is also a relevant consideration. See, e.g., Spring Motors Distribs., Inc., supra, 98 N.J. at 567-68; O'Brien, supra, 94 N.J. at 181-82; Cepeda, supra, 76 N.J. at 174; Henningsen, supra, 32 N.J. at 379. In sum, a consideration of economic consequences in arriving at an appropriate decision is consistent with our jurisprudence.
By relying on unjust enrichment, the court's decision "suggests a moral basis for law (perhaps) divorced from the economic." R. Posner, Economic Analysis of Law § 4.13 at 122 (3d ed. 1986). Judge Posner believes, however,
[i]n fact, the principal case outcomes are better explained in economic than moral terms. The concept of an implied contract is a useful shorthand for an economic approach, for that approach suggests that there is a considerable continuity between express contracts and the questions nowadays treated under the rubric of unjust enrichment. [Ibid.]
Thus, the Court's decision may be understood not only in terms of unjust enrichment but in terms of its economic consequences.
A court need not be committed to economic determinism to appreciate that an economic analysis can reveal and effectuate policy choices. See White, Coase and the Courts: Economics for the Common Man, 72 Iowa L.Rev. 577 (1987). As the Court acknowledges, its decision is not compelled by economic considerations but "is based primarily on the legal duties imposed on counties, with respect to the health care of indigent county jail inmates, and on hospitals with respect to the health care of indigents generally." Ante at 73. In effect, the Court invokes economic reasoning to disclose policy choices implicit in legislatively imposed legal duties. Rather than predicate the decision on an independent economic analysis, the Court defers to the legislative and regulatory judgment on policy choices. See N.J.A.C. 10A:31-3.15(a) ("[w]hile it would be unrealistic to burden the county jail with responsibility for all the inmates' health needs, essential medical, dental, and health service care shall be provided); L. 1986, c. 204 (declaring that "access to quality health care shall not be denied to residents of the State because of their inability to pay for the *88 care"); N.J.A.C. 8:43B-1.11(q) (requiring that hospitals "shall provide accident and emergency services at all times and shall accept, when medically indicated, patients seeking such services without regard to their ability to pay"). Nonetheless, an economic analysis reveals the costs and subsidies implicit in the Court's decision.
This, I believe, is an appropriate use of economic analysis in the judicial process. Economics and law are different, but each discipline can illuminate the other. Economic analysis not only recognizes a decision's costs and benefits, but makes more predictable the effect of the decision. To appreciate that use of economic analysis, one need not subscribe to the proposition that the right rule of law is necessarily the one that is the most efficient. An economic analysis may be more appropriate in some cases, such as those involving rights that are traditionally measured by a monetary standard, than in others, such as those that involve fundamental or deeply personal rights. Some rights are not readily susceptible to an economic evaluation. Compare Matter of Baby M, 109 N.J. 396, 440 (1988) (in declaring unenforceable a contract for surrogate motherhood, the Court stated: "There are, in a civilized society, some things that money cannot buy") with R. Posner, Economic Analysis of Law, supra, § 5.4, at 139-43 (hypothesizing a free market in babies because "the costs of production to natural parents are much lower than the value that many childless people attach to children," and because "the parents who value a child the most are likely to give it the most care"). Deciding cases remains an exercise in judgment, and an economic analysis, although it sheds light on a just decision, need not predetermine the outcome of a case.
POLLOCK, J., concurs.
For affirmance in part; reversal in part Chief Justice WILENTZ, and Justices CLIFFORD, HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN 7.
NOTES
[1] At no time has plaintiff contended that the events surrounding Williams' injuries could give rise to tort liability on the County's behalf. We note that Williams apparently did institute a tort claim against the County at some point, see Saint Barnabas Medical Center v. Essex County, 211 N.J. Super. 488, 491 (Law Div. 1986), but those proceedings are not part of the record in this case. We assume for purposes of this decision that defendant is not liable in tort. See infra at 81-82 & n. 3.
[2] N.J.S.A. 44:5-11 (counties without county-supported hospital "may" appropriate up to $800,000 per year to support treatment for residents); N.J.S.A. 44:5-14 (counties without county-supported hospital "may" appropriate any amount desired to construct or enlarge hospital(s) supported by "private charity"); N.J.S.A. 44:5-16A (counties smaller than 850,000 "may" appropriate one-tenth of one percent of total assessed value of real and personal property to fund local charitable hospital(s) where resident indigents and/or poor are treated up to an amount equal to the hospital(s)' annual deficit); N.J.S.A. 44:5-17 (counties larger than 850,000 "may make provision for the support of resident indigent patients" under certain conditions, if the need for such treatment is certified to in each case by county physician and hospital officials, and the governing body approves the expenditure).
[3] Conversely, when inmates' injuries are the result of actionable negligent conduct by county officials or employees, fundamental tort law principles dictate that county taxpayers are precisely the appropriate group to pay for the necessary medical treatment. Through their management and oversight of county correctional facilities, county officials are in the best position to take precautions against negligently inflicted injuries to inmates. Further, counsel has informed us that typically counties are insured against the costs of tort actions by prisoners, in which medical expenses would normally be recoverable.
[4] Additionally, the Legislature established a nineteen-member Uncompensated Care Trust Fund Advisory Committee to aid the Department of Health in implementing the legislation, L. 1986, c. 204, § 5, and appropriated a fifteen-million dollar loan to the Fund. Id. §§ 12, 14.
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117 S.E.2d 431 (1960)
253 N.C. 529
HENLEY PAPER COMPANY
v.
John C. McALLISTER, Jr.
No. 602.
Supreme Court of North Carolina.
December 14, 1960.
*433 Schoch and Schoch, by Arch K. Schoch, High Point, for plaintiff, appellant.
Haworth, Riggs & Kuhn, High Point, and Jordan, Wright, Henson & Nichols, by Welch Jordan, Greensboro, for defendant, appellee.
HIGGINS, Justice.
The superior court did not assign its reasons for sustaining the demurrer to the evidence and for dismissing the action. The plaintiff contended the restrictive covenant in the contract was entered into at the time and as a part of the consideration for the original employment, and remained in force so long as defendant remained in plaintiff's employment. The plaintiff further contended the contract, because of the character of the business and knowledge thereof by the defendant, was reasonable, both as to time and territory, and should be enforced by injunction.
The defendant contended (1) the contract containing the restrictive covenant was not a part of the original employment agreement but was required after the defendant was already at work and was, therefore, without consideration; (2) was unreasonable and void because of the restraints sought to be imposed upon the defendant; (3) the original contract which contained the covenant was superseded by a new contract of employment which did not embrace the restrictive covenant.
Judge Preyer, not having been requested to do so, did not record findings of fact and conclusions of law. If his decision finds support on any legal ground it becomes our duty to affirm. Mr. McAllister testified that three, four, or possibly six months after he began his employment, Mr. Grant presented the contract and said, "All trainees sign this thing or they don't keep their job." Mr. Grant did not see fit to deny. Whether the evidence shows any consideration for the restrictive covenant is questionable. Kadis v. Britt, 224 N.C. 154, 29 S.E.2d 543, 152 A.L.R. 405; Scott v. Gillis, 197 N.C. 223, 148 S.E. 315. The evidence disclosed the defendant was not advised of any restrictive covenant until he had been at work for three, four, or possibly six months. The evidence is sufficient to support a finding the covenant was without consideration.
*434 The evidence shows the defendant was employed in the Fine Paper Division of the plaintiff's business. Likewise it shows the major part of the fine paper business is confined to North Carolina, South Carolina, East Tennessee, Southwest Virginia, and a small territory in West Virginia. The restricted area covered Virginia, Kentucky, Maryland, North Carolina, South Carolina, Tennessee, Virginia, West Virginia, parts of Alabama, Delaware, Indiana, Ohio, and Pennsylvania. The evidence shows the defendant's activities were confined exclusively to the sale and distribution of fine paper products. The restrictive covenant seeks to prevent "either directly or indirectly" engaging "in the manufacture, sale, or distribution of paper or paper products within a radius of 300 miles of any office or branch of Henley Paper Company or any of its subsidiary divisions." The terms of the restriction, regardless of the cause or manner of discharge, prevented the defendant from taking a job connected with the manufacture, sale, or distribution of paper or paper products. The prohibition would prevent the defendant from cutting pulpwood or gathering linen rags to be used in the manufacture of paper or paper products. Nothing need be added to show the conditions have too many ramifications and impose an undue hardship upon one who had been employed to do no more then sell and deliver fine paper.
As this Court said in Kadis v. Britt, supra [224 N.C. 154, 29 S.E.2d 546]:
"Contracts restraining employment are looked upon with disfavor in modern law. (Citing many authorities.) And they have been held to be prima facie void.* * *
"For the most part, cases of this class are concerned with the effort on the part of the employer to protect his business against the subsequent use, by a competitor, of trade secrets confidentially acquired in the course of employment; * * * Such contracts are upheld only when they are `founded on valuable considerations, are reasonably necessary to protect the interests of the parties in whose favor they are imposed, and do not unduly prejudice the public interest.' * * * To this must be added the condition that they do not impose unreasonable hardship upon the covenantor, * * *". See, also, Tobacco Growers' Co-operative Association v. Jones, 185 N.C. 265, 117 S.E. 174, 33 A.L.R. 231.
"Contracts in partial restraint of trade are still contrary to public policy and are void if nothing shows them to be reasonable. * * * (restriction covering territory) greater than is required for the protection of the plaintiff, is detrimental to the public interest, and is unreasonable and void." Maola Ice Cream Co. of North Carolina v. Maola Milk & Ice Cream Co., 238 N.C. 317, 77 S.E.2d 910, 916.
