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838 F.2d 1210Unpublished Disposition
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Nathan A. THORNE, Plaintiff-Appellant.v.R.K. BYNUM, Robert R. Kelly, James Smith, Defendants-Appellees.
No. 87-7271.
United States Court of Appeals, Fourth Circuit.
Submitted: Nov. 27, 1987.Decided: Feb. 5, 1988.
Nathan A. Thorne, appellant pro se.
Nelson H.C. Fisher, Office of Attorney General of Virginia, for appellees.
E.D.Va.
AFFIRMED.
Before WIDENER and JAMES DICKSON PHILLIPS, Circuit Judges, and BUTZNER, Senior Circuit Judge.
PER CURIAM:
1
A review of the record and the district court's opinion discloses that this appeal from its order denying relief under 42 U.S.C. Sec. 1983 is without merit. Because the dispositive issues recently have been decided authoritatively, we dispense with oral argument and affirm the judgment below on the reasoning of the district court. Thorne v. Bynum, C/A No. 86-570-N (E.D.Va. June 18, 1987).
2
AFFIRMED.
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Filed: June 7, 2007
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 06-1462
(5:05-cv-00190-BO; 04-00141-5-ATS)
In Re: CHARLES A. WHITE, JR.; ANITA D. WHITE,
Debtors.
------------------------
INTERNAL REVENUE SERVICE,
Creditor - Appellee,
versus
CHARLES A. WHITE, JR.; ANITA D. WHITE,
Debtors - Appellants,
and
JOHN F. LOGAN, Chapter 13 Trustee,
Trustee.
O R D E R
The court amends its opinion filed April 23, 2007, as follows:
On page 7, last line of text before footnote 4 -- the words
“the district court’s” are deleted.
On page 8, first line of text -- the word “its” is deleted.
For the Court - By Direction
/s/ Patricia S. Connor
Clerk
PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
In Re: CHARLES A. WHITE, JR.;
ANITA D. WHITE,
Debtors.
INTERNAL REVENUE SERVICE,
Creditor-Appellee,
v. No. 06-1462
CHARLES A. WHITE, JR.; ANITA D.
WHITE,
Debtors-Appellants,
and
JOHN F. LOGAN, Chapter 13 Trustee,
Trustee.
Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
Terrence W. Boyle, District Judge.
(5:05-cv-00190-BO; 04-00141-5-ATS)
Argued: March 15, 2007
Decided: April 23, 2007
Before WILLIAMS, MICHAEL, and SHEDD, Circuit Judges.
Affirmed by published opinion. Judge Williams wrote the opinion, in
which Judge Michael and Judge Shedd joined.
2 IN RE: WHITE
COUNSEL
ARGUED: Joseph A. Bledsoe, III, Raleigh, North Carolina, for
Appellants. Karen Grace Gregory, UNITED STATES DEPART-
MENT OF JUSTICE, Tax Division, Washington, D.C., for Appellee.
ON BRIEF: John T. Orcutt, Raleigh, North Carolina, for Appellants.
George E. B. Holding, United States Attorney, OFFICE OF THE
UNITED STATES ATTORNEY, Raleigh, North Carolina; Eileen J.
O’Connor, Assistant Attorney General, Robert W. Metzler, UNITED
STATES DEPARTMENT OF JUSTICE, Tax Division, Washington,
D.C., for Appellee.
OPINION
WILLIAMS, Circuit Judge:
Charles A. White and Anita D. White ("the Whites") appeal from
the district court’s reversal of the bankruptcy court’s order granting
their bankruptcy petition and confirming their plan of reorganization
under Chapter 13 of the Bankruptcy Code. As part of their plan of
reorganization, the Whites proposed to satisfy a secured claim held by
the Internal Revenue Service (IRS) by surrendering part of the prop-
erty securing the claim to the IRS and by paying the remaining
secured value through the plan. The district court agreed with the
bankruptcy court that 11 U.S.C.A. § 1325 (West 2004 & Supp. 2006)
— the Code provision governing the confirmation of a payment plan
under Chapter 13 — in some circumstances permits a Chapter 13
debtor to partially surrender the property securing a claim. Neverthe-
less, the district court reversed the bankruptcy court’s order and
denied confirmation of the plan, concluding that the Whites’ proposal
to surrender property exempted from administrative levy by the IRS
did not constitute a "surrender" under § 1325(a)(5)(C) because the
Whites would retain the "surrendered" property.
We affirm the district court. The Whites’ proposal to surrender per-
sonal property that the IRS cannot levy on and cannot otherwise col-
lect without resort to litigation does not constitute a "surrender" under
11 U.S.C.A. § 1325(a)(5)(C). We therefore leave for another day the
IN RE: WHITE 3
question of whether § 1325(a)(5) permits a plan to be confirmed when
a Chapter 13 debtor surrenders only part of the property securing a
claim.
I.
A.
The facts of this case are undisputed. The Whites failed to pay fully
their federal income taxes for the tax years 1994-2000 and 2002-
2003. On October 30, 2003, the IRS filed a notice of tax lien in Wake
County, North Carolina, with respect to the tax deficiencies for 1994-
1996, perfecting a security interest for $7,006 in all of the Whites’
property.
On January 13, 2004, the Whites filed a Chapter 13 bankruptcy
petition in the U.S. Bankruptcy Court for the Eastern District of North
Carolina. On schedules attached to the petition, the Whites listed the
IRS as a creditor holding an unsecured priority claim of $1,203 and
an unsecured general claim of $30,648. They did not, however,
include the IRS on the schedule of secured creditors.
The IRS filed a proof of claim on April 30, 2004, in which it
asserted a claim of $7,006 secured by certain of the Whites’ property.
Shortly thereafter, on June 8, 2004, the Chapter 13 trustee filed a
motion to dismiss the Whites’ bankruptcy case, contending that "[the
Whites’] plan as filed is not feasible and, therefore, will not meet the
requirements of 11 U.S.C. § 1325(a)(1). The Chapter 13 Plan is not
feasible in that it fails to pay secured claims in full and does not pro-
vide dividends to priority and general unsecured creditors." (J.A. at
11.)1
B.
To qualify for confirmation under Chapter 13, the Whites’ plan
must satisfy the requirements of § 1325(a) of the Bankruptcy Code.
1
Citations to "(J.A. at __.)" refer to the Joint Appendix filed by the par-
ties in this appeal.
4 IN RE: WHITE
The Whites’ treatment of the IRS’s secured claim, in particular, is
governed by subsection (a)(5).2 Under this provision, a plan’s pro-
posed treatment of secured claims will be confirmed if (1) the secured
creditor accepts the plan, see 11 U.S.C.A. § 1325(a)(5)(A); (2) the
debtor invokes the so-called "cram down"3 power, see
2
Section 1325(a)(5) of the Bankruptcy Code provides, with exceptions
not relevant here, that the bankruptcy court must confirm a plan of reor-
ganization if
with respect to each allowed secured claim provided for by the
plan—
(A) the holder of such claim has accepted the plan;
(B)(i) the plan provides that —
(I) the holder of such claim retain the lien securing such
claim until the earlier of—
(aa) the payment of the underlying debt determined under
nonbankruptcy law; or
(bb) discharge under section 1328; and
(II) if the case under this chapter is dismissed or converted
without completion of the plan, such lien shall also be
retained by such holder to the extent recognized by applica-
ble nonbankruptcy law;
(ii) the value, as of the effective date of the plan, of property
to be distributed under the plan on account of such claim is not
less than the allowed amount of such claim; and
(iii) if—
(I) property to be distributed pursuant to this subsection is
in the form of periodic payments, such payments shall be in
equal monthly amounts; and
(II) the holder of the claim is secured by personal property,
the amount of such payments shall not be less than an
amount sufficient to provide to the holder of such claim
adequate protection during the period of the plan; or
(C) the debtor surrenders the property securing such claim to
such holder . . . .
11 U.S.C.A. § 1325(a)(5) (West 2004 & Supp. 2006).
3
Under the "cram down" option, "the debtor is permitted to keep the
property over the objection of the creditor; the creditor retains the lien
IN RE: WHITE 5
§ 1325(a)(5)(B); or (3) the debtor "surrenders" to the creditor the
property securing the claim, see § 1325(a)(5)(C).
On June 14, 2004, the Whites sent a letter to the IRS requesting
that the IRS amend its proof of claim because the Whites had decided
to surrender part of property securing the IRS’s $7,006 claim. The let-
ter stated that the Whites had decided to surrender their apparel; jew-
elry; certain of their household goods, including their stove and
refrigerator; and their 1995 Plymouth Voyager minivan — property
totaling $4,533 in value. The Whites intended to retain the remaining
$2,473 in property securing the IRS’s tax lien, including a 1995
Chevrolet Silverado truck and two IRA accounts. (J.A. at 12.) In the
letter, the Whites indicated that the value of the surrendered property
should be added to the IRS’s unsecured general claim and subtracted
from the IRS’s secured claim, reducing the secured claim to $2,473.
In other words, the Whites proposed a plan that attempts to invoke
both the "cram down" and "surrender" options under § 1325(a)(5).
The IRS rejected the Whites’ proposed amendment to its secured
claim and instead, on June 21, 2004, filed an amended proof of claim
reasserting the secured $7,006 claim and asserting an unsecured prior-
ity claim of $3,896 and a general unsecured claim of $19,478.
C.
On September 24, 2004, the bankruptcy court denied the trustee’s
motion to dismiss the Whites’ bankruptcy case. In denying the trust-
ee’s motion to dismiss, the court reasoned that 11 U.S.C.A. § 1325(a)
did "not preclude [the Whites] from surrendering part of the IRS’s
secured claim, and treating the remaining portion of the claim as
secured to the value of the retained collateral," though the court did
note that in some circumstances it might be unfair to a secured credi-
tor to allow a partial surrender of collateral. (J.A. at 21.)
securing the claim, see § 1325(a)(5)(B)(I), and the debtor is required to
provide the creditor with payments, over the life of the plan, that will
total the present value of the allowed secured claim, i.e., the present
value of the collateral, see § 1325(a)(5)(B)(ii)." Assocs. Commercial
Corp. v. Rash, 520 U.S. 953, 957 (1997).
6 IN RE: WHITE
On October 4, 2004, the trustee filed a motion to confirm the
Whites’ amended plan. The IRS then objected to confirmation of the
plan on the grounds that (1) by proposing bifurcation of the IRS’s
secured claim, the plan failed to provide for full payment of the claim,
in violation of 11 U.S.C.A. § 1325(a); (2) the plan was not feasible
because the Whites proposed to surrender personal property, includ-
ing their clothing and household goods, that was necessary for their
continued generation of income and thus for their compliance with the
plan; (3) the plan was proposed in bad faith because the Whites never
actually intended to turn over the property to the IRS; and (4) the
Whites were prohibited by 26 U.S.C. §§ 6311 and 6316 from paying
their federal tax liabilities with personal property. The IRS also
argued that it would be without any means of forcing the Whites to
turn over the collateral securing its claim because the IRS is prohib-
ited by § 6334 of the Internal Revenue Code (IRC) from levying on
the "surrendered" personal property.
On December 9, 2004, the bankruptcy court denied the IRS’s
objection to the confirmation of the plan. The court affirmed its ear-
lier ruling that partial surrender of the property securing a claim is
permissible under § 1325(a)(5), but the court also went a step further
and concluded that because the IRS asserted that it could not convert
its tax lien on the secured collateral into payment because of the prop-
erty’s exemption from administrative levy, the IRS’s claim was "not
a secured claim, but . . . an unsecured claim." (J.A. at 47.)
D.
The IRS appealed the bankruptcy court’s order to the district court,
arguing that the bankruptcy court erred (1) in ruling that the IRS’s
claim for $7,006 was unsecured and (2) in holding that partial surren-
der of property in partial satisfaction of a secured claim is permitted
under § 1325(a)(5). On March 6, 2006, the district court reversed the
bankruptcy court’s order, holding first that the IRS’s $7,006 claim
was not rendered unsecured by virtue of the IRS’s inability to convert
the lien into payment. United States v. White, 340 B.R. 761, 765
(E.D.N.C. 2006). The court stated that "the IRS’s inability to levy on
exempt property does not destroy the lien, or make the IRS’s claim
unsecured. . . . This is because a federal tax lien maintains value inde-
pendent of the Government’s ability to proceed against the property
IN RE: WHITE 7
by administrative levy, given the IRS’s ‘considerable arsenal of col-
lection tools.’" Id. at 764. Accordingly, the court held that the IRS’s
claim "remains secured even where the IRS is unable to immediately
seize property secured by a federal tax lien." Id. at 767.
The district court also reversed the bankruptcy court’s ruling per-
mitting the Whites’ proposed surrender of exempted personal prop-
erty to the IRS. While the court agreed with the bankruptcy court that
"under certain circumstances a debtor may bifurcate a secured claim
and follow more than one" of the options set forth in § 1325(a)(5), it
found that the bankruptcy court erred in finding that "any surrender
of personal property to the IRS was permissible under the circum-
stances of this case." Id. at 766 (emphasis in original). Noting that the
bankruptcy court had accepted the Whites’ proposal "despite the fact
that there were substantial legal obstacles to the IRS’s collection of
the property," id., the district court held that partial surrender of col-
lateral is not an option "[i]f the debtor is prohibited from surrendering
certain property by law," id. The court concluded that by merely pro-
posing a surrender of exempted property, and not actually making the
property available to the IRS, the Whites could not be said "to have
‘surrendered’ their property in any meaningful fashion." Id. at 766-67.
The Whites timely appealed.4 We have jurisdiction over this appeal
pursuant to 28 U.S.C.A. § 158(d)(1) (West 2006) (conferring jurisdic-
tion on courts of appeals to review final decisions of district courts
reviewing bankruptcy decisions).
II.
A.
"When reviewing a decision by a district court sitting as an appel-
late court in bankruptcy matters, we apply the same standard of
review as did the district court," Schlossberg v. Barney, 380 F.3d 174,
178 (4th Cir. 2006), which means that we review
4
The Whites do not appeal that portion of the district court’s order
reversing the bankruptcy court’s reclassification of the IRS’s claim as an
unsecured claim. There is thus no question on appeal that the IRS’s
$7,006 claim is a secured claim.
8 IN RE: WHITE
legal conclusions de novo and factual findings for clear error, id.
Because the facts of this case are undisputed, this case presents only
questions of bankruptcy law, and our review is de novo.
For the Whites to prevail in this appeal, we must conclude both that
their proposal constitutes a "surrender" under § 1325(a) and that
§ 1325(a)(5)’s cram down and surrender options are not mutually
exclusive. The IRS maintains that we do not need to reach the subsid-
iary question of whether § 1325(a)(5) permits the Whites to pursue a
hybrid option, consisting of both cram down and surrender compo-
nents, because the Whites’ proposal does not amount to a "surrender"
as that term is used in § 1325(a)(5)(C). We agree with the IRS that
the Whites’ proposed "surrender" is no surrender at all under
§ 1325(a)(5)(C), and there is therefore no need for us to consider
whether the statute permits the Whites to invoke both the cram down
and surrender options to satisfy the IRS’s secured claim.5
B.
Although "surrender" is not defined in the Bankruptcy Code, see
generally 11 U.S.C.A. § 101 (West 2004 & Supp. 2006), the word’s
general meaning is not a mystery. The operative phrase in
§ 1325(a)(5)(C), "surrenders the property securing such claim to such
holder," makes it clear enough that the "surrender" spoken of entails
the secured creditor ultimately holding all rights, including the right
5
Both the bankruptcy court and district court concluded that
§ 1325(a)(5) in some circumstances permits a debtor to invoke both the
cram down and surrender options. In reaching this conclusion, both
courts focused on the use of the conjunction "or" between subsections
(a)(5)(B) (cram down) and (a)(5)(C) (surrender). Because the Bank-
ruptcy Code provides, as a rule of construction, that "‘or’ is not exclu-
sive," 11 U.S.C.A. § 102(5) (West 2004 & Supp. 2006), the courts
concluded that the plain language of § 1325(a)(5), with its use of "or"
between the cram down and surrender options, permits a debtor to pursue
one or the other or both. Both courts acknowledged that the Fifth Circuit
reached the opposite conclusion in In re Williams, 168 F.3d 845, 847
(5th Cir. 1999) ("Although 11 U.S.C. § 102(5) states that ‘"or" is not
exclusive,’ it does not follow that Congress intended the word ‘or’ to
create a fourth alternative [under § 1325(a)(5)]."). As noted above, we do
not reach this question in this case.
IN RE: WHITE 9
of possession, in the property securing the claim. Thus, one prominent
bankruptcy treatise has defined "surrender" in the § 1325(a) context
as the "relinquishment of any rights in the collateral," including the
right to possess the collateral. 8 Collier on Bankruptcy ¶ 1325.06[4]
(Alan N. Resnick & Henry J. Sommer eds., 15th ed. 2005). This defi-
nition has been formulated by a number of bankruptcy courts called
on to construe § 1325(a)(5)(C). See, e.g., Hosp. Auth. Credit Union
v. Smith (In re Smith), 207 B.R. 26, 30 (Bankr. N.D. Ga. 1997)(con-
cluding that § 1325(a)(5)(C) makes plain that "a debtor must at least
tender possession or control of the collateral to the creditor"); In re
Stone, 166 B.R. 621, 623 (Bankr. S.D. Tex. 1993)(holding that "the
term ‘surrender’ [under § 1325(a)(5)(C)] was contemplated by Con-
gress to be a return of property and a relinquishing of possession or
control to the holder of the claim"). Other legal and non-legal defini-
tions of "surrender" also focus on the complete relinquishment of
rights, see Black’s Law Dictionary 1484 (8th ed. 2005) (defining "sur-
render" as "yielding to another’s power or control" and "giving up of
a right or claim"), Merriam-Webster’s Collegiate Dictionary 1258
(11th ed. 2003) (defining "surrender" as "the action of yielding one’s
person or giving up the possession of something esp. into the power
of another"), including relinquishment of the right to possession, see,
e.g., Black’s Law Dictionary 1484-85 (defining "surrender" in the
landlord-tenant context as the tenant’s "relinquishment of possession
before the lease has expired"), U.C.C. § 3-604(a) (2002) (stating that
one way for an instrument-holder to discharge the obligation of a
party to the instrument is "surrender," i.e., physical delivery or turn
over, of the instrument to the obligated party). At the most basic level,
then, the word "surrender" means the relinquishment of all rights in
property, including the possessory right, even if such relinquishment
does not always require immediate physical delivery of the property
to another.
The Whites propose to surrender to the IRS, inter alia, their
apparel and a number of household goods, including their stove and
refrigerator.6 The IRC exempts this property from administrative levy
6
The IRS also contends that the Whites’ proposal to surrender living
and household necessities (their clothing, stove, and refrigerator) renders
their plan unconfirmable because without these items the Whites will not
10 IN RE: WHITE
by the IRS. See 26 U.S.C.A. § 6334(a) (West 2002 & Supp. 2006)
(exempting from administrative levy "wearing apparel . . . necessary"
for the taxpayer and his family and "fuel, provisions, furniture and
personal effects [up to] $6,250 in value"). In other words, while the
IRC grants the IRS the power to obtain a federal tax lien over "all
property" of a debtor, see 28 U.S.C.A. § 6321 (West 2002 & Supp.
2006), the IRS cannot convert that lien into payment through levy on
the exempted property that the Whites purport to surrender. The net
result is that, in the absence of actual delivery or turnover of the prop-
erty to the IRS, the Whites will retain the very property that they "sur-
rendered" because, as the district court noted, the IRS faces
"substantial legal obstacles" to collecting the property. White, 340
B.R. at 766.
The Whites concede that the IRS cannot levy on the property that
they propose to surrender, but they note that § 6334(a)’s exemption
from levy does not prevent the IRS from bringing a court action under
§ 7403 of the IRC to enforce its lien rights and convert the property
to the payment of its claim. See 26 U.S.C.A. § 7403(a) (West 2002
& Supp. 2006) (stating that the Attorney General or his delegate may
bring a civil action to enforce a tax lien "whether or not levy has been
made"). While the Whites are correct that nothing bars the IRS from
seeking judicial enforcement of the tax lien,7 the fact that the IRS can
be able to make all the payments under the plan. See 11 U.S.C.A.
§ 1325(a)(6) (West 2004 & Supp. 2006)(stating that for a plan to be con-
firmed, the debtor must "be able to make all payments under the plan and
to comply with the plan"). Without clothing, the IRS contends, the
Whites would not be able to earn the disposable income that will be nec-
essary for payments to the plan’s creditors, and, according to the IRS, "if
[the Whites] were to discontinue using their refrigerator and stove, they
presumably would have to eat at restaurants — drastically increasing
their monthly expenses, and drastically decreasing their disposable
income." (Appellee’s Br. at 27-28.) While the IRS’s argument has cre-
dence, we need not countenance it here, given our conclusion that the
Whites’ proposal is not a "surrender" in any sense under the statute.
7
Nothing legally speaking, that is. The IRS argues that there would be
a significant cost-benefit disincentive to seek judicial enforcement of the
tax lien in this case, given the likelihood that the litigation costs would
exceed the value of the relevant property. We note this only to further
illustrate the vacuousness of the Whites’ proposed "surrender."
IN RE: WHITE 11
potentially collect the value of the property only through judicial
enforcement underscores why, in the absence of actual physical turn-
over of the property, the Whites’ proposal is not a "surrender" under
the statute. By insisting that the IRS is not foreclosed from obtaining
the property by way of adversarial litigation, the Whites are all but
conceding that their proposed surrender would not result in their relin-
quishment of all of their legal rights to the property, including the
rights to possess and use it. Normally, "[w]hen a debtor surrenders the
property [securing a claim], a creditor obtains it immediately, and is
free to sell it and reinvest the proceeds." Assocs. Commercial Corp.
v. Rash, 520 U.S. 953, 962 (1997). Under the Whites’ proposed plan,
however, the Whites would not immediately turn the property over to
the IRS. Instead, the Whites would retain the purportedly "surren-
dered" property until the IRS obtained a court judgment subjecting
the exempted property to payment of the IRS’s secured claim or,
according to the Whites, until plan confirmation removed the bar to
administrative levy on the property, thus allowing the IRS to levy
against the property. The IRS certainly would not immediately, or
even with minor delay, obtain the property so that it could sell it. The
Whites’ retention of property that is legally insulated from collection
is inconsistent with surrender.
There is another problem with the Whites’ argument. The Whites’
proposal would result in the IRS obtaining possession of the property
after confirmation of the plan, see Appellant’s Br. at 25 (stating that
"[u]pon . . . plan confirmation, the IRS is free to exercise its ordinary
collection activities with respect to the property"), but as the district
court noted, "[t]o treat a secured claim as unsecured once surrender
has been proposed by the debtor is insufficient under [§ 1325(a)(5)],"
White, 340 B.R. at 766. While a debtor’s invocation of the cram down
power under § 1325(a)(5)(B) permits a plan to be approved based on
the plan’s provision for payments to the secured creditor, the surren-
der option under § 1325(a)(5)(C) does not reference the plan. A fair
reading of § 1325(a)(5)(C) is thus that the surrender must be com-
pleted at or before the confirmation of the plan. See Chrysler Fin.
Corp. v. Nolan (In re Nolan), 232 F.3d 528, 533 n.8 (6th Cir.
2000)(noting that § 1325(a)(5)(C) "does allow a surrender of collat-
eral, but only pre-confirmation"); 8 Collier on Bankruptcy
¶ 1325.06[4] (noting that a "fair rendition of section 1325(a)(5)(C)
requires that the surrender of the collateral occur before or at confir-
12 IN RE: WHITE
mation, or at the effective date of the plan"). For this separate reason,
the Whites’ proposal does not "surrender" the property as required by
§ 1325(a)(5)(C).
III.
Despite the clear signals throughout the course of this litigation that
physical relinquishment of the property was the only potential way to
effect a surrender, the Whites never turned the property over to the
IRS. The Whites’ brief makes clear that such relinquishment of pos-
session was not their aim. See Appellant’s Br. at 25 ("Upon relin-
quishment of the [Whites’] IRS exemption rights as a consequence of
plan confirmation, the IRS is free to exercise its ordinary collection
activities with respect to the property."). We therefore hold that the
Whites’ proposal, which entails their retention of the property that
they purport to surrender to the IRS, does not constitute a "surrender"
as that term is used in § 1325(a)(5)(C) given the significant legal hur-
dles that the IRS faces in collecting the property. If a secured creditor
is legally foreclosed from immediately obtaining the property that a
debtor proposes to surrender and the debtor does not in fact voluntar-
ily relinquish all rights in the property, including the right to posses-
sion, to the secured creditor, then the debtor can in no way be said
to have "surrendered" any of his rights in the property. It would be
an odd thing indeed for us to hold that the Whites’ proposal amounted
to a "surrender" when, under their proposal, the Whites could have
returned home after their confirmation hearing and cooked their eve-
ning dinner in the stove, stored their leftovers in the refrigerator, and
worn the clothes that they had "surrendered" to the IRS. While the
Supreme Court has noted that, from the secured creditor’s perspec-
tive, "surrender and retention are not equivalent acts," Rash, 520 U.S.
at 962, from our perspective, in this case they are more than just une-
quivalent: they are altogether contrary. The judgment of the district
court is therefore affirmed.
AFFIRMED
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IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
BERNARD KATZ, )
)
Plaintiff, )
)
v. ) C.A. No. N19C-06-114 ALR
)
SIDNEY MAFFETT, )
)
Defendant. )
Submitted: November 23, 2019
Decided: January 9, 2020
Upon Defendant’s Motion for Summary Judgment
GRANTED
ORDER
Upon consideration of Defendant’s motion for summary judgment; the
opposition thereto filed by Plaintiff; the facts, arguments, and authorities set forth
by the parties; the Superior Court Rules of Civil Procedure; statutory and decisional
law; and the entire record in this case, the Court hereby finds as follows:
1. Plaintiff is an individual who controls a limited liability company
(“Buyer Entity”). Defendant is an individual who is the managing member of a
limited liability company (“Seller Entity”). A limited liability company is a legal
entity that is separate and distinct from its members.1
1
See, e.g., Harner v. Westfield Ins. Co., 2018 WL 6721765, at *3–4 (Del. Super.
Dec. 12, 2018); Poore v. Fox Hollow Enters., 1994 WL 150872, at *2 (Del. Super.
Mar. 29, 1994).
2. Buyer Entity purchased a parcel of real property (“Property”) from
Seller Entity pursuant to a written sale agreement on July 10, 2014 (“Sale”). Plaintiff
executed the sale agreement on behalf of Buyer Entity, and Defendant executed the
sale agreement on behalf of Seller Entity. To fund the purchase, Buyer and Plaintiff
co-signed a purchase money note for $500,000 in favor of Seller Entity.
3. On June 13, 2019, Plaintiff filed this action asserting one claim of
misrepresentation in connection with the Sale. The Complaint alleges that (1)
Defendant sold the Property to Plaintiff, (2) Defendant intentionally concealed rust
build-up on the roof of a warehouse located on the Property to induce Plaintiff to
purchase the Property “as is,” (3) Defendant knew or should have known that the
warehouse was in violation of two sections of the City of Wilmington Building
Code, and (4) Plaintiff would not have purchased the Property had Defendant
disclosed the rust build-up and building code violations to Plaintiff prior to
settlement.
4. Defendant initially filed the instant motion as a motion to dismiss but
because Defendant submitted various supplemental materials with the motion, the
Court converted Defendant’s motion to dismiss into a motion for summary
judgment2 and afforded the parties additional time to present all materials pertinent
to such a motion.
2
See Super. Ct. Civ. R. 12(b).
2
5. The Court may grant summary judgment only where the moving party
can “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.”3 A genuine issue of material fact
is one that “may reasonably be resolved in favor of either party.”4 The moving party
bears the initial burden of proof and, once that is met, the burden shifts to the non-
moving party to show that a material issue of fact exists.5 At the motion for summary
judgment phase, the Court must view the facts “in the light most favorable to the
non-moving party.”6 Summary judgment is only appropriate if Plaintiff’s claim
lacks evidentiary support such that no reasonable jury could find in Plaintiff’s favor.7
6. Defendant asserts four grounds for granting the motion: (1) Plaintiff
lacks standing to bring his claim because Plaintiff was not the buyer; (2) Plaintiff’s
claim is not properly brought against Defendant because Defendant was not the
seller; (3) the Complaint does not plead misrepresentation with sufficient
3
Super. Ct. Civ. R. 56(c).
4
Moore v. Sizemore, 405 A.2d 679, 680–81 (Del. 1979).
5
Id.
6
Brozka v. Olson, 668 A.2d 1355, 1364 (Del. 1995).
7
See Hecksher v. Fairwinds Baptist Church, Inc., 115 A.3d 1187, 1200–05 (Del.
2015); Edmisten v. Greyhound Lines, Inc., 2012 WL 3264925, at *2 (Del. Aug. 13,
2012).
3
particularity, as is required by Superior Court Rule of Civil Procedure 9(b);8 and (4)
Plaintiff’s claim is barred by the applicable three-year statute of limitations.
7. Plaintiff opposes Defendant’s motion.
8. The Complaint alleges that Plaintiff purchased the Property from
Defendant; however, the written sale agreement states that the transaction occurred
between Buyer Entity and Seller Entity, and Plaintiff has produced no evidence to
the contrary.
9. To succeed in an intentional misrepresentation claim,9 a plaintiff must
prove the following:
(1) the defendant falsely represented or omitted facts that the defendant
had a duty to disclose, (2) the defendant knew or believed that the
representation was false or made the representation with a reckless
indifference to the truth, (3) the defendant intended to induce the
plaintiff to act or refrain from acting, (4) the plaintiff acted in justifiable
8
See Super. Ct. Civ. R. 9(b) (“In all averments of fraud, negligence or mistake, the
circumstances constituting fraud, negligence or mistake shall be stated with
particularity.”).
9
The Court construes Plaintiff’s misrepresentation claim as one for intentional
misrepresentation. While the Complaint does not explicitly state that the claim is
for intentional misrepresentation, it describes Defendant’s conduct as “intentional.”
In addition, “‘[i]t is well-settled Delaware law that the Chancery Court has exclusive
jurisdiction over claims of negligence [sic] misrepresentation.’ ‘The one exception
to the exclusive jurisdiction of the Chancery Court would be cases where the
negligent misrepresentation claim is raised in the context of the Consumer Fraud
Act.’” Optical Air Data Sys. v. L-3 Commc’ns Corp., 2019 WL 210543, at *1 (Del.
Super. Jan. 14, 2019) (quoting Van Lake v. Sorin CRM USA, Inc., 2013 WL
1087583, at *11 (Del. Super. Feb. 15, 2013)) (alterations omitted). Plaintiff’s
misrepresentation claim is not raised under the Consumer Fraud Act and therefore
cannot be asserted as a negligent misrepresentation claim in the Superior Court.
4
reliance on the representation, and (5) the plaintiff was injured by its
reliance.10
In other words, Plaintiff must prove not only that Defendant made a false
representation to induce Plaintiff to act but also that Plaintiff acted in reliance on
that representation.
10. Plaintiff claims to have purchased the Property in reliance on
Defendant’s alleged misrepresentations. While Plaintiff may have caused Buyer
Entity to purchase the Property, Buyer Entity, not Plaintiff, actually purchased the
Property. Therefore, even if Plaintiff can prove that Defendant falsely represented
the building’s condition and compliance with the Wilmington Building Code,
Plaintiff lacks standing to pursue a claim of intentional misrepresentation.
11. Notwithstanding Plaintiff’s lack of standing, Defendant is entitled to
judgment as a matter of law based on statute of limitations grounds. A three-year
statute of limitations applies to Plaintiff’s misrepresentation claim.11 Assuming
10
DCV Holdings, Inc. v. ConAgra, Inc., 889 A.2d 954, 958 (Del. 2005) (emphasis
added).
11
See 10 Del. C. § 8106(a) (“[N]o action based on a promise . . . and no action to
recover damages caused by an injury unaccompanied with force or resulting
indirectly from the act of the defendant shall be brought after the expiration of 3
years from the accruing of the cause of such action . . . .”); see also Van Lake, 2013
WL 1087583, at *6 (“Pursuant to 10 Del. C. § 8106, claims ‘arising from a promise,’
including fraud, must be brought within three years after the claim has accrued.”);
Lee v. Linmere Homes, Inc., 2008 WL 4444552, at *3 (Del. Super. Oct. 1, 2008)
(applying 10 Del. C. § 8106 to a fraudulent misrepresentation claim in connection
with the sale of a home);
5
arguendo that Plaintiff has standing to bring his claim, the cause of action would
have accrued on July 10, 2014—the date of settlement—at the latest.12 Plaintiff filed
this action on June 13, 2019, nearly five years after the accrual date. Therefore,
Plaintiff’s claim is time-barred.
12. Accordingly, Defendant is entitled to judgment as a matter of law.13
NOW, THEREFORE, this 9th day of January 2020, Defendant’s motion
for summary judgment is hereby GRANTED and JUDGMENT is entered in
favor of Defendant.
IT IS SO ORDERED.
Andrea L. Rocanelli
________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ___ ________ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ______ ____
The Honorable Andrea L. Rocanelli
12
See Linmere Homes, Inc., 2008 WL 4444552, at *3 (“Generally, where a plaintiff
alleges claims of breach of contract, fraudulent misrepresentation, and negligence
related to the purchase of a home, the statute of limitations begins to run on the date
of the settlement or closing.”).
13
Because the Court finds that Defendant is entitled to judgment as a matter of law
based on Plaintiff’s lack of standing and the expiration of the statute of limitations
period, the Court does not address the merits of Defendant’s other arguments.
6
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OSCN Found Document:WHITAKER v. STATE
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WHITAKER v. STATE2015 OK CR 1Case Number: F-2013-683Decided: 01/09/2015MATTHEW SHELBY WHITAKER, Appellant, v. STATE OF OKLAHOMA, Appellee.
Cite as: 2015 OK CR 1, __ __
S U M M A R Y O P I N I O N
LUMPKIN, VICE-PRESIDING JUDGE:
¶1 On June 15, 2009, Appellant Whitaker, represented by counsel, entered a guilty plea to a charge of Distribution of a Controlled Substance in Tulsa County Case No. CF-2008-6121. Whitaker's sentencing was deferred for a period of four years, subject to terms and conditions of probation. On May 24, 2013, the State filed an Application to Accelerate Deferred Sentence, alleging Whitaker committed the new offense of Domestic Assault and Battery as alleged in Tulsa County Case No. CM-2013-407.1
¶2 On July 11, 2013, at the conclusion of the hearing on the State's acceleration application, the Honorable Tom C. Gillert accelerated Whitaker's deferred sentence and sentenced him to four years. From this judgment and sentence, Whitaker appeals and raises the following propositions of error:
1. The District Court abused its discretion in accelerating Whitaker's sentence because the State presented insufficient evidence to support the claim that Whitaker committed the offense of Domestic Assault and Battery; and
2. Whitaker's sentence is excessive and should be modified.
The acceleration of Whitaker's deferred sentence is AFFIRMED.
¶3 The State's acceleration application alleged that Whitaker violated the terms and conditions of his probation after he was charged with Domestic Assault and Battery in Tulsa County Case No. CF-2013-1907. At Proposition 1, Whitaker argues the State presented insufficient evidence to show, by a preponderance of the evidence, that he committed the charged offense. The State claimed that Whitaker and the victim, Whitaker's former girlfriend Connor, got into an argument. After leaving to stay with her mother, Connor reconciled with Whitaker and returned to the home they shared. The couple again argued, but this time Whitaker took Connor's phone to prevent her from calling her mother, and would not return the device. Connor tried to leave, but Whitaker would not let her leave the house. Connor alleged that Whitaker bit her on the shoulder. Eventually the couple fell asleep and when Connor woke up she found her phone and called her mother to pick her up. That night Connor's parents took her back to the home to get her clothes. Whitaker arrived at the house while Connor and her parents were there, and her stepfather called the police.
¶4 Connor's testimony at the acceleration hearing was consistent with the State's allegations. On cross-examination, Connor admitted that she and Whitaker argued. After first denying that she bit Whitaker, Connor admitted that she bit him on the finger prior to him biting her on the shoulder. Connor was 5 months pregnant at the time of the altercation. A photo was admitted into evidence showing the mark left on Connor's shoulder as a result of the bite. Whitaker argues that he and Connor engaged in a conflict which she initiated by biting him on the finger, and therefore his biting her on the shoulder in retaliation was not "unlawful" because Connor consented to the fight. Whitaker cites no controlling authority supporting his claim that consent is a defense to a charge of assault and battery.
¶5 This Court has consistently held that an acceleration proceeding does not require the same broad scope of due process protection as a criminal proceeding. Degraffenreid v. State, 1979 OK CR 88, ¶ 14, 599 P.2d 1107, 1110. The standard of review in acceleration proceedings is abuse of discretion. Hagar v. State, 1999 OK CR 85, ¶ 10, 990 P.2d 894, 898; Edwards v. State, 1987 OK CR 276, ¶¶ 7-8, 747 P.2d 968, 970. There was more than sufficient evidence presented at the acceleration hearing to find, by a preponderance of the evidence, that Whitaker committed the offense of Domestic Assault and Battery.
¶6 At Proposition 2, Whitaker argues that his sentence is excessive. The State argues that the length of Whitaker's sentence is not proper for consideration within the context of an acceleration appeal. Whitaker acknowledges that the scope of review in an acceleration appeal is limited to the validity of the order of acceleration. See Rule 1.2(D)(5)(b), Rules of the Oklahoma Court of Criminal Appeals, Title 22, Ch. 18, App. (2014). A claim of excessive sentence upon acceleration of a deferred sentence challenges the appropriateness of the sentence, and this issue is only properly reviewed if the defendant appeals his judgment and sentence, which requires the filing of a petition for writ of certiorari and compliance with the procedures established by this Court's Rules for perfecting a certiorari appeal. See 22 O.S.2001, § 1051(a) (statute requiring appellate review of convictions that follow a plea of guilty or nolo contendere to be by petition for writ of certiorari); Rule 1.2(D)(5)(a)(iii) and (D)(5)(c) and Rule 4.2, Rules of the Oklahoma Court of Criminal Appeals, Title 22, Ch.18, App. (2014).
¶7 Citing to this Court's decision in Vigil v. State, 1988 OK CR 276, 765 P.2d 794, Whitaker argues that the procedure for challenging his conviction through a certiorari appeal precludes challenges to the length of a sentence because certiorari review is limited to (1) whether the plea was knowing and voluntary, (2) whether the information was sufficient to confer jurisdiction, and (3) whether the sentence was legal. To that end, he argues that the scope of review in a certiorari appeal violates the Oklahoma Constitution and state statutes. Whitaker proposes that this Court should expand its scope of review in acceleration appeals to address excessive sentence claims.
¶8 In Frederick v. State, 1991 OK CR 56, 811 P.2d 601, this Court reviewed a claim of excessive sentence presented in a certiorari appeal. We noted that in evaluating the validity of a guilty plea, the Court is concerned only with whether the plea was entered voluntarily and intelligently. Frederick, at ¶ 5, 811 P.2d at 602. Frederick admitted that his desire to withdraw his plea was based primarily on his dissatisfaction with the sentence assessed in his case. Finding that Frederick presented this Court with no compelling legal reason to find that the trial court abused its discretion when it denied Frederick's request to withdraw his plea, we affirmed the trial court's ruling. Id. at ¶ 10, 811 P.2d at 604.
¶9 We acknowledge that the language in Frederick is unnecessarily restrictive. We also note, however, that this Court has addressed and will continue to address, claims of excessive sentence when properly raised in a certiorari appeal. In Gonseth v. State, 1994 OK CR 9, ¶ 14, 871 P.2d 51, 55, petitioner claimed only that the trial court exceeded its sentencing authority. This Court reviewed the claim for abuse of discretion and found none. In Vigil v. State, 1988 OK CR 276, ¶ 4, 765 P.2d 794, 794, petitioner's claim of excessive sentence was reviewed on certiorari appeal applying the "shock the conscience" standard. This was the same standard of review applied in Beihl v. State, 1988 OK CR 213, ¶ 3, 762 P.2d 976, 977. Finally, in Davis v. State, 1985 OK CR 93, ¶ 5, 704 P.2d 497, 499 Petitioner's excessive sentence claim was reviewed and found to be within the statutory limitations for the charged offense. We addressed these claims on appeal because the issue of excessive sentence was properly raised in the District Court in the petitioners' motions to withdraw their pleas.
¶10 Excessive sentence claims must be raised at the district court level and the petitioner must make a proper record which allows for meaningful appellate review. This Court's Rule 4.2(B), Rules of the Oklahoma Court of Criminal Appeals, Title 22, Ch.18, App. (2014) provides in relevant part:
B. The trial court shall hold an evidentiary hearing and rule on the application [to withdraw plea] within thirty (30) days from the date it was filed. No matter may be raised in the petition for a writ of certiorari unless the same has been raised in the application to withdraw the plea, which must accompany the records filed with this Court. (emphasis added)
It is incumbent upon a defendant who wishes to challenge his sentence in a certiorari appeal to make a sufficient record of this claim at the district court hearing on his motion to withdraw plea. Only then may the issue of excessive sentence be properly considered in a certiorari appeal.
¶11 The provisions of 22 O.S. 2011, § 1051 provide that the only appeal from a plea of guilty is by certiorari. Inherent in this type of appeal is a review of the trial court's actions taken as a result of the defendant's motion to withdraw his plea. If a matter is not presented to the trial court, there is nothing for this Court to review. In each of the certiorari appeals where this Court has reviewed claims of excessive sentence, the issue was raised in the trial court in the defendant's motion to withdraw plea.
¶12 Whitaker's argument in his acceleration appeal that his sentence is excessive has no bearing on whether he violated the terms and conditions of his probation or whether his probation violation would justify the District Court's acceleration of his deferred sentence. Consideration of the issue of excessive sentence is not properly presented for review in an acceleration appeal.
¶13 We find nothing in the record presented to this Court indicating that the District Court abused its discretion in accelerating Whitaker's deferred sentence.
DECISION
¶14 The order of the District Court of Tulsa County accelerating Appellant's deferred sentence in Case No. CF-2008-6121 is AFFIRMED. Pursuant to Rule 3.15, Rules of the Oklahoma Court of Criminal Appeals, Title 22, Ch.18, App. (2015), the MANDATE is ORDERED issued upon the delivery and filing of this decision.
AN APPEAL FROM THE DISTRICT COURT OF TULSA COUNTY
THE HONORABLE TOM C. GILLERT, DISTRICT JUDGE
APPEARANCES AT TRIAL APPEARANCES ON APPEAL
JAMES HUBER
111 WEST FIFTH
TULSA, OK 74103
COUNSEL FOR APPELLANT
JASON RUSH
ASSISTANT DISTRICT ATTORNEY
TULSA COUNTY
500 SOUTH DENVER
TULSA, OK 74103
COUNSEL FOR THE STATE
ERIC L. REYNOLDS
TULSA COUNTY PUBLIC DEFENDERS OFFICE
423 S. BOULDER, STE. 300
TULSA, OK 74103
COUNSEL FOR APPELLANT
E. SCOTT PRUITT
ATTORNEY GENERAL OF OKLAHOMA
JUDY KING
ASSISTANT ATTORNEY GENERAL
313 N.W. 21st STREET
OKLAHOMA CITY, OK 73105
COUNSEL FOR THE STATE
OPINION BY: LUMPKIN, V.P.J.
SMITH, P.J.: CONCUR
JOHNSON, J.: CONCUR
LEWIS, J.: CONCUR
FOOTNOTES
1 A review of the Tulsa County District Court docket reveals that on March 22, 2013, Whitaker, represented by counsel, entered a guilty plea to a reduced charge of misdemeanor Assault and Battery in Case No. CM-2013-407.
Citationizer© Summary of Documents Citing This Document
Cite
Name
Level
None Found.
Citationizer: Table of Authority
Cite
Name
Level
Oklahoma Court of Criminal Appeals Cases
CiteNameLevel
1987 OK CR 276, 747 P.2d 968, EDWARDS v. STATEDiscussed
1988 OK CR 213, 762 P.2d 976, BEIHL v. STATEDiscussed
1988 OK CR 276, 765 P.2d 794, VIGIL v. STATEDiscussed at Length
1991 OK CR 56, 811 P.2d 601, FREDERICK v. STATEDiscussed
1994 OK CR 9, 871 P.2d 51, GONSETH v. STATEDiscussed
1979 OK CR 88, 599 P.2d 1107, DEGRAFFENREID v. STATEDiscussed
1999 OK CR 35, 990 P.2d 894, 70 OBJ 2766, Hagar v. StateCited
1985 OK CR 93, 704 P.2d 497, DAVIS v. STATEDiscussed
Title 22. Criminal Procedure
CiteNameLevel
22 O.S. 1051, Right of Appeal - Review - Corrective Jurisdiction - Procedure - Scope of Review on CertiorariDiscussed
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39 F.3d 324
U.S.v.Lawrence*
NO. 93-5076
United States Court of Appeals,Eleventh Circuit.
Oct 27, 1994
1
Appeal From: S.D.Fla.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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FILED
NOT FOR PUBLICATION
OCT 17 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 17-10130
Plaintiff-Appellee, D.C. No.
2:16-cr-00121-JAM-1
v.
ISMAEL MAYA-PIZANO, AKA Ismael MEMORANDUM*
Maya Pizano,
Defendant-Appellant.
Appeal from the United States District Court
for the Eastern District of California
John A. Mendez, District Judge, Presiding
Submitted October 12, 2017**
San Francisco, California
Before: THOMAS, REINHARDT, and O’MALLEY,*** Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
***
The Honorable Kathleen M. O’Malley, United States Circuit Judge for
the U.S. Court of Appeals for the Federal Circuit, sitting by designation.
Ismael Maya-Pizano appealed the district court’s sentence prior to our
decision in United States v. Martinez-Lopez, 864 F.3d 1034 (9th Cir. 2017). Maya-
Pizano concedes that Martinez-Lopez forecloses his appeal. Accordingly, we
affirm the sentence.
AFFIRMED.
2
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Matter of Williams v Williams (2017 NY Slip Op 04924)
Matter of Williams v Williams
2017 NY Slip Op 04924
Decided on June 15, 2017
Appellate Division, Third Department
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 and Entered: June 15, 2017
522074
[*1]In the Matter of FRANKLIN KIRK WILLIAMS, Appellant,
vANGELA SCARPA WILLIAMS, Respondent. (Proceeding No. 1.)
In the Matter of ANGELA SCARPA WILLIAMS, Respondent, vFRANKLIN KIRK WILLIAMS, Appellant. (Proceeding No. 2.) (And Two Other Related Proceedings.)
Calendar Date: May 5, 2017
Before: McCarthy, J.P., Egan Jr., Lynch, Devine and Clark, JJ.
Ellen S. Ross, Johnstown, for appellant.
Susan Patnode, Rural Law Center of New York, Castleton (Cynthia Feathers of counsel), for respondent.
Alexandra G. Verrigni, Rexford, attorney for the children.
Clark, J.
MEMORANDUM AND ORDER
Appeal from an order of the Family Court of Fulton County (Skoda, J.), entered August 12, 2015, which, among other things, granted petitioner's application, in proceeding No. 2 pursuant to Family Ct Act article 6, to modify a prior order of visitation.
In 2012, Franklin Kirk Williams (hereinafter the father) and Angela Scarpa Williams [*2](hereinafter the mother) — the parents of two children (born in 2002 and 2004) — obtained a divorce in Colorado. At the time of the parties' divorce, the father had relocated to North Carolina and the mother intended to relocate to New York. Pursuant to the parties' separation agreement, a parenting plan and a 2012 order, all of which were incorporated into the decree of divorce, the parties had, as relevant here, joint legal custody of the children, with primary physical custody to the mother and detailed parenting time to the father, totaling roughly 110 overnights. In addition, the parties entered into a "Home School Agreement," in which they agreed that the children would be home schooled by the mother until May or June 2015 and that the children would thereafter be enrolled in a traditional school program.
In October 2014, the father commenced the first of these proceedings seeking to enforce the parenting time provisions set forth in the 2012 order. The mother thereafter filed a modification petition seeking to modify, among other things, the father's parenting time with the children. The father subsequently filed a second enforcement petition and a petition for a writ of habeas corpus. Following a hearing, Family Court found, among other things, that the mother did not willfully violate a prior court order, that there was no basis to alter the parties' prior agreement to enroll the children in public school for the 2015-2016 school year and that the children's enrollment in public school constituted a change in circumstances warranting a modification of the father's parenting time schedule. Family Court accordingly dismissed the father's enforcement petitions and partially granted the mother's modification petition by modifying the father's parenting time to include one week during the children's winter school vacation and spring school vacation, roughly five consecutive weeks in the summer and alternating Christmas vacations [FN1]. The father appeals, arguing that Family Court's order lacks a sound and substantial basis in the record because it dramatically reduced the amount of parenting time that he received under the prior order.
To modify an existing custody order, it must be established that there has been a change in circumstances since the prior order and that modification of that order is necessary to ensure the continued best interests of the children (see Heather B. v Daniel B., 125 AD3d 1157, 1159 [2015]; Matter of Patricia P. v Dana Q., 106 AD3d 1386, 1386 [2013]). Inasmuch as the mother and the attorney for the children agree that the change from home schooling to public school constituted the requisite change in circumstances, the sole issue before this Court is whether the father's modified parenting time schedule is in the best interests of the children (see Matter of Walter TT. v Chemung County Dept. of Social Servs., 132 AD3d 1170, 1170-1171 [2015]; Matter of Sparbanie v Redder, 130 AD3d 1172, 1173 [2015]). In determining the best interests of the children, courts must consider a variety of factors, including the need to maintain stability in the children's lives, the parents' respective home environments, each parent's willingness to foster a positive relationship between the children and the other parent, the needs of the children and the parents' past performance and ability to provide for the children's overall well-being (see Matter of Clupper v Clupper, 56 AD3d 1064, 1065-1066 [2008]; Matter of Hissam v Mackin, 41 AD3d 955, 956 [2007], lv denied 9 NY3d 809 [2007]). In crafting an appropriate parenting time schedule in the best interests of the children, Family Court is afforded broad discretion (see Matter of Burnett v Andrews-Dyke, 140 AD3d 1346, 1348 [2016]; DeLorenzo v DeLorenzo, 81 AD3d 1110, 1112 [2011], lv dismissed 16 NY3d 888 [2011]), and we will not disturb such determination unless it lacks a sound and substantial basis in the record (see Matter of Christine TT. v Gary VV., 143 AD3d 1085, 1085-1086 [2016]; Matter of Braswell v Braswell, 80 AD3d [*3]827, 831 [2011]).
The record evidence demonstrated that, aside from their difficulty in effectively communicating with each other for the sake of the children, both parties are loving and capable parents who provide for the children's medical, educational and social needs. The father acknowledged, in Family Court, that it was his preference that the children attend public school and that their enrollment would necessarily result in a reduction of his parenting time. However, the father proposed that his parenting time need only be slightly reduced if he received parenting time with the children during all of their school vacations, with the children missing several school days leading up to their Thanksgiving break. Family Court rejected the father's proposal, reasonably finding that awarding the father parenting time for all of the children's school vacations would be "to the detriment of the mother and children having some quality vacation time together." Instead, Family Court fashioned a parenting time schedule that does not require the children to miss any school days, grants the father parenting time with the children for a majority of their school vacation days and allows the children to enjoy some vacation time in New York with the mother, as well as their friends (see Matter of Neeley v Ferris, 63 AD3d 1258, 1260-1261 [2009]). The father argues that, in establishing his parenting time schedule, Family Court should have considered that his contact with the children is limited when they are in New York because the mother does not have Internet access in her home and does not allow the children to have cell phones. However, Family Court acknowledged, in its decision, the parties' differing lifestyles and parenting choices with respect to electronic communication, and the record established that the father could regularly speak with the children on the mother's landline telephone. Considering the totality of the evidence, and the discretion afforded to Family Court in fashioning a parenting time schedule (see Funaro v Funaro, 141 AD3d 893, 896 [2016]), we find that a sound and substantial basis exists in the record to support Family Court's determination that the modified parenting time schedule is in the children's best interests (see Matter of Braswell v Braswell, 80 AD3d at 830-831). Accordingly, we decline to disturb Family Court's order.
McCarthy, J.P., Egan Jr., Lynch and Devine, JJ., concur.
ORDERED that the order is affirmed, without costs.
Footnotes
Footnote 1: The father's habeas corpus petition is not resolved in the order appealed from and the disposition of that petition is not otherwise revealed in the record.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 14-7822
REGINALD F. MILEY-BUTLER,
Plaintiff – Appellant,
v.
VALERIE CARTER, Program Director; SCOTT BAIRD, Major/Asst.
Superintendent Operations,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Anthony J. Trenga,
District Judge. (1:14-cv-01146-AJT-JFA)
Submitted: April 10, 2015 Decided: May 1, 2015
Before SHEDD, FLOYD, and THACKER, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Reginald F. Miley-Butler, Appellant Pro Se.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Reginald F. Miley-Butler appeals the district court’s order
dismissing his 42 U.S.C. § 1983 (2012) action without prejudice
pursuant to Fed. R. Civ. P. 41(b). We have reviewed the record
and find no reversible error. Accordingly, we affirm for the
reasons stated by the district court. Miley-Butler v. Carter,
No. 1:14-cv-01146-AJT-JFA (E.D. Va. Nov. 21, 2014). 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
2
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174 F.3d 451
UNITED STATES of America, Plaintiff-Appellee,v.Akin AKINKOYE, a/k/a A. Sam Akins, Defendant-Appellant.United States of America, Plaintiff-Appellee,v.Nouyibatou Afolabi, Defendant-Appellant.
Nos. 98-4133, 98-4169.
United States Court of Appeals,Fourth Circuit.
Argued Jan. 29, 1999.Decided April 20, 1999.Opinion Vacated April 29, 1999.
ARGUED: Margaret Nottingham Nemetz, Bowie, Maryland, for Appellant Afolabi; Michael Daniel Montemarano, MICHAEL D. MONTEMARANO, P.A., Baltimore, Maryland, for Appellant Akinkoye. Steven Michael Dettelbach, Assistant United States Attorney, Greenbelt, Maryland, for Appellee. ON BRIEF: Lynne A. Battaglia, United States Attorney, Greenbelt, Maryland, for Appellee.
Before WIDENER, MURNAGHAN, and HAMILTON, Circuit Judges.
Affirmed by published opinion. Judge MURNAGHAN wrote the opinion, in which Judge WIDENER and Judge HAMILTON joined.
OPINION
MURNAGHAN, Circuit Judge:
1
Before us is a criminal appeal from two defendants, Akin Akinkoye and Nouyibatou Afolabi, who were convicted of credit card fraud. They raise a number of challenges to the conviction, including claims that the district court erred in denying their motion to sever, failing to hold a Franks hearing to determine whether probable cause existed, failing to grant their motions for a judgment of acquittal, and in departing upward from the sentencing guidelines. Individually, defendant Afolabi also alleges that she did not meet the $1,000 threshold for one of the crimes charged, and that the district judge should have departed downward in her case because she only played a minimal role in the criminal endeavor. Defendant Akinkoye claims that the upward departure for abuse of trust was not warranted because he was not in a position of trust, and that a two level increase for obstruction of justice is not warranted because the statements he made had no effect on the prosecution of his case. All in all, the district court's decisions are in order and we therefore affirm.
I.
2
Akinkoye was a real estate agent employed by Re/Max real estate agency and worked in its Burtonsville, Maryland office. Having determined that he needed money to invest in certain legitimate business opportunities, he planned an elaborate scheme to defraud clients of Re/Max and various financial institutions by using the clients' financial and credit information to obtain credit cards from the financial institutions ("credit card companies").
3
On or about May 12, 1995, Akinkoye put his plan into effect. He effected the scheme by reviewing the files of clients of Re/Max, submitting credit card applications to the credit card companies and obtaining from them genuine credit cards issued in the names of the clients. He used the addresses of the properties owned by the clients to receive the credit cards. To the extent that the clients' mail was delivered into secured places--such as inside the home or in a locked mailbox--Akinkoye would access the mail by using the keys to the home provided by the clients. Through that process, Akinkoye managed to obtain numerous credit cards over a nineteen-month span and incurred losses of more than $200,000.1 None of the clients was aware that their names, information and property were being used fraudulently.
4
Akinkoye did not work alone. Because some of the clients were women, he enlisted Afolabi's assistance in carrying out the scheme. She admitted that she gave Akinkoye pictures of herself that were ultimately used to provide photo identification for the cards. In addition, she signed the back of some of the cards that were used to obtain goods and services. She also personally used at least one of the cards in Nordstrom's.
5
Postal Inspectors became suspicious in December 1996 when they were contacted by credit card companies whose investigators believed that fraud was afoot. Conversations with the companies led Postal Inspector Patrick Bernardo to contact victims of the scheme. After compiling handwriting samples and descriptions resembling Akinkoye, inspectors obtained a warrant and searched Akinkoye's home. Inspectors found numerous credit cards, credit card applications, pictures of Afolabi, and other inculpating evidence. The government charged Akinkoye and Afolabi with conspiracy to violate and violations of 18 U.S.C. § 1029(a)(2), which criminalizes the unauthorized use of access devices. Afolabi was also charged with aiding and abetting violations of that statute. Both defendants made statements to police regarding their respective roles in the offenses. The two defendants were tried by jury, convicted and sentenced. The instant appeal ensued.
II.
6
The defendants first argue that the district court erred in denying their motion for severance. They argue that because each defendant's confession implicated the other, their trials should have been held separately. The failure to do so, they argue, was highly prejudicial. We review decisions to deny motions to sever for abuse of discretion. See United States v. Brooks, 957 F.2d 1138, 1145 (4th Cir.1992).
7
Generally, we adhere to the rule that defendants charged with participation in the same conspiracy are to be tried jointly. See United States v. Roberts, 881 F.2d 95, 102 (4th Cir.1989). A defendant is not entitled to severance merely because separate trials would more likely result in acquittal, see id. at 1145, or because the evidence against one defendant is not as strong as that against the other. See id. Rather, the defendant must show prejudice. See FED. R. CRIM. P. 14.
8
In the instant case, the defendants base their assignment of error on the admission of their respective redacted confessions, which they argue implicate the other party. Where the unredacted out-of-court confession of a non-testifying codefendant clearly implicates a defendant, severance is required to preserve that defendant's Sixth Amendment right to confront his accusers. See Bruton v. United States, 391 U.S. 123, 135-36, 88 S.Ct. 1620, 20 L.Ed.2d 476 (1968). Moreover, if a redacted confession of a non-testifying codefendant given to the jury (by testimony or in writing) shows signs of alteration such that it is clear that a particular defendant is implicated, the Sixth Amendment has been violated. See Gray v. Maryland, 523 U.S. 185, 118 S.Ct. 1151, 1157, 140 L.Ed.2d 294 (1998).
9
In Gray, the non-testifying codefendant's statement was redacted by the government and read into evidence. See id. at 1153. The statement was redacted by simply replacing the defendant's name with blank spaces or the word "deleted." Id. The officer who read the statement into evidence indicated where the blanks and deletions were in the statement. For example, one exchange proceeded as follows:
10
Q: Who was in the group that beat [the victim]?
11
A: Me, [an empty space was left here],[another empty space] and a few other guys.
12
Id. at 1158.
13
When that passage was read to the jury, the officer reading it said "deleted" where the blank spaces appeared. See id. at 1153. The Supreme Court concluded that the statements obviously referred to the existence of the defendant and implicated him, in light of the follow-up questions asked by the prosecutor. Id. at 1157.
14
By contrast, statements that, when redacted, do not even refer to the existence of the defendant are admissible and do not require severance. See Richardson v. Marsh, 481 U.S. 200, 208, 107 S.Ct. 1702, 95 L.Ed.2d 176 (1987). But, Richardson expressly left open the question before us here--namely, whether redacted statements that refer to the existence of another party who may be the defendant through symbols or neutral pronouns are admissible. See id. at 211, n. 5, 107 S.Ct. 1702.
15
The Supreme Court has strongly implied that such statements do not offend the Sixth Amendment. In Gray, the court used as an example the exchange quoted above and expressly wondered "[w]hy could the witness not, instead, have said: 'Question: Who was in the group that beat [the victim]? Answer: Me and a few other guys.' " Id. at 1157.
16
It is that type of neutral phrase that the prosecutor used in the instant case. The prosecutor had the confessions retyped, and replaced the defendants' respective names with the phrase "another person" or "another individual." Because the retyped versions of the confessions were read to the jury, the jury neither saw nor heard anything in the confessions that directly pointed to the other defendant.
17
Given the neutral phrases used in the statements the defendants were not prejudiced in any way. For example, Akinkoye's statement at one point refers to "a guy in New York." Since that reference could not possibly refer to Afolabi (who is a woman) the one gender neutral reference to "another person" appearing in Akinkoye's confession does not facially implicate her. Likewise, in an argument below, Akinkoye himself argued that Afolabi's confession did not implicate him because she lived with a number of males and she could have been referring to one of them. Using his own logic then, a reference to "another person" in Afolabi's confession does not facially implicate him.
18
Furthermore, as discussed below, there was sufficient evidence to convict both defendants without the confessions, particularly Akinkoye. Therefore, the motion to sever was properly denied.
III.
19
Akinkoye next argues that the district court erred in failing to hold a Franks hearing to determine whether errors in the warrant were made intentionally to mislead the magistrate into concluding that probable cause existed to search Akinkoye's home. Under the rule the Supreme Court enunciated in Franks v. Delaware, 438 U.S. 154, 155-56, 98 S.Ct. 2674, 57 L.Ed.2d 667 (1978), where a defendant can show that the officers made misstatements of fact upon which the magistrate relied in issuing a warrant, the court will hold a hearing to determine whether the misstatements were intentional. See id.
20
A court will hold a Franks hearing after the defendant makes a "substantial preliminary showing" that the police misstated the facts upon which the warrant was based. See Franks, 438 U.S. at 155, 98 S.Ct. 2674. Mere conclusory statements are insufficient, as is a request for a hearing simply to have more cross-examination. See id. at 171, 98 S.Ct. 2674.
21
The district court correctly determined that a hearing was unnecessary. The warrant was issued based on facts provided by Inspector Bernardo. The inspector's affidavit averred several things, including that: credit card companies had complained of fraudulent activity, handwriting samples showed that Akinkoye's handwriting was very similar to the perpetrator's, there were photo identifications of Akinkoye as the perpetrator, and Thomas Kulina, a victim, stated that he had been defrauded.
22
Akinkoye argues that there were two major misstatements in the affidavit submitted in support of the warrant application. First, he points out that the name on the credit card used at a gas station (whose attendant identified Akinkoye) was not Thomas Kulina, but was LeeAnn Kulina, his wife. Second, he asserts that the employees of an auto dealership who made photographic identifications of him only told Bernardo that Akinkoye was in their store and that they did not see him actually using the credit card. He states that Bernardo's assertion that the employees identified Akinkoye as the person who used the Kulina card is therefore false.
23
However, neither of the inconsistencies warrants a Franks hearing. The purpose of Franks hearings is to determine whether the probable cause determination was based on intentionally incorrect information. Here, the record indicates that no intentionally incorrect information was given.
24
The gas station attendant specifically identified Akinkoye as the person who used a Kulina card and identified himself as Thomas Kulina. Akinkoye does not challenge the attendant's account, only that the card used was issued to LeeAnn Kulina. Therefore, even if Bernardo used the husband's name where he should have used the wife's, the attendant's identification of Akinkoye still links Akinkoye to criminal activity prohibited by 18 U.S.C. § 1029. Moreover, Bernardo relied on the attendant's statements. Thus, even if the attendant lied to Bernardo, Bernardo's statements would not be intentionally or recklessly misleading unless he had strong reason to believe that the attendant was lying. Akinkoye has not shown that.
25
The inconsistencies with respect to the employees of the automobile dealer do not create a need for a Franks hearing, either. The two employees identified Akinkoye through a photo spread as the person who used Kulina's credit card when paying for automobile parts. Akinkoye points out that the two employees never actually saw him sign the receipt or tender the card to the cashier for payment. However, the employees did state that they saw him with a credit card in his hand, and the record shows that the credit card used at the gas station was used at the automobile dealership on the same day. Moreover, we must again bear in mind that Bernardo relied on their statements to him. Those facts were sufficient to give Bernardo probable cause to conduct his search.
26
In any event, probable cause existed even without those identifications. Bernardo averred that he was contacted by a bank and a victim and was told that fraud was afoot. A comparison of the fraudulent receipts he received from the bank with samples of Akinkoye's handwriting he obtained pursuant to another tip he received revealed striking similarities. Based on the handwriting analysis, Bernardo would have had probable cause to conduct a search even without the other evidence. Therefore, the district court's determination that a Franks hearing was unnecessary will not be disturbed.
IV.
27
The defendants next claim that their convictions under 18 U.S.C. § 1029(a)(3) should be reversed because that statute did not contemplate the use of legitimate credit cards fraudulently obtained from the credit card company itself--i.e., cards for which the person named never actually applied. The defendants were convicted of conspiracy to violate, and violating 18 U.S.C. § 1029(a)(2), which proscribes an individual from "knowingly and with intent to defraud traffic[king] in or us[ing] one or more unauthorized access devices during any one-year period, and by such conduct obtain[ing] anything of value aggregating $1,000 or more during that period." Id. The statute defines "unauthorized access devices" as "any access device that is lost, stolen, expired, revoked, canceled, or obtained with intent to defraud." 18 U.S.C.A. § 1029(e)(3) (West Supp.1998).
28
The defendants contend that the legislative history of the statute suggests that Congress intended the statute to apply only to credit cards that are "genuine, but being misused." See H.R. REP. NO. 98-894, 98th CONG., 2d SESS. 14 (1984). They argue that the credit cards were not "genuine" because they were never legitimately obtained by the victims, but were obtained by Akinkoye "by false applications." See Appellants' Br. at 19.
29
We disagree. First, Appellants ignore a well-established canon of statutory construction: if the statute is unambiguous on its face, the court will not look to the legislative history. See Ex Parte Collett, 337 U.S. 55, 61, 69 S.Ct. 944, 93 L.Ed. 1207 (1949); First United Methodist Church v. United States Gypsum Co., 882 F.2d 862, 865 (4th Cir.1989). The statute unambiguously criminalizes the obtaining of an access device with the intent to defraud, since that conduct is specifically included in the definition of "unauthorized use." See 18 U.S.C.A. § 1029(e)(3). None of the statutory language suggests that the cards must have been originally obtained by the rightful cardholder. In fact, the phrase "obtain with intent to defraud" is not modified in any way at all. Id.
30
The Appellants concede that Akinkoye "obtained [the credit cards] by false applications," and that he and Afolabi signed and used some of them. There is no dispute that credit cards are "access devices" within the meaning of 18 U.S.C. § 1029(e)(1), or that Akinkoye acted intentionally or knowingly in originally obtaining them or that Afolabi acted intentionally or knowingly in obtaining the cards from Akinkoye and using them. Since they intended to defraud the person whose credit was relied upon and the companies issuing the cards, there is no doubt that the defendants' conduct fits squarely within the language of the statute. There is no need to look any further than the statute's plain wording.
31
Even if we were required to review the language the Appellants quoted, their convictions would stand. Akinkoye did not create or manufacture the cards. Rather, the credit card companies issued actual credit cards to him. As Akinkoye proved, the cards could be--and were--used in commerce just like all of the other credit cards the companies regularly issue. Therefore, they are "genuine" cards.
32
Moreover, the cards certainly were "misused." Akinkoye and Afolabi confessed to using the cards to obtain goods and services. They had no permission to avail themselves of the lines of credit the credit card companies intended to extend to the victims. In fact, the victims did not know that the lines of credit had been extended to them. Therefore, the cards were "misused." In short, the Appellants' convictions should stand.
V.
33
Afolabi claims that there was insufficient evidence to convict her of violating § 1029(a)(2) because she only defrauded one person, one time, for an aggregate cost of $647. The statute requires the defendant to "traffic [ ] in or use[ ] one or more unauthorized access devices during any one-year period, and by such conduct obtain[ ] anything of value aggregating $1,000 or more during that period." Id. Challenges to the sufficiency of the evidence require that the reviewing court view the evidence in the light most favorable to the government to determine whether a reasonable fact finder could rationally find the defendant guilty beyond a reasonable doubt. See United States v. Tresvant, 677 F.2d 1018, 1021 (4th Cir.1982).
34
Viewed in the light most favorable to the government, there is sufficient evidence to convict Afolabi. Under § 1029(a)(2), the use of the unauthorized access device is made criminal. As stated above, the phrase "obtain with intent to defraud" is not modified. Nowhere in its plain language or its legislative history does that section require that the unauthorized user obtain the credit card directly from the victim. Nor does the definition of "unauthorized access device," from which the "obtain with the intent to defraud" language is taken, require that the defendant acquire the card directly from the victim. All the statute requires is that the defendant obtain the credit card with the intent to defraud. Since Afolabi obtained the cards with the intent to defraud the persons whose names appear on the cards and the issuers of the cards, she is an "unauthorized" user of the cards.
35
Afolabi also meets the threshold amount in 18 U.S.C. § 1029(a)(2). Afolabi claims that she made only $647 worth of charges, having used a Nordstrom's card ostensibly issued to a former Re/Max client. However, Afolabi indicated to the police that she used two cards issued to that woman.2 The evidence presented showed that only two cards were issued in that woman's name. That second card, a Bloomingdale's card, was used the same day as the Nordstrom's card and $522.89 was charged. Thus, the evidence shows that more than $1,100 was charged on that person's accounts alone on one day. Therefore, there was sufficient evidence for a reasonable jury to conclude beyond a reasonable doubt that Afolabi violated 18 U.S.C. § 1029(a)(2).
36
Moreover, Afolabi was also convicted of aiding and abetting violations of that statute. Aiders and abettors are liable to the same extent as the principal. See 18 U.S.C.A. § 2(b) (West Supp.1998). According to Afolabi's signed confession, she used five of the fraudulently obtained credit cards. She signed several others that she did not personally use. The record reveals that those cards were used to charge thousands of dollars worth of merchandise. Therefore, there is sufficient evidence to sustain her convictions.
VI.
37
Finally, the defendants raise several challenges to their respective sentences. Afolabi claims that she should have received a reduction for her role in the offense and that the total loss was not reasonably foreseeable to her. Akinkoye claims that he did not abuse a position of trust as that term is defined in the Guidelines and that the district court erred in departing upward for obstruction of justice. We will address the departures in turn, bearing in mind that the district court's factual determinations underlying the enhancements are reviewed for clear error. See 18 U.S.C.A. § 3742(e) (West Supp.1998); Koon v. United States, 518 U.S. 81, 97, 116 S.Ct. 2035, 135 L.Ed.2d 392 (1996).
38
A. The Refusal To Depart Downward In Afolabi's Sentence
39
Afolabi contends that the district court erred in refusing to depart downward in her case because she merely signed the back of some of the cards and occasionally accompanied Akinkoye when he used the cards. She argues that since she never applied for any of the cards and never held on to any of them, she is entitled to a departure.
40
Even if we agreed with Afolabi (and we do not), we could not grant her the relief that she seeks. Congress has made clear that we cannot review a district court's decision not to depart from the applicable guideline range if that decision was based on a determination that a departure is not appropriate. See 18 U.S.C.A. § 3742(a) (West Supp.1998); United States v. Brock, 108 F.3d 31, 33 (4th Cir.1997). By contrast, we can review refusals to depart if the district court believed that it did not have the authority to depart. See Brock, 108 F.3d at 33.
41
Here, the record shows that the district court was well aware of the departure for defendants whose role in the offense was minimal. See U.S.S.G. § 3B1.2 (1998). However, the district court decided that Afolabi was involved in the offense to such an extent that she did not merit the downward departure. As the district court has determined that a departure is inappropriate, we may not review it.
B. Reasonable Foreseeability Of Loss
42
Afolabi also contends that the total loss occasioned by the scheme, $214,245.28, was not reasonably foreseeable to her because she only used one card for a total loss of $647. Under U.S.S.G. § 1B1.3(a)(1)(B), a conspirator may be held responsible not only for the losses his own conduct personally caused, but also for any other losses resulting from the furtherance of the conspiracy that were reasonably foreseeable to him. The commentary to § 1B1.3(a)(1)(B) makes clear, however, that only those losses resulting from conduct occurring in furtherance of the jointly undertaken criminal enterprise are relevant. See id. In the instant case, the district court concluded that the entire loss caused by the conspiracy was reasonably foreseeable to Afolabi.
43
Afolabi continues to maintain that the only loss reasonably foreseeable to her was the $647 charge that she detailed in her confession. However, the weight of the evidence reflects that the district court did not abuse its discretion in departing upward to account for the additional losses that Afolabi could foresee.
44
First, Afolabi's continued efforts to cling to the one $647 loss as her only participation miss the mark. The record reflects that Afolabi indicated through her initialing certain pages of police documents that she used five of the cards at issue. She later stated that she signed the backs of other cards but did not personally use all of those cards. She also accompanied Akinkoye during many of his transactions. Certainly, losses occasioned by the use of those cards were reasonably foreseeable to her.
45
The losses resulting from the use of the cards with men's names on them presents a much closer question. There is no direct evidence that Afolabi helped Akinkoye use the men's cards. As a result, Afolabi argues that she could not reasonably foresee any of the losses resulting from their use.
46
However, the record establishes that: (1)there is great overlap in the days during which men's and women's cards were used;3 (2)Afolabi accompanied Akinkoye whenever the women's cards were used; (3) Akinkoye ultimately retained the possession of all of the cards; and (4) many of the overlapping fraudulent transactions occurred within close geographic proximity of each other. In light of those facts, the district court could reasonably infer that Afolabi was with Akinkoye during the transactions and that the use of the cards was within the scope of the conspiracy. Therefore, the district court did not abuse its discretion.
C. The Abuse Of Trust Departure
47
Akinkoye disputes the district court's decision to depart upward because he abused a position of trust. Akinkoye contends that real estate agents do not occupy a position of trust, or, in the alternative, that the only victims were the banks, with whom he held no position of trust. Under U.S.S.G. § 3B1.3 (1998), a district court may depart upward if it determines that the defendant abused a position of trust and that abuse significantly contributed to the commission or concealment of the crime. See id. We review the district court's factual determination that Akinkoye abused a position of trust for clear error. See United States v. Mackey, 114 F.3d 470, 476 (4th Cir.1997).
48
Akinkoye's first argument is unpersuasive. He cites a series of cases in other circuits where defendants of various occupations were held not to have abused trust.4 In our circuit, however, we have rejected a mechanistic approach to the abuse of trust departure that excludes defendants from consideration based on their job titles. See United States v. Gordon, 61 F.3d 263, 269 (4th Cir.1995) ("The abuse of trust enhancement was not designed to turn on formalistic definitions of job type.").5 Instead, we examine several factors in determining whether a particular defendant abused a position of trust. Those factors include: (1) whether the defendant had either special duties or " 'special access to information not available to other employees' "; (2) the extent of discretion the defendant possesses; (3) whether the defendant's acts indicate that he is " 'more culpable' than others' " who are in positions similar to his and who engage in criminal acts; and (4) viewing the entire question of abuse of trust from the victim's perspective. See id. (citations omitted).
49
In reviewing the factors mentioned above, we cannot conclude that the district court clearly erred in determining that Akinkoye held a position of trust and abused it. First, Akinkoye had special access to information as a real estate agent. Re/Max's clients not only gave Re/Max confidential information (such as Social Security Numbers), but also the keys to their respective homes. These items were given to Re/Max to facilitate Re/Max's representation of them in the sale of their homes.
50
Although the confidential information and the keys were located where any Re/Max employee theoretically could have accessed them, a real estate agent's use of them is far less likely to arouse suspicion than another staffer's. Akinkoye entered clients' homes and took files home with him without much concern on Re/Max's part because such activities are consistent with his duties as an agent. By contrast, a Re/Max secretary undoubtedly would have aroused suspicion much more quickly by engaging in those activities. Akinkoye's ability to set his own schedule and work odd hours with little supervision and little concern from Re/Max also facilitated the crimes. Those facts show that Akinkoye's position made his criminal activity difficult to detect, which is a basis for the enhancement. See U.S.S.G. § 3B1.3; United States v. Hill, 915 F.2d 502, 506 (9th Cir.1990) (stating that a person in a position of trust can be distinguished from others by "the extent to which the position provides the freedom to commit a difficult-to-detect wrong").
51
The second and third factors also are met. Akinkoye had great discretion. The manager of the Re/Max office in which Akinkoye worked testified that the agents enjoy broad discretion in the hours they work, freedom of access to information and other matters. She also stated that the agents are subject to little supervision. Based on her uncontroverted testimony, the second factor is met.
52
In addition, the third factor is met because of the nature and extent of Akinkoye's crime. Over a nineteen-month span, Akinkoye acquired dozens of credit cards through his scheme and caused an actual loss of $214,245.28. He wrote more than $30,000 worth of fraudulent checks to the credit card companies in an effort to increase the limits of the cards. He also enlisted the help of a woman, Afolabi, to facilitate the use of the cards with women's names on them. In all, Akinkoye is more culpable than the real estate agent that may commit crimes.
53
Finally, we must view Akinkoye's position from the perspective of the victim. Akinkoye first asserts that the banks were the real victims and from their perspective, he had an ordinary commercial relationship (credit card applicant to credit card company relationship). See United States v. Moore, 29 F.3d 175, 178 (4th Cir.1994) (holding that an ordinary commercial relationship between the perpetrator and victim is insufficient to support the abuse of trust departure). However, it seems to us that although the banks ultimately have borne the financial burden, the Re/Max clients have been victimized as well. Their identities and credit histories were used to facilitate the crime, and several of the clients testified to the difficulties they experienced in clearing up matters with the various credit agencies. One client received constant harassment at home and work from creditors. Another victim's search for a new home was impeded because of the credit problems caused by Akinkoye's activity. Thus, Akinkoye's focus on the ultimate financial burden ignores the emotional, financial and other burdens borne by the clients until the extent of the fraud scheme was exposed and corrected.
54
Moreover, Akinkoye need not have personally known all of the Re/Max clients he defrauded to be subject to the departure. The clients trusted Re/Max to represent them. Their personal information was made available to all of Re/Max's agents in order to facilitate effective representation. Akinkoye would not have had access to the homes and information if not for his status as an agent.
55
Moreover, Akinkoye's reading of the Guidelines would lead to absurd results. If we were to adopt his interpretation of the Guidelines, then, for example, the managing partner of a law firm could not be held to have abused trust of clients of the firm whom he or she had not met. Yet, that partner is precisely the type of person to whom the enhancement was intended to apply, because the clients engaged the firm to represent them. Similarly, Re/Max's clients engaged Re/Max to represent them, and they placed their confidence in Re/Max's agents as their representatives. Akinkoye used that trust to obtain credit cards and execute a fraud scheme. Therefore, the district court's determination that Akinkoye abused a position of trust was not clearly erroneous.
D. Obstruction Of Justice
56
Finally, Akinkoye disputes the district court's upward departure for obstruction of justice. The district court departed upward because Akinkoye committed perjury during a pretrial hearing. While testifying under oath during a hearing pursuant to his motion to suppress evidence, Akinkoye uncategorically denied ever having given any statement to the police about the credit card scheme. Several days earlier, Akinkoye confessed to his role in the scheme and gave a detailed statement.
57
An upward departure for obstruction of justice may properly be based on perjurious testimony. See U.S.S.G. § 3C1.1, n. 3 (1998). Testimony from pretrial proceedings may be considered. See Gordon, 61 F.3d at 270. The district court must specifically identify the perjurious statements and make a finding either as to each element of perjury or one " 'that encompasses all of the factual predicates for a finding of perjury.' " Id. (quoting United States v. Dunnigan, 507 U.S. 87, 95, 113 S.Ct. 1111, 122 L.Ed.2d 445 (1993)).
58
In the instant case, Akinkoye repeatedly denied ever telling Inspector Bernardo of his involvement in the scheme. However, the Inspector recounted in detail Akinkoye's account of the events. The district judge expressly found that Akinkoye lied when he stated that he did not make any of the statements attributed to him, and that the issue of whether the statements were lawfully obtained "was the whole hearing." J.A. at 540. Based on that record, we conclude that the district court neither erred in finding perjury nor erred in departing upward for obstruction of justice.
59
As the district court's determinations appear to be in order, the judgment is hereby
60
AFFIRMED.
1
The district court found that the total actual loss was $214,245.28
2
The record shows that Afolabi initialed the pages of police documents containing the names of the persons whose identities appeared on the cards she actually used
3
As one example, Inspector Bernardo testified that in the case of one husband and wife who were victimized, the dates of eight of the eleven transactions in which the wife's card was involved also showed use of the husband's card
4
See, e.g., United States v. Ragland, 72 F.3d 500, 502-03 (6th Cir.1996) (holding that a particular bank clerk did not abuse trust); United States v. Brown, 47 F.3d 198, 205-06 (7th Cir.1995) (individuals selling real estate to victims had only a commercial, not a trust, relationship with them); United States v. Smaw, 22 F.3d 330, 332 (D.C.Cir.1994) (accounting clerk with access to Social Security Numbers did not abuse trust)
5
In Gordon, for example, we permitted the departure for a head bank teller who gave security and other information to individuals seeking to rob the bank for which she worked. See id. at 269-70. In general, the abuse of trust departure does not apply to bank tellers because they generally do not have sufficient managerial discretion to create a trust relationship. See U.S.S.G. § 3B1.3, Application Note 1
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792 F.2d 305
Donald D. GOLDBERG, M.D., Plaintiff-Appellant,v.MALLINCKRODT, INC., Defendant-Appellee.
No. 448, Docket 85-7682.
United States Court of Appeals,Second Circuit.
Argued Dec. 5, 1985.Decided June 9, 1986.
Charles L. Bach, Jr., New York City (Stewart A. Cunningham, Law Graduate, Heidell, Pittoni, Murphy & Bach, P.C., New York City, of counsel), for plaintiff-appellant.
Lawrence V. Senn, Jr., New York City (Karen M. Cullen, Patricia Hayashi, Mudge Rose Guthrie Alexander & Ferdon, New York City, of counsel), for defendant-appellee.
Before LUMBARD, CARDAMONE and WINTER, Circuit Judges.
WINTER, Circuit Judge:
1
Dr. Donald Goldberg appeals from a grant of summary judgment in favor of Mallinckrodt, Inc., the manufacturer of an allegedly unsafe medical dye. Dr. Goldberg's complaint alleged that defendant had fraudulently misrepresented the safety of its product with the result that two of his patients were injured when he administered the dye. He claimed damages for his emotional distress and for his loss of income as a result of spending time defending malpractice actions. The district court granted summary judgment with respect to both claims. We affirm.
BACKGROUND
2
The facts as alleged are as follows: In October, 1976, Dr. Goldberg, an orthopedic surgeon, attended a physicians' conference at which he learned for the first time about "Dimeray," a new product manufactured by defendant Mallinckrodt. Dimeray is a dye injected into a patient's spinal cord during a procedure known as a myelogram. The dye acts as a "contrast medium" that makes the spinal cord more visible, apparently during an X-ray. Defendant touted Dimeray as an improvement on the dye then in general use, as it provided clearer myelograms and would pass naturally out of a patient's system. The ability to pass naturally out of the body was significant, for the dye then in general use had to be withdrawn from the body by needle after it was used. Defendant represented that more than three thousand tests indicated that Dimeray had no adverse side effects involving serious neurological damage. This representation allegedly was false and known to be so when made.
3
Impressed by the claims made about Dimeray at the conference, Dr. Goldberg used the product on a patient, who shortly thereafter suffered severe pain, paralysis, and other symptoms of nerve damage. Relying on the prior assurances of defendant as to Dimeray's safety, the doctor did not associate this adverse reaction with the product. One month later he administered the product to another patient, who also developed severe pain, lower body paralysis, and other symptoms of nerve damage. Both reactions are typical of a condition known as "cauda equina syndrome," allegedly represented by defendant not to be a side effect of Dimeray. The doctor notified Mallinckrodt of the adverse reactions. Shortly thereafter, Mallinckrodt voluntarily withdrew Dimeray from the market based on reports it had received of similar adverse reactions associated with use of the product.
4
Both of the injured patients brought lawsuits. In one, the patient sued Dr. Goldberg, who impleaded Mallinckrodt as a third-party defendant. In the other, the patient sued Mallinckrodt, who impleaded Goldberg.
5
Dr. Goldberg brought this diversity action in July, 1982. His first complaint did not allege a cause of action for fraud and was dismissed. An amended complaint alleged that Mallinckrodt had fraudulently misrepresented the safety of its product by failing to disclose knowledge of adverse reactions to Dimeray. Plaintiff claimed damages for (i) emotional distress, (ii) harm to reputation, (iii) impairment of earning capacity, (iv) out of pocket costs incurred defending the malpractice suits, and (v) the income lost as a result of time spent preparing a defense of the malpractice claims. During discovery, the damage claims were narrowed to economic loss caused by time spent away from his medical practice in defending the malpractice actions and for economic loss caused by plaintiff's inability to perform myelograms. This latter inability allegedly stemmed from Dr. Goldberg's emotional distress over the adverse reactions suffered by his patients.
6
Both sides moved for summary judgment. On June 21, 1985, the district court granted partial summary judgment for defendant, dismissing Dr. Goldberg's claim for "damages based on or arising out of mental and emotional distress." Subsequently, the court also dismissed the claim for lost income for time spent defending the malpractice suits. It concluded that under New York law damages for fraud must be shown to be a direct result of the fraudulent misrepresentation and that the lost income was too remote from the fraud alleged. Because damage is an essential element of a valid fraud claim, the court dismissed the action. We affirm.
DISCUSSION
7
The sole issue on this appeal is whether the damages claimed are compensable in a fraud action.
8
1. The Claim for Lost Income Resulting From the Time Spent Defending Lawsuits
9
Under New York law, damages for fraud must be the direct, immediate, and proximate result of the fraudulent misrepresentation. See Bennett v. United States Trust Co. of New York, 770 F.2d 308, 316 (2d Cir.1985); Idrees v. American University of the Caribbean, 546 F.Supp. 1342, 1350 (S.D.N.Y.1982); Deyo v. Hudson, 225 N.Y. 602, 122 N.E. 635 (1919); Mills Studio, Inc. v. Chenango Valley Realty Corp., 15 A.D.2d 138, 141, 221 N.Y.S.2d 684, 687 (3d Dept.1961). Dr. Goldberg's argument that the time spent away from his practice was a direct result of defendant's alleged fraud goes as follows. The misrepresentations about Dimeray induced him to purchase and use the product, thereby making plaintiff the "unwitting instrumentality by which defendant's fraud was extended to the public." Brief of Appellant at 14. As a consequence of Dr. Goldberg's use of the product, two patients were injured, and they predictably brought lawsuits. Equally foreseeable, so the argument goes, was that Dr. Goldberg would be required to devote time to the defense of that litigation, taking him away from his medical practice and thereby causing him economic loss.
10
We cannot agree that income lost during defense of the malpractice lawsuits is the direct and proximate result of the alleged misrepresentation.
11
In Idrees, plaintiff sought to recover damages based on fraudulent misrepresentations made by a Caribbean medical school regarding its educational program and facilities. After finding fraud, the court held that plaintiff was entitled to recover his tuition and fees paid, as well as his round-trip airfare to the school. 546 F.Supp. at 1350. However, the court denied a claim for damages based on plaintiff's inability to resume the job he had left upon enrolling in the medical school, concluding that this damage was not the direct result of the medical school's fraudulent conduct. Id.
12
Plaintiff's reliance on Kennedy v. McKesson Co., 58 N.Y.2d 500, 448 N.E.2d 1332, 462 N.Y.S.2d 421 (1983), is misplaced. In Kennedy, a dentist sued alleging that defendant had negligently repaired an anesthetic machine. As a result, plaintiff erroneously administered nitrous oxide to a patient, which caused the patient's death. A wrongful death action was brought against the dentist. The New York Court of Appeals held that plaintiff could recover for harm to his professional reputation, but not for alleged emotional damage. The court stated, "[T]here is no duty to protect from emotional injury a bystander to whom there is otherwise owed no duty, and, even as to a participant to whom a duty is owed, such injury is compensable only when a direct, rather than a consequential, result of the breach." Id., 58 N.Y.2d at 506, 448 N.E.2d at 1335, 462 N.Y.S.2d at 424. No claim for time spent away from practice defending the wrongful death action was made.
13
Finally, in Williams v. Goldberg, 58 Misc. 210, 109 N.Y.S. 15 (Sup.Ct.1908), a tenant sued a real estate agent for fraudulently stating that the ceiling in the tenant's apartment had been tested and found to be secure. In fact, no such test had been performed, and the ceiling collapsed, injuring the tenant. The court held that the plaintiff could recover for her injuries, since the damages were proximate to the fraud and were "a natural and probable effect of the agent's wrongful conduct." Id., 58 Misc. at 212, 109 N.Y.S. at 17. The court treated this as a very close case, however, because the injuries had not been the immediate result of the deceit, the ceiling collapse being an intervening cause. Id.
14
Our review of these cases leads us to conclude that the damages claimed in the instant case are far more remote than have previously been allowed under New York law. Award of such damages would require us to undertake impermissible innovations in state law. See Cornellier v. American Casualty Co., 389 F.2d 641, 644-45 (2d Cir.1968). The clearest and most direct result of the alleged fraud was Dr. Goldberg's purchase of the Dimeray product. The next step, which follows closely, was his use of the product and resultant injury to two patients. The initiation of lawsuits against Dr. Goldberg and his having to spend time defending them, however, were not a direct result of the fraud. Dr. Goldberg alleges that he was a totally innocent participant who had been assured by Mallinckrodt that Dimeray had no side effects when Mallinckrodt knew otherwise. If so, the likelihood of his being sued by the patients is less than he would have us believe. Indeed, his involvement in one of the two lawsuits in question came only after Mallinckrodt impleaded him. More importantly, the likelihood of his having to spend any measurable time defending such suits is negligible, in light of his clear innocence and Mallinckrodt's flagrant misconduct. The time lost would be limited to his giving testimony, which would also be necessary if the lawsuit were brought solely against Mallinckrodt. We therefore believe the lost income is too indirect a result of the fraud to be recoverable under New York law.
15
Dr. Goldberg advances two other theories to support his damage claim. First, he argues that there is an alternative, broader standard under New York law that allows recovery for any damage that is a "consequence" of the fraud, as opposed to the direct and proximate result thereof. This argument is based on language in the Williams decision that damage must be a " 'legitimate consequence of the fraud,' " 58 Misc. at 212, 109 N.Y.S. at 16 (quoting N.Y. Land Imp. Co. v. Chapman, 118 N.Y. 288, 294, 23 N.E. 187, 189 (1890)), and that the damages allowed were "consequential to the fraud." Id., 58 Misc. at 212, 109 N.Y.S. at 17. We do not believe that this language signals the creation of a new standard, however, for the decision also speaks of "proximate" damages and of the "natural and probable" effects of the fraud--phrases smacking of the traditional direct injury rule. Furthermore, the facts of the case, described supra, clearly reveal that the damages claimed were far more direct than those claimed in the instant case.
16
Finally, plaintiff argues that his lost time is recoverable under a rule that allows a person who becomes involved in litigation because of the wrongful act of a third party to recover against that third party for attorney's fees and other expenses suffered. See Central Trust Co., Rochester v. Goldman, 70 A.D.2d 767, 417 N.Y.S.2d 359 (4th Dept.), appeal dismissed, 47 N.Y.2d 1008, 394 N.E.2d 290, 420 N.Y.S.2d 221 (1979); Coopers & Lybrand v. Levitt, 52 A.D.2d 493, 384 N.Y.S.2d 804 (1st Dept.1976); Fugazy Travel Bureau, Inc. v. Ernst & Ernst, 31 A.D.2d 924, 298 N.Y.S.2d 519 (1st Dept.1969); Shindler v. Lamb, 25 Misc.2d 810, 211 N.Y.S.2d 762 (Sup.Ct.1959), aff'd mem., 10 A.D.2d 826, 200 N.Y.S.2d 346 (1st Dept.1960), aff'd mem., 9 N.Y.2d 621, 172 N.E.2d 79, 210 N.Y.S.2d 226 (1961).
17
The general rule of course is that attorney's fees are not recoverable as damages. Coopers & Lybrand, 52 A.D.2d at 496, 384 N.Y.S.2d at 806. However, under New York law, where the litigation is caused by the wrongful act of a third party, the person "is entitled to recover [from the third party] the reasonable value of attorneys' fees and other expenses thereby suffered or incurred." Id. at 496, 384 N.Y.S.2d at 807 (quoting Shindler, 25 Misc.2d at 812, 211 N.Y.S.2d at 765). Dr. Goldberg asserts that economic loss caused by time spent defending lawsuits falls within the category of "other expenses" recoverable under this rule.
18
Mallinckrodt argues that the exception does not apply when both parties were parties in the prior litigation, as is the case here. We agree. With respect to one action, the expenses incurred by Dr. Goldberg stem from defending Mallinckrodt's impleader action, whereas the exception invoked by Goldberg extends only to recovery of attorney's fees expended in disputes with third parties. See Coopers & Lybrand, 52 A.D.2d at 496-97, 384 N.Y.S.2d at 807 (refusing to apply exception where damage claim was for fees and expenses associated with defense of actions brought by present defendants, not third parties). Moreover, all the cases cited involve circumstances where the first party's wrongful conduct (here Mallinckrodt's fraud) exposed another (Dr. Goldberg) to litigation with a third party (the injured patients) in which the first party was not involved. Where the first party is actually in the litigation, the applicability of the exception to the general rule on attorney's fees is very doubtful. The first party in such circumstances will in all probability bear the laboring oar in defending the claim, and other parties such as Dr. Goldberg are free to assert whatever claims they have against the former, thereby disposing of all relevant claims in one action. We are most reluctant to extend this exception so as to authorize a second round of litigation over costs between parties who have already litigated the underlying claims.
19
Even if the exception did apply, however, the damage claimed by plaintiff does not fall within the scope of recovery allowed under the third party exception. Including personal time spent defending litigation in the phrase "other expenses" would be an excessively broad reading of that language. The term "expenses" is more suggestive of traditional litigation costs such as filing fees or fees paid to expert witnesses than of lost time away from one's profession, despite the fact that the latter certainly has value. None of the New York cases cited supra with respect to this exception holds that lost personal time is recoverable. In the absence of such a holding by the New York courts, we cannot equate litigation expenses, which are clearly recoverable, with time spent away from one's profession. The district court was thus correct in granting summary judgment for defendant on this claim.
2. Damages for Emotional Distress
20
Plaintiff also claims that the district court erred in dismissing his claim for damages based on the fact that he no longer performs myelograms. It is not clear whether the emotional trauma of witnessing the serious injuries to his two patients has left plaintiff emotionally unable to perform the procedure, or whether plaintiff has simply made a personal decision to refrain from the procedure because of the inherent danger associated with it, as illustrated by the Dimeray incidents.
21
To the extent that plaintiff's lost income is the result of a personal choice, it is beyond question not a direct result of defendant's alleged fraud. Moreover, even if he is disabled by the emotional trauma flowing from the past incidents, such emotional distress is not compensable under New York law. In Bovsun v. Sanperi, 61 N.Y.2d 219, 461 N.E.2d 843, 473 N.Y.S.2d 357 (1984), the New York Court of Appeals held that bystanders may recover for emotional distress damage only under very limited circumstances. The emotional disturbance suffered must be "serious and verifiable," id., 61 N.Y.2d at 231, 461 N.E.2d at 849, 473 N.Y.S.2d at 363, and "must be tied, as a matter of proximate causation, to the observation of the serious injury or death of [an immediate] family member," id., 61 N.Y.2d at 232, 461 N.E.2d at 849, 473 N.Y.S.2d at 363. Finally, the plaintiff must himself have been in the "zone of danger"--that is, he must himself have been exposed to a risk of bodily harm by the conduct of the defendant. Id., 61 N.Y.2d at 233, 461 N.E.2d at 849, 473 N.Y.S.2d at 363.
22
Dr. Goldberg clearly does not meet two of these requirements. First, the persons whose injuries have allegedly caused the emotional distress and subsequent refusal to perform myelograms were patients, not immediate family members. Second, plaintiff was never himself exposed to risk of serious bodily injury from Dimeray, and thus was outside the "zone of danger." Indeed, Bovsun expressly reaffirmed Kennedy v. McKesson, 58 N.Y.2d 500, 448 N.E.2d 1332, 462 N.Y.S.2d 421, a case similar to the present one which held that a dentist could not recover for emotional distress suffered as a result of the death of his patient. Bovsun, 61 N.Y.2d at 232, 461 N.E.2d at 849, 473 N.Y.S.2d at 363.
23
Plaintiff attempts to avoid the Bovsun rule by relying on several cases involving more intentional or outrageous conduct in which recovery for emotional distress has been allowed. See, e.g., Johnson v. State, 37 N.Y.2d 378, 334 N.E.2d 590, 372 N.Y.S.2d 638 (1975) (recovery for emotional distress allowed where hospital misidentified body and negligently transmitted telegram announcing death of plaintiff's mother, who was actually alive and well in the hospital, with the mistake only being discovered after plaintiff closely examined the corpse at the wake). Such cases are factually inapposite. The district court was thus correct in dismissing the claim for emotional distress.
24
Affirmed.
25
LUMBARD, Circuit Judge, concurring and dissenting:
26
I agree that Goldberg's claim for damages due to his unwillingness to perform any more myelograms was properly rejected under New York law pertaining to damages for emotional distress. I believe, however, that the district court erred in holding that Goldberg's damages relating to time spent away from his medical practice defending lawsuits were too remote from the alleged fraud as a matter of law.
27
The complaint alleges that Mallinckrodt knew of the dangers associated with its product, Dimeray, and that it failed to disclose this information to physicians. Instead, Mallinckrodt allegedly touted the safety of Dimeray at physicians' conventions. The manufacturer of a product such as Dimeray owes a duty of great care in advising all those who use such a product regarding the dangers and risks involved. The physician must rely on what the manufacturer tells him.
28
If a physician is fraudulently induced to prescribe a test for a patient, and the patient becomes seriously ill, it is almost axiomatic that the physician will be involved in litigation with the patient. Of course, the patient charges the physician with negligence, or the physician is so charged when he is impleaded. Where patients believe that they have been negligently injured, malpractice actions against physicians are now as certain as death and taxes.
29
I would hold that Goldberg's defense against his patients' lawsuits and his legal expenses are a "direct result" of Mallinckrodt's alleged fraud. Goldberg had no choice but to take such time from his practice as was necessary to defend himself adequately. Indeed, his insurance policy undoubtedly requires that he give reasonable assistance to counsel provided by his insurer in any litigation. The fact that Goldberg took time off from his practice to defend the lawsuits is thus a direct and foreseeable consequence of the alleged fraud. At any rate, there is enough of an issue on proximate cause to present a jury question. Consequently, summary judgment is not appropriate. See Zeller v. Bogue Electric Manufacturing Corp., 476 F.2d 795, 803 (2d Cir.), cert. denied, 414 U.S. 908, 94 S.Ct. 217, 38 L.Ed.2d 146 (1973).
30
I also believe that Goldberg's lost time is recoverable under an exception to the general rule against awarding attorneys' fees and other legal expenses. If a defendant's wrongful act caused the plaintiff to become involved in litigation with a third party, the defendant may be liable for the plaintiff's attorneys' fees and legal expenses incurred in the earlier litigation. See, e.g., Central Trust Co., Rochester v. Goldman, 70 A.D.2d 767, 417 N.Y.S.2d 359 (4th Dept.), app. dismissed, 47 N.Y.2d 1008, 394 N.E.2d 290, 420 N.Y.S.2d 221 (1979).
31
As the majority points out, this exception applies only to plaintiff's expenses incurred in litigation with third parties and not to expenses incurred in litigation with the defendant itself; however, this qualification does not bar Goldberg's recovery. At least with respect to the direct action against him, it is clear that Goldberg's legal expenses resulted proximately from defending a lawsuit brought by a stranger to the present fraud action, his patient. See Japcap Establishment Inc. v. Trust for Cultural Resources, App.Div., 495 N.Y.S.2d 669, 671 (1st Dept.1985) (discussing third-party requirement).
32
Recovery of legal expenses under the exception is not thwarted simply because Goldberg impleaded Mallinckrodt. Goldberg bears the "laboring oar" in the direct action, and I see no reason why his bringing an indemnity claim against Mallinckrodt in that action should preclude him from seeking his litigation expenses in a separate fraud action. I disagree with the majority's holding that time spent by Goldberg to defend the lawsuits brought by his patients is not compensable under the exception as a legal expense. It is inevitable that a physician would have to take some time off from his practice in this type of situation. Thus, Goldberg should be able to recover damages for his lost time, just as he would with respect to any other necessary litigation expense.
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In the United States Court of Federal Claims
OFFICE OF SPECIAL MASTERS
(Filed: April 28, 2017)
* * * * * * * * * * * * * * * UNPUBLISHED
NICOLE MULLER, on behalf of, A.M., *
a Minor Child, *
* Case No. 14-801V
Petitioner, *
v. *
* Chief Special Master Dorsey
SECRETARY OF HEALTH *
AND HUMAN SERVICES, * Motion to Dismiss; Guillain-Barre
* Syndrome; FluMist.
Respondent. *
*
* * * * * * * * * * * * * * *
Franklin John Caldwell, Jr., Maglio, Christopher & Toale, Sarasota, Florida, for petitioner.
Adriana Ruth Teitel, U.S. Department of Justice, Washington, D.C., for respondent.
DECISION DISMISSING PETITION1
On September 2, 2014, Nicole Muller (“petitioner”) filed a petition under the National
Vaccine Injury Act of 1986, 42 U.S.C. §§ 300aa-10 et seq. (2012) (“Vaccine Act”),2 on behalf of
her minor child, A.M., alleging that A.M. suffered from Guillain-Barre Syndrome as the result of
the FluMist vaccinations she received on November 1, 2011, and December 28, 2011.3 Petition
at 1.
1
Because this decision contains a reasoned explanation for the undersigned’s action in this case,
the undersigned intends to post this ruling on the website of the United States Court of Federal
Claims, in accordance with the E-Government Act of 2002, 44 U.S.C. § 3501 note
(2012)(Federal Management and Promotion of Electronic Government Services). As provided
by Vaccine Rule 18(b), each party has 14 days within which to request redaction “of any
information furnished by that party: (1) that is a trade secret or commercial or financial in
substance and is privileged or confidential; or (2) that includes medical files or similar files, the
disclosure of which would constitute a clearly unwarranted invasion of privacy.” Vaccine Rule
18(b).
2
The National Vaccine Injury Compensation Program is set forth in Part 2 of the National
Childhood Vaccine Injury Act of 1986, Pub. L. No. 99-660, 100 Stat. 3755, codified as
amended, 42 U.S.C. §§ 300aa-1 to -34 (2012) (“Vaccine Act” or “the Act”). All citations in
this decision to individual sections of the Vaccine Act are to 42 U.S.C.A. § 300aa.
3
Petitioner’s petition states that A.M. received two influenza vaccinations, the first on November
1, 2011, and the second on December 28, 2011. Petition at 1. The undersigned issued a fact
ruling on February 27, 2017, finding that A.M. received only one FluMist vaccination on
1
A fact hearing was held on November 17, 2016, in Camden, New Jersey, to determine the
date on which A.M. received the FluMist vaccination. In a decision issued on February 27,
2017, the undersigned determined that A.M. received one FluMist vaccination on November 1,
2011. Findings of Fact and Conclusions of Law dated Feb. 27, 2017 (ECF No. 68).
The undersigned held a status conference with the parties on April 4, 2017, to discuss
how to proceed with the case. During the status conference, the undersigned noted that the onset
of A.M.’s GBS was outside of the window of vaccine causation. Order dated April 4, 2017
(ECF No. 71). The undersigned allowed petitioner 30 days to determine how she wanted to
proceed with her case. Id.
On April 27, 2017, petitioner filed a motion to dismiss her petition. Motion to Dismiss
dated April 27, 2017 (ECF No. 72). Petitioner stated that “an investigation of the facts and
science supporting her case has demonstrated … that she will be unable to prove that she is
entitled to compensation.” Id. at 1. She thereby requested that her petition be dismissed. Id.
To receive compensation under the Program, petitioner must prove either: 1) that A.M.
suffered a “Table Injury”—i.e., an injury falling within the Vaccine Injury Table—corresponding
to a vaccination, or 2) that she suffered an injury that was actually caused by a vaccine. See §§
300aa-13(a)(1)(A) and 300aa-11(c)(1). An examination of the record did not uncover any
evidence that A.M. suffered a “Table Injury,” nor does petitioner allege that she suffered a
“Table Injury.” Further, the record does not contain any persuasive evidence indicating that
A.M.’s injury was caused by the FluMist vaccination she received on November 1, 2011.
Under the Vaccine Act, a petitioner may not be awarded compensation based solely on
the petitioner’s claims. Rather, the petition must be supported by either medical records or by
the opinion of a competent physician. § 300aa-13(a)(1). In this case, because the medical
records are insufficient to establish entitlement to compensation, a medical opinion must be
offered in support. Petitioner has not offered an expert opinion in support of her case, and her
motion stated that she is otherwise unable to prove that she is entitled to compensation in the
Vaccine Program.
Accordingly, it is clear from the record in this case that petitioner has failed to
demonstrate either that A.M. suffered a “Table Injury” or that her injuries were caused-in-fact by
the FluMist vaccination.
Therefore, this case is dismissed for insufficient proof. In the absence of a motion for
4
review, the Clerk of the Court SHALL ENTER JUDGMENT in accordance with this decision.
November 1, 2011. Findings of Fact and Conclusions of Law dated Feb. 27, 2017 (ECF No. 68).
4
Pursuant to Vaccine Rule 11(a), entry of judgment is expedited by the parties’ joint filing of
notice renouncing the right to seek review.
2
IT IS SO ORDERED.
s/Nora B. Dorsey
Nora B. Dorsey
Chief Special Master
3
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United States Court of Appeals
for the Federal Circuit
__________________________
TRANSOCEAN OFFSHORE DEEPWATER
DRILLING, INC.,
Plaintiff-Appellant,
v.
MAERSK CONTRACTORS USA, INC.,
Defendant-Appellee.
__________________________
2009-1556
__________________________
Appeal from the United States District Court for the
Southern District of Texas in case No. 07-CV-2392, Judge
Kenneth M. Hoyt.
___________________________
Decided: August 18, 2010
___________________________
GREGORY A. CASTANIAS, Jones Day, of Washington,
DC, argued for plaintiff-appellant. With him on the brief
was THOMAS J. DAVIS. Of counsel was KARLA R.
GOLDMAN. Of counsel on the brief were CHARLES B.
WALKER, JR., MICHAEL S. MCCOY and WARREN S. HUANG,
Fulbright & Jaworski L.L.P., of Houston, Texas.
WILLIAM H. FRANKEL, Brinks Hofer Gilson & Lione, of
Chicago, Illinois, argued for defendant-appellee. With
him on the brief were GLEN P. BELVIS, MARK H. REMUS
TRANSOCEAN v. MAERSK CONTRACTORS 2
and DAVID P. LINDNER. Of counsel on the brief was LEE L.
KAPLAN, Smyser Kaplan & Veselka, L.L.P., of Houston,
Texas.
__________________________
Before, GAJARSA, Mayer, and MOORE, Circuit Judges.
MOORE, Circuit Judge.
Transocean Offshore Deepwater Drilling, Inc. (Trans-
ocean) appeals from a final judgment of the U.S. District
Court for the Southern District of Texas. The district
court, on summary judgment, held that the asserted
claims of the patents-in-suit are invalid, not infringed,
and that defendant Maersk Contractors USA, Inc.
(Maersk USA) did not act willfully. For the reasons set
forth below, we reverse-in-part, vacate-in-part, affirm-in-
part, and remand.
BACKGROUND
Transocean asserted claims 10-13 and 30 of U.S. Pat-
ent No. 6,047,781 (’781 patent), claim 17 of U.S. Patent
No. 6,068,069 (’069 patent), and claim 10 of U.S. Patent
No. 6,085,851 (’851 patent) against Maersk USA. The
patents-in-suit share a common specification. The patents
relate to an improved apparatus for conducting offshore
drilling. In order to exploit oil and other resources below
the sea floor, the disclosed rig must lower several compo-
nents to the seabed including the drill bit, casings (metal
tubes that create the wall of the borehole), and a blow-out
preventer (BOP) that sits atop the well to prevent rupture
during extended drilling. Id. col.8 l.40-col.9 l.30. The
structure for lowering these elements and rotating the
drill is called the derrick. Id. col.4 l.66-col.5 l.3. The
derrick includes a top drive to rotate the drill and draw-
works to move components (such as the drill, casing, and
3 TRANSOCEAN v. MAERSK CONTRACTORS
BOP) to and from the sea floor. Id. col.6 ll.52-61; col.7
ll.65-67.
The derrick lowers and raises the drill bit and other
components on the drill string. The drill string is a series
of pipe sections, or “joints,” that the rig assembles on the
surface. To begin the drilling process, the rig lowers the
drill bit into the water toward the sea floor, adding more
and more pipe sections or “joints” to the top of the drill
string. For example, if the joints are each 30’ long, the
drawworks would lower the drill 30’ and then pause to
attach a new 30’ joint of pipe before proceeding. Once the
drill reaches the seabed, the top drive turns the drill
string to create the borehole. Again, when the drill bit
moves 30’ into the seabed, the rig must add a new joint of
pipe at the surface in order to continue drilling. Once the
drill bit creates a portion of the borehole, the derrick
retracts it to the surface. This means that the rig must
remove each joint of pipe it added during the drill’s de-
scent. This is a time-consuming process.
Once the drill bit is back on the surface, the derrick
lowers a casing on another drill string, adding joints of
pipe in the same manner. The casing is a metal tube that
creates the wall of the borehole. Once the casing is in
place, cement is pumped down through the drill string
through and around the casing to hold it in place; the rig
then retracts the drill string. This casing forms the first
section of the borehole; the rig must drill through this
casing to greater depth to reach the oil reservoir. Before
the next round of drilling, the rig lowers a BOP on a large
diameter drill string called a riser. The BOP prevents oil
and gas from escaping from the borehole. The rig then
drills through the riser, BOP, and first casing to create a
new portion of the borehole that is smaller in diameter
than the first portion. The casing process occurs for this
new section and this entire process continues until the
TRANSOCEAN v. MAERSK CONTRACTORS 4
borehole resembles a telescope of several sections of
decreasing diameter.
A conventional rig utilized a derrick with a single top
drive and drawworks. Because it could only lower one
element at a time, the rig performed the many steps
involved in drilling a well in series. Transocean at-
tempted to improve the efficiency of this time-consuming
process with the system described in the patents-in-suit.
The patents describe a derrick that includes two sta-
tions—a main advancing station and an auxiliary advanc-
ing station—that can each assemble drill strings and
lower components to the seabed. ’781 patent fig.2; col.3
ll.58-66. Each advancing station includes a top drive for
rotating the drill string and drawworks for raising and
lowering the drill string. The auxiliary advancing station
performs the initial drilling and casing. Id. col.9 l.66-
col.10 l.2. While the auxiliary advancing station cases the
first portion of the borehole, the main advancing station
lowers the BOP. Id. col.9 ll.21-23. Once the casing is
complete, the auxiliary advancing station retracts the
drill string and begins supporting the main advancing
station by preparing lengths of the drill string in advance.
See id. col.9 ll.25-30. For example, the auxiliary advanc-
ing station may take three or four joints of pipe, assemble
them, and set them aside so that while the main advanc-
ing station is lowering a drill bit or casing, it does not
have to connect every joint. Id. While the auxiliary
advancing station is performing this function, the main
advancing station is drilling and casing additional por-
tions of the well. Id. col.9 ll.35-40. This “dual-activity” rig
can significantly decrease the time required to complete a
borehole. Id. col.11 ll.56-67.
Transocean appeals the district court’s grant of sum-
mary judgment of (1) invalidity of all asserted claims
based on obviousness and lack of enablement, (2) nonin-
5 TRANSOCEAN v. MAERSK CONTRACTORS
fringement, and (3) no willfulness. We have jurisdiction
under 28 U.S.C. § 1295(a)(1).
DISCUSSION
We review a district court’s grant of summary judg-
ment de novo. ICU Med., Inc. v. Alaris Med. Sys. Inc., 558
F.3d 1368, 1374 (Fed. Cir. 2009). Summary judgment is
appropriate when, drawing all justifiable inferences in the
nonmovant’s favor, there exists no genuine issue of mate-
rial fact and the movant is entitled to judgment as a
matter of law. Fed. R. Civ. P. 56(c); Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 255 (1986).
I. Invalidity
The district court held that all asserted claims are in-
valid. Claim 17 of the ’069 patent is an example of the
independent claims at issue:
A multi-activity drilling assembly operable to be
supported from a position above the surface of a
body of water for conducting drilling operations to
the seabed and into the bed of the body of water,
said multi-activity drilling assembly including:
a drilling superstructure operable to be
mounted upon a drilling deck for simulta-
neously supporting drilling operations for
a well and operations auxiliary to drilling
operations for the well;
a first tubular advancing station con-
nected to said drilling superstructure for
advancing tubular members to the seabed
and into the bed of body of water;
a second tubular advancing station con-
nected to said drilling superstructure for
TRANSOCEAN v. MAERSK CONTRACTORS 6
advancing tubular members simultane-
ously with said first tubular advancing
station to the seabed and into the body of
water to the seabed; and
an assembly positioned adjacent to said
first and second tubular advancing sta-
tions operable to transfer tubular assem-
blies between said first tubular advancing
station and said second tubular advancing
station to facilitate simultaneous drilling
operations auxiliary to said drilling opera-
tions, wherein drilling activity can be con-
ducted for the well from said drilling
superstructure by said first or second tu-
bular advancing stations and auxiliary
drilling activity can be simultaneously
conducted for the well from said drilling
superstructure by the other of said first or
second tubular advancing stations.
The district court found the claims obvious under 35
U.S.C. § 103(a) and not enabled under 35 U.S.C.
§ 112 ¶ 1.
A. Obviousness
A patent shall not issue “if the differences between
the subject matter sought to be patented and the prior art
are such that the subject matter would have been obvious
at the time the invention was made to a person having
ordinary skill in the art to which said subject matter
pertains.” 35 U.S.C. § 103(a); see KSR Int’l Co. v. Teleflex
Inc., 550 U.S. 398, 406-07 (2007). Obviousness is a ques-
tion of law with underlying fact issues. Id. at 427; Denni-
son Mfg. Co. v. Panduit Corp., 475 U.S. 809, 811 (1986).
What a particular reference discloses is a question of fact,
7 TRANSOCEAN v. MAERSK CONTRACTORS
see Para-Ordnance Manufacturing, Inc. v. SGS Imports
International, Inc., 73 F.3d 1085, 1088 (Fed. Cir. 1995), as
is the question of whether there was a reason to combine
certain references, see McGinley v. Franklin Sports, Inc.,
262 F.3d 1339, 1352 (Fed. Cir. 2001). Under the four part
test for obviousness detailed in Graham v. John Deere Co.
of Kansas City, 383 U.S. 1, 17-18 (1966), the court must
consider (1) the scope and content of the prior art; (2) the
difference between the prior art and the claimed inven-
tion; (3) the level of ordinary skill in the art; and (4) any
objective evidence of nonobviousness. The objective
evidence relevant to this appeal includes industry skepti-
cism, long-felt industry need, commercial success, and
copying. See Agrizap, Inc. v. Woodstream Corp., 520 F.3d
1337, 1344 (Fed. Cir. 2008); Iron Grip Barbell Co. v. USA
Sports, Inc., 392 F.3d 1317, 1324 (Fed. Cir. 2005).
Relevant to this appeal, the asserted claims generally
require (1) a first advancing station capable of advancing
tubular members to the seabed, (2) a second advancing
station also capable of advancing tubular members to the
seabed, and (3) a transfer assembly to move tubular
members between the first advancing station and the
second advancing station.
The district court held that the claims would have
been obvious over two references: U.K. patent application
GB 2 041 836 to Horn (Horn) and U.S. Patent No.
4,850,439 to Lund (Lund). The parties did not dispute the
teachings of the references below. The district court noted
that Horn discloses a single derrick that supports two
advancing stations that each advance tubular members to
the seabed, but fails to disclose a transfer assembly that
will move tubular members between them. The district
court then noted that Lund discloses this missing ele-
ment. The court pointed to the transfer mechanism of
Lund that transfers pre-assembled pipe sections from a
TRANSOCEAN v. MAERSK CONTRACTORS 8
preparation station to an advancing station. The court
held that based on the undisputed teachings of these
references, the asserted claims would have been obvious
to one of ordinary skill in the art.
Transocean argues on appeal that the combination of
Horn and Lund would not result in the claimed invention,
but in a rig with two advancing stations, two preparation
stations, and two transfer assemblies. Transocean also
argues that the claims would not have been obvious over
any combination with Horn because the claimed invention
must operate on a single well and Horn only discloses two
advancing stations operating on two wells.
We agree that Horn and Lund establish a prima facie
case that the claims would have been obvious. In combi-
nation, Horn and Lund teach all of the limitations of the
claims, two advancing stations that can advance tubular
members to the seabed as well as a transfer assembly to
move tubular members between the stations. But it is
not enough to simply show that the references disclose the
claim limitations; in addition, “it can be important to
identify a reason that would have prompted a person of
ordinary skill in the art to combine the elements as the
new invention does.” KSR, 550 U.S. at 401. In this case,
the reason to combine comes directly from the Horn
reference. Discussing the benefits of combining two
advancing stations in a single derrick, Horn states “[o]f
other obvious advantages, there is the possibility of
concentrating common auxiliary equipment . . . .” Horn
p.1 ll.119-21. The transfer assembly of Lund is just the
type of “auxiliary” equipment that one could concentrate
for two advancing stations under a single derrick. 1 We
1 Though it is not clear what the district court in-
tended when it stated: “[t]o be an invention, the combin-
ing of the timesavings element [sic] would need to be
9 TRANSOCEAN v. MAERSK CONTRACTORS
hold that the teachings of the references as well as this
reason to combine support a prima facie case that the
claims would have been obvious to one of ordinary skill in
the art.
Transocean’s first argument that the combination
would result in two advancing stations, two preparation
stations, and two transfer assemblies asks us to improp-
erly turn the person of ordinary skill in the art into an
“automaton” that can only add pieces of prior art. See
KSR, 550 U.S. at 421. Transocean’s second argument
that Horn cannot render these claims obvious in any
combination is similarly unavailing. Horn and Lund in
combination, not individually, support the prima facie
case. It would have been obvious to one of ordinary skill
in the art that the dual well system of Horn could be
combined with the single well system of Lund to result in
two advancing stations operating on a single well with a
transfer assembly moving tubular members between
them.
Although we hold that Horn in view of Lund present a
prima facie case of obviousness, this is not the end of the
analysis. At the district court, Transocean presented
significant objective evidence of nonobviousness. First,
Transocean presented evidence of industry skepticism. A
Transocean competitor, in an article discussing simulta-
neous drilling operations, stated that dual drill strings
would be a “radical departure” from conventional systems
expressed in a manner that distinguishes, mathematically
or scientifically, the time saved by comparing a Trans-
ocean rig from the time saved using other rigs that also
claim timesaving features,” we note that the focus must
be on whether the claimed invention would have been
obvious to one of skill in the art, not whether it is an
improvement over the prior art. Ryco, Inc. v. Ag-Bag
Corp., 857 F.2d 1418, 1424 (Fed. Cir. 1988)
TRANSOCEAN v. MAERSK CONTRACTORS 10
and that there was a high potential for underwater colli-
sion. Others in the field described dual activity as “not
being realistic” for the same reasons. Second, Transocean
presented evidence of industry praise for its dual activity
rig. An industry publication called the invention one of
the top 50 innovations in offshore drilling history. Trans-
ocean also cites other examples of praise from clients and
competitors, including Maersk USA. Third, Transocean
presented evidence that its implementation of the dual
activity invention has been a commercial success. It
showed that its dual activity rigs command a higher
licensing premium than standard rigs. Finally, Trans-
ocean presented evidence that the success of its invention
caused others to copy it, including Maersk USA.
Maersk USA disputes each of these pieces of evidence
arguing that they do not have a nexus to the claimed
invention. Regarding industry skepticism, Maersk USA
points to several prior art references that described dual
side-by-side drill strings with no concern for collision. On
industry praise, Maersk USA argues that the relevant
articles and statements refer to the entire rig, not to the
dual activity of the invention specifically. On commercial
success, Maersk USA argues that Transocean negotiated
its licenses under threat of litigation and the terms are
not relevant. Finally, Maersk USA argues that there is
no evidence that any party copied the claimed invention,
only that others intended to implement some sort of dual
drilling system.
In its opinion, the district court ignored this objective
evidence of nonobviousness. Though the court cites
Graham, it indicates that the court is required to consider
only the first three factors. Transocean Offshore Deepwa-
ter Drilling, Inc. v. Maersk Contractors USA, No. 07-2392,
D.I. 148, *16 (S.D. Tex. July 28, 2009) (Noninfringe-
ment/Invalidity Order). Transocean argues that this is
11 TRANSOCEAN v. MAERSK CONTRACTORS
reversible error asserting that a district court must con-
sider objective evidence of nonobviousness when a party
presents it. Maersk USA responds that we have consid-
ered this type of evidence for the first time on appeal in
prior cases and should do so here.
We hold that the district court erred by failing to con-
sider Transocean’s objective evidence of nonobviousness.
Our case law is clear that this type of evidence “must be
considered in evaluating the obviousness of a claimed
invention.” Iron Grip, 392 F.3d at 1323; Ruiz v. A.B.
Chance Co., 234 F.3d 654, 667 (Fed. Cir. 2000); Richard-
son-Vicks, Inc. v. Upjohn Co., 122 F.3d 1476, 1483 (Fed.
Cir. 1997). While it is true that we have held in individ-
ual cases that objective evidence of nonobviousness did
not overcome the strong prima facie case – this is a case-
by-case determination. See Leapfrog Enters., Inc. v.
Fisher-Price, Inc., 485 F.3d 1157, 1162 (Fed. Cir. 2007);
Agrizap, 520 F.3d at 1344. To be clear, a district court
must always consider any objective evidence of nonobvi-
ousness presented in a case. Iron Grip, 392 F.3d at 1323;
Ruiz, 234 F.3d at 667; Richardson-Vicks, 122 F.3d at
1483.
Maersk USA is correct that in at least one instance,
we considered this type of objective evidence for the first
time on appeal and held that the failure to consider it
below was not reversible error. See Iron Grip, 392 F.3d at
1324. But in the context of summary judgment, this is
only proper if, drawing all justifiable inferences in favor of
the patent owner, the objective evidence cannot rebut the
prima facie case. We decline to make that holding in this
case. If all of the factual disputes regarding the objective
evidence resolve in favor of Transocean, it has presented a
strong basis for rebutting the prima facie case. Viewing
the objective evidence of nonobviousness in a light most
TRANSOCEAN v. MAERSK CONTRACTORS 12
favorable to Transocean, we cannot hold that the claims
would have been obvious as a matter of law.
Because of the failure to consider the objective evi-
dence of nonobviousness and because there are genuine
issues of material fact remaining, we reverse the grant of
summary judgment of invalidity based on obviousness.
B. Enablement
Whether a claim satisfies the enablement require-
ment is a question of law that we review de novo. Sitrick
v. Dreamworks, LLC, 516 F.3d 993, 999 (Fed. Cir. 2008).
A patent specification must “contain a written description
of the invention . . . to enable any person skilled in the
art . . . to make and use the same.” 35 U.S.C. § 112, ¶1.
The specification must “enable one of ordinary skill in the
art to practice the claimed invention without undue
experimentation.” Nat’l Recovery Techs., Inc. v. Magnetic
Separation Sys., Inc., 166 F.3d 1190, 1196 (Fed. Cir.
1999). Enablement under § 112 is a question of law with
underlying questions of fact regarding undue experimen-
tation. Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d
1371, 1377 (Fed. Cir. 2007); CFMT, Inc. v. Yieldup Int’l
Corp., 349 F.3d 1333, 1338 (Fed Cir. 2003).
On summary judgment, the district court held that
the asserted claims did not satisfy the enablement re-
quirement because the specification does not include
sufficient description of the “assembly . . . operable to
transfer tubular assemblies” or “means . . . for transfer-
ring tubular assemblies.” It determined that one of
ordinary skill in the art could not practice the invention
without undue experimentation. Noninfringe-
ment/Invalidity Order at *9. It relied on evidence regard-
ing Transocean’s difficulty in building its first commercial
embodiment of the claimed invention holding that “the
13 TRANSOCEAN v. MAERSK CONTRACTORS
specifications fail to inform as to how this new arrange-
ment works such that a person skilled in the art may take
advantage of the objective of the invention – timesaving.”
Id. The district court specifically faulted Transocean’s
failure to include the “programming” of the transport
mechanism and any required modifications to prior art
transfer mechanisms in the specification. Noninfringe-
ment/Invalidity Order at *10.
Transocean argues that the court erred because there
is a genuine issue of material fact regarding undue ex-
perimentation. Transocean first argues that the state of
the prior art is relevant to enablement and affects the
level of experimentation that we will consider undue. See
In re Wands, 858 F.2d 731, 736-37 (Fed. Cir. 1988). It
argues that pipe transferring equipment was well-known
prior to filing the patent application as evidenced by
Maersk USA’s own expert, George Boyadjieff. 2 Mr.
Boyadjieff admitted that it would not be “complex,” nor
would it “take a lot of time” or “engineering effort” to alter
a prior art transfer assembly to transfer between two
advancing stations, as claimed, rather than an advancing
station and a storage area. J.A. 4897. Mr. Boyadjieff
agreed that it would be “trivial.” Id. Transocean argues
that this shows that rail-mounted transport was well-
known in the art and this should have precluded sum-
mary judgment of nonenablement.
Transocean also argues that the district court erred
by requiring it to enable a commercial embodiment rather
than the claimed invention. CFMT, Inc., 349 F.3d at
2 Mr. Boyadjieff testified in reference to his own
patent that disclosed a rail-mounted transfer assembly
between an advancing station and a storage area. Mr.
Boyadjieff is the former CEO of Varco International, Inc.,
the company that designed the pipe handling system for
Transocean’s own implementation of the patented system.
TRANSOCEAN v. MAERSK CONTRACTORS 14
1338. It claims that 35 U.S.C. § 112 only requires that it
enable “any mode of making and using the claimed inven-
tion.” Engel Indus., Inc. v. Lockformer Co., 946 F.2d 1528,
1533 (Fed. Cir. 1991).
Maersk USA argues that the district court is correct
and that the invention is not enabled because it would
require one of ordinary skill in the art to engage in undue
experimentation to practice the invention as a matter of
law. Nat’l Recovery Techs., 166 F.3d at 1196. Maersk
USA relies heavily on Transocean’s attempts to build the
first commercial embodiment of the claimed invention.
Maersk USA argues that Transocean contracted with
Varco International, Inc. (Varco) to build this embodiment
because the inventors did not know how to construct the
transferring equipment. Maersk USA points to inventor
testimony that the embodiment included “software they
had never done before,” and open issues such as “the
weight it could handle,” “the speed it could travel,” “the
hoisting range we needed,” “the size of the tubular it could
handle,” and “the capability to rotate without friction.”
J.A. 3999.
We agree with Transocean that factual issues regard-
ing undue experimentation remain in this case that
preclude summary judgment of no enablement. As an
initial matter, the district court erred in requiring Trans-
ocean to enable the invention to allow a person of ordi-
nary skill in the art to take advantage of the “timesaving”
aspect of the invention. A patent specification only must
enable one of ordinary skill in the art “to practice the
claimed invention without undue experimentation.” Nat’l
Recovery Techs., 166 F.3d at 1196. It is not required to
enable the most optimized configuration, unless this is an
explicit part of the claims. In the present case, transfer-
ring tubular members from one location to another may
be enabled by simply disclosing the use of a crane or a
15 TRANSOCEAN v. MAERSK CONTRACTORS
rail-mounted system. It is irrelevant whether the ena-
bling disclosure would provide the most efficient transfer.
In requiring disclosure of “programming” and relying on
the difficulty of constructing Transocean’s first dual
activity rig, the district court erroneously required Trans-
ocean to enable the most efficient commercial embodi-
ment, rather than the claims. CFMT, Inc., 349 F.3d at
1338.
The court also erred in its determination that there is
no genuine issue of material fact regarding undue ex-
perimentation. The parties do not dispute that the specifi-
cation discloses two different types of transfer
mechanism: a rail-mounted system and a crane. ’781
patent, col.7 ll.21-26, 53-55; fig.7. But the parties heavily
dispute whether the development of the transfer equip-
ment would be “trivial,” or a much more complex task
based on the evidence presented below. Drawing all
justifiable inferences in favor of Transocean, we cannot
agree with the district court that these claims are not
enabled as a matter of law. Therefore, we reverse the
grant of summary judgment.
II. Infringement
The infringement issues in this case are unusual and
require a discussion of the factual background. Trans-
ocean accused Maersk USA’s DSS-21 rig of infringement.
Maersk USA’s Danish parent company, Maersk A/S,
contracted with Keppel FELS Ltd. in 2005 to build the
accused rig in Singapore. Later, Maersk A/S negotiated
with Statoil ASA (a Norwegian company) for Statoil’s use
of the accused rig. The companies came to an agreement
for use of the rig and Maersk USA and Statoil Gulf of
Mexico LLC (Statoil), a Texas Corporation, signed a
contract in Norway. The contract specified that the
“Operating Area” for the rig was the U.S. Gulf of Mexico
TRANSOCEAN v. MAERSK CONTRACTORS 16
but that Statoil had the right to use the rig outside the
Operating Area with certain limitations. J.A. 7167; 7211.
The contract also included mention of Transocean’s
U.S. patents. Maersk USA specifically retained the right
to make “alterations” to the accused rig “in view of court
or administrative determinations throughout the world.”
J.A. 7190. One of these “determinations” came when
Transocean asserted the same patent claims in this case
against another competitor, GlobalSantaFe Corp. (GSF).
Transocean prevailed in that case and the court issued an
injunction requiring GSF to install a “casing sleeve” on
one of its two advancing stations. Transocean Offshore
Deepwater Drilling, Inc. v. GlobalSantaFe Corp., No. H-
03-2910, 2006 U.S. Dist. LEXIS 93408 (S.D. Tex. Dec. 27,
2006). This casing sleeve prevents the auxiliary advanc-
ing station from lowering a drill string into the water. Id.
at *32-34. The district court in GSF held that this avoids
infringement because the cased advancing station can no
longer advance tubes to the seabed as the independent
claims require. Before delivering the rig to the U.S.,
Maersk USA learned of the injunction against GSF and
modified the accused rig with the same casing sleeve to
prevent one of the stations from advancing pipes to the
seabed.
The district court granted summary judgment of non-
infringement after determining that there was no sale or
offer to sell under 35 U.S.C. § 271(a). 3 Transocean Off-
shore Deepwater Drilling, Inc. v. Maersk Contractors USA,
3 The district court addressed infringement in two
orders. First, it determined that the contract between
Maersk USA and Statoil was not a sale or offer to sell
under § 271(a) in its order granting summary judgment of
no willfulness entered May 15, 2009. It resolved all
remaining infringement issues in an order entered July
28, 2009.
17 TRANSOCEAN v. MAERSK CONTRACTORS
No. 07-2392, D.I. 148, *8-9 (S.D. Tex. May 15, 2009)
(Willfulness Order). The court relied on the undisputed
facts that the negotiation and signing of the contract took
place outside the U.S. and that the contract gave Maersk
the option to alter the rig to avoid infringement. Id. The
district court also held that Transocean was collaterally
estopped from arguing that the modified rig that Maersk
USA delivered to Statoil (that included the casing sleeve
to prevent advancing tubular members to the seabed)
infringed the patent claims because this design was
adjudicated as noninfringing in the GSF litigation.
Noninfringement/Invalidity Order at *12.
A. Offer to Sell
Section 271(a) defines infringing conduct: “whoever
without authority makes, uses, offers to sell, or sells any
patented invention, within the United States. . . infringes
the patent.” 35 U.S.C. § 271(a). An offer to sell is a
distinct act of infringement separate from an actual sale.
An offer to sell differs from a sale in that an offer to sell
need not be accepted to constitute an act of infringement.
See MEMC Elec. Materials, Inc. v. Mitsubishi Materials
Silicon Corp., 420 F.3d 1369, 1376 (Fed. Cir. 2005).
Moreover, the damages that would flow from an unac-
cepted offer to sell and an actual sale would likely be
quite different. See Timothy R. Holbrook, Liability for the
“Threat of Sale”: Assessing Patent Infringement for Offer-
ing to Sell an Invention and Implications for the On-Sale
Patentability Bar and other Forms of Infringement, 43
Santa Clara L. Rev. 751, 791-92 (2003). We analyze an
offer to sell under § 271(a) using traditional contract
principles. Rotec Indus., Inc. v. Mitsubishi Corp., 215
F.3d 1246 (Fed. Cir. 2000). There is no dispute that there
was an offer to sell in this case, but Maersk USA argues
TRANSOCEAN v. MAERSK CONTRACTORS 18
that the offer was made in Norway, not the United States,
thereby absolving it of § 271(a) liability.
Maersk A/S (a Danish company) and Statoil ASA (a
Norwegian company) negotiated the contract that is the
subject of this alleged offer to sell. Their U.S. affiliates,
Maersk USA and Statoil executed the contract in Norway.
The contract included an “Operating Area” of the U.S.
Gulf of Mexico. The district court held that because the
negotiations and execution took place outside the U.S.,
this could not be an offer to sell within the United States
under § 271(a).
Transocean argues that to hold that this contract be-
tween two U.S. companies for performance in the U.S. is
not an offer to sell within the U.S. simply because the
contract was negotiated and executed abroad would be
inconsistent with Lightcubes, LLC v. Northern Light
Products, Inc., 523 F.3d 1353 (Fed. Cir. 2008) (holding
that a foreign company cannot avoid liability for a sale by
delivering the product outside the U.S. to a U.S. customer
for importation). Transocean argues that a contract
between two U.S. companies for delivery or performance
in the U.S. must be an offer to sell within the United
States under § 271(a).
Maersk USA argues that Rotec, 215 F.3d 1246 and
MEMC, 420 F.3d 1369 require that, for there to be an
offer to sell within the U.S., the offer activities must occur
within the U.S. It argues that the negotiations and
execution outside the U.S. preclude offer to sell liability in
this case.
This case presents the question whether an offer
which is made in Norway by a U.S. company to a U.S.
company to sell a product within the U.S., for delivery
and use within the U.S. constitutes an offer to sell within
the U.S. under § 271(a). We conclude that it does. Sec-
19 TRANSOCEAN v. MAERSK CONTRACTORS
tion 271(a) states that “whoever . . . offers to sell . . .
within the United States any patented invention . . .
infringes.” In order for an offer to sell to constitute in-
fringement, the offer must be to sell a patented invention
within the United States. The focus should not be on the
location of the offer, but rather the location of the future
sale that would occur pursuant to the offer.
The offer to sell liability was added to the patent stat-
ute to conform to the April 1994 Uruguay Round’s Trade-
Related Aspects of Intellectual Property Agreement
(TRIPS). The underlying purpose of holding someone who
offers to sell liable for infringement is to prevent “generat-
ing interest in a potential infringing product to the com-
mercial detriment of the rightful patentee.” 3D Sys., Inc.
v. Aarotech Labs., Inc., 160 F.3d 1373, 1379 (Fed. Cir.
1998). The offer must be for a potentially infringing
article. Id. We are mindful of the presumption against
extraterritoriality. Microsoft Corp. v. AT&T Corp., 550
U.S. 437, 441 (2007). “It is the general rule under United
States patent law that no infringement occurs when a
patented product is made and sold in another country.”
Id. This presumption has guided other courts to conclude
that the contemplated sale would occur within the United
States in order for an offer to sell to constitute infringe-
ment. See, e.g., Semiconductor Energy Lab. Co. v. Chi Mei
Optoelectronics Corp., 531 F. Supp. 2d 1084, 1110-11
(N.D. Cal. 2007). We agree that the location of the con-
templated sale controls whether there is an offer to sell
within the United States.
The statute precludes “offers to sell . . . within the
United States.” To adopt Maersk USA’s position would
have us read the statute as “offers made within the
United States to sell” or “offers made within the United
States to sell within the United States.” First, this is not
the statutory language. Second, this interpretation would
TRANSOCEAN v. MAERSK CONTRACTORS 20
exalt form over substance by allowing a U.S. company to
travel abroad to make offers to sell back into the U.S.
without any liability for infringement. See 3D Sys., 160
F.3d at 1379. This company would generate interest in its
product in the U.S. to the detriment of the U.S. patent
owner, the type of harm that offer to sell within the U.S.
liability is meant to remedy. Id. These acts create a real
harm in the U.S. to a U.S. patentee.
Neither Rotec nor MEMC preclude our determination
that an offer by a U.S. company to sell a patented inven-
tion to another U.S. company for delivery and use in the
U.S. constitutes an offer to sell within the U.S. First,
SEB S.A. v. Montgomery Ward & Co., 594 F.3d 1360, 1375
(Fed. Cir. 2010) contemplated whether the territorial
reach of the offer to sell language had been decided by
Rotec and concluded that it had not. The defendants in
Rotec did argue that because the offer was made in China,
not the U.S., they did not infringe. Rotec, 215 F.3d at
1251. And the Rotec court discussed the evidence regard-
ing meetings and communications made in the United
States. Id. at 1255. The Rotec court held that there was
no offer to sell, not because of the location of the offer or of
the ultimate sale, but rather because there was no evi-
dence that an offer was communicated or conveyed by the
defendants. Id. at 1255 (“None of this evidence, however,
establishes any communication by Defendants with any
third party.”). In concurrence, Judge Newman indicates
that she would have instead decided the case on the
ground that there was no offer which contemplated a sale
within the U.S. Id. at 1259 (Newman, J., concurring).
The MEMC case is even further attenuated as it did not
even consider location of the offer or the contemplated
sale, but instead held there was no offer to sell because
the emails at issue, which contained only technical data
and no price terms, cannot constitute an offer that could
21 TRANSOCEAN v. MAERSK CONTRACTORS
be made into a binding contract by acceptance. 420 F.3d
at 1376.
We conclude that neither Rotec nor MEMC control
this case. We hold that the district court erred because a
contract between two U.S. companies for performance in
the U.S. may constitute an offer to sell within the U.S.
under § 271(a). The fact that the offer was negotiated or a
contract signed while the two U.S. companies were abroad
does not remove this case from statutory liability. We
therefore vacate the district court’s summary judgment of
noninfringement. 4
B. Sale
The parties begin with the same territoriality argu-
ment presented in the context of an offer to sell. Trans-
ocean argues that a contract between two U.S. companies
for performance in the U.S. constitutes a sale under
§ 271(a). Maersk USA responds that this cannot be a sale
within the U.S. because all negotiations and execution of
the contract took place in Norway and the contract did not
provide for performance only in the U.S.
4 We note that because the district court held that
the location of the offer in this case removed it from the
statute as a matter of law, it never reached the factual
issue of whether the subject of the offer to sell was of a
“patented invention” by analyzing the design of the rig.
Of course, in this analysis, the district court must deter-
mine what was offered for sale, not what was ultimately
delivered. See Holbrook, supra, at 753. In other words, it
does not affect this analysis that Maersk USA eventually
altered the design prior to delivery; the subject of the offer
to sell was the unmodified rig. The district court must
determine whether this unmodified rig was “the patented
invention.” We decline to perform this analysis in the
first instance on appeal.
TRANSOCEAN v. MAERSK CONTRACTORS 22
The parties further dispute whether the device that
was sold was “the patented invention.” Transocean
argues that we should analyze infringement based on the
schematics that accompanied the contract. Maersk USA
argues that this was not an infringing sale because it
reserved the right to alter the rig to avoid infringement.
Finally, Maersk USA argues this cannot be a sale under
§ 271(a) because the rig was not complete at the time of
contracting. It argues that “in order for there to have
been a sale within the meaning of 35 U.S.C. § 271(a), the
entire apparatus must have been constructed and ready
for use,” citing Ecodyne Corp. v. Croll-Reynolds Engineer-
ing, 491 F. Supp. 194, 197 (D. Conn. 1979).
As with the offer to sell, we hold that a contract be-
tween two U.S. companies for the sale of the patented
invention with delivery and performance in the U.S.
constitutes a sale under § 271(a) as a matter of law.
Maersk USA’s first argument, that the location of nego-
tiation and contracting should control is contrary to our
precedent in Lightcubes. There, we held that a sale does
not only occur at a “single point where some legally opera-
tive act took place.” Lightcubes, 523 F.3d at 1369-70. We
may also consider other factors such as the place of per-
formance. Id. at 1371. Maersk USA’s argument that
Statoil could use the rig outside the U.S. ignores the plain
language of the contract, which includes an “Operating
Area” of the U.S. Gulf of Mexico. J.A. 7167. It also ig-
nores the fact that Maersk did in fact deliver the rig to
U.S. waters. Maersk USA’s remaining arguments regard-
ing the right to alter the final design and the fact that the
rig was not complete at the time of contracting do not
change the result. Maersk USA and Statoil signed a
contract and the schematics that accompanied that con-
tract could support a finding that the sale was of an
infringing article under § 271(a). The fact that Maersk
23 TRANSOCEAN v. MAERSK CONTRACTORS
USA, after the execution of the contract, altered the rig in
response to the GSF injunction is irrelevant to this in-
fringement analysis. The potentially infringing article is
the rig sold in the contract, not the altered rig that
Maersk USA delivered to the U.S.
Finally, we reject Maersk USA’s claim that the entire
apparatus must have been constructed and ready for use
in order to have been sold. Our precedent establishes
that a contract can constitute a sale to trigger infringe-
ment liability. See NTP, Inc. v. Research in Motion, Ltd.,
418 F.3d 1282, 1319 (Fed. Cir. 2005). A “sale” is not
limited to the transfer of tangible property; a sale may
also be the agreement by which such a transfer takes
place. Id. In this case, there was a contract to sell a rig
that included schematics. On summary judgment, we
must draw all justifiable inferences in favor of the non-
movant, Transocean. Transocean argues that these
schematics show sale of the patented invention. This is a
genuine issue of material fact sufficient to withstand
summary judgment.
We conclude that the district court erred in granting
summary judgment that there was no sale within the U.S.
in this case. As with the offer to sell, there remains a
dispute over whether the unmodified rig that was sold
was the patented invention, a question not reached by the
district court thus far.
C. Collateral Estoppel
We analyze collateral estoppel under the law of the
regional circuit. Applied Med. Res., Corp. v. U.S. Surgical
Corp., 435 F.3d 1356, 1359-60 (Fed. Cir. 2006). To apply
collateral estoppel to an issue, it must 1) be identical in
the two actions, 2) have been actually litigated in the
prior action, and 3) have been necessary to the judgment
TRANSOCEAN v. MAERSK CONTRACTORS 24
in the prior action. Next Level Commc’ns LP v. DSC
Commc’ns Corp., 179 F.3d 244, 250 (5th Cir. 1999). The
parties only dispute the first element, that the two issues
are identical in the two actions.
Transocean argues that the issues are not identical in
this case and the GSF litigation because there are differ-
ences in the facts and the legal standards. It argues that
there is a factual distinction between the cases because
Maersk USA is not implementing all parts of the injunc-
tion. Specifically, while Maersk USA installed the casing
sleeve that the GSF court found to avoid infringement, it
refuses to abide by other requirements of the injunction
such as the limited circumstances in which GSF could
remove the casing sleeve and periodic reporting to Trans-
ocean regarding the use of the rig. Transocean also
argues that the legal standards are different in an injunc-
tion determination and a determination of infringement.
Maersk USA responds that these differences are ir-
relevant because they do not relate to the holding by the
GSF court that the modified rig does not infringe. It
argues that the only facts relevant to collateral estoppel
in this case relate to the GSF court’s holding on infringe-
ment. Specifically, the court in the GSF litigation held
that this modification avoids infringement. Transocean
Offshore Deepwater Drilling, Inc., 2006 U.S. Dist. LEXIS
93408, at *34. Maersk USA argues that this is the identi-
cal issue in this case and that Transocean cannot now
argue that this modified design infringes.
We agree with Maersk USA that the infringement is-
sue in this case is identical to the one in GSF. Although
Transocean is correct that Maersk USA does not conform
to all aspects of the injunction, it does conform to the only
relevant condition, the noninfringing design. The other
portions of the injunction do not relate to infringement
25 TRANSOCEAN v. MAERSK CONTRACTORS
and do not change the fact that the modified rig does not
infringe. For example, the GSF injunction requires GSF
to report periodically on its use of the rig. Whether GSF
provides these reports only goes to its compliance with the
injunction, not whether the rig is infringing. In other
words, if GSF keeps the casing sleeve in place, but fails to
report, it will not change the noninfringing design to an
infringing one. By implementing this design, Maersk
USA is not infringing with the delivered rig. Trans-
ocean’s argument regarding the legal standards is simi-
larly unavailing. Although it is true that the GSF court
performed its analysis in the context of an injunction, it
determined that the modified rig did not infringe.
We hold that the district court did not err in holding
that Transocean is collaterally estopped from arguing
that the rig modified in accordance with the GSF injunc-
tion infringes any of the asserted claims. On remand,
Transocean may argue that the unmodified design (with-
out the casing sleeve) was the subject of the Maersk
USA/Statoil contract and that therefore there is infringe-
ment of the asserted claims based on both a sale and offer
to sell. Transocean, however, is estopped from arguing
infringement by the modified rig that Maersk USA actu-
ally delivered to the U.S.
D. Willfulness
“Proof of willful infringement . . . requires at least a
showing of objective recklessness.” In re Seagate Tech.,
LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc). The
patent owner “must show by clear and convincing evi-
dence that the infringer acted despite an objectively high
likelihood that its actions constituted infringement of a
valid patent.” Id. (citing Safeco Ins. Co. of Am. v. Burr,
551 U.S. 47 (2007)). This objective standard is a thresh-
old. Once met, the patentee must show that the infringer
TRANSOCEAN v. MAERSK CONTRACTORS 26
knew or should have known of the objectively high risk.
Seagate, 497 F.3d at 1371.
The district court granted summary judgment of no
willfulness. The court held that because Maersk USA
modified its design to conform to the GSF injunction, it
could not be “objectively reckless,” and thus could not be
willful as a matter of law. Willfulness Order at *9.
Transocean argues that the district court erred by
looking only to Maersk USA’s conduct after the modifica-
tion to conform to the GSF injunction. It asserts that at
the time of the contract between Statoil and Maersk USA,
Maersk USA knew of the patents-in-suit and acted objec-
tively recklessly by proceeding with the contract. It
points to the contract that allowed Maersk USA to make
changes to the rig pending the outcome of any “court or
administrative determinations that favour the validity or
infringement arguments of Transocean” related to Trans-
ocean’s patents, including the patents-in-suit. J.A. 7190-
91. Transocean argues that this shows that Maersk USA
knew of the patents-in-suit and ignored an objectively
high likelihood that it infringed. Transocean also argues
that an internal Maersk memorandum that discusses the
Transocean dual activity rig is evidence of copying that
supports its case for willful infringement.
Maersk USA argues that its decision to modify the rig
according to the GSF injunction shows that Maersk USA
purposely avoided any potential infringement and this
should preclude a finding of willfulness as a matter of
law. Regarding copying, Maersk USA argues that there is
no evidence that it copied a design that it knew was
patented and that, regardless, it took steps to avoid
infringement with the modified rig once the GSF court
entered its injunction.
27 TRANSOCEAN v. MAERSK CONTRACTORS
We agree with the district court that, as a matter of
law, there is no willfulness. Although the contract does
show that Maersk USA knew of Transocean’s patents, it
also shows intent to avoid infringement. Maersk USA
reserved the right to modify the rig in response to any
court proceeding that favored “the validity or infringe-
ment arguments of Transocean.” J.A. 7190. In fact,
Maersk USA did modify its rig once the court in the GSF
litigation issued an injunction defining a noninfringing
alternative. We hold, as a matter of law, that Maersk's
actions were not objectively reckless and thus affirm the
district court’s holding of no willfulness.
CONCLUSION
Because there remain genuine issues of material fact
regarding objective evidence of nonobviousness and undue
experimentation, the grant of summary judgment relating
to obviousness and enablement is reversed. Because the
contract between Statoil and Maersk USA is both an offer
to sell and a sale, we vacate the district court’s summary
judgment of noninfringement and remand for further
findings on infringement based on the rig that was the
subject of this contract. We affirm the district court’s
holding of summary judgment of no willfulness.
REVERSED-IN-PART, VACATED-IN-PART,
AFFIRMED-IN-PART, and REMANDED
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Case: 13-10744 Document: 00512616699 Page: 1 Date Filed: 05/02/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
Fifth Circuit
FILED
No. 13-10744 May 2, 2014
Summary Calendar
Lyle W. Cayce
Clerk
NATHANIEL HOWARD THOMAS,
Plaintiff-Appellant
v.
UNITED STATES OF AMERICA,
Defendant-Appellee
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 4:12-CV-5
Before REAVLEY, JONES, and PRADO, Circuit Judges.
PER CURIAM: *
Nathanial Howard Thomas, former federal prisoner # 07052-078 and
now Texas prisoner # 1836945, proceeding pro se and in forma pauperis, filed
a medical malpractice suit against the United States under the Federal Tort
Claims Act (FTCA), 28 U.S.C. § 2671 et seq. He alleged that the federal prison’s
medical staff failed to diagnose or treat his glaucoma, which resulted in
blindness in one eye and partial blindness in the other. State law controls the
* 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: 13-10744 Document: 00512616699 Page: 2 Date Filed: 05/02/2014
No. 13-10744
liability for medical malpractice under the FTCA. Ayers v. United States, 750
F.2d 449, 452 n.1 (5th Cir. 1985). Under Texas law, a medical-malpractice
plaintiff must prove: (1) the physician’s duty to act according to an applicable
standard of care, (2) a breach of that standard of care, (3) injury, and (4)
causation. Quijano v. United States, 325 F.3d 564, 567 (5th Cir. 2003). Expert
testimony is generally required to prove the applicable standard of care. Id.
An expert is not necessary where “the mode or form of treatment is a matter of
common knowledge or is within the experience of the layman.” Hood v.
Phillips, 554 S.W.2d 160, 165-66 (Tex. 1977).
The district court granted summary judgment against Thomas on the
malpractice claim based on his failure to designate an expert witness. We
review de novo a district court’s grant of summary judgment. Nickell v. Beau
View of Biloxi, L.L.C., 636 F.3d 752, 754 (5th Cir. 2011). Contrary to his
argument that the diagnosis and treatment for glaucoma is common
knowledge, Thomas was required to present expert testimony to establish the
applicable standard of care. See Hood, 554 S.W.2d at 165-66. As it is
uncontested that Thomas did not designate an expert witness to testify on his
behalf, summary judgment was appropriate. See Quijano, 325 F.3d at 567.
Thomas moved for appointment of counsel, asserting that he was unable
to proceed pro se because he was incarcerated. Finding no exceptional
circumstances, the district court denied the motion, and it later denied a
renewed request when summary judgment was granted. On appeal, Thomas
has not shown that the district court abused its discretion in denying his
requests for the appointment of counsel. See Cupit v. Jones, 835 F.2d 82, 86
(5th Cir. 1987).
AFFIRMED.
2
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423 F.2d 419
Angelo GUERRINO, Philip Deodati, Dr. A. P. Engemi, Albert J.Guerra, E. B. Fleming Company, Appellants,v.OHIO CASUALTY INSURANCE COMPANY.
No. 17889.
United States Court of Appeals, Third Circuit.
Argued Jan. 8, 1970.Decided March 24, 1970.
Clarence L. Walker, Philadelphia, Pa., (William R. Pomerantz, Philadelphia, Pa., on the brief), for appellants.
Joseph Head, swartz, Campbell & Detweiler, Philadelphia, Pa., for appellee.
Before BIGGS, VAN DUSEN and ALDISERT, Circuit Judges.
OPINION OF THE COURT
BIGGS, Circuit Judge.
1
The court below granted a motion made by the defendant Ohio Casualty Insurance Company for summary judgment. The complaint alleges that one Fleming, the president and active manager of the corporate plaintiff E. B. Fleming Company, unlawfully and fraudulently disposed of assets of Fleming Company and that Ohio Casualty Insurance Company bonded Fleming Company against losses 'through any dishonest (,) fraudulent or criminal act of any of its employees * * *'. A similar prior suit, names of the plaintiffs aside, was brought in October 1964 against Ohio Casualty by Messrs. Forman and Collins as custodians appointed by the Pennsylvania Securities Commission for the Fleming Company at C.A. No. 36641. An answer was filed by Ohio Casualty which, inter alia, denied that Forman and his fellow custodian had legal capacity to bring the suit. Judge Kraft dismissed the action on the ground stated. No appeal was taken.
2
The only difference between the prior action and the suit at bar is the identity of the parties, the individual plaintiffs in the instant case being stockholders of Fleming Company. Interrogatories taken in the prior case were made part of the record in the suit at bar. Judge Kirkpatrick, presiding in the case at bar, held that where there is identity of issue and common questions of fact and law a court in a later suit may use the interrogatories taken in an earlier action. Baldwin-Montrose Chemical Co. v. Rothberg, 37 F.R.D. 354, 356 (S.D.N.Y.1964). See Rules 26(d) and 42(a), Fed.R.Civ.Proc., 28 U.S.C. There was no objection by any party to the course followed by Judge Kirkpatrick in this regard. Judge Kirkpatrick granted Ohio Casualty's motion for summary judgment on the ground that the suit was barred by limitation provisions. The appeal at bar followed.
3
Jurisdiction in the case at bar is alleged to be based upon diversity of citizenship and jurisdictional amount but various important jurisdictional allegations are wanting and serious issues of conflict of laws lurk in the record apparently unheeded by the parties.
4
Section 1332(a), Title 28, U.S.C., provides that United States district courts shall have original jurisdiction in all civil actions where the matter in controversy 'exceeds the sum or value of $10,000, exclusive of interest and costs,' and is between citizens of different States or citizens of a State and foreign States and citizens thereof. There is no sufficient jurisdictional allegation as to the amount in controversy. The complaint also fails to allege that the individual plaintiffs Guerrino, Deodati, and Guerra are 'citizens' of the Commonwealth of Pennsylvania or that the plaintiff Engemi is a citizen of New Jersey. The individual plaintiffs are described as residents, not as 'citizens'. Allegations of citizenship are required to meet the jurisdictional requirement. See Wolfe v. Hartford Life Insurance Co.,148 U.S. 389, 13 S.Ct. 602, 37 L.Ed. 493 (1893); Realty Holding Co. v. Donaldson, 268 U.S. 398, 399, 45 S.Ct. 521, 69 L.Ed. 1014 (1925).
5
The complaint also states that the individual plaintiffs are stockholders of the plaintiff Fleming Company, 'a corporation duly authorized and existing under the laws of the Commonwealth of Pennsylvania' but there is no allegation as required by Section 1332(c), 28 U.S.C., as to where the Fleming Company 'has its principal place of business'. Section 1332(c) provides that for the purposes of that section a corporation shall be deemed to be a citizen of the State in which it is incorporated and where it 'has its principal place of business; * * *'. An allegation as to where the Fleming Company has its principal place of business is a jurisdictional requirement. The complaint also alleges that the defendant Ohio Casualty is an Ohio corporation, authorized to do business in the Commonwealth of Pennsylvania and that it 'does not have its principal place of business within the state of Pennsylvania.' This would be a sufficient jurisdictional allegation of 'principal place of business' only if all of the plaintiffs were 'citizens' of Pennsylvania. See Form 2(A) Fed.R.Civ.Proc., 28 U.S.C. (Supp. IV); 2A Moore's Federal Practice, P8.10, at 1657-58. Cf. Cherry v. Alcoa Steamship Co., 202 F.Supp. 663, 664 (D.Md.1962). However, as stated above, the complaint does not provide an adequate basis for ascertaining the citizenship of the plaintiffs. See Wymard v. McCloskey & Co., 342 F.2d 495, 497 (3 Cir. 1965); McCurdy v. Greyhound Corp., 346 F.2d 224, 225, n. 1. (3 Cir. 1965).
6
We find nothing in the record which would aid the court in establishing the jurisdictional requirements referred to.
7
The complaint also alleges that the individual plaintiffs are the 'principal shareholders' of the plaintiff Fleming Company. It must be assumed from this statement that there are other shareholders who do not come within the category of 'principal shareholders'. The complaint on its face is apparently a class action, a stockholders derivative suit albeit there is no allegation in the complaint that it was brought for the benefit of all the stockholders. This omission is not vital, however, for the cause of action belongs to FlemingCompany and any recovery will be for the benefit of that corporation.
8
We point out that the individual plaintiffs allege that they bring the instant suit 'individually' as well as stockholders. But the cause of action belongs to Fleming Company, and it may maintain the instant suit, if it has the capacity, and on the present record there is no showing that the stockholder plaintiffs have any right to recover as individuals. Cf. Kelly v. Thomas, 234 Pa. 419, 83 A. 307 (1912). In a stockholders derivative action the corporation is ordinarily an indispensable party. Ross v. Bernhard, 396 U.S. 531, 90 S.Ct. 733, 24 L.Ed.2d 729, decided February 2, 1970; City of Davenport v. Dows, 18 Wall. 626, 627, 21 L.Ed. 938 (1874); Venner v. Great Northern Rwy., 209 U.S. 24, 32, 28 S.Ct. 328, 52 L.Ed. 666 (1908); Commonwealth Title Insurance & Trust Company v. Seltzer, 227 Pa. 410, 418-419, 76 A. 77, 80 (1910). But this principle is necessarily applicable only if the corporation has the capacity to maintain a suit. It is far from clear on the present record that Fleming Company is still in existence or, if it is not, that it retains the capacity, by virtue of Pennsylvania law, statute or otherwise, to maintain this case. If it does not possess this capacity the stockholder plaintiffs may perhaps maintain an action substantially similar to that at bar but any recovery would not be for their benefit as individuals but for the benefit of all stockholders. In this connection we point out that there is some evidence in the record which suggests that Fleming Company may no longer be in existence and may not have the capacity to maintain the suit at bar. If so, other diversity questions may arise in respect to the citizenship of individual stockholders. These issues will require examination and perhaps determination on remand.
9
We point out further that there has been no adherence, insofar as we are able to ascertain from the complaint or from any part of the record, to the provisions of Rule 23, Fed.R.Civ.Proc., 28 U.S.C., 'Class Actions'.
10
There also has been a failure to comply with Rule 23.1, Fed.R.Civ.Proc., 28 U.S.C., in that there are no allegations or proof in the record that the individual plaintiffs, or any of them, were shareholders in the Fleming Company at the time of the transactions of which they complain or that their shares devolved on them or any of them by operation of law, and that the action is not a 'collusive one' to confer jurisdiction on a court of the United States which it would not otherwise have.
11
Insofar as the record of the present suit shows (or that of the prior action at C.A. No. 36641) there was no request for trial by jury. See again Ross v. Bernhard, supra. Moreover, apparently the individual plaintiff stockholders' 'initial claim to speak for the corporation * * *' was not tried by the Judge. See id. supra, at 532, 90 S.Ct. at 735, and the decision in the trial court in the cited case, 275 F.Supp. 569 (S.D.N.Y.1967). There has been no determination in the instant case as to whether the suit at bar is fundamentally legal rather than equitable though we note that a money judgment is asked. Cf. Dairy Queen, Inc. v. Wood, 369 U.S. 469, 82 S.Ct. 894, 8 L.Ed.2d 44 (1962). In this connection and in the light of Ross, can it be said there was a knowing waiver of trial by jury, assuming trial by judge not to be required? These are issues that the court below must inquire into upon remand. We cannot and do not presently pass on these questions, assuming arguendo that they or any of them are pertinent to the issues in this case.
12
The parties have approached this case as if Klaxon Co. v. Stentor,313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), and Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), had never been written. We are here concerned with the construction of a contract, a bond. Cf. Silvestri v. Slatowski, 423 Pa. 498, 501, 224 A.2d 212, 215 (1966), and McNair v. American Insurance Co., 210 Pa.Super. 107, 232 A.2d 64 (1967). An examination of the bond does not show where it was executed or where it was delivered, and nothing in the record aids us in determining what may be a complex question of conflict of laws. Some of the issues presented can be more appropriately disposed of in the court below than here. See Section 1653, Title 28, U.S.C. But there are also preliminary determinations which should be made in the court below rather than here. We cannot presently deal with the merits of the controversy.
13
The judgment of the court below will be vacated and the case remanded with direction to proceed in conformity with this opinion.
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Case: 09-50594 Document: 00511027520 Page: 1 Date Filed: 02/12/2010
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
February 12, 2010
No. 09-50594
Conference Calendar Charles R. Fulbruge III
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee
v.
MAURILIO VERGARA-MARTINEZ,
Defendant-Appellant
Appeal from the United States District Court
for the Western District of Texas
USDC No. 6:09-CR-61-1
Before GARZA, DENNIS, and ELROD, Circuit Judges.
PER CURIAM:*
The attorney appointed to represent Maurilio Vergara-Martinez has
moved for leave to withdraw and has filed a brief in accordance with Anders v.
California, 386 U.S. 738 (1967). Vergara-Martinez has not filed a response. Our
independent review of the record and counsel’s brief discloses no nonfrivolous
issue for appeal. Accordingly, counsel’s motion for leave to withdraw is
GRANTED, counsel is excused from further responsibilities herein, and the
APPEAL IS DISMISSED. See 5 TH C IR. R. 42.2.
*
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.
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9 F.3d 1553
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.Daniel N. RIOS, Petitioner-Appellant,v.Mark HENRY, Warden, et al., Respondents-Appellees.
No. 93-55061.
United States Court of Appeals, Ninth Circuit.
Submitted Nov. 1, 1993.*Decided Nov. 9, 1993.
1
Before: SCHROEDER, D.W. NELSON and THOMPSON, Circuit Judges
2
MEMORANDUM**
3
Daniel N. Rios appeals pro se the district court's dismissal without prejudice of his 28 U.S.C. § 2241 petition for writ of habeas corpus seeking removal of an Immigration and Naturalization Service ("INS") detainer against him. We have jurisdiction under 28 U.S.C. § 1291. We review the district court's dismissal de novo, see United States v. McConney, 728 F.2d 1195, 1201 (9th Cir.1984) (en banc), cert. denied, 469 U.S. 824 (1984), and we affirm.
4
Rios contends that because the INS's detainer increased his security classification and rendered him ineligible for many prison programs, and because the INS did not commence deportation proceedings "as expeditiously as possible," his rights have been violated. We disagree. The crux of Rios's petition is that the INS detainer increased his security classification so that he is ineligible to participate in prison rehabilitative programs.1 We agree with the district court that until Rios exhausts his federal administrative remedies, any action challenging his prison classification is premature.2 Cf. Tucker v. Carlson, 925 F.2d 330, 332 (9th Cir.1990); Little v. Hopkins, 638 F.2d 953 (6th Cir.1981).
The district court's judgment is
5
AFFIRMED.