According to plaintiff's own allegations, more than 35 competitors engage in the wholesale and distribution of all lines of paper products. The defendant's employment was "in the fine paper field." The plaintiff had a wider field of distribution for its coarse or industrial paper than for its fine paper. The defendant had nothing to do with industrial paper. Yet the contract excludes him from industrial paper. The plaintiff is a distributor, not a manufacturer, yet the contract prevents defendant from "either directly or indirectly" engaging in the manufacture, sale or distribution of paper or paper products in a territory extending in a 300-mile radius from any of plaintiff's divisions. The territory extends from Delaware to Alabama; from Indiana to the Atlantic. The contract excludes the defendant from too much territory and from too many activities. It is, therefore, void and unreasonable. Noe v. McDevitt, 228 N.C. 242, 45 S.E.2d 121, 123.
Whether part of the contract might be deemed reasonable and enforceable is not the question. It comes to us as a single *435 document. We must construe it as the parties made it. "The Court cannot by splitting up the territory make a new contract for the parties. It must stand or fall integrally." Noe v. McDevitt, supra.
The original contract established the relationship of employer and employee. It described duties to be performed by the employeesalesman; and compensation to be paid by the employercommissions. Some time prior to November 4, 1952, the parties entered into another agreement. The memorandum thereof was drawn on that day by the plaintiff. The new agreement provided the defendant's compensation beginning October 1, 1952, should be $400 per month and commission on sales to Tri-Bee Label Company. It changed the defendant's duties completely and he became head of the Fine Paper Kardex-stock control and sales desk department. His duties were to develop sales and train sales personnel. By memorandum dated March 23, 1954, the defendant was guaranteed compensation of $10,000 per year. Thus by agreement subsequent to January 3, 1950, of which the exhibits quoted above are memoranda, the duties of the defendant and his compensation were changed without any reference to or mention of the original contract. Thus the defendant became employed to perform new duties and plaintiff became obligated to pay new and different compensation. Inasmuch as the parties by the subsequent agreement fixed the terms of employment and the obligation of the parties each to the other without any r nfewaceerthee o1bffi-i6lisffiie without any reference whatever to the original contract, it is not unreasonable to assume the new contract was intended as a substitution for and not a modification of the original agreement. With the exception of the restrictive covenant, all other provisions of the original contract were changed. The evidence before the court would warrant a finding the parties intended to make a new contract omitting the restrictions. Tomberlin v. Long, 250 N.C. 640, 109 S.E.2d 365; Roberts v. Mays Mills, 184 N.C. 406, 114 S.E. 530, 28 A.L.R. 338.
For the reasons indicated, the testimony and the record evidence before Judge Preyer offer abundant support from his order, which is
Affirmed.
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574 A.2d 872 (1990)
Mustafa V. ONAT
v.
PENOBSCOT BAY MEDICAL CENTER, et al.
Supreme Judicial Court of Maine.
Argued March 20, 1990.
Decided May 4, 1990.
Donna L. Zeegers (orally), Kennedy Brook Business Center, Augusta, for plaintiff.
Phillip E. Johnson (orally), Malcolm Lyons, Michael Seitzinger, Kristin A. Gustafson, John Nivison, Pierce, Atwood, *873 Scribner, Allen, Smith & Lancaster, Augusta, William D. Robitzek (orally), Paul F. Macri, Berman, Simmons & Goldberg, Lewiston, for defendants.
Before ROBERTS, WATHEN, GLASSMAN, CLIFFORD and HORNBY, JJ.
GLASSMAN, Justice.
Mustafa V. Onat, M.D., appeals from a summary judgment entered in favor of the defendants on an order of the Superior Court (Knox County, Smith, J.) in Onat's consolidated actions against Penobscot Bay Medical Center ("the hospital") and some of its employees and affiliated physicians[1] who, as participants in the hospital's peer review process, voted to suspend Onat's staff privileges because of concerns about his standards of medical practice. Onat contends that the court erred because issues of material fact remain on all of this claims.[2] In reviewing the extensive record in this case, we find that Onat failed to present probative evidence to the trial court that there were any genuine issues of material facts to be resolved by the trier of fact, and affirm the grant of the defendants' motion for a summary judgment. Accordingly, we do not reach the defendants' cross-appeal on the question of qualified versus absolute immunity under 24 M.R.S.A. § 2511 (1985) or 32 M.R.S.A. § 3293 (1975).
Mustafa Onat has been an anesthesiologist on the hospital's medical staff since at least 1975. In March 1983 concerns raised by physicians and nurses about Onat's standard of patient care culminated in a request to the hospital's Credentials and Peer Review Committee for monitoring Onat.[3] The monitoring revealed problems with Onat's patient care and led to an extended process of peer review, including review of the entire anesthesiology department by an outside consultant. Onat participated in the review process with the assistance of counsel and during the process filed three actions against the defendants.[4] In November 1985, after the review process had been completed pursuant to the hospital bylaws, the hospital's trustees voted to take corrective action against Onat by making his clinical privileges provisional, requiring monitoring of his cases *874 by an outside anesthesiologist, and requiring the chief of the department to report regularly to the Credentials and Peer Review Committee on Onat's patient care. In February 1986, however, a case raising renewed concerns about Onat's patient care resulted in suspension of Onat's staff privileges pending completion of the hospital hearing process on the complaint.[5]
Onat has claimed damages based on the defendants' alleged defamation; conspiracy; intentional infliction of emotional distress; breach of contract; tortious interference with contractual and business relationships; antitrust, conspiracy and restraint of trade; violation of his state and federal constitutional rights to due process and equal protection; violation of his state and federal civil rights; and negligence. The trial court (Brody, C.J.) denied the defendants' initial motion for summary judgment, without prejudice to its renewal after completion of discovery, on the grounds that the possibility of malice within the peer review process and the possibility of constitutional and civil rights violations remained unexplored. Following the completion of discovery, the trial court granted the defendants' renewed motion for summary judgment on all of Onat's claims.
On appeal of this granted motion for summary judgment, we examine the record, viewing the evidence in the light most favorable to Onat, to determine whether the trial court properly held that the defendants have established that there exists no genuine issue of material fact and that they are entitled to judgment as a matter of law. See Philbrook v. Gates Formed-Fibre Products, 536 A.2d 1118, 1119 (Me.1988); Peoples Heritage Bank v. City of Saco, 527 A.2d 320, 321 (Me.1987); M.R.Civ.P. 56(c). Onat cannot survive the motion on the basis of allegations alone, but "must respond by affidavits or otherwise as provided in this rule, setting forth specific facts showing that there is a genuine issue for trial." See M.R.Civ.P. 56(e).
Onat's claims of defamation, conspiracy, intentional infliction of emotional distress, breach of contract, and tortious interference with contractual and business relationships arose from the defendants' participation in the hospital's peer review process, to which Onat voluntarily subjected himself when he accepted staff privileges at the hospital. Onat does not challenge that this acceptance included conditional immunity for the defendants' conduct of the peer review process. See Gautschi v. Maisel, 565 A.2d 1009, 1011 (Me.1989); Saunders v. VanPelt, 497 A.2d 1121, 1124-25 (Me.1985); Restatement (Second) of Torts § 595 comments d, e, and j; § 596 comment c (1977). This conditional privilege immunizes publication of Onat's alleged shortcomings from legal claims absent abuse of this privilege through express or implied malice. See Saunders v. VanPelt, 497 A.2d at 1125; Restatement (Second) of Torts § 593.
We have defined malice as either actual malice, i.e., ill will, see Tuttle v. Raymond, 494 A.2d 1353, 1361 (Me.1985), or implied malice, i.e., reckless disregard for the truth or falsity of the slanderous element of a statement, see Gautschi v. Maisel, 565 A.2d at 1011; Saunders v. VanPelt, 497 A.2d at 1124-25; Restatement (Second) of Torts § 600 comment b ("Reckless disregard as to truth or falsity exists when there is a high degree of awareness of probable falsity or serious doubt as to the truth of the statement"). Despite Onat's numerous allegations of actual and implied malice, there is simply no evidence in the record supporting these allegations with fact. Professional disagreement over the appropriate standard of care does not per se constitute malice, either express or implied. Faced with like claims in a similar factual situation, the First Circuit noted in Mendez v. Belton, 739 F.2d 15 (1st Cir. 1984):
Although we are reluctant to affirm grants of summary judgment to defendants in cases that hinge on the subjective intent of defendants, a plaintiff opposing a motion for summary judgment *875 must present sufficient probative evidence to convince the court that genuine, material factual issues remain to be resolved by the trier of fact.
739 F.2d at 20 (citation omitted). Because Onat has failed to identify a factual basis on which the court could find either actual or implied malice, the trial court properly granted summary judgment on these claims.
In a similar vein, Onat has not put forth any factual evidence that the defendants in this case possessed the specific intent to monopolize necessary to substantiate claims of monopolization, attempt to monopolize, and conspiracy to monopolize under either the state antitrust statute, 10 M.R.S.A. § 1102 (1980), or the federal Sherman Act, 15 U.S.C. § 2. See 3 Von Kalinowski, Antitrust Laws and Trade Regulation §§ 8.01(4); 9.01(4) (1989). Other than Onat's bare allegations that the defendants' participation in the peer review process constituted monopolistic behavior because the defendants acted with others and because the review resulted in suspension of his medical practice, we find the record devoid of evidence that the defendants possessed the requisite specific intent to monopolize or act collusively to restrain trade, and find summary judgment appropriate on Onat's antitrust and restraint of trade claims.