*
The panel finds this case suitable for decision without oral argument. Fed.R.App.P. 34(a); 9th Cir.R. 34-4
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
1
We note, however, that Rios does not appear to have a constitutional right to the prison services which he alleges he was denied because of his higher security classification. See Hernandez v. Johnston, 833 F.2d 1316, 1318 (9th Cir.1987) (no right to a particular security classification or to prison rehabilitative services); Bauman v. Arizona Dep't of Corrections, 754 F.2d 841, 844 (9th Cir.1985) (no constitutional right to work furlough classification); Hoptowit v. Ray, 682 F.2d 1237, 1254-55 (9th Cir.1982) (no general right to rehabilitation)
2
The U.S. Attorney argues that the INS is not the proper party to this action. Instead, appellee argues Rios should have named the Executive Office of Immigration Review (EOIR). Because we may affirm on any ground supported by the record, we need not address this issue. See Marino v. Vasquez, 812 F.2d 499, 508 (9th Cir.1987). We further decline to address the question of whether mandamus is the appropriate vehicle to be pursued in this situation because we agree with the district court that Rios is not entitled to any relief on the record. See Tatum v. Christensen, 786 F.2d 959, 963 & n. 4 (9th Cir.), overruled on other grounds, Wallace v. Christensen, 802 F.2d 1539, 1554 & n. 10 (9th Cir.1986) (en banc)
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FILED
NOT FOR PUBLICATION OCT 15 2012
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
MORENA GUADALUPE MELGAR, No. 10-71866
Petitioner, Agency No. A072-232-417
v.
MEMORANDUM *
ERIC H. HOLDER, Jr., Attorney General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted October 9, 2012 **
Before: RAWLINSON, MURGUIA, and WATFORD, Circuit Judges.
Morena Guadalupe Melgar, a native and citizen of El Salvador, petitions for
review of the Board of Immigration Appeals’ (“BIA”) order denying her motion to
reconsider the BIA’s prior decision dismissing her appeal and denying her motion
to remand. Our jurisdiction is governed by 8 U.S.C. § 1252. We review for abuse
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
of discretion the denial of a motion to reconsider. Valeriano v. Gonzales, 474 F.3d
669, 672 (9th Cir. 2007). We deny in part and dismiss in part the petition for
review.
The BIA did not abuse its discretion in denying Melgar’s motion to
reconsider where she did not identify any error of law or fact in the BIA’s previous
determinations that she did not qualify for cancellation of removal under 8 U.S.C.
§ 1229b(a), and that her motion to remand failed to show that the evidence she had
submitted was not available at the time of her hearing before the immigration
judge. See 8 C.F.R. § 1003.2(b)(1), (c)(1); Romero-Ruiz v. Mukasey, 538 F.3d
1057, 1063 (9th Cir. 2008) (“The formal requirements of a motion to remand and a
motion to reopen are the same.”).
We lack jurisdiction to review Melgar’s contentions that 8 U.S.C. § 1254a(e)
does not apply to individuals seeking cancellation of removal under 8 U.S.C.
§ 1229b(a) and that the agency miscalculated her seven years of continuous
residence under 8 U.S.C. § 1229b(a)(2) because she did not raise these claims
before the BIA. See Barron v. Ashcroft, 358 F.3d 674, 678 (9th Cir. 2004)
(explaining that this court lacks jurisdiction to review contentions not raised before
the agency).
PETITION FOR REVIEW DENIED in part; DISMISSED in part.
2 10-71866
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United States Court of Appeals
For the Eighth Circuit
___________________________
No. 12-1356
___________________________
United States of America,
lllllllllllllllllllll Plaintiff - Appellee,
v.
Frederick Cooper,
lllllllllllllllllllll Defendant - Appellant.
____________
Appeal from United States District Court
for the Eastern District of Arkansas - Little Rock
____________
Submitted: September 5, 2012
Filed: September 14, 2012
[Unpublished]
____________
Before LOKEN, BOWMAN, and COLLOTON, Circuit Judges.
____________
PER CURIAM.
Frederick Cooper appeals the district court’s1 denial of his 18 U.S.C.
§ 3582(c)(2) motion to reduce his sentence under Amendment 750 to the United
1
The Honorable Susan Webber Wright, United States District Judge for the
Eastern District of Arkansas.
States Sentencing Guidelines. We conclude the district court did not abuse its
discretion in declining to reduce the sentence after properly considering the danger
that a reduction in Cooper’s prison term might pose to the community. See United
States v. Burrell, 622 F.3d 961, 963-64 (8th Cir. 2010); see also U.S.S.G. § 1B1.10,
comment. (n.1(B)(ii)). Accordingly, we affirm the judgment of the district court, and
we grant counsel’s motion to withdraw.
______________________________
-2-
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107 F.3d 865
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.John Wayne BROWN, Petitioner-Appellant,v.J.D. NETHERLAND, Warden, Respondent-Appellee.
No. 96-7068.
United States Court of Appeals, Fourth Circuit.
Submitted Feb. 13, 1997.Decided Feb. 26, 1997.
John Wayne Brown, Appellant Pro Se.
Katherine P. Baldwin, OFFICE OF THE ATTORNEY GENERAL OF VIRGINIA, Richmond, VA, for Appellee.
Before WIDENER and HAMILTON, Circuit Judges, and BUTZNER, Senior Circuit Judge.
PER CURIAM:
1
Appellant appeals from the district court's order denying relief on his petition filed under 28 U.S.C. § 2254 (1994), amended by Antiterrorism and Effective Death Penalty Act of 1996, Pub.L. No. 104-132, 110 Stat. 1214. We have reviewed the record and the district court's opinion and find no reversible error. Accordingly, we deny a certificate of appealability and dismiss on the reasoning of the district court. Brown v. Netherland, No. CA-95-715-AM (E.D.Va. May 22, 1996). We deny Appellant's motions for the appointment of counsel, objecting to the terms of the Prison Litigation Reform Act, for compliance with prior court order, and requesting this court to order the institution where he is incarcerated to follow the procedures stated in this court's prior order.
2
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.
DISMISSED
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TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-05-00350-CR
Jonathan Shawn Goosby, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF BELL COUNTY, 27TH JUDICIAL DISTRICT
NO. 55829, HONORABLE JOE CARROLL, JUDGE PRESIDING
M E M O R A N D U M O P I N I O N
Jonathan Shawn Goosby seeks to appeal from a judgment of conviction for burglary
of a habitation. The trial court has certified, and the record confirms, that this is a plea bargain case
and Goosby has no right of appeal. See Tex. R. App. P. 25.2(a)(2). The appeal is dismissed. See
id. rule 25.2(d).
__________________________________________
W. Kenneth Law, Chief Justice
Before Chief Justice Law, Justices Patterson and Puryear
Dismissed for Want of Jurisdiction
Filed: June 23, 2005
Do Not Publish
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15 B.R. 514 (1981)
In re Robert Kenneth RYAN, Debtor.
Stephen H. SACHS, Attorney General of Maryland, to the use of the State of Maryland, Plaintiff,
v.
Robert Kenneth RYAN, Debtor,
and
Neal S. Melnick, Trustee, Defendants.
Bankruptcy No. 80-2-0347-L, Adv. No. 80-0448.
United States Bankruptcy Court, D. Maryland.
November 20, 1981.
*515 Charles A. Castle, Elliot, Nicklas & Castle, Frederick, Md., for debtor.
James J. Doyle, III, Asst. Atty. Gen., Pikesville, Md., for plaintiff.
Neal S. Melnick, Weinberger & Weinstock, Baltimore, Md., Trustee.
MEMORANDUM OPINION AND ORDER
HARVEY M. LEBOWITZ, Bankruptcy Judge.
This case calls upon the Court to consider whether action by the State of Maryland seeking to establish a forfeiture pursuant to Md.Ann.Code art. 27, § 297 (Supp.1981) in the Circuit Court for Frederick County is stayed with respect to individuals who seek relief in a Bankruptcy Court under the Bankruptcy Reform Act of 1978, Pub.L.No. 95-508, 92 Stat. 2549 (1978) (now codified at 11 U.S.C. §§ 101-1330 (Supp. IV 1980)) (the "Code"). After consideration of the memoranda of law submitted by the parties and the argument of counsel in open court, this Court concludes that any action by the State to enforce a forfeiture in another forum against either the Debtor and his property or the property of the estate is stayed until such time as a Bankruptcy Court permits the action to proceed.
On October 3, 1980, the Attorney General of Maryland acting on behalf of the State of Maryland filed a "Complaint for Declaratory Judgment" seeking a judgment pursuant to 28 U.S.C. § 2201 (1976) that his pending action for forfeiture is not stayed by § 362(a) of the Code.[1] The Attorney *516 General urged in the alternative that the Court declare that if a forfeiture action is stayed, it is nonetheless excepted from such stay by sections 362(b)(1) or 362(b)(4) of the Code.[2] At trial, the parties entered into a stipulation of fact, which has been summarized below and upon which this Court has based its opinion.[3]
I.
On June 11, 1979, a Maryland State Policeman entered a hotel room in Frederick, Maryland, where he observed a water pipe and a bag of what he suspected to be marijuana. As a result of these observations, the three occupants of the room were arrested, one of whom was the Debtor, Robert Kenneth Ryan. Subsequently, the officer obtained a search warrant, and returned to search thoroughly the hotel room. Ultimately the State Police seized from the hotel room or its occupants a quantity of controlled dangerous substances and several items characterized as "drug paraphernalia." In the course of the arrest, the State Police came into possession of $5,562.00 in United States coin and currency. The Attorney General and the Debtor differ as to how the State Police came into possession of the money.[4] The State Police contend that the officer seized the money from the hotel room at the time of the Debtor's arrest. Ryan, on the other hand, testified at a bond hearing in the District Court for Frederick County that the money had been voluntarily surrendered by him to the property officer at the Frederick State Police Barracks on the date of his arrest pursuant to a request by that officer. Ryan further contends that testimony in the District Court demonstrated that the money was the proceeds of a sale of a residential dwelling which had been built by the Debtor's construction company.
Thereafter, Ryan was indicted and found guilty on various criminal charges among which were several involving possession of controlled dangerous substances with the intent to distribute. On March 7, 1980, the Debtor received a suspended sentence and was placed on two-year probation. On *517 March 13, 1980, Ryan filed a bankruptcy petition in this Court seeking relief under Chapter 7 of the Code.[5] The Attorney General then brought an action in the Circuit Court for Frederick County on June 3, 1980, seeking to have the money declared forfeited to the State. The Circuit Court action names both the Debtor and the coin and currency as parties defendant. Ryan filed an answer in the Circuit Court and suggested that any action in that court was stayed by the filing of the bankruptcy petition. Subsequently the Attorney General turned to this court for a declaration of the State's rights.
II.
The first contention by the Attorney General is that the state court forfeiture action is not stayed by § 362(a) of the Code. This contention is derived from the provision of the state statute that "all rights, title and interest in and to the money or currency shall immediately vest in . . . the State" upon the seizure of money that is found within "close proximity to contraband controlled dangerous substances or controlled paraphernalia, or which otherwise has been used or intended for use in connection with the illegal manufacture, distribution, dispensing or possession of controlled dangerous substances or controlled paraphernalia." Md.Ann.Code art. 27, § 297(a)(6) (Supp. 1981). The Attorney General argues that because the State's interest vested upon the arrest, the Debtor had no interest in the funds in question at the time he later filed his petition for relief under the Bankruptcy Code. Based upon this premise, the Attorney General concludes that no interest in the money passed into the bankruptcy estate pursuant to § 541(a) of the Code, and that therefore the State is not stayed by § 362(a) from prosecuting its forfeiture action in the state courts.
The Court disagrees with the conclusion that immediately prior to the filing of the bankruptcy petition the Debtor did not have an interest that became property of the estate by force of § 541(a). It is axiomatic bankruptcy law that the scope of § 541(a) is broad and all-embracing. In re Ford, 3 B.R. 559, 568-70 (Bkrtcy., D.Md. 1980), aff'd per curiam sub nom. Greenblatt v. Ford, 638 F.2d 14 (4th Cir. 1981). By its express terms, § 541(a)(1) brings into the estate "all legal or equitable interests of the debtor in property as of the commencement of the case." Once the Debtor's interest in property becomes property of the estate, subsections 2, 3, and 4 of § 362(a) effectively stay any interference with the property without prior relief from the stay in the Bankruptcy Court under § 362(d). Cf. In re Moore, 5 B.R. 449 (Bkrtcy., D.Md.1980).
It is manifest upon the face of the state forfeiture statute in question here that the Debtor retained some legal or equitable interest in the funds at the time the bankruptcy petition was filed. The statute establishes a procedure whereby a petition for forfeiture must be filed in the state courts and a show cause order served in accordance with the usual provisions for service of process in a civil proceeding. Md. Ann.Code art. 27, § 297(b) (Supp.1981). This was in fact the procedure adopted by the Attorney General in this instance. Inasmuch as arbitrary deprivations of property are proscribed by the United States Constitution, Fuentes v. Shevin, 407 U.S. 67, 80-82, 92 S.Ct. 1983, 1994-1995, 32 L.Ed.2d 556 (1972), the Debtor undoubtedly has the right to establish in the forfeiture proceeding that the money in question falls outside the scope of the state statute.[6] Although *518 the actual recovery of the money by the Debtor may be contingent and dependant upon his future success at a hearing on the merits of the forfeiture action, the right to claim the money after seizure, recognized by the provisions of the state statute, is an interest in property that becomes part of the bankruptcy estate.[7] Were the claim not an asset of the estate, and were the Debtor to prevail in the forfeiture action, the Debtor would achieve a windfall at the expense of his creditors predicated upon the fortuity of a pre-bankruptcy arrest. Section 362(a), therefore, stays any attempt by the State to foreclose the estate's interest in the funds in question.
Furthermore, the forfeiture action is also stayed in part by § 362(a)(1). The Debtor is a named party defendant in the forfeiture proceeding. The "commencement or continuation . . . of a judicial . . . proceeding against the debtor that was or could have been commenced" prior to the bankruptcy petition is stayed by the express terms of § 362(a)(1). The prosecution of an action in which the debtor is a named party defendant is perhaps the simplest example of a judicial proceeding stayed by the intervention of bankruptcy proceedings.
The Court concludes therefore, that any action by the State to enforce a forfeiture is stayed by the force of § 362(a). This conclusion is consistent with the overall scheme of the Bankruptcy Code that makes the Bankruptcy Court the forum of first resort with respect to action against the Debtor, his property, or property of the estate.
III.
The Court is also unpersuaded by the Attorney General's alternative contention that a forfeiture proceeding is excepted from the § 362(a) stay. For the reasons that appear below, the Court concludes that a forfeiture proceeding is neither a criminal action or proceeding within the meaning of § 362(b)(1), nor an action by a governmental unit seeking enforcement of its police or regulatory powers within the meaning of § 362(b)(2).
Section 362(b)(1) provides for a broad exception to all the provisions of § 362(a) for the "commencement or continuation of a criminal action or proceeding against the debtor." 11 U.S.C. § 362(b)(1) (Supp. IV 1980) (emphasis added). This exception is a manifestation of Congressional intent that the "bankruptcy laws are not [to become] a haven for criminal offenders." H.R.Rep. No.95-595, 95th Cong., 1st Sess. 342 (1977), U.S.Code Cong. & Admin.News 1978, p. 5787, 6299. Nonetheless, it is clear that it is the substance of the proceeding rather than its form that governs the applicability of the § 362(b)(1) exception. The equitable powers of Bankruptcy Courts have long been "invoked to the end that fraud will not prevail, that substance will not give way to form, [and] that technical considerations will not prevent substantial justice from being done." Pepper v. Litton, 308 U.S. 295, 304-05, 60 S.Ct. 238, 244-245, 84 L.Ed. 281 (1939). Thus, creditor action to institute criminal proceedings under "bad check" statutes has been held to be stayed despite the exception because the creditor was not motivated by an interest in "protecting society by punishment for violation of the criminal laws." In re Caldwell, 5 B.R. 740, 741-42 (Bkrtcy., W.D.Va.1980).
Careful analysis of the nature of a forfeiture proceeding indicates that such an action is not a criminal proceeding against the debtor. Notwithstanding the fact that the Debtor has been named as a defendant *519 in the state court forfeiture action, Maryland law regards forfeiture as a civil in rem proceeding distinct from the criminal proceeding against the individual from whom the res was seized. State v. Greer, 263 Md. 692, 694, 284 A.2d 233, 235 (1971). The Maryland Court of Appeals has emphasized this distinction by pointing out that forfeiture is not an aspect of the punishment imposed by the State for an individual's criminal offense. Prince George's County v. Blue Bird Cab Co., 263 Md. 655, 658-59, 284 A.3d 203, 204-05 (1971). The mere fact that an action contains allegations of the Debtor's prior criminal conduct does not make the § 362(b)(1) exception applicable as a matter of federal bankruptcy law. 2 Collier on Bankruptcy ¶ 362.05[1] (15th ed. 1981). This is particularly the case, when as in this instance, the State Courts stead-fastly maintain the position that the proceeding is not in the nature of a criminal prosecution.
Moreover, to the extent that a forfeiture action is a proceeding against property rather than one against the debtor, it can never come within the § 362(b)(1) exception. Section 362(b)(1) is by its terms applicable only with respect to criminal proceedings "against the debtor."[8] The money in question here has been named by the State as an in rem defendant in the forfeiture action. Such a proceeding is not excepted from the broad scope of the automatic stay.
Likewise, a forfeiture proceeding is not within the exception set out in § 362(b)(4) for "the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power." First, this is a limited exception expressly applicable only to actions against the debtor stayed by § 362(a)(1) rather than his property or property of the estate stayed under other subsections of § 362(a). The stay of action against property of the estate imposed by subsections (2), (3), and (4) of § 362(a) is thus uneffected by the § 362(b)(4) exception. A forfeiture action is at least in part an action against property. Second, a forfeiture proceeding is not the type of governmental action contemplated by § 362(b)(4). This subsection "is intended to be given a narrow construction in order to permit governmental units to pursue actions to protect the public health and safety and not to apply to actions by a governmental unit to protect a pecuniary interest in property of the debtor or property of the estate." 124 Cong.Rec. H11,092 (daily ed. Sept. 28, 1978) (emphasis added) (remarks of Rep. Edwards). The exception was intended to encompass only governmental action against the Debtor necessary to "prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws." H.R. Rep.No.95-595, 95th Cong., 1st Sess. 343 (1977), U.S.Code Cong. & Admin.News 1978, p. 6299. A forfeiture proceeding is not governmental action seeking to vindicate or secure the public welfare. Accordingly, § 362(b)(4) is inapplicable.
IV.
The decision reached here is also consistent with sections of the Code not cited by either party. Section 726 provides for the order of distribution of the property of the estate in a Chapter 7 case. Fourth in order of payment is "any allowed claim, whether secured or unsecured, for any fine, penalty, or forfeiture, or for multiple, exemplary, or punitive damages, arising before the earlier of the order for relief or the appointment of a trustee, to the extent that such fine, penalty, forfeiture, or damages are not compensation for actual pecuniary loss suffered by the holder of such claim." 11 U.S.C. § 726(a)(4) (Supp. IV 1980) (emphasis added). In addition, § 724(a) provides that the Chapter 7 Trustee may avoid liens securing a claim of the type specified in § 726(a)(4). By relegating such claims to the fourth position for purposes of distribution, *520 it is clear that they are to be treated as inferior and subordinate to the claims of the unsecured creditors. Indeed, a § 726(a)(4) claim is superior in order of distribution only to postpetition interest and the Debtor's right to receive any surplus. The intent of Congress was that unsecured creditors should be protected from "the debtor's wrongdoing." H.R.Rep. No.95-595, 1st Sess. 382 (1977). Thus, the Code expressly provides that a forfeiture is to be considered as a subordinate claim against the estate.
Despite the subordinate status of a forfeiture claim in the order of distribution, § 523(a)(7) provides that such a claim is expressly excepted from a discharge granted under Chapter 7 of the Code.[9] In addition, a § 523(a)(7) claim is not one specified by § 523(c) for which a complaint must be filed prior to the granting of a discharge and within a time set by the Court. See In re Leonard, 12 B.R. 91, 92 n. 2 (Bkrtcy., D.Md.1981). The effect of these sections read together is to provide that to the extent that a claim for forfeiture is not satisfied out of the assets of the bankruptcy estate, it is uneffected by the Debtor's discharge. Although the Debtor's exemptions are free from the State's claim under § 522(c), the State may look to the Debtor's post-petition property for payment of the forfeited amount. 11 U.S.C. § 522(c) (Supp. IV 1980).[10] Thus, a debtor is unable to use the Bankruptcy Code to evade penalties visited upon him by society. These provisions are a reflection of Congressional policy that bankruptcy should not shield an individual from the consequences of his wrongful behavior.
Congress has devised in the Bankruptcy Code a comprehensive scheme for sorting out the competing claims and interests present in bankruptcy proceedings. This scheme implements a fresh financial start for the debtor while at the same time accommodating the need for government to control reprehensible conduct. To permit forfeiture actions to proceed unimpeded by a bankruptcy petition, however, would impair the objective of a swift and orderly disposition of the Debtor's estate pursuant to the Code under the exclusive jurisdiction of the Bankruptcy Court.
V.
Should the State prevail in its forfeiture action, the Bankruptcy Code would operate to convert its in rem rights against money into both a claim against the bankruptcy estate and a nondischargeable claim against the Debtor. Therefore, immediately following the filing of a bankruptcy petition, a forfeiture action is in effect converted to little more than a proceeding to establish the nondischargeability of a claim under § 523(a)(7). Whatever the outcome of the forfeiture action, the bankruptcy estate becomes vested by the Code with all ownership rights to the money. The Congress has made a conscious judgment to treat an assertion of forfeiture rights as a claim against the Debtor. Such an election is a matter of policy to be decided by Congress by virtue of its power under the bankruptcy clause. The judgment of Congress that a *521 State's forfeiture action ought to be transformed into a nondischargeable claim against the Debtor and his estate may be somewhat unexpected, but it is at the same time consistent with the Congressional objective that the bankruptcy estate not be depleted by the Debtor's previous wrongful conduct.
The Attorney General has not sought relief from the automatic stay as part of this proceeding. Thus, any modification of the stay under § 362(d) of the Code is improper at this time. Nor has the Attorney General sought to institute the forfeiture action in this Court, and thus the Court is not called upon to consider the merits of whether the money should be forfeited. Accordingly, judgment can be entered only upon the Attorney General's Complaint for Declaratory Judgment and it would be inappropriate for the Court to grant any other relief at this time.
For the aforegoing reasons, it is this 20th day of November, 1981, by the United States Bankruptcy Court for the District of Maryland,
ORDERED, ADJUDGED, AND DECREED that the forfeiture proceeding pending in the Circuit Court for Frederick County under Article 27, § 297 of the Annotated Code of Maryland is stayed pursuant to 11 U.S.C. § 362(a) (Supp. IV 1980) upon the filing of a petition for relief in a United States Bankruptcy Court; and it is
FURTHER ORDERED, ADJUDGED, AND DECREED that such a forfeiture proceeding is not excepted from the automatic stay imposed by § 362(a) under either 11 U.S.C. § 362(b)(1) (Supp. IV 1980) or 11 U.S.C. § 362(b)(4) (Supp. IV 1980); and it is
FURTHER ORDERED that a copy of this Memorandum Opinion and Order be mailed forthwith by the Clerk of the Court by regular mail to all counsel of record.
NOTES
[1] Section 362(a) provides for the imposition of an automatic stay as follows:
Except as provided in subsection (b) of this section, a petition filed under section 301, 302 or 303 of this title operates as a stay, applicable to all entities, of
(1) the commencement or continuation, including the issuance or employment of process, of a judicial, administrative, or other proceeding against the debtor that was or could have been commenced before the commencement of the case under this title, or to recover a claim against the debtor that arose before the commencement of the case under this title;
(2) the enforcement, against the debtor or against property of the estate, of a judgment obtained before the commencement of the case under this title;
(3) any act to obtain possession of property of the estate or of property from the estate;
(4) any act to create, perfect or enforce any lien against property of the estate;
(5) any act to create, perfect, or enforce against property of the debtor any lien to the extent that such lien secures a claim that arose before the commencement of the case under this title;
(6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title;
(7) the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor; and
(8) the commencement or continuation of a proceeding before the United States Tax Court concerning the debtor.
11 U.S.C. § 362(a) (Supp. IV 1980).
[2] Section 362(b) provides in pertinent part:
The filing of a petition under Section 301, 302, or 303 of this title does not operate as a stay
(1) under subsection (a) of this section, of the commencement or continuation of a criminal action or proceeding against the debtor;
. . . .
(4) under subsection (a)(1) of this subsection, of the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power.
11 U.S.C. § 362(b) (Supp. IV 1980).
[3] The Trustee was named as a party defendant, but did not file an answer or appear at trial.
[4] In view of the Court's disposition of this complaint the dispute is not material to a determination of the issues presently before the Court. It may nonetheless be relevant to the outcome of the forfeiture action once the State properly brings on a hearing on the merits in some forum.
[5] At trial, counsel indicated that the money in question was claimed by the Debtor on his Schedule B-4 as exempt under § 522(d)(5) of the Code. The validity of such an exemption has not been, nor could it appropriately be, challenged in this proceeding. See 11 U.S.C. § 522(l) (Supp. IV 1980) ("Unless a party in interest objects, the property claimed as exempt on [Schedule B-4] is exempt.").
[6] Indeed the Court of Appeals of Maryland has recognized a like right founded upon Article 23 of the Maryland Declaration of Rights. In the context of a forfeiture proceeding, the Maryland court held that due process requires notice and an opportunity to contest the claim. State v. Greer, 263 Md. 692, 284 A.2d 233 (1971) (quoting Burns v. Midland, 247 Md. 548, 553, 234 A.2d 162, 156 (1967)). The language of § 297(a)(6) suggests at least the following defenses to the forfeiture action: (1) the money was not in close proximity to contraband; (2) the alleged substances or paraphernalia were not of the "controlled" type; and (3) there was no actual or intended use of the money in connection with the proscribed activities specified by the statute.
[7] The Code provides for what perhaps may be a startling result with respect to claims of the type at issue here. As Part V of the memorandum opinion indicates, whatever the nature of the conflicting claims of parties to a forfeiture proceeding, the Code transforms the relationship between them at the moment the petition is filed.
[8] "Debtor" is defined by § 101(12) of the Code to mean "person or municipality concerning which a case under [the Code] has been commenced." The definition of "person" cannot be construed to include "property." See 11 U.S.C. § 101(3) (Supp. IV 1980).
[9] The Code provides in pertinent part that:
A discharge under Section 727 . . . does not discharge an individual debtor from any debt
. . . .
(7) to the extent such debt is for a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty
(A) relating to a tax of a kind not specified in paragraph (1) of this subsection; or
(B) imposed with respect to a transaction or event that occurred before three years before the date of the filing of the petition; 11 U.S.C. § 523(a)(7) (Supp. IV 1980). This provision makes fines, penalties, and forfeitures nondischargeable so long as they are payable to government and do not compensate pecuniary loss. Section 523(a)(7) makes tax penalties nondischargeable to the extent that the underlying tax is nondischargeable as well. 3 Collier on Bankruptcy ¶ 523.17 (15th ed. 1981).
[10] Section 522(c) "insulates exempt property from prepetition claims, except tax and alimony, maintenance, or support claims that are excepted from discharge." H.R.Rep.No.95-595, 95th Cong., 1st Sess. 361 (1977), U.S.Code Cong. & Admin.News 1978, p. 6317.
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485 F.Supp.2d 1302 (2006)
ESSEX BUILDERS GROUP, INC., Plaintiff,
v.
AMERISURE INSURANCE COMPANY and Pennsylvania General Insurance Company,[1] Defendants.
No. 6:04-cv-1838-Orl-22JGG.
United States District Court, M.D. Florida, Orlando Division.
December 13, 2006.
Order Denying Clarification or Reconsideration January 22, 2007.
*1303 *1304 Brenton Neil Ver Ploeg, Stephen A. Marino, Jr., Ver Ploeg & Lumpkin, P.A., Miami, FL, Robert Patrick Major, Winderweedle, Haines, Ward & Woodman, P.A., Orlando, FL, for Plaintiff.
John Bond Atkinson, Rebecca Ann Brownell, Atkinson & Brownell, P.A., Miami, FL, Jeffrey Russell Davis, Stuart J. Freeman, Brasfield, Fuller, Freeman, & O'Hern, PA, St. Petersburg, FL, for Defendants.
ORDER
CONWAY, District Judge.
I. INTRODUCTION
This cause comes before the Court for consideration of pending motions in this insurance coverage dispute. After carefully considering these motions and associated filings, the Court issues the rulings set forth herein.
II. BACKGROUND
In March 1999, Plaintiff Essex Builders Group, Inc. ("Essex") entered into an agreement to act as general contractor on an apartment construction project. Reliance Insurance Company, the predecessor to Travelers Casualty & Surety Company ("Travelers"), issued a performance bond on behalf of Essex. Following project completion, the owner discovered water damage to the apartment buildings. After incurring substantial costs to remedy the problem, the owner demanded reimbursement from Essex. The owner also made a claim against the bond. Essex's commercial general liability ("CGL") insurers, Defendants Pennsylvania General Insurance Company ("PGIC") and Amerisure Insurance Company ("Amerisure"), received notice of the claim against Essex, but did not pay it. Ultimately, Travelers paid the project owner $6.25 million to resolve the owner's claim.
In the present lawsuit, Essex sues PGIC and Amerisure for breach of the CGL insurance contracts. Essex maintains that Travelers' bond payment to the project owner rendered Essex unbondable and thereby "severely impaired and/or destroyed" its business. Joint Final Pretrial Statement ("PTS") (Doc. 336) at 3-4. Essex seeks "consequential damages for the injury to its business, as well as the damages, costs and attorney's fees associated with defending against the Claim and . . . bringing this action." Id. at 4.
III. SUMMARY JUDGMENT STANDARD
A motion for summary judgment should be granted when "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). "The party seeking summary judgment bears the initial burden of identifying for the district court those portions of the record `which it believes demonstrate the absence of a genuine issue of material fact.'" Cohen v. United Am. Bank of Cent. Fla., 83 F.3d 1347, 1349 (11th Cir.1996) (quoting Cox v. Adm'r U.S. Steel & Carnegie, 17 F.3d 1386, 1396, modified on other grounds, 30 F.3d 1347 (11th Cir.1994)). "There is no genuine issue for trial unless the non-moving party establishes, through the record presented to the court, that it is able to prove evidence sufficient for a jury to return a verdict in its favor." Cohen, 83 F.3d at 1349. The Court considers the evidence and all inferences drawn therefrom in the light most favorable to the non-moving party. See Hairston v. Gainesville Sun Pub. Co., 9 F.3d 913, 918 (11th Cir.1993).
*1305 IV. PGIC'S MOTION FOR PARTIAL SUMMARY JUDGMENT[2]
At the outset, PGIC denies that Essex can prove it was forced out of business as a result of the CGL insurers' failure to pay the project owner's claim. PGIC further maintains that even if Essex can prove this injury, "it is not entitled, as a matter of law, in its Breach of Contract claim, to recover the consequential damages it is seeking as a result of its being forced to go out of business." Doc. 298 at 2.[3] To support this argument, PGIC relies on two cases: Swamy v. Caduceus Self Ins. Fund, Inc., 648 So.2d 758 (Fla. 1 st DCA 1994), and Frenz Enters., Inc. v. Port Everglades, 746 So.2d 498 (Fla. 4th DCA 1999).
In Swamy, a liability insurer failed to settle a medical malpractice claim against a physician, resulting in a judgment that greatly exceeded policy limits. This prompted Dr. Swamy to sue his insurer for bad faith. In that suit, the doctor "sought damages to compensate [him] for the excess judgment, a loss of profits due to reduced referrals, and damage to professional reputation." 648 So.2d at 759. Thereafter, the insurer paid the tort plaintiff the $1 million policy limit, and later agreed to pay her "an additional $2 million in return for a satisfaction of the judgment and [the tort plaintiffs] unconditional release of Dr. Swamy and [the insurer]." Id. The insurer then "moved for summary judgment in Dr. Swamy's suit, arguing that its satisfaction of the excess judgment precluded further recovery by Dr. Swamy and, in essence, extinguished Swamy's cause of action for bad faith." Id. The lower court agreed and granted summary judgment in the insurer's favor.
On appeal, Florida's First District first determined that an insured tortfeasor's damages are not necessarily limited to the amount of an excess judgment; and that "additional damages may be recovered." Id. at 759-760. The appellate court then confronted the question "whether the damages actually pled by Dr. Swamy were recoverable in his action for bad faith at common law or pursuant to section 624.155, Florida Statutes." Id. at 760 (footnote omitted).
The First DCA noted that in Florida, an insured's bad faith claim against its insurer for failure to settle a third party's claim sounds in contract, rather than in tort. Id. Consequently, the recoverable damages "are limited to those that can be said to have been contemplated by the parties at the time of the formation of the insurance contract." Id. Applying this legal principle to the facts in Swamy, the appellate court stated:
In the instant case, once the excess judgment was satisfied, Dr. Swamy's remaining damage claims consisted of alleged lost profits due to reduced referrals, and damage to his professional reputation. In essence, Dr. Swamy sought to recover for losses resulting from the attendant negative publicity of the large excess judgment. Such damages are, at best, an indirect consequence of Caduceus' failure to settle, More importantly, the loss of reputation and referral cannot be said to have been within the contemplation of the parties to the insurance contract.
*1306 Presumably, Dr. Swamy procured insurance to protect himself from the serious risks involved in practicing medicine. Insured and insurer must have contemplated that the insurer's bad faith in failing to settle a claim could jeopardize the insured's security by exposing him to an excess judgment. In such an event, the carrier could be liable for the amount of the excess judgment or damages resulting from execution. The possibility that negative publicity would be generated, which would then result in a loss of reputation and business, cannot be deemed the natural or contemplated result of the carrier's breach. In short, the damages claimed by Dr. Swamy were not recoverable in Florida, and the trial court properly entered summary judgment for [the insurer].
Id. at 760-761 (alteration added).
In Frenz Enterprises, the plaintiff ("Frenz") appealed a final judgment awarding it damages on its breach of contract claim against Port Everglades and Broward County for dredging work. Among other things, Frenz argued that the trial court committed error when it denied Frenz's proposed jury instructions regarding lost profits. On that point, Florida's Fourth District stated:
The trial court ruled Frenz's claim seeking lost profits based on an alleged inability to obtain a bond as a result of its dealings with the Port was inappropriate because such damages were not foreseeable. We agree. To recover damages for lost profits in a breach of contract action, a party must prove a breach of contract, that the party actually sustained a loss as a proximate result of that breach, that the loss was or should have been within the reasonable contemplation of the parties, and that the loss alleged was not remote, contingent, or conjectural and the damages were reasonably certain. See Crain Automotive Group[, Inc.] v. J & M Graphics [Inc.], 427 So.2d 300, 301 (Fla. 3d DCA 1983) (reciting the elements of a claim for damages for lost profits as a result of the late placement of an advertisement). Here, the evidence did not establish that Frenz's drop in revenues from $6,000,000 to zero was proximately caused by the Port's failure to pay Frenz the amount it expected under the contract and the Port's filing of a counterclaim seeking liquidated damages. Frenz failed to establish that such a large loss was or should have been within the reasonable contemplation of the parties, or that the Port should have known Frenz would lose his bond line. To the contrary, it would have been reasonable to expect Frenz's business to continue to some extent. Frenz has failed to establish an abuse of discretion under this point.
746 So.2d at 504 (alterations added).
PGIC essentially argues that Swamy and Frenz Enterprises establish that the types of damages Essex seeks here are not recoverable as a matter of law, on the ground that they cannot be considered to have been within the contemplation of the parties at the time of contract formation, i.e., the date on which the CGL policies were issued. However, PGIC places undue importance on these decisions. They do stand for the proposition that contract damages are limited to those within the contemplation of the parties at the time of contract formation, and, also, that a litigant who fails to establish such a connection cannot recover consequential damages. However, these cases do not suggest that the types of consequential damages Essex seeks here can never be recovered. In fact, there, is Florida decisional authority suggesting that in appropriate circumstances, an insured may recover consequential damages when its insurer's breach of contract *1307 causes the insured's business to fail. See Travelers Ins. Co. v. Wells, 633 So.2d 457 (Fla. 5th DCA 1993). At bottom, Swamy and Frenz Enterprises are largely failure-of-proof cases. They do little to resolve the question presented here, i.e., whether the plaintiff in this case has proved that the damages claimed here are legally compensable.
Hence, the salient question is whether Essex has identified evidence, sufficient to present a jury question, that the alleged destruction of Essex's business as a result of the CGL insurers' refusal to pay the project owner's claim was a consequence within the contemplation of the parties at the time the insurance policies were issued. In an effort to thwart entry of summary judgment, Essex asserts that it was "commonly known that a bond payment would be fatal to Essex." Doc. 331 at 6 (capitalization omitted)[4] To support this contention, Essex quotes the testimony of a representative (Marcelle Houston) of Essex's bond surety (Travelers), who stated that no principal wants its surety to pay a bond claim because that guarantees the principal will never again be able to obtain bonding. Essex also relies on the testimony of one of Essex's owners (Ed Storey), the company's bonding agent (Dave Carr), and a representative (Tom Finn) of another entity that issued corporate surety bonds (Zurich American Insurance Company). Collectively, this testimony supports Essex's position that after Travelers paid the bond claim, Essex became unbondable, was therefore precluded from working on any projects requiring a bond, and ceased doing business as a result. Essex maintains this evidence establishes that "[i]t was . . . no secret that if Defendants failed to defend and indemnify Essex, it would lose the ability to secure additional bonds." Id. at 7.
This evidence may show that these consequences were no secret to Essex, the company's bonding agent, Travelers, or others in the surety bond business, but it is insufficient to prove that they were within the actual or constructive knowledge of PGIC and Amerisure. In that regard, Essex has presented no evidence that PGIC or Amerisure knew or should have known at the time of contracting that the natural consequence of denying coverage to Essex for an owner's claim arising from a construction project would be that Essex would lose its ability to obtain bonding, and that the company would be severely damaged or forced out of business as a result. Essex's position really boils down to this: what was common knowledge to those associated with corporate surety bonding necessarily was universally understood among those writing CGL policies. This is too great a leap of faith to withstand intellectual scrutiny. Supposition is not the same as reasonable inference, and speculation cannot substitute for evidence. Additionally, Essex has not shown what percentage of its work required bonds, or that its CGL insurers were familiar enough with Essex's business operations that they knew or should have known that the bonded portion of Essex's work was significant enough that the loss of that business would severely damage Essex or lead to the company's demise.
In sum, then, Essex has presented no evidence that PGIC or Amerisure ever contemplated at the time of contracting that a denial of a third-party claim against the CGL policies would result in Essex losing bonding capacity and failing as a business. Similarly, Essex has failed to *1308 present any evidence that it was universally understood in the CGL insurance industry that a refusal to pay an underlying claim such as this would necessarily result in a loss of a building contractor's bonding eligibility, and, proceeding yet another step, that a loss of bonding capacity would necessarily (or even likely) lead to severe damage to or destruction of an insured construction business.
Perhaps Essex might have established these things through depositions of PGIC's and Amerisure's representatives, or through an expert witness; perhaps not. It could be that these matters are indeed common knowledge throughout the insurance industry, and CGL insurers invariably know what corporate bond sureties know. However, the fact remains that Essex has presented no actual evidence of this. Consequently, in the final analysis, this is a failure of proof akin to that in Swamy and Frenz Enterprises.[5] Accordingly, PGIC (and, by adoption, Amerisure) is due summary judgment on Essex's claimed damages associated with the demise of, or severe injury to, Essex's construction business.[6]
V. ESSEX'S MOTION FOR SUMMARY JUDGMENT
A. Essex's Positions
The PGIC policy provided coverage for the period November 11, 1999 through November 11, 2000. PTS, § 9, ¶ G, at 6. The Amerisure policy afforded coverage for the following one-year term, from November 11, 2000 through November 11, 2001. Id., ¶ H, at 6.[7] Essex seeks summary judgment against both Amerisure and PGIC on the asserted basis that the project owner's claim "falls within the [CGL] policies' covering agreement, and no exclusions or policy conditions apply to bar coverage." Doc. 301 at 1. More specifically, Essex maintains that the water damage to the apartments constitutes "property damage" and an "occurrence" under the CGL policies. Essex then states:
The undisputed facts show that the damage to the Construction Project first became *1309 visible in late 2001. The damage itself, however, began within a short period of time after each building within the project was completed, then continued over time until it was observed. The undisputed facts also show that the buildings within the project were turned over to the Project Owner between March and December of 2000. The [PGIC] policy period ran from November 11, 1999 through November 11, 2001 [sic]; the Amerisure policies incepted on November 11, 2000 and ran for two years (including a policy renewal), through November 11, 2002. The Claim, and the damage incorporated therein, clearly falls within the policy periods of both Amerisure and [PGIC].
Doc. 301 at 10 (footnotes omitted).[8]
B. PGIC's Response
For present purposes, PGIC does not dispute that the damage to the apartment buildings first manifested itself in late 2001, and that the buildings were turned over to the owner between March and December of 2000. Doc. 317 at 3-4. However, PGIC does challenge Essex's position that the property damage occurred within the PGIC policy period, i.e., from November 11, 1999 to November 11, 2000.
On that point, PGIC contends that when damage continuously occurs, the "trigger" for CGL coverage is the point at which the damage manifests itself or is discovered. To support this contention, PGIC cites Auto Owners Ins. Co. v. Travelers Cas. & Surety Co., 227 F.Supp.2d 1248 (M.D.Fla.2002). In that case, Magistrate Judge Jenkins of this Court construed policy language virtually identical to that present in the instant case, surveyed the four generally accepted "trigger of coverage" theories,[9] and stated that "Florida courts follow the general rule that the time of occurrence within the meaning of an `occurrence' policy is the time at which the injury first manifests itself." 227 F.Supp.2d at 1266 (citing, inter alia, Travelers Ins. Co. v. C.J. Gayfer's & Co., 366 So.2d 1199 (Fla. 1 st DCA 1979)[10]).[11] PGIC reasons that because Essex's position is that the damage or injury to the apartment buildings did not manifest itself until late 2001, there was no occurrence before the PGIC policy's coverage ended in November 2000. On this asserted basis, says PGIC, Essex's summary judgment motion must be denied.
The undersigned judge agrees with Judge Jenkins' reasoning in Auto Owners regarding the "trigger of coverage" issue.[12]*1310 Because Essex's position is that the damage to the apartment buildings was not visible until late 2001, and the PGIC policy expired in November 2000, there was no occurrence within the policy period. Accordingly, Essex's summary judgment motion regarding coverage is due to be denied as to PGIC.[13] Alternatively, based on the deposition testimony cited in PGIC's response to Essex's motion, even if the injury-in-fact trigger theory applies, there are still unresolved issues of fact concerning whether the property damage occurred during the term of the PGIC policy. On that additional basis, Essex's summary judgment motion must be denied as to PGIC.
C. Amerisure's Response
Amerisure points out that from January 2004 to February 2006, Essex was being defended from claims arising from the apartment construction project by another insurer, Liberty Mutual, due to Essex's status as an additional insured under one of its' subcontractors' policies. Building on that point, Amerisure relies on provisions in its policy regarding "excess" insurance and argues that Amerisure's duty to defend was not triggered until Liberty Mutual withdrew its defense of Essex. The Court does not find this argument dispositive of Essex's summary judgment motion. While these circumstances may impact Amerisure's liability for alleged failure to defend, Amerisure has not demonstrated how it would extinguish the insurer's separate duty to indemnify Essex.
Amerisure advances a second argument in response to Essex's summary judgment motion. Like PGIC, Amerisure argues that material issues of fact exist concerning when the damage to the apartment buildings actually occurred and, more to the point, whether that damage occurred within the policy period. As previously noted, Amerisure's CGL policy ran from November 11, 2000 to November 11, 2001. Amerisure takes the position that "the property damage first occurred at various times throughout each building's construction, i.e., between March 1999 and December 2000." Doc. 320 at 12 (emphasis omitted). Most of this period pre-dated the commencement date of the Amerisure policy. Consequently, Amerisure asserts that Essex has not demonstrated conclusively that property damage occurred during the CGL policy period, and fact issues remain which must be resolved at trial.
Unlike PGIC, Amerisure has not expressly addressed the "trigger of coverage" issue. Rather, the insurer seemingly assumes that the injury-in-fact trigger theory applies. However, the Court reiterates that under Florida law, the general rule is that "the time of occurrence within the meaning of an `occurrence' policy is the time at which the injury first manifests itself." Auto Owners, 227 F.Supp.2d at 1266. Here, according to Essex, at least, the damage "first became visible in late 2001." Doc. 301 at 10. "Late 2001" could mean sometime after November 11, 2001, the last date Amerisure's CGL policy was in force. Moreover, Essex has not specified whether the "visible" damage in "late 2001" manifested itself in just one building, or more than one structure. Based on these considerations, the Court determines that under the manifestation trigger theory of coverage, Essex has failed to demonstrate as a matter of law that an "occurrence" took place within the Amerisure policy period. Alternatively, if the injury-in-fact *1311 trigger theory applies, as Amerisure points out, there are still unresolved issues of fact concerning whether the property damage occurred during the term of the Amerisure policy. Either way, Essex has not demonstrated its entitlement to summary judgment against Amerisure.
D. The "Confession to Judgment" Issue
In a footnote to its summary judgment motion, Essex raises a point it previously argued in connection with its motion seeking leave to file a supplemental complaint adding bad faith claims. In that regard, Essex contends that all of the issues it addresses in its summary judgment motion have already "been resolved in favor of Essex by Defendants' assumption of their duty to defend Essex and payment of the Claim to Travelers." Doc. 301 at 1 n. 1. In other words, Essex contends the Defendants' have essentially confessed to judgment in the sense of admitting liability on Essex's breach of contract claims, which seek millions of dollars in consequential damages arising from the alleged destruction of Essex's business. To support this position, Essex principally relies on decisions addressing confession of judgment in the context of determining prevailing party status under Fla. Stat. § 627.428, an attorney's fee provision contained in Florida's insurance code. However, the Court does not find the cases addressing confession of judgment in that context to be analogous to the very different circumstances of the case at bar. It is one thing to subject a settling insurer to liability for attorney's fees under a fee-shifting statute, and quite another to expose the insurer to potential liability for consequential damages. The consequential damages Essex seeks are wholly distinct from the sums the Defendants are contractually obligated to pay under the CGL policies (assuming coverage and liability on the part of the insured). Additionally, based on the May 2, 2006 tender letter from Essex's counsel, Robert Major, to Defendants' attorneys, Ex. "E" to Doc. 292, there appears to be a fact question concerning whether the Defendants' eventual assumption of Essex's defense was undertaken under a reservation of rights. In the end, the Court is not convinced that, as a matter of law, the Defendants exposed themselves to potential liability to Essex for consequential damages merely by assuming Essex's defense and settling with Travelers.
VI. AMERISURE'S MOTION IN LIMINE
Amerisure seeks an order precluding Essex from offering evidence relating to a second CGL policy Amerisure issued Essex, covering the period November 11, 2001 to November 11, 2002, as well as an umbrella policy covering Essex. Based on Essex's response to the motion, the Court concludes that these insurance policies may be admissible to rebut Amerisure's impossibility defense. Accordingly, Amerisure's motion will be denied insofar as it seeks a pretrial exclusionary ruling. A final determination concerning admissibility will be made at trial.
VII. CONCLUSION
Based on the foregoing, it is ORDERED as follows:
1. Defendant Pennsylvania General Insurance Company's Motion for Partial Summary Judgment as to Essex Builder's Group, Inc.'s Consequential Damage Claim (Doc. 298), filed July 31, 2006, is GRANTED. Summary judgment is awarded in favor of PGIC and its codefendant, Amerisure Insurance Company, on Plaintiffs claim for consequential damages arising from the alleged destruction of Plaintiffs business. This ruling will be incorporated in a final judgment entered at the conclusion of the entire case.
2. Plaintiff Essex Builder's Group, Inc.'s Motion for Summary Judgment *1312 (Doc. 301), filed August 1, 2006, is DENIED.
3. Defendant Amerisure Insurance Company's Motion In Limine (Doc. 326), filed September 1, 2006, is DENIED insofar as it seeks a pretrial exclusionary ruling concerning the admissibility of the two insurance policies that are the subject of the motion.
4. On or before December 18, 2006, counsel for the parties shall confer and shall submit a written filing (a) identifying the issues remaining for trial and (b) estimating how long the case will take to try. The Court prefers a joint submission. Failing agreement, the parties may file separate memoranda.
DONE and ORDERED.
ORDER ON MOTION
This cause comes before the Court for consideration of Plaintiff Essex Builders Group, Inc.'s Motion for Clarification or, in the Alternative, Reconsideration of the December 13, 2006 Order (Doc. 354), filed on December 22, 2006, and Defendant Amerisure Insurance Company's Opposition (Doc. 361) to that motion.[1]
By means of this Motion, Essex seeks clarification of the Court's December 13, 2006 Order (Doc. 348) in the following respects:
. . . to specify that: (1) Amerisure's and PGIC's settlement of the Travelers claim operates as a confession of judgment with respect to the claim for contractual damages caused by Defendants' failure to defend and indemnify Essex against the Claim; (2) Essex is entitled to attorney's fees and costs under Fla. Stat. § 627.428 as the prevailing party with regard to Defendants' contractual duties to defend and indemnify Essex; and (3) Essex is not barred from seeking consequential damages in a bad faith action under the standard provided by Fla. Stat. § 624.155. In the alternative, Essex respectfully requests that this Court reconsider its holding regarding whether Essex presented sufficient evidence regarding its entitlement to consequential damages under the common law standard for contractual damages.
Doc. 354 at 2.
In its December 13th Order, the Court ruled that Amerisure and PGIC's settlement with Travelers did not constitute a confession of judgment on Essex's claims against Amerisure and PGIC in this suit. The Court's principal concern at that time was that it would be legally improper to subject the CGL insurers to liability for consequential damages under a confession of judgment theory. In that regard, the Court stated:
Essex contends the Defendants have essentially confessed to judgment in the sense of admitting liability on Essex's breach of contract claims, which seek millions of dollars in consequential damages arising from the alleged destruction of Essex's business. To support this position, Essex principally relies on decisions addressing confession of judgment in the context of determining prevailing party status under Fla. Stat. § 627.428, an attorney's fee provision contained in Florida's insurance code. However, the Court does not find the cases addressing confession of judgment in that context to be analogous to the very different circumstances of the case at bar. It is one thing to subject a settling insurer to liability for attorney's fees under a fee-shifting statute, and quite another to expose the insurer to potential liability for consequential *1313 damages. The consequential damages Essex seeks are wholly distinct from the sums the Defendants are contractually obligated to pay under the CGL policies (assuming coverage and liability on the part of the insured). Additionally, based on the May 2, 2006 tender letter from Essex's counsel, Robert Major, to Defendants' attorneys, Ex. "E" to Doc. 292, there appears to be a fact question concerning whether the Defendants' eventual assumption of Essex's defense was undertaken under a reservation of rights. In the end, the Court is not convinced that, as a matter of law, the Defendants exposed themselves to potential liability to Essex for consequential damages merely by assuming Essex's defense and settling with Travelers.
Doc. 348 at 14-15.
In the December 13th Order, the Court also ruled that Amerisure and PGIC were entitled to summary judgment on Essex's claimed consequential damages associated with the demise of, or severe injury to, Essex's construction business. Id. at 3-9. Now, Essex seeks a determination that Amerisure's settlement with Travelers constitutes a confession of judgment as to Amerisure's liability for the other contractual damages Essex seeks (apart from consequential damages) based on Amerisure's refusal to defend and indemnify Essex. To support this position, Essex cites Wollard v. Lloyd's & Cos. of Lloyd's, 439 So.2d 217, 218 (Fla.1983), in which the Florida Supreme Court stated: "When the insurance company has agreed to settle a disputed case, it has, in effect, declined to defend its position in the pending suit. Thus, the payment of the claim is, indeed, the functional equivalent of a confession of judgment or a verdict in favor of the insured."
In response, Amerisure concedes the holding in Wollard. Additionally, Amerisure does not argue that payment by it to Travelers would not constitute a confession of judgment under Florida law. In the Court's view, this effectively concedes the point that such payment would amount to a confession of judgment in this particular case. However, Amerisure asserts that Essex has failed to offer any proof that Amerisure actually paid money to Travelers as a part of the settlement. Amerisure points out that Essex attempted to reopen discovery for the purpose of obtaining a copy of the settlement papers in order to establish payment, but the assigned magistrate judge denied that motion on the ground that Essex had been dilatory. See Docs. 322 & 332. Continuing, Amerisure states:
Consequently, the Record is devoid of any terms of the settlement agreement including whether there was a payment of monies by Amerisure or PGIC to Travelers and, as such, Plaintiff has not proved that Amerisure's settlement with Travelers constitutes a confession of judgment as to Plaintiffs contractual damages. Consequently, this Court should deny Plaintiffs Motion for Clarification of the Court's Order to specify that Amerisure's and PGIC's settlement with Travelers constitutes a confession of judgment.
Doc. 361 at 4 (emphasis in original).
Amerisure is correct in stating that, presently, there is no evidence in the record that Amerisure paid Travelers money to settle Travelers' claims against Essex. Accordingly, Essex has not, at least at this juncture, demonstrated that it is entitled to a favorable ruling on its confession of judgment theory. However, Essex has preserved this issue in the initial and amended pretrial statements. Does. 336, § 12.A, at 9 ("Whether PGIC's and Amerisure's settlement with Travelers constitutes an admission of coverage for the Claim") & 364, § 12.A, at 10 (same). Accordingly, *1314 this is a fair subject of inquiry at trial. If Essex is able to establish through the trial witnesses that Amerisure paid money to Travelers as a part of the settlement,[2] the Court will consider what measures might be appropriate to remedy Amerisure's litigation gamesmanship on this point. In that regard, the Court will not be favorably impressed if jurors, witnesses, parties and attorneys are put to the trouble of appearing for a trial that is unnecessary.
Turning to the issue of whether Essex is entitled to attorney's fees and costs under Fla. Stat. § 627.428, the Court is presently unable to rule on this point because the confession of judgment issue remains outstanding and a judgment has not otherwise been entered against Amerisure.
Next, on the issue of whether Essex may seek consequential damages via a bad faith suit, Essex's motion for clarification essentially constitutes a request for an advisory opinion, which, of course, the Court cannot issue.
Finally, concerning Essex's alternative request for reconsideration of the Court's ruling that Essex cannot pursue its claim for consequential damages arising from destruction of Essex's business, Essex has not presented any valid basis for reconsideration.
Based on the foregoing, it is ORDERED that Plaintiff Essex Builders Group, Inc.'s Motion for Clarification or, in the Alternative, Reconsideration of the December 13, 2006 Order (Doc. 354), filed on December 22, 2006; is DENIED.
DONE and ORDERED.
NOTES
[1] Pennsylvania General Insurance Company was formerly known in this case as OneBeacon Insurance Company. On July 17, 2006, OneBeacon filed an Unopposed Motion to Amend Name of Party, which sought to "correct a misnomer as to the name of the insurer of the policy of insurance issued to Essex." Doc. 291 at 2. More specifically, OneBeacon sought to "amend its name to Pennsylvania General Insurance Company." Id. at 1. By Order dated August 4, 2006, the Court granted the motion. Doc. 304. In that Order, the Court expressly stated: "Henceforth, OneBeacon Insurance Company shall be referred to in this lawsuit as Pennsylvania General Insurance Company." Id. at 2.
[2] This motion was filed in OneBeacon's name, before the Court granted OneBeacon's motion to change its name to PGIC for the purposes of this lawsuit. Amerisure has joined in PGIC's motion for summary judgment. Doc. 300.
[3] The Court will assume, purely, for present analytical purposes, that PGIC and Amerisure breached the CGL insurance contracts, that the breach rendered Essex unbondable, and that this forced Essex out of business.
[4] The quoted passage is lifted from the title to section IV of Essex's opposition memorandum.
[5] In its summary judgment response, Essex cites cases suggesting that a party may demonstrate entitlement to consequential contract damages by showing either that they were within the reasonable contemplation of the parties or "ar[o]se naturally from the breach." Doc. 331 at 12 (quoting T.D.S., Inc. v. Shelby Mut. Ins. Co., 760 F.2d 1520, 1531 n. 11 (11th Cir.1985)). As a matter of law, Essex's claimed consequential damages are equally unavailable under the "arising naturally" standard. Based largely on the factors this Court has already discussed, these damages are too attenuated to be characterized as naturally flowing from PGIC's and Amerisure's alleged contract breach.
[6] This ruling is not inconsistent with the Court's September 3, 2006 Order denying the Defendants' prior motion for partial summary judgment. See Doc. 327. There, the issue was proximate cause. Here, the issue is whether Essex has presented evidence that the resulting damages meet the legal standard for recovery of consequential damages in a breach of contract action.
[7] In its summary judgment motion, Essex states: "[T]he Amerisure policies incepted on November 11, 2000 and ran for two years, (including a policy renewal), through November 11, 2002." Doc. 301 at 10. While it appears true that there are two one-year Amerisure policies (and even an umbrella policy), Essex's Complaint identified just one: policy number CPP XXXXXXXXXXXXX, which covered the period November 11, 2000 to November 11, 2001. See Doc. 1, ¶ 8, at 2 & Ex. "B." On June 28, 2006, Essex sought to supplement its pleadings to include the other CGL policy and the umbrella policy (and to add bad faith claims), but the Court denied Essex's motion. Consequently, the Court will not consider the second CGL policy for summary judgment purposes. However, that policy and the umbrella policy may still be admissible at trial to rebut Amerisure's impossibility defense. See § VI, infra.
[8] Essex presents additional arguments regarding the inapplicability of certain policy exclusions. However, the Court need not address those arguments given its determinations regarding the question of whether there has been an "occurrence" within the CGL policy periods. See § V.B & C, infra.
[9] The four theories are (1) exposure, (2) manifestation, (3) continuous trigger, and (4) injury in fact. 227 F.Supp.2d at 1266.
[10] C.J. Gayfer's states: "The term `occurrence' is commonly understood to mean the event in which negligence manifests itself in property damage or bodily injury[.]" 366 So.2d at 1202.
[11] District Judge Merryday adopted Judge Jenkins' report and recommendation. 227 F.Supp.2d at 1253.
[12] Respectfully, however, the undersigned judge disagrees with that part of Auto Owners that discusses LaMarche v. Shelby Mut. Ins. Co., 390 So.2d 325 (Fla.1980), for the reasons expressed in the September 21, 2005 Order (Doc. 133) entered in the instant case. The Court continues to adhere to its prior rulings regarding LaMarche, State Farm Fire & Cas. Co. v. CTC Dev. Corp., 720 So.2d 1072 (Fla. 1998), and J.S.U.B., Inc. v. U.S. Fire Ins. Co., 906 So.2d 303 (Fla. 2d DCA 2005), and the impact of those decisions on the coverage afforded by CGL policies. Accordingly, the Court declines the Defendants' invitations to revisit those issues.
[13] If PGIC had moved for summary judgment on this point, the Court likely would have granted such a motion based on the same reasoning. However, PGIC did not move for summary judgment, and the Court does not believe it can fairly grant summary judgment sua sponte in PGIC's favor without affording Essex an opportunity to be fully heard on the issue.
[1] Essex and Amerisure's co-defendant, Pennsylvania General Insurance Company ("PGIC") have reached a settlement.
[2] The Court reserves ruling on whether this inquiry must be pursued outside the jury's presence.
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983 S.W.2d 505 (1999)
COMMONWEALTH of Kentucky, Appellant,
v.
Billy Joe DAY, Appellee.
No. 97-SC-662-DG.
Supreme Court of Kentucky.
January 21, 1999.
*506 A.B. Chandler, III, Attorney General, Frankfort, KY, Matthew D. Nelson, Assistant Attorney General, Frankfort, KY, for appellant.
Cullen Gault, Lexington, KY, for appellee.
COOPER, Justice.
Appellee Billy Joe Day was indicted by a Pulaski County Grand Jury on two charges of trafficking in a controlled substance in the first degree. The indictments were premised upon transactions which occurred between Appellee and Nora Ison on March 21 and March 25, 1993. Following a trial by jury, Appellee was acquitted with respect to the *507 March 21, 1993 transaction, but convicted and sentenced to five years imprisonment with respect to the March 25, 1993 transaction. On appeal, the Court of Appeals reversed and remanded for a new trial, holding that the trial judge erred in not instructing the jury on (1) the defense of entrapment and (2) possession of a controlled substance and criminal facilitation as lesser included offenses. We granted discretionary review.
Ison was employed as a confidential informant for the Somerset Police Department. As such, she used money provided by the police to purchase controlled substances from suspected drug dealers for the purpose of obtaining evidence to be used in the subsequent prosecution of those persons. She and Appellee had known each other since childhood. Ison testified that on March 20, 1993, she saw Appellee in Somerset and solicited him to sell her an ounce of cocaine. Arrangements were made to meet the following day at the K-Mart parking lot in Somerset to conclude the transaction. The meeting took place as scheduled on March 21. According to Ison, Appellee told her he had been unable to obtain an ounce of cocaine, but he did sell her an "eight ball" and a gram of cocaine for $ 350.00. Ison admitted that Appellee was accompanied by Sheila Thomas on that occasion, but claimed Thomas did not participate in the transaction. Ison then told Appellee that she still needed an ounce of cocaine and arrangements were made for her to call Appellee at his home in Leslie County to arrange a second transaction.
Ison telephoned Appellee at his Leslie County residence on March 24, 1993 and arrangements were made to meet again at the K-Mart parking lot in Somerset on the following day. On March 25, Ison met Appellee as agreed, gave him $900.00 to obtain the cocaine, and arranged to meet him later at another location to complete the transaction. The rendezvous occurred as planned and Appellee delivered the cocaine to Ison. Ison secretly tape-recorded the March 21 and March 25 transactions, as well as the March 24 telephone call. The recordings were introduced at trial to verify her version of these events.
Appellee testified that he had previously had a sexual relationship with Ison and that they had used drugs together in the past. He claimed that he was not in Somerset at all on March 20, 1993; that Ison had arranged to purchase some cocaine from Sheila Thomas, but Thomas did not want to deal directly with Ison; and that Appellee agreed to accompany Thomas to Somerset on March 21 to act as intermediary. According to Appellee, when they arrived at the K-Mart parking lot, Thomas handed him the "eight ball" and the gram of cocaine, which he then handed to Ison; and that Ison handed him the $ 350.00, which he then handed to Thomas. Ison then offered Appellee a "line" of the cocaine, which he accepted.
Appellee essentially agreed with Ison's version of the March 25 transaction. However, he maintained that he would not have participated in the transaction except for Ison's request; and that he acceded to her request only because of their prior sexual relationship and because he was "strung out" on drugs at the time. He admitted that the person from whom he obtained the cocaine paid him $50.00 for his trouble, but claimed that the payment was both unexpected and unsolicited. He testified that although he had purchased and used controlled substances in the past, he had never before sold or transferred any controlled substances to another person.
I. ENTRAPMENT.
KRS 505.010 provides in pertinent part as follows:
(1) A person is not guilty of an offense arising out of proscribed conduct when:
(a) He was induced or encouraged to engage in that conduct by a public servant or by a person acting in cooperation with a public servant seeking to obtain evidence against him for the purpose of criminal prosecution; and
(b) At the time of the inducement or encouragement, he was not otherwise disposed to engage in such conduct.
(2) The relief afforded by subsection (1) is unavailable when:
(a) The public servant or the person acting in cooperation with a public servant *508 merely affords the defendant an opportunity to commit the offense;
...
(3) The relief provided a defendant by subsection (1) is a defense.
The defense of entrapment is available when there is evidence that the defendant was induced by police authorities, or someone acting in cooperation with them, to commit a criminal act which he was not otherwise disposed to commit. Johnson v. Commonwealth, Ky. App., 554 S.W.2d 401, 402 (1977). Even though the defendant admittedly committed the offense, if the criminal design was conceived in the mind of a government agent, who then induced or lured the defendant into its commission, strong public policy estops the government from convicting him for it. Sorrells v. United States, 287 U.S. 435, 445, 53 S.Ct. 210, 214, 77 L.Ed. 413 (1932). As with any other "defense" under the penal code, once the defendant introduces enough evidence to create a doubt, the burden of proof shifts to the Commonwealth and there must be an instruction so casting it. KRS 500.070(3); Brown v. Commonwealth, Ky., 555 S.W.2d 252, 257 (1977). Ison admitted that she induced and encouraged Appellee to engage in the criminal conduct for which he was indicted. The only issue was whether Appellee was otherwise disposed to engage in that conduct so that Ison merely afforded him the opportunity to commit the offense. Put another way, the criminality of Appellee's act "depends on whether the criminal intent originated in the mind of the entrapping person or in the mind of the accused." Sebastian v. Commonwealth, Ky.App., 585 S.W.2d 440, 441 (1979).
The jury was instructed on entrapment as a defense with respect to the March 21 transaction, but not with respect to the March 25 transaction. The trial judge reasoned that while Appellee's testimony that he had never before sold or transferred a controlled substance might prove entrapment with respect to the first offense, he must have been predisposed to commit the second offense, because "the second time he had done it before, because he did it the first time."[1] However, the fact that Appellee was entrapped by Ison to commit the first offense, as the jury seemingly must have found, does not require a conclusion that he was not likewise entrapped by Ison to commit the second offense. The United States Supreme Court recently held that where the government has induced an individual to break the law and the defense of entrapment is raised, the prosecution must prove beyond a reasonable doubt that the defendant was disposed to commit the criminal act prior to first being approached by government agents. Jacobson v. United States, 503 U.S. 540, 549, 112 S.Ct. 1535, 1540, 118 L.Ed.2d 174 (1992). While Appellee's acquittal of the first charge did not require an acquittal of the second, neither does his admission that he was entrapped to commit the first offense require a conclusion that as a matter of law he was predisposed to commit the second. Although evidence of prior similar transactions is relevant to prove predisposition, Sorrells v. United States, supra, 287 U.S. at 451-52, 53 S. Ct. at 216, the question of whose mind initiated the criminal intent is a question of fact to be submitted to the jury. Id., 287 U.S. at 452, 53 S.Ct. at 216; Sebastian v. Commonwealth, supra, at 441. To the extent Fuston v. Commonwealth, Ky.App., 721 S.W.2d 734 (1986) holds otherwise, it is overruled. The Commonwealth's reliance on Johnson v. Commonwealth, Ky.App., 554 S.W.2d 401 (1977) is misplaced. The undisputed evidence in that case was that the defendant, who was charged with bootlegging, made the initial solicitation to sell alcoholic beverages to the undercover informant.
II. LESSER INCLUDED OFFENSES.
An instruction on a lesser included offense is required only if, considering the totality of the evidence, the jury could have a reasonable doubt as to the defendant's guilt of the greater offense, and yet believe beyond a reasonable doubt that he is guilty of the lesser offense. Webb v. Commonwealth, *509 Ky., 904 S.W.2d 226 (1995); Skinner v. Commonwealth, Ky., 864 S.W.2d 290 (1993). A lesser included offense is one which includes the same or fewer elements than the primary offense. KRS 505.020(2)(a); Wombles v. Commonwealth, Ky., 831 S.W.2d 172, 175 (1992). This does not require a strict "statutory elements approach," so long as the lesser offense is established by proof of the same or less than all of the facts required to establish the commission of the charged offense. Perry v. Commonwealth, Ky., 839 S.W.2d 268, 272 (1992). Appellee admitted transferring the cocaine to Ison on both occasions. Thus, he could not have been convicted of possession of a controlled substance. Any possession which may have occurred prior to the transfer may have been a separate uncharged offense, but was not a fact necessary to prove the charged offense. Nor could Appellee have been convicted of criminal facilitation, which is committed when a defendant, with no intent to promote or commit the crime himself, provides the means or opportunity for another to do so. KRS 506.080; Skinner v. Commonwealth, supra.
In holding otherwise, the Court of Appeals relied on its prior decision in Farris v. Commonwealth, Ky.App., 836 S.W.2d 451, 454 (1992), which held under facts identical to those in this case that both possession and criminal facilitation are lesser included offenses of trafficking. In Houston v. Commonwealth, Ky., 975 S.W.2d 925, 931 (1998), we overruled Farris to the extent that it held that criminal facilitation is a lesser included offense when the defendant is charged with trafficking in a controlled substance.[2] While possession of a controlled substance would be a lesser included offense of trafficking under a different factual scenario, such is not the case under the facts presented either here or in Farris. To that extent, we overrule Farris on that point as well.
The opinion of the Court of Appeals is affirmed insofar as it holds that Appellee was entitled to an instruction on the defense of entrapment, but is reversed insofar as it holds that Appellee was entitled to instructions on possession and criminal facilitation as lesser included offenses. Accordingly, this case is remanded to the Pulaski Circuit Court for a new trial at which, if the evidence is the same, the jury shall be instructed on the defense of entrapment.
LAMBERT, C.J.; GRAVES, JOHNSTONE, STEPHENS, and STUMBO, JJ., concur.
WINTERSHEIMER, J., concurs in result only without a separate opinion.
NOTES
[1] Although Appellant denied selling cocaine, he admitted transferring cocaine from Thomas to Ison, which was sufficient to constitute the offense of trafficking in a controlled substance in the first degree. KRS 218A.1412; KRS 218A.010(24).
[2] Generally, criminal facilitation is a lesser included offense when the defendant is charged with being an accomplice to an offense, not the principal offender. E.g., Chumbler v. Commonwealth, Ky., 905 S.W.2d 488 (1995); Webb v. Commonwealth, Ky., 904 S.W.2d 226 (1995).
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144 F.3d 50
U.S.v.Cortes-Zuniga*
NO. 97-40697
United States Court of Appeals,Fifth Circuit.
April 27, 1998
Appeal From: S.D.Tex. ,No.B96CR1081
1
Reversed.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34-2
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36 So.3d 657 (2010)
VASQUEZ
v.
STATE.
No. SC10-837.
Supreme Court of Florida.
May 7, 2010.
Decision Without Published Opinion Review dismissed.
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NOTE: This disposition is nonprecedential.
United States Court of Appeals
for the Federal Circuit
______________________
POWER SURVEY, LLC,
Appellant
v.
L-3 COMMUNICATIONS HOLDINGS, INC.,
Appellee
______________________
2016-1644, 2016-1645, 2016-1646
______________________
Appeals from the United States Patent and Trade-
mark Office, Patent Trial and Appeal Board in Nos.
IPR2014-00834, IPR2014-00836, IPR2014-00839.
______________________
JUDGMENT
______________________
BYRON LEROY PICKARD, Sterne Kessler Goldstein &
Fox, PLLC, Washington, DC, argued for appellant. Also
represented by PAULINE PELLETIER, JON WRIGHT, NIRAV
DESAI, ADAM LAROCK, CHANDRIKA VIRA.
JOHN P. DONOHUE, Baker & Hostetler LLP, Philadel-
phia, PA, argued for appellee. Also represented by DANIEL
J. GOETTLE, KEVIN MATTHEW BOVARD, CHARLIE C. LYU,
LESLEY MCCALL GROSSBERG.
______________________
THIS CAUSE having been heard and considered, it is
ORDERED and ADJUDGED:
PER CURIAM (O’MALLEY, WALLACH, and HUGHES,
Circuit Judges).
AFFIRMED. See Fed. Cir. R. 36.
ENTERED BY ORDER OF THE COURT
March 7, 2017 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court
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In the United States Court of Federal Claims
(Pro Se)
)
MINDY L. FOGEL, )
)
Plaintiff, )
) No. 20-980C
v. ) (Filed: August 18, 2020)
)
THE UNITED STATES OF AMERICA, )
)
Defendant. )
)
ORDER
The pro se plaintiff, Mindy L. Fogel, brought this action to challenge the Social Security
Administration’s (“SSA”) denial of her application for disability benefits. Compl. at 2, ECF No.
1. She alleges that the denial was unfair because medical records that supported her claim were
not added to the record, and because her attorney nonetheless persuaded her to go ahead with the
hearing on her claim. Id. She seeks an opportunity to prove that she is disabled and unable to
work, and requests that the Court “[o]verturn the [j]udgment and final [o]rder of [d]ismissal” and
award her $84,000 in past due benefits. Id. at 3. 1
Jurisdiction is a threshold matter, Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83,
94–95 (1998), and the Court may raise the issue on its own at any time without a motion from a
party, Folden v. United States, 379 F.3d 1344, 1354 (Fed. Cir. 2004). Further, while it is well
established that complaints filed by pro se plaintiffs are held to “less stringent standards than
formal pleadings drafted by lawyers,” Haines v. Kerner, 404 U.S. 519, 520 (1972), even pro se
plaintiffs must persuade the Court that jurisdictional requirements have been met, Harris v.
United States, 113 Fed. Cl. 290, 292 (2013).
This Court does not have jurisdiction over claims alleging the wrongful denial of social
security benefits. Marcus v. United States, 909 F.2d 1470, 1471 (Fed. Cir. 1990). To the
contrary, the Social Security Act confers jurisdiction over challenges to the final decisions of the
Commissioner of the SSA on the district courts. 42 U.S.C. § 405(g). Indeed, Ms. Fogel currently
has a lawsuit pending in the U.S. District Court for the District of Oregon that appears to seek
1
Ms. Fogel has filed a motion to proceed in forma pauperis in this case. That motion is
GRANTED.
review of the same denial of benefits that she has challenged in this case. See Fogel v.
Commissioner, No. 19-1545 (D. Or. Sept. 25, 2019).
For these reasons, the Court directs the Clerk to DISMISS Ms. Fogel’s complaint
without prejudice based on lack of subject matter jurisdiction.
IT IS SO ORDERED.
Elaine D. Kaplan
ELAINE D. KAPLAN
Judge
2
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Filed 10/17/18
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
JOSHUA P. PAGNINI,
Plaintiff and Appellant,
A151390
v.
UNION BANK, N.A., et al. (Contra Costa County
Super. Ct. No. MSC1401833)
Defendants and Respondents.
After plaintiff and appellant Joshua P. Pagnini (appellant) failed to respond to a
demurrer filed by defendants and respondents Union Bank, N.A. and Unionbancal
Mortgage Corporation (respondents), the trial court sustained the demurrer and entered
judgment in favor of respondents. Appellant appeals from the court’s denial of his
motion for relief under Code of Civil Procedure section 473, subdivision (b) (Section
473(b)). 1 We conclude the trial court was obligated to grant relief under the mandatory
provision of Section 473(b), where appellant presented a sworn declaration from his
counsel attesting that counsel mistakenly failed to respond to the demurrer by timely
filing an amended complaint. Although a number of court of appeal decisions have
declined to give plaintiffs the benefit of the mandatory provision of Section 473(b) in
other circumstances, we hold respondents’ demurrer was effectively a “dismissal motion”
and appellant’s counsel’s mistaken failure to respond to the motion obligated the trial
court to relieve appellant from counsel’s error. (Peltier v. McCloud River R.R. Co.
(1995) 34 Cal.App.4th 1808, 1824 (Peltier) [concluding mandatory provision of statute
1
All undesignated statutory references are to the Code of Civil Procedure.
1
applies to “plaintiffs whose cases are dismissed for failing to respond to a dismissal
motion”].)
BACKGROUND
In September 2014, appellant filed the present action against respondents, alleging
wrongful foreclosure and related causes of action arising from a July 2012 trustee’s sale
of appellant’s real property.
In May 2016, respondents demurred to all causes of action in appellant’s
complaint. On June 10, respondents filed a notice of non-receipt of opposition to the
demurrer. On July 13, the trial court sustained the demurrer without leave to amend and
entered judgment in favor of respondents.
On January 12, 2017, almost six months after entry of the judgment, appellant
moved for relief from the judgment under Section 473(b). He submitted a sworn
declaration from his counsel in which counsel averred he attempted to file an amended
complaint on June 14, 2016, shortly before the June 16 hearing on the demurrer. The
court clerk declined to file the amended complaint because the statute allowing the filing
of an amended complaint pending a hearing on a demurrer (§ 472) had been amended
effective January 1, 2016, to require that an amended complaint be filed within the time
provided for filing opposition to the demurrer (Stats. 2015, ch. 418, § 2). Appellant’s
counsel averred that he was not aware of the amendment to the statute, which previously
permitted the filing of an amended complaint at any point before the hearing. 2
In March 2017, the trial court denied the Section 473(b) motion. This appeal
followed.
DISCUSSION
The parties dispute whether the trial court was obligated to grant appellant relief
under Section 473(b) due to appellant’s counsel’s mistake that resulted in the sustaining
of respondents’ demurrer and dismissal of the complaint. This is an issue of statutory
2
The previous version of section 472 allowed the filing of an amended complaint “after
demurrer and before the trial of the issue of law thereon.”
2
interpretation we review de novo. (The Urban Wildlands Group., Inc. v. City of Los
Angeles (2017) 10 Cal.App.5th 993, 998 (Urban Wildlands).)
Section 473(b) provides for both discretionary and mandatory relief. (Gee v.
Greyhound Lines, Inc. (2016) 6 Cal.App.5th 477, 484 (Gee).) The mandatory provision
provides: “the court shall, whenever an application for relief is made no more than six
months after entry of judgment, is in proper form, and is accompanied by an attorney’s
sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate
any (1) resulting default entered by the clerk against his or her client, and which will
result in entry of a default judgment, or (2) resulting default judgment or dismissal
entered against his or her client, unless the court finds that the default or dismissal was
not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (Italics
added.) “ ‘The range of attorney conduct for which relief can be granted in the
mandatory provision is broader than that in the discretionary provision, and includes
inexcusable neglect.’ [Citation.] The purposes of the mandatory relief provision is to
promote the determination of actions on their merits, to relieve innocent clients of the
burden of the attorneys’ fault, to impose the burden on the erring attorney, and to avoid
the precipitation of additional litigation in the form of malpractice suits.” (Gee, at
p. 492.) “ ‘[I]f the prerequisites for the application of the mandatory provision of
[Section 473(b)] exist, the trial court does not have discretion to refuse relief.’ ” (Id. at
p. 484; see also Tackett v. City of Huntington Beach (1994) 22 Cal.App.4th 60, 65 [“a
mea culpa declaration by an attorney establishing that a default, default judgment, or
dismissal was entered against his or her client as a result of attorney neglect deprives the
trial court of discretion to deny relief, even without a showing that the neglect was
excusable.”].)
“[T]he reason the Legislature added the word ‘ “dismissal” ’ to the mandatory
provision of the statute ‘was the State Bar’s conclusion “ ‘that it is illogical and arbitrary
to allow mandatory relief for defendants when a default judgment has been entered
against them due to defense counsel’s mistakes and to not provide comparable relief to
plaintiffs whose cases are dismissed for the same reason.’ ” ’ [Citation.] . . . ‘By inserting
3
the word “dismissal” into the mandatory provision of the statute, the Legislature now
required the courts to vacate any “resulting default” or “resulting default judgment or
dismissal” when the other requirements of the mandatory provision were met.’ ” (Gee,
supra, 6 Cal.App.5th at pp. 490–491.)
As respondents point out, numerous court of appeal decisions have limited the
reach of Section 473(b) as it relates to relief from a “dismissal.” Although the statutory
language “on its face, ‘affords relief from unspecified “dismissal” caused by attorney
neglect, our courts have, through judicial construction, prevented it from being used
indiscriminately by plaintiffs’ attorneys as a “perfect escape hatch” [citations] to undo
dismissals of civil cases.’ [Citation.] Courts have limited the application of the
mandatory provision to those dismissals procedurally equivalent to defaults. [Citations.]
‘ “[A] default judgment is entered when a defendant fails to appear, and, under section
473, relief is afforded where the failure to appear is the fault of counsel. Similarly, under
our view of the statute, a dismissal may be entered where a plaintiff fails to appear in
opposition to a dismissal motion, and relief is afforded where that failure to appear is the
fault of counsel. The relief afforded to a dismissed plaintiff by our reading of the statute
is therefore comparable to the relief afforded a defaulting defendant.” ’ [Citations.] This
interpretation is consistent with the statute’s policy to put plaintiffs whose cases are
dismissed for counsel’s failure to respond to the dismissal motion on the same footing as
defendants who have defaulted because of counsel’s failure to respond. [Citation.] The
purpose of the statute is to relieve the hardship on those parties who have lost their day in
court solely because of counsel’s inexcusable failure to act.” (Gotschall v. Daley (2002)
96 Cal.App.4th 479, 483.)
For example, “[c]ourts have held the mandatory provision is inapplicable to
voluntary dismissals [citation] and dismissals for lapsing of the statute of limitations
[citation], failure to serve a complaint in a timely manner [citation], failure to prosecute
[citation], and failure to file an amended complaint after a demurrer has been sustained
with leave to amend.” (Gotschall, supra, 96 Cal.App.4th at pp. 483–484; see also Urban
4
Wildlands, supra, 10 Cal.App.5th at p. 999 [listing additional cases declining to apply
mandatory provision, including in summary judgment context].)
Nevertheless, the courts uniformly agree the Legislature intended at least “to put
plaintiffs whose cases are dismissed for failing to respond to a dismissal motion on the
same footing with defendants who are defaulted for failing to respond to an action.”
(Peltier, supra, 34 Cal.App.4th at p. 1824; accord, e.g., Urban Wildlands, supra, 10
Cal.App.5th at p. 1001; Gotschall, supra, 96 Cal.App.4th at p. 483; English v. IKON
Business Solutions, Inc. (2001) 94 Cal.App.4th 130, 145 (English); Leader v. Health
Industries of America, Inc. (2001) 89 Cal.App.4th 603, 618–619 (Leader); see also
Peltier, at pp. 1819–1820 [discussing legislative history].)
We conclude respondents’ demurrer was a dismissal motion for purposes of
Section 473(b), as construed by the above cases. Section 581 (“Dismissal; definitions”)
lists the “instances” in which “[a]n action may be dismissed,” including “after a demurrer
to the complaint is sustained without leave to amend and either party moves for
dismissal.” (§ 581, subd. (f)(1).) In a revealing contrast, the court in English, supra, 94
Cal.App.4th at pages 144–145, determined that the mandatory provision of Section
473(b) did not apply to a motion for summary judgment, observing, “[a]lthough . . .
section 581 describes various circumstances in which an action may be dismissed, either
by the court or by a party, noticeably lacking is any provision describing a summary
judgment in favor of a defendant as a ‘dismissal.’ ” In the present case, respondents’
demurrer was directed at the entirety of the complaint and concluded, “For the foregoing
reasons, the complaint filed by [appellant], and all causes of action therein, fail to state
facts sufficient to state a cause of action and the entire complaint must be dismissed.”
As further support for the proposition that a demurrer is a dismissal motion, it may
be observed that “[a] motion to dismiss in federal court is the equivalent of a demurrer in
California.” (The Swahn Group, Inc. v. Segal (2010) 183 Cal.App.4th 831, 844; see also
Laguna Village, Inc. v. Laborers’ Internat. Union of North America (1983) 35 Cal.3d
174, 182; Krinsky v. Doe 6 (2008) 159 Cal.App.4th 1154, 1171, fn. 10; 11601 Wilshire
5
Associates v. Grebow (1998) 64 Cal.App.4th 453, 457; Greene v. Zank (1984) 158
Cal.App.3d 497, 504, fn. 5; Fed. Rules Civ. Proc., rule 12(b).)
The present case is analogous to two recent court of appeal decisions that have
found the mandatory provision of Section 473(b) applicable. In Gee, supra, 6
Cal.App.5th 477, the court held Section 473(b) applied where plaintiff’s counsel failed to
pay change of venue fees and failed to respond to the defendant’s motion to dismiss
based on the failure to pay the fees. (Gee, at pp. 480–482, 491.) In Younessi v. Woolf
(2016) 244 Cal.App.4th 1137 (Younessi), the court held Section 473(b) applied where the
trial court granted a defendant’s “ex parte application for entry of a dismissal” following
plaintiffs’ counsel’s failure to timely file an amended complaint in response to an order
sustaining a demurrer to the original complaint with leave to amend. (Younessi, at
pp. 1140, 1148.) The Younessi court reasoned that, although the “defendants did not file
a motion to dismiss the case . . . , the dismissal resulted from an order granting [an] ex
parte application for entry of a dismissal, without any opposition from plaintiffs that
would allow the trial court to evaluate why they had failed to timely file an amended
complaint. Consequently, the dismissal was the procedural equivalent of a default
judgment.” (Younessi, at pp. 1148–1149.)
Respondents rely on Leader, supra, 89 Cal.App.4th 603, but that case is consistent
with our holding. There, the defendants’ demurrers were sustained with leave to amend,
the plaintiffs failed to file an amended complaint within the time permitted by the trial
court, and the defendants moved to dismiss the action when the plaintiffs offered an
untimely amended complaint. (Id. at p. 607.) Following a hearing, the trial court
dismissed the plaintiffs’ action. (Id. at p. 611.) The court of appeal affirmed, concluding,
among other things, that the mandatory provision of Section 473(b) did not apply to
relieve the plaintiffs from their counsel’s failure to file an amended complaint. (Id. at
p. 620.) Leader reasoned the dismissal was not analogous to a default judgment because
it followed a hearing at which the trial court received and considered the plaintiffs’
opposition. (Id. at p. 621.) The court held Section 473(b)’s mandatory provision did not
apply to “discretionary dismissals based on the failure to file an amended complaint after
6
a demurrer has been sustained with leave to amend, at least where, as here, the dismissal
was entered after a hearing on noticed motions which required the court to evaluate the
reasons for delay in determining how to exercise its discretion.” (Leader, at p. 620.) In
effect, the motion at issue in Leader was the dismissal motion contemplated under section
581, subdivision (f)(2), which provides in relevant part as a basis for dismissal that “after
a demurrer to the complaint is sustained with leave to amend, the plaintiff fails to amend
it within the time allowed by the court and either party moves for dismissal.” The court
of appeal in Leader did not suggest the defendants’ motion was not a dismissal motion or
that a dismissal resulting from an attorney’s failure to oppose the motion would have
been outside the scope of Section 473(b)’s mandatory provision. Instead, the court
explained that “the ‘day in court’ envisioned by [prior case law] is not a guaranteed trial
on the merits, but merely the opportunity to appear and present evidence and argument in
opposition to the motion to dismiss.” (Leader, at p. 620.) Because the plaintiffs did
respond to the motion to dismiss, they were not entitled to Section 473(b)’s mandatory
relief. (Leader, at p. 620; see also Younessi, supra, 244 Cal.App.4th at p. 1148
[distinguishing Leader because in Younessi “the dismissal resulted from an order granting
[an] ex parte application for entry of a dismissal, without any opposition from plaintiffs
that would allow the trial court to evaluate why they had failed to timely file an amended
complaint”].) In contrast, in the present case, appellant’s counsel did not respond to
respondents’ demurrer, a dismissal motion under section 581, subdivision (f)(1). 3
In conclusion, counsel’s mistake in misapprehending the time for filing an
amended complaint deprived appellant of an opportunity to respond to the demurrer and
resulted in a dismissal that was “the functional equivalent of a default for a plaintiff.”
(Gee, supra, 6 Cal.App.5th at p. 491; see also Peltier, supra, 34 Cal.App.4th at p. 1821
[“under our view of the statute, a dismissal may be entered where a plaintiff fails to
3
In the present case, appellant’s counsel’s declaration indicates he intended to respond to
the demurrer by filing an amended complaint, rather than by filing an opposition. That
does not affect our analysis, because counsel’s failure to respond the dismissal motion
resulted in dismissal of the action.
7
appear in opposition to a dismissal motion, and relief is afforded where that failure to
appear is the fault of counsel”].) The trial court erred in denying appellant’s Section
473(b) motion. 4
DISPOSITION
The trial court’s order denying appellant’s motion for relief under Code of Civil
Procedure section 473, subdivision (b) is reversed. The trial court is directed to grant the
motion, to vacate its order sustaining respondents’ demurrer, and to provide appellant an
opportunity to respond to the demurrer. Appellant is awarded his costs on appeal.
4
We reject respondents’ additional argument that the mandatory provision of Section
473(b) is inapplicable because “[a] judgment after the sustention of a general demurrer on
substantive grounds is a judgment on the merits” for purposes of the res judicata doctrine.
(Berman v. Aetna Cas. & Surety Co. (1974) 40 Cal.App.3d 908, 912.) Respondents fail
to explain why that provides a basis to deny relief under Section 473(b), given the
Legislature’s intent to provide relief where a plaintiff’s counsel has failed to respond to a
dismissal motion. Notably, default judgments, which are indisputably within the scope of
the mandatory provision, also have res judicata effect. (Fitzgerald v. Herzer (1947) 78
Cal.App.2d 127, 131 [“A judgment by default is as conclusive as to the issues tendered
by the complaint as if it had been rendered after answer filed and trial held on allegations
denied by the answer.”]; see also Steven M. Garber & Associates v. Eskandarian (2007)
150 Cal.App.4th 813, 823.)
8
SIMONS, J.
We concur.
JONES, P.J.
NEEDHAM, J.
(A151390)
9
Superior Court of Contra Costa County, No. MSC14-01833, Hon. Steven K. Austin,
Judge.
William E. Gilg, for Plaintiff and Appellant.
Serlin & Whiteford, LLP, Mark A. Serlin, for Defendants and Respondents.
10
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496 P.2d 214 (1972)
Wayne L. RUEGSEGGER & Marjorie E. Ruegsegger, Husband and Wife, Respondents,
v.
Ken M. McCarley and Gladys C. McCarley, Husband and Wife, and Ken McCarley, Inc., an Oregon Corporation, Appellants.
Supreme Court of Oregon.
Argued and Submitted March 6, 1972.
Decided April 26, 1972.
Rehearing Denied May 23, 1972.
*215 Howard I. Bobbitt, Portland, argued the cause and filed the briefs for appellants.
George M. Joseph, Portland, argued the cause for respondents. With him on the brief were Bemis, Breathouwer & Joseph, Portland.
Before O'CONNELL, C.J., and McALLISTER, DENECKE, HOLMAN, TONGUE and BRYSON, JJ.
TONGUE, Justice.
This is an action for damages and restitution by the purchasers of a house against the builder-seller of the house, who failed to convey clear title. As a result, the purchaser was required to pay off a construction mortgage with a balance of $19,395.73, in addition to payment of the purchase price in full in the sum of $23,866.
Defendants' answer alleged, among other things, that defendants had filed a petition for voluntary bankruptcy, in which plaintiffs were listed as creditors and in which plaintiffs' claim was one from which a discharge would be a release, and prayed that plaintiffs' action be abated until a determination of that issue.
Plaintiffs' reply denied that defendants' obligation to plaintiffs was dischargeable in bankruptcy and alleged that at some unspecified date defendants represented that upon payment in full they would convey title free and clear of all encumbrances; that in reliance thereon plaintiffs paid defendants in full, but that "said representations were false and defendants knew then and there that they were false"; that the property was in fact subject to a mortgage and that defendants "had no intention to discharge the same, but intended to and did convert said funds to their own use." At the conclusion of the trial defendants filed a demurrer to this reply, which the court took under advisement.
The facts of this domestic financial tragedy are not complex. Plaintiffs saw a model home advertised by defendants and on April 12, 1967, signed a contract under which defendants agreed to build a similar house for them. The contract provided that upon payment in full of the sum of $23,866 defendants would deliver marketable title. The contract also provided that defendants might obtain a mortgage loan to secure funds for construction and that the plaintiffs might elect to assume the balance of that loan in part payment of the contract. At that time, however, there was no mortgage on the property and plaintiffs testified that they did not read those contract provisions and were not told of defendants' intention to get a mortgage loan.
Defendants then obtained a construction mortgage loan for $19,000 and started to build the house. The house was completed on schedule in August 1967 and plaintiffs moved in. At that time they were making monthly payments to defendants, as provided in the contract.
On or about January 1, 1968, plaintiffs made a payment to defendants of $16,182, which they had withdrawn from savings for that purpose, leaving a balance of only $666.40 yet to be paid on the contract. At that time plaintiffs had no further conversation with defendants, although they had previously told defendants of their intent to pay off the contract at an early date and to take title free and clear.
That payment of $16,182 was not applied by defendants to the payment of the mortgage on the property, but instead went into the firm's general account and was used for other purposes. There was no evidence, however, that defendants were in financial difficulty at that time. By letter dated January 22, 1968, defendants sent plaintiffs a statement of the amount of the contract balance as of the date of the January payment, but made no reference to the mortgage.
*216 Plaintiffs then continued to make monthly payments in February, March, April and May and on June 4, 1968, made a final payment in the sum of $187.89. At that time, and also by letter dated June 5, 1968, defendants informed plaintiffs that they were preparing a deed and were ordering a policy of title insurance "to show the property is free and clear of any encumbrances" and which would be delivered when received. Defendants told plaintiffs that this would take from 60 to 90 days because of "paper work."
As time went on, however, no deed or title policy was received and plaintiffs were unsuccessful in attempts to reach defendants by telephone. By letter dated January 24, 1969, however, defendants notified plaintiffs that they had "set up an escrow account" to "complete the closing transactions on [the] house." They also prepared escrow instructions as set forth by letter dated February 6, 1969, but never deposited the money as referred to in that letter and necessary to pay off the mortgage, because no such funds were then available. At that time the mortgage may have been in default.
In April 1969 plaintiffs heard that defendants were in financial trouble and went to an attorney, who was then successful in securing delivery of a warranty deed, dated as of June 15, 1968, with no reference to any mortgage. That deed had never been previously delivered in escrow or to plaintiffs.
In April 1969 plaintiffs were also notified by the holder of the mortgage that it was in default. They were then required to assume payment of the mortgage to prevent it from being foreclosed. On November 13, 1969, plaintiffs filed this action.
After considering the testimony in a trial before the court, without a jury, the trial court entered the following findings of fact, among others:
"V
"At the time of plaintiffs' final payment of approximately $16,000.00, Ken McCarley told plaintiffs that they would receive a deed and title policy in two or three months because of paper work and did not disclose mortgage to Lincoln Savings & Loan. Ken McCarley thereupon caused said moneys to be deposited to the general account of Ken McCarley, Inc., and was subsequently disbursed for other purposes than to apply on mortgage to Lincoln Savings & Loan.
"VI
"The statements made to plaintiffs by Ken McCarley at time of receiving final payment, were false, were known to be false, were material, were made with intent that they be relied on by plaintiffs, and were relied on by plaintiffs.
"* * *
"VIII
"The indebtedness to these plaintiffs was not discharged in bankruptcy of defendants Ken H. McCarley and Gladys C. McCarley."
Based upon these findings judgment was entered against defendants for the sum of $19,395.73, representing the mortgage balance as paid by plaintiffs in order to clear title to the property, for which they had already paid defendants in full in the sum of $23,866. Defendants appeal.
Defendants' first and second assignments of error are that the trial court erred in the foregoing findings of fact and in its conclusion of law that the debt of defendants to plaintiffs was not dischargeable in bankruptcy.
Both parties have treated that question to be whether the debt was not dischargeable because of the provisions of Section 17(a) (2) of the Bankruptcy Act, 11 U.S.C. § 35(a) (2), as a "liabilit(y) for obtaining money or property by false pretenses or false representations," rather than as a fraud claim under Section 67 of that Act, 11 U.S.C. § 107. At the time of the filing of defendants' petition in bankruptcy, plaintiffs were free to seek a determination of that question in the state courts. See Cowans, Bankruptcy Law and Practice § 930 (1963 ed). Since then the Act has *217 been amended to require that such a contention be raised in the Federal Bankruptcy Court. 11 U.S.C. § 35(c).
Plaintiffs contend that defendants obtained the payment of over $16,000 by "false representations," rather than by "false pretenses," and make no contention that the elements required to prove that money was obtained by false representations are substantially different than the elements required in Oregon to prove, as common law fraud, that money was obtained by false representations. See 8 Remington on Bankruptcy §§ 3319, 3320 (6th ed). Cf. Cowans, Bankruptcy Law and Practice §§ 442, 443, 444 (1963 ed). Thus, plaintiffs cite no authorities contrary to defendants' contention, citing Amort v. Tupper, 204 Or. 279, 286, 282 P.2d 660, 663 (1955), that in order for plaintiffs to prevail in such a case it must appear:
"* * * (1) That defendant made a material representation; (2) that it was false; (3) that when he made it he knew it was false, or made it recklessly without any knowledge of its truth, and as a positive assertion; (4) that he made it with the intention that it should be acted upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6) that he thereby suffered injury. Each of these facts must be proved with reasonable certainty, and all of them must be found to exist. The absence of any one of them is fatal to recovery * * *."
More specifically, defendants contend that a contention that money was obtained by false representations, fraud cannot be "predicated" upon broken promises, which are "inherent in bankruptcy," with the result that failure to perform a promise is not fraud unless the person making the promise, at the time he made it, had no intention of performing, citing Conzelmann v. Northwest Poultry & Dairy Prod. Co., 190 Or. 332, 350-352, 225 P.2d 757 (1950), and Elizaga v. Kaiser Foun. Hospitals, 93 Or. Adv.Sh. 63, 68, 487 P.2d 870 (1971).
Plaintiffs contend, however, that Conzelmann and Elizaga are not only distinguishable, but support plaintiffs' position in this case.
In Conzelmann we held (190 Or. at p. 351, 225 P.2d at p. 765):
"To amount to a fraudulent representation sufficient to constitute actionable fraud, the intention not to perform must exist at the time the promise to do something in the future is made, and such an intent formed later and carried into effect is insufficient."
and (at p. 352, 225 P.2d at p. 765):
"A fraudulent intent not to perform a promise may not be inferred as existing at the time the promise is made from the mere fact of nonperformance. Other circumstances of a substantial character must be shown in addition to nonperformance before such inference of wrongful intent may be drawn."
Similarly, in Elizaga we held (93 Or.Adv. Sh. at p. 68, 487 P.2d at p. 874):
"A failure to perform a promise is not a basis for an action for fraud. Making a promise, however, with the knowledge that it probably cannot be performed or with reckless disregard whether the promisor can or cannot perform can be the basis for an action of fraud. Prosser, Torts, supra, at 745."
We also held in that case (at p. 67, 487 P.2d 870) that the fact that the defendant in that case "persisted in its nondisclosure" after learning of plaintiff's intent to accept its promise of a job could be considered as evidence that at the time when defendant promised the job to plaintiff it then knew that the program would probably terminate in a few months, with the result that no job would be available and that defendant would not be able to keep its promise.
Thus, plaintiffs contend in this case that here, as in Elizaga, there was a "nondisclosure of material facts" and a reckless disregard for plaintiffs' rights and that, as in Conzelmann, there were also the following "other circumstances of a substantial character" as evidence of defendants' *218 wrongful intent not to perform their promise to defendants:
"* * * Non-disclosure of the mortgage, deposit of the money in the firm's general account, failure to apply the $16,000.00 received in January to the mortgage, stating that steps were actually being taken to deliver a free and clear insured title when no steps were being taken, preparation of a deed which did not recite the existence of the mortgage, knowledge of a worsening financial condition without disclosure of it, preparation of wholly useless escrow instructions. * * *"
The difficulty with plaintiffs' contention, however, is that there is no evidence whatever to prove that when defendants, by the original contract of sale dated April 12, 1967, promised to deliver good title upon the receipt of payment in full they did not at that time intend to keep that promise. The evidence is also clear that when plaintiffs made the payment of $16,000 to defendants on January 1968 no representation whatever was made by defendants to plaintiffs. It is well established that in order to constitute the "obtaining [of] money or property by false pretenses or false representations," within the meaning of Section 17(a) (2) of the Bankruptcy Act, the fraud by such means must occur at or prior to the time the money or property is obtained. 133 A.L.R. 440, 446 (Annot.) and cases cited therein.
Plaintiffs concede that the trial court made an "immaterial error" in its finding of fact that representations were made by defendants at the time of the "final payment of $16,000." Plaintiffs say, however, that this "makes no difference, for the record is clear that as part of the receipt of the final payment [of $187.89 on June 4, 1968] the defendants McCarley did make the alleged representations concerning the deed and title insurance."
It necessarily follows, however, that the original promise made by defendants to convey clear title, as made in April 1967, even if subsequently relied upon by plaintiffs when they later paid $16,000 to defendants, cannot be regarded as a false or fraudulent representation, for lack of evidence that it was made either with an intent at that time not to perform or that at that time it was made recklessly and without regard to defendants' ability to perform. Indeed, at that time there was no mortgage on the property and there was no evidence that defendants did not then intend to pay or could not then pay any future construction mortgage loan on that property. The subsequent nondisclosure of the mortgage, the deposit of the $16,000 in the firm's general account and the failure to apply it to the mortgage cannot (and apparently are not contended to) provide sufficient evidence to establish that in April 1967 defendants had such a fraudulent intent.
In Elizaga, on the contrary, at the time defendant promised the job to plaintiff it then knew that the program would probably be terminated so that it would be unable to perform its promise. In Conzelmann, the court found, as in this case, that the alleged "other circumstances" were not sufficient as the basis for an inference of a wrongful intent at the time of making the promise complained of in that case.
It also follows that since the only other representations made by defendants to plaintiffs were the representations made by defendants on June 4, 1968, when the final payment of $187.89 was paid, that plaintiffs are confined as a basis for recovery to the representations made at that time. We fully agree with plaintiffs' contention that there was sufficient evidence to establish the necessary fraudulent intent in the making of those representations at that time. The problem, however, involves the amount of damages, or to be more specific, the amount of money obtained from plaintiffs by those false representations.
If this were an action for damages for fraud, plaintiffs might not be confined to a claim of $187 in damages if they were able to prove, for example, that had they then known of defendants' fraud they could then have taken steps that would have made possible the recovery of previous payments because of the existence of assets then *219 available as a basis for such recovery. No such evidence was offered in this case and, in any event, plaintiffs' sole contention in this case has been that defendants "obtained money by false representations" within the meaning of Section 17(a) (2) of the Federal Bankruptcy Act, 11 U.S.C. § 35(a) (2).[1]
This does not mean, of course, that plaintiffs were not entitled to judgment against defendants for the full amount of the debt owed by them to plaintiffs in the sum of $19,395.73, in accordance with the terms of the judgment as entered by the trial court in this case. It does mean, however, that because, according to the evidence in this case, the only money obtained by defendants by false representations was the final payment, in the sum of $187.89, as paid on June 4, 1968, there is no basis in the record to support the conclusion of law by the trial court that any amount in excess of that payment of $187.89 was a debt not discharged in bankruptcy.
This is an extremely unfortunate case and we have studied the entire record carefully, as well as the applicable law, before coming to this reluctant conclusion. Unfortunately, debts resulting from broken promises are dischargeable in bankruptcy in the absence of proof that money or property was obtained by false pretenses or by false representations, or that the facts were such as to come within other provisions of the Bankruptcy Act not applicable in this case.
If plaintiffs' complaint had alleged that the entire $16,000 was obtained by false "pretenses," under Section 17(a) (2) of the Bankruptcy Act (11 U.S.C. § 35(a) (2) rather than by false "representations," or if plaintiffs' complaint had alleged an embezzlement by a fiduciary, under Section 17(a) (4) of that Act (11 U.S.C. § 35(a) (4)), based upon allegations that at the time of receiving payment of the $16,000 defendants fraudulently concealed the existence of the mortgage as well as their intent to divert that payment to purposes other than payment of the mortgage, this might be a different case. Indeed, we have recognized that under some circumstances the recovery of a judgment by a plaintiff may be affirmed on a theory different from that under which the case was tried, provided that sufficient facts were both pleaded and proved to support recovery on such a theory. See Chaney v. Fields Chevrolet Co., 258 Or. 606, 484 P.2d 824 (1971).[2]
The principal difficulty with this case, however, is not so much that such facts were not pleaded as it is that plaintiffs offered no evidence that at the time of *220 the $16,000 payment the defendants were in financial difficulty and offered no evidence that defendants did not then intend to pay off the mortgage, so as to be able to convey good title to plaintiffs.
In any event, and perhaps for good reason, plaintiffs chose to proceed both in the trial court and in this court on the theory that defendants obtained money by false representations within the meaning of Section 17(a) (2) of the Bankruptcy Act. 11 U.S.C. § 35(a) (2).
For all of these reasons, we are constrained to hold that under the evidence in this case the only money received by defendants by false representation, so as to result in a liability that was not dischargeable in bankruptcy under Section 17(a) (2) of that Act, was the sum of $187.89.
This disposition of the case makes it unnecessary to consider defendants' additional assignments of error and contentions.
It should also be noted that the attorneys who represented plaintiffs in this court were not the same as those who represented plaintiffs on trial.
Affirmed as modified.
NOTES
[1] Thus, plaintiffs state the question to be decided in this case as follows:
"If the individual defendants were liable to the plaintiffs, was that liability subject to discharge under Section 17(a) (2) of the Bankruptcy Act, 11 USC § 35?"
[2] In an attempt to bring this case within the scope of Section 17(a) (2) as a one involving money obtained by false representations, plaintiffs cite Gregory v. Pierce, 186 Iowa 151, 172 N.W. 288 (1919), as holding that the concealment of a mortgage amounted to a "continuing misrepresentation" by which defendants acquired and kept control of plaintiffs' money. As we read that case, however, the court (at p. 291 of 172 N.W.) rejected the contention of a continuing misrepresentation. In any event, the distinction between the pleading and proof of affirmative representations, as distinct from concealment, is well established in Oregon, even though the legal effect may be the same and even though a representation in the nature of a "half truth," plus concealment of the remaining truth, may constitute fraud. See Heise v. Pilot Rock Lbr. Co., 222 Or. 78, 352 P.2d 1072 (1960); Musgrave v. Lucas, 193 Or. 401, 238 P.2d 780 (1951); Palmiter v. Hackett, 95 Or. 12, 185 P. 1105, 186 P. 581 (1920); Fitzhugh v. Nirschl, 77 Or. 514, 151 P. 735 (1915); and Clearwater v. Forrest, 72 Or. 312, 316, 143 P. 998 (1914).
Plaintiffs also cite Wells v. Blitch, 182 Ga. 826, 187 S.E. 86 at p. 90 (1936), which held that "a false representation may consist in obtaining the money of another upon the faith that it will be used for the purpose for which the trust was extended" and that to receive money without a present intention of using it as directed is a "false representation of one's intention." In that case, however, it appears (at p. 88 of 187 S.E.) that it was alleged that at the time of a sale of land for $1,500 in cash defendant affirmatively "promised your petitioner" that the money would pay off an existing loan debt and that he failed to do so. Thus, it was properly held in that case that plaintiff had obtained the money by either "false pretenses" or "false representations."
We have also read other cases cited by plaintiffs and find that they are not in point.
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709 F.2d 1512
Veenkantv.Gurn
82-1582
UNITED STATES COURT OF APPEALS Sixth Circuit
3/28/83
1
W.D.Mich.
AFFIRMED
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822 F.2d 1094
Chance (William)v.Lobbers (Troy)
NO. 86-5405
United States Court of Appeals,Eighth Circuit.
JUN 08, 1987
1
Appeal From: D.S.D.
2
AFFIRMED.
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395 F.2d 783
J. A. JONES CONSTRUCTION COMPANYv.The UNITED STATES.
No. 71-62.
United States Court of Claims.
May 10, 1968.
Claude Monnet, Oklahoma City, Okl., attorney of record for plaintiff.
Sheldon J. Wolfe, Washington, D. C., with whom was Asst. Atty. Gen., Edwin L. Weisl, Jr., for defendant.
Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS, COLLINS, SKELTON and NICHOLS, Judges.
OPINION
1
NICHOLS, Judge*
2
The plaintiff seeks review of an adverse decision of the Armed Services Board of Contract Appeals (hereinafter called ASBCA or the Board), Appeal of J. A. Jones Construction Company, ASBCA No. 5798 (December 27, 1961), 61-2 BCA para. 3256, which modified in part a previous adverse decision of the Corps of Engineers Board of Contract Appeals, Appeal of J. A. Jones Construction Company, Eng. Dec. No. 1425 (June 4, 1959). The defendant, though agreeing with that part of the Board decision rejecting the bulk of the plaintiff's claim, contended the partial recovery allowed plaintiff by the Board was not supported by substantial evidence. The Board was right and we affirm.
3
Part of a large contract awarded plaintiff in 1954 by the Corps of Engineers for constructing facilities at the Ernest Harmon Air Force Base in Newfoundland, Canada, involved, for purposes of this suit, the completion and/or construction for the Air Force of five multi-purpose hangars with shells (roofs, siding, and sliding doors) of galvanized iron sheeting of prescribed gages (see Paragraph 14-04 of the technical provisions, infra). J. A. Jones subcontracted this phase to Capitol Steel & Iron Company, the beneficial claimant suffering the loss in suit, and all but the furnishing of the sheeting was sub-subcontracted in turn to the Western Steel Erection Company. "Plaintiff" shall refer to any or all of the trio, unless specified.
4
Paragraph 14-04 of the technical specifications for roofing and siding provided:
5
GALVANIZED SHEETS shall be the manufacturer's standard commercial type, having corrugations approximately 2½ inches wide, and shall be tight-galvanized with not less than ¾ ounce zinc coating per square foot on each side of sheet. Sheets shall be of plain open-hearth 20 gage for roofing and 24 gage for siding. All interior corrugated metal work shall be galvanized sheets. (Emphasis supplied)
6
* * * * * *
7
The principal issue of law relates to the requirement of ¾ ounce coating "on each side" in light of paragraph 14-02 of the technical provisions of the specifications which listed a series of specifications generally applicable to roofing and siding metal, and included Federal Specification QQ-I-716, Iron and Steel, Sheet, Zinc Coated, Galvanized. This specification set forth, in tables contained therein, as a requirement for compliance with the provisions thereof, the nominal weight of zinc coating for 20 and 24 gage galvanized sheets. It provided:
8
Class A (oz. Class B (oz. Class C (oz.
per sq. ft.) per sq. ft.) per sq. ft.)
20 gage .............. 2.75 2.50 1.75
24 gage ....................... 2.50 1.50
9
It also set forth as the minimum weight of zinc coating for compliance with the provisions of QQ-I-716 the following:
10
Minimum weight as disclosed by
Sheet weight Diagonal triple
Nominal weight test (oz. per spot test (oz.
(oz. per sq. ft.) sq. ft.) per sq. ft.)
2.75 ........................... 2.45 2.30
2.50 ........................... 2.20 2.00
2.00 ........................... 1.80 1.60
1.75 ........................... 1.55 1.35
1.50 ........................... 1.30 1.15
11
The weights set forth in this specification are total weights, that is, the total weight of the zinc coating applied to each side of a square foot of a galvanized sheet.
12
Reading the tables together, one can see, for example, that where 20-gage, Class C sheeting is required by the contract, the nominal weight of zinc coating specified in the first table is 1.75 oz. per sq. ft. The corresponding nominal weight figure in the second table would show the contractor that for the coated sheets to be acceptable, the minimum oz. per sq. ft. weight of the coating would have to be 1.55 under the sheet weight test and 1.35 under the diagonal triple spot test. Testimony showed that the manufacturing industry uniformly employed the diagonal triple spot test in testing for compliance with the specification.
13
Since at least 1942, specification QQ-I-716, which with interim amendments is the Government counterpart of and closely resembles the industry standard specification A-90-39 of the American Society of Testing Materials, has been the basic specification governing all military contracts involving galvanized steel sheeting. Capitol Steel & Iron Company say they have constructed more galvanized steel hangar buildings for the Corps of Engineers than any other contractor in the United States and have always operated under specification QQ-I-716, having never before encountered the equivalent of paragraph 14-04, quoted supra. Specification QQ-I-716 also prescribed testing methods for determining the weight of zinc coating.
14
The Army Engineers drafted the language of paragraph 14-04 and promulgated it as a "guide specification" to be copied into contracts by field officials. Though details are vague, it is said to have been used in several other contracts. Except as disclosed in the language itself, the purpose of the paragraph does not appear in the record. It was not, as might have been supposed, connected with any peculiarities of the Newfoundland climate.
15
Witnesses for plaintiff, representatives of major steel companies, said their concerns would have refused to bid on a contract incorporating paragraph 14-04 for several reasons: the absence of a prescribed testing method, the alleged difficulty of measuring weight of coating if it is not a total for both sides, and the requirement for a "tight" coat, i. e., one that will not flake if the metal is bent, associated with a coating thickness making such tightness difficult. However, they also said that in 1954 a reasonable contractor would have construed 14-04, despite its literal language, as calling only for a total coating of 1.50 oz. on both sides. This statement did not influence the Board, as will appear, and a careful reading of the testimony indicates the witnesses may have meant no more than that bidders in 1954 were not too careful in reading contract specifications. They were not giving a trade or commercial meaning, for they also said the language of 14-04 was unheard of and unknown.
16
Plaintiff's officials read the specifications and determined in their own minds that the Government really wanted a zinc coating aggregating 1½ ounces of zinc on both sides. They did this because of their experience in steel work, "the information of the industry", and because a thickness for single sides had never before been specified. They related this 1½ ounces to the figure, supra, for Class C 24-gage, although 20-gage was also to be supplied.
17
In July 1954 plaintiff ordered corrugated galvanized sheets for the hangar roofing and siding, and for the hangar doors. While specifying in the order the lengths, widths and gages, the plaintiff did not specify in writing the class or weight of zinc coating required. It claims to have stated orally it desired Class C and apparently that is what it got.
18
In the normal Government procurement involving the use of galvanized sheeting the invitation and contract specify the class of sheeting to be used, and from this the contractors can readily ascertain exactly what is needed by consulting the pertinent tables in Federal Specification QQ-I-716. Indeed, paragraph 1-5 of that specification requires that Government invitations and contracts state the class of coating desired. Both users and suppliers in the galvanized sheeting industry subscribe uniformly to such classifications. It will have been noted the contract here involved nowhere mentioned Class C.
19
During the course of two conferences with defendant's representatives prior to the award, plaintiff did not question the language or application of paragraph 14-04 of the technical provisions of the specifications, or inquire whether it affected Federal Specification QQ-I-716, or ask what class of sheeting was contemplated.
20
The galvanized sheeting the plaintiff had ordered was produced in late July or early August, and after a stay in a Houston warehouse arrived by sea transport at the jobsite late in November, 1954. Installation began in the early part of December. Defendant made no inspection of the sheeting as it arrived at the jobsite, as the job specifications provided, but it would have been difficult to inspect without removing the protective paper wrappers in which the material was delivered. The wrappers were left intact in order to protect the material in open storage. In January, 1955, the Government inspector reported to plaintiff's representative that he had noticed some discoloration of the sheeting he had seen. On March 14, 1955, the defendant's representative wrote to plaintiff that many of the siding sheets and a lesser number of the roofing sheets being installed on Hangar No. 4 "indicate improper workmanship in the galvanizing process. It appears that the sheets have some bare or improperly coated areas or salamoniac spots or defects." (Salamoniac = sal amoniac.) This representative recommended that installation of sheets with apparent defects be discontinued, and plaintiff was advised that samples would be submitted by the defendant to a testing laboratory for determination of the cause of the defects and the weight of the zinc coating.
21
On April 11, 1955, the Public Service Testing Laboratories, Inc., to which defendant submitted four sample sheets for testing, reported that tests disclosed less than ¾ ounce per square foot of zinc coating on each side, contrary to the direction of technical provision 14-04. The four test samples represented sheets in poor, fair and average conditions. Corrosion was detected in these sample sheets and was deemed to be the result of temperature and humidity conditions in storage. On April 13, 1955, the defendant issued a stop order for further installation of substandard galvanized metal siding sheets pending discussion of corrective action. In its response to defendant of April 19 the plaintiff stated:
22
There was evidently some misunderstanding in your office about our position in regard to the galvanized metal siding at Harmon. Just as soon as this condition was discovered we immediately, before receiving any notice from you, began to take steps to have the manufacturers furnish galvanized metal siding that would pass the specifications. At no time do we intend to ask you to accept materials that do not meet the specifications. That is not the policy of this company. We confirmed this to you in our conference in your office on April 14.
23
Also, on April 19, 1955, the defendant issued a formal stop order directing plaintiff not to install any additional sheeting pending further instructions, and to report what corrective action the plaintiff proposed to take in regard to the defective sheeting.
24
By letter of May 3 the plaintiff requested the defendant to approve certain proposed corrective measures to (1) replace all sheeting already erected which showed active corrosion, (2) resume erection using only sheeting with no signs of corrosion after rigid inspection, and (3) use of sheeting which had minimum discoloration but no corrosion for interior wainscoting and hangar doors upon cleaning and painting it with zinc oxide paint, all at no change in the contract price. On May 16, 1955, the contracting officer rejected this proposal because laboratory tests had indicated the zinc coating did not meet specifications, and directed plaintiff not only to stop any further application of sheeting, but also to replace the entire amount of sheeting for all five hangars with material conforming to the specifications. This letter was followed on June 15, 1955, with the plaintiff's letter of protest, notice of claim, and advice that it would comply with directions to replace all sheeting.
25
A second commercial laboratory test was performed at defendant's order by the City Testing & Research Laboratories, Inc., on June 17, 1955, on six samples of the siding and roofing sheeting which had been selected jointly by representatives of the parties. The report reflected that the amount of zinc coating on each side of the sheets ranged from .43 to .60 ounces per square foot, as compared to the .75 ounce per square foot requirement for each side in technical provision 14-04. The report also noted corrosion defects which were probably caused by the presence of water on the surfaces.
26
On July 7, 1955, the contracting officer issued his findings of fact, rejecting plaintiff's protest and claim on the basis that the two laboratory test reports thus far obtained disclosed that none of the ten samples submitted to tests for zinc coating weight had met the requirements of technical provision 14-04. Finding No. 4 referred to the contracting officer's previous letter of March 14, 1955, in which the contractor had been advised that "many of the corrugated metal siding and roofing sheets being installed on Wing Hangars have bare or improperly coated areas or defects." and that "samples of the material would be submitted by the government to a laboratory for determination of the cause of the defects as well as the weight of the galvanizing." From this it is construed that the defects in the sheeting which caused the contracting officer to issue his stop order were the indications of corrosion as well as the insufficient zinc coating, since both laboratories had referred to the corrosion, and the contracting officer's previous letter of March 14, 1955, had referred to "some bare or improperly coated areas or salamoniac spots or defects." The contracting officer's findings of fact of July 7, 1955, were transmitted to plaintiff by letter of July 20, 1955, in which the contracting officer disallowed the plaintiff's protest.
27
In a notice of appeal dated August 11, 1955, to the Chief of Engineers, the plaintiff alleged that Federal Specification QQ-I-716, referenced in paragraph 14-02 of the technical provisions, prescribed the method for testing zinc coating, that the tests initiated by defendant were improperly made and the interpretations thereof were erroneous, and that all the sheets complied with the contract specifications.
28
The defendant thereafter had a test performed by the National Bureau of Standards to determine the weight of the coating on each side separately of 44 samples of galvanized sheets jointly selected by representatives of the parties. The report submitted on November 4, 1955, concluded that 59 percent of the galvanized sheets tested had an average zinc coating weight of less than .75 ounce per square foot on one side or the other of each separate sheet.
29
Plaintiff submitted 23 random sheets of roofing sheeting and 18 sheets of siding sheeting for testing to the Pittsburgh Testing Laboratory, plus three other sheets that are not germane to this controversy. The laboratory's report of November 9, 1955, disclosed that six (26 percent) of the 23 roofing sheets had less than either the nominal or minimum zinc coating requirements of Federal Specification QQ-I-716 for 20-gage Class C sheets, and two (11 percent) of the 18 siding sheets had less than the nominal or minimum coatings required by the same specification for 24-gage Class C sheets. The test applied to these samples were in accordance with Federal Specification QQ-I-716. The laboratory report also stated that "The majority of the sheets tested showed severe signs of weathering."
30
At the contracting officer level the plaintiff had not raised the issue of which specification controlled the zinc coating requirement. Accordingly, the CEBCA, as the appellate body of first resort, elected not to deal with this issue. Instead, it denied the plaintiff's claim in toto on the grounds that the galvanized sheeting was defective because of corrosion and, therefore, properly rejected by the contracting officer.
31
On plaintiff's subsequent appeal to the ASBCA, the Board ruled on two issues. The first was to consider and reject plaintiff's contention that Federal Specification QQ-I-716, rather than technical provision 14-04, governed the zinc coating requirement. In this connection it found that 60 percent of the sheeting had less than .75 ounce of zinc coating per square foot on at least one of the two sides of each separate sheet, and was, therefore, to be rejected for noncompliance with technical provision 14-04. The second issue dealt with the problem of defects due to corrosion. Since 60 percent of the total quantity of sheeting had been found to be rejectable for deficiency of zinc coating, the fate of the remaining 40 percent depended on the portion thereof suffering from an unacceptable degree of corrosion. Here the ASBCA differed from the CEBCA, holding that only half of the sheets was unacceptably corroded, which left 20 percent of the total number of rejected roofing and siding sheets for which plaintiff was entitled to compensation in an amount to be determined by the contracting officer on remand. To this the ASBCA added the cost of half of the galvanized sheets for sliding hangar doors, for the reason that Federal Specification QQ-I-716 expressly applied to them under the contract rather than technical provision 14-04, the other half not being acceptable because of the pervasive corrosion.
32
Plaintiff both disagreed with the conclusion that technical provision 14-04 governed the zinc coating requirement rather than QQ-I-716 and with the percentage of various sheetings found to be properly rejected, rejection being based on the lack of the required amount of zinc coating or the existence of corrosion. We hold both of plaintiff's positions lacking of merit.
33
There seems to be little reason for finding any real discrepancy or ambiguity in the contract provisions. According to testimony, the Engineers intended that 14-04 should supersede QQ-I-716 and that the latter should not apply to the hangar roofs and walls involved in this dispute. That intent would seem to have been stated. It is difficult to see how any bidder could have supposed that QQ-I-716 applied inasmuch as it described several classes of sheets, and to trigger its application, the Government would have needed to state what class was to be supplied. This it did not do. If, however, QQ-I-716 did apply, the question would arise whether the bidder was expected to satisfy both specifications. If he thought he was, it was possible for him to do it. Apparently, after rejection of the original supply, the ultimate supply by plaintiff of Class B sheeting did substantially satisfy both 14-04 and QQ-I-716 and if there was any detail wherein it did not do so, the record fails to show what it was. However, if both specifications applied and plaintiff had any real reason to think it could not conform to both, plaintiff had reason to think there was a discrepancy and it still cannot prevail because instead of jumping to conclusions as to what 14-04 meant, it should have asked a few questions.
34
Plaintiff argued that its interpretation of the specifications, i. e., that QQ-I-716 controlled, that not less than .75 ounces of zinc coating per square foot on each side meant 1.50 ounces on both sides, was a reasonable construction of Government drafted specifications and therefore should control. In support of this position plaintiff cited Kings Electronics Co. v. United States, 341 F.2d 632, 169 Ct.Cl. 433 (1965), that case citing with approval Peter Kiewit Sons' Co. v. United States, 109 Ct.Cl. 390, 418 (1947). While the "reasonableness" of the contractor's interpretation may sometimes be controlling in resolving a controversy of this nature, see, e. g., L. Rosenman Corp. v. United States, 390 F.2d 711, 182 Ct.Cl. ___ (1968), in the instant case that argument overlooks Article III of the contract and the legal significance the inclusion of that clause (or one like it) in a contract carries. Article III provided:
35
ARTICLE III. Specifications and Drawings. — * * *
36
In any case of discrepancy either in the figures, in the drawings, or in the specifications, the matter shall be promptly submitted to the Contracting Officer, who shall promptly make a determination in writing. Any adjustment by the Contractor without this determination shall be at his own risk and expense. * * *
37
It scarcely can be doubted that plaintiff's argument asserts, with whatever validity, the existence of such a discrepancy. In Beacon Construction Co. v. United States, 314 F.2d 501, 161 Ct.Cl. 1 (1963), a contract provision similar to Article III, called on the contractor to submit any discrepancy in the figures, drawings or specifications to the contracting officer for a ruling. There were surfacial inconsistencies" within the specification in question and between that specification and the drawing. However the contractor did not consult with the contracting officer to clear up the inconsistency but instead chose to make and rely on its own interpretation of what was required by the contract, partially relying on its understanding of trade practice. Finding (314 F.2d at 503, 161 Ct.Cl. at p. 4) that the inconsistencies "were and must have been obvious to plaintiff from the time it began to prepare its bid." and that (314 F.2d at 504, 161 Ct.Cl. at p. 6) "the discrepancy was in actual fact, and in reason must have been, fully known to plaintiff before it computed its bid," the court denied plaintiff recovery. The court said (314 F.2d at 504, 161 Ct.Cl. at p. 6) a prime purpose of the contract provision calling for a ruling was to enable the parties "to clarify the contract's meaning before the die [was] cast." and (314 F.2d at 504, 161 Ct.Cl. at p. 7) that where the contractor was "presented with an obvious omission, inconsistency, or discrepancy of significance, he must consult [with] the Government's representatives if he intends to bridge the crevasse in his own favor." * * *. Accord, Jefferson Construction Co. of Florida v. United States, 364 F.2d 420, 176 Ct.Cl. 1363 (1966), cert. denied 386 U.S. 914, 87 S.Ct. 865, 17 L.Ed.2d 786 (1967); Southern Construction Co. v. United States, 364 F.2d 439, 176 Ct.Cl. 1339 (1966); Black, Raber-Kief & Associates v. United States, 357 F.2d 355, 174 Ct.Cl. 302 (1966).
38
Plaintiff would have us say Beacon is not in point because there the possible conflict was noticed by the contractor immediately before it had undertaken the performance of the contract. In the instant case, said plaintiff, it was only after the sheeting had been ordered that plaintiff was made aware of the Government's contention that plaintiff had made an incorrect interpretation of the specifications. We would not so limit Beacon. Where the discrepancy occurs in the specifications themselves, the discrepancy exists from the very start. It is the existence and type of the discrepancy, not necessarily the contractor's actual knowledge of it, that imposes a burden of inquiry on the contractor in the face of a provision like Article III. It is where "* * * a contractor knew or should have known of an obvious error in the plans or specifications [that] he must call it to the attention of the appropriate Government representatives so that proper steps may be taken with respect to the matter. * * *" Allied Contractors, Inc. v. United States, 381 F.2d 995, 1000, 180 Ct.Cl. 1057, 1064, (1967). Accord Unicon Management Corp. v. United States, 375 F.2d 804, 179 Ct.Cl. 534 (1967). Plaintiff did notice paragraph 14-04 and did meditate on what it took to be its apparent conflict with QQ-I-716, and chose to resolve it by ignoring the plain language of 14-04.
39
We hold that if specifications 14-04 and QQ-I-716 were inconsistent, the inconsistency was "obvious", Allied Contractors, Inc. v. United States, supra, 381 F.2d at p. 999, 180 Ct.Cl. at p. 1062, and "major", Blount Brothers Construction Co. v. United States. 346 F.2d 962, 973, 171 Ct.Cl. 478, 496 (1965), and not merely "obscure in nature.", Tufano Contracting Corp. et al. v. United States, 356 F.2d 535, 540, 174 Ct.Cl. 398, 407 (1966). It required no information except the contract clauses themselves and matter the contractor claimed that it knew in its testimony. Therefore, under the rule of Beacon Construction Co., cases in accord with that decision, and Allied Contractors, Inc., supra, the plaintiff, having bridged the crevasse in his own favor without having consulted the Contracting Officer as required by Article III, cannot recover on its demand.
40
Plaintiff's counsel urges the theory plaintiff adopted when it ordered the steel. The errors in that theory are numerous. First, the initial table in Federal Specification QQ-I-716 did not specify a nominal coating of 1.50 for any class of 20-gage sheet. The lowest nominal weight specified, that being for 20-gage, Class "C" sheet, was 1.75. Thus, while plaintiff's interpretation led it to believe that the 24-gage sheets required by the contract were Class "C" sheets, that interpretation could not have properly led to the same result for 20-gage sheets. Next, the second table in QQ-I-716 prescribed nominal and minimum zinc coating weights for 20-gage, Class "C" sheets of 1.75 and 1.35 ounces, respectively, and for 24-gage, Class "C" sheets of 1.50 and 1.15 ounces, respectively, neither of which minimums corresponded to 14-04, that specification requiring "not less than" 1.50 ounces on both sides (if projected from the .75 ounce requirement for each side). As used in 14-04, "not less than" is closer in meaning to "minimum" than it is to "nominal". Third, QQ-I-716 did not prescribe a minimum coating of 1.50 ounces for any class of gage of sheeting. The nearest minimum was 1.60 ounces and this applied to sheeting with a nominal coating of 2.00 ounces. The closest approximation in QQ-I-716 to a class of sheeting with a nominal coating of 2.00 ounces was the 2.5 ounces for 20 or 24-gage sheeting of Class "B".
41
If the defendant was at fault in not specifying the class of sheeting required (but Cf. Albert J. Jansen, d/b/a Mercury Service v. United States, 344 F.2d 363, 170 Ct.Cl. 346, (1965) this obvious omission was enough to put plaintiff on notice that something was amiss. Again, a reading of 14-04 in conjunction with QQ-I-716 showed that Class "C" sheeting would not meet the coating requirements of the contract. Yet, plaintiff chose to go ahead by supplying Class "C" sheeting for both gages. And, most important on the question of making inquiry of the Contracting Officer to resolve discrepancies, plaintiff admitted it had never before encountered the equivalent of 14-04 and stated that a requirement of .75 ounces of zinc per square foot on each side was previously unknown. What better situation to ask for guidance than one where an unknown, never before seen specification appears in a contract, seemingly describing a class of sheeting not known to the industry. Clearly, had the Contracting Officer been consulted he would have taken the position, and rightly so, that the specific requirement of a technical provision of a contract, e. g., 14-04, controls over a provision which is of general application, e.g., 14-02, which contained a general reference to QQ-I-716. Rust Engineering Co. v. United States, 95 Ct.Cl. 125, 137-138 (1941).
42
The next question relates to the percentage of the various sheetings found by the Board to be properly rejected. The Board found that 60 percent of the roofing and siding sheets were properly rejected on the ground that they lacked the zinc coating required by specification 14-04 and that half of the remaining 40 percent of those sheets and half of the galvanized sheets for the hangar doors were properly rejected on the ground that they were corroded. The Board's mathematical computations concerning this question of fact — the percentage of defective sheets — are final and binding on us if supported by substantial evidence. Jefferson Construction Co. of Florida v. United States, supra, 364 F.2d at 424, 176, Ct.Cl. at 1371. We hold they are.
43
Where, as here, there are a variety of samplings and tests, it is clear the support of substantial evidence would exist for a variety of percentages, under Wunderlich Act standards, 41 U.S.C. §§ 321, 322. This includes the 60 percent figure, as well as others higher and lower. It does not rest on the Bureau of Standards tests alone, and thus any alleged error in the Bureau sampling does not affect our conclusion. And a reduction of 5 or 10 percent in the Board figures is not indicated because a Bureau witness conceded their test method may err by 5 or 10 percent. He did not know whether the error would be up or down. Non constat that a 10 percent adjustment in the weight of the zinc coating would transfer 10 percent of the samples from the reject to the acceptable column.
44
The burden is on the plaintiff specifically to show why the Board's findings of fact are arbitrary, capricious or not supported by substantial evidence. Sundstrand Turbo v. United States, 389 F.2d 406, 182 Ct.Cl. ___ (1968). Plaintiff made no effort to do this regarding the Board's finding that 60 percent of the roofing and siding sheets lacked the required zinc coating. In any event, all the test results support this conclusion, more or less.
45
Plaintiff and defendant have both attacked the Board's second finding that 50 percent of the remaining roofing and siding sheets and 50 percent of the hangar door sheets were defective due to corrosion. This corrosion occurred after manufacture and before installation. It represented a substantial depletion of the zinc coating, whether originally adequate or inadequate. It was due to the long period that elapsed between manufacture and installation, during much of which the sheets were in warehouse at Houston, Texas, in the hold of a vessel in transit to Newfoundland, and then stored at the work site. During all this time, the sheets were wrapped in double paper. Changes in temperature, in humid climates, caused moisture to collect inside the paper on the sheets, and their ventilation was obstructed by the paper. Evidence showed that these conditions produced corrosion which was very destructive to the zinc coating, and that the sheets would have corroded less if stacked in the open, entirely uncovered. After the sheets arrived at the site, they should, under the contract, have been stored at a tilt, but evidence showed that they were not. Plaintiff was responsible for maintaining the sheets in condition until installed in the hangars, and failed to do it. On this point we need do no more than quote from the Board's opinion, J. A. Jones Construction Company, ASBCA 5798, supra, at pp. 16-865-16,866:
46
Evidence before us also indicates that some of the corrugated sheets showed signs of corrosion before and after they were applied to the hangars. According to the witnesses, the corrosion seen on the sheets ranged from discoloration, or wet storage stains — an early stage of the corrosive process — to the more advanced stage evidenced by the presence of zinc carbonate, a product of zinc corrosion. The contract authorized rejection by the contracting officer of defective material. Corrugated sheets which have started to corrode unquestionably are defective materials. * * * The evidence before us indicates that more than 50 per cent of the sheets showed evidence of an advanced stage of corrosion.
47
* * * * * *
48
* * * We find no provision, however, which authorized rejection of all material upon a showing of defects in some of the material. Material which did comply with specifications and did not contain defects could not properly be rejected. Moreover, assuming sample inspection [by the Government of the allegedly corroded sheets] was appropriate for use in this case * * * the evidence will not support a finding that the samples tested were reasonably representative of the material from which they were selected and hence total rejection [as the Corps of Engineers Board had decided] premised on test results of those samples cannot be sustained. On the record before us we are unable to find that all of the corrugated sheets were defective or failed to meet contract requirements. The rejection of all sheets was therefore improper. * * we are compelled to determine how much of the material was defective and failed to comply with contract requirements based on the record before us.
49
* * * We find that 60 per cent of the sheets failed to comply with the zinc coating requirement. Of the remaining 40 per cent, we must find, based on the evidence that 50 or more per cent was corroded, that half thereof was properly rejected as defective. We therefore conclude that 20 per cent of the rejected [roofing and siding] material was improperly rejected.
50
* * * As for [the galvanized sheeting for the hangar doors], if any was in fact rejected and replaced, since there is no evidence to indicate that it failed to comply with the Federal specification [QQ-I-716], we find that only 50 per cent was properly rejected. This conclusion is based on the evidence that more than 50 per cent of all sheets were corroded. (Emphasis supplied.)
51
With respect to this issue, too, the evidence shows substantial support for a wide range of findings as to the percentage of sheets that were unacceptable due to corrosion between manufacture and installation. Fifty percent is within the range. We decide, as did the Board, that 20 percent of the roofing and siding sheets and 50 percent of the hangar door sheets should not have been rejected.1 In accordance with our decision, the matter will be returned to the Board for a determination of the amount due the plaintiff.
52
In sum, the assignments of errors by plaintiff and defendant are without merit. The petition is dismissed insofar as it claims any recovery not allowed in the determination of the ASBCA. Further proceedings shall be suspended to enable the parties to apply to the ASBCA for determination of damages.
53
per sq. ft.) per sq. ft.) per sq. ft.)
20 gage .............. 2.75 2.50 1.75
24 gage ....................... 2.50 1.50
Sheet weight Diagonal triple
Nominal weight test (oz. per spot test (oz.
(oz. per sq. ft.) sq. ft.) per sq. ft.)
2.75 ........................... 2.45 2.30
2.50 ........................... 2.20 2.00
2.00 ........................... 1.80 1.60
1.75 ........................... 1.55 1.35
1.50 ........................... 1.30 1.15
per sq. ft.) per sq. ft.) per sq. ft.)
20 gage .............. 2.75 2.50 1.75
24 gage ....................... 2.50 1.50
Sheet weight Diagonal triple
Nominal weight test (oz. per spot test (oz.
(oz. per sq. ft.) sq. ft.) per sq. ft.)
2.75 ........................... 2.45 2.30
2.50 ........................... 2.20 2.00
2.00 ........................... 1.80 1.60
1.75 ........................... 1.55 1.35
1.50 ........................... 1.30 1.15
20 gage .............. 2.75 2.50 1.75
24 gage ....................... 2.50 1.50
Nominal weight test (oz. per spot test (oz.
(oz. per sq. ft.) sq. ft.) per sq. ft.)
2.75 ........................... 2.45 2.30
2.50 ........................... 2.20 2.00
2.00 ........................... 1.80 1.60
1.75 ........................... 1.55 1.35
1.50 ........................... 1.30 1.15
Notes:
*
The court is indebted to Trial Commissioner C. Murray Bernhardt from whose opinion we have borrowed in part, although we direct a somewhat different disposition. The facts are set forth in our opinion
1
The Government also disagreed with the percentages of sheeting found by the Board to have been properly rejected. The Government argued that all of the hanger door sheeting and the balance of the roofing and siding sheeting which did meet the zinc coating requirements should have been rejected because of incipient and actual corrosion. Our decision that the Board's findings were supported by substantial evidence obviates a discussion of the Government's argument
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423 F.2d 655
Fred D. TUCKER, Petitioner-Appellant,v.UNITED STATES of America, Respondent-Appellee.
No. 19618.
United States Court of Appeals, Sixth Circuit.
March 18, 1970.
Fred D. Tucker, in pro. per.
Robert J. Grace, U.S. Atty., Joseph P. Zanglin, Asst. U.S. Atty., Detroit, Mich., on brief for respondent-appellee.
Before McCREE and COMBS, Circuit Judges, and CECIL, Senior Circuit judge.
PER CURIAM.
1
This is an appeal by Fred D. Tucker, petitioner-appellant, from an order of the United States District Court for the Eastern District of Michigan, Southern Division, denying his motion under Section 2255, Title 28, U.S.C. to vacate sentence.
2
The appellant was arrested on January 8, 1968, and was under indictment in Case No. 43177 charging him in count one with conspiring with others to buy and sell heroin in violation of Federal law and in count two with a sale of heroin. He was also under indictment in Case No. 43744 charging him with a separate case of Federal narcotics violation.
3
Case No. 43177 came to trial on April 2, 1968, and after three days of trial, on April 5th, the appellant through his attorney, advised government counsel that he wished to plead guilty to a lesser offense-- purchasing the heroin he was charged with selling in count two. The maximum penalty under the indictment in Case No. 43177 could have been two twenty year consecutive sentences. Under the lesser offense the maximum prison sentence was ten years.
4
Accordingly, the appellant pleaded guilty to an information in Case No. 43415, charging him with the purchase of a quantity of narcotic drugs in violation of Section 4704(a), Title 26, U.S.C. He signed a waiver of indictment which stated that he was advised of the nature of the charge and of his rights and that he consented to the proceeding by information instead of indictment. He also signed an acknowledgment of information that he had received a copy of the information, understood its contents and that upon a plea of guilty he might be sentenced to pay a fine of $5,000 and to imprisonment for two to ten years or both. He was sentenced to ten years imprisonment. Subsequently indictments numbered 43177 and 42744 were dismissed as to the appellant.
5
The appellant now claims by his motion to vacate and the amendment thereto that his plea of guilty was involuntary because he was mentally incompetent as a result of being in the throes of withdrawal from the use of drugs and that his counsel was incompetent. The district judge denied the motion and its amendment without an evidentiary hearing. We affirm.
6
The fact that the appellant was in continuous custody for approximately three months before trial would cast grave doubt on his claim that he was suffering from the withdrawal of the use of drugs. To dispel this doubt appellant says in his brief that narcotics were readily available in the jail and that he was in fact using drugs throughout his period of incarceration. He also says in his brief that the court,
7
'* * * chose to ignore the well known fact that it is not only quite possible, but quite easy to procure and obtain narcotics in the Wayne County Jail.'
8
These are pure conclusory statements and in the absence of any allegations in his motion and particularly specific allegations as to how, when and where he obtained narcotics in the jail we would not give them credence.
9
Then too, the fact that in the fourth day of trial after two government witnesses had testified, the appellant offered through his attorney to plead guilty to a lesser offense with an exposure to ten years of imprisonment instead of forty lends credence to the voluntary character of the plea. This is true despite the claim of appellant that it should have cast suspicion on the transaction. The bargaining away of a possible forty year commitment for a maximum of ten years is not the act of an incompetent.
10
The district judge had the appellant under close observation during the four days of trial and as he said,
11
'The record clearly shows that there was no basis for a hearing at the time of the trial to determine mental competence. The Petitioner intelligently aided his attorney during the trial, communicated with him without difficulty, and had been continuously in custody for a period of three months before trial.
12
'Nor is there any merit to Petitioner's contention that his attorney was incompetent. Mr. Tucker was represented by an extremely competent and experienced criminal trial lawyer, Mr. Joel Shere, and the record indicates that Mr. Tucker was extremely well represented by this attorney. Lengthy conferences were had between attorney and client throughout the four days of trial and prior to plea.'
13
Affirmed.
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United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 10-1466
___________
United States of America, *
*
Appellee, * Appeal from the United States
* District Court for the
v. * Southern District of Iowa.
*
Alberto Zaragoza Becerra, * [UNPUBLISHED]
*
Appellant. *
___________
Submitted: October 21, 2010
Filed: November 17, 2010
___________
Before BYE, BOWMAN, and COLLOTON, Circuit Judges.
___________
PER CURIAM.
In this direct criminal appeal, Alberto Becerra challenges the within-Guidelines-
range sentence the district court1 imposed following his guilty plea to conspiring to
distribute methamphetamine, in violation of 21 U.S.C. §§ 841(a)(1), (b)(1)(A), and
846. Counsel has submitted a brief under Anders v. California, 386 U.S. 738 (1967),
in which he argues that the district court abused its discretion in sentencing Becerra
and should have sentenced him to a below-Guidelines-range prison term.
1
The Honorable James E. Gritzner, United States District Judge for the Southern
District of Iowa.
We hold that the district court, in sentencing Becerra, did not commit any
procedural error, because the court correctly calculated the advisory Guidelines range,
properly considered only relevant section 3553(a) factors, and explained its reasons
for the within-Guidelines-range sentence, and that the court did not abuse its
discretion by imposing an unreasonable sentence. See United States v. Feemster, 572
F.3d 455, 461 (8th Cir. 2009) (en banc) (in reviewing sentence for reasonableness, this
court first ensures district court committed no significant procedural error, such as
improperly calculating Guidelines range, treating Guidelines as mandatory, failing to
consider § 3553(a) factors, sentencing based on clearly erroneous facts, or failing to
adequately explain chosen sentence, then considers substantive reasonableness of
sentence under abuse-of-discretion standard; appellate presumption of reasonableness
may be applied to within-Guidelines-range sentence); see also United States v. Haack,
403 F.3d 997, 1003-04 (8th Cir. 2005) (defining ways in which abuse of discretion
may occur).
After reviewing the record independently under Penson v. Ohio, 488 U.S. 75
(1988), we have found no nonfrivolous issues. Accordingly, we affirm.
______________________________
-2-
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IN THE COURT OF APPEALS OF IOWA
No. 17-0959
Filed July 18, 2018
MICHAEL TERRY,
Plaintiff,
vs.
IOWA DISTRICT COURT FOR POLK COUNTY,
Defendant.
RACHAEL TERRY n/k/a RACHAEL MCCANN,
Petitioner-Appellee/Cross-Appellant,
vs.
MICHAEL TERRY,
Respondent-Appellant/Cross-Appellee.
______________________________________________________________
Appeal from the Iowa District Court for Polk County, Jeanie K. Vaudt, Judge.
Former husband challenges the district court’s order dismissing his
applications for rule to show cause and granting his former wife’s applications for
rule to show cause. Former wife cross appeals from the denial of her request for
attorney fees. AFFIRMED ON APPEAL, AFFIRMED ON CROSS-APPEAL,
WRIT SUSTAINED.
Earl B. Kavanaugh of Harrison & Dietz-Kilen, P.L.C., Des Moines, for
appellant.
2
Stefanie J. Thomas of Wandro & Associates, P.C., Des Moines, for
appellee.
Considered by Doyle, P.J., and Tabor and McDonald, JJ.
3
MCDONALD, Judge.
Michael Terry appeals the district court’s order dismissing his numerous
applications for rule to show cause. In his applications, Michael requested the
district court find his former spouse, Rachael McMann, in contempt of court.
Rachael filed her own applications for rule to show cause, alleging Michael violated
a court order by failing to pay attorney fees. The district court found Michael in
contempt of court, and Michael challenges this order by way of petition for writ of
certiorari. In addition to challenging the finding of contempt, Michael contends the
penalties imposed for the findings of contempt were illegal and not authorized by
statute. Rachael filed a cross-appeal, challenging the district court’s declination of
her request for attorney fees.
I.
Michael and Rachael married in 2002 and divorced two years later by way
of a stipulated dissolution decree. One child, C.T., was born into the marriage.
The decree granted the parents joint legal custody of C.T., awarded physical care
to Rachael, and awarded liberal visitation to Michael. The decree set forth the
parents’ responsibilities with respect to C.T. As relevant here, it provided:
Both parents shall participate equally in the rights and
responsibilities of legal custodians, including but not limited to
decisions affecting the child’s . . . medical care . . . .
The parties shall consult with each other with respect to . . .
medical care . . . related to the child, whose well-being and
development shall at all times be the paramount consideration to the
parties. If either party has knowledge of any illness, accident, or
other matter seriously affecting the well being of the child, that party
shall promptly notify the other, and except in emergencies, shall not
take any action without notifying the other.
....
Both parties shall keep each other informed in a timely
manner regarding anything, which affects the child’s physical and
4
emotional well-being. When time permits, each shall provide the
other with advanced notice of any medical . . . treatments and
appointments including hospitalizations and operations.
...
[Michael] shall have reasonable visitation as agreed upon
between the parties. All visitations are to be exercised in a
reasonable manner that is responsive to the minor child’s best
interest and schedule of activities. . . .
Over the next several years Michael and Rachael went about their lives
without incident. Michael lived overseas for a period of time, and Rachael and C.T.
moved to Oklahoma. Eventually both parents returned to Iowa.
In 2014, Michael filed a petition to modify the parties’ decree, seeking
physical care of C.T. The district court declined to grant Michael physical care of
the child, but the district court did increase Michael’s visitation with the child and
modified the child support award. The district court’s ruling made clear all of the
other provisions of the stipulated decree remained in effect. The district court also
awarded Rachael attorney fees and set up a twelve-month payment plan for
Michael. During the modification action, the parties’ animosity toward each other
increased a great deal.
This appeal arises out contempt actions filed after the completion of the
modification action. The first group of contempt actions relates to the medical care
of C.T. In the fall of 2016, Rachael discovered some of C.T.’s artwork. The artwork
caused Rachael some concern due to violent content regarding a relationship
between a father and a child. Rachael text messaged Michael and subsequently
discussed her concerns with him. She also contacted her ex-husband, Ken
McCann, a pediatrician, to express her concerns. Shortly thereafter, a parent of
C.T.’s best friend contacted Rachael to express concern for C.T.’s safety. The
5
parent told Rachael that C.T. told the friend that C.T. wants to self-harm and that
C.T. has suicidal thoughts when in Michael’s care. The same day, a counselor
from C.T.’s school contacted Rachael to share that C.T.’s friends reported C.T.
has suicidal thoughts and self-harms when staying with Michael. The counselor
also called Michael. After receiving this information, Rachael made an
appointment for C.T. with a child therapist for the following business day. Rachael
told Michael about C.T.’s scheduled therapy appointment, but she would not tell
him the name of the provider, the time, or the location because C.T. indicated she
did not want Michael present at the appointment. Following the initial appointment,
Rachael scheduled another appointment for the first available time. Rachael gave
the appointment information to Michael, and he attended the next session.
Rachael continued to schedule appointments and notify Michael of them. Michael
did not attend the subsequent appointments. Michael filed six contempt actions
against Rachael, one for each appointment she scheduled without first contacting
Michael.
The second group of contempt actions relates to visitation with the child.
For approximately six weeks, C.T. refused to attend visitation with Michael.
Michael became upset with Rachael over C.T.’s refusal and stated Rachael should
force C.T. to attend visitation with him. Rachael declined to do so. However, as
C.T. continued with her therapy, she became more receptive to visitation with
Michael and began attending. Michael filed a contempt action against Rachael for
each missed visitation period—eighteen in total.
For her part, Rachael brought three contempt actions against Michael for
his refusal to pay the attorney fees awarded in the modification proceeding. The
6
attorney-fee award was to be paid in monthly installments, but Michael had missed
three of the installments.
Following a trial, the district court found Michael failed to prove Rachael
willfully violated the terms of the dissolution decree in scheduling therapy
appointments for C.T. The district court also found Rachael did not act
contumaciously with respect to C.T.’s missed visitation with her father. The district
court found Michael willfully violated the modification decree by refusing to pay the
attorney-fee award. As a sanction, the court adjusted the payment plan from a
twelve-month schedule to a sixty-five-month schedule paid via a wage withholding
order pursuant to Iowa Code section 598.23(2)(a) (2017). Additionally, the court
ordered Michael to participate in twelve months of therapy with C.T. pursuant to
Iowa Code section 598.23(2)(d) and serve ten days in Polk County jail. As it relates
to court costs, the court split costs equally between the parties.
II.
Iowa Code section 598.23 provides that “If a person against whom a . . .
final decree has been entered willfully disobeys the order or decree, the person
may be cited and punished by the court for contempt.” Contempt may be
characterized as willful disobedience. See Ary v. Iowa Dist. Ct., 735 N.W.2d 621,
624 (Iowa 2007). Contempt proceedings are quasi-criminal in nature and each
element must be proved beyond a reasonable doubt. See In re Marriage of Ruden,
509 N.W.2d 494, 496 (Iowa Ct. App. 1993). The petitioning party carries the
burden of showing the contemnor willfully failed to obey a court-mandated duty.
Ary, 735 N.W.2d at 624. If the petitioner can evidence the contemnor’s violation
of a court order, then the burden shifts to the contemnor to show the violation was
7
not willfully done. Id. Evidence of willfulness must show “conduct that is intentional
and deliberate with a bad or evil purpose, or wanton and in disregard of the rights
of others, or contrary to a known duty, or unauthorized, coupled with an unconcern
whether the contemnor had the right or not.” Amro v. Iowa Dist. Ct., 429 N.W.2d
135, 140 (Iowa 1988) (quoting Lutz v. Darbyshire, 297 N.W.2d 349, 353 (Iowa
1980)). The contempt statute provides only that a “person may be cited and
punished” for contempt. Iowa Code § 598.23 (emphasis added. Thus, “a trial court
is not required to hold a party in contempt even though the elements of contempt
may exist.” In re Marriage of Swan, 526 N.W.2d 320, 327 (Iowa 1995). Because
the statute provides for the exercise of trial court discretion in citing and punishing
a person for contempt, our review of the district court’s denial of the application is
for an abuse of discretion. See id. Further, we will affirm the judgment of the
district court unless it is demonstrated the district court grossly abused its
discretion in denying the application. See id.
A.
We begin our review with the court’s dismissal of Michael’s six counts of
contempt against Rachael for failing to consult Michael before scheduling C.T.’s
therapy appointments. The district court found the decree permitted Rachael to
independently schedule C.T.’s initial therapy appointment without involving
Michael because C.T.’s emotional state constituted an emergency situation. The
district court further found that Rachael made Michael aware of the subsequent
appointments.
In determining whether the district court abused its discretion in declining to
hold Rachael in contempt, we first discuss her duties under the parties’ decree.
8
The stipulated decree granted both parents the right to participate in decisions
affecting C.T’s medical care, required they consult each other with respect to C.T.’s
medical care, required both to notify the other of any illness or matter seriously
affecting C.T., and prevented one from taking any action without notifying the other
except in emergency situations.
Michael first argues the district court abused its discretion in finding Rachael
was permitted to schedule the initial appointment because C.T.’s condition
qualified as an emergency situation. We disagree. Michael conceded that C.T.’s
emotional state was “a little shocking” and that the parents needed to focus on C.T.
While Michael chastises Rachael for failing to secure a weekend appointment for
C.T. and not taking C.T. to the hospital immediately upon learning of C.T.’s threats
of self-harm, Michael fails to acknowledge that Rachael took the first available
appointment. Further, there is no evidence Rachael intended to violate the decree
when scheduling the initial appointment. When Rachael learned of the information,
she contacted Michael to discuss the same. She informed Michael of the
appointment. While it is true she failed to disclose details regarding the
appointment, this is reasonable conduct given C.T.’s threats of self-harm related
to her contact with Michael and C.T.’s statements she would not participate in
treatment with Michael present. Rachael’s conduct is supported by the decree,
which provides that C.T.’s “well-being and development shall at all times be the
paramount consideration to the parties.” The district court did not abuse its
discretion in dismissing Michael’s application.
With respect to the counts regarding the subsequent appointments, Michael
again argues Rachael violated the stipulation by scheduling appointments before
9
first consulting Michael. Yet Michael attended the second appointment and
indicated he would not participate in any more based on a belief that would be best
for C.T.’s treatment. Given this indication, it was reasonable for Rachael to
assume Michael consented to C.T. continuing treatment and she would not need
to inquire with him before scheduling each subsequent appointment. Michael
concedes that Rachael kept him informed regarding upcoming appointments.
Additionally, Michael never objected to the therapy, never objected to the care
provider, and never stated any preference for different appointment dates or times.
Certainly Rachael did not interfere with Michael’s right to participate in decisions
when he voluntarily removed himself from the situation. Even if the stipulation
could be interpreted to require Rachael to consult Michael before scheduling each
appointment, her assumption that she was not required to do so was reasonable
and falls far short of a willful violation. The district court did not abuse its discretion
in dismissing Michael’s application.
B.
Next Michael challenges the district court’s denial of his contempt
application alleging eighteen violations of the stipulation for missed visitation with
C.T. Rachael concedes that C.T. missed these visitations with Michael. Michael
urges the court to conclude Rachael was required to force C.T. to attend visitation
with Michael or penalize her for not attending. We note Rachael encouraged
visitation between C.T. and Michael. While it is true Rachael stopped short of
punishing C.T. for not attending the visitation, this does not rise to the level of a
willful violation of a court order. We are also mindful of C.T.’s concerns that she
would harm herself if required to attend visitation with Michael during this time.
10
Certainly this factor is worthy of consideration. See In re Marriage of Swan, 526
N.W.2d at 327 (permitting a court to consider all relevant circumstances). Because
Michael cannot show Rachael attempted to interfere with visitation or that she
stood by and did not encourage visitation, he failed to show she willfully
disregarded the visitation terms. See In re Marriage of Ruden, 509 N.W.2d at 496
(concluding court properly dismissed contempt action when teenage children
refused visitation); see also In re Marriage of Boomgarden, No. 09-1904, 2010 WL
2925828, at *2 (Iowa Ct. App. July 28, 2010) (refusing to find father in contempt
with regard to the mother’s missed visitation when there was no evidence the
father discouraged visitation or stood passively by when children refused to
attend).
C.
Michael next challenges the district court’s finding he was in contempt of
court for failing to make installment payments towards Rachael’s attorney fees.
See Iowa Code § 665.11 (requiring a contempt finding be challenged through a
writ of certiorari). Because certiorari is an action at law, our review is for errors at
law. See Ary, 735 N.W.2d at 624. “In our review of a certiorari action, we can only
examine ‘the jurisdiction of the district court and the legality of its actions.’” Id.
(citing Christensen v. Iowa Dist. Ct., 578 N.W.2d 675, 678 (Iowa 1998)). An
illegality exists when the court’s findings are not supported by substantial evidence
or when the law is improperly applied. See Amro, 429 N.W.2d at 138. We review
a contemnor’s sentence for an abuse of discretion. Ary, 735 N.W.2d at 624.
The district court concluded Michael willfully disobeyed the attorney-fee
award associated with the dissolution modification proceedings when he failed to
11
make his monthly installment payments for three months. Michael argues the court
erred in its conclusion because he did not have the ability to make the payments.
He cites the court’s revision of the payment plan lowering the amount of the
monthly installments as evidence of this. While this is certainly evidence that
Michael did not have the ability to make the monthly payments in full, it also
indicates he was able to pay some amount. The court may base its contempt
finding on a portion of Michael’s violation—the portion of the monthly installment
he could pay but did not. See Skinner v. Ruigh, 351 N.W.2d 182, 186 (Iowa 1984)
(concluding contempt may be sufficiently shown when a portion of the defaulting
conduct is willful). Michael admits he knowingly failed to make any payments of
any amount toward Rachael’s attorney fees for three months, but the district court
identified at least some discretionary expenses Michael could have avoided and
instead made some payments towards his attorney-fee obligation. See In re
Marriage of Holcomb, 457 N.W.2d 619, 622 (Iowa Ct. App. 1990) (noting inability
to pay is not a defense to a contempt claim when the contemnor continues to make
discretionary purchases). Given Michael’s ability to make some payment and
failure to make any, we will not disturb the district court’s findings.
While the court’s finding of contempt was proper, Michael correctly notes its
imposed sanctions were not. The court ordered wage withholding pursuant to Iowa
Code section 598.23(2)(a), which permits wage withholding “under the terms and
conditions of chapter 252D.” But chapter 252D specifically addresses delinquent
child-support payments. See Iowa Code §§ 252D.1, 252D.16. Because section
598.23(2)(a) only permits income withholding for delinquent child-support
12
payments, the court erred in authorizing its wage withholding order through this
code section.
The court also ordered Michael to attend twelve months therapy with C.T.
pursuant to Iowa Code section 598.23(2)(d). Again this section of the code does
not permit such a remedy. Any alternative punishment must relate to the subject
matter involved. Iowa Code § 598.23(2). Here that is Michael’s nonpayment of
Rachael’s attorney fees. The therapy requirement is not related to Michael’s
nonpayment and not permissible under Iowa Code section 598.23(2)(d). The
district court abused its discretion by imposing punishment not authorized by the
cited code sections.
D.
Michael also argues the court should have reduced or eliminated the
attorney-fee award due to his financial condition. If Michael wanted to challenge
the attorney-fee award, he should have done so through the appeal process. See
Iowa R. App. P. 6.103 (noting final orders and judgments are appealable); see also
In re Marriage of Michael, 839 N.W.2d 630, 639 (Iowa 2013) (challenging attorney-
fee award on direct appeal). The district court was not at liberty to disturb the
award amount in the underlying proceedings.
E.
Finally we address Rachael’s cross-appeal alleging the district court abused
its discretion by declining to award her attorney fees associated with the contempt
proceeding. Attorney fees may only be awarded when statutorily authorized. Van
Sloun v. Agans Bros., Inc., 778 N.W.2d 174, 182 (Iowa 2010). Iowa Code section
598.24 permits an award for attorney fees when the court determines a party is in
13
contempt of a dissolution decree. But the award is discretionary and not
mandatory. Trial courts are granted considerable discretion when making such
determination. See In re Marriage of Hunt, 476 N.W.2d 99, 103 (Iowa Ct. App.
1991). We review the district court’s decision for an abuse of discretion. See In
re Marriage of Hankenson, 503 N.W.2d 431, 433 (Iowa Ct. App. 1993). On review
of the record and the parties’ financial condition, we cannot say the district court
abused its discretion by declining to award attorney fees.
F.
Rachael and Michael each request appellate attorney fees. An award of
attorney fees on appeal is not a matter of right but rests within the court’s broad
discretion. See In re Marriage of Berning, 745 N.W.2d 90, 94 (Iowa Ct. App. 2007).
“We consider the needs of the party making the request, the ability of the other
party to pay,” the relative merits of the appeal, and whether the party making the
request was obligated to defend the district court’s decision on appeal. See id.
After full consideration of all the relevant factors, we conclude that the parties shall
be responsible for their respective appellate attorney fees.
III.
For the foregoing reasons, we affirm the district court’s dismissal of
Michael’s applications to hold Rachael in contempt of court. We also sustain the
writ. While the district court did not err in finding Michael in contempt of court, it
abused its discretion in imposing unauthorized punishments for the contempt. We
14
vacate the unauthorized punishments. On Rachael’s cross-appeal, we affirm the
judgment of the district court.
AFFIRMED ON APPEAL, AFFIRMED ON CROSS-APPEAL, WRIT
SUSTAINED.
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26 A.3d 484 (2011)
IN RE TUB MILL FARMS, INC.
No. 171 WAL (2011).
Supreme Court of Pennsylvania.
August 2, 2011.
Disposition of Petition for Allowance of Appeal Denied.
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371 P.2d 422 (1962)
Fred HERBERTSON and Robert Herbertson, d/b/a Herbertson Sand and Gravel Company, Plaintiffs in Error,
v.
Amos RUSSELL and Eva Russell, Defendants in Error.
No. 19691.
Supreme Court of Colorado. En Banc.
May 7, 1962.
Rehearing Denied May 28, 1962.
*423 Gorsuch, Kirgis, Campbell, Walker & Grover, John L. Ferguson, Denver, for plaintiffs in error.
Martin P. Miller, William S. Hart, Littleton, for defendants in error.
McWILLIAMS, Justice.
In a trial to the court judgment was entered for Amos and Eva Russell against Fred and Robert Herbertson, doing business as Herbertson Sand and Gravel Company and hereinafter referred to as defendant or Herbertson, in the amount of $25,000 for the wrongful and negligent death of their minor daughter, Glenda Sue Russell. By writ of error Herbertson seeks reversal of the judgment, contending: (1) that their agent, one Barksdale, was not negligent; (2) but that if he was in fact negligent, such was not the proximate cause of Glenda Sue's death; (3) that in reality the proximate cause of Glenda Sue's death was her own act of running into and in front of the left rear wheel of the Herbertson truck; and (4) that the award of $25,000 was so grossly excessive that as a matter of law it must be set aside.
We conclude that the trial court committed no error when as the trier of the facts it determined that Herbertson was liable to respond in money damages to the Russells, but that the court did err when it fixed the monetary damages of the Russells at $25,000. Accordingly, the judgment is reversed and the cause remanded for a new trial on the issue of damages only.
This tragedy occurred at about 11 o'clock A.M. on August 2, 1959 in Arapahoe County, at the intersection of West Hampden *424 Avenue and South Bryant Street. West Hampden Avenue runs east and west, with South Bryant Street running north and south. These two roadways intersect at right angles and in so doing form a "T" intersection, i. e. South Bryant "dead ends" at Hampden and only runs north from Hampden.
One Barksdale was a truck driver for Herbertson, and at the time and place of this fatality was admittedly about his master's business. More specifically, Barksdale was driving a Herbertson-owned truck, partially filled with pit run gravel, in an easterly direction on Hampden Avenue, approaching the intersection of that avenue and South Bryant Street.
Glenda Sue, age 6, was running in a southerly direction on the east side of South Bryant Street. She apparently saw a car approaching this intersection from the east, and when this car slowed and eventually stopped she ran into the intersection and into and in front of the left rear wheels of the Herbertson truck.
Barksdale testified that he never saw Glenda Sue until she was even with the cab of the truck, and that though he applied his brakes it was by then too late to avoid the accident. A pivotal factual dispute was whether Barksdale was to the right of the center line of Hampden Avenue or, on the contrary, was astraddle of the center line so that his left wheels were some two to three feet on the "wrong" side of the road. Barksdale insisted that he was entirely on the "right" side of the avenue. A disinterested witness who was driving in a westerly direction on Hampden Avenue testified that Barksdale was entirely in the proper lane for eastbound travel, and was not "over" the center line of that street. It was this witness who said she saw Glenda Sue running in a southerly direction along the east side of South Bryant Street and therefore stopped her vehicle, whereupon Glenda Sue ran into the crosswalk area past the front end of her vehicle and into the side of the Herbertson truck.