Onat further contends that the defendants' actions deprived him of his rights under the Federal Civil Rights Act, 42 U.S.C. §§ 1981, 1983, and of due process and equal protection under the federal and state Constitutions. The record reveals no discriminatory classification of medical personnel administering patient care that would fall within the purview of the peer review process; by its terms the same process applied to all physicians accepting staff privileges at the hospital. Onat has offered no evidence of discriminatory application of the process. See Brann v. State, 424 A.2d 699, 703 (Me.1981). Nor does the record disclose a factual basis on which Onat can make the necessary threshold showing that the defendants were state actors or that they acted under the color of state law. See Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 936-37, 102 S.Ct. 2744, 2753, 73 L.Ed.2d 482 (1982); Penobscot Area Housing Development Corp. v. City of Brewer, 434 A.2d 14, 24-25 (Me. 1981).
In Mendez v. Belton, the First Circuit considered like claims of a physician against a hospital, its administrators, and affiliated physicians for violation of the physician's civil rights in the hospital's suspension of staff privileges because of concerns about the physician's patient care. Finding that the plaintiff-physician had failed to state a cause of action under section 1983, the court ruled that:
The statute does not reach private action, but rather "prohibits interference with federal rights under color of state law." Where nominally private defendants, such as the hospital and its officers and doctors, are sued under § 1983 and the Fourteenth Amendment, the court must determine whether "the alleged infringement of federal rights [may be] `fairly attributable to the State.'"
739 F.2d at 17 (citations omitted). In the case at bar, the only evidence on this issue is the affidavit of Jerry Koontz, Chief Executive Officer of the hospital. He averred that the hospital is a private, non-profit Maine corporation and a subsidiary of Northeast Health, also a Maine corporation. Koontz further averred that both of these corporations are managed by privately-selected boards of directors and that the corporations own the hospital property and privately distribute profits. Although the hospital has in the past received Hill-Burton funds and currently receives funds under both the Medicare and Medicaid programs, there is nothing beyond broadly-based government regulation linking the State with this corporation. The evidence in this record does not support a finding that the hospital or its employees were state actors for the purposes of Onat's claims, and summary judgment as to these claims was appropriate. See Mendez v. Belton, 739 F.2d at 17-18; Loh-Seng Yo v. Cibola General Hospital, 706 F.2d 306, 307-08 (10th Cir.1983); Modaber v. Culpeper *876 Memorial Hospital, 674 F.2d 1023, 1025-26 (4th Cir.1982). See also Annotation, Action of Private Hospitals As State Action Under 42 U.S.C.S. § 1983 or Fourteenth Amendment, 42 A.L.R.Fed. 463 (1979). Because there was no state action involved in the suspension of Onat's staff privileges, we do not consider his contentions that the defendants' actions deprived him of due process and equal protection under the federal and state Constitutions. See Hottentott v. Mid-Maine Medical Center, 549 A.2d 365 (Me.1988); Bello v. South Shore Hospital, 384 Mass. 770, 429 N.E.2d 1011 (Mass.1981).
Finally, we find no factual basis for Onat's claim of negligence in the conduct of the evaluation of the hospital's anesthesiology department by the American Society of Anesthesiologists or Bucknam McPeek, M.D., its designated representative.
The entry is:
Judgment affirmed.
All concurring.
NOTES
[1] In two separate actions Onat sued Penobscot Bay Medical Center; the hospital's Chief Executive Officer Jerry S. Koontz; the hospital's Vice President of Corporate Management Information Services Carole L. Esley; chief operating room nurse M. Evelyn Blaney, R.N.; Donald Weaver, M.D.; the American Society of Anesthesiology ("ASA"); Bucknam McPeek, M.D., an anesthesiologist at Massachusetts General Hospital, professor at Harvard Medical School, and designated representative of the ASA; Stephen Ross, M.D.; John Meyer, M.D.; Paul Killoran, M.D.; William Nuesse, M.D.; and Theodore Schettler, M.D. The last five defendants are licensed physicians who served on the hospital's Medical Staff Executive Committee during the events giving rise to Onat's suits. The parties have stipulated to the dismissal of Donald Weaver, M.D.
[2] We note at the outset that Onat has failed to comply with M.R.Civ.P. 75A(a)(4), requiring that the argument section of an appellant's brief on appeal to this Court "shall contain the contentions of the appellant with respect to the issues presented, and the reasons therefor, with citations to the authorities and particular pages of the record relied on." In his brief, Onat has simply restated his allegations without substantiation or citation to the particular pages of the record he relies upon as evidence of material fact. Although we have not previously invoked this rule in considering or refusing to consider an appellant's arguments to this court, we note that the federal circuit courts using the analogous federal rule of appellate procedure, Fed.R. App.P. 28(a)(3) and (e), have under similar situations refused to consider arguments unsupported by record citations, especially on an appeal of a summary judgment order entered in favor of the appellees. See, e.g., Mendez v. Belton, 739 F.2d 15, 18 (1st Cir.1984).
[3] The Joint Commission of Accreditation of Hospitals (JCAH) requires on-going review of medical staff practice and performance and further requires a hospital's medical staff to police itself in establishing and using mechanisms for peer review.
[4] Onat filed two actions against the defendants in September 1985, the first for release of an Executive Committee report recommending corrective action against him, the second for his current tort claims. Onat filed a third action in March 1986 for declaratory and injunctive relief from suspension of his staff privileges. At the first hearing on defendants' motion for summary judgment, the court (Brody, C.J.) dismissed Onat's first action because Onat had since received the report.
[5] The hospital hearing process had not been completed when the summary judgment motions were heard, either in September 1986 or in October 1987.
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643 F.2d 549
UNITED STATES of America, Appellee,v.Larry GLAZE and Robert Loyd, Appellants.
No. 80-2057.
United States Court of Appeals,Eighth Circuit.
Submitted March 11, 1981.Decided March 17, 1981.Rehearing Denied April 14, 1981.
Robert R. White, Fayetteville, Ark., for appellants.
Larry R. McCord, U. S. Atty., Steven N. Snyder, Asst. U. S. Atty. (argued), Fort Smith, Ark., for appellee.
Before HEANEY, HENLEY and McMILLIAN, Circuit Judges.
PER CURIAM.
1
Appellant, Larry Glaze, was indicted and charged with violating 21 U.S.C. §§ 841(a)(1), 843(b), which prohibit respectively the unlawful distribution of a controlled substance and the use of a communication facility to aid in such distribution. Appellant, Robert Loyd, was indicted and charged with violating 21 U.S.C. § 841(a)(1). Glaze and Loyd were tried jointly before a jury in the Western District of Arkansas, and a verdict of guilty was returned as to each count. Appellants appeal from judgments of conviction and sentences.1 We affirm.
2
In January, 1980 Gary Lang, an informant for the Drug Enforcement Administration (DEA), telephoned Glaze to arrange a cocaine purchase from him. During their conversation, which was recorded by DEA officials, Lang and Glaze agreed to meet at a liquor store near the Arkansas-Missouri border in order to transfer the cocaine.
3
On the agreed date, Lang, accompanied by DEA Task Force Investigator Don Sanders, arrived at the liquor store and found Glaze and appellant Loyd waiting in an automobile. Glaze, fearing the transaction might be detected, told Lang and Sanders to follow them to a more secluded area. The parties then proceeded by vehicle to Bella Vista, Arkansas, where, once in a relatively secluded area, they parked their automobiles.
4
Lang and Sanders left their vehicle and entered the automobile driven by Glaze. Once inside, they were introduced to Loyd, identified by Glaze as his partner. After a brief conversation, Sanders gave Loyd $2,100.00 in return for a substance which Loyd claimed to be cocaine. Soon after this transaction, the parties returned to their respective vehicles. Sanders immediately conducted a field test which indicated, although not conclusively, that the substance purchased was indeed cocaine.
5
After returning to the DEA office in Little Rock, Arkansas, Sanders placed the cocaine in a plastic bag, heat sealed the bag and placed an identification label on it, then sent it registered mail to the DEA laboratory in Dallas, Texas. The bag was received in Dallas by a laboratory technician and then given for testing to Buddy Goldston, a chemist. Goldston opened the end of the bag which had not been heat sealed, removed some of the substance, tested it, heat sealed the end of the bag he had opened, placed an identification label on the bag, and returned the bag by registered mail to the DEA office in Little Rock. Sanders received in Little Rock a plastic bag that had been heat sealed on both ends and bore his identification label as well as that of Buddy Goldston.
6
Appellants were indicted on April 30, 1980, and after two continuances were tried on September 8, 1980. The government's case consisted primarily of Sanders' testimony, Goldston's testimony, Lang's testimony, the taped telephone conversation between Lang and Glaze, and the cocaine. Appellants presented no evidence.
7
On appeal it is contended that the district court erred by (1) failing to grant appellants a third continuance, (2) failing to strike Sanders' testimony concerning the results of his field test, and (3) failing to strike Goldston's testimony concerning the results of his laboratory test.2
8
Motion for Continuance.
9
On May 22, 1980, shortly after indictment, Glaze was involved in an automobile accident which caused him to spend some time in a hospital. Because of his injuries, Glaze was physically unable to aid in his defense, and at appellants' request a continuance was granted. Approximately two months after the granting of this continuance, appellants requested and were granted a second continuance, although at the time Glaze was no longer a hospital patient. Ten days before the scheduled trial date appellants requested a third continuance which was opposed by the government. A hearing was held on the matter, and the district court denied appellants' request.
10
Appellants contend this denial was erroneous because Glaze's physical condition and his inability, until shortly before the trial date, to travel from his home in Joplin, Missouri to his lawyer's office in Fayetteville, Arkansas made it impossible for him to assist in the preparation of a defense.
11
Whether a continuance should be granted or not rests in the sound discretion of the District Court and only a showing of a clear abuse of discretion will justify an overturning of the District Court's ruling.
12
United States v. Taylor, 542 F.2d 1023, 1025 (8th Cir. 1976) (citation omitted), cert. denied, 429 U.S. 1074, 97 S.Ct. 813, 50 L.Ed.2d 792 (1977).