Two police officers who investigated the accident found 37 feet of heavy skid marks several feet north of the center line of Hampden Avenue, and both stated that from their investigation they concluded that these skid marks were laid down by the Herbertson truck. Also they testified that they found blood, hair and human matter at or very near to these skid marks. The net effect of this testimony, if believed, would tend to establish that the truck was astraddle the center line of Hampden Avenue and not entirely to the south of the center line.
On this state of the record the trial court found that Barksdale was negligent in that a portion of his truck was on the "wrong" side of the street and further that under all the facts and circumstances of the case Barksdale failed to exercise due care, and that his negligence was a proximate cause of the ensuing accident. Additionally, the trial court found that Glenda Sue's conduct was consonant with that of a reasonably prudent 6 year old child and that she was not contributorily negligent.
Herbertson contends that the trial court erred in finding that Barksdale was negligent, and that such was a proximate cause of Glenda Sue's death. Recognizing that because of her age it was most difficult to make out a case of contributory negligence against Glenda Sue, Herbertson argues that Glenda Sue's act of running across Hampden Avenue was the proximate cause of her death, regardless of whether the act be deemed negligent or not.
In our view of the matter the trial court committed no error in imposing liability on Herbertson. The issues of primary negligence, contributory negligence and proximate causation were clearly disputed issues of fact, and no citation of authority is deemed necessary in support of the oftrepeated pronouncement that findings of fact made by the trier of the facts will not be disturbed on review if supported by credible testimony.
Certainly there is competent and credible evidence to support the finding *425 that Barksdale at the very least was astraddle of the center line of Hampden, and that this negligent act was at least a proximate cause of the fatality. Also, the trial court was obviously impressed by the fact that the disinterested witness traveling west on Hampden saw this child and stopped her vehicle, whereas Barksdale who had an even clearer view of the intersection and claimed to be maintaining a sharp lookout did not see the child until only a split second before the impact. In short, there is ample evidence in the record to support the finding of the trial court that Herbertson's agent was negligent, that such was a proximate cause of Glenda Sue's death and that Glenda Sue was herself without negligence. This being the case, these findings should not be disturbed by us on review.
In their complaint the Russells alleged "that as a result of the unlawful and negligent act of the defendant's agent, the plaintiffs were denied the right to the earnings of Glenda Sue during her minority and further denied the right to look to her for assistance in their declining years." Accordingly, the Russells prayed for judgment in the amount of $50,000, claiming that the statutory limit of $25,000 was "a deliberate violation of the Colorado Constitution and the Federal Constitution." The trial court entered judgment for $25,000. The Russells assign no error to the award made by the trial judge, hence the contention that the statutory $25,000 limitation is unconstitutional is not properly before us.
Careful analysis of the meager and very sketchy testimony bearing on the issue of damages convinces us that the award of $25,000 was grossly excessive and under well established principles cannot be permitted to stand.
Amos and Eva Russell, the natural and surviving parents of Glenda Sue, were respectively 42 and 41 years of age as of the date of trial. They maintained their family home in Athens, Tennessee, where Amos had seasonal employment with a sawmill and his average annual earnings were $600 to $700. Eva, who was not in the best of health, had no outside employment, her full time being occupied in running the Russell household. The Russells had eleven children, two of whom died during childbirth, and following Glenda Sue's unfortunate death eight living children remained. The four oldest children were all girls, and each had married at about the age of sixteen. The Russells testified that on occasion these four had made some financial contribution to them, but they were unable to give exact figures as to amounts, with one exception where a daughter had given them $200, which sum was apparently used to get the Russells to Colorado for the trial.
Glenda Sue was described as a more-or-less typical six year old child, in apparent good health, and she was said to be both dutiful and loving in her relationship with her parents. At the time of the accident she was "staying", if not indeed living, with an aunt and uncle who resided on South Bryant Street. The Russells indicated that because of their large family and meager income Glenda Sue had spent almost two years of her life with relatives, away from the family home, and for almost one year immediately prior to August 2, 1959 had apparently been with her aunt and uncle in Colorado.
On this state of the record the trial court specifically noted that it was "difficult to fairly assess the value of human lifein fact impossible", but after this candid confession proceeded with no hesitation and little explanation to enter judgment for the Russells in the amount of $25,000. This was error.
Colorado has long held to the rule that the damages to be awarded in a wrongful death case are compensatory only, and not exemplary in the sense that they are imposed as a penalty against the wrongdoer. Nor are they a solatium for the grief of the living occasioned by the death of their relative, "however dear".
*426 In Pierce v. Conners, 20 Colo. 178, 37 P. 721, it was held:
"The true measure of compensatory relief in an action of this kind, under the act of 1877, supra, is a sum equal to the net pecuniary benefit which plaintiff might reasonably have expected to receive from the deceased in case his life had not been terminated by the wrongful act, neglect, or default of the defendant. Such sum will depend on a variety of circumstances and future contingencies, and will therefore be difficult of exact ascertainment; but the damages to be awarded in each case may be approximated by considering the age, health, condition of life, habits of industry or otherwise, ability to earn money, on the part of the deceased, including his or her disposition to aid or assist the plaintiff. Not only the kinship or legal relation between the deceased and the plaintiff, but the actual relations between them, as manifested by acts of pecuniary assistance rendered by the deceased to the plaintiff, and also contrary acts, may be taken into consideration. But it must be borne in mind that the recovery allowable is in no sense a solatium for the grief of the living, occasioned by the death of the relative or friend, however dear. It is only for the pecuniary loss resulting to the living party entitled to sue, resulting from the death of the deceased, that the statute affords compensation. This may seem cold and mercenary, but it is unquestionably the law."
"Net pecuniary loss" has been construed so as to include not only the loss to the parent of the services and earnings which they could have reasonably expected from their child during his or her minority, less their expenditures for his or her maintenance, but also includes the loss of services and support which they could have reasonably anticipated during their "declining years", but for the untimely death. See Kansas Pacific Railway Co. v. Lundin, Adm., 3 Colo. 94 and St. Luke's Hospital Association v. Long, 125 Colo. 25, 240 P.2d 917, 31 A.L.R.2d 1120.
Granted that damages in a wrongful death case need not and generally cannot be proven with mathematical certainty, still there must be some evidence to prima facie establish with at least a reasonable degree of certainty the damages flowing from the wrongful death. In the instant case we are reluctantly, but inexorably, forced to the conclusion that the evidence pertaining to damage is legally insufficient to support the monetary award of $25,000.
The suggestion that this Court should depart from its prior pronouncements defining the measure of damages recoverable under our wrongful death statute would do utter violence to the well-established rule of statutory construction that when a legislature repeatedly re-enacts a statute which has theretofore received a settled judicial construction, there can be no doubt as to the legislative intent, and in such circumstances it must be considered that the particular statute is re-enacted with the understanding that there be adherence by the judiciary to its former construction. See Harvey et al. v. Travelers' Insurance Co., 18 Colo. 354, 32 P. 935; Lyons, Administratrix v. Egan, 110 Colo. 227, 132 P.2d 794; and School District No. 1 of Arapahoe County v. Hastings, 122 Colo. 1, 220 P.2d 361. Nor are we impressed with the further suggestion that our prior decisions on this point are "unconstitutional". It should never be forgotten or overlooked that at the common law there was no action for wrongful death, as such, and but for our wrongful death statute the Russells would have no claim against Herbertson for the wrongful death of their child.
Accordingly, the judgment is affirmed as to the liability of defendants, and reversed on the matter of damages, and the cause remanded for a new trial on the issues of damages only.
FRANTZ, J., specially concurs.
MOORE and PRINGLE, JJ., dissent.
*427 FRANTZ, Justice (specially concurring).
I, too, vote for a reversal of this case, but, in doing so, I cannot accept the reasoning of the majority opinion. Indeed, I am opposed to the doctrine of damages enunciated in the majority opinion, and I would from this day forward write "finis" to such doctrine as being a debasing and mealancholy chapter in the jurisprudence of this state. I refer to the doctrine of damages judicially declared to be allowable in wrongful death actions.
Since the case of Pierce v. Connors, 20 Colo. 178, 37 P. 721, 46 Am.St.Rep. 279, this court has construed C.R.S. `53, 41-1-3, as amended, in a truly constricted sense. Beyond cavil this court in so doing amended the statute; it gave an astringent construction to the words of the statute permitting the award of "such damages as [the jury] may deem fair and just * * * with reference to the necessary injury resulting from such death, to the surviving parties, who may be entitled to sue * *." The court, in Pierce v. Connors, shrunk the quoted words to a meaning of "pecuniary loss" to the persons entitled to sue.
Compression of the statute was further achieved by giving a narrow and very particular meaning to the words "pecuniary loss." In effect, these words meant a loss of the benefit of the decedent's earnings less any expenses, and, as applied to a very young child, his earnings would probably be practically nil while the expenses of his care, upkeep, and education would be great. Thus, the court substituted the words "pecuniary loss" for the damages recoverable under the statute, and then defined "pecuniary loss" as if the heart of the law was all stone and no flesh.
As a matter of cold fact, parents who lose a six-year-old daughter sustain no such pecuniary loss; in fact, they are in a very practical and materialistic sense relieved of a burden. Our present way of life being such as it is, in which child labor is generally forbidden, in which we have compulsory education, and in which the education of a child to the age of 20 years is not unusual, the snuffing out of a child's life through fault disburdens the parents, in a very realistic sense, of expensive obligations, rather than bringing about any pecuniary loss to them.
The wrongful death statute has been reenacted several times, but only to increase the amount recoverable. Unfortunately, under the well-recognized rule, the re-enactments carried with them the interpretation previously given them by this court. If prior interpretation had not been given, we would be in a position now to give the very general, broad terms of the wrongful death statute a meaning consonant with the Constitution of this state. But we are confronted with a stricture on language which makes the wrongful death act unconstitutional, in my opinion, if the former interpretation is adhered to.
Should we cling to a court-imposed construction which, upon consideration, appears to circumvent constitutional rights? Courts, including this one, have discarded a prior interpretation of an act when it was made to appear that such interpretation ran counter to fundamental law. In People ex rel. Public Utilities Commission v. Mountain States Tel. & Tel. Co., 125 Colo. 167, 243 P.2d 397, this court overturned a line of decisions which had recognized rate-making of public utilities to be local and municipal matters in home-rule cities under the 20th Amendment. Even a construction of the Constitution itself, previously made, was declined further recognition in People ex rel. v. Cassiday, (People ex rel. Attorney General v. Curtice) 50 Colo. 503, 117 P. 357, the court quoting Justice Field that "[i]t is more important that the court should be right upon later and more elaborate consideration of the cases than consistent with previous declarations."
Justice Fuller of the Supreme Court, in the case of Pollock v. Farmers Loan & Trust Co., 157 U.S. 429, 15 S.Ct. 673, 39 L. Ed. 759, declared that the duty to maintain the fundamental law of the Constitution was entrusted to the court and that "the discharge of that duty requires it not to *428 extend any decision upon a constitutional question if it is convinced that error in principle might supervene." Cf. State ex rel. Bloedel-Donovan Lumber Mills v. Savidge, 144 Wash. 302, 258 P. 1.
Death resulting from an intentional or negligent act of a person has a two-fold aspect. Such act violates a duty owing to the person killed, and it violates a duty owing to the family of the decedent. The right to life of the person killed, and the right of his family to his affection, society, companionship and comfort, together with the loss of the benefit of his earnings, if any, have been subverted. That these are the certain effects of such death I propose to show.
Colorado was directed by Section 4 of the Enabling Act to adopt a constitution "republican in form * * * and not * * * repugnant to the constitution of the United States and the principles of the declaration of independence." The Declaration of Independence resorted to absolutes; language was used which could only be construed as viewing the utterances therein contained as being timeless and as stating eternal verities. How else can we evaluate the words that men "are endowed by their Creator with certain unalienable Rights, that among these rights are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men * * *."
Obedient to the mandate of the Enabling Act, the constitutional convention framed our Constitution, submitted it to the people of the proposed State of Colorado, and the people adopted it. Article II thereof declared the rights of the individual citizen and is designated the Bill of Rights.
The Bill of Rights in applicable part provides:
"In order to assert our rights, acknowledge our duties, and proclaim the principles upon which our government is founded, we declare:
* * * * * *
"Section 3. Inalienable rights.All persons have certain natural, essential and inalienable rights, among which may be reckoned the right of enjoying and defending their lives and liberties; of acquiring, possessing and protecting property; and of seeking and obtaining their safety and happiness.
* * * * * *
"Section 6. Equality of justice.Courts of justice shall be open to every person, and a speedy remedy afforded for every injury to person, property or character; and right and justice should be administered without sale, denial or delay.
* * * * * *
"Section 25. Due process of law.No person shall be deprived of life, liberty or property, without due process of law."
Beyond contention, the quoted portions of the Constitution proclaim the right of a person to his life and the duty of another person not to destroy that life through intentional or negligent act. When the Declaration of Independence said that a man had certain unalienable rights and that among these are life, liberty and the pursuit of happiness, the word "among" definitely indicated that there are other "unalienable rights" besides those mentioned. Our Constitution, seeking to precisely follow the mandate of the Enabling Act, said that "[a]ll persons have certain natural, essential and inalienable rights, among which may be reckoned the right of enjoying and defending their lives," etc. The word "among" in both contexts has significance. Among these rights not enumerated are those relating to the family and its members. Of these much more will be said later.
No state shall "deprive any person of life, liberty or property, without due process * * *." 14th Amendment, Federal Constitution. The right to the enjoyment of life is a fundamental or natural right not derived from or created by the Federal Constitution; the 14th Amendment only safeguards this right from subversion by state action. Screws v. United States, 325 *429 U.S. 91, 65 S.Ct. 1031, 89 L.Ed. 1495, 162 A.L.R. 1330. For this court to deny a right of redress through some effective procedure where a life has been taken as the result of a wrong would be action in violation of the federal mandate. See Gibbes v. Zimmerman, 290 U.S. 326, 54 S.Ct. 140, 78 L.Ed. 342.
The constitutional assurances that a person has a natural, essential and inalienable right to enjoy his life and that it may not be taken away without due process of law can mean little if, through the wrongful act of another, he loses his life, and because he is dead there is no injury and no damage. And if the person whose life is taken happens to be a baby or a child of tender years or a teen-age child who, because of some bad condition of health, is a financial burden on his parents, such parents can prove no pecuniary loss and hence are not damaged. These fine wordsthat one has a natural, essential and inalienable right to enjoy his lifejudicially placed in such a context, become empty words; they are "full of sound * * *, signifying nothing."
The Enabling Act wanted these words to be vital, to have life and utmost meaning. The wrongful death act should have been construed in such manner as would have breathed life into these constitutional provisions. Contrary to the letter and the spirit of constitutional language, this court rendered lifeless and dead these constitutional rights. Constitutions are not abstractions, and it was never intended that we equate these fundamental and sacred rights with concepts which in reality mean nothing.
When the people of this state proclaimed that this right to life was natural, essential and inalienable, neither legislature nor court had the power to drain these words of all meaning. If the legislature had failed to provide a remedy for the taking of a human life through fault or wilful wrong, this court would have been resourceful in providing such remedy. The rights protected by the Bill of Rights have efficacy because the Constitution in respect to them is self-executing. Quinn v. Buchanan, (Mo.) 298 S.W.2d 413; Perkins v. Cooper, 155 Okl. 73, 4 P.2d 64; Burnham v. Bennison, 121 Neb. 291, 236 N.W. 745; Payne v. Lee, 222 Minn. 269, 24 N.W.2d 259; See Lyons v. City of Longmont, 54 Colo. 112, 129 P. 198.
In holding that the rights declared to exist under the Bill of Rights are self-executing, the Supreme Court of Missouri, in the case of Quinn v. Buchanan, went on to say that "[i]n the absence of legislation, individuals may enforce and protect these rights from infringement by other individuals by any appropriate common law or code remedy."
It should be our conclusion that a human life may not be destroyed through fault without a remedy to that which succeeds the decedent. His estate should be allowed to bring suit for such damages as the decedent could have recovered had he lived, and should be allowed to recover further damages resulting from the death itself. The measure of the recovery should be the value of the life of the decedent if he had not come to such untimely end, and in considering this formula the jury should have the right to take into account whatever the decedent may have accumulated in the way of property during his or her life.
Law develops and grows, and perhaps in no field of the law has this evolutionary process been more noticeable than in the recognition of rights arising out of the family relationship. It has already been suggested that the enumerated rights in the Enabling Act and in the Constitution are not the only natural rights preserved and protected by these fundamental documents. The enumerated rights are "among" the rights which inhere in the person. The law has enlarged its knowledge of natural rights and has been confirming rights as natural and inalienable which grow out of family ties.
To us this should represent a healthy growth in the law. Although it is too late for this court to be in the vanguard, it can fall in with the ranks of those which have *430 realized the existence of these fundamental rights. "Individual Interests in the Domestic Relations" by Roscoe Pound, 14 Mich. L.Rev. 177; Annotations, 12 A.L.R.(2d) 1178 and 162 A.L.R. 824; Daily v. Parker, 7 Cir., 152 F.2d 174, 162 A.L.R. 819; Heck v. Schupp, 394 Ill. 296, 68 N.E.2d 464, 167 A.L.R. 232; "The Natural Law" by Heinrich A. Rommen, p. 239. Examples abound in which the law has recognized the natural right of the family to the retention of its integrity. Injury to a member has residual damaging effects upon the family as a unit and to the members thereof. These rights are, if anything, more greatly set at naught by a death through wrong than by an injury through wrong.
Causing an estrangement between husband and wife involves "the rights which all members of the family have a right to protect. Not only does every member of the family have a right to protect the family relationship but the State likewise has an interest in the sacredness of the family relationship." Heck v. Schupp, supra.
"Our conclusion, without going further into the matter, is that a child today has a right enforceable in a court of law, against one who has invaded and taken from said child the support and maintenance of its father, as well as damages for the destruction of other rights which arise out of the family relationship and which have been destroyed or defeated by a wrongdoing third party. * * *
"On this subject of the family and the rights and obligations of its members there has been a change in the accepted view of the status of the wife and the children. The courts have been rather slow to follow this accepted change. But they have belatedly accepted it and when once they accepted the change they have made law by their decisions." Daily v. Parker, supra.
An ever-expanding body of law has conceived the family to be a unit, the destruction of which is an actionable wrong to the child whose security and interests are thereby imperiled. Johnson v. Luhman, 330 Ill. App. 598, 71 N.E.2d 810; Miller v. Monsen, 228 Minn. 400, 37 N.W.2d 543; Lacher v. Venus, 177 Wis. 558, 188 N.W. 613, 24 A.L.R. 403.
In this state it has been held that government should never interfere "with the natural rights of man, except only when it is essential for the good of society," and it is said that "the state recognizes, and enforces, the right which nature gives to parents to the custody of their own children, and only supervenes with its sovereign power when the necessities of the case require it." Wilson v. Mitchell, 48 Colo. 454, 111 P. 21, 30 L.R.A.,N.S., 507.
When these relationships are disrupted, either by injury or death, what damages should be visited upon the wrong-doer? The damages should be the natural product of the act. These damages involve mental anguish, loss of love and affection, the society and companionship, the loss of protection and comfort, and the loss of the decedent's earnings, if any, resulting from the injury or death. Daily v. Parker, supra; Lacher v. Venus, supra; Stephens v. Weigel, 336 Ill.App. 36, 82 N.E.2d 697; Hayward v. Yost, 72 Idaho 415, 242 P.2d 971.
To deny mental anguish resulting from the wrongful death of a member of the family places this court in a most anomalous situation. For we have recently said that one must respond in damages for mental anguish for molesting the body of a deceased child. Spomer v. City of Grand Junction, 144 Colo. 207, 355 P.2d 960. A parent may not be recompensed for the mental anguish resulting from the injury or death of his or her child, but may be recompensed for such anguish where the clay to which it has been reduced in death has been disturbed. This is the present state of the law in Colorado!
A child of tender years may lose an arm through the fault of another and the latter will have to respond in damages. This child may sustain the loss of both arms and the loss possibly of both legs through the fault of another, and the latter, as the losses *431 increase, will have to respond in greater damages. But if this other person causes the death of this child, parties entitled to sue, being unable to show that they sustained any pecuniary loss by reason of the death, cannot hold the wrongdoer liable for anything. This is a travesty, and it is the only instance within my knowledge where the part has more value and is greater than the whole.
Because of what has been said in this opinion, I would say that two natural rights are violated, the right of the individual in that her life has been taken, and the rights of her family and the members thereof, and that damages should be allowed in both these respects.
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113 Ill. App.3d 892 (1983)
446 N.E.2d 896
EDITH SAUERS, Plaintiff-Appellant,
v.
THE CITY OF WOODSTOCK et al., Defendants-Appellees.
No. 82-520.
Illinois Appellate Court Second District.
Opinion filed March 8, 1983.
*893 Richard W. Eicksteadt, of Pollock, Meyers, Eicksteadt & Arnold, Ltd., of Marengo, for appellant.
Michael T. Caldwell, of Caldwell, Berner & Caldwell, of Woodstock, for appellees.
Reversed and remanded.
JUSTICE UNVERZAGT delivered the opinion of the court:
The plaintiff, Edith Sauers, appeals from an order of the circuit court of McHenry County which entered summary judgment against her and in favor of the defendants, the city of Woodstock (the city) and John Hayes, the city manager of Woodstock.
Her assignments of error on review are: (1) that the trial court improperly entered summary judgment for the defendants on count I of her amended complaint because the affidavit and exhibits supporting the defendants' motion for summary judgment did not comply with the requirements of Supreme Court Rule 191(a) (91 Ill.2d R. 191(a)); and (2) that the granting of the defendants' motion for summary judgment on counts II and III of her amended complaint was erroneous for the reasons (a) that material issues of fact existed with respect to those counts which precluded the use of summary judgment procedure in this cause and (b) that the defendants' motion was only directed at count I.
The plaintiff filed a one-count complaint in the circuit court of McHenry County, pursuant to section 8.01a of the Fair Employment Practices Act (FEPA) (Ill. Rev. Stat. 1979, ch. 48, par. 858.01a), in which she alleged that the defendants engaged in employment discrimination on the basis of sex and a physical disability (hearing impairment) when, on January 24, 1977, they discharged her from her position as an accounting clerk with the city of Woodstock.
The plaintiff filed a motion for leave to amend her complaint, which the trial court granted. Her amended complaint, which was brought against the same two defendants who had been named in the original complaint, consisted of three counts. Count I of the amended *894 complaint alleged essentially the same facts and cause of action as the original complaint, except that it was brought under section 9-102(B) of the Illinois Human Rights Act (IHRA) (Ill. Rev. Stat. 1981, ch. 68, par. 9-102(B)). It also added an additional paragraph which stated that the defendants had discriminated against the plaintiff because of her age.
The other two counts of the amended complaint alleged, in essence, that the defendants breached the employment contract which existed between the plaintiff and the city. More specifically, count II stated that the plaintiff had accepted, as part of her employment contract, the policies and procedures set forth in the city's Review Board Procedure and Personnel Plan and that the city had violated the employment contract by failing to comply with certain terms and conditions of those two documents. Both documents were attached as exhibits to the plaintiff's complaint. The defendants answered admitting that the plaintiff had accepted, as part of her employment contract, the above-mentioned standards, policies, and procedures; they denied, however, that they had violated the provisions of those documents. Count II further recited that the plaintiff had performed all the terms and conditions of the contract of employment, an allegation which the defendants denied. In addition, she alleged that she was discharged without just or sufficient cause, a statement the defendants also denied. Count II requested an award of monetary damages.
Count III alleged the same facts as count II but requested that the plaintiff be reinstated in her former position as an accounting clerk and that she be awarded backpay and accrued fringe benefits, with interest. The responses contained in the defendants' answer were the same as those directed to count II.
In their answer, the defendants raised an affirmative defense. The plaintiff did not reply to that defense. The defendants asserted in their defense that the plaintiff was discharged from her position as a general accounting clerk for four reasons: (1) poor work performance; (2) not directing telephone messages to proper people because of her hearing loss; (3) use of the telephone for personal calls; and (4) the "phasing out" of her position. The defense further recited that the plaintiff had filed a written complaint with the Chicago office of the Illinois Fair Employment Practices Commission (the Commission) on March 2, 1977, charging the defendants with unfair employment practices; that the Commission gave the defendants written notice of the charge on March 11 of that year; that, on October 24, 1978, the city of Woodstock filed a motion with the Commission to dismiss the charge; that the Commission responded on October 27, 1978, that the *895 plaintiff's complaint was still in the investigatory stage and that the city's motion was inappropriate at that time. The October 27 letter from the Commission to the city attorney, Michael Caldwell, which was attached to the answer as an exhibit, stated that the plaintiff's charge had not been processed through investigation and conciliation within 180 days. The affirmative defense also said that, according to the records of the Commission, as of April 30, 1979, there were no charges or investigations pending before the agency relative to the city of Woodstock. The defendants attached as exhibits to their answer the complaint which the plaintiff filed with the Commission and the correspondence between the city and the Commission to which the defendants referred in their affirmative defense.
The gravamen of the defendants' affirmative defense was that section 9-102(B) of the Illinois Human Rights Act (Ill. Rev. Stat. 1981, ch. 68, par. 9-102(B)), upon which, they alleged, the plaintiff relied in bringing her lawsuit in the circuit court, was unconstitutional because it (1) denied the defendants equal protection of the law and due process by reviving a previously barred cause of action and (2) constituted prohibited special legislation. (See Wilson v. All-Steel, Inc. (1981), 87 Ill.2d 28, 33.) Consequently, they asserted that due to the unconstitutionality of section 9-102(B), the plaintiff's suit in the circuit court was barred.
The defendants filed a motion for summary judgment in which they raised the same matters asserted in their affirmative defense. Included as part of the motion for summary judgment were the same exhibits that were incorporated as part of the affirmative defense, as well as an affidavit by the city attorney. The record reveals that the plaintiff did not file a response to the motion for summary judgment, a counteraffidavit, or any other document.
In his affidavit, Michael Caldwell related that he was an attorney for the defendants and was authorized to make the affidavit in support of the motion for summary judgment. The affiant stated that he was the city attorney for the city for Woodstock during all times material to the present cause of action and that he was aware of the unfair employment practice claim which the plaintiff had filed with the Commission. He further stated that the exhibits which were included as part of the motion for summary judgment were true, correct, and accurate copies of all documents which either the city or the affiant had received in connection with the plaintiff's claim of an unfair employment practice.
The trial court granted the defendants' motion for summary judgment. In its order, the trial court concluded, in agreement with the *896 defendants' theory, that section 9-102(B) of the Illinois Human Rights Act was unconstitutional in that it constituted special legislation and also denied the defendants equal protection and due process. After finding that no genuine issues of material fact existed, the court below entered judgment, as a matter of law, for the defendants and against the plaintiff.
The plaintiff filed a "motion to vacate summary judgment and for rehearing" on May 5, 1982. In that motion, she alleged that only count I of her complaint was predicated on section 9-102(B) of the IHRA; she stressed that counts II and III were based on a claim of a breach of her employment contract. Accordingly, she concluded that the defendants' motion for summary judgment was directed solely to count I of her complaint. In addition, she argued that material issues of fact existed with respect to counts II and III of her complaint. Lastly, the plaintiff maintained that the affidavit and supporting documents or exhibits which were included as part of the defendants' motion for summary judgment were legally deficient because they did not comply with the requirements of Supreme Court Rule 191 (91 Ill.2d R. 191). Attached to the plaintiff's motion were the affidavit of her attorney, her own affidavit, and numerous exhibits relating to her employment relationship with the city.
The court below denied the plaintiff's motion to vacate. The plaintiff appealed from both the original summary judgment and the subsequent denial of her motion to vacate that judgment.
Two issues are presented: (1) Did the trial court improperly enter summary judgment for the defendants and against the plaintiff and (2) Were the affidavit and attached exhibits submitted in conjunction with the motion for summary judgment violative of Supreme Court Rule 191(a) (91 Ill.2d R. 191(a)) such that the trial court should not have considered them in ruling on the motion.
Preliminarily, we note that the plaintiff pleaded a cause of action for employment discrimination or unfair employment practice in count I of her amended complaint and, in our opinion, a separate and distinct cause of action for breach of her employment contract in counts II and III. Although counts II and III of the amended complaint contain a single, fleeting reference to the Illinois Human Rights Act, upon which count I is predicated, it is clear that the gravamen of the latter two counts is an action sounding in breach of contract, not employment discrimination. The passing reference to the IHRA in counts II and III should be treated as surplusage, because that single comment does not, by itself, state a cause of action separate and distinct from the breach of employment contract claim. Counts II and III *897 plead only a cause of action for breach of the employment contract. (See Bates & Rogers Construction Corp. v. North Shore Sanitary District (1980), 92 Ill. App.3d 90, 94.) Furthermore, counts II and III reasonably informed the defendants of the nature of the breach of employment contract claim. (Ill. Rev. Stat. 1981, ch. 110, par. 42(2), recodified as Ill. Rev. Stat. 1981, ch. 110, par. 2-612(b).) The present case is clearly distinguishable from Knox College v. Celotex Corp. (1981), 88 Ill.2d 407, 420-23. Also, the defendants never raised the alleged pleading defect in the trial court. Therefore, we conclude that, under section 33(2) of the Civil Practice Act (Ill. Rev. Stat. 1981, ch. 110, par. 33(2)), recodified as section 2-603(b) of the Code of Civil Procedure (Ill. Rev. Stat. 1981, ch. 110, par. 2-603(b)), the plaintiff's complaint contains different causes of action which were pleaded, designated, and numbered in separate counts. Because the plaintiff's complaint pleaded two distinct theories of recovery in the trial court, we will discuss those alleged causes of action separately for purposes of determining whether the trial court properly entered summary judgment for the defendants.
COUNT I
1 On appeal, the plaintiff first contends that the trial court improperly entered summary judgment on count I of her amended complaint because the affidavit of city attorney Caldwell and the attached exhibits or documents submitted in support of the motion did not comply with the requirements of Supreme Court Rule 191(a) (91 Ill.2d R. 191(a)). We believe that the plaintiff's position is not meritorious.
Count I of the plaintiff's amended complaint for employment discrimination or unfair employment practice was predicated upon section 9-102(B) of the Illinois Human Rights Act (IHRA) (Ill. Rev. Stat. 1981, ch. 68, par. 9-102(B)). In 1979, the legislature passed the IHRA (Ill. Rev. Stat. 1980 Supp., ch. 68, par. 1-101 et seq.), which repealed and superseded the Illinois Fair Employment Practices Act (FEPA) (Ill. Rev. Stat. 1977, ch. 48, par. 851 et seq.); the IHRA incorporated substantially all of the provisions found in the FEPA.
Under the terms of section 8.01(a) of the FEPA (Ill. Rev. Stat. 1977, ch. 48, par. 858.01(a)), which was in force at the time (March 2, 1977), the plaintiff filed her charge before the Illinois Fair Employment Practices Commission, the Commission was required to issue, within 180 days of the plaintiff's charge, either a complaint or an order that no complaint would issue. The Illinois Supreme Court has determined that the 180-day period is mandatory, and that, generally, *898 the Commission must act within 180 days. (See Board of Governors v. Illinois Fair Employment Practices Com. (1979), 78 Ill.2d 143, appeal dismissed sub nom. Zackai v. Board of Governors (1980), 449 U.S. 807, 66 L.Ed.2d 11, 101 S.Ct. 54; Springfield-Sangamon County Regional Plan Com. v. Fair Employment Practices Com. (1978), 71 Ill.2d 61.) It appears that the practical effect of those decisions was to deny a complainant access to the circuit court (see Ill. Rev. Stat. 1977, ch. 48, par. 860) in cases where the Commission had not completed action on the complaint, one way or the other, within 180 days.
In 1978, the Illinois legislature added section 8.01a to the FEPA (Ill. Rev. Stat. 1979, ch. 48, par. 858.01a). That section created a remedy for those individuals whose discrimination charges were not acted upon by the Commission within the 180-day statutory time limit. In relevant part, section 8.01a states:
"In the case of any charge of an unfair employment practice which has been properly filed with the Commission prior to March 30, 1978, which has not been settled or adjusted by conference and conciliation under Section 8, and which within 180 days thereafter has not been the subject of a complaint issued by the Commission or an order that no complaint be issued, the person filing the charge may seek appropriate injunctive or other relief by filing an action in the circuit court of the county where the alleged unfair employment practice occurred * * *." (Ill. Rev. Stat. 1979, ch. 48, par. 858.01a.)
Section 9-102(B) of the IHRA, which is virtually identical to section 8.01a of the FEPA, similarly provides a remedy for persons whose FEPA charges were not addressed or resolved within the requisite statutory period.
Prior to the time the plaintiff filed her amended complaint in this cause, our supreme court determined that section 9-102(B) amounted to unconstitutional special legislation and also violated the equal protection and due process clauses of the Constitution of the State of Illinois. (Wilson v. All-Steel, Inc. (1981), 87 Ill.2d 28, 33.) Under the Wilson decision, it is manifest that section 9-102(B) is void and that no rights can be based upon it. We note that the defendants' affirmative defense and motion for summary judgment relied solely upon the authority of Wilson v. All-Steel, Inc.
While at first glance Wilson v. All-Steel, Inc. would appear (1) to sound the death knell of the plaintiff's cause of action and (2) to support the trial court's decision to grant summary judgment on count I, two opinions subsequent to Wilson (see Logan v. Zimmerman Brush *899 Co. (1982), 455 U.S. 422, 71 L.Ed.2d 265, 102 S.Ct. 1148; Lott v. Governors State University (1982), 106 Ill. App.3d 851), cast serious doubt on the validity of the trial court's reliance on the Wilson decision.
In Zimmerman Brush Co. v. Fair Employment Practices Com. (1980), 82 Ill.2d 99, rev'd sub nom. Logan v. Zimmerman Brush Co. (1982), 455 U.S. 422, 71 L.Ed.2d 265, 102 S.Ct. 1148, Logan filed an employment discrimination charge with the Commission, which was required to convene a factfinding conference within 120 days of Logan's charge (Ill. Rev. Stat. 1979, ch. 48, par. 858(b)). When the Commission failed, due to administrative delay for which Logan was not responsible, to hold the conference within the requisite period, Logan filed a petition for a writ of prohibition in our supreme court. In responding to that petition, the Illinois Supreme Court held that the 120-day period was mandatory and that, therefore, the Commission lacked jurisdiction to consider Logan's charge. (82 Ill.2d 99, 104.) The United States Supreme Court reversed the Illinois Supreme Court, holding that Logan's access to the FEPA's adjudicatory procedures was a protected property interest under the due process clause of the fourteenth amendment. (Logan v. Zimmerman Brush Co. (1982), 455 U.S. 422, 428.33, 71 L.Ed.2d 265, 273-76, 102 S.Ct. 1148, 1153-56.) Accordingly, the court determined that Logan was entitled to have the Commission consider the merits of the charge. 455 U.S. 422, 434, 71 L.Ed.2d 265, 277, 102 S.Ct. 1148, 1157.
In Lott v. Governors State University (1982), 106 Ill. App.3d 851, the plaintiff timely filed a charge of employment discrimination with the Commission, which did not act upon the complaint within the requisite 180-day statutory period. His claim was thereby defeated due to administrative inaction. He then filed a complaint in the circuit court, which dismissed the suit on jurisdictional grounds. While the appellate court recognized that the plaintiff could not rely on section 9-102(B) of the IHRA because the Illinois Supreme Court had declared that section unconstitutional, it nevertheless concluded, relying upon the United State Supreme Court's decision in Logan v. Zimmerman Brush Co., that the plaintiff had a protected property interest in his employment discrimination claim and could not be deprived of that interest by the inaction of the Commission without offending the constitution. (106 Ill. App.3d 851, 854.) The Lott court determined that the plaintiff there was entitled to have the Department of Human Rights and the Human Rights Commission (the successors of the FEPC) consider the merits of his discrimination claim in accordance with the procedures enumerated in articles 7 and 8 of the IHRA. See Ill. Rev. *900 Stat. 1981, ch. 68, pars. 7-102, 8-102.
Concluding that the Department of Human Rights (the Department) and the Human Rights Commission were necessary parties in that lawsuit, the court in Lott directed the trial court, upon remand, to allow the plaintiff to amend his complaint to add those entities as defendants (see Ill. Rev. Stat. 1981, ch. 110, par. 26, recodified as Ill. Rev. Stat. 1981, ch. 110, par. 2-407). The trial court was also directed to order the Department to accept and process the plaintiff's charge as provided in the IHRA. Finally, the Lott opinion stressed that there was no limitation problem involved there, because the plaintiff's original charge was brought in timely fashion before the FEPC.
The facts of the present case mirror very closely those presented in Lott. Here, as in Lott, the plaintiff was prevented from having her employment discrimination claim disposed of before the FEPC due to administrative inaction of the Commission; was denied relief in the trial court; and did not raise on review the theory of relief which would justify the appellate court in reversing and remanding the cause. Similar to Lott, here the plaintiff's claim was timely filed before the Commission, as it was brought less than 180 days after the unfair employment practice allegedly occurred (see Ill. Rev. Stat. 1977, ch. 48, par. 858). We adopt the rationale employed in Lott and adhere to the result reached in that case and, therefore, the trial court erred in entering summary judgment for the defendants on count I of the plaintiff's complaint.
COUNTS II AND III
2-5 The thrust of the plaintiff's challenge here is that, with respect to counts II and III of her amended complaint, the pleadings presented genuine issues of material fact, thereby precluding the use of the summary judgment procedure in this cause. The plaintiff points out, correctly, that the defendants' motion for summary judgment related only to the unconstitutionality of section 9-102(B). At no place in that motion did the defendants address the breach of employment contract claims which the plaintiff asserted in counts II and III.
Recently, this court has had occasion to articulate the well-recognized principles which guide an appellate court's review of a trial court's disposition of a motion for summary judgment. It is axiomatic that summary judgment is a proper procedure when the pleadings, together with the depositions, affidavits, and other material filed in support and in opposition to the motion, demonstrate that there is no genuine issue of material fact and that the moving party is entitled to *901 judgment as a matter of law. (Bennett v. Raag (1982), 103 Ill. App.3d 321, 325.) The purpose of a summary judgment proceedings is not to try an issue of fact but rather to determine whether there is an issue of fact to be tried, and a reviewing court will reverse an order granting summary judgment if it is determined that a question of material fact exists. (Schnabel v. County of Du Page (1981), 101 Ill. App.3d 553, 560.) Although summary judgment provides a means of disposing of cases with dispatch, it is a drastic method which should be employed only in cases in which the moving party's right to it is free from doubt. (Smith v. St. Therese Hospital (1982), 106 Ill. App.3d 268.) Where the facts contained in an affidavit in support of a motion for summary judgment are not contradicted by a counteraffidavit, those facts are admitted and must be taken as true. Heidelberger v. Jewel Companies, Inc. (1974), 57 Ill.2d 87, 92-93.
From our review of the record, and for the reasons set forth below, we conclude that the pleadings presented to the trial court in the summary judgment proceeding contained disputed material facts regarding the plaintiff's allegations, in counts II and III of her amended complaint, that the defendants breached her employment contract with the city. In our opinion, the existence of the genuine issues of material fact precluded the entry of summary judgment in this case. In addition, the record in its present state does not establish, as a matter of law, that the plaintiff's claim of a breach of her employment contract is without merit.
6 In our opinion, the plaintiff's amended complaint and the defendants' answer raised issues of material fact, and the defendants did not supply any evidentiary facts by affidavit or deposition which would show either that there were no remaining genuine issues of material fact or that the defendants were entitled to judgment, as a matter of law, on those counts (see Bennett v. Raag (1982), 103 Ill. App.3d 321, 326). For example, counts II and III of the amended complaint, among other things, alleged that the plaintiff performed all the terms and conditions of the contract of employment into which she had entered with the city and that the city unlawfully discharged her without just or sufficient cause. In their answer, the defendants denied all those allegations. Based on the conflicting nature of the pleadings with respect to the question whether the city had "good cause," under its personnel rules, to discharge or dismiss the plaintiff, a material question of fact exists on this subject. In particular, the plaintiff alleged that she had performed all the conditions and terms of her employment contract, an allegation the defendants denied. The defendants' affirmative defense and the letter that the plaintiff filed *902 with the Commission, which was included as an exhibit to both the defendants' answer and motion for summary judgment, reveal that one of the reasons the plaintiff was terminated was "poor work performance." However, the reasonable inference we draw from the plaintiff's allegations in her complaint that she dutifully performed the terms and conditions of her employment contract is that she alleged, in essence, that her work performance was satisfactory.
We point out, in addition, that there is no indication in the record before this court that the defendants introduced, in their pleadings, affidavit or supporting documents, any underlying facts to supports the four alleged reasons for discharging the plaintiff. Thus, the trial court was never presented any evidence upon which it could determine whether the charges were well founded and whether, as a matter of law, they constituted good cause for terminating the plaintiff. Further, neither the defendants' affirmative defense nor their motion for summary judgment expressly addressed the breach of contract claims which the plaintiff raised in her amended complaint and the trial court's summary judgment refers only to the unconstitutionality of section 9-102(B) of the IHRA and makes no reference, either directly or indirectly, to the contractual claims of counts II and III.
Because these are genuine issues of material fact raised by the complaint and answer, and because there is no evidence in the record that the trial court was presented with sufficient undisputed facts to allow it to determine, as a matter of law, that the plaintiff was discharged for good cause, with respect to counts II and III of the plaintiff's amended complaint, summary judgment was erroneously granted in behalf of the defendants.
Because of our disposition of this issue, we find it unnecessary to resolve the second issue raised by the plaintiff relating to the sufficiency of the affidavit and attached exhibits in conjunction with the motion for summary judgment.
We now turn to an issue which the defendants argue in their brief.
The defendants' contention is that the plaintiff's statement of facts fails to conform to the law in two regards. In the first place, they maintain that the plaintiff's statement of facts does not contain the necessary citations to the record in violation of Supreme Court Rule 341(e)(6) (91 Ill.2d R. 341(e)(6)). Secondly, they maintain that this court should disregard certain matters contained in the plaintiff's proposed report of proceedings because the trial court did not certify the bystander's report as an accurate representation of the proceedings.
*903 Our examination of the record reveals that the plaintiff has substantially complied with Rule 341(e)(6), for her statement of facts does cite to the appropriate references in the record. However, the defendants correctly point out that the plaintiff's statement of facts (1) contains references to an uncertified report of proceedings and (2) in reliance on that uncertified bystander's report, relates the purported arguments of the parties before the trial court at the hearings held on the defendants' motion for summary judgment and on the plaintiff's motion to vacate the entry of summary judgment. We note, however, that the record does not contain any evidence of what occurred at those hearings other than the matters related in the plaintiff's uncertified bystander's report. Therefore, as the defendants properly argue, this court may not consider any statements of fact in the plaintiff's brief where the sole support in the record for those statements is found in the uncertified and, hence, legally insufficient, proposed report of proceedings.
The decision of the circuit court of McHenry County is reversed and the cause is remanded for proceedings consistent with this opinion.
Reversed and remanded with directions.
SEIDENFELD, P.J., and REINHARD, J., concur.
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172 Cal.App.3d 899 (1985)
218 Cal. Rptr. 627
HAMMER COLLECTIONS CO., INC., Plaintiff, Cross-defendant and Respondent,
v.
IRONSIDES COMPUTER CORPORATION, Defendant; PARTHENON COMPUTERS, INC., Cross-complainant and Appellant.
Docket No. B009988.
Court of Appeals of California, Second District, Division Two.
September 30, 1985.
*900 COUNSEL
Gould, Merritt & Burke, David R. Hagen and Laurence D. Merritt for Cross-complainant and Appellant.
Morton Schein for Plaintiff, Cross-defendant and Respondent.
OPINION
ROTH, P.J.
In its summons and complaint incident to a suit brought on an assigned claim, respondent Hammer Collections Co., Inc. (Hammer) named as defendant "Ironsides Computer Corporation, also known as Parthenon Computers, Inc., a corporation, doing business as Ironsides Computers." After these documents were served on appellant Parthenon Computer, Inc. (Parthenon), Parthenon notified Hammer it did not intend to respond, owing to the fact it had been served "On behalf of Ironsides Computer Corporation"[1] but was not itself that corporation nor known by that name. Hammer thereafter obtained a default judgment and a writ of execution, which it levied upon Parthenon.
When Hammer agreed at Parthenon's request to have the default judgment set aside and to permit Parthenon to plead in the cause on condition of a deposit of money sufficient to secure any judgment Hammer might recover, Parthenon not only answered the complaint but cross-complained as well, charging Hammer with abuse of process.
*901
*902 (1) There is no question that Parthenon was in all respects save one properly served in the action and was fully apprised of the fact and the nature of the pending litigation herein. What is maintained is that, even so, it was not lawfully made a party to the proceedings, such that Hammer, knowing that it had not been, abusively took its default and levied upon its assets, because Parthenon is not, and is not known as, Ironsides Computer Corporation. It is conceded at the same time that Parthenon does business as "Ironsides Computers."[2]
In other words, what we are asked to find is that, because there is no entity precisely denominated Ironsides Computer Corporation, the service of summons and complaint upon Parthenon Computers (see fn. 2) was invalid so as to permit the cross-complaint for abuse of process. That request, however, must be denied.
"[W]e set out the legal principles pertaining to the construction of the procedural rules set forth in the Code of Civil Procedure. To start with, we refer to section 4, which underscores that the provisions of the code and all proceedings under it `are to be liberally construed, with a view to effect its objects and to promote justice.' This century-long view (see Plummer v. Brown (1884) 64 Cal. 429 [1 P. 703]; Clark v. Palmer (1891) 90 Cal. 504 [27 P. 375]; Burns v. Superior Court (1903) 140 Cal. 1 [73 P. 597]; Hancock Oil Co. v. Hopkins (1944) 24 Cal.2d 497 [150 P.2d 463]; McClearen v. Superior Court (1955) 45 Cal.2d 852 [291 P.2d 449]) has been recently reaffirmed in Pasadena Medi-Center Associates v. Superior Court (1973) 9 Cal.3d 773, 778 [108 Cal. Rptr. 828, 511 P.2d 1180], wherein interpreting section 416.10, providing for service on a corporation our Supreme Court stated as follows: `Although some decisions under pre-1969 statutes required strict and exact compliance with the statutory requirements (see 2 Witkin, Cal. Procedure (2d ed. 1970) pp. 1390, 1413-1415), the provisions of the new law, according to its draftsmen, "are to be liberally construed.... As stated in the Nov. 25, 1968, Report of the Judicial Council's Special Committee on Jurisdiction, pp. 14-15: `The provisions of this chapter should be liberally construed to effectuate service and uphold the jurisdiction of the court if actual notice has been received by the defendant, and in the last analysis the question of service should be resolved by considering each situation from a practical standpoint....' The liberal construction rule, it is anticipated, will eliminate unnecessary, time-consuming, and costly disputes over legal technicalities, without prejudicing the right of defendants to proper notice of court proceedings." (Li, Attorney's Guide to Cal. *903 Jurisdiction and Process (Cont.Ed.Bar (1970) pp. 57-58.)' (Italics added.)" (Cory v. Crocker National Bank (1981) 123 Cal. App.3d 665, 669-670 [177 Cal. Rptr. 150]; cf. MJS Enterprises, Inc. v. Superior Court (1984) 153 Cal. App.3d 555 [200 Cal. Rptr. 286]. See also Billings v. Edwards (1979) 91 Cal. App.3d 826, 830-831 [154 Cal. Rptr. 453].)
Such was, or should have been, the case here.
The order appealed from is affirmed.
Compton, J., and Gates, J., concurred.
NOTES
[1] So that footnote 1 may appear in a legible configuration, it is reproduced on the following page.
[2] So, in its answer to the complaint Parthenon declared "COMES NOW Parthenon Computers Inc., (hereinafter `Parthenon') dba Ironside [sic] Computers, ..."
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638 S.E.2d 804 (2006)
HUNTER
v.
The STATE.
No. A06A1568.
Court of Appeals of Georgia.
November 9, 2006.
*805 Mark Casto, Columbus, for Curtis Hunter.
J. Gray Conger, District Attorney, Crawford Seals, Assistant District Attorney, for The State.
BARNES, Judge.
On appeal from his conviction for child molestation and aggravated child molestation, Curtis Hunter argues that the evidence was insufficient, that the trial court mishandled voir dire and a juror's dismissal, that the State improperly bolstered witnesses' testimony and argued Hunter's future dangerousness, and that trial counsel was ineffective. We find no error and affirm.
Viewed in the light most favorable to the jury's verdict, the record shows that on May 19, 2003, an eleven-year-old girl told two school counselors that Hunter, the girl's mother's boyfriend at the time, had repeatedly over a period of months put his mouth on the girl's vagina and forced her to put her mouth on his penis. When the victim first recounted the molestation, she began to cry so hard that both counselors thought she was going to throw up. Hunter had given the victim money and gifts to entice her to continue the sexual activity. The victim repeated her allegations to two police officers and at least one other adult.
In the months before the victim's outcry, Hunter began giving money to the victim's cousin, telling her not to tell anyone else about the gifts. When the first victim found out about these gifts, she feared that Hunter was molesting her cousin as well, and asked her what she had to do to get the money. During a Mother's Day party at his home, Hunter played a sexually explicit video for both girls in his bedroom while he stood watch outside, instructing them to turn off the video if he signaled them to do so. Hunter was later convicted of two counts each of child molestation and aggravated child molestation and sentenced to twenty years with fifteen to serve. His motion for new trial was denied.
On appeal from a criminal conviction, we view the evidence in the light most favorable to the verdict, with the defendant no longer enjoying a presumption of innocence. Williams v. State, 261 Ga.App. 793, 794(1), 584 S.E.2d 64 (2003). We neither weigh the evidence nor judge the credibility of witnesses, but determine only whether the evidence was sufficient for a rational trier of fact to find the defendant guilty of the charged offense beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S.Ct. 2781, 61 L.Ed.2d 560 (1979).
1. Having reviewed the record, we find that the evidence was sufficient to sustain Hunter's conviction for child molestation and aggravated child molestation. OCGA § 16-6-4(a), (c); Jackson, supra.
2. Hunter asserts that the trial court erred when it posed certain questions to the jurors concerning the State's efforts in prosecuting child molestation charges and when it dismissed a juror after she realized that she knew the second victim. Hunter failed to object to either the questions or the dismissal, however, and has thus waived both issues on appeal. Primas v. State, 231 Ga. App. 861, 862(2), 501 S.E.2d 28 (1998) (failure to object to voir dire questions); Worthy v. State, 223 Ga.App. 612, 614(1), 478 S.E.2d 421 (1996) (failure to state grounds of objection to dismissal of juror). We have reviewed the record, moreover, and find that there was nothing improper, let alone an abuse of discretion, in the trial court's questions or comments. See Walker v. State, 214 Ga.App. 777, 779(3), 449 S.E.2d 322 (1994) *806 (no abuse of discretion in trial court's handling of defendant's proposed voir dire question); Worthy, supra, 223 Ga.App. at 614(1), 478 S.E.2d 421 (no error in trial court's dismissal of juror or in its explanation of the event to the jury).
3. Hunter also argues that (a) the State should not have been allowed to refresh one of its witnesses' recollection with a police report and (b) the State improperly bolstered the credibility of the first victim when it asked her mother whether the victim had made accusations against the mother's new boyfriend. We reject these contentions.
(a) It is true that under OCGA § 24-9-69, a witness whose memory is refreshed with a document must continue her testimony on the basis of recollection alone. This was not the basis for Hunter's objection below, however. There, he argued that the police report was improperly used because it was not prepared by this particular witness. "Because this is a court for review and correction of error, we cannot consider objections to evidence different from those raised at trial." Waugh v. State, 218 Ga.App. 301, 304(5), 460 S.E.2d 871 (1995). Moreover, as the trial court ruled, a witness's memory may indeed be refreshed by a document prepared by someone else. See Penland v. State, 258 Ga.App. 659, 661(2), 574 S.E.2d 880 (2002). There was no error here.
(b) In response to Hunter's claim that the victim's accusations against Hunter were motivated by her jealousy of his relationship with her mother, the State asked the mother whether the victim had ever accused her present boyfriend of a molestation. Hunter did not object to the question, and the mother replied in the negative. Here, the State was eliciting testimony for the purpose of refuting one of Hunter's claims. Again, Hunter failed to object, and has thus waived the issue on appeal. Carr v. State, 259 Ga. 318, 320(1), 380 S.E.2d 700 (1989). Even if Hunter had objected, the Supreme Court of Georgia has held that when a defendant has attacked a witness's credibility, that witness's availability for cross-examination obviates any inquiry into bolstering. See Edwards v. State, 255 Ga. 149, 151(2), 335 S.E.2d 869 (1985); Cuzzort v. State, 254 Ga. 745, 334 S.E.2d 661 (1985). There was no error here.
4. Hunter next argues that the State made impermissible references to his future dangerousness when it argued to the jury that "you can protect the children right now, the buck stops here," that given Hunter's efforts to "groom" a second victim for future molestation, "only you can make it stop," and that "with your verdict, you really can send a message." Trial counsel objected to this line of argument on the ground that "the jury's job is not to send a message to anybody," but the trial court overruled the objection.
If and when a prosecutor's comments are improper, the grant of a mistrial for improper argument is a matter largely within the trial court's discretion. Pace v. State, 271 Ga. 829, 841(27), 524 S.E.2d 490 (1999). We have held, however, that "[i]t is not improper for a prosecutor to appeal to the jury to convict for the safety of the community, or to stress the need for enforcement of the laws and to impress on the jury its responsibility in that regard." (Citation and punctuation omitted.) Jowers v. State, 272 Ga.App. 614, 617(2), 613 S.E.2d 14 (2005) (no error when State requested jury to send a message to the people of Columbus that violence would not be tolerated.)
Counsel's illustrations may be as various as are the resources of his genius; his argumentation as full and profound as his learning can make it; and he may, if he will, give play to his wit, or wing to his imagination. Counsel may bring to his use in the discussion of the case well-established historical facts and may allude to such principles of divine law relating to transactions of men as may be appropriate to the case. Counsel for the state may forcibly or even extravagantly attempt to impress upon the jury the enormity of the offense and the solemnity of their duty in relation thereto.
(Citations and punctuation omitted.) Moss v. State, 278 Ga.App. 221, 223-224(1), 628 S.E.2d 648 (2006) (no error when prosecutor told the jury that it needed to send a message that shooting was an inappropriate way to handle a conflict).
*807 Accordingly, there was no error.
5. Finally, Hunter argues that his trial counsel was ineffective in a number of respects. We disagree.
To prevail on an ineffectiveness claim, a defendant must show both that his trial counsel's performance was deficient and that the deficient performance prejudiced his defense. Brown v. State, 257 Ga. 277, 278(2), 357 S.E.2d 590 (1987). In order to establish prejudice, the defendant must show that but for the deficient representation, there is a reasonable probability that the outcome of his trial would have been different. Brogdon v. State, 255 Ga. 64, 68(3), 335 S.E.2d 383 (1985).
(a) Hunter first argues that trial counsel was ineffective in failing to prepare adequately, as when he failed to listen to audiotapes of police interviews before trial. The trial court was within its rights to believe trial counsel's testimony that he was adequately prepared when he had "many conversations" with Hunter about the case, characterized his pretrial preparation as "extensive," and obtained an acquittal on two of the six charged counts. See Mallon v. State, 266 Ga.App. 394, 397(3), 597 S.E.2d 497 (2004) (one meeting before trial was not shown to be inadequate preparation). Likewise, Hunter does not proffer what the audiotapes would have shown, and can thus show neither deficient performance nor prejudice. See McDaniel v. State, 279 Ga. 801, 802(2)(c), 621 S.E.2d 424 (2005) (failure to proffer negates claim that trial counsel was ineffective in not interviewing witness).
(b) At the hearing on his motion for new trial, Hunter excused trial counsel from the stand before raising his concerns about the juror's dismissal, the State's examination of the victim's mother, the refreshment of the State's witness's recollection, and closing argument. There is therefore nothing in the record to rebut the presumption that trial counsel had legitimate reasons for its strategic decisions on each of these matters. Hayes v. State, 279 Ga. 642, 645(3), 619 S.E.2d 628 (2005).
The trial court correctly denied the motion for new trial.
Judgment affirmed.
ANDREWS, P.J., and BERNES, J., concur.
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Revised January 31, 2002
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 00-30165
KERMIT DEMETTE,
Plaintiff,
versus
FALCON DRILLING COMPANY, INC.; ET AL.,
Defendants.
R & B FALCON DRILLING USA, INC.,
Defendant-Third Party
Plaintiff-Appellee,
versus
FRANK’S CASING CREW & RENTAL TOOLS, INC.,
Third Party Defendant-
Appellant.
Appeal from the United States District Court
for the Eastern District of Louisiana
January 16, 2002
Before HIGGINBOTHAM and DeMOSS, Circuit Judges, and FISH,* District
Judge.
PATRICK E. HIGGINBOTHAM, Circuit Judge:
*
District Judge of the Northern District of Texas, sitting by
designation.
Without prejudice to the Petition for Rehearing En Banc of
Third Party Defendant-Appellant Franks Casing Crew & Rental Tools,
Inc., we substitute the revised opinions that follow in place of
the prior opinions, reported at Demette v. Falcon Drilling Company,
Inc., 253 F.3d 840 (5th Cir. 2001). The parties may file on or
before January 30, 2002 any supplemental briefs in support of or
opposition to the petition for rehearing en banc in light of these
revised opinions.
Appellee R & B Falcon Drilling USA, Inc. sued appellant
Frank’s Casing & Crew Rental Tools, Inc. for indemnity when a
Frank’s employee sued Falcon under the Longshore and Harbor
Workers’ Compensation Act1 for injury sustained while working on a
Falcon jack-up rig in the Gulf of Mexico. Frank’s argued that the
indemnity agreement was voided by LHWCA or by Louisiana law. The
district court held that the indemnity agreement was valid.
Determining the validity of the indemnity agreement requires
a foray into the federal statutes defining the law applicable to
offshore drilling on jack-up rigs. We first consider the
application of the Outer Continental Shelf Lands Act (“OCSLA”)2 and
then construe the LHWCA. We conclude that the OCSLA applies to a
rig jacked-up over the outer continental shelf; that state law does
not apply to this case by operation of the OCSLA, but the LHWCA
1
33 U.S.C.A. § 901 et seq. (2000).
2
43 U.S.C.A. § 1331 et seq. (2000).
2
does; and that the LHWCA does not invalidate the indemnity
agreement. We affirm.
I
Frank’s Casing & Crew Rental Tools, Inc. and R & B Falcon
Drilling USA, Inc. are both contractors with Union Oil Company of
California for Unocal’s offshore drilling operations. Frank’s
provides casing services. “Casing” is an activity performed during
the drilling for oil, whether onshore or offshore; it involves the
“welding together and hammering of pipe into the subsurface of the
earth to create a permanent construction.”3
Frank’s and Unocal signed a “Services and Drilling Master
Contract.” Under the Master Contract, Frank’s provided casing
services to Unocal at offshore drilling sites. Under the Master
Contract, Unocal agreed to defend and indemnify Frank’s against any
liabilities Frank’s owes to Unocal, and Frank’s agreed to defend
and indemnify Unocal and all of its contractors and subcontractors
against liabilities they may owe to Frank’s. Falcon was a
contractor of Unocal.
Falcon provides movable rigs from which casing crews drill
offshore wells. Falcon has an “Offshore Daywork Drilling Contract”
with Unocal. This contract provided Unocal with access to all of
Falcon’s vessels for offshore drilling. Falcon provided Unocal
3
See Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d
1115, 1118 n.2 (5th Cir. 1992).
3
the Fal-Rig #85, a jack-up drilling rig. A jack-up drilling rig is
a floating rig with legs that can be lowered into the seabed. Once
the legs are secured in the seabed, the rig can be “jacked-up” out
of the water to create a drilling platform. The process can be
reversed, and a jack-up rig can be towed to new sites.4
Pursuant to the Master Contract between Frank’s and Unocal,
plaintiff Kermit Demette, an employee of Frank’s, worked aboard the
Fal-Rig #85. Demette was injured while performing casing work as
a welder on the Fal-Rig #85. He was part of a “hammer job,” which
involves a casing crew welding together sections of pipe end-to-end
as the pipe is driven into the seabed by a large hammer. While
Demette was working at the base of the derrick where the pipe was
being driven, a metal retaining ring used to secure hoses fell from
the derrick, striking him on the head. At the time of Demette’s
injury, the Fal-Rig #85 was jacked up. Its legs rested on the
outer continental shelf of the United States beyond the territorial
waters of Louisiana.5
Demette sued Falcon for his injuries. Falcon, pursuant to the
Offshore Daywork Drilling Contract, filed a third-party complaint
against Unocal for defense and indemnity. Unocal voluntarily
assumed the defense of Falcon. Falcon then filed a third-party
4
Thomas J. Schoenbaum, 1 Admiralty and Maritime Law § 3-9,
100 n.8 (West 2d Ed. 1994), describes jack-up rigs and other rigs.
5
In this opinion, we define OCS to exclude lands lying
beneath the territorial waters of the states. See 43 U.S.C. §
1331(a).
4
complaint against Frank’s, seeking defense and indemnity pursuant
to the Master Contract.
The district court granted summary judgment to Falcon on the
issues of whether Frank’s owed defense and indemnity to Falcon.
Frank’s agreed to fund a settlement with Demette and to pay
Falcon’s defense costs, but made a full reservation of appeal
rights. A consent judgment was entered pursuant to this agreement.
Frank’s appeals the summary judgment ruling on indemnity and
defense.
II
The Outer Continental Shelf Lands Act6 provides comprehensive
choice-of-law rules and federal regulation to a wide range of
activity occurring beyond the territorial waters of the states on
the outer continental shelf of the United States. Relevant to this
case, it applies federal law to certain structures and devices on
the OCS, incorporates state law into federal law on the OCS, and
applies the LHWCA to certain injuries sustained by persons working
on the OCS.
In this case, the parties dispute whether Louisiana state law
governs the Master Contract and whether the OCSLA makes the
Longshore and Harbor Workers’ Compensation Act7 applicable to
6
43 U.S.C.A. § 1331 et seq. (2000).
7
33 U.S.C.A. § 901 et seq. (2000).
5
Demette’s injuries. First, we must determine whether the injury
occurred on an OCSLA situs; if so, we then have two inquiries: we
must determine whether OCSLA makes state law applicable; and we
must determine if the injured party’s status makes the LHWCA
applicable under OCSLA. We begin with a review of the three OCSLA
inquiries we must make in this case.
A. Section 1333(a)(1): Situs Test
Section 1333(a)(1) describes the reach of the OCSLA and
applies federal law within this scope. It states that the laws and
jurisdiction of the United States extend
to the subsoil and seabed of the [OCS] and to all artificial
islands, and all installations and other devices permanently
or temporarily attached to the seabed, which may be erected
thereon for the purpose of exporing [sic] for, developing, or
producing resources therefrom, or any such installation or
other device (other than a ship or vessel) for the purpose of
transporting such resources, to the same extent as if the
[OCS] were an area of exclusive Federal jurisdiction located
within a state.8
The Supreme Court and the Fifth Circuit have held that this section
creates a “situs” requirement for the application of other sections
of the OCSLA, including sections 1333(a)(2) and 1333(b).9 Neither
the Supreme Court nor this court has parsed the precise language of
8
43 U.S.C.A. § 1333(a)(1).
9
Offshore Logistics, Inc. v. Tallentire, 477 U.S. 207, 217-20
& 220 n.2 (1986); Mills v. Director, OWCP, 877 F.2d 356, 361-62
(5th Cir. 1989) (en banc).
6
the statute to specify the exact contours of the situs test it
establishes.10 We are called upon to do so today.
We rely on the text of the statute. A close inspection of
section 1333(a)(1) reveals that it applies to two primary sets of
subjects: “to the subsoil and seabed of the [OCS]”; and “to all
artificial islands, and all installations and other devices
permanently or temporarily attached to the seabed.” This latter
category is further divided into two categories: those artificial
islands, installations, or devices “erected” on the OCS “for the
purpose of exploring for, developing, or producing resources” from
the OCS, and those “other than a ship or vessel” whose purpose is
“transporting such resources.”11
10
Mills interpreted section 1333(b) and held that it could not
apply to injuries that do not occur on or over the OCS. 877 F.2d
at 362.
11
43 U.S.C.A. § 1333(a)(1). The reference “any such
installation or other device” suggests that Congress treated
“installation or other device” as a unit separate from “artificial
islands.” In the context of the entire section, however, it is
clear that Congress used “artificial islands, installations, and
other devices” as a single category. See 43 U.S.C.A. § 1333(c)
(using the phrase “artificial island, installation, or other device
referred to in subsection (a) of this section”); 43 U.S.C.A. §
1333(d)(2) (same); 43 U.S.C.A. § 1333(d)(1) (using the phrase
“artificial islands, installations, and other devices referred to
in subsection (a) of this section”); 43 U.S.C.A. § 1333(e) (same);
43 U.S.C.A. § 1333(f) (same). Further, it is hard to imagine an
artificial island that is not subsumed into the category
“installations and other devices permanently or temporarily
attached to the seabed.” Making sense of text and context, we
conclude that “artificial islands, and all installations and other
devices” form a single category.
7
Thus, the OCSLA draws important distinctions between the two
categories of artificial islands, installations, and other devices.
Each category is defined by the purpose of the device—the former,
extraction of resources; the latter, transportation of resources.
The former also includes the phrase, “which may be erected [on the
OCS],” while the latter does not. Conversely, the latter contains
the phrase, “other than a ship or vessel,” while the former does
not.
We incorporate these distinctions into the following rule:
The OCSLA applies to all of the following locations:
(1) the subsoil and seabed of the OCS;
(2) any artificial island, installation, or other device if
(a) it is permanently or temporarily attached to the
seabed of the OCS, and
(b) it has been erected on the seabed of the OCS, and
(c) its presence on the OCS is to explore for, develop,
or produce resources from the OCS;
(3) any artificial island, installation, or other device if
(a) it is permanently or temporarily attached to the
seabed of the OCS, and
(b) it is not a ship or vessel, and
(c) its presence on the OCS is to transport resources
from the OCS.
B. Section 1333(a)(2): Incorporation of State Law
If the situs test is met, section 1333(a)(2) provides that
“[t]o the extent that they are applicable and not inconsistent with
this subchapter or with other Federal laws . . . the civil and
criminal laws of each adjacent State . . . are hereby declared to
be the law of the United States [on OCS situses as defined by
section 1333(a)(1)].” Sections 1333(a)(1) and 1333(a)(2) together
8
provide a rule for the incorporation of state law as surrogate
federal law governing claims arising out of activity on the OCS.
This court has articulated the rule in a three-part test announced
in Union Texas Petroleum Corp. v. PLT Engineering (“PLT”):12
[For state law to govern,] (1) The controversy must arise on
a situs covered by OCSLA (i.e., the subsoil, seabed, or
artificial structure permanently or temporarily attached
thereto). (2) Federal maritime law must not apply of its own
force. (3) The state law must not be inconsistent with Federal
law.13
For disputes arising out of contracts—including indemnity contracts
for offshore drilling—the courts of this circuit have held that if
the contract is a maritime contract, federal maritime law applies
of its own force, and state law does not apply.14
C. Section 1333(b): Status Test
Section 1333(b) extends the LHWCA to non-seamen employed on
the OCS. Specifically, it creates the following “status” test: the
LHWCA applies to injuries “occurring as a result of operations
conducted on the [OCS] for the purpose of exploring for,
developing, removing, or transporting by pipeline the natural
12
895 F.2d 1043 (5th Cir. 1990).
13
Id. at 1047.
14
See Hodgen v. Forest Oil Corp., 87 F.3d 1512, 1526 (5th Cir.
1996) (observing that the second factor in the PLT test is
identical to the determination that the contract is maritime);
Diamond Offshore Co. v. A&B Builders, Inc., 75 F. Supp. 2d 676, 681
(S.D. Tex. 1999) (applying Hodgen to an indemnity contract).
9
resources . . . of the [OCS].”15 In order for the LHWCA to apply
by virtue of section 1333(b), notwithstanding any application of
the LHWCA of its own force, the injured worker must satisfy the
“status” requirement of section 1333(b) as well as the situs
requirement of section 1333(a)(1).16
III
A. Situs Test
Here, the situs requirement of section 1333(a)(1) is met. The
Fal-Rig #85 was jacked-up over the OCS at the time of Demette’s
injury. It therefore falls into the second category of OCSLA
situses: it was a device temporarily attached to the seabed, which
was erected on the OCS for the purpose of drilling for oil.17
Frank’s argues that since the Fal-Rig #85 is a vessel,18 the
15
43 U.S.C.A. § 1333(b). Section 1333(b)(1) expressly excludes
masters and crew of vessels.
16
See Mills, 877 F.2d at 361-62.
17
43 U.S.C.A. § 1333(a)(1).
18
This is beyond dispute. This circuit has repeatedly held
that special-purpose movable drilling rigs, including jack-up rigs,
are vessels within the meaning of admiralty law. See, e.g., Smith,
960 F.2d at 460; Offshore Co. v. Robison, 266 F.2d 769, 776 (5th
Cir. 1959). The dissent’s challenge to the definition of vessel is
misplaced. The dissent argues that a jack-up rig stops being a
vessel when it jacks up. Tinkering with the maritime definition of
vessel would overturn a centuries-old understanding of what
constitutes a vessel. See The Robert W. Parsons, 191 U.S. 17, 28-
32 (1903) (reviewing authority). As long as a boat is able and
intended to return to navigation, it remains a vessel, even when in
dry dock, storage on land, or otherwise removed from the water.
10
OCSLA cannot apply to this case. Frank’s argument is that the
qualifier “other than a ship or vessel” in section 1333(a)(1)
precludes the application of the OCSLA. This argument has no
merit. As discussed above, the statute twice refers to artificial
islands, installations, and other devices permanently or
temporarily attached to the seabed. Once it inserts the qualifier
“other than a ship or vessel”; once it does not. We give effect to
the different wording of the two phrases by reading them
differently.19
See Thomas J. Schoenbaum, 1 Admiralty and Maritime Law 88-92 (West
2d ed. 1994). This circuit has repeatedly rejected the notion that
removing a vessel’s hull from the water divests it of vessel
status. See American Eastern Development Corp. v. Everglades
Marina, Inc., 608 F.2d 123, 124-25 (5th Cir. 1979) (contractual
action involving boat in dry storage); Delome v. Union Barge Line
Co., 444 F.2d 225, 228-32 (5th Cir. 1971) (unseaworthiness action
involving boat undergoing repairs on marine railway). Thus, the
dissent’s argument that a jack-up rig stops being a vessel when it
temporarily lifts out of the water implicates the treatment of any
boat, ship, barge, or special-purpose vessel that is temporarily
taken out of navigation. Further, the dissent’s definition of
vessel, which requires that the object “float on water,” would also
exclude submersible rigs and submarines (when submerged), and boats
employing hydrofoils (which displace less water than their mass).
19
See Rusello v. United States, 464 U.S. 16, 23 (1983) (“We
refrain from concluding here that the differing language in the two
subsections has the same meaning in each.”). Also, the use of the
term “temporarily” implies that devices that can detach from the
seabed and are capable of movement on the sea—i.e., vessels—can
fall within the scope of the OCSLA. The distinction the statute
draws between devices used to extract and devices used to transport
resources serves to exclude vessels that merely transport
resources: oil tankers and the like. The transport devices covered
by the OCSLA are pipelines, which are explicitly mentioned in
section 1333(b), and similar structures. A further indication that
the statute contemplates vessels being OCSLA situses is section
1333(b)’s exclusion of “a master or member of a crew of any vessel”
11
This result is consistent with the precedent of this circuit.
As we noted in Hodgen v. Forest Oil Corp.,20 our holding in Domingue
v. Ocean Drilling and Exploration Co.21 implicitly supports the
holding that a jacked-up rig is an OCSLA situs. Domingue applied
state law to an indemnity agreement regarding an injury on a
jacked-up drilling rig, but failed to explicitly address the situs
requirement of the OCSLA, focusing instead on the question of
whether state law applied.22 Since the incident occurred on the OCS
beyond the territorial waters of Louisiana, the only way state law
could have operated was by incorporation into federal law under
OCSLA.23
from LHWCA coverage on OCSLA situses. If OCSLA situses are never
vessels, this provision would be mere surplusage. The dissent’s
contention that an OCSLA situs cannot be a vessel ignores these
textual indications to the contrary.
20
87 F.3d 1512 (5th Cir. 1996).
21
923 F.2d 393 (5th Cir. 1991).
22
Id. at 395-98. Hodgen, 87 F.3d at 1525-26, notes that
Domingue failed to discuss the situs requirement.
23
Frank’s cites a number of cases challenging this conclusion,
none of which are apposite. Frank’s relies on Smith v. Penrod
Drilling Corp. 960 F.2d 456 (5th Cir. 1992), in arguing that a
vessel cannot be an OCSLA situs. The holding of Smith was that
maritime law, and not Louisiana law, applied to an indemnity
agreement regarding a jack-up rig. Id. at 461. This is a
straightforward application of the second prong of the PLT test and
has nothing to do with the question of whether jack-ups can be
OCSLA situses. Indeed, Smith explicitly found that since the
accident that implicated the indemnity agreement occurred on a
fixed, permanent platform, it need not address the question of
whether a jack-up is an OCSLA situs. Dupre v. Penrod Drilling
Corp., 993 F.2d 474, 476-77 (5th Cir. 1993), follows Smith in this
12
The amicus supporting Frank’s quotes Longmire v. Sea Drilling
Corp.,24 which states: “The OCSLA covers fixed platform workers,
while floating rig workers, even those whose tasks are essentially
identical to the tasks performed by fixed platform workers, are
treated differently.”25 This out-of-context statement cannot carry
Frank’s case. In the context of the facts of the case, this
statement addresses the fact that the employee was injured on a
tender working alongside a fixed platform.26 Tenders are vessels
(in Longmire it was a converted warship) that are often anchored
next to drilling platforms to service the platforms and ferry
workers to and from the shore. Longmire does not involve a
floating rig, let alone a jack-up rig; the “floating” rig the
opinion refers to is this tender, which was attached to the OCS
regard and is equally distinguishable. Frank’s also cites
Tennessee Gas Pipeline v. Houston Cas. Ins. Co., 87 F.3d 150, 155-
56 (5th Cir. 1996), for the proposition that vessels are not within
the OCSLA jurisdiction for removal purposes. This claim is
incorrect. Tennessee Gas Pipeline finds removal jurisdiction over
maritime claims involving a fixed platform that was within OCSLA
jurisdiction; it makes no claims about vessels. Frank’s claim
stems from its confusion of “vessels” with “maritime claims.”
While maritime claims cannot generally be removed to federal court,
claims arising under federal statute can be. While the presence of
a vessel in the facts of a case may allow a plaintiff to allege
claims under maritime law, the presence of a vessel does not
convert other, non-maritime claims into unremovable maritime
claims.
24
610 F.2d 1342 (5th Cir 1980).
25
Id. at 1348.
26
Id. at 1344-45.
13
only by an anchor. In Parks v. Dowell Division of Dow Chemical
Corp.,27 we explained Longmire, noting that tenders are not
extensions of drilling rigs fixed to the seabed, and the OCSLA does
not apply to them.28 Longmire’s conclusion that a tender is not an
OCSLA situs is not relevant to the facts of this case.29
In sum, this case arises out of an injury on an OCSLA situs.
Since the section 1333(a)(1) requirement is satisfied, the OCSLA
applies to this case.
B. Incorporation of State Law
The next logical step is to consider whether Louisiana law
applies as a surrogate to federal law under section 1333(a)(2). As
stated above, this circuit applies the PLT test to determine the
application of state law. The second prong of the PLT test is that
maritime law does not apply of its own force. Because maritime law
27
712 F.2d 154 (5th Cir. 1983).
28
See id. at 157. Although arguably an anchor “attache[s]”
a ship to the seabed, a tender, unlike a jack-up rig, is not
“erected” on the OCS.
29
Frank’s also cites legislative history stating that the
phrase “waters above the [OCS]” was deleted from the situs
requirement of what became section 1333(b) in order “to make more
definite the application of the [LHWCA] to workers other than those
employed on vessels.” Sen. Rep. No. 411, 83d Cong., 1st Sess. 16,
23 (1953). Unfortunately for Frank’s, the situs requirement that
this deletion left behind was later deleted, leaving no situs
requirement in the enacted version of that subsection. As noted
above, section 1333(b) contains only a status requirement.
14
applies of its own force, Louisiana law does not apply in this
case.30
Maritime law applies to the Master Contract between Unocal and
Frank’s if the contract is a maritime contract. The Master
Contract stated that Frank’s would “provide casing installation
services.” The parties indemnified each other against claims
brought by their employees. The contract does not explicitly
mention any vessels, and it is unclear whether it contemplated work
exclusively offshore or work both offshore and onshore.
Determining whether a contract relating to offshore drilling
is maritime is often a perplexing affair.31 This circuit utilizes
the two-step test of Davis & Sons, Inc. v. Gulf Oil Corp.,32 to
determine whether a contract is maritime. We consider, first, the
contract’s “historical treatment in the jurisprudence” and, second,
the specific facts of the case.33 For some categories of contracts,
30
Since Louisiana law does not apply, we need not decide
whether it is inconsistent with federal law in this case. If the
contract in this case were not maritime, we would then consider
whether Louisiana law is inconsistent with applicable federal law.
31
See Davis & Sons, Inc. v. Gulf Oil Corp., 919 F.2d 313, 315
(5th Cir. 1990) (“The attempt to determine whether a contract,
particularly one linked to offshore gas and oil production, is
governed by state or maritime law has led to much confusion.”).
32
919 F.2d 313, 315 (5th Cir. 1990).
33
Id. at 316; see also Campbell v. Sonat Offshore Drilling,
Inc., 979 F.2d 1115, 1121 (5th Cir. 1992) (describing two-step
character of the Davis test).
15
the historical treatment is sufficiently clear that the fact-
specific inquiry becomes unimportant.34 This is such a case.
This court has held that indemnity provisions in contracts to
provide offshore casing services are maritime.35 Even a contract
for offshore drilling services that does not mention any vessel is
maritime if its execution requires the use of vessels.36 This is
true for contracts that may also involve obligations performed on
land.37 Thus, circuit precedent virtually compels the conclusion
that this is a maritime contract.
The Davis factors confirm this result. Davis lists six
factors to consider in determining whether the facts of the case
34
An example of such a case is Smith, 960 F.2d at 459-60.
35
See Campbell v. Sonat Offshore Drilling, 979 F.2d at 1120-
21; see also Smith, 960 F.2d 456 (holding that contract to “work
over” a jack-up rig is maritime); Diamond Offshore Co. v. A&B
Builders, Inc., 75 F. Supp. 2d 676, 679-81 (S.D. Tex. 1999)
(holding that a contract for repair of a jack-up rig is maritime);
Gilbert v. Offshore Production & Salvage, Inc., 1997 WL 149959, at
*4 (E.D. La. March 21, 1997) (holding that a contract to provide
drilling supervision services is maritime); Campbell v. Offshore
Pipeline, Inc., 1993 WL 302623, at *3-4 (E.D. La. Aug. 5, 1993)
(holding that a contract for welding services of pipeline on the
OCS is maritime).
36
See Lewis v. Glendel Drilling Co., 898 F.2d 1083, 1086 (5th
Cir. 1990) (holding that a contract to provide offshore drilling
services is maritime even if it does not mention vessels).
Contracts involving vessels tend to be deemed maritime. See PLT,
895 F.2d at 1048 (describing an “oversimplified” test as “whether
the transaction relates to ships and vessels, masters and mariners,
as the agents of commerce”). Schoenbaum, 1 Admiralty and Maritime
Law § 3-10 provides an extensive list of contracts found to be
maritime and non-maritime.
37
See Davis, 919 F.2d at 315-16.
16
lend the contract a sufficiently “salty flavor”38 for a court to
deem it maritime:
1) what does the specific work order in effect at the time
of the injury provide?
2) what work did the crew assigned under the work order
actually do?
3) was the crew assigned to do work aboard a vessel in
navigable waters[?]
4) to what extent did the work being done relate to the
mission of the vessel?
5) what was the principal work of the injured worker? and
6) what work was the injured worker actually doing at the
time of the injury?39
In this case, Demette’s work order provided for a hammer operator,
a hammer mechanic, and four welders, including Demette, to drive
and weld 416 feet of pipe from the Fal-rig #85 while the rig was
jacked-up; this crew actually performed the hammer job the work
order described; Demette was working on a vessel over navigable
waters; casing is an integral part of drilling, which is the
primary purpose of the vessel; and Demette’s principal work was as
a welder performing casing work; and Demette was performing casing
services at the time of the accident. Thus, all six factors point
to the same conclusion: the contract and the injury that invoked it
were maritime in nature.
C. Status Test
38
See Kossick v. United Fruit Co., 365 U.S. 731, 742 (1962).
39
Davis, 919 F.2d at 316.
17
Having concluded that the OCSLA applies, but does not
incorporate state law, the only remaining issue under the OCSLA is
whether the LHWCA applies to Demette by virtue of section 1333(b)
of the OCSLA. It does. Demette was injured while doing casing
work. Casing work is the model case of injuries “occurring as a
result of operations conducted on the [OCS] for the purpose of
exploring for, developing, removing, or transporting by pipeline
the natural resources . . . of the [OCS].”40
We thus conclude that the injury occurred on an OCSLA situs,
that Louisiana law does not apply, and that the LHWCA applies to
this case by virtue of section 1333(b). We now address the
consequences of our conclusion that section 1333(b) applies the
LHWCA to this case.
IV
The LHWCA provides the exclusive remedies for injuries to
employees injured while subject to the LHWCA.41 It creates for such
employees an action against the vessel (including its owner) on
which the employee was working when injured.42 Section 905(b) of
the LHWCA bars employers from indemnifying the vessel from LHWCA
40
43 U.S.C.A. § 1333(b). That Demette may be a longshoreman
by operation of the LHWCA itself seems to be of little consequence;
the language of the OCSLA is clear. This point becomes important
in the analysis of 33 U.S.C.A. § 905(c) below.
41
See 33 U.S.C.A. § 905(a).
42
See 33 U.S.C.A. § 933.
18
liability.43 However, if the injured employee is entitled to the
benefits of the LHWCA “by virtue of” section 1333(b) of the OCSLA,
then section 905(c) of the LHWCA states that “any reciprocal
indemnity provision” between the vessel and the employer is
enforceable.44
Central to this case is the meaning of the phrase “by virtue
of.” Frank’s argues that Demette is directly covered by the
LHWCA,45 and therefore section 905(b) bars the indemnity agreement
between Falcon and Frank’s. Frank’s reads section 905(c) to apply
only to persons entitled to receive LHWCA benefits exclusively “by
virtue of” the OCSLA. We acknowledge that this interpretation
would not do violence to the text of the statute.
Ordinarily, however, we should give the words of statutes
their plain meaning. The most obvious meaning of “by virtue of
section 1333" is simply that the worker is covered by section 1333.
For example, it is perfectly sensible to say, “Demette is eligible
to receive LHWCA benefits by virtue of section 1333 and also by
virtue of the LHWCA itself.” This sentence makes sense because we
43
See 33 U.S.C.A. § 905(b).
44
See 33 U.S.C.A. § 905(c).
45
Both parties seem to agree that Demette is a longshoreman
by operation of the LHWCA itself. To qualify as a longshoreman
under the LHWCA, the employee must be engaged in maritime
employment over navigable water, but not a seaman. See 33 U.S.C.A.
§ 902(3); Director, OWCP v. Perini North River Assoc., 459 U.S. 297
(1983).
19
understand that “by virtue of” does not imply exclusivity. The
adverbs “exclusively” or “solely” would have indicated the meaning
Frank’s advocates, but those words are absent from the statute.
We might question our plain meaning interpretation of “by
virtue of” if Frank’s identified something in the context of the
statute that indicated that those words have a narrower, more
technical meaning. But there is none. Further, what little
legislative history section 905(c) has supports our reading of the
text. Congress enacted section 905(c) as part of the Longshore and
Harbor Workers’ Compensation Act Amendments of 1984.46 The House
Conference Report47 discusses language in the Senate version of the
bill; this language became section 905(c). The Conference Report
stated that “the Senate bill provides an exemption to the Longshore
Act’s current proscription of indemnity agreements under section
[905(b)] of the Act. . . . The bill would legalize those indemnity
agreements insofar as they apply to the Outer Continental Shelf.”
Thus, the Conference Report treats section 905(c)’s limitation to
persons entitled to benefits “by virtue of section 1333" as
applying to all persons connected to the OCS, as defined by the
OCSLA, without any reference to any exception for persons
qualifying directly under the LHWCA.
46
Pub. L. No. 98-426, 98 Stat. 1639 (1984).
47
H. Conf. Rep. No. 98-1027 (1984), reprinted in 1984
U.S.C.C.A.N. 2771.
20
Frank’s argues that construing section 1333(b) to apply to
workers already directly covered by the LHWCA causes some
anomalies. While this may be so, this is a result of the existence
of section 905(c), not of any interpretation of section 905(c).
Any line we draw will leave some indemnity agreements valid and
others invalid. A line between LHWCA employees on permanent
platforms and all other LHWCA employees is not any more arbitrary
than a line between LHWCA employees on permanent or temporary
platforms and all other LHWCA employees. In fact, as Judge Sear
cogently argued in Campbell v. Offshore Pipeline, Inc.,48
interpreting section 905(c) to include employees who are covered by
virtue of both the LHWCA and OCSLA eliminates some anomalies.49
Given that section 1333(b) of the OCSLA applies to Demette,
the plain language of section 905(c) dictates that the indemnity
contract, if reciprocal, is valid, notwithstanding section 905(b).50
Since Frank’s and Unocal each indemnified the other, the
indemnification is reciprocal and therefore valid.51
48
1993 WL 302623 (E.D. La. Aug. 5, 1993).
49
See id. at *5 (noting that a contrary interpretation would
lead to different treatment of two indemnity agreements when two
workers are injured on the same platform, but one is not entitled
to benefits directly under the LHWCA).
50
Frank’s also argues that this interpretation of section
905(c) renders section 905(b) a nullity. This is nonsense.
Section 905(c) applies only on the OCS and only when the contract
is reciprocal.
51
That Falcon was not a signatory to the reciprocal Unocal-
Frank’s indemnity agreement does not alter this result. We have so
21
Frank’s finally argues that even if section 905(c) removes the
section 905(b) prohibition, Louisiana law invalidates the indemnity
agreement. As we have already concluded, however, Louisiana law
does not apply to this contract.
V
In sum, the OCSLA applies to this case; Louisiana law does not
apply as surrogate federal law under the OCSLA; and because Demette
is subject to the LHWCA by virtue of the OCSLA, the indemnity
agreement between Unocal and Frank’s is valid.
In reaching this conclusion, we acknowledge the dissent’s
puzzlement at the conclusion that a jack-up rig is a vessel and
that maritime law can apply on an OCSLA situs. But we disagree
that en banc reversal of established circuit precedent is in order.
Although current law suffers from the inconsistencies the dissent
complains of, changing the law of this circuit may not improve the
situation.52 Instead, the source of the dissent’s vexation is the
held in Campbell v. Sonat Offshore Drilling, Inc., 979 F.2d 1115,
1124 (5th Cir. 1992).
52
The dissent’s recourse to legislative history of the OCSLA
to argue that OCSLA situses cannot also be deemed vessels does not
grapple with the text of the OCSLA, which contemplates OCSLA
situses that are vessels. See Parts II.A and III.A. We also note
that even if we were to ignore the text of the OCSLA, examination
of the purposes of the OCSLA does not yield so clear an answer as
the dissent indicates. This circuit has noted that OCSLA was
originally designed as a gap-filling statute. Mills v. Director,
OWCP, 877 F.2d 356, 358 (5th Cir. 1989) (en banc). This was
because fixed platforms on the OCS were neither vessels nor within
the territorial jurisdiction of any state; thus, no law applied to
them. The OCSLA filled this gap by applying state law as surrogate
22
OCSLA itself, a statute that by introducing the law of terra firma
to a seaward realm requires unavoidably arbitrary line-drawing
between the application of terrestrial law and the law of the sea.53
We AFFIRM the district court’s grant of summary judgment
against Frank’s.
federal law to those platforms. Floating rigs, however, were
always subject to maritime law, and thus did not linger in the
lawless limbo occupied by drilling platforms prior to the enactment
of the OCSLA. Thus, applying the OCSLA’s choice-of-law provision
only when “maritime law [does] not apply of its own force,” PLT,
895 F.2d at 1047, is consistent with the gap-filling purpose of the
OCSLA.
53
By applying state law as surrogate federal law to offshore
situses, the OCSLA requires courts to draw lines between the zones
in which surrogate federal law applies and in which admiralty law
applies. No interpretation of the OCSLA can eliminate the
arbitrariness of such lines. Our circuit precedent essentially
draws a line between floating rigs and fixed platforms, which may
seem arbitrary in light of the purposes cited by the dissent. PLT,
895 F.2d at 1047. One alternative, treating jack-up rigs as
vessels but also applying to them surrogate federal law instead of
maritime law, would draw a strange line between rig operators who
are permanently assigned to floating rigs (who are crew members,
and thus would be excluded from LHWCA coverage by section
1333(b)(1), but would also lack seaman’s remedies because maritime
law would not apply) and rig operators temporarily assigned to
floating rigs or assigned to platforms (who are covered by the
LHWCA by section 1333(b)). Another alternative, proposed by the
dissent, would deem floating rigs no longer vessels when they jack-
up on the OCS. This draws an equally strange line between rigs
that lift out of the water to drill and rigs that do not, even when
both are OCSLA situses. Further, this creates the problem of
determining when a rig has been sufficiently jacked-up to switch
the applicable law from admiralty to surrogate federal law. This
in turn complicates questions of what law applies to incidents that
occur while a rig is jacking up or which law applies to contracts
governing the use of jack-up rigs.
23
DeMOSS, Circuit Judge, dissenting:
Because the panel majority arrives at their decision in this
case without consideration of three Supreme Court cases and two
statutory amendments which I think require a different conclusion,
I respectfully dissent.
Rodrigue -- The First Supreme Court Case
On August 7, 1953, the United States Congress passed the Outer
Continental Shelf Lands Act (hereinafter “OCSLA”), which extended
federal law (and adjacent state law) “to the sub-soil and seabed of
the Outer Continental Shelf and to all artificial islands and fixed
structures which may be erected thereon for the purpose of
exploring for, developing, removing, and transporting resources
therefrom.” See § 4(a)(1), 67 Stat. 642 (emphasis added).54 The
54
In 1953, there were no "jack-up rigs" operating in the
area defined as the Outer Continental Shelf. The engineering and
technological skills which produced the first "jack-up" rig were
not developed until in the late 1950s and early 1960s. The use of
the term "fixed structures" in the OCSLA was descriptive of the
type of devices actually being used on the OCS; and therefore
should probably not be read as restrictive to those structures
only. In its traditional usage, the term "fixed structure"
referred to a structure that’s components were manufactured on
shore, then floated out to a well site on barges, and then
assembled and erected on site in the water.
extension of federal law contemplated by this provision was to be
“to the same extent as if the Outer Continental Shelf were an area
of exclusive federal jurisdiction located within a state.” Id.
The subsequent sub-paragraph of this same section provided that the
civil and criminal laws of each adjacent state “are hereby declared
to be the law of the United States for that portion of the sub-soil
and seabed of the Outer Continental Shelf, and artificial islands
and fixed structures erected thereon, which would be within the
area of the state if its boundaries were extended seaward to the
outer margin of the Outer Continental Shelf.”55
This Circuit considered the significance of these statutory
provisions in two cases, Dore v. Link Belt Co., 391 F.2d 671 (5th
Cir. 1968), and Rodrigue v. Aetna Casualty & Surety Co., 395 F.2d
216 (5th Cir. 1968). Each of these cases involved the death of a
worker which occurred on a drilling rig on a fixed platform on the
Outer Continental Shelf. In each case, the plaintiff sought relief
under Louisiana state law, which they contended was made applicable
55
The phrases "general admiralty law" and "maritime law" do
not appear anywhere in the OCSLA as originally passed in 1953; and
these phrases were not inserted by the 1978 Amendments to OCSLA
discussed later. Likewise, there is not now (and never has been)
any language in the OCSLA which "requires courts to draw lines
between the zones in which surrogate federal law applies and in
which admiralty law applies" as the majority asserts in footnote 53
of the opinion. Therefore, there is no statutory basis for the
majority's holding (based on the second prong of PLT) that we must
first determine whether admiralty and maritime law applies of their
own accord before applying these choice-of-law provisions of the
OCSLA.
25
by OCSLA. The defendants contended that relief could only be made
under the Death on the High Seas Act (“DOHSA”). In holding that
relief was available only under DOHSA, the Fifth Circuit stated:
We think that a consideration of both intrinsic and
extrinsic factors requires the conclusion that it
was the intention of Congress that (a) this
occurrence be governed by Federal, not State, law,
and (b) that the Federal law thereby promulgated
would be the pervasive maritime law of the United
States. In connection with the latter phase -- the
choice by Congress of maritime law -- it is again
important to keep in mind that we are in an area in
which Congress has an almost unlimited power to
determine what standards shall comprise the Federal
law.
Dore, 391 F.2d at 675 (quoting Pure Oil Co. v. Snipes, 293 F.2d 60,
64 (5th Cir. 1961)).
The Supreme Court granted certiorari in both cases, which were
argued together. In an opinion covering both cases, Rodrigue v.
Aetna Casualty & Surety Co., 89 S. Ct. 1835 (1969), the Supreme
Court in an unanimous decision written by Justice White, reversed
the decisions of the Fifth Circuit and stated:
In light of the principles of traditional admiralty
law, the Seas Act [DOHSA], and the Lands Act
[OCSLA], we hold that petitioner’s remedy is under
the Lands Act and Louisiana law. The Lands Act
makes it clear that federal law, supplemented by
state law of the adjacent State, is to be applied
to these artificial islands as though they were
federal enclaves in an upland State. This approach
was deliberately taken in lieu of treating the
structures as vessels, to which admiralty law
supplemented by the law of the jurisdiction of the
vessel’s owner would apply.... Since the Seas Act
does not apply of its own force under admiralty
principles, and since the Lands Act deliberately
eschewed the application of admiralty principles to
26
these novel structures, Louisiana law is not ousted
by the Seas Act, and under the Lands Act it is made
applicable.
Id. at 1837. In a very comprehensive discussion of the legislative
history of OCSLA, the Supreme Court went on to make the following
comments:
1. “Even if the admiralty law would have applied to the
deaths occurring in these cases under traditional principles,
the legislative history shows that Congress did not intend
that result. First, Congress assumed that the admiralty law
would not apply unless Congress made it apply, and then
Congress decided not to make it apply. The legislative
history of the Lands Act makes it clear that these structures
were to be treated as island or as federal enclaves within a
landlocked State, not as vessels.” Id. at 1840.
2. “Careful scrutiny of the hearings which were the
basis for eliminating from the Lands Act the treatment of
artificial islands as vessels convinces us that the motivation
for this change, together with the adoption of state law as
surrogate federal law, was the view that maritime law was
inapposite to these fixed structures.” Id. at 1841.
3. “The committee was aware that it had the power to
treat activity on these artificial islands as though it
occurred aboard ship .... And the very decision to do so in
the initial bill recognized that if it were not adopted
explicitly, maritime simply would not apply to these
stationary structures....” Id. at 1841 (citations omitted).
4. “[T]he special relationship between the men working
on these artificial islands and the adjacent shore to which
they commute to visit their families was also recognized by
dropping the treatment of these structures as ‘vessels’ and
instead, over the objection of the administration that these
islands were not really located within a State, the bill was
amended to treat them ‘as if (they) were (in) an area of
exclusive Federal jurisdiction located within a State.’” Id.
at 1842.
In light of the Supreme Court decision in Rodrigue and the
absence of any later decision by the Supreme Court changing any of
27
its conclusions in Rodrigue, I would submit that the following
principles are applicable to the case now before us:
1. Structures placed on the Outer Continental Shelf “for
the purpose of exploring for, developing, removing, and
transmitting resources therefrom,” are not vessels;
2. Congress decided that maritime law does not apply to
these structures; and
3. The laws of the State of Louisiana will apply to
activities on these structures to the extent that such state
laws are not inconsistent with other federal laws.
The First Statutory Amendment
In 1978, Congress adopted comprehensive amendments to OCSLA.
See Pub. L. 95-372 (1978). Section 203(a) of this statutory
amendment reads as follows:
SEC. 203. (a) Section 4(a)(1) of the Outer
Continental Shelf Lands Act (43 U.S.C. 1333(a)(1)
is amended --
(1) by striking out “and fixed structures” and
inserting in lieu thereof “, and all installations
and other devices permanently or temporarily
attached to the seabed,”; and
(2) by striking out “removing, and
transporting resources therefrom” and inserting in
lieu thereof “or producing resources therefrom, or
any such installation or other device (other than a
ship or vessel) for the purpose of transporting
such resources.”
The report of the Conference Committee regarding the amendment
reads as follows:
Section 203 -- Laws Applicable to the Outer
Continental Shelf
28
Both the Senate bill and the House amendment
amend section 4(A)(1) of the OCS Act of 1953 by
changing the term “fixed structures” to “and all
installations and other devices permanently or
temporarily attached to the seabed” and making
other technical changes. The Conference Report
retains this language.
The intent of the managers in amending section
4(A) of the 1953 OCS Act is technical and
perfecting and is meant to restate and clarify and
not change existing law. Under the Conference
Report language, federal law is to be applicable to
all activities on all devices in contact with the
seabed for exploration, development, and
production.
H.R. Conf. Rep. No. 95-1474 (1978). The House Committee Report No.
95-590 on this legislation states the following in the section-by-
section analysis:
Section 203.--Laws Applicable to Outer Continental
Shelf
Section (a) amends section 4(a)(1) of the OCS
Act of 1953 by changing the term “fixed structures”
to “and all installations and other devices
permanently or temporarily attached to the seabed”
and making other technical changes. It is thus
made clear that Federal law is to be applicable to
all activities on all devices in contact with the
seabed for exploration, development, and
production. The committee intends that Federal law
is, therefore, to be applicable to activities on
drilling ships, semi-submersible drilling rigs, and
other watercraft, when they are connected to the
seabed by drillstring, pipes, or other
appurtenances, on the OCS for exploration,
development, or production purposes. Ships and
vessels are specifically not covered when they are
being used for the purpose of transporting OCS
mineral resources.
H.R. Rep. No. 95-590 (1978) (emphasis added).
29
I have found no Supreme Court decision and no Fifth Circuit
decision which expressly discuss or interpret the significance of
the statutory language change made by the 1978 Amendments to OCSLA
regarding deletion of “fixed structures” and insertion of “all
installations and other devices permanently or temporarily attached
to the seabed” in the definition of the situs to which OCSLA is to
apply. We must assume that when it was adopting the 1978
Amendments to OCSLA, Congress was aware of and considered the
Supreme Court holding in Rodrigue. Since there is nothing in the
text of the 1978 Amendments nor in any legislative history which
would indicate a desire or intention on Congress’ part to change
any of the Supreme Court’s holdings in Rodrigue, we have to assume
that Congress accepted those holdings as applicable to the 1978
Amendments. The deletion of the words “and fixed structures” and
the insertion of the words “and all installations and other devices
permanently or temporarily attached to the seabed” reflect a clear
intention on the part of Congress to broaden and clarify the
category of structures and facilities to which OCSLA would apply;
and the House Committee Report 95-590 expressly identifies
“drilling ships, semi-submersible drilling rigs, and other water
craft, when they are connected to the seabed by drill string,
pipes, or other appurtenances on the OCS for exploration
development or production purposes” as being the situs of
activities to which OCSLA would apply. In my view, there is
30
absolutely no question at all that these statutory language changes
eliminate the basis for any distinction which our case law may have
made in the past as between a “jack-up rig” being a vessel and “a
fixed platform” not being a vessel, insofar as activities on the
Outer Continental Shelf are concerned. Both our Circuit and the
Supreme Court have clearly indicated that Congress holds the
ultimate power in defining applicable law and categorizing the
facilities and operations to which it applies when dealing with
activities on the Outer Continental Shelf.
The controlling premise of the majority opinion in the case
before us is that Fal-Rig 85 is a vessel.56 Because it is a vessel,
the majority says admiralty and maritime law controls its
operations and activities. Because admiralty and maritime law
applies, that body of law prevents and preempts any application of
state law. If the majority’s original premise is incorrect, then
their house of cards collapses.
In my view, we are bound by the Supreme Court decision in
Rodrigue, and by Congress’ 1978 Amendments to OCSLA, to conclude
that when a jack-up rig is operating on the Outer Continental
Shelf, it cannot be construed as being a vessel because, in the
56
In footnote 18 of its opinion, the majority relies on
Offshore Co. v. Robison, 266 F.2d 769 (5th Cir. 1959), as being the
original source of its premise; but the casualty in Robison
occurred in the territorial waters of the State of Texas and there
was no contention nor need for discussion as to the applicability
of the OCSLA, which at that time referred to "artificial islands
and fixed structures" in its definition of OCSLA situs.
31
statutory language, it is “an installation temporarily attached to
the seabed for the purpose of exploring for, or producing oil and
gas” or, in the language of the House Committee Report (supra), it
is “a watercraft connected to the seabed by drillstring, pipes, or
other appurtenances for exploration or production purposes.” This
conclusion is mandated not only by the new language of OCSLA but
also by common sense and plain language interpretation of “what is
a vessel.”
The dictionary says that a vessel is “a craft for traveling on
water.” Webster’s Collegiate Dictionary (Random House 1991). The
quintessential characteristics of a vessel are that it floats on
water and that it is used for transporting cargo or passengers from
one place to another. In order to “float on water,” it must be
supported by the laws of buoyancy, i.e., it will float to the
extent that the volume of water which it displaces weighs more than
the vessel and its cargo. However, the mere fact that a structure
floats does not mean it is a vessel. A floating dock does float,
but it is permanently connected to land and never goes anywhere.
Likewise, a restaurant or gambling casino built on a barge is
floating, but if it is connected to land by permanent mooring lines
and utility lines (water, gas, sewage, electricity, telephones) and
never moves, it is not a vessel; it is simply a floating dock with
a restaurant on it, which earns money by selling food or games of
chance, not by transporting cargo or people. A pontoon bridge
32
floats, but it is not a vessel because it does not move once it is
in place. Using these concepts to assess the characteristics of a
jack-up drilling rig, I come to the easy conclusion that a jack-up
drilling rig is clearly not a vessel when it is “jacked up.”
Clearly, when it is jacked up, Fal-Rig 85 is not floating at all.
The process of jacking up lifts the hull and work decks of the Fal-
Rig 85 completely out of the water. The only parts of the Fal-Rig
85 which are in the water are its legs, which extend downward
through the water into the seabed where support for the entire
weight of Fal-Rig 85 is found in the sea bottom itself. In the
jacked-up position, the hull and work decks of the Fal-Rig 85 are
high enough out of the water that neither ocean currents nor wind
generated wave action impacts the work area. Finally, in the
jacked up position, the Fal-Rig 85 cannot move; its position in
terms of longitude and latitude is fixed; it is stationary. The
primary purpose for which the Fal-Rig 85 was built is to drill a
hole in the earth under water in order to locate oil and/or gas and
produce them if found. The Fal-Rig 85 earns its revenue for
cutting the hole and completing the well, and it performs these
tasks only when it is jacked up. In its jacked up position, the
Fal-Rig 85 is functionally indistinguishable from a drilling
platform which has been assembled on site in the water: (1) both
stand on legs resting on the bottom; (2) both have work decks and
platforms high enough above the water to avoid currents and waves;
and (3) both conduct drilling and completion activities for oil and
33
gas production. I can see no rational basis for distinguishing the
two platforms.
I recognize that our case law has labeled a jack-up drilling
rig as a “special purpose vessel;” but in my view that is a
mislabeling that confuses the realities involved and, in light of
the 1978 Amendments to OCSLA, should not be applicable to
operations on the Continental Shelf. The “special purpose” of a
jack-up rig, which is drilling for oil and gas, has nothing to do
with traditional maritime activities or interests. Drilling for
oil and gas does not create any buoys, channel markers, or other
aids to navigation. Drilling for oil and gas does not enhance or
improve the navigability of the waters in which it occurs.
Drilling for oil and gas does not facilitate the loading or
unloading of vessels. A jack-up drilling rig is a structure
designed and constructed (1) to contain and house in one structure
all of the work spaces, living spaces, machinery, and engines,
pumps, generators, hoists, pipe racks, derrick, cranes, and other
equipment required to conduct drilling operations into the earth
and (2) to float in water when required to move from one drill site
to another but then jack itself up out of the water to conduct
drilling operations. This unique combination of functions saves
time and expense by avoiding the dismantling and disassembly into
pieces and units and the reassembling process which inevitably
occurs in order to move a shore side drilling rig or a drilling
platform which was originally constructed at a site in the water.
34
While it is true that during the time a jack-up rig is being moved
it floats and is moved by tug boats, like a barge, the percentage
of time involved in such moves represents only a tiny fraction of
the time that it is jacked up in a fixed position engaged in
drilling operations. It is better labeled, therefore, as a
“movable drilling platform” for it moves only for the purpose of
drilling in another location and while drilling it is a fixed and
stationary platform. To label the Fal-Rig 85 as a “vessel” when it
has a casing being driven into the sea floor in anticipation of
drilling with a drill stem for thousands of feet into the earth is
simply nonsense to me.
In addition to the changes made by Congress in the definition
of what constituted a “situs” for purposes of the Outer Continental
Shelf Lands Act, the 1978 Amendments to OCSLA also made changes
pertinent to our discussion here by (1) adding definitions for the
term “exploration,” the term “development,” and the term
“production” which had not previously been included in the 1953
Act; and by (2) deleting from old § 4(c) of the 1953 Act the phrase
“described in subsection (b)” and inserting in lieu thereof
“conducted on the Outer Continental Shelf for the purpose of
exploring for, developing, removing, or transporting by pipeline
the natural resources ... of the sub-soil and seabed of the Outer
Continental Shelf” as it appeared in old subsection (b) of § 4 of
the 1953 Act. While these amendments were more or less technical
in nature, they clearly demonstrate that Congress considered
35
changes needed in § 4(c) and wanted workman’s compensation benefits
extended to employees who sustain disability or death on the
broader definition of situs as contemplated by the amendments to §
4(a)(1) discussed earlier. In this regard, it should be noted that
the original 1953 Act contained a definition of “the term
‘employee’ which makes express that the term does not include “a
master or member of a crew of any vessel” and this phraseology was
retained in the 1978 amendments to the subsection dealing with the
extension of compensation benefits.57 Consequently, it seems clear
to me that as of the time of the 1978 amendments to OCSLA, Congress
intended that “employees” working on “all artificial islands and
all installations and other devices permanently or temporarily
attached to the seabed” would be entitled to receive compensation
benefits in accordance with the provisions of LHWCA, but “crew
members” of “any vessel” would not be entitled to receive
compensation benefits. And this necessarily means that “artificial
57
In footnote 19 of its opinion, the majority argues that
the language excluding "master or number of crew of any vessel"
from compensation benefits, indicates a contemplation on the part
of Congress that "a vessel can be a OCSLA site" as otherwise this
exclusion would be surplusage. But this same exclusionary language
was in the original 1953 OCSLA when the definition of a situs was
an "artificial island" or "fixed structure" neither of which would
have been deemed a "vessel." I suggest that a better reading of
this exclusionary language would be that Congress recognized in
both the 1953 Act and the 1978 Amendments that there would be
vessels (tugs and barges, crew boats, and tankers) transporting
personnel and goods, supplies, consumables, and equipment to and
from the "artificial islands" however defined; and that the crew
members of such vessels would not be entitled to compensation even
though they received an injury while actually on such "artificial
islands."
36
islands, etc.” and “vessels” are separate and distinct concepts,
and we make a mistake when we fail to distinguish them. I have
great difficulty, therefore, in understanding how the majority
opinion concludes that the Fal-Rig 85 can be both at the same time.
Herb’s Welding -- The Second Supreme Court Case
In resolving the interplay between the LHWCA and OCSLA, the
decision of the U.S. Supreme Court in Herb’s Welding, Inc. v. Gray,
105 S. Ct. 1421 (1985), is the second case I view as controlling.
Gray, a welder with Herb’s Welding, was employed to help repair and
maintain oil and gas pipelines and fixed platform production
structures in the Bay Marchand oil and gas field, which is located
both in Louisiana territorial waters and in the Outer Continental
Shelf. On July 11, 1975, Gray was welding a two-inch gas pipeline
on a platform in the navigable waters of Louisiana when an
explosion occurred. Gray, in trying to run away from the area,
twisted his knee. Gray received workman’s compensation benefits
under the Louisiana compensation law, but the carrier refused to
pay benefits under the LHWCA. An administrative law judge denied
Gray’s claim for LHWCA benefits because he was “not involved in
maritime employment.” The Benefits Review Board determined that
Gray was covered under the LHWCA and remanded the case for entry of
an award. The administrative law judge awarded $10,000 and
deducted the $3,000 already awarded under the state compensation
37
law. Herb’s Welding appealed the decision of the Benefits Review
Board to a panel of the Fifth Circuit, which in April 1983,
affirmed the decision of the Benefits Review Board by holding that
Gray “was clearly employed in maritime employment and therefore
was within the compensation coverage afforded by the LHWCA.”
Herb’s Welding v. Gray, 703 F.2d 176, 180 (5th Cir. 1983).
The Supreme Court granted certiorari and promptly reversed.
In so doing, the Supreme Court held:
The rationale of the Court of Appeals was that
offshore drilling is maritime commerce and that
anyone performing any task that is part and parcel
of that activity is in maritime employment for
LHWCA purposes. Since it is doubtful that an
offshore driller will pay and maintain a worker on
an offshore rig whose job is unnecessary to the
venture, this approach would extend coverage to
virtually everyone on the stationary platform. We
think this construction of the Act is untenable.
Herb’s Welding, 105 S. Ct. at 1426. The Supreme Court went on to
analyze its prior cases, particularly its decision in Rodrique v.
Aetna Casualty & Surety, supra, and to describe in some detail the
factual circumstances that determine the nature of the employment
that Gray was involved in:
[Gray] built and maintained pipelines and platforms
themselves. There is nothing inherently maritime
about those tasks. They are also performed on
land, and their nature is not significantly altered
by the marine environment, particularly since
exploration and development of the Continental
Shelf are not themselves maritime commerce.
38
Id. at 1428 (footnote omitted). In assessing the precedential
aspects of the Supreme Court decision in Herb’s Welding, we need
to remember that:
1. Gray’s injury occurred in 1975 at which time the
pertinent statutory provisions were the LHWCA as amended in
1972 and OCSLA as originally passed in 1953;
2. Gray’s injury occurred on a fixed platform in
Louisiana territorial waters;
3. The Supreme Court decision in Herb’s Welding was
issued prior to the effective date of the 1984 amendments to
LHWCA; and
4. The Supreme Court did not address in its decision
the applicability of § 1333(b) of OCSLA, either in its form as
it existed on the date of injury or as it was amended in 1978
during the course of appeals of Gray’s claim through the
Benefits Review Board.58
Nevertheless, the Supreme Court decision in Herb’s Welding is
especially controlling insofar as it deals with the meaning of the
term “maritime employment.” The Court in Herb’s Welding discussed
at great length the decision of the Supreme Court in Rodrique,
supra, and reconfirmed all of its essential holdings. In this
regard, the Supreme Court in Herb’s Welding stated:
We cannot assume that Congress was unfamiliar with
Rodrique and the Lands Act when it referred to
“maritime employment” in defining the term
58
On remand from the Supreme Court, the Fifth Circuit panel
quickly concluded that Gray was not entitled to recover under
§ 1333(b) because of the “geographical limitation imposed by the
OCSLA.”
39
“employee” in 1972. It would have been a
significant departure from prior understanding to
use that phrase to reach stationary drilling rigs
generally.
105 S. Ct. at 1427 (footnote omitted).
After categorizing the Fifth Circuit’s view of the term
“maritime employment” as “expansive,” the Court went on to state:
The Amendments [1972 amendments to LHWCA] were not
meant “to cover employees who are not engaged in
loading, unloading, repairing, or building a
vessel, just because they are injured in an area
adjoining navigable waters used for such activity.
H.R. Rep. 92-1441, p. 11 (1972); S. Rep. 92-1125,
p. 13 (1972); U.S. Code Cong. & Admin. News 1972,
p. 4708. We have never read “maritime employment”
to extend so far beyond those actually involved in
moving cargo between ship and land transportation.
Both Caputo and P.C. Pfeiffer Co. make this clear
and lead us to the conclusion that Gray was not
engaged in maritime employment for purposes of the
LHWCA.
Id. at 1427-28.
I have found no Supreme Court decision subsequent to Herb’s
Welding that purports to overrule in whole or in part the principal
core decision that the Supreme Court made in Herb’s Welding, i.e.,
that the term “maritime employment” does not include any of the
various activities which lessees, operators, contractors,
subcontractors, and their employees perform in connection with
exploring for, drilling for, producing, and transporting oil and
gas from the seabed beneath navigable waters.
40
1984 Amendments to LHWCA
The second statutory amendment made by Congress which the
panel majority did not consider in arriving at their conclusion is
found in a portion of the 1984 amendments to the Longshoreman and
Harbor Worker’s Compensation Act. These changes relate to the
inclusion of new subparagraph (c) in 33 U.S.C. § 905 as it now
exists. This change was initiated by a provision in Senate Bill 38
of the 98th Congress First Session set forth in § 4(c) of that
bill, which reads as follows:
(c) Section 5 [of LHWCA] is amended
by adding at the end thereof the following new
subsection:
“(c) In the event that the
negligence of a third party causes
injury to a person entitled to receive benefits
under this chapter by virtue of section 4 of the
Outer Continental Shelf Lands Act (43 U.S.C. 1333),
then such person, or anyone otherwise entitled to
recover damages by reason thereof, may bring an
action against such third person in accordance with
the provisions of section 33 of this Act. Nothing
contained in this chapter, or in any otherwise
applicable State law, shall preclude the
enforcement according to is terms of any written
agreement under which the employer has agreed to
indemnify such third party in whole or in part with
respect to such action.
S. 38, 98th Cong. § 4(c) (1984) (emphasis added). The House of
Representatives declined to go along with the changes contemplated
by this section of the Senate Bill and the Conference Committee
41
appointed to resolve this and other conflicts inserted the language
as it now appears in 33 U.S.C. § 905(c) which reads as follows:
(c) Outer Continental Shelf
In the event that the negligence of a vessel
causes injury to a person entitled to receive
benefits under this chapter by virtue of section
1333 of Title 43, then such person, or anyone
otherwise entitled to recover damages by reason
thereof, may bring an action against such vessel in
accordance with the provisions of subsection (b) of
this section. Nothing contained in subsection (b)
of this section shall preclude the enforcement
according to its terms of any reciprocal indemnity
provision whereby the employer of a person entitled
to receive benefits under this chapter by virtue of
section 1333 of Title 43 and the vessel agree to
defend and indemnify the other for cost of defense
and loss or liability for damages arising out of or
resulting from death or bodily injury to their
employees.
33 U.S.C. § 905(c) (emphasis added).
The legislative history regarding this change indicates that
the Senate Report stated:
Finally, the Senate Bill provides an exemption
to the Longshore Act’s current proscription of
indemnity agreements under Section 5(b) of the Act.
That section is made applicable currently to
situations on the Outer Continental Shelf by virtue
of Section 4 of the Outer Continental Shelf Lands
Act (43 U.S.C. 1333). The bill would legalize
those indemnity agreements insofar as they apply to
the Outer Continental Shelf and would further
preempt the application of state laws prohibiting
such indemnity agreements.
S. Rep. No. 98-81 (1983), reprinted in 1984 U.S.C.C.A.N. 2771, 2773
(emphasis added).
The report of the Conference Committee states:
42
Second, the substitute removes the current
proscription with respect to mutual indemnity
agreements between employers and vessels as applied
to the Outer Continental Shelf by virtue of the
Outer Continental Shelf Lands Act.
H.R. Conf. Rep. No. 98-1027 (1984), reprinted in 1984 U.S.C.C.A.N.
2771, 2774 (emphasis added).
In my view, it is extremely significant that, as indicated by
the underlining in the text of the Senate Bill and the statute as
finally passed, the word “third person” in the Senate Bill was
changed to the word “vessel” in the statute as finally passed; the
internal cross-reference as to the section under which “an action”
may be brought was changed from “the provisions of section 33 of
this Act” to “the provisions of subsection (b) of this section;”
the opening phrase in the last sentence of the Senate Bill which
stated “nothing contained in this chapter or in any otherwise
applicable state law” was changed to read “nothing contained in
subsection (b) of this section” in the statute as passed; and
finally, the language at the end of the second sentence referring
to “any written agreement under which the employer has agreed to
indemnify such third party” was changed to refer to “any reciprocal
indemnity provision whereby the employer of a person entitled to
receive benefits under this chapter by virtue of section 1333 of
Title 43 and the vessel agree to defend and indemnify the other.”
From these textual changes and legislative history I draw the
following conclusions fairly easily:
43
1. Senate Bill 38 intended to effect a preemption of
“otherwise applicable state law,” but the final statute as
passed says absolutely nothing about that subject;
2. The change from “third party” to “vessel”
considerably narrows the category of parties (1) whose
negligence may be the cause of injury to an oil field worker
on the Outer Continental Shelf and (2) who would be entitled
to be the beneficiary of an indemnity agreement from the
employer; and
3. The term “vessel” as consciously inserted by
Congress in § 905(c) must be construed consistently as that
same term is used in OCSLA and, therefore, the term “vessel”
cannot be taken to mean a situs of offshore oil and gas
activity as defined in OCSLA.
The Third Supreme Court Case -- Tallentire
The final Supreme Court case which I look to in assessing the
issues in this case is the case of Offshore Logistics, Inc. v.
Tallentire, 106 S. Ct. 2485 (1986). In Tallentire, two offshore
drilling platform workers were killed when the helicopter in which
they were riding crashed in the high seas some 35 miles off the
Louisiana coast while transporting them from the offshore drilling
platform where they worked to their home base in Louisiana. The
issue in the case revolved essentially around the provisions of §
7 of the Death on the High Seas Act (DOHSA) and the effect, if any,
of OCSLA. Survivors of the deceased workers contended that they
were entitled to damages based on the Louisiana Wrongful Death
Statute, which was made applicable either by its own terms or by
the applicability of OCSLA. The federal district court determined
that the survivors were entitled to benefits only under DOHSA. In
44
a very long and scholarly opinion, a panel of our Court concluded
that § 7 of DOHSA was broad enough on its face to permit the
applicability of the Louisiana Wrongful Death Statute and that, as
a matter of law, Louisiana has the authority to apply its Death Act
to its own citizens on the high seas adjacent to its shores and
that, therefore, the survivors may assert a claim under the
Louisiana Death Act. Tallentire v. Offshore Logistics, Inc., 754
F.2d 1274 (5th Cir. 1985). On the issue as to whether the
Louisiana Wrongful Death Statute applied by way of § 1333 of OCSLA,
the Fifth Circuit panel waffled. It assumed that OCSLA does apply
but the Louisiana statute would then be in conflict with DOHSA “so
Louisiana law could be adopted only to the extent it is not
inconsistent with DOHSA.”59 Id. at 1279.
On appeal to the Supreme Court, the Supreme Court held “that
neither OCSLA nor DOHSA requires or permits the application of
Louisiana law in this case,” and accordingly the Court reversed and
remanded the decision of the Fifth Circuit. As was the case in the
Fifth Circuit opinion, the larger part of the Supreme Court
decision related to the interpretation of § 7 of DOSHA, but the
Court did address in clear and expressive language the interplay
between DOHSA and OCSLA. See 106 S. Ct. at 2491-93. The Supreme
59
Curiously, the text of 43 U.S.C. § 1333 cited in footnote
7 of the Fifth Circuit opinion is the text of subsection (a)(1) as
passed in 1953 even though the helicopter crash in Tallentire
occurred in August 1980, well after the 1978 amendments to OCSLA
which broadened the definition of a “situs” as discussed above.
45
Court determined that because the helicopter crash and ensuing
death of the platform workers in this case occurred “miles away
from the platform and on the high seas,” it would not be proper to
extend OCSLA to the casualties in this case. In reviewing the
history and applicability of OCSLA, the Supreme Court in Tallentire
stated:
The intent behind OCSLA was to treat the
artificial structures covered by the Act as upland
islands or as federal enclaves within a landlocked
State, and not as vessels, for purposes of defining
the applicable law because maritime law was deemed
inapposite to these fixed structures. See Rodrigue
v. Aetna Casualty & Surety Co., 395 U.S. 352, 361-
366, 89 S. Ct. 1835, 1840-1842, 23 L.Ed.2d 360
(1969). This Court endorsed the congressional
assumption that admiralty law generally would not
apply to the lands and structures covered by OCSLA
in Rodrigue, noting that accidents on the
artificial islands covered by OCSLA “had no more
connection with the ordinary stuff of admiralty
than do accidents on piers.” Id., at 360, 89 S.
Ct., at 1839-1840. See also Herb’s Welding, Inc.
v. Gray, 470 U.S. 414, 422, 105 S. Ct. 1421, 1426,
84 L.Ed.2d 406 (1985). Thus, in Rodrigue, the
Court held that an admiralty action under DOHSA
does not apply to accidents “actually occurring” on
these artificial islands, and that DOHSA therefore
does not preclude the application of state law as
adopted federal law through OCSLA to wrongful death
actions arising from accidents on offshore
platforms. Rodrigue v. Aetna Casualty Co., supra,
395 U.S., at 366, 89 S. Ct., at 1842.
Id. at 2491-92. While I recognize that the issue of what
constitutes a “situs” as defined in OCSLA was not directly before
the court in Tallentire, I think this quoted paragraph from
Tallentire is very instructive as indicating that as of 1986 the
46
Supreme Court was clearly following the jurisprudential analysis of
Rodrigue and Herb’s Welding as to whether the “artificial islands”
involved in oil and gas production should be considered as
“vessels” and that the place where an injury or death occurs is
more determinative of the applicability of the Outer Continental
Shelf Lands Act than the status of the injured worker as being
employed in operations relating to production of oil and gas from
the Outer Continental Shelf.
Undisputed Facts
At the time of his injury, Demette was employed by Frank’s
Casing as a welder who welded together the segments of casing as
they are installed in an oil and gas well. At the time of his
injury, Demette was on the derrick floor of the Fal-Rig 85 and he
was struck on the head by some object which fell from the derrick
tower above him. At the time of Demette’s injury, the process of
hammering the casing down into the sea floor was going on which
means that the casing pipe extended from the derrick floor down
into the seabed beneath the water. At the time of Demette’s
injury, Fal-Rig 85 was in a jacked-up position and was located on
the Outer Continental Shelf adjacent to the State of Louisiana. A
blanket service agreement was signed between Union Oil of
California (Unocal) and Frank’s Casing Crew and Rental, Inc.
(Frank’s), under the terms of which Frank’s was to provide casing
47
installation services as specified in subsequent work orders. The
blanket service agreement would cover work orders issued for casing
services both onshore and offshore. Frank’s would be paid for its
services by Unocal. Unocal also had a blanket service agreement
with R&B Falcon Drilling USA, Inc. (Falcon). This contract
provided Unocal with access to all of Falcon’s jack-up drilling
rigs for offshore drilling, but it did not specify use of Fal-Rig
85. Each of the Unocal/Falcon and Unocal/Frank’s blanket
agreements contains indemnity agreements, but there is no
contractual agreement of any kind directly between Falcon and
Frank’s.
Given these undisputed facts, I can easily concur with the
majority holding that on the occasion of Demette’s injury, Fal-Rig
85 was a situs as defined in OCSLA because it was jacked up out of
the water, supported by its legs resting on the sea bottom, and was
connected to the sea bottom by the casing being driven into the
floor of the ocean for the purpose of exploring for oil and gas.
I, likewise, concur with the finding that the majority
inferentially makes that at the time of his injury Demette was
employed by an employer engaged in operations relating to
exploration for and production of oil and gas from the Outer
Continental Shelf and that, therefore, he would be entitled to
compensation benefits for his injury from his employer under the
provisions of § 1333(b) of OCSLA.
48
I have to abandon ship, however, from the rest of the
majority’s conclusions. Specifically, I dissent from the following
majority conclusions:
1. “Because maritime law applies of its own force,
Louisiana law does not apply in this case.” Majority Opinion
at 847.
2. “Thus all six factors [Davis case] point to the same
conclusion: the contract and the injury that invoked it were
maritime in nature.” Majority Opinion at 848. While the
majority opinion does not specifically say, I have to assume
that it is referring to the contract between Unocal and
Frank’s because that is the only contract in which Frank’s
agreed to indemnify anybody from anything; and
3. Section 905(c) of LHWCA validates the indemnity
agreement between Unocal and Frank’s, a conclusion which I
find both unnecessary and incorrect.
Concluding Comments
In Rodrigue, the Supreme Court held that Congress made an
explicit decision that maritime law would not apply to the
“artificial islands placed or erected on the Outer Continental
Shelf for the purpose of exploration, production, and development
of oil and gas resources” when it passed the original OCSLA in
1953. After the Supreme Court decision in Rodrigue, Congress made
substantial amendments to OCSLA in 1978, the most significant of
which was the elimination of the term “fixed structures” and the
insertion of the words “all installations and other devices
permanently or temporarily attached to the seabed.” The
legislative history of this change contains an express statement
49
that: “The committee intends that federal law is, therefore, to be
applicable to activities on drilling ships, semi-submersible
drilling rigs, and other watercraft when they are connected to the
seabed by drillstring, pipes, or other appurtenances.” H.R. Rep.
No. 95-590. The key phrase in this new definition is “when they
are connected to the seabed by drillstring, pipes, or other
appurtenances” because these circumstances result in these
“installations and other devices” being “permanently or temporarily
attached to the seabed.” In this broader definition, Congress drew
no distinctions as to whether the attachment was between the seabed
and a fixed platform, a movable platform, a semi-submersible
platform, or a drilling ship platform. I have to conclude,
therefore, that from and after the 1978 Amendments to OCSLA all of
our Circuit case law purporting to draw tortuous and complicated
distinctions as to what is and is not a “vessel” are just “so much
sound and fury signifying nothing” insofar as activities on the
Outer Continental Shelf are concerned. Congress spoke originally
in 1953, the Supreme Court interpreted in 1969, and Congress spoke
again in 1978 without changing or correcting in any way the
principles established by the Supreme Court that the artificial
islands, structures, installations, and devices temporarily or
permanently placed on the Outer Continental Shelf for the purpose
of producing oil and gas are not “vessels” and that “maritime law”
does not apply to them.
50
As to the conclusion that the contract between Unocal and
Frank’s was maritime in nature, I think the panel majority’s
conclusion is in direct conflict with the language of the Supreme
Court in Herb’s Welding. The installation of casing at various
stages in the drilling for and producing of an oil and gas well is
normal and routine regardless of whether the oil well is producing
from dry land on shore or from the seabed. The installation of
casing in an oil and gas well has absolutely nothing to do with
improving the navigability of the waters in which the well may be
drilled, nor does it have anything to do with the placement of an
aid to navigation in those waters, nor does it have anything to do
with loading or unloading of a vessel. If, as the Supreme Court
held in Herb’s Welding, a welder who repairs gathering pipelines
and well production structures is not engaged in “maritime
employment” because “there is nothing inherently maritime about
those tasks,” then in my view the task of welding together segments
of casing pipe as they are driven into the seabed, as Demette was
doing here in this case, surely should not be deemed a maritime
employment. Therefore, the contract between Unocal and Frank’s to
provide such casing services should not be a maritime contract.
Like a ship without an engine or rudder, our Fifth Circuit case law
on the subject of “maritime employment” and “maritime contracts”
has floated from one side of the Gulf of Mexico to the other
depending upon the vagaries of wind and current in each individual
51
case. I regret to say that our Circuit case law on “what is a
vessel” and “what is a maritime contract” and what is “maritime
employment” have taken on a Humpty-Dumpty60 approach -- they are
whatever a particular panel says they are. That’s a tragic
circumstance because it destroys uniformity and predictability of
the law; and the only ones who benefit from unpredictability and
confusion are lawyers.
In regard to § 905(c) of LHWCA, I have great difficulty in
understanding the rather convoluted argument which the majority
opinion puts forth as to the applicability of this subsection. If
the majority is correct that Fal-Rig 85 is a vessel whose special
purpose was to drill an oil and gas well and Demette’s assignment
of welding together segments of casing pipe was an essential aspect
of that special purpose, then Demette was a member of the crew of
a vessel and both § 1333(b) of OCSLA and § 902(3)(G) of LHWCA would
exclude Demette from any right to compensation benefits under the
LHWCA. Even if Demette were determined not to be a member of the
crew of the Fal-Rig 85, he would not be entitled to benefits
directly under LHWCA because Herb’s Welding specifically held that
activities related to oil and gas production are not maritime
60
“There is glory for you,” [said Humpty-Dumpty]. “I don’t
know what you mean by ‘glory,’” Alice said. “I meant ‘there is a
nice knock-down argument for you,” [said Humpty-Dumpty]. “But
‘glory’ doesn’t mean a nice knock-down argument,” Alice objected.
“When I use a word,” Humpty-Dumpty said in a rather scornful tone,
“it means just what I choose it to mean, neither more nor less.”
Lewis Carroll, Through the Looking Glass ch. 6.
52
employment. Likewise, if the majority opinion is correct that the
Fal-Rig 85 is a vessel, then Demette would not be entitled to
compensation benefits indirectly by way of § 1333(b) of OCSLA
because the Fal-Rig 85 would not be a situs to which § 1333(b)
could have extended those compensation benefits. In short, just as
I believe that the Fal-Rig 85 cannot be a vessel and an OCSLA situs
at the same time, I believe an injured employee cannot be an
offshore oil production worker under § 1333(b) and a maritime
worker under § 902(3) of the LHWCA at the same time. On the other
hand, if I am correct that when it is jacked up and driving casing
into the seabed, the Fal-Rig 85 is not a vessel but an OCSLA situs,
then Demette is an oil field worker right where he should be on an
OCSLA situs when he is injured and, therefore, is entitled to
compensation benefits under § 1333(b). Of course, this discussion
about compensation benefits is somewhat academic because Demette
settled all of his personal injury claims and whether or not he
received the compensation benefits he should have gotten is not an
issue before us on appeal.
But the same conundrum arises in analyzing the applicability
of § 905(c). A full understanding of the relevance of § 905(c) is
much clearer when you look at the legislative history of that
provision. As indicated earlier in this dissent, the first
statutory iteration of the provisions which ultimately became §
905(c) was in Senate Bill 38 which used the term “third party” in
place of the term “vessel” in identifying the negligent tortfeasor
53
and in identifying the indemnitee of the indemnity agreement
referred to therein.61 Likewise, Senate Bill 38 had an express
provision contemplating that this new language would preempt and
override “any otherwise applicable state law.” The House of
Representatives was not agreeable to this change, and the
Conference Committee eliminated the idea of preemption of state law
altogether and inserted the word “vessel” in place of the words
“third party.” It is uncontroverted that Demette’s injury occurred
on the Fal-Rig 85, and there is nothing in the briefs or record
excerpts to indicate that any other tug boat, crew boat, supply
boat, barge, or other water craft was involved and could be the
source of a “vessel negligence” claim. Therefore, if the Fal-Rig
85 in its jacked-up position is not a vessel (as I have argued
earlier in this dissent), then there is no vessel negligence upon
which Demette (the injured worker) could have sued and no vessel to
be sued as defendant. If, on the other hand, the majority is right
and the jacked-up Fal-Rig 85 is actually a vessel, then, because he
61
An earlier iteration of the amendment was proposed by the
International Association of Drilling Contractors (“IADC”) during
oversight hearings on the LHWCA in 1978. Oversight Hearings on the
Longshoremen’s and Harbor Workers’ Compensation Act Before the
House Subcommittee on Compensation, Health and Safety, Committee on
Education and Labor, 95th Cong. (May 3, 1978) (statement of Jon
Bednerik, Director, Government Affairs, IADC). It is interesting
to note that in this early version proposed by the IADC, the term
“third party” is used instead of “vessel” and this version also
makes no mention of state law preemption. Id. The IADC version
also creates a definition for a “Marine Petroleum Worker” and makes
the amendment only applicable to such workers. Id. This
definition never made it into the proposed amendments of 1984.
54
is a member of the crew of the vessel, Demette (the injured worker)
loses his status as an employee entitled to compensation under
§ 1333(b), which is an essential condition to the applicability of
§ 905(c).
Conclusion
I recognize, of course, that no single panel of our Court can
overrule any prior panel decisions and that the changes and
reconsiderations that I suggest herein can only be effected by an
en banc reconsideration by our Court. In my view, that is
precisely what we should do, and I have written at length in this
dissent in order to put the parties to this appeal, the amicus in
this appeal, and other interested agencies on notice that I will
call for a ballot for en banc reconsideration, if strong
suggestions for such course of action from the parties and other
interests are forthcoming. In my opinion, the seabed of the Outer
Continental Shelf adjacent to the States of Texas, Louisiana, and
Mississippi contains the largest volume of both discovered and
undiscovered oil and gas resources of all of the areas of the Outer
Continental Shelf. It is also my opinion that the largest number
of workers involved in the development of these oil and gas
resources on the Outer Continental Shelf come from the States of
Texas, Louisiana, and Mississippi and that most of the operators,
contractors, and subcontractors who engage in the business of
55
drilling and producing oil and gas from the Outer Continental Shelf
are either headquartered in or have major facilities in the States
of Texas, Louisiana, and Mississippi. We are also blessed to have
within the States of Texas, Louisiana, and Mississippi an enormous
concentration of legal talent (private practitioners, corporate
counsel, and law school professors) who are familiar with (1) the
history of the development of the oil and gas resources on the
Outer Continental Shelf, (2) the statutory enactments by Congress,
(3) the Supreme Court decisions interpreting the statutes, (4) the
statutes and interests of the adjacent states, and (5) that
historic, traditional, judge-made body of amorphous law
affectionately known as “admiralty and maritime law.” An en banc
reconsideration of the enigmas raised here in this case, informed
by briefs of counsel for the parties and interested amici, would be
a first step in bringing greater uniformity and predictability to
the law applicable to the development of these increasingly
critical natural resources.
56
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"pile_set_name": "FreeLaw"
} |
617 F.3d 520 (2010)
Brian J. KENNEDY; Michelle Kennedy, individually and as mother and next friend of B.D.K.; M.K.; D.K., Plaintiffs, Appellees/Cross-Appellants,
v.
TOWN OF BILLERICA; Daniel C. Rosa, individually and as Chief of the Billerica Police Department; Mark Tsoukalas; Richard Nestor; Scott Parker, Defendants, Appellants/Cross-Appellees,
Thomas Conners; Frank A. MacKenzie; Richard Rhonstock; Martin E. Conway; Andrew Devito; Richard Howe; Steven Elmore; Michael A. Casey; William MacDonald; Alan Munn, Defendants, Appellees,
John Barretto, individually and as former Chief of the Billerica Police Department, et al., Defendants.
Nos. 08-2221, 08-2222.
United States Court of Appeals, First Circuit.
Heard May 3, 2010.
Decided July 13, 2010.
*524 Leonard H. Kesten with whom Deidre Brennan Regan, Jeremy I. Silverfine, and Brody, Hardoon, Perkins & Kesten, LLP were on brief for the appellants/cross-appellees and appellees.
Andrew M. Fischer with whom Jason & Fischer, Frederick V. Gilgun, Jr., and Nicholson, Sreter & Gilgun, P.C. were on brief for the appellees/cross-appellants.
Before LYNCH, Chief Judge, BOUDIN and LIPEZ, Circuit Judges.
LYNCH, Chief Judge.
We affirm in part and reverse in part in this contentious civil rights case brought by a family of plaintiffs, the Kennedys, against the Town of Billerica, Massachusetts, and numerous individual police officers. Before us are cross-appeals from jury verdicts and court rulings in the two trials in this bifurcated case.
Specifically, we hold that error in instructing the jury in the first trial on the state law crime of assault and battery on a police officer requires that there be a new trial on the only successful federal civil rights claim against a police officer in that trial. The error undercut the basis for a defendant police officer's defense to a federal claim of false arrest for that crime. The federal civil rights award against the Town and the award of attorney's fees under 42 U.S.C. § 1988 must, as well, be vacated.
As to the state law verdicts in the first trial against two individual police officers based on intentional infliction of emotional distress (IIED), we vacate and direct entry of judgment for defendants. A minor's fear of going to court and a fear of the police, nightmares, and the loss of sleep, after arrest or after the filing of an application for a complaint against a minor, do not meet the severity of harm requirements under state law to find liability on IIED claims. We also vacate the state law verdict against the Town, which rested on a theory not recognized under Massachusetts law, that the Town may be liable for supervisory negligence even in the absence of cognizable underlying torts attributable to individual municipal employees or the Town. We order entry of judgment for the Town on this claim. We further reject plaintiffs' cross-appealed claims from the first trial, which were waived and also lack merit.
The verdict for plaintiffs in the second trial solely involved state law claims against two individual officers. We vacate and enter judgment for defendants on a state intentional infliction of emotional distress claim against an individual officer, because there was no evidence at trial supporting a finding that the officer intended to inflict emotional distress or that his conduct caused the emotional harms asserted by one of the minor plaintiffs. The verdict for plaintiffs against the other individual officer on an assault charge stands; the evidence presented on this claim was not so insufficient that no reasonable jury could have found for plaintiffs. We also affirm the district court's grant to defendants of judgment as a matter of law on plaintiffs' cross-appealed claims against the two officers.
I. Background
In 2004, plaintiffs, Michelle and Brian Kennedy, Sr., and their three children, Brian Jr., Mitchell, and Dylan, all minors, brought suit under 42 U.S.C. § 1983 and *525 state law against the Town of Billerica, Massachusetts, and more than two dozen individual police officers in their official and personal capacities. Plaintiffs claimed that for thirteen years and in approximately sixty-five different incidents, from 1991 through the filing of their suit in 2004, the Billerica police conspired to and did deprive family members of their constitutionally protected civil rights and committed state law torts in order to drive the Kennedys out of town.
In light of the number and complexity of these claims, the district court bifurcated the case into two trials held in April and October 2007. The Kennedys introduced numerous witnesses and detailed dozens of events to try to show that defendants were involved in a department-wide campaign to harass them and violate their civil rights. They say the harassment began when Michelle Kennedy allegedly spurned defendant Officer Frank MacKenzie's advances in 1991.
Defendants denied all allegations and contested plaintiffs' account of the events, countering that the Billerica Police, like the police in nearby Tewksbury, investigated members of the Kennedy family because of their suspected involvement in drug crimes during this period. In both trials, juries rejected nearly all of the Kennedys' federal and state claims, including the Kennedys' central civil rights conspiracy claim in the first trial.
The first trial concerned the Kennedys' claims against the Town and seven named police officers: Chief Daniel Rosa and Officers Frank MacKenzie, Steven Elmore, Michael Casey, Thomas Conners, Martin Conway, and Mark Tsoukalas.[1] The lone federal claim on which the jury found against the individual defendants and awarded damages was Mitchell Kennedy's § 1983 false arrest claim against Officer Tsoukalas, a claim arising from an incident in 2004, when Mitchell was fourteen years old. On the state IIED claims, the jury found for Mitchell on the same incident involving Officer Tsoukalas, and awarded Mitchell $15,000 in total damages for the two claims.[2] The jury also found for Brian Jr. on a claim against Chief Rosa arising from a 1997 incident that occurred when Brian Jr. was nine years old, awarding $10,000 in damages.
As to the Town, there were two verdicts for plaintiffs, one each under federal and state law. The jury found the Town liable under Monell v. Department of Social Services, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978), only for Mitchell's § 1983 false arrest claim, on the ground that the Town's failure to properly supervise or discipline Officer Tsoukalas amounted to deliberate indifference to Mitchell's civil rights. The jury further found against the Town, and for Michelle, Brian Jr., Dylan, and Mitchell Kennedy, on a state law supervisory negligence claim, *526 on the theory that the Town's practices were responsible for free-standing harms independent of identifiable torts committed by individual officers. Plaintiffs obtained nearly $380,000 in total damages at the first trial, mostly from the latter claim against the Town.[3]See Kennedy v. Town of Billerica (Kennedy IV), No. 04-cv-12357, slip op. at 1-4 (D.Mass. Dec. 10, 2007) (judgment on damages); Kennedy v. Town of Billerica (Kennedy III), No. 04-cv-12357, slip op. at 1-3, 7-10 (D.Mass. Aug. 21, 2007) (ruling on defendants' post-verdict motion for judgment as a matter of law in the first trial).
The second trial concerned the Kennedys' federal constitutional and state law tort claims against six other individual officers: Officers Alan Munn, Richard Howe, Richard Rhonstock, Andrew Devito, Richard Nestor, and Scott Parker.[4] Only claims against Officers Nestor and Parker, involving two discrete incidents in 1993 and 2002 respectively, went to the jury. The jury found for Brian Jr. on an IIED claim against Officer Nestor arising from the emotional trauma Brian Jr. said he suffered when his mother was arrested in front of him in 1993, when Brian Jr. was five years old, and awarded $2,500 in compensatory damages. The jury also found that in 2002, Officer Parker engaged in conscience-shocking conduct against Michelle Kennedy, assaulted her, and intentionally inflicted emotional distress on her, for which the jury awarded compensatory and punitive damages.
The district court granted defendants' post-verdict motion for judgment as a matter of law on Michelle's federal claim of conscience-shocking conduct and state IIED claim against Officer Parker, but left the verdicts against Officer Parker on Michelle's assault claim and against Officer Nestor on Brian Jr.'s IIED claim intact. See Kennedy v. Town of Billerica (Kennedy V), No. 04-cv-12357, slip op. at 2-12, 2008 WL 2945436 (D.Mass. Jul. 24, 2008) (ruling on defendants' motion for judgment as a matter of law on claims in the first and second trials). The district court also vacated the punitive damages award against Officer Parker, id. at 16, and Officer Parker was ultimately deemed liable for $2,000 in compensatory damages only.
II. Issues Arising from the First Trial
The first trial, against the Town and seven individual officers, lasted seventeen days and involved testimony from nearly fifty witnesses. Though most of the Kennedys' claims had a three-year (November 5, 2001) statute of limitations, the district court allowed testimony about incidents stretching back to 1991 to provide context for the alleged civil rights conspiracy. It also allowed certain pre-2001 claims involving the Kennedy children, since the statute of limitations was tolled on some of those claims while they were minors.
*527 The district judge described the trial as "an intense, nasty, awful case" and "the least civil trial I have presided over . . . within the last five years, maybe the last ten" due to incessant "uncivil and unprofessional" and even "unethical[]" behavior by both parties' counsel. The record fully supports this assessment. We commend the district court's handling of this extremely difficult case.
Eventually, twenty federal and state law claims against the Town, Chief Rosa, and Officers MacKenzie, Elmore, Conners, and Tsoukalas went to the jury, which rejected most, but not all, of plaintiffs' claims. Defendants now appeal the denial of their motion for judgment as a matter of law, or in the alternative for a new trial, on all claims on which the jury found for plaintiffs. They also claim prejudicial errors. Because we grant defendants a new trial on some claims and judgment as a matter of law on all others, we need not reach those issues. We also reject all the claims raised on plaintiffs' cross-appeal.
We review the district court's denial of a post-verdict motion for judgment as a matter of law under Rule 50 de novo, viewing the evidence in the light most favorable to the verdict. See Jennings v. Jones, 587 F.3d 430, 438 (1st Cir.2009); Visible Sys. Corp. v. Unisys Corp., 551 F.3d 65, 71 (1st Cir.2008). We reverse the district court's denial of such motions if "the jury `would not have a legally sufficient evidentiary basis' for its verdict." Jennings, 587 F.3d at 436 (quoting Fed. R.Civ.P. 50(a)). We review the denial of a motion for a new trial for abuse of discretion. See id. at 436-37. "Any error of law, if prejudicial, is a good ground for a new trial," among other grounds. 11 Charles A. Wright, Arthur R. Miller, & Mary Kay Kane, Federal Practice and Procedure § 2805, at 55 (2d ed.1995). We describe the facts, framed in light of the applicable standard of review, as relevant.
A. Federal and State Law Liability of Officer Tsoukalas
Mitchell Kennedy's false arrest and IIED claims against Officer Tsoukalas arose from a contested incident after dark on the evening of February 20, 2004, when Mitchell was fourteen years old. That night, Officer Tsoukalas, in uniform, and another officer went to the trailer park where the Kennedys lived to respond to police reports that children were running across the top of a vacant trailer. The officers looked for signs of break-ins or vandalism but saw none, and told the children they initially encountered that they were free to leave.
Mitchell alleged at trial that at this point, Officer Tsoukalas stopped him on the Kennedys' property, shined a flashlight in his face, scratched his face when putting the flashlight down, and then arrested him without probable cause and threw him into a police car. Officer Tsoukalas pressed charges for assault and battery of a police officer against Mitchell. A jury acquitted Mitchell on these charges. A friend of the Kennedy family who said he saw the incident thirty feet away testified that he saw Officer Tsoukalas shine a flashlight in Mitchell's face, "belly-bump" him, and arrest him, and that Mitchell never touched Officer Tsoukalas.
Mitchell testified that he was "scared" of Officer Tsoukalas when he was arrested in front of his home. His mother was not home at the time but his older brother came by and spoke to the officer. Mitchell also testified he was "wicked scared" when he was photographed at the police station after his arrest and started crying; the police then called his mother and took him home. He was at the police station for half an hour or so. He testified that he was "nervous" when he went to court to face charges and "really scared" when the jury came out because he "didn't know *528 what was going to happen."[5] He also testified that as a result of this incident and other run-ins he had with the police (including when he was videotaping the police and later incidents in which he was questioned by the police), he suffered nightmares about being taken away from his family and was afraid whenever he heard police sirens. This was the only evidence plaintiffs introduced regarding the emotional harms Mitchell suffered from the February 20, 2004 arrest.
Officer Tsoukalas testified that, after he completed his initial investigation of the incident, he "saw another kid come walking around the corner from one of the trailers," shined a flashlight to illuminate him because it was dark, and asked the child to come toward him, again illuminating him to identify who it was. At this point, Tsoukalas identified the child as Mitchell Kennedy. Mitchell approached, swore at Officer Tsoukalas and told him to get the flashlight out of his face, and shoved Officer Tsoukalas, thus providing Officer Tsoukalas with probable cause to arrest Mitchell for assault and battery of a police officer. Officer Tsoukalas denied scratching or otherwise hitting Mitchell. Pertinent to the issue of whether Officer Tsoukalas had probable cause to arrest Mitchell for shoving a police officer, defendants requested an instruction on the elements of the crime of assault and battery on a police officer. The district court declined the request and said the jury could be instructed if it asked. After it was charged, the jury then returned with a question: "Does light contact initiated, whether intentional or not, by a suspect on an officer constitute probable cause for arrest? For example, if a baseball player so much as touches an umpire, is it grounds for expulsion?"
The court then instructed the jury that under Massachusetts law, the elements of assault and battery on a police officer included "two types of batteries": either "a touching by an individual of the person of another with such violence that harm is likely to result, regardless of whether the person so touched consented thereto," or "a touching, which is not physically harmful, but offensive as an affront to the police officer's personal integrity," requiring "proof of nonconsent by the police officer." The latter type of battery, the court elaborated, required proof "that [Mitchell] touched the police officer," that "the police officer did not consent to the touching," and "that the conduct constituting the act of touching was an intended act and not an accidental one." The difficulty came in the court's next statement, that Officer Tsoukalas "also has to establish that [Mitchell's] act which resulted in the touching was both intentional and wanton and reckless, that is to say, more than negligent, and that it caused bodily injury to the victim; in other words, the police officer [Tsoukalas]."
Defense counsel objected to the last part of this instruction, focusing on the argument that the "bodily injury requirement" was not necessary to show offensive battery.[6] The district court said it would consider the objection over the weekend, review cases, "and, if necessary, change [the instruction] on Monday." Later in the discussion, the district court stated that although "the last paragraph" of the *529 battery instruction was not wrong, it was "not well crafted" and "just a little confusing," and the court invited both parties "to try your hand at doing something cleaner." Defense counsel reiterated his objection.
The following Monday, defense counsel submitted a proposed supplemental jury charge to clarify that the state crime of offensive battery did not require proof of bodily injury. The district court rejected the instruction and decided that the original instruction had been clear enough. Defense counsel again objected. The jury ultimately found for Mitchell on the § 1983 false arrest claim, which required finding that Officer Tsoukalas had arrested Mitchell for assault and battery on a police officer without probable cause. The jury also found for Mitchell on the state law IIED claim derived from that arrest.
1. Mitchell's § 1983 False Arrest Claim
Defendants say the assault and battery jury instruction created prejudicial error because it wrongly conveyed to the jury that offensive batterythe type of battery defendants alleged Mitchell committed on Officer Tsoukalasrequired proof that Officer Tsoukalas suffered a bodily injury. Officer Tsoukalas never claimed bodily injury resulted when Mitchell shoved him; defendants say the instruction precluded the jury from finding that Mitchell committed battery on a police officer, and therefore that Officer Tsoukalas had probable cause to arrest Mitchell.[7] In effect, defendants argue, the court instructed a verdict in Mitchell's favor.
Where, as here, defendants have a preserved objection that the jury instructions were so inaccurate that they are entitled to a new trial, our review of the instructions is de novo. Goodman v. Bowdoin Coll., 380 F.3d 33, 47 (1st Cir.2004). We look to the challenged instructions in relation to the charge as a whole, "asking whether the charge in its entiretyand in the context of the evidencepresented the relevant issues to the jury fairly and adequately." Id. Even if the instructions were erroneous, we find that the district court abused its discretion in denying a motion for new trial on this basis only if "the preserved error, based on a review of the entire record, can fairly be said to have prejudiced the objecting party." Id. (quoting Levinsky's, Inc. v. Wal-Mart Stores, Inc., 127 F.3d 122, 135 (1st Cir.1997)) (internal quotation marks omitted). That threshold is satisfied here, and we hold that defendants are entitled to a new trial on Mitchell's § 1983 false arrest claim.
The instructions at issue prevented the jury from fairly and adequately understanding the elements of offensive battery essential to Officer Tsoukalas's defense. Massachusetts law, as defendants point out, does not require proof of physical injury as an element of offensive battery. See Commonwealth v. Hartnett, 72 Mass. App.Ct. 467, 892 N.E.2d 805, 814 & n. 4 (2008); see also Commonwealth v. Cohen, 55 Mass.App.Ct. 358, 771 N.E.2d 176, 177-78 (2002). The sample Massachusetts jury instruction from which the district court instructed the jury correctly identified the three elements of offensive battery in the *530 initial portions of its instructions. The final part of the court's instructions to the jury nonetheless conveyed a contradictory and confusing statement of the law to the jury and effectively identified bodily injury as a required element of offensive battery.
This instruction materially prejudiced defendants on Mitchell's false arrest claim against Officer Tsoukalas, whose primary defense was that he had probable cause to arrest Mitchell because Mitchell had committed an offensive battery against him. The jury clearly considered this issue essential to its deliberations and indicated that neither the evidence nor other instructions had given it a clear sense of the issue, prompting it to specifically ask for further instructions. Cf. Susan Wakeen Doll Co., Inc. v. Ashton Drake Galleries, 272 F.3d 441, 452 (7th Cir.2001). The instructions given prevented the jury from fairly evaluating Officer Tsoukalas's defense and arguably precluded a finding for Officer Tsoukalas entirely. Defendants are entitled to a new trial on this claim.
2. Mitchell's State Law IIED Claim
Defendants argue, and we agree, that they were also entitled to judgment on Mitchell's IIED claim against Officer Tsoukalas.[8]
Under Massachusetts law, a plaintiff must show he suffered "severe" emotional distress as one of the four elements of an IIED claim.[9] This means the kind of distress "that no reasonable man could be expected to endure," Agis v. Howard Johnson Co., 371 Mass. 140, 355 N.E.2d 315, 319 (1976) (quoting Restatement (Second) of Torts § 46 cmt. j (1965)) (internal quotation marks omitted), as opposed to mere "emotional responses including anger, sadness, anxiety, and distress," which, though "blameworthy," are "often not legally compensable." Quinn v. Walsh, 49 Mass.App.Ct. 696, 732 N.E.2d 330, 338 (2000).
We do not downplay the possible emotional effect of an allegedly wrongful arrest on a fourteen-year-old. However, though Massachusetts recognizes that children and other particularly susceptible persons are likely to be more vulnerable to emotional harm, see Boyle v. Wenk, 378 Mass. 592, 392 N.E.2d 1053, 1056 (1979), the generalized harms Mitchell alleged were too transient, too vague, and insufficiently severe to satisfy this standard.
The strength of a standard is always a matter of degree, but the Massachusetts cases are demanding. See Bailey v. Shriberg, 31 Mass.App.Ct. 277, 576 N.E.2d 1377, 1379 (1991) (finding no "severe" emotional distress, even for susceptible plaintiffs, where the allegations merely involved being upset as a result of defendants' conduct); cf. Homesavers Council of Greenfield Gardens, Inc. v. Sanchez, 70 Mass.App.Ct. 453, 874 N.E.2d 497, 504 (2007) (finding "severe" emotional distress *531 where the plaintiff presented evidence of severe depression, suicidal thoughts, and loss of sleep for more than a month). The harms Mitchell alleged in his testimony that he feared Officer Tsoukalas at the time of arrest and feared going to court, and that this arrest, as well as other incidents, had made him generally "nervous," afraid of police sirens, and had sometimes given him "nightmares" that produced sweating and a racing pulseare little different from the harms Massachusetts courts have deemed insufficiently severe.
We do not reach the question of whether Mitchell could have made out an IIED claim on different facts, for instance if he had offered detailed testimony that established that he had suffered serious emotional injury or anguish, exhibited psychiatric or physical symptoms of severity, or that Mitchell's life was otherwise materially disrupted by his reaction to this arrest. No such evidence was offered in this case. On the facts developed at trialand we do not go beyond themplaintiffs have not made the requisite showing that Mitchell suffered "severe" emotional distress.
B. State Law Liability of Chief Rosa
The sole ground on which the jury found against Chief Rosa was on a state law IIED claim by Brian Jr. The factual predicate for this claim, viewed in the light most favorable to the verdict, was that in 1997, when Brian Jr. was nine years old, Chief Rosa deliberately filed a baseless complaint application against him for malicious destruction of property, using a report from another officer stating that Brian Jr. had thrown rocks at his neighbor's trailer. As a result of the complaint application, Brian Jr. said that he was "scared" and "didn't sleep much" when he learned he would have to appear in court because he had "never been in court before."
We agree with defendants that Chief Rosa was entitled to judgment on this IIED claim. Even when viewing the evidence in plaintiffs' favor, Brian Jr., like Mitchell, clearly did not allege emotional harm of a requisite severity to make out an IIED claim, for the reasons discussed above with respect to Mitchell's claim.[10] Brian Jr.'s alleged loss of sleep for an unspecified period before his court appearance, and his generalized fear of going to court, do not rise to the level of emotional suffering that "no reasonable man should be expected to endure," Agis, 355 N.E.2d at 319 (quoting Restatement (Second) of Torts § 46 cmt. j (1965)) (internal quotation marks omitted), even considering Brian Jr.'s susceptible emotional state as a nine-year-old.
C. Federal and State Law Liability of the Town of Billerica
1. Monell Liability on Mitchell's § 1983 False Arrest Claim against Officer Tsoukalas
Mitchell's false arrest claim against Officer Tsoukalas was the only constitutional violation to which the jury attributed the Town's negligent failure to train and supervise under Monell. Because we have granted a new trial on the false arrest claim, we also vacate the jury's verdict on the Monell claim and remand for a new trial with the false arrest claim.
Monell can impose municipal liability only for underlying, identifiable constitutional violations attributable to official municipal policy; the municipality's failure to train or supervise its police officers only becomes a basis for liability when "action pursuant to official municipal policy *532 of some nature caused a constitutional tort." Monell, 436 U.S. at 691, 98 S.Ct. 2018 (emphasis added); see also City of Los Angeles v. Heller, 475 U.S. 796, 799, 106 S.Ct. 1571, 89 L.Ed.2d 806 (1986) (per curiam) ("If a person has suffered no constitutional injury at the hands of the individual police officer, the fact that the departmental regulations might have authorized the use of constitutionally excessive force is quite beside the point."); McSherry v. City of Long Beach, 584 F.3d 1129, 1147 (9th Cir.2009); Graves v. Thomas, 450 F.3d 1215, 1218 (10th Cir. 2006); Wilson v. Town of Mendon, 294 F.3d 1, 6-7 (1st Cir.2002). Other than Mitchell's § 1983 false arrest claim, the district court either entered judgment for defendants or the jury rejected all other remaining constitutional torts that could have formed a basis for municipal liability. Plaintiffs did not allege, nor did the evidence suggest, any other possible underlying constitutional torts that the jury could have attributed to the municipality.
2. The Town's State Law Liability for Supervisory Negligence Claims
We also hold that the defendants were entitled to judgment on the state law supervisory negligence claim against the Town, and we vacate the award for plaintiffs.
The jury found that the Town was liable under state law for supervisory negligence because the Town "commit[ted] negligence in disciplining or supervising its police officers which proximately caused harm" to Michelle, Brian Jr., Mitchell, and Dylan Kennedy. Plaintiffs were awarded more than $300,000 in total damages against the Town, beyond the Town's joint and several liability for individual torts the jury found were committed by individual officers. The district court held that this claim could be made under Mass. Gen. Laws ch. 258, § 2, and that it could be sustained based on general evidence that the Billerica police engaged in a pattern of harassment over the course of a decade, see Kennedy III, slip op. at 7, not on the basis of individual torts committed by individual officers.
Defendants start by objecting that they were unfairly caught by surprise by the district court's ruling. The plaintiffs never framed the state negligent supervision claim as a free-standing claim against the Town in the absence of a finding that particular torts were committed by Town employees and these were caused by the Town's negligent supervision, much less that liability could be predicated on a pattern of events including events outside the three-year statute of limitations. They protest that this theory of liability was first articulated by the district court in its order denying defendants judgment as a matter of law.[11]
We pretermit analysis of that question in favor of addressing defendants' more substantive objections. Defendants argue that the verdict against the Town must be vacated, and judgment granted to defendants, in the absence of a finding that individual officers committed any specific torts which in turn were traceable to the Town's supervisory negligence. They say that under Massachusetts law, the Town is only liable for supervisory negligence for failing to prevent torts committed by individual employees, not for unattributed, *533 general practices that do not rise to the level of tortious conduct. Defendants have preserved this issue for appeal.
The district court did not address this argument in denying defendants judgment as a matter of law.[12] Defendants are correct that thus far, Massachusetts cases have only allowed supervisory negligence claims against municipalities where the municipality knew or should have known about an underlying, identifiable tort which was committed by named or unnamed public employees. See Mass. Gen. Laws ch. 258, § 2, 10(c); Dobos v. Driscoll, 404 Mass. 634, 537 N.E.2d 558, 569 (1989) (explaining that municipalities can be sued under the MTCA for supervisory negligence "where the supervisory officials allegedly had, or should have had, knowledge of a public employee's assaultive behavior"); Doe v. Blandford, 402 Mass. 831, 525 N.E.2d 403, 408 (1988) (same). No Massachusetts case has been cited to us that has ever recognized a supervisory negligence claim against municipalities for generalized, free-standing, and unspecified wrongs when no individual employee or group of employees committed an underlying tort.
We decline to extend the doctrine of municipal supervisory liability that far, especially in light of the policy and economic concerns for municipalities. A federal court, interpreting state law, is not the appropriate place to adopt a novel and expansive view of municipal liability under state law. See Warren v. United Parcel Serv., Inc., 518 F.3d 93, 100-01 (1st Cir. 2008). Plaintiffs failed at trial and on appeal to identify any cognizable tort committed against Michelle, Brian Jr., Mitchell, or Dylan, outside of the specific torts that either were rejected by the jury or were directed out by the district court, which the jury could have connected to the Town's negligent supervision. Plaintiffs cannot collect on this claim by simply asserting that the Town created unspecified harms.
Second, there is reason to doubt the SJC would adopt such a view. Under 28 U.S.C. § 2680(h) of the Federal Tort Claims Act, which Massachusetts considers a "nearly identical provision" to § 10(c) of the Massachusetts Tort Claims Act, Doe, 525 N.E.2d at 407, the United States can be held liable for certain identifiable torts committed by its agents. But the FTCA has never been interpreted to impose free-standing liability on the federal government for unspecified and unattributed conduct that do not fall under recognized categories of torts. See 28 U.S.C. § 2680(h); see also Santoni v. Potter, 369 F.3d 594, 603 (1st Cir.2004). This suggests a further reason not to extend the doctrine.
We vacate the jury's award of damages to Michelle, Brian Jr., Dylan, and Mitchell Kennedy on this basis and hold that the Town was entitled to judgment on this claim.[13]
*534 D. Plaintiffs' Cross-Appeal
Plaintiffs also cross-appeal issues from the first trial. They argue that they are entitled to a new trial because the district court erred in (1) granting summary judgment to defendants on the Kennedy children's loss of consortium claims; (2) entering judgment for the defendants on plaintiffs' false arrest, malicious prosecution, unlawful imprisonment, and related claims arising from the so-called November 9, 2001 "Masone incident"; (3) admitting "bad character" hearsay evidence as to the Kennedy parents' involvement in drugs; (4) bifurcating the two trials into an initial trial against the Town and seven individual officers, and a second trial against remaining individual officers; and (5) not submitting a federal constitutional substantive due process claim to the jury. They also claim that the district court erred in reducing the damages award to Mitchell and Brian Jr. on the negligent supervision claim against the Town and to Mitchell on the Monell claim.
We have reviewed all of these claims and reject them. Plaintiffs have waived most of these arguments by failing to timely make them before the district court. See States Res. Corp. v. The Architectural Team, Inc., 433 F.3d 73, 85 (1st Cir.2005). They are in any event meritless for reasons we briefly discuss.
The district court properly granted summary judgment on the Kennedy children's loss of consortium claims because they are plainly barred by the November 5, 2001 statute of limitations, notwithstanding the rule preserving claims of minors. The underlying injuries that caused the Kennedy children to allegedly suffer a loss of consortium involved timebarred claims of injuries to the Kennedy parents. Under Massachusetts law, "loss-of-consortium claims that do not accrue until after the statute of limitations has run on the underlying injury may not be enforced." Lareau v. Page, 39 F.3d 384, 391 (1st Cir.1994).
Likewise, the district court properly granted judgment for defendants on claims arising from the so-called "Masone incident," in which Brian Sr., Michelle, and Mitchell were arrested, prosecuted, and eventually acquitted for their alleged involvement in breaking car windows and fighting with various acquaintances who showed up by the Kennedy's trailer in the middle of the night on November 5, 2001. The district court properly directed a verdict on the claims made by Michelle and Brian Sr., since a grand jury found there was probable cause to arrest them in connection with this incident, disposing of their false arrest, malicious prosecution, and other derivative claims. See Gonzalez Rucci v. I.N.S., 405 F.3d 45, 49 (1st Cir. 2005). Plaintiffs' attempts to impugn the grand jury testimony are not only belated and unpreserved but also insufficient to upset the district court's conclusion.