13
When reviewing an appeal from a denial of a motion for continuance based on inadequate preparation for trial, this court has examined certain factors in determining whether there was an abuse of discretion. We will look to the amount of time granted for preparation, the conduct of counsel at trial, and whether prejudice appears from the record.
14
United States v. Campbell, 609 F.2d 922, 925 (8th Cir. 1979) (citation omitted), cert. denied, 445 U.S. 918, 100 S.Ct. 1282, 63 L.Ed.2d 604 (1980).
15
Twenty-one days elapsed between the handing down of the indictment and Glaze's accident, and though perhaps confined to his home, Glaze was released from the hospital more than two months prior to the trial. In light of the nature of the case, it is apparent that appellants had ample time in which to prepare. The fact that Glaze's attorney might have been forced to travel from Fayetteville to Joplin in order to prepare the case is of little consequence. Appellants failed to alert the district court to any specific physical infirmities which prevented Glaze from intelligently communicating with and aiding his attorney.
16
An examination of the record reveals the soundness of trial counsel's conduct and the absence of any prejudice. In light of the evidence presented by the government, it is apparent that nothing was to be served by granting a third continuance and that the district court's refusal to do so was not a clear abuse of discretion.Sanders' Testimony.
17
Prior to trial appellants, pursuant to Fed.R.Crim.P. 16(a)(1)(D), requested the government to produce the results of any tests or experiments conducted in connection with the case. Responding to this request, the government produced the results of Goldston's laboratory test. It did not produce results of the inconclusive field test conducted by Sanders.
18
During trial Sanders, on direct examination, testified concerning the field test and the results obtained from it. After a brief cross-examination counsel for appellants moved to strike Sanders' testimony on this point because of the government's failure to produce the field test results in response to appellants' pretrial motion. The district court allowed Sanders' testimony to stand.
19
Appellants contend (1) that the district court erred by failing to exclude the testimony pursuant to Fed.R.Crim.P. 16(d)(2), and (2) that the district court erred in not striking the testimony for violation of the Jencks Act, 18 U.S.C. § 3500(d). It is not clear that the procedures followed by trial counsel preserved the Jencks' question for appeal. See Lewis v. United States, 340 F.2d 678, 680-83 (8th Cir. 1965). But assuming it was preserved, we find no ground for reversal, either under the Jencks Act, see Kane v. United States, 431 F.2d 172, 175 (8th Cir. 1970), or under Rule 16.
20
(I)f error were committed by the trial court in failing to apply any of the sanctions permissible under Rule 16 ... the error must be prejudicial to the defendant's substantial rights before the case should be reversed on that ground.
21
Hansen v. United States, 393 F.2d 763, 770 (8th Cir.) (citation omitted), cert. denied, 393 U.S. 833, 89 S.Ct. 103, 21 L.Ed.2d 103 (1968).
22
We observe that Sanders' testimony does not clearly reflect that any written report of the field test was ever made. The evidence of this test was largely cumulative and was not essential to the case of either party. Goldston's testimony alone firmly identified as cocaine the substance purchased by Sanders and was sufficient to support the verdict. There is no suggestion by appellant and no reason to believe that this sufficiency might be tainted by any report of the field test. It is apparent that appellants' substantial rights were not prejudiced by any error the district court might have made.
23
Goldston's Testimony.
24
Appellants finally contend that Goldston should not have been permitted to testify as to the results of his laboratory test. In support of this contention, appellants claim that the government failed to establish a custodial chain from which one could infer that the substance tested by Goldston was that purchased by Sanders. Appellants find fatal the government's failure to produce the Dallas laboratory technician who received the bag from Little Rock and then gave it to Goldston.
25
Our court was presented with this precise objection in United States v. Jones, 486 F.2d 476 (8th Cir. 1973), cert. denied, 415 U.S. 917, 94 S.Ct. 1415, 39 L.Ed.2d 472 (1974), and rejected it. We do not find that the present circumstances dictate a different result. The custodial evidence presented established with a reasonable probability that the substance tested by Goldston was that purchased by Sanders. See United States v. Brown, 482 F.2d 1226, 1228 (8th Cir. 1973).
26
After careful consideration of the parties' briefs and the record on appeal, we affirm the judgments of the district court.
1
The Honorable Oren Harris, United States Senior District Judge, Eastern and Western Districts of Arkansas, sentenced Glaze to serve eighteen months with a special parole term of three years on the distribution count and placed him on probation for two years on the communications count. Loyd received a sentence of two years with six months to serve
2
Appellants also contend that admission of the taped telephone conversation was error. This contention is frivolous and merits no discussion other than to say that admission of the tape was certainly within the broad discretion accorded the district court. See United States v. Williams, 545 F.2d 47, 50 (8th Cir. 1976)
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668 S.E.2d 283 (2008)
In re ESTATE OF BOSS.
No. A08A1081.
Court of Appeals of Georgia.
October 1, 2008.
*284 Robert W. Hughes, Jr., for Appellant.
Charles A. Tingle, Lawrenceville, for Appellee.
RUFFIN, Presiding Judge.
Raburn Peevy, Johnnie Cox, Jean Sass, Blanche Knight, and Gail Thompson (the "caveators") successfully contested a purported will executed by the late Memphis Azalee Boss in a petition to determine the heirs of Boss's estate. The caveators appeal the order of the probate court awarding their attorney, Robert Hughes, Jr., $64,638.28 in attorney fees from the estate. For reasons that follow, we affirm.
The facts in this case are largely undisputed. Boss died on August 22, 2005, leaving the following heirs: Raburn Peevy, Johnnie Cox, Blanche Knight, Elaine Barnett, Gail Thompson, Jean Sass, John Allen Peevy, Terry Jordan, and Tim Peevy. Raburn Peevy filed a "Petition for Letters of Administration" for Boss's estate, contending that she died intestate. John Allen Peevy, however, tendered a purported will executed by Boss and filed a petition for probate.[1] Thereafter, the caveators Raburn Peevy, Cox, Knight, Thompson, and Terry Jordan[2] contested the will.
The case went to trial, and the jury found in favor of the caveators.[3] Thereafter, their attorney, Robert Hughes, Jr., filed a motion for attorney fees. The fee contract between Hughes and the caveators provided for a contingency fee rate of 20 percent of the ultimate recovery. Instead of seeking payment from the caveators with whom he had entered a fee agreement, Hughes sought to recover the entire fee directly from the estate, which he alleged benefitted from his services.
Following a hearing, the probate court declined to award Hughes the full 20 percent, instead granting him "reasonable" attorney fees from Boss's estate in the amount of $64,638.28.[4] The court reasoned that
the estate was benefitted from the invalidation of a Will procured by fraudulent practices. However, only four heirs at law entered into a contingency fee contractual relationship with [Hughes]. One of the remaining heirs at law, John Allen Peevy, will receive less from the estate as a result of the invalidation of the Will. Thus, the Court finds that, under the facts of this case, it is fair and equitable that Mr. Hughes receive his actual attorney's fees[,] but not his contractual contingency fees directly from the estate ... Nothing in this Order shall be interpreted to prevent Mr. Hughes from seeking his contractual [attorney] fees from his clients with the appropriate setoff for the money received out of the estate pursuant to this Order.
The caveators appeal, challenging the amount of the attorney fees award to Hughes.
*285 1. The appellee, John Allen Peevy, requests that we affirm the $64,638.28 attorney fee award. Nevertheless, he argues in his brief that there is no statutory basis for awarding attorney fees to a successful will caveator and relies on cases from other jurisdictions to support his apparent position that attorney fees for a caveator should not be paid by the estate unless there is proof that the estate as a whole benefitted.
But Peevy did not file a cross-appeal. "[A]s a general rule[,] a cross-appeal is required for an appellee to preserve an enumeration of error concerning an adverse ruling."[5] "However, a ruling that becomes material to an enumeration of error urged by an appellant may be considered by the appellate court without the necessity of a cross-appeal."[6] Here, we can address the appellants' challenge to the amount of award without addressing the appellee's argument. Thus, because Peevy failed to raise his argument that the probate court abused its discretion in holding that the caveators' attorney fees should be paid by Boss's estate in a properly filed cross-appeal, the issue is not before us and will not be considered in this opinion.[7]
2. Pretermitting whether the probate court erred in requiring the caveators' attorney fees to be paid by the estate, we find no merit to the caveators' challenge to the amount of the attorney fees award.
First, the caveators argue that because John Allen Peevy's three siblings who are apparently entitled to five percent of the intestate estate did not object to the motion for attorney fees and did not appeal the probate court's order, "there was no objection to the [attorney fee motion] from [ninety-five percent] of the heirs [and] the trial court should have granted the ... motion to the extent of [ninety-five percent] at a minimum." But the caveators have not supported this argument with citation of authority, and we are aware of none.
Moreover, we reject the caveators' apparent position that the probate court was required to award Hughes 20 percent of the estate's value from the estate because his contingency fee agreement with the caveators specified that amount. Hughes contracted with his individual clients, the caveators, for a 20 percent contingency fee. He had no such agreement with the estate. Thus, while he may be contractually entitled to 20 percent of the estate's value from his clients, his fee agreement with the caveators does not as the probate court properly found bind the estate.
Attorney fee awards, including those involving contingency fees, must be supported by proof that the fee "was a valid indicator of the value of the professional services rendered."[8]
A court may consider a contingent fee agreement and the amount it would have generated as evidence of usual and customary fees in determining both the reasonableness and the amount of an award of attorney fees. But, evidence of the existence of a contingent fee contract, without more, is not sufficient to support the award of attorney fees. An attorney cannot recover for professional services without proof of the value of those services. A naked assertion that the fees are "reasonable," without any evidence of hours, rates, or other indication of the value of the professional services actually rendered is inadequate.[9]
Here, the probate court, after reviewing the evidence, including Hughes's time records *286 and billing statements, determined that $64,638.28[10] was the reasonable value of Hughes's attorney fees.[11] Under these circumstances, including the absence of a binding fee arrangement between the estate and Hughes, and given the evidence presented, we find no abuse of discretion in the probate court's determination that $64,638.28 was a reasonable fee to be paid by the estate.[12]
Judgment affirmed.