The district court also properly directed a verdict on Mitchell's malicious prosecution claims against all officers but Chief Rosa. All of plaintiffs' arguments on these claims were not made to the district court and cannot be raised now. Plaintiffs could not, in any event, have submitted Mitchell's claims against non-defendant officers in the first trial to the jury, as they now *535 request, and there was insufficient evidence connecting the other defendant officers to the incident.
Plaintiffs' assertion that they are entitled to a new trial because the district court committed prejudicial error by admitting hearsay evidence is meritless. We review the specific evidentiary objections presented. On appeal, plaintiffs claim there was error in the admission of a police chart and a related 1991 police report regarding a drug investigation, testimony about Michelle and Brian Sr.'s involvement in a drug ring, testimony about drug buys, questioning about a drug conviction, plaintiffs' drug treatment records, testimony regarding plaintiffs' eviction from their trailer park, and defense counsel's opening and closing arguments. The district court did not err in admitting this evidence.
Defendants introduced assorted evidence regarding the Kennedys' involvement in drug dealing to rebut plaintiffs' central theory, that the police were targeting the Kennedys for no reason, by showing that the Kennedys' involvement in drugs gave the police ample grounds to investigate them. Defendants were entitled to do so. Indeed, the district court explicitly warned plaintiffs' counsel that plaintiffs were "open[ing] the world" to testimony regarding the Kennedys' suspected involvement in drug dealing by suggesting that the police began investigating the Kennedys for drugs only in retaliation for Michelle spurning Officer MacKenzie's advances. Plaintiffs' counsel at that point agreed to the risk and even conceded that it was "fine" to allow in the 1991 police report that plaintiffs now challenge on appeal. The district court also reminded the jury that the 1991 report, like other documents regarding drug investigations of the Kennedys, was "hearsay from an informant," and explained that such documents were "relevant only as to what was in the mind of the police when they were investigating the Kennedys in 1991." The court repeated this instruction before the jury went to deliberate. Plaintiffs fail to acknowledge these curative instructions and have not, in any event, established prejudice. For the same reasons, even if plaintiffs had timely objected to defense counsel's statements in opening and closing arguments about the Kennedy's involvement in drugs, these claims fail.
As for defense counsel's questions regarding Brian Sr.'s 1988 drug conviction, the district court repeatedly sustained plaintiffs' objections, and the conviction was never admitted. Plaintiffs have not shown that defense counsel's repeated references to this incident caused prejudice, not least in light of the district court's instructions. Moreover, both sides repeatedly flouted the court's various rulings; plaintiffs' request for a mistrial on this basis is misplaced.
Similarly, the district court restricted the scope of testimony regarding the plaintiffs' eviction but allowed limited testimony to rebut plaintiffs' central claim, that they were forced out of Billerica and evicted from the trailer park because of constant police harassment. Plaintiffs' objections to questions beyond the scope of this testimony were consistently sustained, and plaintiffs' assertions that the jury was nonetheless exposed to prejudicial hearsay misrepresents the record.
Plaintiffs' objections to the admission of Michelle Kennedy's drug treatment records are also meritless. Plaintiffs not only asked Michelle about her counseling at the Seven Hills treatment center and about her addiction to various pills but admitted her medical records into evidence themselves. At no point did plaintiffs object to the admission of records concerning methadone use. Plaintiffs also failed to object when defense counsel questioned *536 Michelle Kennedy regarding her treatment for heroin and cocaine use.
We also reject plaintiffs' cross-appeal of the district court's bifurcation of their claims into the two trials. This claim is in any event waived, since plaintiffs failed to timely object to the bifurcation during the two trials. Plaintiffs inaccurately argue that they were unable to present the "full scope of harassment and misconduct" at both trials. The district court in fact gave plaintiffs great leeway, allowing them in both trials to introduce extensive evidence about incidents occurring well before the statute of limitations bar date, and to present, in the first trial, evidence of conduct by defendants who were involved only in the second trial. Plaintiffs' other, cursory objections were not preserved and also fail to show prejudice.
We further reject plaintiffs' argument that they should have been able to submit a federal constitutional "substantive due process" claim to the jury asserting that the Kennedys were singled out for disparate treatment and deprived of their liberty. Plaintiffs have repeatedly waived this claim. To the extent this is a substantive due process claim, it is waived because plaintiffs specifically told the district court they did not want to submit such a claim to the jury. To the extent this may be characterized as an equal protection claim, it is equally waived and meritless. The district court properly found that plaintiffs never gave defendants fair notice of such a claim in any relevant pleadings, and plaintiffs did not timely object to that ruling.
Finally, the district court did not erroneously reduce damages awards to plaintiffs. Plaintiffs say that the court erred in reducing the Monell award to Mitchell because they say the jury could have held (and should have been instructed) that the Town was liable for cumulative constitutional violations even if no individual officer was found liable. Plaintiffs' objections to the jury instructions are waived. Even assuming dubitante that the jury could have considered uncharged, accumulated instances of harassment in addition to the specific constitutional violations plaintiffs asserted (all but one of which the jury rejected), plaintiffs never argued, nor is it apparent, that the uncharged harassment could have amounted to a constitutional violation. Their argument also incorrectly states the law; the Town may be liable even if individual officers are ultimately exonerated, for instance because the officers are granted qualified immunity or for failure of proof, but plaintiffs must still show some underlying constitutional tort attributable to the Town. See Wilson, 294 F.3d at 6-7. And we have directed entry of judgment to defendants on the supervisory negligence claim against the Town, making plaintiffs' objections to the reduction of that award moot.
III. Issues Arising from the Second Trial
The second trial lasted six days and involved testimony from eleven witnesses. Only claims against Officers Nestor and Parker went to the jury. See Kennedy II, slip op. at 14 (granting summary judgment on claims against all other defendants). After the district court granted in part defendants' post-verdict motion for judgment as a matter of law, the only claims on which plaintiffs prevailed were Brian Jr.'s IIED claim against Officer Nestor for events in 1993 and Michelle's assault claim against Officer Parker for events in 2002. See Kennedy V, slip op. at 16. Defendants now argue that the district court erred in not granting them judgment on these claims as well.[14] They also say *537 the district court erred in denying their motion for a mistrial because of allegedly prejudicial comments admitted into evidence. Plaintiffs cross-appeal the district court's grant of judgment to defendants on Michelle's substantive due process and IIED claims and say the jury verdicts on those claims should not have been vacated.
We review the district court's grant or denial of judgment as a matter of law de novo, Visible Sys. Corp., 551 F.3d at 71, viewing the evidence in the light most favorable to the verdict-winner, and vacating the jury verdict only if it lacks a sufficient evidentiary basis, Jennings, 587 F.3d at 438. We review the district court's denial of a motion for a mistrial for manifest abuse of discretion. See United States v. DeCologero, 530 F.3d 36, 52 (1st Cir.2008). We again describe the facts as necessary and in light of the relevant standards of review.
A. State Law Liability of Officer Nestor
The jury returned a verdict for Brian Jr., and against Officer Nestor, on an IIED claim that arose from a 1993 incident in which Brian Jr. allegedly suffered emotional harms from watching his mother being arrested and taken by police in their trailer home when he was five years old.[15] Plaintiffs asserted that Officer Nestor was responsible for Brian Jr.'s emotional distress, even though Officer Nestor was not present at the arrest, because they claim he had no basis for filling out a criminal complaint against Michelle after an earlier incident in which she allegedly confronted Nestor for driving dangerously close to the Kennedys' car. Officer Nestor testified that in that incident, Michelle swore and spat at him. He considered this an assault and filled out a complaint application, but he decided not to apply for a warrant. He further stated that the charges against Michelle were enhanced while he was away, without his knowledge. Even assuming arguendo that Officer Nestor had no basis for filing this complaint application, there was no evidence that he was involved in or intended for the charge to be enhanced to have Michelle arrested.
We hold that defendants were entitled to judgment on this claim. Even when viewing the record most favorably to plaintiffs, no evidence at trial established, and considerable evidence rebutted, two of the essential elements of an IIED claim: "that the actor intended to inflict emotional distress or that he knew or should have known that emotional distress was the likely result of his conduct" and that "the actions of the defendant were the cause of the plaintiff's distress." Agis, 355 N.E.2d at 318-19.
Uncontroverted testimony from Officer Nestor and other witnesses confirmed that he explicitly and deliberately requested only a complaint application, which results in a mere summons, not an arrest. He was on vacation when the application was enhanced (either by another officer or the magistrate clerk at the local court) to request an arrest warrant, and he was still away when Michelle was arrested.[16] Officer *538 Nestor testified that on his return, he was "upset to learn" that the charge had been enhanced without consulting him. He cannot be held liable for the harms Brian Jr. alleged as a result of that arrest, which Officer Nestor did not seek and which was sought without his knowledge or input.
B. State Law Liability of Officer Parker
The only verdict the district court left in place against Officer Parker was a state law assault claim brought by Michelle for events in 2002. See Kennedy V, slip op. at 11. Defendants say the district court erred by not granting them judgment as a matter of law on this claim because the evidence was insufficient to support the verdict. We disagree.
Viewing the evidence in the light most favorable to plaintiffs, the verdict-winners, we cannot find that "the evidence was so strongly and overwhelmingly inconsistent with the verdict that no reasonable jury could have returned it." See Crowe v. Bolduc, 334 F.3d 124, 134 (1st Cir.2003). Assault, under Massachusetts tort law, requires that the defendant "act[ed] intending to cause a harmful or offensive contact" with plaintiff, "or an imminent apprehension of such a contact," and that plaintiff was "thereby put in such imminent apprehension." Restatement (Second) of Torts § 21(1) (1965); see also Conley v. Romeri, 60 Mass.App.Ct. 799, 806 N.E.2d 933, 939 n. 6 (2004). "`Words do not make the actor liable for assault unless together with other acts or circumstances they put the other in reasonable apprehension of an imminent harmful or offensive contact with his person.'" Commonwealth v. Delgado, 367 Mass. 432, 326 N.E.2d 716, 719 n. 3 (1975) (quoting Restatement (Second) of Torts § 31 (1965)).
The assault claim here arose from a 2002 incident in which Michelle testified that Officer Parker "shoved [her] really hard" when she was walking to her car, "tr[ied] to get in" her car after she locked herself in, and was "kicking it and calling [her] really bad names" and continually swearing at her.[17] Dean Royston, a (nowformer) police officer who appeared on the scene, testified that he saw Officer Parker standing at the driver's door of Michelle's car yelling and swearing, and that Michelle left her car and swore back at him in a "screaming match." Officer Parker denied shoving Michelle, kicking her car, or attempting to break into her car to get to her. Parker conceded that "unfortunately, I lost my cool and started giving it back to her, cursing at her, swearing at her" after she "had gotten back in the car and locked the door" and that he cursed at her "through the open sunroof" of her car for several minutes.
The jury rejected Michelle's claims that Officer Parker used excessive force, had battered her, or had unreasonably detained her. It could nonetheless have found Officer Parker liable for assault on the basis of Michelle's testimony that Officer Parker repeatedly kicked her car while *539 swearing at her and attempting to get inside her car.
Defendants' argument to the contrary rests on an overly narrow view of the state law tort of assault. Under Massachusetts tort law, a defendant need not "be able instantly to carry out the physical violence threatened by his conduct," Ginsberg v. Blacker, 67 Mass.App.Ct. 139, 852 N.E.2d 679, 684 n. 8 (2006); rather, "`[i]t is enough that one is so close to striking distance that he can reach [plaintiff] almost at once.'" Id. (quoting Restatement (Second) of Torts § 29 cmt. b (1965)). On this basis, Massachusetts has suggested and other state courts have heldthat "shouting angrily at a person and raising a hand (or shaking a fist) in that person's face" constitutes assault. Id. On these facts, Officer Parker's shouting and swearing, combined with his proximity to Michelle while he was kicking her car and allegedly trying to get into her car, qualifies as an assault.[18]
C. Defendants' Motion for a Mistrial
Defendants cursorily appeal the district court's denial of their motion for a mistrial, arguing that the district court abused its discretion by admitting improper and prejudicial evidence. Specifically, defendants object to the admission of evidence regarding another officer's arrest of Michelle months after the 1993 incident involving Officer Nestor and "inflammatory suggestions" regarding a non-defendant witness, retired Deputy Chief Conners, who allegedly "gave the `finger' to Brian Jr." in the courthouse after Conners's testimony at the second trial.
Neither of these incidents rise to the exceedingly high level of prejudice required for us to find a manifest abuse of discretion. See DeCologero, 530 F.3d at 52. The admission of evidence regarding another officer's arrests of Michelle later in 1993 was hardly prejudicial; indeed, the officer's testimony suggested that Officer Nestor had little to do with these later arrests and that the officer had probable cause to arrest Michelle. In any event, any prejudice would have only affected the jury verdict against Officer Nestor, which we already vacated.
The admission of evidence concerning Deputy Chief Conners's conduct at the federal courthouse was admitted as relevant to Conners's credibility. Any prejudice from the admission of this testimony would again have been limited to the incident involving Officer Nestor, in which Conners had been involved. Neither side alleged that Deputy Chief Conners had anything to do with the 2002 incident involving Officer Parker, and Conners' testimony was limited to the 1993 incident. We therefore hold that there was also no prejudice in admitting this testimony.
D. Plaintiffs' Cross-Appeal
We reject plaintiffs' cross-appeal of the district court's grant of judgment to defendants on Michelle's substantive due process and IIED claims against Officer Parker, arising out of this same 2002 incident. The district court was correct. Even taken in the light most favorable to the verdict, the evidence fell far short of showing conscience-shocking conduct, a *540 sine qua non for the claim. Martinez v. Cui, 608 F.3d 54, 63-65 (1st Cir.2010).
The jury rejected plaintiffs' claims that Officer Parker used excessive force against Michelle or unreasonably detained her; the only remaining bases for finding Officer Parker engaged in conscience-shocking conduct were Michelle's allegations that Officer Parker kicked her car repeatedly and swore and screamed at her for several minutes. This conduct may have been reprehensible, but it falls short of conduct that is "so brutal and so offensive to human dignity" that it gives rise to a substantive due process violation. Chavez v. Martinez, 538 U.S. 760, 774, 123 S.Ct. 1994, 155 L.Ed.2d 984 (2003) (quoting Rochin v. California, 342 U.S. 165, 172, 72 S.Ct. 205, 96 L.Ed. 183 (1952)); see also Cummings v. McIntire, 271 F.3d 341, 344 (1st Cir.2001). That is so even assuming arguendo that, as plaintiffs assert, Officer Parker's actions were the product of a decade-long campaign of harassment. That fact goes to the intentionality of Officer Parker's conduct on that day in 2002, not its severity. "[T]he due process guarantee does not entail a body of constitutional law imposing liability whenever someone cloaked with state authority causes harm." County of Sacramento v. Lewis, 523 U.S. 833, 848, 118 S.Ct. 1708, 140 L.Ed.2d 1043 (1998).[19]
The district court also properly held that defendants were entitled to a verdict on the state IIED claim. The emotional harms Michelle asserted as a result of the 2002 incident involving Officer Parker were feeling "always nervous that I'm going to get arrested," not being able to sleep, and thinking about the incident "all the time" for several months. As we have discussed with respect to the IIED claims in the first trial, these are not the kind of "severe" emotional harms required to make out an IIED claim under Massachusetts law. See Bailey, 576 N.E.2d at 1379.
IV.
Plaintiffs were awarded attorney's fees under 42 U.S.C. § 1988, solely for civil rights claims on which they prevailed in the first trial, namely Mitchell's § 1983 false arrest claim against Officer Tsoukalas and the related Monell liability for the Town on this claim. See Kennedy v. Town of Billerica (Kennedy V), No. 04-cv-12357, slip op. at 6-7, 2008 WL 2945436 (D.Mass. Jul. 24, 2008) (order granting attorney's fees). Because we vacate and remand the jury verdict on these claims and order a new trial, we also vacate the district court's award of attorney's fees.
V.
We remand and direct the grant of a new trial to defendants on Mitchell's § 1983 false arrest claim against Officer Tsoukalas for the 2004 incident from the first trial and on the accompanying Monell claim against the Town on the question of its liability for this incident only. We order entry of judgment for the defendants on the IIED claims by Mitchell against Officer Tsoukalas and by Brian Jr. against Chief Rosa from the first trial, as well as the state supervisory negligence claim against the Town. *541 We also order entry of judgment for defendants on Brian Jr.'s IIED claim against Officer Nestor on the 1993 incident in the second trial. We affirm judgment for Michelle Kennedy on her assault claim against Officer Parker. We vacate the award of attorney's fees under 42 U.S.C. § 1988. No costs are awarded.
So ordered.
NOTES
[1] The district court dismissed a number of plaintiffs' claims against defendants in the first trial on summary judgment, ruling that these claims were either outside the November 5, 2001 statute of limitations or supported by insufficient evidence to state a claim. Among those claims the court ruled as outside the statute of limitations were plaintiffs' loss of consortium claims, including those made by the Kennedy children. See Kennedy v. Town of Billerica (Kennedy I), 502 F.Supp.2d 150, 160 (D.Mass.2007).
The court also granted defendants' motion for a directed verdict following the close of evidence on all claims against Officer Conway, virtually all claims against Officer Casey, and almost all claims Michelle, Brian Sr., and Mitchell made arising from a November 9, 2001 incident (the "Masone incident").
[2] The jury also found for Dylan on one IIED claim but awarded no damages; the district court granted defendants judgment on this claim. See Kennedy v. Town of Billerica (Kennedy IV), No. 04-cv-12357, slip op. at 2 (D.Mass. Dec. 10, 2007).
[3] On May 10, 2007, defendants filed a post-verdict motion for judgment as a matter of law or a new trial, and on August 21, 2007, the district court rejected all of defendants' arguments on the merits. See Kennedy III, No. 04-cv-12357, slip op. at 1-7 (Aug. 21, 2007). Plaintiffs did not file any post-verdict motions for reconsideration of any issues from the first trial, including the claims they now assert are a basis for a new trial.
[4] Plaintiffs initially proceeded against an additional fourteen officers in the second trial but later agreed to dismissal with prejudice of all claims against these officers. See Kennedy v. Town of Billerica (Kennedy II), No. 04-cv-12357, slip op. at 1 & n. 1 (D.Mass. Aug. 15, 2007) (order granting in part and denying in part defendants' motion for summary judgment). The district court also granted summary judgment to defendants Officers Howe, Munn, Rhonstock, and Devito on all claims, and on certain claims against Officers Parker and Nestor. See id. at 1-15. Plaintiffs do not appeal any of these claims.
[5] Mitchell also testified on cross-examination that he had been to court in an earlier case in which he had been criminally charged, but not arrested, and then acquitted of beating a car windshield. Plaintiffs claimed that this incident was malicious prosecution, but the district court directed a verdict for defendants on this claim. For the reasons we discuss below, there was no error in this ruling.
[6] We accordingly do not examine the "wanton and reckless" portion of the instruction.
[7] Plaintiffs claim defendants' objections to the instruction were waived because defendants failed to offer a jury instruction before deliberations began. But the claimed error here is not that the district court failed to provide the jury with an essential instruction; it is that when the jury asked for further instructions, the district court provided an erroneous instruction on the law. Defense counsel timely objected to that instruction. See 9C Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 2553, at 72-73 & n. 39 (3d ed.2008). Counsel also timely provided a supplemental instruction at the court's invitation; the district court rejected it.
[8] Our conclusion on this state law claim is independent of our holding that Officer Tsoukalas is entitled to a new trial on Mitchell's § 1983 false arrest claim. Even assuming arguendo that a properly instructed jury could find that Officer Tsoukalas arrested Mitchell without probable cause, and even viewing the evidence in Mitchell's favor, Mitchell's asserted emotional harms do not make out an IIED claim.
[9] The other elements are "(1) that the actor intended to inflict emotional distress or that he knew or should have known that emotional distress was the likely result of his conduct. . .; (2) that the conduct was extreme and outrageous, was beyond all possible bounds of decency and was utterly intolerable in a civilized community," and "(3) that the actions of the defendant were the cause of the plaintiff's distress." Howell v. Enter. Publ'g Co., LLC, 455 Mass. 641, 920 N.E.2d 1, 28 (2010) (quoting Agis v. Howard Johnson Co., 371 Mass. 140, 355 N.E.2d 315, 318-19 (1976)) (internal quotation marks omitted).
[10] We bypass whether Chief Rosa's alleged conduct was "extreme and outrageous" and "beyond all possible bounds of decency," Howell, 920 N.E.2d at 28, another required element of an IIED claim that defendants say was not satisfied here.
[11] The district court concluded that the Town could be held liable for free-standing incidents only in a post-verdict motion denying defendants judgment as a matter of law, and even then it recognized that "neither side thoroughly discussed this claim during closing arguments." See Kennedy III, slip op. at 4-7. Articulation of this issue in a post-verdict ruling is too late for defendants to have had an adequate chance to counter the claim at trial.
[12] It merely held that defendants were not entitled to judgment because the Massachusetts Tort Claims Act (MTCA) generally recognizes the tort of supervisory negligence and that the evidence that various unspecified Billerica officers harassed plaintiffs as a general practice over the course of a decade was sufficient to support the claim. See Kennedy III, slip op. at 3-7.
[13] Our conclusion is further supported by the fact that, as defendants argue, plaintiffs never framed negligent supervision as a free-standing claim that could confer independent liability on the Town based on events that occurred well outside the three-year statute of limitations. In their presentment letter, their complaint, their arguments and submissions at trial, and in their proposed jury instructions, plaintiffs never argued that the Town could be held liable for supervisory negligence in the absence of specified individual torts committed by named or unnamed individual officers. Indeed, plaintiffs suggested the opposite. Defense counsel's colloquy with the district court regarding jury instructions appeared to confirm defendants' position that the Town had to be linked to individual constitutional or state law torts to be liable on either Monell or supervisory negligence claims. And the jury instructions were ambiguous.
Moreover, plaintiffs did not point to any incidents within the three-year statute of limitations that were not attributable to individual defendants and could have provided a viable basis for supervisory liability.
[14] Defendants' motion before the district court requested judgment as a matter of law or, in the alternative, a new trial, and the district court denied both remedies on these claims in its opinion. See Kennedy V, slip op. at 1-2, 10. On appeal, defendants only request judgment in their favor on these claims; they have waived their appeal of the district court's denial of a new trial.
[15] We do not decide whether Brian Jr.'s asserted emotional harms of not being able to sleep alone and being afraid for a period of months that his mother would be taken away were "severe" given the emotional susceptibility of a five-year-old. Other required IIED elements are plainly absent.
[16] Plaintiffs assert on appeal that Officers Nestor and Conners lied about altering the complaint application and both intended to have Michelle arrested. No evidence at trial supports these assertions.
[17] The incident began when Michelle, her husband Brian Sr., and two friends began loading skateboard rampswhich they said they had permission to takein a wooded area behind the local Boys' Club. Officer Parker said he received a call reporting a suspected drug deal at the location, identified the skateboard ramps as those used in a police recreational league, and asked that the ramps be put back.
As Brian Sr. and the other friends left, Michelle was swearing at Officer Parker. The assault allegedly occurred when no one else was around. Michelle called then-Officer Dean Royston from her car during the alleged assault, and exited her car when Royston arrived. The incident ended when Royston told Michelle to leave.
[18] There may be relevant defenses or privileges available to police officers under other provisions of Massachusetts law, for instance to use reasonable force to effect an arrest. Defendants, however, solely argued that Officer Parker could not be liable for the tort of assault because shouting and kicking a car generally do not rise to the level of assault. We reject that position in relation to the facts of this particular case, viewed in the light most favorable to the jury verdict.
[19] This court has left open the possibility that severe "verbal harassment and intimidation could violate due process." Cruz-Erazo v. Rivera-Montanez, 212 F.3d 617, 623 (1st Cir. 2000). Engaging in a mutual shouting match in which both parties hurled profanities at the other would simply not meet this standard even if we were to assume arguendo that the theory was viable. Id. at 623-24 (holding that even more severe verbal harassment, including alleged death threats by police officers, did not shock the conscience); see also McConkie v. Nichols, 446 F.3d 258, 261-62 (1st Cir.2006) (surveying cases).
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SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
517
KA 10-00151
PRESENT: CENTRA, J.P., PERADOTTO, CARNI, LINDLEY, AND WHALEN, JJ.
THE PEOPLE OF THE STATE OF NEW YORK, RESPONDENT,
V MEMORANDUM AND ORDER
CHRISTOPHER A. NICHOLSON, ALSO KNOWN AS JOHN DOE,
DEFENDANT-APPELLANT.
(APPEAL NO. 2.)
DAVISON LAW OFFICE PLLC, CANANDAIGUA (MARY P. DAVISON OF COUNSEL), FOR
DEFENDANT-APPELLANT.
CHRISTOPHER A. NICHOLSON, DEFENDANT-APPELLANT PRO SE.
SANDRA DOORLEY, DISTRICT ATTORNEY, ROCHESTER (GEOFFREY KAEUPER OF
COUNSEL), FOR RESPONDENT.
Appeal from a resentence of the Supreme Court, Monroe County
(Francis A. Affronti, J.), rendered November 24, 2009. Defendant was
resentenced upon his conviction of course of sexual conduct against a
child in the first degree.
It is hereby ORDERED that the resentence is modified as a matter
of discretion in the interest of justice and on the law by amending
the order of protection and as modified the resentence is affirmed,
and the matter is remitted to Supreme Court, Monroe County, for
further proceedings in accordance with the same Memorandum as in
People v Nicholson ([appeal No. 1] ___ AD3d ___ [June 20, 2014]).
All concur except CARNI and LINDLEY, JJ., who dissent and vote to
vacate the resentence in the same dissenting Memorandum as in People v
Nicholson ([appeal No. 1] ___ AD3d ___ [June 20, 2014]).
Entered: June 20, 2014 Frances E. Cafarell
Clerk of the Court
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688 F.2d 898
Carl O. AKERMANIS, Plaintiff-Appellee-Cross-Appellant,v.SEA-LAND SERVICE, INC., Defendant-Appellant-Cross-Appellee.
Nos. 1088, 1089, Dockets 81-7833, 81-7873.
United States Court of Appeals,Second Circuit.
Argued May 12, 1982.Decided Sept. 14, 1982.
Joseph T. Stearns, New York City (Sandra R. M. Gluck and Walker & Corsa, New York City, on the brief), for defendant-appellant-cross-appellee.
Steven Thaler, New York City (Markowitz & Glanstein, New York City, on the brief), for plaintiff-appellee-cross-appellant.
Before FEINBERG, Chief Judge, and NEWMAN and WINTER, Circuit Judges.
NEWMAN, Circuit Judge:
1
This appeal concerns primarily the issue, apparently one of first impression in the federal courts, whether a trial judge may use the device of a new trial order conditioned on a remittitur to increase a jury's determination of the percent of responsibility for an injury that is attributable to a plaintiff's contributory negligence. That device was employed in this suit under the Jones Act, 46 U.S.C. § 688 (1976), brought by plaintiff Carl O. Akermanis, an injured seaman, against defendant shipowner Sea-Land Service, Inc. After plaintiff agreed to the remittitur, the District Court for the Southern District of New York (Charles S. Haight, Jr., Judge) entered judgment on November 17, 1981, in favor of the plaintiff. 521 F.Supp. 44. Defendant appeals, contending that it is entitled to an unconditional order for a new trial. Plaintiff cross-appeals, seeking an increased judgment based on the jury's initial determination as to the share of responsibility attributable to his negligence. For reasons that follow, we conclude that a remittitur may not be used to adjust a jury's contributory negligence percentage, and we therefore reverse and remand for further proceedings.
2
In the spring of 1977, Akermanis was a third assistant day engineer aboard Sea-Land's vessel S/S Los Angeles during a voyage from Greece to Rotterdam. One of the plaintiff's duties was to replace deteriorated angle irons on pedestals used to secure the vessel's deck cranes. At trial, Akermanis contended that the defendant's negligence caused him to injure himself while working on these pedestals. Although there was conflicting evidence, Akermanis testified that on June 4, 1977, his superiors instructed him to work on the deck burning off a rusted pedestal bracket, despite rolling seas and a deck slippery from the ocean's spray. According to the plaintiff, as a result of these unsafe working conditions, he lost his balance, hit his head against the pedestal, and hurt his back when his head was snapped backwards as he fell. The accident was said to have severely injured Akermanis' cervical spine and forced his early retirement from the merchant marine.
3
Sea-Land Service contested almost all of Akermanis' allegations. First, Sea-Land claimed that Akermanis' injuries stemmed not from an accident aboard the Los Angeles, but rather from several preexisting ailments. Second, Sea-Land contended that it was in no way to blame for the condition of the Los Angeles on June 4, 1977, that Akermanis had not been ordered to work on the pedestal bracket at any particular time, and that any risks Akermanis faced while working on the deck were inherent in the life of a seaman. In addition, Sea-Land raised the defense of contributory negligence, arguing that, if working on the pedestal was unsafe, Akermanis, who was 59 years old and had 30 years of maritime experience at the time of the accident, should have been able to appreciate the danger and rearrange his schedule to work below deck until the weather cleared. According to the defendant, Akermanis had considerable discretion in scheduling his work. Moreover, counsel for Sea-Land suggested that the alleged accident was more likely the result of Akermanis' carelessness in doing his job than any fault of the defendant. Finally, Sea-Land introduced evidence through a series of expert witnesses that contradicted the testimony of Akermanis' doctors as to the extent and cause of his spinal injuries.
4
In response to a special verdict form, the jury found that Sea-Land was negligent, that its negligence was a proximate cause of Akermanis' June 4, 1977, accident, and that as a result of the accident, Akermanis suffered damages totaling $528,000. The jury further found that Akermanis also was negligent and that the share of responsibility attributable to his negligence was four percent.
5
Following the jury's verdict, Sea-Land moved for judgment notwithstanding the verdict or, in the alternative, for a new trial, pursuant to Fed. R. Civ. P. 50(b). After reviewing the record, Judge Haight concluded that there was sufficient evidence to support the jury's findings that negligence on the part of the defendant caused the plaintiff's injuries. Because it was not " 'clear that the jury had reached a seriously erroneous result,' " Bevevino v. M.S. Saydjari, 574 F.2d 676, 684 (2d Cir. 1978) (quoting 6A Moore's Federal Practice P 59.08(5), at 59-160 to -161 (1973)), the District Court denied defendant's motion for judgment notwithstanding the verdict, see Berner v. British Commonwealth Pacific Airlines, Ltd., 346 F.2d 532, 538 (2d Cir. 1965) (evidence must be viewed most favorably for the defendant on j.n.o.v. motion), cert. denied, 382 U.S. 983, 86 S.Ct. 559, 15 L.Ed.2d 472 (1966), and declined to order a new trial of all the issues.
6
Judge Haight then considered the jury's finding that plaintiff's contributory negligence was a four percent cause of the accident, and concluded that the selection of this percentage was against the weight of the evidence, in his view a "clear and serious error." While he agreed that it was reasonable for the jury to determine that Sea-Land's negligence was the major cause of the accident, he rejected four percent as the measure of plaintiff's share of responsibility. His reasoning is set forth in his memorandum opinion. He first assumed that the jury's finding of plaintiff's contributory negligence was based on their acceptance of defendant's evidence that Akermanis had some discretion to determine when he would work on the ship's pedestals and had exercised that discretion without using reasonable care. Judge Haight then determined that a factor of only four percent for contributory negligence of this sort was against the weight of the evidence and so substantially below jury determinations in similar Jones Act cases as to warrant a new trial. After referring to cases cited at 44A Modern Federal Practice Digest Seamen § 29(4)(H) (West 1968), he concluded that the lowest contributory negligence factor the evidence would support was 25 percent. He therefore ordered a new trial on liability issues, but with the condition that the defendant's motion for new trial would be denied if the plaintiff would accept a "remittitur" of damages based on an increase of the contributory negligence factor from four to 25 percent. The plaintiff accepted, and judgment was entered in favor of the plaintiff for 75% of the jury's determination of the total amount of damages suffered.
I.
7
We consider first Sea-Land's appeal, which challenges the District Court's authority to use the device of a remittitur to adjust the jury's determination of the contributory negligence percentage. Remittitur is a limited exception to the sanctity of jury fact-finding. It allows trial judges to reduce damages, but only when an award is grossly excessive. As the Supreme Court has stated, this exception is justified because, "(w)here the verdict is excessive, the practice of substituting a remission of the excess for a new trial is not without plausible support in the view that what remains is included in the verdict along with the unlawful excess-in that sense that it has been found by the jury-and that the remittitur has the effect of merely lopping off an excrescence," Dimick v. Schiedt, 293 U.S. 474, 486, 55 S.Ct. 296, 301, 79 L.Ed. 603 (1935). But in Dimick, the Supreme Court made clear that remittitur was not an expansive doctrine: "Maintenance of the jury as a fact-finding body is of such importance and occupies so firm a place in our history and jurisprudence that any seeming curtailment of the right to a jury trial should be scrutinized with the utmost care." Id.
8
In giving that scrutiny to the use of remittitur in this case, we note a fundamental difference between the use of remittitur to decrease a determination of damages and its use here to increase a contributory negligence percentage. Though both have the same ultimate consequence of reducing the amount of the judgment that the plaintiff is invited to accept as the price of avoiding a new trial, the means by which the reduction is accomplished differ in a way that is critical to determining the lawfulness of the technique. A conditional reduction of a damage calculation leaves in the judgment a portion of what the jury awarded, a circumstance that the Supreme Court considered crucial to its willingness to permit remittitur while rejecting additur in Dimick. In this case, however, the conditional adjustment of the contributory negligence percentage inserts into the judgment something beyond what the jury found: a conclusion that the plaintiff's negligence was responsible for a greater share of the accident than the jury had thought. In Dimick, the four dissenters thought it was needlessly artificial to deny a trial judge the authority to condition a new trial order on payment of an additur while permitting him to use the device of remittitur. In either circumstance, they argued, the judge is simply conditioning the new trial order on the minimum adjustment necessary to render the verdict within the bounds of reasonableness. But their view did not prevail. We are therefore obliged to apply the rationale of the Dimick majority, which, as we understand it, precludes any adjustment that extends a jury's finding, even if that extension results in a reduced monetary judgment.1
9
We have located only one case in which a trial court attempted to use the remittitur device to adjust a jury's contributory negligence assessment, and that decision did not survive appellate review. In Ferguson v. Chester A. Poling, Inc., 285 N.Y.S. 340, 247 A.D. 727 (2d Dep't 1936) (per curiam), also a Jones Act case, the jury found that the plaintiff had suffered damages of $25,000, and then reduced this sum by $5,000 because the plaintiff's contributory negligence was a 20 percent cause of the accident. The trial court thought the lowest reasonable contributory negligence factor was 60 percent and therefore ordered a new trial unless the plaintiff agreed to a reduction in the judgment from $20,000 to $10,000. The Appellate Division reversed because "the question of apportioning the negligence was peculiarly within the province of the jury." Id. at 341, 247 A.D. at 728. We agree with the New York court that a jury's apportionment of responsibility in a Jones Act case is not subject to adjustment by the device of a remittitur. In Ferguson the Appellate Division ordered judgment upon the jury's fact-finding. Whether that result or a new trial is warranted here requires consideration of plaintiff's cross-appeal.
II.
10
A. In considering the plaintiff's cross-appeal, we face the threshold issue of whether we have appellate jurisdiction. This Circuit has followed the majority rule that a plaintiff who accepts a remittitur may not appeal from a judgment entered upon the reduced award. Donovan v. Penn Shipping Co., 536 F.2d 536 (2d Cir. 1976), aff'd per curiam, 429 U.S. 648, 97 S.Ct. 835, 51 L.Ed.2d 112 (1977); Evans v. Calmar Steamship Co., 534 F.2d 519 (2d Cir. 1976). And we have also dismissed the cross-appeal of a plaintiff who accepted a remittitur, even though we adjudicated the merits of the defendant's appeal from the judgment entered upon the reduced award. Mattox v. News Syndicate Co., 176 F.2d 897, 904 (2d Cir.), cert. denied, 338 U.S. 858, 70 S.Ct. 100, 94 L.Ed. 325 (1949). But see Burris v. American Chicle Co., 120 F.2d 218, 223 (2d Cir. 1941) (questioning appealability but reaching merits of cross-appeal). That rule, whatever its merit, see Donovan v. Penn Shipping Co., supra, 536 F.2d at 538 (Feinberg J. (now C.J.), dissenting); Reinertsen v. George W. Rogers Construction Corp., 519 F.2d 531 (2d Cir. 1975), does not necessarily preclude our exercise of jurisdiction over Akermanis' cross-appeal. The rationale of Donovan v. Penn Shipping Co., supra, appears to be two-fold: waiver and efficiency. The plaintiff who has accepted a remittitur, even if the acceptance was under protest, will not be heard to complain, and allowance of such appeals would add to the burdens of courts.
11
Neither rationale applies here. Now that we have adjudicated Sea-Land's appeal and agreed with appellant that the District Judge lacked the power to condition the new trial order on a remittitur adjusting the contributory negligence percentage, the first step in ordering relief with respect to the appeal is, as Sea-Land requests, to vacate the judgment entered upon the reduced award on the ground that its entry was erroneous. Once we do that, it is conceptually difficult and practically unfair to think of the plaintiff as having waived a cross-appeal by consenting to a judgment that no longer exists. The rationale of court efficiency does not disappear, but it becomes less persuasive. Normally, when an appellate court dismisses the appeal or cross-appeal of a plaintiff who has accepted a remittitur, the burden on the court system is reduced because there will be neither an appeal nor a new trial. That is not true in this case. If we dismiss the cross-appeal and simply return the case to the District Court for a new trial, now that the conditional aspect of the new trial order has been excised, there would clearly be less of a burden on this Court. But that course would add considerably to the burden on the District Court, which would have to conduct a trial that the cross-appellant is prepared now to show us should never have been ordered. What we really face is an issue that has nothing to do with acceptance of a remittitur: whether a cross-appeal will lie as to a non-final order for a new trial when the main appeal from a final judgment has already brought the case to an appellate court.
12
That is similar to the situation that arises under Fed. R. Civ. P. 50(c) when a trial court grants a motion for judgment n.o.v. and also, as required by Rule 50(c), conditionally grants a motion for new trial. Upon appeal of the judgment by the party that wants judgment entered on the verdict, Rule 50(c) provides that if the judgment is reversed, "the new trial shall proceed unless the appellate court has otherwise ordered." This provision, which the Advisory Committee explains was not intended to alter the scope of appellate review, see Fed. R. Civ. P. 50 advisory committee note, contemplates that an appellate court, after vacating the judgment n.o.v., may then review the trial court's ruling conditionally granting a new trial and "otherwise order ( )" that the new trial not be held. The result is review of a new trial order that would not have been appealable, if not accompanied by the granting of a motion for judgment n.o.v., until entry of judgment after retrial. See Taylor v. Washington Terminal Co., 409 F.2d 145 (D.C. Cir.), cert. denied, 396 U.S. 835, 90 S.Ct. 93, 24 L.Ed.2d 85 (1969). Even more analogous is the procedure authorized by Rule 50(d), which applies when appeal is taken by a party whose motion for judgment n.o.v. was denied. If that party prevails on its appeal from the judgment entered upon the verdict, the appellee is entitled to urge the court of appeals to order a new trial, rather than order the entry of judgment n.o.v. See Neely v. Martin K. Eby Construction Co., 386 U.S. 317, 329, 87 S.Ct. 1072, 1080, 18 L.Ed.2d 75 (1967) (making clear that court of appeals can consider the new trial request apart from the authority of Rule 50(d)). Our case is an amalgam of the situations contemplated by Rules 50(c) and 50(d): like the 50(c) appellant, Akermanis wants to be heard in opposition to the trial court's grant of a new trial, but he is not the party who appealed the judgment; like the 50(d) appellee, he is the adversary of the party who appealed the judgment, but he is opposing, rather than supporting, an order for a new trial.
13
The situations contemplated by Rules 50(c) and 50(d) are variations of the general authority of a court of appeals, upon vacating a judgment, to "require such further proceedings to be had as may be just under the circumstances." 28 U.S.C. § 2106 (1976). The circumstances of this case are unusual, to say the least. We need not and do not consider the full range of otherwise interlocutory rulings that an appellee would like to urge an appellate court to consider upon his adversary's successful appeal from a final judgment. But we think it is entirely appropriate to entertain the cross-appeal in this case. Doing so is in keeping with the spirit of Rules 50(c) and 50(d) and, as will be seen in Part II(B), infra, affords us the opportunity to focus the District Court's attention on matters that may obviate the need for a new trial or at least limit its scope. We therefore turn to the cross-appeal.
14
B. In granting the defendant's motion for new trial, Judge Haight reasoned that the jury's finding of contributory negligence was based on a conclusion that Akermanis had the authority to schedule his own work and that he exercised poor judgment by agreeing to work on the Los Angeles' deck on June 4, 1977, when he might have deferred the task to another day.2 If that was the jury's conclusion, then, based on the evidence presented at trial, Judge Haight was acting within his broad discretion in ruling that a finding of only four percent contributory negligence was against the weight of the evidence and that a new trial should be granted.3
15
It is possible, however, that the jury's finding of contributory negligence was not based on a conclusion that Akermanis chose to work on the pedestal that day. The jury might have concluded that Akermanis was directed to work on the pedestal at the time of the accident, but that he was negligent in the manner in which he performed his work. During cross-examination, Akermanis admitted that his own preoccupation with burning the bracket might have contributed to the accident.4 During his summation, counsel for the defendant reviewed the events surrounding Akermanis' accident and suggested to the jury that the accident "was something due to, perhaps, a momentary lapse of carefulness on his part." If the jury was focusing on the plaintiff's manner of working at the time of the accident, it is arguable that they considered Akermanis' work performance to be negligent but that such negligence represented only a slight percentage of the cause of the accident. In his memorandum opinion, Judge Haight gave no explicit consideration to this possible explanation for the jury's contributory negligence factor of four percent.
16
Ordinarily, we might not be so concerned that a trial judge explicitly consider every possible justification for a jury's verdict before concluding that a verdict is against the weight of the evidence and ordering a new trial. But this case arises under the Jones Act, and jury findings under that Act, which incorporates standards of the FELA, are particularly resistant to being overturned. See Morgan v. Consolidated Rail Corp., 509 F.Supp. 281, 285 (S.D.N.Y. 1980). Because we recognize that a trial judge, with a " 'feel' " of the case, Neely v. Martin K. Eby Construction Co., supra, 386 U.S. at 325, 87 S.Ct. at 1078, is normally in the best position to determine whether a verdict is against the weight of the evidence, we prefer to have Judge Haight consider whether the "work performance" theory of contributory negligence finds enough support in the evidence, assessed in the context of the entire trial, to justify the four percent factor. If he concludes it does not, then his order for a new trial will stand. Even if he concludes that the "work performance" theory alone would support a four percent factor, then Judge Haight will have the option of either entering judgment for the plaintiff on the jury's damage computation, reduced by only four percent, or ordering a new trial. This latter option remains a possibility because of an intimation in Judge Haight's opinion that he thinks the jury would have committed serious error if they had not attributed at least part of the responsibility for the accident to Akermanis for continuing to work on deck despite the inclement weather and unsafe conditions. In other words, Judge Haight may find that the "work-performance" theory justifies a four percent factor, but that Akermanis' negligence in continuing to work is so strongly supported by the evidence that a verdict assessing his share of fault at only four percent is against the weight of the evidence, whether or not the jury based its finding of contributory negligence on the "continuing-to-work" theory. In short, the District Judge, upon remand, has discretion whether or not to order a new trial.
17
If the District Court decides that a new trial is necessary to determine the extent of Akermanis' contributory negligence, there will remain a question as to the proper scope of the retrial. Rule 59(a) permits partial retrial of distinct issues, but the trial court must examine whether a jury's award of damages and its finding of liability are sufficiently separate to allow a partial new trial as to liability issues. See Gasoline Products Co. v. Champlin Refining Co., 283 U.S. 494, 500, 51 S.Ct. 513, 515, 75 L.Ed. 1188 (1931) (Partial retrial "may not properly be resorted to unless it clearly appears that the issue to be retried is so distinct and separable from others that a trial of it alone may be had without injustice."). In its memorandum opinion, the District Court indicated that, if a new trial were necessary, it would be limited to questions of liability. Defendant contends that any retrial should include redetermination of damages since the jury might have perceived comparative negligence as closely related to damages and might have allowed its determination of damages to be influenced by its erroneous finding of relative fault.5
18
Courts have been reluctant to hold a new trial on contributory negligence without also retrying damages. See Rivera v. Farrell Lines, Inc., 474 F.2d 255, 259 (2d Cir.) (Jones Act case), cert. denied, 414 U.S. 822, 94 S.Ct. 122, 38 L.Ed.2d 55 (1973); cf. Norfolk Southern Railroad Co. v. Ferebee, 238 U.S. 269, 273, 35 S.Ct. 781, 782, 59 L.Ed. 1303 (1915) (it would rarely be proper to allow a jury to consider a question of damages without also submitting the issue of contributory negligence). But this reluctance has been expressed in cases like Rivera, where the form of the jury verdict left the court "in the dark as to what the total award would have been absent the finding of contributory negligence and the extent to which that finding affected the verdict." Rivera, supra, 474 F.2d at 259. The jury in that case had reported a finding of contributory negligence, but had not been asked to report the percent of responsibility it attributed to plaintiff's contributory negligence. However, when a jury arrives at its decision by detailed special verdicts, enabling a trial or a reviewing court to be reasonably certain that an erroneous verdict was reached independent of another verdict, a partial retrial may be in order. See, e.g., Ferebee, supra.
19
In this case, a new trial, if one is held, need not reconsider damages. Because Judge Haight submitted detailed interrogatories to the jury, following substantially the form suggested in Rivera, supra, 474 F.2d at 259 n. 5, we know the jury's determination of aggregate damages suffered by the plaintiff, as well as their view of how much of a discount should be applied because of contributory negligence. Armed with these specific findings, the District Court acted within its discretion in excluding the issue of damages from retrial. Cf. Landry v. Two R. Drilling Co., 511 F.2d 138, 143 n. 4 (5th Cir. 1975) (court accepted 20% contributory negligence factor from first trial and limited retrial to question of damages). Although it is possible that the jury's special verdicts encompassed some undisclosed compromise, absent obvious inconsistencies we will not presume that the jury's findings represent anything other than good faith responses to the questions presented. As Judge Haight has already determined that the jury's determination of damages is supported by the evidence, we conclude that damages need not be reconsidered at retrial.
20
In his opinion conditionally ordering a new trial, Judge Haight indicated that the defendant is entitled to a new trial "on the question of contributory negligence," but the operative language of his order grants a new trial "on liability issues." The authority provided by Rule 59(a) for a new trial on "part" of the issues has been used by some courts with precision. E.g., Higginbotham v. Ford Motor Co., 540 F.2d 762 (5th Cir. 1976). If Judge Haight determines that a new trial, if held, should be limited to the question of contributory negligence-both its existence and its percentage-he has discretion to narrow the retrial to that extent.6 He might well conclude that since the retrial is occasioned because the first jury assigned too great a share of the blame to the defendant, Akermanis should not have to persuade the second jury that the defendant was negligent simply because he had made that demonstration too convincingly to the first jury.7 On the other hand, the District Judge also has discretion to retry all the liability issues, if he concludes that a trial limited to contributory negligence would not, on balance, be fair to the parties.
21
We have considered the other issues raised by the defendant concerning evidentiary rulings and the instructions to the jury and find them to be without merit. Accordingly, the judgment is reversed, and the case remanded for further consideration consistent with this opinion.
1
It could be argued that the type of remittitur permitted by Judge Haight should be allowed since the increase in the contributory negligence factor can be accomplished only with the consent of the plaintiff, whose share of fault is being enlarged. However, it was equally true in Dimick that the increase in the amount of damages sought to be achieved by the use of additur could have been accomplished only with the consent of the defendant, who would have paid the increase. The Supreme Court's rejection of additur, indeed, its grudging acceptance of remittitur, 293 U.S. at 484, 55 S.Ct. at 300, suggests that jury determinations are not to be enlarged upon, even with the consent of the party thereby disadvantaged
2
As the District Court correctly noted, under the Jones Act, negligence requires more than knowledge of a hazard; it entails failure to adopt safer alternative courses of action. See Tolar v. Kinsman Marine Transit Co., 618 F.2d 1193, 1196 (6th Cir. 1980); Rivera v. Farrell Lines, Ltd., 474 F.2d 255, 257-58 (2d Cir.), cert. denied, 414 U.S. 822, 94 S.Ct. 122, 38 L.Ed.2d 55 (1973). Inquiry at the trial properly centered on what choices were available to Akermanis and how he exercised those choices
3
Indeed, if the jury thought that Akermanis was negligent in electing to do his work at the time of the accident, there is at least a superficial inconsistency with the finding that the defendant was negligent in ordering him to do the work at that time. But inconsistency is not inevitable. The jury may have thought that the defendant had negligently instructed him to work at that time, but not in the form of such an absolute order as to preclude Akermanis from exercising care in deciding whether to do the work or at least whether to call to his superiors' attention the risks of doing the work at that time. In any event, it is a function of the comparative negligence doctrine to permit the jury to reconcile conflicting versions of an episode
4
Akermanis' testimony on cross-examination included the following:
....
Q. Sir, in fact, do you know why your foot came off the pedestal?
A. Because it was wet or the sea-the ship slightly rolling just plain slip.
....
Q. You don't know why?
A. Why? It could be the ship's rolling. I don't know why.
Q. Sir-
A. I was concentrating on my work, right. I was interested to cut off that thing. I didn't watch my foot. The foot was standing there. I slipped while I working and the ship moved, the foot slipped. That's why I say I don't know why (emphasis added).
5
While it is understandable that the defendant would prefer a second opportunity to persuade a jury to return a modest damage award, the logic of the argument is unclear: if the jury had determined the amount of damages in relation to their contributory negligence percentage, the setting of a low percentage would indicate that, if anything, damages had been scaled down from what they might have been had the contributory negligence factor been high. In this circumstance, it would normally be the plaintiff, not the defendant, who might have a claim that damages should be retried in the event of a retrial as to contributory negligence
6
If this procedure were used, the jury would be told that defendant's negligence has already been determined and that their task is only to determine whether the plaintiff was contributorily negligent and, if so, to determine what percentage of responsibility for the accident is attributable to the plaintiff's contributory negligence. The parties would, of course, be entitled to present all evidence relevant to the fault of both parties in order for the jury to make an apportionment of fault
7
In some situations, it might be inappropriate to order such a limited partial new trial. For instance, if in this case the jury's contributory negligence factor had been impermissibly high, then any retrial might have to encompass all aspects of liability: it might be unclear from such a verdict whether the jury really thought the defendant was liable or whether their finding of liability coupled with a high assessment of contributory negligence represented a compromise between factions. Similarly, if in this case the jury's award of damages as well as its assessment of contributory negligence had been low, then it might be necessary to afford the plaintiff the option to retry damages as well as liability: the jury might have discounted the damages to compensate for the plaintiff's contributory negligence
| {
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Slip Op. 19-124
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977 F.2d 581
NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.Johnny L. GARDENHIRE, Plaintiff-Appellant,v.SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant-Appellee.
No. 92-5644.
United States Court of Appeals, Sixth Circuit.
Oct. 15, 1992.
Before RALPH B. GUY, Jr. and BATCHELDER, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.
ORDER
1
Johnny Gardenhire appeals a district court affirming the Secretary's denial of supplemental security income and social security disability benefits. 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 briefs and the record, this panel unanimously agrees that oral argument is not needed. Fed.R.App.P. 34(a). All counsel of record have waived oral argument.
2
Gardenhire filed an application for supplemental security income and social security disability benefits with the Secretary, alleging that he suffered from a neck injury and pain. Following a hearing, the administrative law judge (ALJ) determined that Gardenhire was not disabled because he had the residual functional capacity to perform a significant number of jobs in the economy. The Appeals Council affirmed the ALJ's determination.
3
Gardenhire then filed a complaint seeking a review of the Secretary's decision. The district court held that substantial evidence existed to support the Secretary's decision and granted summary judgment for the Secretary. Gardenhire has filed a timely appeal.
4
Upon review, we determine that substantial evidence exists to support the Secretary's decision. Brainard v. Secretary of Health and Human Services, 889 F.2d 679, 681 (6th Cir.1989) (per curiam).
5
Accordingly, we affirm the district court's judgment for the reasons set forth in the district court's opinion filed on March 3, 1992. Rule 9(b)(3), Rules of the Sixth Circuit.
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322 B.R. 541 (2005)
In re MUMMA SERVICES, INC. (f/k/a) Murphy Marine Services, Inc.), et al., Debtors.
No. 01-926(MFW) to 01-932 (MFW), 01-935(MFW) to 01-950(MFW).
United States Bankruptcy Court, D. Delaware.
March 30, 2005.
*544 Daniel K. Astin, Esquire, The Bayard Firm, Wilmington, DE, Alfred E. Yudes, Jr., Esquire, Watson, Farley & Williams, New York, NY, for the trustee.
Richard Riley, Esquire, Duane Morris LLP, Wilmington, DE, for the Bank Group.
Michael Kaminski, Esquire, DKW Law Group, PC, Pittsburgh, PA, for CSX Intermodal, Inc.
Jami B. Nimeroff, Esquire, Buchanan, Ingersoll, Wilmington, DE, for S.C. Engineering Co., Inc.
Susan E. Kaufman, Esquire, Heiman, Gouge & Kaufman, LLP, Wilmington, DE, for the Unions.
*545 John J. Hession, Esquire, Dogherty, Ryan, Giuggra, Zambito & Hession, New York, NY, for Stewart Dixon.
Paul Matthews, Esquire, New York, NY, for Keenan & Haber.
Charles J. Brown, Esquire, Elzufon, Austin, Reardon, Tarlov & Mondell, PA, Wilmington, DE, for Saravello, Birch, Coney, Casper & Bilbow.
OPINION[1]
MARY F. WALRATH, Chief Judge.
Before the Court is the task of resolving the validity and priority of competing claims to approximately $10 million from the sale of the assets of NPR, Inc. ("NPR"), one of the Debtors in these jointly administered cases. The claims include preferred ship mortgages, seamen's wage claims, penalty wage claims, personal injury claims, an artisan's possessory lien for repairs, an interline constructive trust fund claim, and a claim under section 522(b) to subordinate claims under the "equities of the case" doctrine. After trial and briefing, we determine the priorities of the claims are as set forth in the attached Order.
I. BACKGROUND
On March 21, 2001, Murphy Marine Services, Inc., and certain affiliates including NPR (collectively "the Debtors") filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. The Debtors were in the shipping industry, where they operated maritime facilities and provided integrated cargo transportation and logistics management services.
On April 26, 2002, we authorized the sale of substantially all of the assets of NPR, including certain leases, accounts receivable, and four vessels: the MTV Carolina, M/V Guyama, M/V Humacao and M/V Mayaguez. The assets were sold free and clear of all liens and encumbrances to Sea Star Line, LLC ("Sea Star"). The sale proceeds were used to repay the postpetition financing obligations and related fees owed to Wells Fargo and to satisfy unpaid wages, withholding taxes and other current obligations due to employees. The remaining sale proceeds (which currently total in excess of $10 million) were deposited into segregated accounts pending the Court's determination of the claims and liens thereon.
On July 25, 2002, we granted the U.S. Trustee's Motion to convert the Debtors' cases to chapter 7. Charles A. Stanziale ("the Trustee") was appointed the trustee. Subsequently, a deadline was set for the Trustee and claimants asserting Hens against the NPR sale proceeds to file their claims. A hearing to consider the claims and respective priorities of the liens was held on May 13, 2003. Thereafter, briefs were submitted by the Trustee and some of the claimants. The matter is ripe for decision.
II. JURISDICTION
This Court has jurisdiction over this core proceeding pursuant to 28 U.S.C. §§ 1334 & 157(b)(2)(A), (B), (K) & (O).
III. DISCUSSION
Because the sale proceeds include proceeds from the sale of NPR's vessels,[2] we *546 must determine the priority of claims to those proceeds under maritime law.
A. Maritime Liens Generally
"The federal maritime lien is a unique security device, serving the dual purpose of keeping ships moving in commerce while not allowing them to escape their debts by sailing away. The lien is a special property right in the vessel, arising in favor of the creditor by operation of law as security for a debt or claim." Equilease Corp. v. M/V Sampson, 793 F.2d 598, 602 (5th Cir.1986) (citations omitted). A maritime lien is grounded in "the legal fiction that the ship itself caused the loss and may be called into court to make good." Ventura Packers, Inc. v. F/V JENINE KATHLEEN, 305 F.3d 913, 919 (9th Cir.2002). This "personifies a vessel as an entity with potential liabilities independent and apart from the personal liability of its owner," giving the maritime lien claimant the right to seize the vessel and have it sold to satisfy the debt owed. Equilease, 793 F.2d at 602 (citations omitted). See generally, Robert Force & Martin Norris, 1 The Law of Seamen § 20:3 (5th ed.2004).
When a maritime lien attaches to a vessel, it accompanies the ship everywhere and through all transfers of ownership, even into the hands of a bona fide purchaser without notice, unless the transferee has acquired title through an in rem judicial proceeding that extinguishes the lien. See Michael J. Ende, Adrift on a Sea of Red Ink: the Status of Maritime Liens in Bankruptcy, 11 Fordham Int'l L.J. 573, 588 (1988) (arguing that bankruptcy courts, as courts with in rem jurisdiction over the debtor's assets, should have the power to sell vessels free and clear of maritime liens).
The perfection of a maritime lien does not require that a creditor record his lien, obtain possession of the vessel, or file a claim against the ship. See, e.g., Bermuda Express, N.V. v. M/V Litsa (Ex. Laurie U), 872 F.2d 554, 557-58 (3d Cir.1989). Rather, the lien attaches and is perfected when the underlying debt or claim arises. See, e.g., Equilease, 793 F.2d at 603. For these reasons, maritime liens are often characterized as "secret liens" because third parties may have no notice that they exist. Id. See also, Bermuda Express, 872 F.2d at 558. Although maritime liens were created by common law, they have largely been codified in the Commercial Instruments and Maritime Lien Act ("the Maritime Lien Act"). See 46 U.S.C. §§ 30101-31343 (1989).
A preferred ship mortgage is not a maritime lien created by common law; it is a creature of statute. See, e.g., U.S. v. TRIDENT CRUSADER, 366 F.3d 391, 394 (5th Cir.2004); Long Island Tankers Corp. v. S.S. Kaimana, 265 F.Supp. 723, 725 (N.D.Cal.1967) (preferred ship mortgages were created "to provide for the promotion and maintenance of the American merchant marines... to make private investment and credit in the shipping industry more attractive and also to protect the United States as one of the principal sources of credit for ship financing."). A preferred ship mortgage is not a secret lien and is perfected only when filed in substantial compliance with the requirements of the Maritime Lien Act. 46 U.S.C. § 31322(a)(3)(B). See, e.g., Prudential Ins. Co. of Am. v. S.S. American Lancer, 870 F.2d 867, 874 (2d Cir.1989) (preferred ship mortgage was valid where party attempted *547 in good faith to perform all statutorily required procedures to perfect the mortgage and subsequent lienor had actual knowledge of clerical error).
The Maritime Lien Act provides that when a vessel is sold in an in rem action by order of a court of competent jurisdiction the maritime lien claims attach to the proceeds of the sale in accordance with their priorities. 46 U.S.C. § 31326(a) & (b). This is similar to the sale of property free of liens under section 363 of the Bankruptcy Code. 11 U.S.C. § 363(f). See also, In re Trans World Airlines, Inc., 322 F.3d 283, 290-92 (3d Cir.2003) (holding that section 363(f) permits sale free and clear of interests as well as traditional liens on property, with such claims relegated to the proceeds of sale).
Generally, maritime liens must be satisfied before non-maritime liens. See, e.g., McAllister Towing v. Ambassador Factors (In re Topgallant Lines, Inc.), 154 B.R. 368, 376 (S.D.Ga.1993). Maritime liens are ranked first by class and then by priority within each class. All maritime liens of the same class must be satisfied in full before payment can be made on any lien of a lower class. See, e.g., U.S. v. One (1) 254 Ft. Freighter, the M/V Andoria, 570 F.Supp. 413, 415 (E.D.La.1983) ("If the funds are insufficient to pay the next lower ranked class in full, the available funds will be distributed among claimants in that class according to the rules operating within that class.") Within a class, a maritime lien that arises later in time primes earlier liens. See, e.g., Gowen, Inc. v. F/V Quality One, 244 F.3d 64, 69 (1st Cir.2001) ("among liens of `equal rank,' later liens have priority").
Preferred ship mortgages have priority over all claims against the vessel, except expenses and fees imposed by the court selling the vessel and preferred maritime liens. 46 U.S.C. § 31326(b)(1). A preferred maritime lien is defined as
a maritime lien on a vessel(A) arising before a preferred mortgage was [duly] filed ...; (B) for damage arising out of maritime tort; (C) for wages of a stevedore when employed directly by [an officer or agent of the vessel]; (D) for wages of the crew of the vessel; (E) for general average; or (F) for salvage.
46 U.S.C. § 31301(5)(A)-(F).
B. Priority of Claims in this Case
1. Preferred ship mortgage liens
Wachovia Bank, National Association, as agent for itself, Fleet National Bank, Wilmington Trust Company of Pennsylvania and MBC Leasing Corporation (collectively "the Bank Group") hold first preferred ship mortgages on the NPR vessels. The Trustee has stipulated that the Bank Group claim totals approximately $62 million and concedes the validity of its first preferred ship mortgages on the NPR vessels, as well as its liens on NPR's other assets. None of the other parties asserting claims dispute the existence or amount of the Bank Group's claim.
The Bank Group's claim exceeds the amount of the proceeds from the sale of the NPR assets. Therefore, in order to receive any recovery, the other claimants must establish that their claims rank above those of the Bank Group.
2. Maritime Tort Claims
Several claimants have personal injury claims which they assert are entitled to priority as maritime tort claims. Although we have no jurisdiction to liquidate personal injury claims,[3] the parties ask us to determine only whether their claims are *548 entitled to preferred maritime lien status, ahead of the Bank Group's claims. 46 U.S.C. § 31301(5)(B).
a. Sarvello, Coney, Birch, Casper
On July 2, 2002, Robert Sarvello, Michael Coney, John Birch, and Francis Casper filed a joint notice of maritime liens for personal injuries they allegedly sustained while working on the NPR vessels. Sarvello asserts a claim for injuries sustained aboard the M/V Guyama, where he worked as a longshoreman/lasher, while the vessel was moored to a pier in the Port of Greater Philadelphia. Coney's claim is for injuries sustained while working as a longshoreman aboard the M/V Humacao. Birch and Casper assert claims for injuries sustained while working as longshoremen on the M/V Mayaguez.
These claimants have executed a Stipulation with the Trustee lifting the automatic stay to allow them to liquidate their claims and recover from available insurance proceeds. The Stipulation preserved then* claims against the estate for any portion not covered by insurance. The claimants assert they are entitled to a maritime lien for those claims. The Trustee disputes their status as anything other than unsecured claims. In the notice filed with the Court, Sarvello, Coney, Birch and Casper requested that we order the Trustee to place in escrow funds to satisfy any portion of their claims that applicable insurance policies do not cover, until their claims have been fully liquidated.
Maritime tort claims are entitled to a second priority under the Maritime Lien Act, with priority over preferred ship mortgages such as the Bank Group's. See 46 U.S.C. §§ 31326(b)(1) & 31301(5)(B). See also, Andoria, 570 F.Supp. at 415. Seamen who are injured aboard a vessel may sue the ship owner for negligence under the Jones Act or may pursue a maritime tort claim against the vessel for unseaworthiness. See, e.g., Miles v. Apex Marine Corp., 498 U.S. 19, 29, 111 S.Ct. 317, 112 L.Ed.2d 275 (1990).
However, longshoremen who are injured are precluded from suing a vessel for unseaworthiness. Id. at 28, 111 S.Ct. 317 (citing the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §§ 901-950 ("the LHWCA")). Previously, where an injured longshoreman sued a vessel for unseaworthiness, the owner of the vessel often would seek indemnity from the longshoreman's employer, thereby resulting in the employer paying more than just workers' compensation. As a result, the LHWCA was amended in 1972 to eliminate the longshoreman's right to sue a vessel for unseaworthiness (which has a strict liability standard). To compensate, the LHWCA increased the amount of workers' compensation which is payable to injured longshoremen by their employers and allowed the longshoremen to sue the vessel (or vessel owner) for negligence. See, e.g., Garris v. Norfolk Shipbuilding & Drydock Corp., 210 F.3d 209, 221 (4th Cir.2000); Pittston Stevedoring Corp. v. Dellaventura, 544 F.2d 35, 39-40 (2d Cir.1976); Griffith v. Wheeling Pittsburgh Steel Corp., 521 F.2d 31, 40 (3d Cir.1975).
The LHWCA specifically provides that:
In the event of injury to a person covered under this Act caused by the negligence of a vessel, then such person, or anyone otherwise entitled to recover damages by reason thereof, may bring an action against such vessel as a third party in accordance with the provisions of section 33 of this Act.... The liability of the vessel under this subsection shall not be based upon the warranty of seaworthiness or a breach thereof at the time the injury occurred. The remedy *549 provided in this subsection shall be exclusive of all other remedies against the vessel except remedies available under this Act.
33 U.S.C. § 905(b).
Consequently, we conclude that the longshoremen (to the extent they are successful in establishing a claim for negligence) would have maritime tort claims with priority over the Bank Group's preferred ship mortgages on the relevant vessels. See 46 U.S.C. §§ 31326(b)(1) & 31301(5)(B). See also, Andoria, 570 F.Supp. at 415.
b. Keenan and Haber
Two other claimants, Thomas Keenan and Edward Haber, filed objections to the NPR sale on April 16, 2002. They both, apparently, assert unliquidated personal injury claims. The Trustee's submissions suggested that stipulations for relief from the stay may be filed with respect to them as well; however, no further pleading has been filed.
To the extent that Keenan and Haber are seamen with personal injury claims that arose from injuries sustained onboard any of the NPR vessels, they would be entitled to maritime tort claims with priority over the Bank Group's claims. Id.
c. Bilboiv
On July 2, 2002, Matthew Bilbow filed a notice of maritime lien for personal injuries he allegedly sustained at the Packer Avenue Terminal when he was struck by a motor vehicle operated by an employee of the M/V Humacao. Bilbow asserts that the employee was acting within the scope of on-board employment and, therefore, asserts he has a maritime tort claim. The Trustee stipulated to limited relief from the automatic stay to allow Bilbow to serve his Complaint; however, the Trustee denies that Bilbow has a maritime lien on the NPR sale proceeds.
After considering Bilbow's arguments, we agree with the Trustee's contention that Bilbow does not have a valid maritime tort claim which would be a lien on the sale proceeds from the MTV Humacao. Although Bilbow was employed by the Debtors as a crane operator at the Packer Avenue Terminal, he was injured by a private motor vehicle operated by one of the Debtor's other employees. No vessel was in any way connected with the injury.
Bilbow argues nonetheless that there is support for his position that land-based injuries can give rise to personal injury maritime liens. See, e.g., Hopson v. Texaco, Inc., 383 U.S. 262, 86 S.Ct. 765, 15 L.Ed.2d 740 (1966); Reed v. S.S. Yaka, 373 U.S. 410, 83 S.Ct. 1349, 10 L.Ed.2d 448 (1963); Gutierrez v. Waterman S.S. Corp., 373 U.S. 206, 83 S.Ct. 1185,10 L.Ed.2d 297 (1963); Boudoin v. Lykes Bros., S.S. Co., Inc., 348 U.S. 336, 75 S.Ct. 382, 99 L.Ed. 354 (1955). The cases cited are, however, distinguishable and, in some instances, no longer good law.
The Reed and Gutierrez cases did conclude that longshoremen may assert a maritime tort claim based on the unseaworthiness of a vessel if they were injured by the actions of the vessel or her crew. 373 U.S. at 414-15, 83 S.Ct. 1349, 373 U.S. at 210, 83 S.Ct. 1185. However, it appears that those cases are no longer valid precedent since longshoremen are now precluded from suing a vessel for unseaworthiness and are, instead, limited to claims for workers' compensation or negligence. See Apex Marine Corp., 498 U.S. at 28, 111 S.Ct. 317; 33 U.S.C. §§ 901-950.
Further, comparing the instant facts with the facts of those cases show further *550 dissimilarities. In Gutierrez, a longshoreman was injured on land while unloading a vessel's cargo when he slipped on beans which had spilled from the cargo onto the dock. 373 U.S. at 207, 83 S.Ct. 1185. The Supreme Court ruled that the plaintiff could bring a maritime tort claim based on the unseaworthiness of the vessel even though he was injured on land. Id. at 210, 83 S.Ct. 1185. The Court limited its ruling by stating that the "case is within the maritime jurisdiction ... when, as here, it is alleged that the shipowner commits a tort while or before the ship is being unloaded, and the impact of which is felt ashore at a time and place not remote from the wrongful act." Id. The instant case does not fit that description. Bilbow was not injured by the M/V Humacao, its cargo, or anyone in the act of loading or unloading the cargo. Therefore, he has no in rem claim against the vessel.
The Hopson case also does not support Bilbow's cause. In Hopson, the Supreme Court ruled that a claim could be made under the Jones Act for death and injury incurred when a taxi carrying two sick seamen collided with a truck en route to the U.S. Consul's office. The Hopson Court held that, because there was a statutory duty to deliver the seamen to the U.S. Consul, the seamen were still in the service of the vessel when they were injured. 383 U.S. at 264-65, 86 S.Ct. 765. In this case, Bilbow was not a seaman in service to any vessel and therefore his injuries on land (which were not caused by any action of the vessel or its unloading) cannot be considered a maritime tort claim.
The Boudoin and Reed cases are similarly inapposite as they involved claims of seamen for injuries caused by the vessel's unseaworthiness. Because Bilbow is a longshoreman he is precluded from bringing any claim for unseaworthiness. 33 U.S.C. § 905(b).
Therefore, we conclude that Bilbow's claim for personal injuries is not entitled to priority as a maritime tort claim or to a lien against the proceeds of sale of the vessel.
d. Dixon
Stewart Dixon asserts a maritime tort claim for injuries sustained while acting as a seaman on the M/V Carolina. By Order dated March 12, 2003, we disallowed Dixon's claim because he had failed to file a timely proof of claim.[4] We held that Rule 3002(c) of the Federal Rules of Bankruptcy Procedure precluded us from enlarging the time to file proofs of claim in this chapter 7 case. However, we lifted the automatic stay to allow Dixon to prosecute his action in New York.
Dixon now requests that we reconsider the disallowance of his claim for several reasons. First, he argues that Rule 3002(c) would allow the Court to extend the time for filing a proof of claim for an infant or an incompetent person in the interests of justice if it would not unduly delay the administration of the estate. Fed. R. Bankr.P. 3002(c)(2). Since Dixon is a Jones Act seaman, he is a ward of the Court similar, he argues, to an infant or orphan. See, e.g., The Governor & Co. of the Bank of Scotland v. Sabay, 211 F.3d 261, 265-66 (5th Cir.2000) ("no authority really need be cited for the fact that seamen, the `wards of admiralty,' historically have received favored treatment from the Congress and the admiralty courts.") (citations omitted).
We will grant Dixon's request that we reconsider our earlier decision and will *551 allow Dixon's maritime tort claim against the sale proceeds of the M/V Carolina. See, e.g., 11 U.S.C. § 5020) ("a claim that has been ... disallowed may be reconsidered for cause ... [and] may be allowed... according to the equities of the case.").
Our reasoning, however, is somewhat different from that argued by Dixon. We reconsider our decision because a maritime tort claim is a secured claim. A secured claimant is not required to file a proof of claim in a bankruptcy case because, unless the lien is avoided, it passes through bankruptcy unaffected. See, e.g., Dewsnup v. Timm, 502 U.S. 410, 417, 112 S.Ct. 773, 116 L.Ed.2d 903 (1992) (stating that the Court was "not convinced that Congress intended to depart from the pre-Code rule that liens pass through bankruptcy unaffected."); Johnson v. Home State Bank, 501 U.S. 78, 84, 111 S.Ct. 2150, 115 L.Ed.2d 66 (1991) (holding that "a bankruptcy discharge extinguishes only one mode of enforcing a claimnamely, an action against the debtor in personam while leaving intact anothernamely, an action against the debtor in rem."); United Presidential Life Ins. Co. v. Barker, 31 B.R. 145, 148 (N.D.Tex.1983) (finding that valid liens which have not been disallowed or avoided survive bankruptcy discharge); Penco Corp. v. Andrews (In re Andrews), 22 B.R. 623, 625-26 (Bankr.D.Del.1982) (holding that debtors' failure to act timely to avoid lien resulted in lien surviving bankruptcy discharge). Cf. In re Penrod, 50 F.3d 459, 462-63 (7th Cir.1995) (concluding that chapter 11 plan of reorganization can modify lien, force holder to accept indubitable equivalent, or even extinguish lien).
Section 506(d) of the Bankruptcy Code specifically provides that:
To the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such claim is void, unless
(2) such claim is not an allowed secured claim due only to the failure of any entity to file a proof of such claim under section 501 of this title.
11 U.S.C. § 506(d). In addition, section 522(c) provides that:
property exempted under this section is not liable during or after the case for any debt of the debtor that arose ... before the commencement of the case, except
. . . . .
(2) a debt that is secured by a lien that is ... not avoided under [applicable provisions of the Bankruptcy Code].
11 U.S.C. § 522(c).
Because Dixon's asserted maritime tort claim for personal injury against the M/V Humacao is a preferred maritime lien, that lien was not affected simply because Dixon failed to file a timely proof of claim. Consequently, Dixon's maritime tort claim stands on equal footing with the other maritime tort claims. To the extent that his claim is ultimately proven and liquidated, it has priority over the Bank Group's preferred ship mortgage. See 46 U.S.C. §§ 31326(b)(1) & 3130K5XB). See also, Andoria, 570 F.Supp. at 415.
In addition, Dixon argues that, while we granted him relief from the stay with permission to proceed against insurance proceeds, the terms of the insurance policies make it impossible for him to obtain any recovery. The insurance policies are marine protection and indemnity policies which require that the Debtor actually pay the insured claims before the insurer is required to reimburse the Debtor. Thus, Dixon asserts that unless we order the estate to pay his claim, he cannot recover under the insurance policies.
*552 There is authority, however, that would preclude the insurance carriers from requiring the estate to pay the claimants before they can recover from the insurance carriers. See, e.g., Home Ins. Co. of III., v. Hooper, 294 Ill.App.3d 626, 632, 229 Ill. Dec. 129, 691 N.E.2d 65 (Ill.App.Ct.1998) (holding that insurance policy provision which required actual payment of self-insured retention by insolvent insured before insurance carrier was obligated to pay damages violated public policy). However, the Trustee has stipulated with other personal injury claimants that he will pay the claims simultaneously with the payment to him from the insurance carriers. (See Stipulation dated May 8, 2003, at paragraph 4.) Consequently, we will require that the Trustee do the same with respect to Dixon's claim. There is no prejudice to the estate (or to the other claimants' position in the proceeds) by this procedure because the Trustee will be able to recover the insurance proceeds (less the deductibles) and distribute them to the other claimants with maritime liens on the sale proceeds.
3. Seaman's Wages
No individual seaman has filed a claim for unpaid wages.[5] However, the Marine Engineers Beneficial Association, AFCIO ("MEBA") and the American Radio Association ("ARA") (collectively "the Unions") ask this Court to recognize their claims (in excess of $13 million) for dismissal compensation for their members as a maritime lien for seamen's wages.
The Unions represented workers on three of the four NPR vessels, the M/V Humacao, M/V Guyama and M/V Mayaguez. They claim that these workers are due dismissal wages pursuant to their collective bargaining agreements, which provide, in relevant part:
(e)(1) In order to preserve the jobs of the Company's [workers] covered by the Agreement, the Company agrees that should any vessel ... be sold or transferred... to another entity (excluding the Federal Government) for operation under U.S. Flag ... the vessel shall be sold or transferred with the full complement of [workers] last employed on said vessel ....
(2) In order to protect and maintain the wages, pension rights, other economic benefits and conditions of such [workers], and to prevent their immediate discharge by the buyer or transferee thereby frustrating the preservation of their job rights, the Company ... will obtain from the purchaser or transferee a written agreement providing:
(a) that the purchaser or transferee shall immediately upon sale or transfer employ the [workers] last employed on said vessel, and thereafter shall not terminate such [workers] without just cause; and
(b) that for the life of the vessel the purchaser or transferee will provide such [workers] with wages, pension benefits, and other economic benefits and conditions ... at least equal to that which would have been enjoyed had such [workers] continued employment on the vessel by the Company.
. . . . .
(g)(2) In the event that the Company fails to secure the written agreement required by subsections (e) or (f) above, *553 the Company shall be liable to the [Union] in the sum certain amount equal to the total employment costs of a full complement of [workers] on each involved vessel for a period of three years. Such sum shall be distributed by the [Union] to the [workers] injured by the Company's breach and shall not be reduced by the interim earnings of such [workers] or for any other reason.
(MEBA Exh. 1 at § 41. See also MEBA Exh. 2, 6, & 7.)
The Unions assert maritime lien status for the dismissal wages due under the agreements. See, e.g., Gayner v. The New Orleans, 54 F.Supp. 25, 27-28 (N.D.Cal. 1944) (recognizing maritime lien status for dismissal wages due for loss of expectation of future employment). Both the Trustee and the Bank Group dispute the maritime lien status of the Unions' claims. See, e.g., Sabay, 211 F.3d at 275-76 (holding that penalty wages are due from the vessel owner, not the vessel, and therefore are not maritime lien claims entitled to priority over preferred ship mortgage).
We conclude that the Unions' claims are not entitled to preferred maritime lien status as seaman's wages. First, the Unions have no claim for dismissal wages under their Agreements because, after the vessels were sold, Sea Star continued to employ all Union workers (the engineers and the radioman) then serving on the vessels. (Transcript at 64, 113.) Sea Star later scrapped the MTV Humacao and the M/V Guyama in the Far East and sold the M/V Mayaguez to CSX Lines (which is now known as Horizon Lines). Horizon continued to employ these same workers under the collective bargaining agreement it had with the Unions.
The Unions argue, nonetheless, that dismissal wages are due because NPR breached the Agreements by not getting Sea Star to guarantee in writing the workers' employment for the life of the vessels. While this may be a technical breach of the Agreements, the workers have suffered no damages as a result of that breach. Sea Star did, in fact, continue to employ them until the vessels were scrapped and their maritime lives ended or until the vessel was sold again. In the latter case, although Sea Star also did not get the written commitment of Horizon to employ the crew represented by the Unions, Horizon did in fact continue to employ the crew under its own collective bargaining agreement with the Unions. Therefore, we conclude that the seamen have suffered no injuries for which dismissal wages would be due.
Further, even if the crew members had not continued to be employed on those vessels, we would conclude that the Unions' claims are not entitled to preferred maritime lien status. To qualify as a preferred maritime lien for seaman's wages, the claim must be for wages due to a specific seaman for services rendered on a specific vessel. See, e.g., Citibank, N.A. v. The Vessel American Maine, 865 F.2d 24, 27 (2d Cir.1988) ("The hallmark of a wage lien is that the wage owed to a seaman has accrued by virtue of his service to a particular ship."); Bender Welding & Mack Co., Inc. v. M/V Sovereign Opal, 415 F.Supp. 772, 774 (S.D.Ala.1976) (calculating maritime lien wages based on the amount of time individual seamen had served on the vessels and allowed them directly to those seamen); Gayner, 54 F.Supp. at 26, 29 (noting that claims were asserted by seamen directly and concluding that trial must be held on question of what services were rendered to vessel for which dismissal wages were due).
The collective bargaining agreements in this case state that dismissal wages are to be paid to the Unions, not to the individual *554 workers. The Unions argue that the agreements also require that the funds received be distributed by the Unions to the seamen "injured by the Company's breach" and, therefore, the funds at issue really are wages due to the seamen.
However, the claims asserted represent not specific wages, but instead is the hypothetical cost to the vessels to operate for three years in the future. Unlike the Gayner case, on which the Unions rely, the dismissal wages here are not calculated by the length of time that any individual seaman served on the vessels. 54 F.Supp. at 26.
In addition, there is no specific seaman identified as being entitled to any specific wages. Although the Unions did provide a list of the Union members who were the last to serve on the vessels before the sale (MEBA Exh. 4), they conceded that those seamen were not necessarily the ones entitled to be paid. (Transcript at 68-69.) The crew were assigned to the vessels under the Unions' procedures. Although some crew members were "permanent," they did not serve the vessels for the entire year but rather shared the service with others. (Id. at 48, 58-60, 87, 121-22.) Non-permanent positions were supplied from the union hall on a rotating basis among its members. (Id. at 60.) Therefore, the Unions' representatives were unable to identify how much, if anything, any specific seaman would be paid. Thus, the Unions' claims do not qualify as a preferred maritime lien for seaman's wages.
Further, almost $7 million of the Unions' claims do not represent wages, but Union benefits. (MEBA Exh. 5 & 10.) Courts have consistently refused to grant preferred maritime lien status to contributions due to unions and their benefit funds, even though they are based on services performed by seamen and even though seamen may be beneficiaries of those funds. See, e.g., American Maine, 865 F.2d at 27-28 (holding that MEBA union trust fund benefits are not wages entitled to preferred maritime lien status); West Winds, Inc. v. M.V. Resolute, 720 F.2d 1097, 1099-1100 (9th Cir.1983) (finding that contributions to union benefit funds were not wages entitled to maritime lien status); Long Island Tankers, 265 F.Supp. at 727 (holding that claims of union trusts for vacation, pension and welfare benefits were not preferred maritime liens for seamen's wages).