ANDREWS and BERNES, JJ., concur.
NOTES
[1] John Allen Peevy was the primary beneficiary of the purported will.
[2] The caveators state in their brief that "Jordan died during the pendency of this case and his sisters, Thompson and Sass[,] inherited his position in this litigation."
[3] According to the judgment, the jury determined that Boss's will was procured by fraud or misrepresentation.
[4] This amount was derived from the time records and billing statements provided by Hughes, including his hourly rate.
[5] Brady v. Elevator Specialists, 287 Ga.App. 304, 306(1), 653 S.E.2d 59 (2007). See OCGA § 5-6-38(a); City of Atlanta v. Miller, 256 Ga.App. 819, 822(4), 569 S.E.2d 907 (2002).
[6] (Emphasis supplied.) Ga. Society of Plastic Surgeons v. Anderson, 257 Ga. 710, 711(1), 363 S.E.2d 140 (1987). See Electrical Distrib. v. Turner Constr. Co., 196 Ga.App. 359, 361(2), 395 S.E.2d 879 (1990) (appellee's defense was material to whether grant of summary judgment was correct and could be considered in the absence of a cross-appeal).
[7] See Burnette v. Bradley, 190 Ga.App. 427, 429(2), 379 S.E.2d 225 (1989).
[8] (Punctuation omitted.) Rowen v. Estate of Hughley, 272 Ga.App. 55, 60(2), 611 S.E.2d 735 (2005).
[9] Id.
[10] As stated in the probate court's order, Hughes "provided that at his hourly rate, the total fee charged [the caveators] would have been $64,638.28." The estate consisted of an account containing approximately $750,000, a judgment of approximately $250,000, and a parcel of land valued at approximately $225,000. Thus, Hughes sought approximately $245,000 in fees under the 20 percent contingency fee agreement.
[11] We reject the caveators' assertion that the trial court was required to award Hughes 20 percent of the estate's value because it did not specifically rule that the requested contingency fee was unreasonable. Implicit in the probate court's ruling was a determination that the amount sought under contingency fee agreement was unreasonable, given that it specifically concluded that $64,638.28 constituted a reasonable amount of Hughes's attorney fees payable from the estate.
[12] See Rowen, supra.
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PRICE DANIEL
ATTORNEY GENF.RAL
April 0, 1947
Hon. George H. Sheppard Opinion No. V-123
Comptroller of Public Accounts
Austin, Texas Re: Possible exemptions from
ad valorem taxes of prop-
erties belonging to The ‘.
Fair Foundation.
Dear Sir:
You have requested an opinion from this department as
to whether or not the properties belonging to The Fair Foundatiotf
are exempt from ad valorem taxes.
The copy of the trust indenture which you enclosed with
your request discloses the following facts.
In November, 1937, Robert Walter Fair and wife, Mattie
Fair, settlers, desiring to create a charitable trust and charitable
foundation, to be known as The Fair Foundation, “for general char+
table purposes, including (1) relief of poverty and distress; (2) ad-
vancement of religion; and (3) advancement of education and sci-
ence” conveyed, assigned, set over and delivered to Robert Walter
Fair and Mattie Fair, Trustees of “The Fair Foundation,” their
successors and assigns, all their right, title and interest in and .to
the property.described in Schedule A which was made a part of the
trust indenture, attached thereto, headed “Exhibit A,” and which
reads as follows:
“Prope.rty transferred by us to The Fair Foun-
dation upon signature:
“1. Cash - Two Thousand Dollars
($2,000.00).
“2. One Hundred (100) milligrams
of Radium, now under the super-
vision of Dr. Minnie L. Maffett
and being used at present for
poor and charity patients in
Parkland Hospital at Dallas,
Texas. Said Radium shall al-
ways be used for the benefit
Hon. George H. Sheppard, Page 2 Opinion No. V-123
of charity patients and absolutely
without profit to anyc.ne.
(Signed) R. W. Fair.”
The trustees are to have absolute power of disposal of
this property (both principal and income), and of such other prop-
erty as might later be added by the settlers or by third parties for
any of the charitable purposes previously enumerated subject to
certain limitations, viz.: no contributions are to be made to indi-
vidual persons; “no contributions or investment shall be made for
such purposes fpreviously enumerated/ or either of them exce’pt
through an accredited organization or-institution existing at the
time of such contribution, gift or conveyance, or to one of such in-
stitutions as may be created by the Trustees for such charitable
purposes or either of them, it being their fihe settlers7 intention
to leave absolutely in the discretion of the-Trustees tlie manner,
form and terms of any gift or contributions so long as same shall
be made through well recognrzed and established institutions or
agencies.” (Emphasis added)
Gifts made by third parties are “subject to the terms
and conditions of this trust and also subject to all rules and regula-
tions established by the Trustees hereunder.”
The various other details of the trust, which is expressly
declared to be irrevocable, have no bearing on the question of wheth-
er or not the properties belonging to The Fair Foundation are ex-
empt from ad valorem taxes.
So far as appears from “Exhibit A” the only property be-
longing to The Fair Foundation is personal property; however, in
order to settle all aspects of this question it will be assumed that
The Fair Foundation has acquired real property interests since the
creation r>f the trust.
Article VIII, Section 2 of the Constitution of the State of
Texas provides that the Legislature ma,y exempt certain classes of
property from taxation. This constitutional provision is the foun-
tainhead of all exemptions, for it expressly declares that “all laws
exempting properties from taxation other than the property above
mentioned shall be null and void;” but even though these exemptions
“cannot be enlarged * * ‘2 either by the Legislature or by the Courts,”
(City of Wichita Falls v. Cooper, Civ. App., 170 S. W. (2d) 777, error
refused), It IS the legislatrve enactment, Article 7150, R.C.S., which
,nctually creates exemptions from taxation. The constitutional provi-
sinn is not self enacting but merely provides the limits of legislative
‘_
Hon. George H. Sheppard, Page 3 Opinion No. V-123
exemption. St. Edwards’ College v. Morris, 17 S. W. 512, 82 T. 1;
Little Theatre of Dallas, Inc. v. City of Dallas, 124 S. W. (2d) 863.
Therefore whether or not propertles belonging to The Fair Foun-
dation are exempt from taxation must be determined by examining
the relevant exemptions stated in parts of Section 1 and in Section
7 of Art, 7150 as construed by court decisions. The other sections
of Art. 7150 are inapplicable.
The relevant parts of Section 1 are as follows:
“* * * and all endowment funds of institutions of
learning and religion not used with a view to profit,
and when the same are invested in bonds or mort-
gages, and all such buildings used exclusively and
owned by persons or associations of persons for school
purposes; provided that when the land or ofber prop-
erty has been, or shall hereafter be, bought in by such
institutions under foreclosure sales made to satisfy or
protect bonds or mortgages in which said endowment
funds are invested, that such exemption of such land
and property shall continue for two years after the
purchase of the same at such sale by such institutions
and no longer. This provision shall not extend to the
leasehold estates of real property held under authority
of any college or university of learning.”
Section 7 reads as follows:
“Public charities. - All buildings belonging to in-
stitutions of purely public charity, together with the
lands belonging to and occupied by such institutions
not leased or otherwise used with a view to profit, un-
less such rents and profits and all moneys and credits
are appropriated by such institutions solely to sustain
such institutions and for the benefit of the sick and
disabled members and their families and the burial of
the same, or for the maintenance of persons when un-
able to provide for themselves, whether such persons
are members of such institutions or not. An institu-
tion of purely public charity under this article is one
which dispenses its aid to its members and others in
sickness or distress, or at death, without regard to
poverty or riches of the recipient, also when the funds,
property and assets of such institutions are placed and
bound by its laws to relieve, aid and administer in any
way to the relief of its members when in want, sick-
ness and distress, and provide homes for its helpless
and dependent members and to educate and maintain
the orphans of its deceased members or other persons.”
. ,
Hon. George H. Sheppard, Page 4 Opinion No. V-123
It is noteworthy that although the trust is termed a
“charitable” trust and the various purposes for which it was cre-
ated are referred to as “general charitable purposes,” two of
these purposes, advancement of religion and advancement of edu-
cation and/or science, might well be covered by the quoted por-
tion of Section 1 particularly in view of the fact that the trustees
are expressly given authority to establish institutions for any of
the purposes for which the trust was created. If such a&ion has
been taken by the trustees, it is true that the personal property
which constitutes the endowment fund of institutions of learning
and religion and which is not used for “profit” in the sense of I, ‘.
private gain is exempt from taxation; and such exemption is dc-
corded to all per sonalty so held -- not just to “bonds and mort-
gages.” Harris, et al v. City of Fort Worth, et al, 180 S.W. (2d)
131: but where such nronertv merelv mav be used for endowment
purposes clearly the statutory exe&p* is not gained. Obvious-
ly the fact that the trustees might make a gift (see underlined
portion quoted as to trustees powers to make contributions, etc.)
from the trust estate to established institutions of learnjng’and
religion could not result in gaining an exemption until such gifts
were actually made. It is noteworthy in connection with possible
exemptions under this Section that the Harris Case, supra, con-
strued the clause in Section 1 of Article 7150 which limits to two
years exemption of land bought in under fore,closure sale to nega-
tive the exemption of real estate generally even ‘though a part of
an endowment fund. Of course it is well settled that the buildings
and lands which are owned by persons or associations of persons
for school purposes and which are used exclusively for school
purposes, i.e. in the actual operation of the school, such as yard6
and recreational grounds, are exempt from taxation. Red. v. John-
son, 53 Tex. 284; Cassiano v. Ursuline Academy, 64 Tex. t173; St.
‘Ehward’s College v. Morris, supra; Little Theatre of Dallas,~ E
v. City of Dallas, supra.
To summarize: It would appear that no personal prop-
erty belonging to The Fair Foundation is entitled to exemption
from ad valorem taxes under the provisions of Section 1, Article
7150, Revised Civil Statutes, which exempts from taxation the en-
dowment funds of institutions of learning and religion not used
with a view to profit, for the reason that it does not appear that
The Fair Foundation has yet established any such institution of
learning and religion. If in fact such an institution has been es-
tablished by The Fair Foundation, then, under the holding of the
Harris case, supra, all the personal property which constitutes
the endowment of the institution and which is not used for “profit”
in the sense of private gain is exempt from taxation; however, no
real property comprising ~a part of the endowment fund is exempt.
from taxation save such as is bought in to protect bonds, mort- .
gages, etc. and that’only for’~a period of two years. The buildings
. .
Hon. George H. Sheppard, Page 5 Opinion MO. V-123
and lands which are owned by an institution of learning and which
are used exclusively for school purposes are &xempt frbm taxa-
tion.
Turning next to a consideration of the exemption which
is granted by Section 7 of Article 7150, it is noteworthy that it may
be claimed by “institutions of purely public charity.” Justice Green-
wood in the case of City of Houston v. Scottish Rite Benev. Ass’n.,
111 Tex. 191, 230 S. W. 978, said that ‘an institution was one of pure-
ly public charity’ where: First, it made no gain or profit; second, ~’
it accomplished end,s wholly benevolent; and third, it benefited per-.
sons, indefinite in numbers and in personalities, by preventfrig
them, through absolute gratuity, from becoming burdens to society
and to the state. ” The purposes of The Fair Foundation are in ac-
cord with these requirements, and it will be assumed that there
has been in fact no departure from these purposes.
Having decided that The Fair Foundation is an “institu-
tion of purely public charity,’ the remaining question as to the scope
of the exemption accorded it by virtue of Section 7 is excellently
dis&ussed in the early case of Morris v. bone Star Chapter, No; 6,
Roval Arch Masons. 68 Tex. 69/. 5 S. W. m. in whichJudae Gaines
construed the then existing constitutional provisions in’the-fOllOWing
way:
“The word ‘institution’ properly means an asso-
ciation organized or established for some specific
purpose, (see the word in Webster’s dictionary)though
it is sometimes used in statutes and in common par-
lance in the sense of the building or establishment in
which the business of such a society is carried on***.
Hence that part of the section under considerationwhich
contains this word may have been intended to read, ei-
ther ‘all buildings used exclusively andowned by per- . :
sons or associetions of persons for school purposes,
* * * and all institutions /meaning establishments with
houses, grounds, etc.lofpurely public charity,’ or
‘all buildings used ezclusively and owned by persons
or associations of persons for school purposes, * * *
and all buildings used exclusively and owned by insti-
tutions of purely public charity.‘.” * * We are of the
opinion that the latter reading gives the more reason-
able construction of the language as used in the consti-
tution of our state. This * * * is in accord with the
spirit of the other provisions contained in the section.
The legislature is empowered to exempt only ‘actual
places’ of religious worship, and actual burial grounds
not held for profit, and, for school purposes, merely
the buildings (including the grounds on which they are
Hon. George H. Sheppard, Page 6 Opinion No. V-123
situate) and the necessary furniture. In neither
case is property which is not actually used,as a
place of worship or burial, or for a school house,
exempt, although it may be used for the support
of religion or education, or to secure the decent
burial of the dead. If it had been intended to ex-
empt all the property of charitable institutions, it
would seem that more general terms would have
been used. Besides, the omission of the word ‘all’
before the word ‘institutions’ would indicate that
the former construction was not intended, it was
used before the word ‘buildings’ and the word
‘schools’ in the same sentence, when the mean-
ing in both instances would have been clear with-
out it. It would seem, therefore, to have been
omitted before the word ‘institutions’ because its
insertion there would have changed the meaning
which was intended to be conveyed.”
Judge Gaines next decided that the property in contro-
versy was embraced within that designation, or kithin the de-
scription contain&d in subdivision 6, Article 4673, Revised
Statutes, which section he construed and applied to the facts
of that case. He then concluded: “the building in question is
not ‘used exclusively’ by appellee in the sense given to these
words in the Constitution; the exclusive use meant being the
actual and direct use for the purposes of the association, and
not a use by others for revenue, although that revenue may be
exclusively appropriated for the objects of the charity. The
legislature in exercising the power conferred by the constitu-
tion seems to follow the construction we have adopted and~ex-
empt ‘all buildings belonging to institutions of purely public
charity, together with the lands belonging to and occupied by
such institutions, not leased or otherwise used with a view to
profit, and all moneys and credits appropriated solely to sus-
taining such institutions.’ This means that a building leased
for profit is not exempt although such profit may be appropri-
ated solely for the purposes of the charity, and not to the pri-
vate gain of its promoters or stockholders. The other provi-
sions in the same article show this; * * *. This position is
also sustained by the analogy of the section, which exempts
the property of counties, cities, and towns. The exemption is
limited to their property owned and held only for public pur-
poses, such as public buildings and sites therefor. Const.
Art. XI, e 8 * * *. Many of the states have statutes of simi-
lar import to our constitutional and statutory provisions upon
this subject; and so far as our investigation has gone, it is
generally held that the renting of even a part of the building
for profit, though the proceeds be devoted exclusively to the
Hon. George H. Sheppard, Page 7 Opinion No. V-123
charity, subjects such part, at least, to taxation.” A long list of
authorities is then given.
Although the constitution has been amended and the stat-
ute changed since the time of the Morris case, the substance of
the opinion, as set out in the above excerpt, has been expressly
approved by the Supreme Court in City of Houston v. Scottish Rite
Benevolent Association, supra, and by the Commission of Appeals
in State v. Settegast, 254 S. W. 925. It has been followed by a long
line of subsequent decisions (not all ofwhich expressly cite the
Morris case as authority for the later holding) which clearly es’
tablished the rule that the property exemption granted to “public
charities” covers only real property and the improvements there-
on with a further requisite that the charity must make an actual,
direct and exclusive use of the property for charitable purposes.
iew, v. Markham - McRee Memorial Hospital, 137
S W (2d) In2 Santa Rosa Infirmary v. C ity of San
Co,. App., 2$ S. W. 926; B enevolent and Protec-
tive Order of Elks v. City of Houston, Tex. Civ. App., 44 S W
; ar am Hospital v. City of Longview, 191 S. W. i2dj
695.
To summarize: The only real property on which The
Fair Foundation could claim,exemption by virtue of Section 7 of
Article 7150 would be ,such buildings and lands as belong to and
are exclusively used by The Fair Foundation for charitable pur-
poses; the fact that income from real property is devoted to the
charitable purposes of the trust is not enough to gain the exemp-
i tion; nor does any exemption exist for the personal property
owned by public charities.
SUMMARY
If the trustees of The. Fair Foundation, a charitable
trust, have established an institution of learning and re-
ligion and have established an endowment fund for said
institution, then by virtue of Section 1 of Article 7150, R.
C.S., the personal property which constitutes the fund or
any part thereof and which is not used with a view to
“profit” in the sense of private gain is exempt from ad
valorem taxes; however, no real property comprising
part of such endowment fund is exempt fr.om taxation
save such as is bought in to protect bonds, mortgages,
etc.‘and that only for a period of two years. The,build-
ings and lands which are owned by an institution of learn-
ing and which are used exclusively for school purposes
are exempt from taxation. If no such institutions have
.been established, the only real property on which The
Fair Foundation could claim exemption by virtue of Sec-
tion 7 of Article 7150 would be such buildings and lands
. .I.
Hon. George H. Sheppard, Page 8 Opinion No. V-123
as belong to and are exclusively used by The Fair
Foundation for charitable purposes. Section 7 of
Article 7150 does not grant any exemption for the
personal property owned by public charities.
Very truly yours,
ATTORNEY GENERAL OF TEXAS
ByBl$$fGG-p
Assistant
.:MP/lh
APPROVED APR 8.1947
ATTORNEYGENERALOFTEXAS
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
October 20, 2009
No. 09-50115
Conference Calendar Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
CURTIS REUBEN WASHINGTON,
Defendant-Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 6:02-CR-97-1
Before WIENER, BENAVIDES, and STEWART, Circuit Judges.
PER CURIAM:*
The attorney appointed to represent Curtis Reuben Washington has
moved for leave to withdraw and has filed a brief in accordance with Anders v.
California, 386 U.S. 738 (1967). Washington has not filed a response.
“This Court must examine the basis of its jurisdiction, on its own motion,
if necessary.” Mosley v. Cozby, 813 F.2d 659, 660 (5th Cir. 1987). Article III,
section 2, of the Constitution limits federal court jurisdiction to actual cases and
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
No. 09-50115
controversies. Spencer v. Kemna, 523 U.S. 1, 7 (1998). The case-or-controversy
requirement demands that “some concrete and continuing injury other than the
now-ended incarceration or parole – some ‘collateral consequence’ of the
conviction – must exist if the suit is to be maintained.” Id.
Counsel asserts that there are no nonfrivolous issues relating to the
district court’s revocation of Washington’s supervised release and sentence of
seven months in prison. During the pendency of this appeal, Washington
completed his seven-month term of imprisonment. The judgment imposed no
further supervised release term. Accordingly, there is no case or controversy for
this court to address, and this appeal is DISMISSED as moot. Counsel’s motion
to withdraw is DENIED as unnecessary.
2
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Court of Appeals
of the State of Georgia
ATLANTA, April 16, 2018
The Court of Appeals hereby passes the following order
A18D0400. JAMES L. BROWN v. THE STATE.
Upon consideration of the Application for Discretionary Appeal, it is ordered that it be
hereby DENIED.
LC NUMBERS:
CR090633
Court of Appeals of the State of Georgia
Clerk's Office, Atlanta, April 16, 2018.
I certify that the above is a true extract from the minutes
of the Court of Appeals of Georgia.
Witness my signature and the seal of said court hereto
affixed the day and year last above written.
, Clerk.
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534 F.2d 1406
Van Eberhardyv.General Motors Corp.*#
No. 75-4036
United States Court of Appeals, Fifth Circuit
6/14/76
1
M.D.Fla.
AFFIRMED
*
Summary Calendar case; Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409
# Local Rule 21 case; see NLRB v. Amalgamated Clothing Workers of America, 5 Cir., 1970, 430 F.2d 966.
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
_____________
No. 97-2816SD
_____________
Kathy Casper, *
*
Appellant, *
*
v. *
*
DeSmet Farm Mutual Insurance Co., a *
corporation; Peter Mack, in his capacity *
as the Board of Directors of DeSmet *
Farm Mutual Insurance Company; *
Roger Elverson, in his capacity as the *
Board of Directors of DeSmet Farm *
Mutual Insurance Company; William *
Poppen, in his capacity as the Board of * Appeal from the United States
Directors of DeSmet Farm Mutual * District Court for the District
Insurance Company; Donald Clarke, in * of South Dakota.
his capacity as the Board of Directors of *
DeSmet Farm Mutual Insurance * [UNPUBLISHED]
Company; Lyle Osbeck, in his capacity *
as the Board of Directors of DeSmet *
Farm Mutual Insurance Company; *
Richard Peterson, in his capacity as the *
Board of Directors of DeSmet Farm *
Mutual Insurance Company; Richard *
Root, in his capacity as the Board of *
Directors of DeSmet Farm Mutual *
Insurance; Allen Siefkes, in his capacity *
as the Board of Directors of DeSmet *
Farm Mutual Insurance Company; *
William Poppen, individually, *
*
Appellees. *
_____________
Submitted: February 9, 1998
Filed: February 20, 1998
_____________
Before FAGG and MURPHY, Circuit Judges, and SMITH,* District Judge.
_____________
PER CURIAM.
Kathy Casper appeals the adverse grant of summary judgment on Casper's claims
for sex discrimination based on a disparate impact analysis and for the intentional
infliction of emotional distress. Having carefully reviewed the record and the parties'
briefs, we conclude the district court correctly ruled that Casper neither established a
prima facie case of disparate impact under Title VII nor a state law cause of action for
the intentional infliction of emotional distress. Because the controlling law is clear, our
review satisfies us that an opinion would have no precedential value in this fact-
intensive case. We thus affirm the district court without further discussion. See 8th
Cir. R. 47B.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
*
The Honorable Ortrie D. Smith, United States District Judge for the Western
District of Missouri, sitting by designation.
-2-
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698 F.2d 1234
U. S.v.Rock
82-5234, 82-5257
UNITED STATES COURT OF APPEALS Ninth Circuit
12/15/82
1
C.D.Cal.
AFFIRMED
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985 F.2d 567
U.S.v.Jackson (Michaelis)
NO. 91-1335
United States Court of Appeals,Eighth Circuit.
Nov 27, 1991
Appeal From: N.D.Iowa
1
AFFIRMED.
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40 B.R. 496 (1984)
In re Franklin N. MANN, Debtor.
The FIRST NATIONAL BANK OF BOSTON, Plaintiff,
v.
Franklin N. MANN, Defendant.
Bankruptcy No. 83-00948-JG, Adv. No. A83-0743-JG.
United States Bankruptcy Court, D. Massachusetts.
July 13, 1984.
*497 Charles R. Bennett, Jr., Riemer & Braunstein, Boston, Mass., for plaintiff.
Howard M. Miller, Singer, Stoneman, Kunian & Kurkland, P.C., Boston, Mass., for defendant.
MEMORANDUM
JAMES N. GABRIEL, Bankruptcy Judge.
The debtor, Franklin Mann ("Mann" or "the debtor"), filed a Voluntary Chapter 7 petition on June 27, 1983. The First National Bank filed this Complaint to determine the nondischargeability pursuant to 11 U.S.C. § 523(a)(2)(A) and (B) of the debtor's guarantee of an obligation to the Bank in the amount of $106,982.20. The Bank alleges that the debtor submitted a false financial statement concerning his company's financial condition to the Bank. Plaintiff alleges in the alternative that to the extent that the debtor's false representations were not concerning his company's condition, the debt was incurred by actual fraud.
The debtor's Answer admits the basis of the liability to the Bank, but denies the amount and the nondischargeability of the debt. A pretrial conference was held at which time the parties agreed to bifurcate the trial. A trial was held on the nondischargeability aspect of the adversary proceeding on November 23, 1983. Based upon the testimony and documentary evidence the Court makes the following findings of fact as required by Bankruptcy Rule 7052.
The debtor was the president and sole stockholder of Mann Data Inc. ("Mann Data"). The company also had an executive vice president who was responsible for day-to-day operations of the company. Mann Data was in the business of selling software to customers who would generally *498 make payment after delivery, and often paid in installments. In March 1981, Mann Data gave a promissory note to the First National Bank ("the Bank") in the amount of $260,000, in exchange for a loan agreement, the terms of which provided that the Bank would make advances up to $260,000 based on qualified accounts receivables. In May of 1981 the debtor gave the Bank a personal guarantee of Mann Data's liabilities arising out of his loan and security agreement. In December of 1981 the parties modified the loan agreement to provide that the Bank would collect the accounts receivable, remitting 95% of the proceeds to Mann Data because the amount advanced by FNB was related to the accounts receivable. Mann Data was required to and did supply the Bank with assignments of accounts receivable, monthly profit and loss statements, and balance sheets. This information was prepared by bookkeepers, but Mann was aware of the contents of the information forwarded to the Bank. The Agreement provided that accounts of one-hundred and twenty days (120) days old would be considered by the Bank in determining the company's available borrowing base.
It is agreed that when Mann Data ceased operations in January 1983, the Bank was in a substantially over-advanced position. To date, it has received only $6,000 in collections whereas it made loans of $270,000.
The Bank contends that the company wrongfully listed three accounts receivable as fully earned on the reports submitted to the Bank when in fact they were not qualified accounts. The facts concerning the accounts are as follows. Mann Data had a contract with Posi Seal for the sale of software in the amount of $75,000. As New England representative of a manufacturer, Data Three, Mann was entitled to retain only thirty-five per cent (35%) of the balance of the $60,000 contract price. I find that at least three of the Bank's officers knew of the arrangement. Although the May 1982 receivable report lists the account in the amount of $60,000, the amount due Data Three was clearly reflected as an offset in the profit and loss statements also submitted to the Bank.
Mann Data had a contract to provide software to General Electric in the amount of $27,000. According to Mann Data's invoice sent to General Electric in November 1982, payment to Mann Data was not due until after expiration of a ninety day trial period. This invoice was submitted to the Bank. The report for May 1982 listed $27,000 as owed by General Electric.
Mann Data had a contract dated November 1, 1981 with Theatre Communications Group to provide services in three phases on a long-term basis from 1982 to 1984. Payment of $250,000 was to be made in fixed installments. The agreed receivable reports throughout 1982 list various amounts ($18,634.97, $22,244.97) due from Theatre Communications. The September 1982 report lists nothing as owed by Theatre Communications; the December 1982 report states that $54,703.47 was owed. The Bank presented no evidence as to when the assignment of the Theatre Communications account was made, although there was testimony the assignment was sometime in the fall of 1982. From July 1981 to January 1983 there was a fluctuating balance due from Theatre Communications even though in the month of September there was no balance due Mann Data.
CONCLUSIONS OF LAW:
11 U.S.C. Section 523(a)(2)(B) provides:
"A discharge . . . does not discharge an individual debtor from any debt . . .
(2) for obtaining money, property, services, or an extension, renewal or refinance of credit, by
(B) use of a statement in writing (i) that is materially false; (ii) respecting the debtor's or an insider's financial condition; (iii) on which the creditor to whom the debtor is liable for obtaining such money, property, services or credit reasonably relied; and (iv) that the debtor caused to be made to be published with intent to deceive."
A creditor seeking a determination of nondischargeability of a debt has the burden of proving each element by *499 clear and convincing evidence. See Household Finance Corp. v. Danns, 558 F.2d 114, 116 (2d Cir.1977); In Re West, 21 B.R. 872 (Bankr.D.Tenn.1982). To sustain the burden of proving that its debt comes within the false financial statement exception the creditor must establish that the debtor made or published a written statement that was materially false as to his or his insider's financial condition, that the debtor knew of such falsity and made the false statement with intent to deceive the creditor, that the property was obtained or credit extended by reason of such statement, and that the creditor actually and reasonably relied on the false financial statement to his detriment. Matter of Klusman, 29 B.R. 865, 867 (Bankr.S.D.Ohio 1983). I will examine each of these elements separately to determine whether Plaintiff has sustained its burden of proof.
The debtor contends that the corporation, Mann Data, obtained money and credit from the Bank, not Mann personally. Courts have considered whether a debtor must personally obtain the money as a result of a false financial statement in order to satisfy the element, and the majority view is that the debtor need not actually procure money or property for himself. E.g., Harris v. Birnie, 16 B.R. 65 (Bankr. D.Mass.1980) (Section 17(a)(2) applies even where bankrupt obtains property for another); McCloud v. Woods, 23 B.R. 563 (Bankr.E.D.Tenn.1982). See L. King, 3 Collier on Bankruptcy, Par. 523.08 (1) (15th ed. Supp.1983). Where the debtor is an officer and shareholder of a corporation and he uses a false financial statement to induce a creditor to make a loan to the corporation, the debtor is considered to have "obtained money" within the meaning of Section 523(a)(2)(B). In Re Winfree, 34 B.R. 879, 833 (Bankr.M.D.Tenn.1983); Century First National Bank v. Holwerda, 29 B.R. 486, 489, (Bankr.M.D.Fla.1983). Here, the creditor, First National Bank, made loans to the corporation based upon representations authorized by the individual debtor. Thus, it is clear that the individual debtor, Franklin Mann, has obtained money within the meaning of this exception to discharge.
The Bank argues that because the debtor's reports contained erroneous information concerning three accounts receivable, the financial statement was "materially false". For the purposes of Section 523(a)(2)(B) a "materially false" financial statement is one containing an important and substantial untruth. In Re Biedenharn, 30 B.R. 342 (Bankr.D.La.1983); In Re Anderson, 29 B.R. 184 (Bankr.N.D. Iowa 1983).
Based upon the testimony and Exhibits, I am unable to find that the reports, when read together with the other information submitted simultaneously to the Bank, were materially false.
Accordingly, since the Bank has failed to establish the essential element of its case, material falsity, it has failed to sustain its burden of proof in this adversary proceeding. See Bankruptcy Rule 4005 (1983).
Even if the Court had found the reports concerning these reports materially false, the evidence and testimony precludes a finding that the Bank relied on the documentation, or that the debtor intended to deceive the Bank in these transactions. With respect to the Posi Seal account, the Bank was aware of the percentage arrangement with Data Three, which shows that it did not rely on the statement that $60,000 was owed. Concerning General Electric, the invoice sent to the Bank on its face shows the trial period, and therefore the Bank cannot assert its reliance solely on the aging report. With respect to the Theatre Communications account, there was no testimony that the Bank relied on the reports. The loan officer Mr. Coleman, who testified at trial, was not involved with the Mann Data loan, and therefore he could not state the basis of the previous loan officer's decisions to advance. He did state however, that his review of the previous loan officer's work notes showed that the Bank was in an over-advanced position "from day one" of the loan agreement. The Bank cannot claim its reliance was *500 reasonable where it continued to do business with Mann knowing the Bank had over-advanced. Therefore, in view of these facts, I am unable to find that the Bank reasonably relied on the reports in computing the amount of advances or that this reliance was reasonable.
Finally, the record is devoid of any inferences from which I could find that the debtor intended to deceive the Bank when his company submitted the reports to the Bank. A representation in a financial statement must be made with intent to deceive in order for a debt to be excepted from discharge under Section 523(a)(2)(B). Where a debtor knew or should have known of errors in a financial statement and he fails to correct the error, it may be inferred that he has intended to deceive the creditor. In Re Bradford, 22 B.R. 899 (Bankr.D.Okla.1982); Matter of Gray, 22 B.R. 676 (Bankr.D.Wisc.1982). Even assuming the existence of errors in the materials forwarded to the Bank, the Bank failed to show that Mann had any knowledge which would impose upon him a duty to correct the information. He did not prepare the reports and was only aware of their contents in a general way. Thus, even if there were errors, I cannot find that he intended to deceive the Bank in submitting these financial statements. Accordingly, because the Plaintiff failed to sustain its burden on each element of this exception to discharge, judgment shall enter for the Defendant on Count I of the Plaintiff's Complaint.
Judgment shall also enter for the Defendant on Count II of Plaintiff's Complaint, which alleges that the representations concerning the receivables made to the Bank were fraudulent and thus the debt is nondischargeable under Section 523(a)(2)(A). In order for a debt to be nondischargeable under this sub-section, the misrepresentation must relate to something other than the debtor's financial condition. See In Re Patch, 22 B.R. 970 (Bankr.D.Md.1982). Here, since the statements concerned the collectibility of monies owed Mann Data, they concerned its financial condition. Therefore, judgment shall enter for the Defendant in this adversary proceeding.
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37 F.3d 1509NOTICE: 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.
Charles Robert KILLINGSWORTH, Defendant-Appellant,v.UNITED STATES of America, Plaintiff-Appellee.
No. 94-7038.
United States Court of Appeals, Tenth Circuit.
Oct. 12, 1994.
1
Before TACHA, BRORBY, Circuit Judges, and KANE,** Senior District Judge.
ORDER AND JUDGMENT1
2
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.
3
Defendant Charles Robert Killingsworth was convicted by a jury of three counts of using the Postal Service to send threatening letters, in violation of 18 U.S.C. 876. We affirmed his conviction on appeal. United States v. Killingsworth, No. 86-2093, slip op. (10th Cir. Apr. 22), cert. denied, 484 U.S. 844 (1987). Defendant then filed a motion to vacate, set aside or correct sentence pursuant to 28 U.S.C. 2255, which the district court denied. Representing himself, he appeals. We exercise jurisdiction under 28 U.S.C. 1291, and affirm.
4
Defendant raises six issues on appeal: (1) his Sixth Amendment right to confront witnesses was violated; (2) ineffective assistance of counsel at trial; (3) ineffective assistance of counsel on direct appeal; (4) the government obtained handwriting exemplars from him illegally; (5) he was convicted of one offense but sentenced for another; and (6) the district court erred in denying his 2255 motion before ruling on defendant's motion to compel discovery filed in that proceeding.
5
Defendant's second issue, ineffective assistance of counsel at trial, is properly raised in a 2255 motion. Beaulieu v. United States, 930 F.2d 805, 806 (10th Cir.1991). The district court concluded that defendant's ineffective assistance claim was legally insufficient. R. doc. 12, at 3. We review such a legal conclusion de novo. United States v. Clonts, 966 F.2d 1366, 1369 (10th Cir.1992). To prevail on an ineffective assistance claim, defendant must show "that his counsel's representation fell below an objective standard of reasonableness, ... [and] also that there is a reasonable probability that but for the error, he would have prevailed." United States v. Walling, 982 F.2d 447, 449 (10th Cir.1992)(citing Strickland v. Washington, 466 U.S. 668, 688, 694 (1984)). Based upon our review of defendant's brief, we agree with the district court that defendant's claim of ineffective assistance of counsel at trial is insufficient. See Hall v. Bellmon, 935 F.2d 1106, 1110 (10th Cir.1991)("conclusory allegations without supporting factual averments are insufficient to state a claim").
6
Defendant could have raised issues one, four, and five on direct appeal. Section 2255 is not available to test the legality of matters that should have been raised on appeal, United States v. Frady, 456 U.S. 152, 164-65 (1982); United States v. Cox, 567 F.2d 930, 932 (10th Cir.1977), cert. denied, 435 U.S. 927 (1978), unless defendant can show cause and prejudice for his failure to raise them, Brown v. United States, No. 94-7029, 1994 WL 484940, at * 1 (10th Cir. Sept. 8, 1994). A claim of ineffective assistance of counsel on direct appeal (defendant's third issue) may, if valid, be sufficient cause to excuse his failure to raise substantive arguments on direct appeal. Walling, 982 F.2d at 449. Defendant merely mentions this issue, however; his argument, under the heading "counsel for Mr. Killingsworth was ineffective during trial and appeal of criminal case," is directed solely at alleged trial error. Therefore, defendant's claim of ineffective assistance of counsel on direct appeal is insufficient cause to excuse his failure to raise his substantive arguments on direct appeal. As a result, we do not reach these other issues.
7
Defendant's sixth issue is likewise without merit. Defendant's outstanding motion to compel discovery was impliedly denied by the district court's denial of defendant's 2255 motion. Because we agree that defendant failed to allege sufficient facts to state a claim for relief, discovery was unnecessary.
8
The judgment of the United States District Court for the Eastern District of Oklahoma is AFFIRMED.
9
The mandate shall issue forthwith.
**
Honorable John L. Kane, Jr., Senior District Judge, United States District Court for the District of Colorado, sitting by designation
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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Court of Appeals
of the State of Georgia
ATLANTA,____________________
December 01, 2017
The Court of Appeals hereby passes the following order:
A18A0689. RONNIE DALE PACK v. THE STATE.
A jury found Ronnie Dale Pack guilty of child molestation, and we affirmed
his conviction on appeal. See Pack v. State, 335 Ga. App. 783 (783 SE2d 146)
(2016). In January 2017, Pack filed a “Motion to Compel to be Heard by the Chief
Judge” and “Demand for Order Vacating Void Judgment.” The trial court denied his
motions on March 1, 2017, and Pack filed his notice of appeal on April 6, 2017. We
lack jurisdiction.
First, a petition or motion to vacate or modify a conviction is not one of the
established procedures for challenging the validity of a judgment in a criminal case.
See Roberts v. State, 286 Ga. 532 (690 SE2d 150) (2010); Harper v. State, 286 Ga.
216, 218 (1) (686 SE2d 786) (2009). An appeal from an order denying or dismissing
such a petition or motion must be dismissed. See Roberts, supra; Harper, supra at
218 (2).
Second, this appeal is untimely. A notice of appeal must be filed within 30
days after entry of an appealable order. See OCGA § 5-6-38 (a). The proper and
timely filing of a notice of appeal is an absolute requirement to confer jurisdiction on
this Court. Jaheni v. State, 281 Ga. App. 213, 214 (635 SE2d 821) (2006). Pack’s
notice of appeal is untimely, as it was filed 36 days after entry of the order denying
his motion.
For the foregoing reasons, we lack jurisdiction of this appeal, which is hereby
DISMISSED.
Court of Appeals of the State of Georgia
Clerk’s Office, Atlanta,____________________
12/01/2017
I certify that the above is a true extract from
the minutes of the Court of Appeals of Georgia.
Witness my signature and the seal of said court
hereto affixed the day and year last above written.
, Clerk.
2
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