Therefore, we find that the Unions have not demonstrated that their claim for dismissal wages are seamen's wages that are entitled to preferred maritime lien status. Consequently, their claim is subordinate to the Bank Group's preferred ship mortgages. Since the sale proceeds fall short of satisfying the mortgages in full, the Unions cannot recover from the proceeds of the sale of the NPR vessels.
4. Necessaries
S.C. Engineering ("SC") alleged a maritime lien for necessaries against the M/V Mayaguez totaling $67,759 for equipment repairs. In response to the Trustee's objections, SC has reduced its claim for necessaries to $30,688 for repairs to equipment from the M/V Mayaguez alone.[6] At the hearing, SC advised that it was still in possession of the equipment because it could not be determined if that equipment had been sold to Sea Star. It was agreed that the parties would review the asset purchase agreement to answer that question. Apparently, SC now concedes that *555 the equipment was sold because it has turned over the equipment to Sea Star's assignee, Horizon, and seeks only a claim against the proceeds of the sale to Sea Star.
SC asserts a claim for necessaries for the repairs to the equipment. See, e.g., 46 U.S.C. § 31301(4) ("'necessaries' includes repairs, supplies, towage, and the use of a dry dock or marine railway"); Equilease, 793 F.2d at 603 ("The term `necessary' under the [statute] includes most goods or services that are useful to the vessel, keep her out of danger, and enable her to perform her particular function. Necessaries are the things that a prudent owner would provide to enable a ship to perform well the functions for which she has been engaged.") (citation omitted).
Even though SC may have a claim for necessaries for its repair of equipment from the M/V Mayaguez, that does not result in it being entitled to payment ahead of the Bank Group. Claims for necessaries do not rank ahead of preferred ship mortgages. 46 U.S.C. § 31326. See also, Andoria, 570 F.Supp. at 415 (holding that, traditionally, liens for necessaries have had maritime lien status that ranks below preferred ship mortgages). No claims for necessaries will be paid from the proceeds of the vessels because the Bank Group's preferred ship mortgages are superior and will consume all the proceeds.
The vast majority of the other claims filed are also for maritime liens for "necessaries" supplied to the NPR vessels. Because there will be no funds left after payment on the preferred ship mortgages, we need not address those claims.
C. Non-maritime Claims
Several claimants assert claims against the proceeds of the sale of NPR's assets (other than the vessels) under non-maritime theories as well.
1. The Bank Group
The Bank Group asserts a blanket security interest in all the assets of NPR, including the accounts receivable, leases and miscellaneous other assets. As noted, the Trustee concedes the validity and perfection of its liens. Other claimants assert, nonetheless, that their non-maritime claims should prime the Bank Group's claim.
2. S.C. Engineering
The Bank Group anticipated that SC might assert a common law artisan's lien on the equipment it repaired. The Bank Group argues, however, that any such claim would also be subordinate to its preferred ship mortgages.
A common law possessory lien attaches to equipment which is repaired by the claimant and still in its possession. See, e.g., Beck v. Nutrodynamics, Inc., 77 N.J.Super. 448, 186 A.2d 715, 716 (Essex County Ct.1962) ("a workman who by his skill and labor has enhanced the value of a chattel... has a lien on the chattel for his reasonable charge.") (quoting OBrien v. Buxton, 9 N.J. Misc. 876, 156 A. 17, 18 (Monmouth County Ct.1931)).
Even if SC had a valid possessory lien against the equipment, however, we conclude that it still could not recover funds in satisfaction thereof. The Bank Group's preferred ship mortgage against the vessel specifically encumbers the pump and motor assembly. (See Wachovia Exh. 7 at 2.) Consequently, the Bank Group's preferred ship mortgage against the M/V Mayaguez is superior to any common law possessory lien against the equipment which SC might have. See, e.g., Gary Aircraft Corp. v. General Dynamics Corp., 681 F.2d 365, 372 (5th Cir.1982) ("The preferred mortgage prevails over common law possessory *556 liens, such as a mechanic's lien.") (citations omitted).
3. CSX
CSX Intermodal, Inc., and CSX Transportation Inc. (collectively "CSX") assert that the Debtors hold approximately $800,000 of proceeds from the sale of NPR's accounts receivable which should be paid to them. CSX alleges that these funds are payment by NPR customers for shipments handled by CSX.
Pre-petition, NPR and CSX executed an Intermodal Transportation Agreement ("the Agreement"). Pursuant to the Agreement, NPR provided ocean carriage of cargo for its customers in conjunction with CSX which provided inland transportation. NPR transmitted shipping instructions electronically to CSX. NPR would transport the cargo to the port in Jacksonville, Florida, and CSX would pick it up and move it to the final destination over CSX or another railroad's lines. In the latter case, CSX would arrange for the transport and pay the other railroad from its own funds. NPR would later pay CSX for all railroad costs (whether shipped on CSX lines or other railroads' lines). CSX provided NPR with weekly summary paper bills, which were always reconciled and paid within 25 days.
a. Constructive trust
CSX asserts that they have a constructive trust claim on the accounts receivable of NPR representing payments for the cargo they shipped, based primarily on the interline lien doctrine. That doctrine provides that where goods are shipped in interstate commerce via several carriers, the carrier which collects payment from the customer (typically the originating or destination carrier) holds the payment in trust for all the other carriers involved in the transport. See, e.g., In re Penn Central Transp. Co., 486 F.2d 519, 533 (3d Cir.1973). See also, Parker Motor Freight, Inc. v. Fifth Third Bank, 116 F.3d 1137, 1142 (6th Cir.1997) (applying interline trust doctrine to motor carriers); The Official Comm. of Unsecured Creditors v. Columbia Gas Systems, Inc. (In re Columbia Gas Systems, Inc.), 997 F.2d 1039, 1066-67 (3d Cir.1993) (applying interline trust doctrine to natural gas pipeline providers). Consequently, CSX argues that the accounts receivable are not property of the Debtors' estate to which the lien of the Bank Group could attach.
The Trustee and the Bank Group disagree. They argue that the requirements necessary for the Court to construe a trust on the sale proceeds have not been satisfied. They contend further that, even if CSX could demonstrate that the conditions for a constructive trust have been met, CSX still could not receive the funds it seeks because it has failed to identify and trace them.
In Penn Central, the Court found that the carriers had manifested an intent to designate their relationship as one of trustee-beneficiary. 486 F.2d at 524. However, where parties have not expressly designated a trust, the Court identified six factors relevant to determine whether a constructive trust exists (as opposed to a debtor-creditor relationship). While no single factor is determinative, a trust is imposed if, in the aggregate, the following factors predominate: (1) there is no provision for payment of interest by the collecting carrier; (2) the collecting carrier does not commingle monies due to the other carrier with its general funds; (3) the carriers agree to apportion payments collected; (4) the amount the collecting carrier owes the other carrier directly relates to and depends upon the overall charge to the customer; (5) the collecting carrier *557 must pay the other carrier only if the customer has paid it; and (6) the collecting carrier must pay the other carrier immediately upon settlement of the account, so that there is no "credit accommodation" for untimely payments. Id. at 524-27.
In the instant case, there was no requirement that NPR pay interest to CSX on the monies collected from customers on their behalfeither under the Agreement or by custom. This is indicative of a trust relationship.
Second, NPR did not earmark monies due to CSX, but rather commingled all collected revenues into a general fund from which it paid CSX and others. Mr. Crawford from CSX admitted as much, testifying that NPR "was our customer... [and] we issued a freight bill to them and they paid us out of their funds." (Transcript at 161.) This suggests a debtor-creditor relationship, rather than a trust.
Third, there was no arrangement between NPR and CSX to apportion payments collected from the customers. Mr. Crawford conceded that the Agreement did not require that NPR collect money from its customers and apportion it between CSX and NPR for their services. (Transcript at 167.) This does not satisfy a crucial element for imposing a trust and instead suggests a debtor-creditor relationship.
Fourth, the amount NPR owed CSX did not relate to, or depend on, the overall charge to the customer. In fact, the Agreement fixed the rate CSX charged NPR, independent of any charges paid by the customer. (Agreement at § 5.1.) Under cross-examination, Mr. Crawford conceded that the rates CSX charged NPR were based on volume rather than the rates NPR charged its customers. (Id. at § 6.1; Transcript at 167.) This implies a debtor-creditor relationship.
Fifth, NPR was liable to CSX even if the customer did not pay. Although the Agreement authorized CSX to collect directly from delinquent customers that had not paid NPR for services provided by CSX, that did "not, in any way, discharge or modify [NPR]'s obligations" thereunder. (Agreement at § 8.3.) Thus, the written agreement between the parties evidences a debtor-creditor relationship.
Sixth, the Agreement called for NPR to pay CSX within 15 days from the invoice date and refers to these payments due as an "extension of terms/credit." (Id. at § 8.1.) Moreover, the Agreement requires that NPR "remain in good credit standing as determined by [CSX], throughout the term of this Agreement." (Id. at § 7.) This evidences a debtor-creditor relationship between the parties.
Therefore, applying the Penn Central factors, we conclude that the relationship between NPR and CSX was one of debtorcreditor, not one of trustee-beneficiary.
b. Equities of the Case Doctrine
CSX requests, in the alternative, that we find under the "equities of the case" that the Bank Group's pre-petition secured claims should not be allowed to attach to receivables created post-petition through the efforts of CSX. CSX asserts that the services they provided to NPR post-petition created the value that allowed the sale proceeds to exceed the amount of Wells Fargo's DIP loan, thus leaving money for further distribution to creditors. Consequently, CSX argues they should be reimbursed before the pre-petition claims of the Bank Group are satisfied.
CSX relies on several cases which interpret section 552(b)(1) of the Bankruptcy Code. That section provides: *558 Except as provided in sections 363, 506(c), 522, 544, 545, 547, and 548 of this title, if the debtor and an entity entered into a security agreement before the commencement of the case and if the security interest created by such security agreement extends to property of the debtor acquired before the commencement of the case and to proceeds, product, offspring, or profits of such property, then such security interest extends to such proceeds, product, offspring, or profits acquired by the estate after the commencement of the case to the extent provided by such security agreement and by applicable nonbankruptcy law, except to any extent that the court, after notice and a hearing and based on the equities of the case, orders otherwise.
11 U.S.C. § 552(b)(1) (emphasis added). See e.g., United Va. Bank v. Slab Fork Coal Co., 784 F.2d 1188, 1191 (4th Cir. 1986) (holding that equities of the case may allow bankruptcy court to cut off prepetition security interest in post-petition proceeds); In re Patio & Porch Systems, Inc., 194 B.R. 569, 575 (Bankr.D.Md.1996) ("This `equities of the case' provision is intended to prevent secured creditors from receiving windfalls and to allow bankruptcy courts broad discretion in balancing the interests of secured creditors against the general policy of the Bankruptcy Code, which favors giving debtors a `fresh start.'"); In re Photo Promotion Assocs., Inc., 61 B.R. 936, 940 (Bankr.S.D.N.Y. 1986) ("The equities in this case reveal that the postpetition proceeds from the processed portraits should not be turned over to [the bank] and should remain property of the estate for all the unsecured creditors."); In re Crouch, 51 B.R. 331, 332 (Bankr.D.Or.1985) ("The purpose behind the `equities of the case' rule ... is, in a proper case, to enable those who contribute to the production of proceeds during chapter 11 to share jointly with pre-petition creditors secured by proceeds.").
The Bank Group and the Trustee disagree with the position taken by CSX. They deny that the equities of this case warrant changing the rule established by section 552(b)(1) that the Bank Group's liens will extend to post-petition proceeds. The Bank Group asserts that "Courts generally limit the application of this exception to Chapter 11 cases in which evidence establishes that the lender is over secured, and will obtain a windfall `from collateral that has appreciated in value as a result of the trustee's/debtor-in-possession's use of other assets of the estate (which normally would go to general creditors) to cause the appreciated value'." In re Tower Air, Inc., 2002 Bankr.LEXIS 102 at *11 (Bankr.D.Del. Feb. 11, 2002) (quoting Delbridge v. Prod. Credit Ass'n, 104 B.R. 824, 826 (E.D.Mich.1989)). In this case, the Bank Group asserts it is not over-secured and there is no evidence that the Trustee used other assets of the estate which would have gone to administrative claimants like CSX to increase the value of the Bank Group's collateral. To the contrary, the Debtors and Trustee in this case used cash collateral of the Bank Group to pay, inter alia, CSX. The Bank Group notes, in particular, that CSX received $1 million post-petition on account of their pre-petition claims as critical vendors of the Debtors. Thus, the Bank Group asserts there is nothing in the equities of this case which would warrant ignoring the mandate of section 552(b)(1) that it be paid the proceeds of its collateral.
We agree with the contention of the Bank Group. This is not the type of case which warrants application of the "equities of the case doctrine." As the Delbridge Court noted:
The purpose of the equity exception is to prevent a secured creditor from reaping *559 benefits from collateral that has appreciated in value as a result of the trustee's/debtor-in-possession's use of other assets of the estate (which normally would go to general creditors) to cause the appreciated value. S.Rep. No. 989, 95th Cong., 2d Sess. 91, reprinted in 1978 U.S.Code Cong. & Admin. News 5787, 5877. For example, if a creditor had a security interest in raw materials worth one million dollars and the debtor invested $100,000 from the general estate funds to convert those materials into a manufactured good worth 1.5 million dollars, it may be inequitable to let the secured creditor benefit from the entire proceeds of the sale, since the general creditors contributed to the appreciated value.
104 B.R. at 826.
In this case, neither the Debtors nor the Trustee invested any unencumbered funds available to the general unsecured creditors to enhance the value of the assets which were sold to Sea Star. On the contrary, since all assets were the security of the Bank Group, it was only through the use of the Bank Group's cash collateral (and the financing provided by Wells Fargo) that the estate was able to continue to operate and maintain the value of the assets. Wells Fargo has been paid from the proceeds of the NPR sale. The equities of this case do not support further eroding the Bank Group's collateral position under section 552(b)(1).
The cases cited by CSX are distinguishable from this case. In two of the cases, while acknowledging the equities of the ease doctrine, the courts deferred deciding the issue until a factual presentation could be made. Slab Fork, 784 F.2d at 1191 (remanding for consideration by bankruptcy court); Patio & Porch, 194 B.R. at 575 (scheduling evidentiary hearing to consider evidence of identification of proceeds of security interest and equities of the case). In Photo Promotion, the trustee had borrowed additional funds in order to complete the work in process that constituted the collateral of the pre-petition lender. 61 B.R. at 939. The Photo Promotion Court concluded that, in the absence of completion, the collateral had minimal value. Id.
In Crouch, the Court articulated a test to determine whether creditors of the estate who provided services post-petition would be entitled to share in the proceeds of a secured creditor's collateral. 51 B.R. at 333. In doing so, it considered those creditors who would have a section 506(c) claim against the collateral for preserving it. Id. at 332. However, since the ruling in Crouch, the Supreme Court has determined that creditors do not have standing under section 506(c) to assert a claim for preserving a secured creditor's collateral. Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A., 530 U.S. 1, 14, 120 S.Ct. 1942, 147 L.Ed.2d 1 (2000) ("We conclude that 11 U.S.C. § 506(c) does not provide an administrative claimant an independent right to use the section to seek payment of its claim."). In this case, the Trustee has already waived any section 506(c) claims which the estate may have against the Bank Group.
Consequently, we conclude that CSX has failed to establish that the "equities of the case" warrant subordination of the Bank Group's preferred ship mortgages to CSX's claims.
IV. CONCLUSION
Therefore, based upon the foregoing, we conclude that only the personal injury claimants with maritime tort claims have priority over the Bank Group's preferred ship mortgages. The claims of MEBA, ARA, SC, CSX, and all the other claims *560 for "necessaries" are not entitled to priority over the Bank Group's claims.
An appropriate Order is attached.
ORDER
AND NOW, this 30th day of MARCH, 2005, upon consideration of the claims and liens asserted against the proceeds of the sale of the NPR assets, and for the reasons set forth in the attached Opinion, it is hereby
ORDERED that the proceeds of the NPR vessels shall be disbursed as follows:
First, to any allowed personal injury claims of Sarvello, Coney, Birch, Casper arising from the negligence of the NPR vessels and to any allowed personal injury claims Keenan, Haber and Dixon arising from their service as seamen on the NPR vessels to the extent not otherwise covered by insurance; and
Second, to the Bank Group on account of its preferred ship mortgages; and it is further
ORDERED that the proceeds of the non-maritime assets of NPR shall be disbursed to the Bank Group on account of its security interest therein; and it is further
ORDERED that all other claims to the proceeds are hereby DISALLOWED.
NOTES
[1] This Opinion constitutes the findings of fact and conclusions of law of the Court pursuant to Federal Rule of Bankruptcy Procedure 7052, which is made applicable to contested matters by Federal Rule of Bankruptcy Procedure 9014.
[2] The Trustee presented evidence that the portion of the purchase price attributable to the vessels is approximately $6.6 million. This is disputed by some of the other claimants who assert that the value of the vessels (to which their maritime liens attach) is significantly more. Because we conclude that the Bank Group (which has a lien on the vessels as well as all the other assets) is entitled to the bulk of the proceeds, we find it unnecessary to determine the precise value of the vessels.
[3] 28 U.S.C. § 157(b)(5).
[4] Dixon sought additional time to file his claim, because he did not receive notice of the bankruptcy filing or of the bar date, being out of the country for an extended period of time.
[5] The Trustee previously settled the claims of the Masters, Mates and Pilots union ("MM & P") for unpaid wages due for the period immediately prior to closing on the sale. Pursuant to that stipulation, the Trustee has paid $95,600 for the MM & P maritime lien wage claim and MM & P has reserved the right to assert the balance of its claim as an administrative claim.
[6] The remainder of the claim represents repairs SC made to equipment from another vessel not involved in this controversy.
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57 P.3d 733 (2002)
203 Ariz. 543
Rebecca Lynn JACOBSON, Petitioner,
v.
The Honorable Arthur ANDERSON, Judge of the Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge,
State of Arizona ex rel. Richard M. Romley, Maricopa County Attorney, Real Party in Interest.
No. 1 CA-SA 02-0250.
Court of Appeals of Arizona, Division 1, Department D.
November 21, 2002.
*734 Law Office of Tamara Brooks-Primera By Tamara Brooks-Primera, Tempe, Attorneys for Petitioner.
Richard M. Romley, Maricopa County Attorney By Lee White, Deputy County Attorney, Phoenix, Attorneys for Real Party in Interest.
OPINION
EHRLICH, Judge.
¶ 1 Rebecca Lynn Jacobson seeks review of the trial court's denial of her motion for appointment at government expense of such experts as are reasonably necessary for her defense. She has no equally plain, speedy and adequate remedy by appeal. ARIZ. R.P. SPEC. ACT. 1(a); Martin v. Reinstein, 195 Ariz. 293, 300 ¶ 9, 987 P.2d 779, 786 (App.1999). Therefore, in an earlier order, we accepted jurisdiction, promising that this opinion would follow.
BACKGROUND
¶ 2 Jacobson was the driver of a vehicle involved in a single-vehicle-rollover accident in which two passengers were killed and a third passenger was injured. Based on evidence that she was legally intoxicated and speeding at the time of the accident, Jacobson was charged with two counts of manslaughter, class 2 dangerous felonies, and endangerment, a class 6 dangerous felony.
¶ 3 In preparation for trial, the State filed a witness list that included as expert witnesses an accident reconstructionist, D.J. Hansen, and a criminalist, Jennifer Klem. In response, Jacobson retained accident reconstructionist Michael Broughton and criminalist Chester Flaxmeyer, and listed them as witnesses.
¶ 4 Although Jacobson's parents had retained counsel to represent her, she has been declared by the trial court to be indigent. See ARIZ. R.CRIM. P. 6.4 ("Determination of indigency"); Knapp v. Hardy, 111 Ariz. 107, 110, 523 P.2d 1308, 1311 (1974)(The parent "had no legal obligation to provide legal *735 counsel for the defendant, and the determination of indigency must be based on his financial condition and not that of relatives and friends."). Accordingly, she moved that the court appoint and order government payment for her experts. ARIZ. R.CRIM. P. 15.9.[1] The court denied her motion, finding "no legal authority" to support the appointment and compensation of experts in a non-capital case. Jacobson then filed her petition for special action.
ANALYSIS AND CONCLUSION
¶ 5 Arizona Rule of Criminal Procedure ("Rule") 15.9 permits the trial court to appoint expert witnesses for an indigent defendant who makes the proper showing. Indeed, due process requires the appointment of expert witnesses for an indigent defendant when such testimony is reasonably necessary to present an adequate defense. See, e.g., Little v. Armontrout, 835 F.2d 1240, 1243 (8th Cir.1987)(refusal to appoint expert to assist indigent defendant rendered trial fundamentally unfair and required rape conviction to be set aside), cert. denied, 487 U.S. 1210, 108 S.Ct. 2857, 101 L.Ed.2d 894 (1988); Mason v. Arizona, 504 F.2d 1345, 1351-52 (9th Cir.1974)(Due Process Clause "requires, when necessary, the allowance of investigative expenses or appointment of investigative assistance for indigent defendants in order to insure effective preparation of their defense by their attorneys" depending "upon the need as revealed by the facts and circumstances of each case"), cert. denied, 420 U.S. 936, 95 S.Ct. 1145, 43 L.Ed.2d 412 (1975); Bowen v. Eyman, 324 F.Supp. 339, 340 (D.Ariz.1970)("`[F]undamental fairness' is the touchstone, i.e., whether or not a defendant is entitled to a court-appointed expert depends on the facts and circumstances of the case."); State v. Lamar, 144 Ariz. 490, 495, 698 P.2d 735, 740 (App.1984)(constitutional considerations may mandate appointment of investigator in non-capital cases if denial would substantially prejudice defendant); cf. Knapp, 111 Ariz. at 113, 523 P.2d at 1314.[2]
¶ 6 The legislature has explicitly protected the right of an indigent defendant to expert assistance in capital cases, ARIZ.REV. STAT. § 13-4013(B) (2001), but the fact that this is a non-capital case is not dispositive because Rule 15.9 is not merely applicable to capital cases. And we decline to "draw a decisive line for due-process purposes between capital and non-capital cases." Little, 835 F.2d at 1243. The interest of the body politic in a fair trial as well as that same interest of the defendant outweighs any State interest in avoiding expenditures for such expert witnesses as are reasonably necessary for the defense of an indigent person. See id. at 1243-44.
¶ 7 Because Jacobson was declared by the trial court to be indigent, she is entitled to have the opportunity to demonstrate to that court that her proposed expert witnesses are reasonably necessary for her defense. Therefore, this matter is remanded, and the court is instructed to reconsider Jacobson's motion.
CONCURRING: WILLIAM F. GARBARINO, Presiding Judge and JON W. THOMPSON, Judge.
NOTES
[1] Arizona Rule of Criminal Procedure 15.9 was promulgated on January 30, 2002, effective June 1, 2002. It states: "An indigent defendant may apply for the appointment of an investigator and expert witness ... to be paid at county expense if the defendant can show that such assistance is reasonably necessary to present a defense adequately at trial or sentencing."
[2] The Knapp case is distinguishable because, at that point in time in the case, "[w]hat the defendant [was] really requesting [was] the appointment of an expert to rebut the State's anticipated evidence," or, in other words, Knapp's motion was premature.
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17 So.3d 1240 (2009)
FORD
v.
STATE.
No. 5D09-2375.
District Court of Appeal of Florida, Fifth District.
September 1, 2009.
Decision without published opinion. Affirmed.
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IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
JARET AMMONS, NOT FINAL UNTIL TIME EXPIRES TO
FILE MOTION FOR REHEARING AND
Appellant, DISPOSITION THEREOF IF FILED
v. CASE NO. 1D15-4566
STATE OF FLORIDA,
Appellee.
_____________________________/
Opinion filed October 5, 2016.
An appeal from the Circuit Court for Gadsden County.
Barbara K. Hobbs, Judge.
Nancy A. Daniels, Public Defender, and Kathleen Stover, Assistant Public Defender,
Tallahassee, for Appellant.
Pamela Jo Bondi, Attorney General, and Sharon S. Traxler, Assistant Attorney
General, Tallahassee, for Appellee.
PER CURIAM.
AFFIRMED.
WINOKUR, JAY, and WINSOR, JJ., CONCUR.
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Matter of Aliyah S. P. (William L.) (2018 NY Slip Op 05472)
Matter of Aliyah S. P. (William L.)
2018 NY Slip Op 05472
Decided on July 25, 2018
Appellate Division, Second Department
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 July 25, 2018
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department
REINALDO E. RIVERA, J.P.
MARK C. DILLON
JEFFREY A. COHEN
ANGELA G. IANNACCI, JJ.
2017-10338
(Docket No. B-6389-16)
[*1]In the Matter of Aliyah S. P. (Anonymous). Dutchess County Department of Community and Family Services, respondent; William L. (Anonymous), appellant.
Salvatore C. Adamo, New York, NY, for appellant.
James M. Fedorchak, County Attorney, Poughkeepsie, NY (Michael L. Rusilas of counsel), for respondent.
Michael J. O'Connor, Poughkeepsie, NY, attorney for the child.
DECISION & ORDER
In a proceeding pursuant to Social Services Law § 384-b, the father appeals from an order of the Family Court, Dutchess County (Denise M. Watson, J.), dated August 18, 2017. The order, after a fact-finding hearing, found that the father abandoned the child and terminated his parental rights.
ORDERED that the order is affirmed, without costs or disbursements.
The petitioner commenced this proceeding pursuant to Social Services Law § 384-b against the father to terminate his parental rights on the ground of abandonment. Following a fact-finding hearing, the Family Court terminated his parental rights. We affirm.
To demonstrate that the father abandoned the subject child, the petitioner was required to establish by clear and convincing evidence that the father "evince[d] an intent to forego his . . . parental rights and obligations" by failing to visit or communicate with the child or petitioner during the six-month period before the petition was filed (Social Services Law § 384-b[5][a]; see Social Services Law § 384-b[4][b]; Matter of Andrea B., 66 AD3d 770). Here, the petitioner met this burden. The record reveals that the father did not contact the petitioner, or otherwise attempt contact with the child by sending letters, gifts, cards, or financial support (see Matter of Jeremiah Kwimea T., 10 AD3d 691, 692). The father's incarceration did not relieve him of his responsibility to maintain contact or communicate with the child or the petitioner (see Matter of Beatrice A. [Selina A.], 158 AD3d 747, 748). Although the father testified to attempts to maintain contact through his mother and other family members, his testimony was vague and uncorroborated, and insufficient to overcome a showing of abandonment. Further, contrary to the father's contention, there was no evidence that the petitioner prevented or discouraged him from visiting or communicating with the petitioner or the child.
Finally, the Family Court providently exercised its discretion in terminating the [*2]father's parental rights without conducting a dispositional hearing (see Matter of Thomas Z., 4 AD3d 372, 373).
RIVERA, J.P., DILLON, COHEN and IANNACCI, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
______________
No. 14-4240
______________
KWAN HO WU,
a/k/a Shui-Hui Wei,
a/k/a Kuan He Wu,
a/k/a Ho Kwan Wu,
Petitioner
v.
ATTORNEY GENERAL UNITED STATES OF AMERICA,
Respondent
______________
PETITION FOR REVIEW OF AN ORDER OF
THE BOARD OF IMMIGRATION APPEALS
(Agency No. A071-873-513)
Immigration Judge: Hon. William Strasser
______________
Submitted Under Third Circuit LAR 34.1(a)
June 5, 2015
______________
Before: FISHER, JORDAN, and SHWARTZ, Circuit Judges.
(Filed: June 8, 2015)
______________
OPINION
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
1
______________
SHWARTZ, Circuit Judge.
Kwan Ho Wu (“Wu”), a native and citizen of China from the Zhejiang province,
petitions for review of a decision of the Board of Immigration Appeals (“BIA”) denying
his supplemental motion to reopen his removal proceedings. Because the BIA acted
within its discretion in denying Wu’s motion, we will deny his petition.
I
In 1992, Wu was detained and charged with inadmissibility under 8 U.S.C.
§ 1182(a)(6)(C) for attempting to fraudulently obtain admission into the United States
and 8 U.S.C. § 1182(a)(7)(A)(i)(I) for attempting to enter the United States without a
properly issued visa. Wu filed an application for asylum, withholding of removal, and
protection under the Convention Against Torture (“CAT”), claiming that he would be
persecuted for his past activities as a student demonstrator and involvement in a “pro-
democracy movement.” AR 1896. In 1994, the IJ denied Wu’s application and ordered
Wu’s removal from the United States, finding that there was not “sufficient, credible
evidence . . . that [Wu] was persecuted before he left China or that it is likely that he has
a well-founded fear of persecution . . . if he were to return to China.” AR 1735. In 2000,
the BIA affirmed the IJ’s decision and dismissed Wu’s appeal, finding that Wu “has not
established that he was persecuted in China” or that “he has a well-founded fear of
persecution.” AR 1721–22.
2
In 2007, Wu filed a motion to reopen, claiming that his attorney failed to inform
him that the BIA dismissed his appeal and failed to appeal the BIA’s decision. The BIA
denied Wu’s motion because he failed to make the required showing “that he acted with
reasonable diligence” in maintaining contact with his former counsel following his appeal
of the IJ’s 1994 decision. AR 1695.
In 2010, Wu filed his second motion to reopen on the basis of changed country
conditions in China. Wu, who at that time had four U.S.-born children, specifically cited
China’s family planning policies, which limit the number of children a person may have
and penalize those who exceed the limit through fines, forced abortions, and forced
sterilizations. Wu presented “voluminous” documents including affidavits from other
Chinese nationals “who have allegedly experienced sterilizations,” a 2009 article from
the Law Library of Congress, an excerpt of the “2009 Congressional-Executive
Commission on China [CECC] Annual Report” (the “2009 CECC Report”), and “various
other reports from 2007 through 2009.” AR 4.1 The BIA denied Wu’s second motion to
reopen as untimely and because Wu failed to present authenticated evidence that
demonstrated changed country conditions. Specifically, the BIA noted that the birth of
Wu’s four children constituted a change in personal circumstances, not “a change in
1
“The CECC is a body created by Congress with the legislative mandate to
monitor human rights and the development of the rule of law in China. It is composed of
nine Senators, nine Members of the House of Representatives, and five senior
Administration officials appointed by the President. The CECC reports are pertinent
official publications of the federal government.” Zhu v. Att’y Gen., 744 F.3d 268, 277
n.15 (3d Cir. 2014) (internal quotation marks and citation omitted).
3
circumstances or country conditions ‘arising in the country of nationality’ so as to create
an exception to the time limitation for filing a motion to reopen.” AR 1338 (quoting 8
U.S.C. § 1229a(c)(7)(C)(ii)). The BIA also noted Wu’s failure to “demonstrate how
conditions in China have changed since his last motion [to reopen] in 2007,” when Wu
and his spouse already “had multiple children.” AR 1338.
One month later, Wu filed his third motion to reopen, again claiming changed
country conditions in China based on its family planning policies. As with his second
motion to reopen, Wu offered numerous documents, including “a 2001 administrative
decision of the Qi Du Township Education Department,” a research article from 2007,
“several media reports dated between 2007 and 2009,” various 2008 announcements from
neighborhood and township committees in China, a portion of the 2009 CECC Report,
and additional congressional and academic research reports. AR 4. The BIA denied
Wu’s third motion to reopen, finding that “[m]ost of the evidence is not new nor
previously unavailable” and that Wu “has not demonstrated that he would be subjected to
economic harm amounting to persecution” were he to return to China. AR 974–75. In
2012, we vacated the BIA’s denials of Wu’s second and third motions to reopen and
remanded to the BIA to determine whether country conditions in China had changed
since Wu’s 1994 hearing before the IJ, rather than whether they had changed since the
date of Wu’s first motion to reopen as the BIA had done. Wu v. Att’y Gen., 461 F.
App’x 184 (3d Cir. 2012) (not precedential).
4
After remand, Wu filed “Supplementary Materials,” AR 889, and “Supplementary
Submissions,” AR 842, containing additional documents, including letters purportedly
from “the Village Committee of QianSha Village” and “the Family Planning Office of
Wenzhou City,” AR 845, 847, two 2010 U.S. State Department communications
“regarding [United Nations Population Fund] funding and China’s population control”
and “regarding population control [policies] in Fujian province,” two 2011 articles
“regarding birth control policies in China,” and Wu’s 2011 letter to “the U.S. State
Department Appeals Review Panel.” AR 5. The BIA considered Wu’s prior evidence
along with these new documents and, in a decision dated February 28, 2013, denied Wu’s
second and third motions to reopen.
Wu moved for reconsideration of the BIA’s February 28, 2013 decision. In
support of his motion, Wu submitted “complete versions of previously filed partial U.S.
State Department and Congressional reports, and a statement from [Wu’s] attorney
regarding his attempts to authenticate his previously proffered documentation.” AR 5.
The BIA denied Wu’s motion for reconsideration, determining that he “fail[ed] to
indicate any error in law or fact” in its February 28, 2013 decision. AR 160. Wu
appealed, and we granted the Government’s unopposed motion to remand to the BIA for
further consideration of certain documents Wu had submitted in his prior motions but that
“were not specifically addressed in the BIA’s decision,” namely “documents from the
Chinese government’s website that [Wu] claimed were self-authenticating” and
“documents from [his] home province of Zhejiang.” AR 155.
5
On remand, Wu also filed his fourth “supplementary” motion to reopen (the
“Supplemental Motion”), AR 14, which included an affidavit of Myron Cohen, an
anthropology professor at Columbia University who Wu asserts “has focused his
academic research on the study of Chinese culture and family,” AR 15, documents from
Chinese government websites concerning family planning policies in Wu’s home
province of Zhejiang, and several Internet news articles concerning forced abortions in
Zhejiang.
The BIA denied Wu’s Supplemental Motion (the “Final Decision”). The Final
Decision first addressed the documents from the Chinese government websites and found
they did not “demonstrate a change in country conditions in Zhejiang Province since
1994” concerning China’s family planning policies or its enforcement of those policies.
AR 6. The BIA also re-reviewed various documents from the Chinese government
website that Wu had provided with his second motion to reopen and found that they “do
not announce or describe a significant or non-incremental change in the family planning
laws or enforcement of such laws.” AR 8. The BIA also reviewed “a third set of
documents from Zhejiang province” that Wu provided following remand and similarly
found that they did not indicate “that sterilization would be forcibly imposed or that harm
amounting to persecution would be otherwise inflicted on the father of U.S. born children
who returns to China.” AR 9. The BIA concluded that these documents, taken together,
“[a]t most . . . demonstrate that pressures to enforce the family planning policy vary from
locale to locale and fluctuate incrementally from time to time.” AR 9.
6
The Final Decision then addressed photocopies of unsigned letters Wu claimed
were prepared by the Village Committee of QianSha Village and the Family Planning
Office of Wenzhou City.2 The BIA found “no basis to conclude that these letters are
authentic,” AR 9, and, even assuming their authenticity, determined that they did “not
indicate a shift or change in policy demonstrating a change in family planning
enforcement” given that “[s]imilar letters have been provided for many years,” AR 10.
The Final Decision next considered Professor Cohen’s affidavit, in which he
opined that “officials in Zhejiang offer cash rewards to informants who report on family
planning violations,” which he suggested showed “a high probability” that Wu would be
subject to forced sterilization. AR 10. Professor Cohen also represented that “present
day enforcement [of China’s family planning policies] has become significantly harsher
than in 1994.” AR 10–11. The BIA gave “minimal weight” to Professor Cohen’s
opinions because they were “based primarily on materials provided by [Wu’s] attorney”
2
The first letter, purportedly from the “Village Committee of QianSha Village,
QiDu Street, LuCheng District, Wenzhou City” to “Villagers YouXiong WU” and
“VengYing HUANG,” describes QianSha Village’s policy that “a couple who have
reached their marriageable age can only give birth to one child” and that “after birth of
one child, one must have IUD [sic] inserted, and those who gave birth to two children
must be sterilized,” and advises the letter’s recipients that YouXiong WU’s son (who we
assume ostensibly violated these policies by having children while living in the United
States) “is subject to sterilization unless he becomes a United States citizen or a
permanent resident.” AR 847–48. The second letter, purportedly from the “Family
Planning Office[,] QiDu Street, LuCheng District, Wenzhou City” to the same recipients,
similarly explains that YouXiong WU’s son “is still under the regulation of family
planning office [sic] of QiDu Street if he returned back to China” and “violated the
family planning policy by giving birth to four children” while in the United States. AR
852–53.
7
and because Cohen lacked “any personal or anecdotal knowledge of instances of forced
sterilization” or increased enforcement of China’s family planning policies. AR 11.
Concluding that Wu failed to carry his burden “of demonstrating changed country
conditions that would justify reopening these proceedings” or establish “a prima facie
case of eligibility for asylum,”3 the BIA denied Wu’s Supplemental Motion. Wu
petitions for review of the BIA’s Final Decision.
II
The BIA had jurisdiction to review Wu’s motion to reopen under 8 C.F.R.
§ 1003.2. We have jurisdiction pursuant to 8 U.S.C. § 1252. We review the denial of a
motion to reopen for abuse of discretion, “regardless of the underlying basis of the alien’s
request for relief.” Pllumi v. Att’y Gen., 642 F.3d 155, 158 (3d Cir. 2011). We thus give
“broad deference” to the BIA’s ultimate decision, Ezeagwuna v. Ashcroft, 325 F.3d 396,
409 (3d Cir. 2003) (internal quotation marks omitted), which we will disturb only if it is
“arbitrary, irrational, or contrary to law,” Filja v. Gonzales, 447 F.3d 241, 251 (3d Cir.
2006) (internal quotation marks omitted).4
3
The BIA also observed that Wu had not “provided convincing evidence that a
father of multiple children born in the United States who returns to China would be
forcibly sterilized” or “shown that [economic] sanctions [he may face] would approach
the severity required to constitute persecution,” given that Wu’s application for
cancellation of removal “indicates that he had $1,400,000.00 in assets and earned
$6,000.00 a week.” AR 12–13.
4
“The BIA may deny a motion to reopen if it determines that (1) the alien has not
established a prima facie case for the relief sought; (2) the alien has not introduced
previously unavailable, material evidence; or (3) in the case of discretionary relief (such
as asylum), the alien would not be entitled to relief even if the motion was granted.”
8
III
Wu’s Supplemental Motion to reopen was both time- and number-barred. See 8
U.S.C. § 1229a(c)(7)(A), (C)(i) (providing that an applicant generally may file only one
motion to reopen and must do so “within 90 days of the date of entry of a final
administrative order of removal”). Moreover, as explained herein, Wu has not met the
exception that permits an untimely motion as he has not presented previously unavailable
material evidence of “changed country conditions arising in the country of nationality.”
Id. § 1229a(c)(7)(C)(ii); Shardar v. Att’y Gen., 503 F.3d 308, 313 (3d Cir. 2007).
To determine if the BIA abused its discretion in denying Wu’s Supplemental
Motion, “we must determine if the BIA meaningfully considered the evidence and
arguments [Wu] presented.” Zhu v. Att’y Gen., 744 F.3d 268, 272 (3d Cir. 2014).
Although the BIA need not “parse or refute on the record each individual . . . piece of
evidence offered by the petitioner,” Zheng v. Att’y Gen., 549 F.3d 260, 268 (3d Cir.
2008) (internal quotation marks omitted), it “must provide an indication that it considered
such evidence, and if the evidence is rejected, an explanation as to why it was rejected,”
Zhu, 744 F.3d at 272.
Huang v. Att’y Gen., 620 F.3d 372, 389 (3d Cir. 2010) (internal quotation marks
omitted). Where the BIA concludes that a petitioner has not established a prima facie
case to reopen proceedings, we review the BIA’s findings of fact under the substantial
evidence standard. Sevoian v. Ashcroft, 290 F.3d 166, 174 (3d Cir. 2002). Under this
standard, we must uphold the BIA’s factual findings “unless the evidence not only
supports a contrary conclusion, but compels it.” Abdille v. Ashcroft, 242 F.3d 477, 483–
84 (3d Cir. 2001).
9
Here, Wu contends primarily that: (i) the BIA failed to consider the entire record,
including documents from Wu’s prior motions to reopen such as the 2009 CECC Report;
(ii) even if the Final Decision incorporated the BIA’s consideration of these documents
from its previous February 28, 2013 decision, neither decision adequately considers these
documents; and (iii) the BIA improperly discounted the evidentiary weight of certain
documents, namely letters from various Chinese government entities and the affidavit of
Professor Cohen. Although we agree that the BIA could have more thoroughly discussed
certain of Wu’s submissions, the Final Decision reflects that the BIA meaningfully
considered Wu’s voluminous documentary evidence such that it acted within its
discretion in denying his Supplemental Motion.
The Final Decision explains that the BIA considered the documents “filed with
each [of Wu’s] motion[s] and appeal,” including the documents “identified in the
government’s motion to remand” and in Wu’s previous motions to reopen to determine
“whether the totality of the evidence submitted since the first motion to reopen
establishes changed country conditions.” AR 3. The Final Decision proceeds to discuss
numerous documents Wu included in his various motions to reopen, and after “hav[ing]
thoroughly reviewed” them, found them insufficient to establish “a change in country
conditions since 1994” concerning the policies governing “Chinese citizens with children
born outside of the United States” such as Wu. AR 9–11.5 See generally Liu v. Att’y
5
Although we agree with Wu that the BIA’s February 28, 2013 decision
erroneously identifies Fujian Province as Wu’s home province in one place, the Final
10
Gen., 555 F.3d 145, 151 (3d Cir. 2009) (clarifying that an applicant “citing changed
personal circumstances” still must “demonstrate[] that there are changed country
conditions”).
For example, the Final Decision reflects the BIA’s examination of the Chinese
government documents Wu included with his first and second motions to reopen. It
provides “an explanation as to why [these documents] w[ere] rejected,” Zhu, 744 F.3d at
272, and contains “more than cursory, summary or conclusory statements” such that we
can “discern [the BIA’s] reasons for declining” Wu’s requested relief, Zheng, 549 F.3d at
268 (internal quotation marks omitted).6 As to documents purportedly from the Chinese
government website, the BIA explained that they did not “directly address the treatment
of Chinese nationals returning to China with [U.S.-born] children” or government
enforcement of family planning policies in Zhejiang, Wu’s home province. AR 6–7.
Likewise, the BIA noted that the “Family Planning Regulations of Zhejiang Province”
that Wu included with his first motion to reopen “did not directly address the treatment of
Chinese nationals returning to China with children born in the United States” or
otherwise “refer to forced abortion or forced sterilization for violations of the family
planning policy.” AR 7. Furthermore, the Final Decision shows that the BIA thoroughly
Decision explicitly examined whether Wu carried his “burden to demonstrate that the
current situation for enforcement of family planning policy in Zhejiang province today
has sufficiently changed since 1994 to justify reopening.” AR 9.
6
The Final Decision also lists the “additional” Chinese Government documents
Wu included with his second motion concerning family planning policies in Zhejiang
Province, and found them unpersuasive for describing family planning enforcement
efforts “in place since the late 1980s.” AR 8.
11
reviewed the “third set of documents from Zhejiang province” that Wu submitted
following remand, AR 8, assumed their authenticity, discussed one such document in
substantial detail, and found they did not reflect a “change in country conditions [in
Zhejiang province] since 1994.” AR 9.
Thus, this is not a case in which the BIA “fail[ed] to discuss most of the
evidentiary record” or “did little more than quote passages from its earlier decision . . .
without identifying—let alone discussing—the various statements contained in the record
before it.” Zheng, 549 F.3d at 268–69 (vacating denial of motion to reopen where the
BIA “did not mention” numerous documents included in the petitioner’s motion).
Rather, the BIA here fulfilled its obligation under Zhu to consider relevant and authentic
evidence.
The BIA’s failure to thoroughly discuss or credit the 2009 CECC Report does not
undermine this conclusion.7 As we noted in Zhu, CECC reports “alone” are not
“necessarily sufficient to demonstrate a material change in country conditions.” Zhu, 744
F.3d at 278 n.21. Even had the Final Decision specifically discussed Wu’s excerpted
2009 CECC Report, the BIA could have reasonably discounted its probative value as it
predominantly describes activities in provinces other than Zhejiang and only discusses
7
We remind the BIA that CECC reports may “materially bear” on certain claims
for asylum premised on changed country conditions and, under those circumstances, may
merit explicit consideration. Zhu, 744 F.3d at 278; see also Chen v. Holder, 742 F.3d
171, 180 (4th Cir. 2014) (“The BIA’s failure to account for the reports of the CECC is
not unprecedented.”); Ni v. Holder, 715 F.3d 620, 627 (7th Cir. 2013) (“The Board’s
ongoing refusal to respond meaningfully to [CECC Reports] is difficult to understand.”).
12
female-specific enforcement mechanisms.8 Coupled with the Final Decision’s “reasoned
consideration” of the bulk of Wu’s submissions and “adequate findings” about those
submissions, Zheng, 549 F.3d at 268 (internal quotation marks omitted), a reasonable
adjudicator would not be “compelled” to reach a contrary conclusion regarding the
country conditions based on the CECC Report, Kayembe v. Ashcroft, 334 F.3d 231, 237
(3d Cir. 2003).
Finally, the BIA acted within its discretion in finding Wu’s letters from the Village
Committee of QianSha Village and the Family Planning Office of Wenzhou City
insufficiently authenticated. The BIA “can reject evidence that it finds to be
untrustworthy or irrelevant.” Zhu, 744 F.3d at 273–74. Here, the BIA found Wu’s letters
inauthentic because Wu “submitted photocopies rather than original letters, the letters
lack signatures, and no author is identified in either letter.” AR 9. Wu has provided no
basis to refute these conclusions. Because the BIA “is not required to conduct an
independent examination of a document where the proponent has provided no basis from
which it could find the document is authentic,” Zhu, 744 F.3d at 274, we reject Wu’s
contention that the BIA improperly “discount[ed] material evidence from [his]
8
See, e.g., AR 1571 (“[C]entral and local authorities continued to interfere with
and control the reproductive lives of Chinese women . . . .”), id. at 1572 (reporting that
“additional fines are imposed on women who resist official efforts to ‘implement
remedial measures’ such as abortion”), id. at 1573 (finding that “‘termination of
pregnancy’ is explicitly required in eight provinces,” and listing “10 other provinces”
wherein officials “are authorized to take ‘remedial measures’ to deal with ‘out-of-plan’
pregnancies,” none of which are Zhejiang Province).
13
hometown” due to its lack of authenticity, Pet’r Br. 36.9 Thus, the BIA did not abuse its
discretion in denying Wu’s Supplemental Motion.10
IV
For the foregoing reasons, we will deny the petition.
9
We also reject Wu’s contention that the BIA erred by affording “minimal
weight” to Professor Cohen’s affidavit. Pet’r Br. 43. The Final Decision contains
multiple paragraphs reflecting the BIA’s consideration of Professor Cohen’s opinions and
explaining why it gave the opinion little weight. The BIA discounted them in part
because Professor Cohen did not indicate “that he has researched or written on issues of
Chinese family planning law or policy prior to his involvement in his case.” AR 11.
This reflects the BIA’s view that he lacked a particular expertise in the relevant issues.
This alone is a sufficient reason to afford the opinion little weight. The BIA also
discounted Professor Cohen’s views because he offered no “personal knowledge to
support his finding that there has been increased enforcement of the family planning
policy . . . as to returnees from the United States with United States children.” AR 11.
Even if we disagreed with the BIA’s decision to discount his opinions based on a lack of
personal knowledge, as previously stated, the BIA gave “reasoned consideration” to
Cohen’s opinion and, under our highly deferential standard of review, we defer to the
weight the BIA gave to the opinion. Zheng, 549 F.3d at 268 (internal quotation marks
omitted).
10
We likewise conclude that the BIA acted within its discretion in concluding that
Wu failed to carry his burden of establishing a prima facie showing of eligibility for
asylum.
14
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145 N.J. 374 (1996)
678 A.2d 712
CHOU
v.
RUTGERS
The Supreme Court of New Jersey.
June 28, 1996.
Petitions for Certification
Denied.
283 N.J. Super. 524 662 A.2d 986
| {
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} |
684 F.2d 204
Joseph BERTRAND, et al., Petitioners-Appellees,v.Charles SAVA, et al., Respondents-Appellants.Laissez-Moi VIGILE, et al., Petitioners-Appellees,v.Charles SAVA, et al., Respondents-Appellants.
No. 1237, 82-2110, 82-2123.
United States Court of Appeals,Second Circuit.
Argued April 30, 1982.Decided June 25, 1982.
Harriet Rabb, New York City (Susan D. Susman, Immigration Law Clinic, Steven R. Shapiro, New York Civ. Liberties Union, Stanley Mailman and Arthur C. Helton, Mailman & Ruthizer, New York City, on the brief), for petitioners-appellees.
Harvey J. Wolkoff, New York City (John S. Martin, Jr., U. S. Atty., S. D. N. Y., Michael H. Dolinger, Asst. U. S. Atty., and Thomas H. Belote, Sp. Asst. U. S. Atty., New York City, on the brief), for respondents-appellants.
Before MANSFIELD and KEARSE, Circuit Judges, and CABRANES, District Judge.*
JOSEE A. CABRANES, District Judge:
The questions presented arise from judicial review of discretionary decisions by a District Director of the Immigration and Naturalization Service ("INS") to deny parole to unadmitted aliens1 who are detained pending the completion of proceedings to consider their applications for political asylum and their exclusion. The INS District Director for the New York area, Charles Sava, denied the parole requests of fifty-three unadmitted Haitian aliens. On petitions for the writ of habeas corpus, the United States District Court for the Southern District of New York (Robert L. Carter, Judge ) held that the INS District Director had abused his discretion in denying the requests and ordered their release "under reasonable release conditions." 535 F.Supp. 1002 (S.D.N.Y.1982); 535 F.Supp. 1020 (S.D.N.Y.1982).
We reverse.
INTRODUCTION
The original petitioners are eight unadmitted aliens detained since their arrival in Florida from Haiti in makeshift boats in the summer of 1981. Forty-five other similarly-situated Haitian aliens became parties to this action when the trial court certified a class of fifty-three persons. Upon their arrival in the United States, the petitioners were detained by the INS at Camp Krome in Miami, Florida. On July 18, 1981, the INS transferred them to the Service Processing Center ("SPC") in Brooklyn, New York, where they have been detained until now. In August 1981 the INS began proceedings to consider both the exclusion of the fifty-three from the United States (pursuant to 8 U.S.C. §§ 1225, 1226 and 8 C.F.R. § 236.2) and their applications for political asylum (pursuant to 8 U.S.C. §§ 1158, 1226 and 8 C.F.R. §§ 108, 236.3).2
Procedures for determining the admissibility of unadmitted aliens are found in the Immigration and Nationality Act, 8 U.S.C. § 1101 et seq., and regulations promulgated thereunder. The statute provides that any alien "who (upon arrival in the United States) may not appear to (an INS) examining officer ... to be clearly and beyond a doubt entitled to land" is to be detained for examination by a special inquiry officer or immigration judge of the INS. 8 U.S.C. §§ 1225(b) and 1226(a); see 8 C.F.R. § 236.1. The immigration judge decides whether to admit formally or to exclude and deport the arriving alien. Id. An excluded alien is immediately returned to the country from which he came "unless the Attorney General, in an individual case, in his discretion, concludes that immediate deportation is not practicable or proper." 8 U.S.C. § 1227(a). A decision by an immigration judge to exclude an arriving alien may be appealed to the Board of Immigration Appeals ("BIA"), 8 C.F.R. § 236.7, the decision of which is appealable to the United States Court of Appeals for the relevant circuit. 8 U.S.C. § 1105a. The Attorney General may, in his discretion, "for emergent reasons or for reasons deemed strictly in the public interest," parole an alien into the United States pending the outcome of exclusion hearings. However, a paroled alien is not regarded as having been "admitted" into the United States. 8 U.S.C. § 1182(d)(5)(A).3 The Attorney General has delegated to INS District Directors his discretionary authority to act on requests for parole by unadmitted aliens detained in their respective districts. 8 C.F.R. § 212.5.4
PRIOR PROCEEDINGS
At the start of the INS exclusion hearings, each petitioner requested that counsel be appointed to assist him in the pursuit of his claims. To comply with these requests the hearings were temporarily adjourned. In September and October 1981, after the appointment of counsel, each petitioner filed an application for political asylum. At about the same time, each of the eight original petitioners filed requests to be released on parole with Charles Sava, the District Director of the INS for the New York area. In the fall of 1981 Sava denied each of the eight applications for parole, in the asserted belief that the petitioners would abscond if temporarily permitted to enter the country.5
On November 25, 1981, the original eight petitioners commenced these habeas corpus proceedings. 28 U.S.C. § 2241. They challenged Sava's denial of their parole requests and their continued detention on the grounds, inter alia, that (1) Sava had either failed to exercise the discretion delegated to him by the Attorney General or, in the alternative, had abused that discretion by invidiously discriminating against the petitioners because of their race or national origin; and (2) Sava had violated the United Nations Convention and Protocol Relating to the Status of Refugees, 19 U.S.T. 6223, 6259, T.I.A.S. 6577 (collectively, the "Protocol").6 In bringing these habeas corpus actions the petitioners did not claim the right to remain in the United States. Their claims to political asylum and their resistance to exclusion and deportation are the subject of separate proceedings and do not concern us at this time.
The original eight petitioners sought and obtained a prompt evidentiary hearing on their claims in these actions. At the hearing held on January 22 and January 26, 1982, the petitioners called four witnesses and the Government called three. The principal Government witness was Sava, who attempted to explain generally how decisions involving parole applications are made, and, in particular, how he had made the decisions to deny the petitioners' requests.
In its first ruling, issued on March 5, 1982, the trial court held that it could review for abuse the INS District Director's discretionary decisions on requests for parole. In addressing the merits of the petitioners' claims, the court found that Sava knew little about "the individual characteristics" of the petitioners but was well versed in the detail of the files of certain comparable non-Haitian applicants and that all the petitioners had received identical form letters informing them of the fact that their requests had been denied. On the basis of these findings it concluded that Sava had improperly failed to exercise any discretion in reviewing petitioners' requests.
Assuming arguendo that some discretion had been exercised by Sava, the District Court turned to the alternative question of whether Sava had abused that discretion. It considered whether Sava had made parole decisions concerning non-Haitians in similar circumstances and, if so, whether those decisions were consistent with Sava's decisions on petitioners' applications. The court found that there were twelve unadmitted non-Haitian aliens who had applied to Sava for parole and whose circumstances were "indistinguishable" in relevant respects from those of the eight petitioners.7 The only differences between the two assertedly "comparable" groups of parole applicants, the court held, were (1) that the petitioners were Haitians and black while the members of the group of twelve were neither Haitians nor black and (2) that Sava had denied all of the petitioners' requests for parole while he had granted all twelve of the requests from the group of twelve non-Haitians.
Based on this comparison, the District Court concluded that Sava had abused his discretion. In the court's view, the only reason that petitioners' requests for parole were denied was "because (the petitioners) were black and/or because they were Haitians." Accordingly, it ordered the INS either to release the eight petitioners on parole within 10 days or, in the alternative, to "show cause in writing, supported by affidavit, reasons for believing that any or all of (the petitioners) pose a risk of absconding."
The INS declined to release any of the petitioners and sought to comply with the court's alternative directive. On March 15, 1982, Sava filed with the court an affidavit which attempted to demonstrate that the eight petitioners were different in relevant respects from the group of twelve non-Haitians identified by the court for comparison purposes; that the petitioners posed "extremely significant" risks of absconding; and that the denial of the petitioners' parole requests was justified.
On March 10, 1982, the petitioners filed a motion for leave to amend their petitions to add class allegations and include forty-five other unadmitted Haitian aliens detained at the SPC as part of a defined class of fifty-three persons, a motion to certify this class and a motion for summary judgment in favor of the class.
The District Court issued a second ruling on April 5, 1982. In the ruling, the court refused to accept the arguments or consider the information presented in Sava's March 15, 1982 affidavit. It held that the Sava affidavit of March 15, 1982 contained a series of "(p)ost-hoc rationalizations" of Sava's original decisions and constituted an improper attempt to "re-open the record" that had been closed at the end of the evidentiary hearing in January. The court also granted the three motions filed by the petitioners on March 10, 1982 and ordered the Government to release all fifty-three members of the newly-certified class. The Government appealed, 28 U.S.C. § 1291, and another panel of this Court stayed the District Court's order pending oral argument and a decision by this panel.
The following questions are presented:
(1) May a federal court review discretionary actions by an INS District Director denying requests by detained unadmitted aliens for parole into the United States pending hearings on exclusion and applications for political asylum? If so, what is the scope of the court's authority to review such discretionary actions?
(2) Did the trial court err in holding that the respondent INS District Director failed to exercise his discretion to parole unadmitted aliens or, alternatively, that he had abused that discretion by discriminating against the fifty-three aliens because of their race or national origin?
(3) Does the Protocol afford the petitioners any rights beyond those available to them under domestic law?
(4) Did the District Court err in certifying the class of fifty-three unadmitted aliens and granting summary judgment in favor of that class?
We hold that the federal courts may exercise habeas corpus jurisdiction to review allegations that an INS District Director has abused his discretion in making parole decisions; that in the particular circumstances of this case, the INS District Director did exercise his discretion; that the District Court's conclusion that the INS District Director abused his discretion was based upon an overly-broad interpretation of the scope of judicial review in cases such as these and the substitution of the court's judgment for that of the INS District Director; that the Protocol does not afford petitioners any rights beyond those provided under domestic law; and that certification of the class of fifty-three persons will be left undisturbed, subject to later review, if necessary. Accordingly, we reverse the judgment in favor of the class and remand the cause for further proceedings.
DISCUSSION
I.
Judicial Review of Discretionary Power To Parole Unadmitted Aliens
The threshold issue is the extent to which the courts may review a decision by an INS District Director to deny parole to detained unadmitted aliens-that is, non-resident aliens properly detained on arrival but not yet formally "excluded" from the United States.
In the course of this litigation, the Government has presented three arguments on the courts' power to consider the issues raised by the petitioners. First, the Government argued below that "(j)urisdiction for courts to review the denial of a stay of a deportable alien has been specifically granted by Congress ... (but) (n)o such review jurisdiction exists in the case of unadmitted excludable aliens seeking parole into the United States." Joint Appendix at 1050. Second, assuming only for the argument on appeal that parole decisions in the cases of unadmitted aliens are subject to some judicial review, the Government now asserts that "the maximum breadth of (a court's) inquiry must be whether the district director exercised his discretion." Brief for the Respondents-Appellants ("Respondents' Brief") at 34 (filed April 23, 1982). Relying on the leading case on this subject in this Circuit, Petition of Cahill, 447 F.2d 1343 (2d Cir. 1971) (per curiam), the Government in effect argues that if it can be shown that the INS District Director did exercise his discretion, his decision must be affirmed without further inquiry. In a third optional argument, the Government asserts that judicial review "arguably" extends to the broader (but nonetheless limited) inquiry "whether (the INS District Director's) parole release criteria were 'wholly irrational' or 'facially legitimate.' " Respondents' Brief at 34-35.
In contrast, the petitioners argue that "(t)his is a discrimination case." Brief for the Petitioners-Appellees ("Petitioners' Brief") at 1 (filed April 27, 1982). They contend not only that the courts have the power to review for abuse the discretionary decisions on parole by INS District Directors, but also that the nature of this review is substantially identical to that which courts generally conduct in cases alleging invidious discrimination by federal officials.
A.
We conclude that the federal courts may review INS decisions to deny parole to unadmitted aliens in the circumstances presented by this case-namely, a habeas corpus action brought by unadmitted aliens who assert that their continued detention by the INS is the result of abuse of discretion by an INS official who does not claim to act pursuant to a national policy adopted by the political branches of the federal government.8 In arguing that the court has no power to review the discretionary decisions on parole of the INS District Director, the Government relied on a line of cases that sustain decisions by the INS in exclusion proceedings. See, e.g., Hsieh v. Kiley, 569 F.2d 1179 (2d Cir. 1978), cert. denied, 439 U.S. 828, 99 S.Ct. 102, 58 L.Ed.2d 121 (1978). Even in this long line of cases, however, there is no suggestion that the courts are wholly without power to consider a petition for a writ of habeas corpus challenging the detention of an unadmitted alien or that in habeas corpus cases the courts may not consider allegations of abuse of discretion.
Discretion vested by statute in agents of the federal government is rarely, if ever, entirely free of judicial review for abuse. That discretionary power is not absolute power is fundamental to our constitutional form of government. The discretionary power to parole unadmitted aliens granted by statute to the Attorney General, and delegated by him to INS District Directors, is broad, but it is not without limits. See Mayet Palma v. Verdeyen, 676 F.2d 100 at 105 (4th Cir. 1982) (Attorney General's denial of parole to an unadmitted alien reviewed for abuse of discretion).9 In granting the Attorney General this discretionary power, Congress did not modify or qualify the availability of a habeas corpus action to unadmitted aliens detained pending completion of exclusion proceedings. Accordingly, the exercise of administrative discretion on parole requests by unadmitted aliens may be judicially reviewed.10
B.
Although the discretionary decisions of INS District Directors to parole unadmitted aliens may be judicially reviewed, the scope of that review is necessarily narrow.
The Supreme Court "has repeatedly emphasized that 'over no conceivable subject is the legislative power of Congress more complete than it is over' the admission of aliens(,)" Fiallo v. Bell, 430 U.S. 787, 792, 97 S.Ct. 1473, 1477, 52 L.Ed.2d 50 (1977) (citations omitted), and that "in the exercise of its broad power over immigration and naturalization, 'Congress regularly makes rules that would be unacceptable if applied to citizens.' " Id. The teaching of Galvan v. Press, 347 U.S. 522, 74 S.Ct. 737, 98 L.Ed. 911 (1954) has frequently been noted. After observing that "much could be said for the view" that due process places some limitations on the power of Congress in this area, "were we writing on a clean slate," Justice Frankfurter added:
1
But the slate is not clean. As to the extent of the power of Congress under review, there is not merely "a page of history," ... but a whole volume. Policies pertaining to the entry of aliens and their right to remain here are peculiarly concerned with the political conduct of government. In the enforcement of these policies, the Executive Branch of the Government must respect the procedural safeguards of due process.... But that the formulation of these policies is entrusted exclusively to Congress has become about as firmly embedded in the legislative and judicial tissues of our body politic as any aspect of our government....
Id. at 530-531, 74 S.Ct. at 742-743.11
2
The limits to this legislative power are few, "for an alien has no constitutional right to enter or remain in this country... (and) he may be denied entrance on grounds that would be constitutionally suspect or impermissible in the context of domestic policy, namely, race, physical condition, political beliefs, sexual proclivities, age, and national origin." Fiallo v. Levi, 406 F.Supp. 162, 165 (E.D.N.Y.1975) (three-judge court) (Moore, J., sitting by designation) (footnotes omitted), aff'd sub nom. Fiallo v. Bell, supra. See also Pierre v. United States, 547 F.2d 1281, 1290 (5th Cir. 1977) (en banc), vacated and remanded to consider mootness, 434 U.S. 962, 98 S.Ct. 498, 54 L.Ed.2d 447 (1977).
3
It is not disputed that the "plenary congressional power to make policies and rules for exclusion of aliens has long been firmly established(,)" Kleindienst v. Mandel, 408 U.S. 753, 769-770, 92 S.Ct. 2576, 2585-2586, 33 L.Ed.2d 683 (1972); the cases supporting the principle "have been legion." Id. 408 U.S. at 765-766 & n.6, 92 S.Ct. at 2582-2583 & n.6. It is in the exercise of this plenary authority over immigration matters that Congress granted to the Attorney General of the United States broad discretionary power to parole unadmitted aliens pending a final determination on their applications for admission to the United States. 8 U.S.C. § 1182(d)(5).
4
The unusually broad Congressional power over the admission of aliens into the United States is reflected in the narrow construction by the courts of their own power to review the discretionary decisions of the Attorney General made pursuant to authority delegated to him by Congress. The historic deference of the courts to the political branches of our national government in immigration matters is at the heart of the Supreme Court's statement of the scope of review of the Attorney General's exercise of discretion to deny temporary admission to an unadmitted alien in Kleindienst v. Mandel, supra. In that case, Congress exercised its plenary powers to deny admission to defined classes of persons and granted to the Attorney General discretion to waive inadmissibility and approve temporary admission. As in the case before us, the Attorney General exercised this discretionary power negatively. The Court concluded that in such a case "the courts will neither look behind the exercise of that discretion, nor test it by balancing its justification against ... First Amendment interests ...." Id. at 770, 92 S.Ct. at 2585. This was true, however, only as long as the Attorney General exercised that discretionary, power "on the basis of a facially legitimate and bona fide reason(.)" Id.
5
By the same token, as long as the Attorney General exercises his broad discretion under 8 U.S.C. § 1182(d)(5) to determine whether unadmitted aliens may be paroled pending final determination of their applications for admission to the United States, his decision may not be challenged on the grounds that the discretion was not exercised fairly in the view of a reviewing court or that it gave too much weight to certain factors relevant to the risk of abscondence and too little to others. Indeed, section 1182(d)(5) permits the Attorney General to deny parole to all or to certain groups of unadmitted aliens on the ground that he finds no emergent or public interest reasons justifying their release on parole. The discretion may not be exercised to discriminate invidiously against a particular race or group or to depart without rational explanation from established policies. See Wong Wing Hang v. Immigration and Naturalization Service, 360 F.2d 715, 719 (2d Cir. 1966). Such exercise of the power would not be "legitimate and bona fide" within the meaning of Kleindienst v. Mandel.12 But the Attorney General's exercise of his broad discretionary power must be viewed at the outset as presumptively legitimate and bona fide in the absence of strong proof to the contrary. The burden of proving that discretion was not exercised or was exercised irrationally or in bad faith is a heavy one and rests at all times on the unadmitted alien challenging denial of parole. See Pierre v. United States, supra, 547 F.2d at 1289.
II.
6
The Decision and Judgment of the District Court
7
A review of the District Court's rulings and the record of this case reveals that the INS District Director, in denying petitioners' applications for parole, did exercise the discretion delegated to him by the Attorney General. It also reveals that the trial court improperly concluded that the INS District Director abused his discretion.
A.
8
In its ruling of March 5, 1982, the District Court first concluded that the discretion vested in the Attorney General by statute and delegated to Sava had not been exercised because Sava had failed to make individual decisions on the petitioners' parole requests. This conclusion was grounded on a finding that Sava's knowledge of the matter was based on "casual, inaccurate generalizations (that) rebut (Sava's) claim to have conducted individualized review(s)" and on a finding that "(e)ach denial, five of which were issued on the same day, contained the same language concerning the insufficiency of the information presented in the parole requests." To the trial court, "(b)oth the wording and the timing of these responses indicate that denial (of the parole requests) was a foregone conclusion, not a decision reached through independent review and analysis of each file." 535 F.Supp. at 1014 & n.21.
9
The testimony upon which the court relied consisted of a brief exchange between the court and Sava in which the latter stated-in response to the court's request that Sava state "(j)ust generally, what kind of things (he knew) about (the petitioners)"-that the petitioners were "for the most part illiterate" and "(m)ost of them were farmers, working the land in Haiti." Id. The court, upon a review of the affidavits submitted by the petitioners and exhibits produced by the Government, concluded that the "generalizations" offered by Sava in response to the court's own request for general information were "casual" and "inaccurate" and inconsistent with an individualized review of the eight requests for parole. Id.13
10
Even if we assume for the argument that Sava's decision to deny parole was based on generalizations that were "casual" or "inaccurate," it does not follow that Sava thus failed entirely to exercise the discretion vested in him by law. Moreover, the finding that all of the notices sent to the petitioners informing them that their parole requests had been denied were form letters containing virtually identical language does not necessarily support the court's conclusion that no discretion had been exercised. While this finding may prove that the decision made in each case was the same-that is, that the parole requests were all denied-it is not at all probative on the question of whether there had been an individualized consideration of the actual parole requests.
11
The probative evidence in the record on which the trial court relied, therefore, is not sufficient to support its conclusion that Sava failed to exercise any discretion in rejecting the petitioners' parole requests. The record includes uncontroverted evidence that Sava did indeed affirmatively act to deny each petitioner's parole. Moreover, the record includes much evidence on the criteria used by Sava in making parole decisions and his conclusion that none of these eight petitioners met those criteria. The record here thus permits no conclusion other than that Sava did exercise his discretion, although perhaps partly on the basis of "generalizations."
B.
12
The District Court did not rest its judgment exclusively on its finding that Sava had failed to exercise any of the discretion delegated to him by the Attorney General. Assuming arguendo that Sava had exercised some discretion, the court reviewed Sava's decisions under principles and evidentiary standards borrowed from domestic discrimination cases arising under the Fifth and Fourteenth Amendments to the Constitution. It concluded that Sava had unlawfully discriminated against the petitioners on the basis of race or national origin, thereby abusing his discretion. In reaching this conclusion, however, the court improperly substituted its judgment for that of the INS District Director on the criteria or factors to be used for deciding whether an alien poses a risk of absconding if paroled; it then undertook a broad-ranging comparative analysis of the eight petitioners and other unadmitted aliens upon whose parole applications Sava had passed. Had the court not substituted its judgment for that of Sava on the relevant parole criteria, its comparative analysis might have shown that the petitioners were not the victims of any invidious discrimination. Accordingly, we reverse the judgment of the District Court and remand the cause for further proceedings.
13
At the January 1982 evidentiary hearing, the Government set forth the criteria used to evaluate the risk of absconding of applicants for parole. The first criterion the Government claimed to employ in making decisions on parole applications is an alien's "documentation." An alien is said to be minimally documented, in the Government's view, "to the extent that (he has a) passport (,)" because, to obtain a passport the alien would "have been through a prior screening process(.)" The quality of an alien's documentation is substantially enhanced, according to the Government, if he has a visa issued by an American consulate abroad because an American consular screening process is a necessary condition for the issuance of a visa.
14
The second criterion the Government claimed to consider in making decisions on the risk of absconding is the likelihood of success of the alien's political asylum application-in Sava's words, "(H)ow much chance does (an alien's) application (for asylum) have of flying?"
15
The third criterion upon which the Government assertedly relied in deciding whether an applicant for parole posed a risk of absconding is whether the alien has a family member residing in this country who can confer an "immigration benefit" on him, such as a preferred entrance status. See 8 U.S.C. § 1154(a) and 8 C.F.R. §§ 204.1 et seq.
16
Finally, the Government claimed that it considered also several other factors in passing on parole requests by an unadmitted alien. These include the alien's prior immigration history (which might show whether he has complied with our laws when previously given the opportunity to do so); the alien's ability to sustain himself financially while on parole; sponsorship of the alien, if any, by a family member or an organization; and the ability of an alien to have bond posted on his behalf.
17
Although it had no burden on the matter, the Government presented evidence (most of which was undisputed) on how those criteria applied to the petitioners and other unadmitted aliens. It also offered evidence regarding its experience in paroling unadmitted Haitian aliens who had in recent years arrived under circumstances comparable to the petitioners.14 Much of this evidence tended to indicate that the petitioners were quite different, in relevant respects, from the other, non-Haitian aliens over whose parole applications Sava had passed.15
18
Notwithstanding this evidence, the District Court found that the eight petitioners did not present any greater risk of absconding than did the twelve non-Haitians who were found to have no compelling humanitarian reasons justifying their parole. 535 F.Supp. at 1013; see notes 7 and 15, supra. The court reached this conclusion by substituting its judgment for that of Sava in deciding what criteria were relevant to determine whether a parole applicant presented a significant risk of absconding. While noting the factors articulated by the Government at the January 1982 hearing, the court discounted all of the differences between the two groups of applicants and concluded that in all relevant respects they were "indistinguishable." 535 F.Supp. at 1013.
19
The court recognized that "(a)n alien's documentation is important (in estimating) the absconding threat insofar as documented aliens have been through a screening process at a United States consular office abroad and have their identities and histories examined and verified," thereby crediting the Government's evidence concerning the importance of documentation. Id. at 1008. It concluded, however, that Sava rigidly categorized aliens as either "documented" or "undocumented" depending upon whether they had been through U.S. consular screening for a visa. See id. at 1008-09, 1012 & n.15. Noting that under this definition of "documented" the eight Haitians and most of the non-Haitians were "undocumented," the court concluded that with respect to this criterion the petitioners were indistinguishable from the non-Haitians.
20
The court's finding of rigid categorization is clearly erroneous. Sava testified that while he valued a U. S.-issued visa, he also gave weight to an applicant's lesser documentation. See Joint Appendix at 778, 781. Thus it was improper for the court to fail to consider the distinctions between the eight Haitians and the twelve non-Haitians in the degree to which they were documented. Moreover, the court found that the INS had "detailed information about each petitioner" from his own sworn statement contained in his political asylum application and that this self-generated information made the petitioner's lack of documentation virtually irrelevant. 535 F.Supp. at 1015. Had the court not substituted its judgment for that of Sava in determining the nature and importance of the documentation criterion, it might have concluded, on the basis of the record before it, that the petitioners were indeed different from the twelve non-Haitians in this respect.
21
The District Court recognized also that a second criterion relevant to parole decisions is the "likelihood that (an alien's) immigration application will meet with success," and it thus credited the Government's view of the significance of this criterion. Id. at 1009. It concluded, however, that the likelihood of a successful claim of asylum was not relevant in this case because Sava had stated that petitioners' applications were "serious" and "non-skeletal," id. at 1014; the court thereby implicitly suggested that the test of "seriousness" is synonymous with the question of whether an asylum application is or is not "skeletal." There is no support in the record for this conclusion. Sava did state that the petitioner's applications were not merely "skeletal." However, he never equated (the trial court's suggestions to the contrary notwithstanding) "non-skeletal" applications for asylum with "serious" applications, nor did he indicate that "non-skeletal" applications were sufficiently likely to succeed so as to minimize the risk of absconding. By adopting an unsupported interpretation of one of the Government's stated criteria for deciding parole requests, the court again improperly substituted its own judgment for Sava's judgment. In doing so, it arguably accorded too little weight to the petitioners' asylum applications; the court itself expressly found that Sava's finding that the petitioners were "unlikely to succeed(,)" id. at 1012, "seem(s) to be uncontradicted by the files." Id. at 1013.
22
The court also addressed the third criterion considered by the INS-whether the alien in question might derive from a family member, in the near future, an "immigration benefit." The court concluded that if an alien's relative is not currently in a position to confer such a benefit, or has not yet acted to confer a benefit, the alien is in no better position than an alien who has no relatives at all in the United States. Id. at 1016, n.26. The court discounted the Government's position that the alien was less likely to abscond if he had a relative in the United States who could, in time, pass such a benefit to an alien. If the court had applied the criterion as articulated by Sava, the uncontradicted evidence would have revealed that none of the eight petitioners had any relatives in the United States who are, or in the near future will be, in a position to confer upon them an "immigration benefit." On the other hand, it appears that two of the twelve non-Haitian parolees may have had relatives who will in the near future be able to confer on them an "immigration benefit" and another non-Haitian parolee may have had a relative who is now able to confer a benefit on him.
23
The District Court considered also another factor noted by the Government in addressing the risk of absconding presented by parole applicants-the identity of the alien's proposed sponsor. The Government presented evidence to support its preference that unadmitted aliens seeking parole obtain sponsorship from members of their family who reside in the United States rather than from large institutions or organizations. In the Government's view, it is easier to keep "track" of aliens whose sponsors are family members because family members generally have only one person to supervise and are more likely to feel personally responsible to keep "track" of the whereabouts of their paroled relative. Accordingly, the Government considers aliens who have family sponsors to present less of a risk of absconding than do aliens who are sponsored by large institutions or organizations. The trial court recognized that this was the Government's judgment on the matter but concluded that the Government's judgment was in error. Id. at 1009. In the court's view, large organizations "appear better structured than individual families" to act as sponsors. Id. The court's adoption of its own policy preference may have made the petitioners appear to be less likely to abscond than if the Government's criterion had been applied.
24
A review of the record convinces us that on several occasions the trial court improperly substituted its own judgment and policy preferences for those of Sava, thereby effectively distorting the case-by-case analysis of the likelihood that each of the petitioners would abscond if paroled and distorting also the comparison of the petitioners with the twelve non-Haitian parolees. Sava's stated criteria were neither irrational nor unreasonable.16 The court was not empowered to disregard them or to substitute its own policy preferences for those of the official vested by law with discretionary authority to act on requests for parole. See Johns v. Department of Justice, 653 F.2d 884, 891 (5th Cir. 1981); 2 Gordon and Rosenfield § 8.14 at 8-121.
25
The court's finding that the petitioners were "indistinguishable" from the twelve non-Haitians with whom the court chose to compare them was the result of its improper substitution of its judgment for that of Sava and therefore is fatally flawed. The finding that the two groups were "indistinguishable" constitutes an essential feature of the conclusion that Sava's decisions on the petitioners' parole requests were not legitimate and bona fide or were the product of invidious discrimination on the basis of race or national origin. Consequently, the petitioners cannot be said to have overcome the presumptive legitimacy of the Government's discretionary decisions.17
III.
Petitioners' Claims Under The Protocol
26
The District Court relied upon the Protocol, to which the United States is a party,18 as an additional basis for its holding that Sava had abused his discretion. It did so without deciding whether the Protocol is a "self-executing" international agreement which directly accords rights to persons without the benefit of Congressional legislation implementing the international obligations embodied in the instrument. See generally, L. Henkin, Foreign Affairs and the Constitution 156-164 (1972); Restatement, Second, Foreign Relations Law of the United States § 141 (1965).
27
The leading case on the Protocol concluded that "(t)he history of the adoption of the Protocol by this country makes clear that all the individuals and institutions involved in that process had a continuing belief that the (Protocol) would not alter or enlarge the effect of existing immigration laws, chiefly because it was felt that our immigration laws already embodied the principles of the (Protocol)." Ming v. Marks, 367 F.Supp. 673, 677 (S.D.N.Y.1973), aff'd on opinion below, 505 F.2d 1170, 1172 (2d Cir. 1974) (per curiam), cert. denied, 421 U.S. 911, 95 S.Ct. 1564, 43 L.Ed.2d 776 (1975); see also Pierre v. United States, supra, 547 F.2d at 1288-1290 (rejecting the contention of unadmitted Haitian aliens seeking parole "that the Protocol invests them with a liberty right protectable by due process or other constitutional protections," and noting "the intent of Congress in acceding to the Protocol to leave existing immigration procedures intact"). To the extent that the Protocol "(does) not alter or enlarge the effect of existing immigration law," we are required to conclude, for the reasons noted above, that the judgment of the District Court must be reversed.
28
Only recently we noted Ming v. Marks, supra, in a case which concluded that the Refugee Act of 1980, Pub.L. 96-212, 94 Stat. 102, had brought "the (domestic law) definition of refugee ... into compliance with the Protocol (,)" Stevic v. Sava, 678 F.2d 401, 406, 408 (2d Cir. 1982), by changing the domestic law standard governing applications for political asylum. In Stevic, we noted that "Article 33 of the Convention imposes an absolute obligation upon the United States" requiring that domestic law "standards developed in an era of discretionary authority (be adjusted,)" id. at 406-407, and that "Congress left no ambiguity about its intention to conform United States domestic law to the Protocol." Id. at 409. We also observed a "suggestion" of a "lack of identity" between actual domestic legal practice "and what should be expected after accession to the Protocol(.)" Id. at 406. In concluding that the Refugee Act of 1980 was designed, at least in part, to bring the United States into compliance with the Protocol, we indicated that the Protocol's provisions were not themselves a source of rights under our law unless and until Congress implemented them by appropriate legislation.
29
Accordingly, under the circumstances presented here, the Protocol affords the petitioners no rights beyond those they have under our domestic law.
IV.
30
The Forty-Five Additional Petitioners: The Motion to Amend,
31
Motion For Class Certification and the Motion for
Summary Judgment
32
In its opinion of April 5, 1982, the District Court granted the motion of the eight petitioners to amend the petition to add class action allegations covering all other Haitians then detained at the SPC and a motion to certify a class of fifty-three persons as defined in the amended petition. It also granted, on the basis of its March 5, 1982 ruling with respect to the original eight petitioners, a motion for summary judgment in behalf of the newly certified class.
33
We find no error in the ruling on the motion to amend or on the motion to certify a class of "all Haitian aliens transferred from INS's Krome facility to the SPC on July 18, 1981, who have requested political asylum and parole, but have remained in respondent's custody."
34
In granting the motion for summary judgment, the court relied on its March 5, 1981 ruling to hold that "the (forty-five) new petitioners are indistinguishable from the original eight" who were the subject of evidentiary hearings and concluded that the forty-five "(were) thus deserving of summary judgment." Inasmuch as we have concluded that the court erred in holding in favor of the original eight petitioners, that holding cannot support the entry of summary judgment in favor of the forty-five additional members of the newly-certified class. However, because the court found that the forty-five new class members are indistinguishable from the original eight petitioners, we leave undisturbed the District Court's certification of the class, without prejudice to its being reopened upon remand in light of the principles set forth herein for guidance of the District Court.
CONCLUSION
35
Ordinarily we would reverse and remand the case to the District Court for further proceedings consistent with our decision. However, we have been advised that there have been changes in some of the circumstances bearing directly on whether parole should now be granted, regardless of the INS District Director's past decisions. For instance, orders have apparently been entered denying all petitioners' applications for political asylum and directing that they be deported, subject to appeal to the BIA. In addition, new guidelines have been issued by the INS with respect to the parole of unadmitted aliens. Joint Appendix at 1490-92; letter of June 11, 1982 from Government enclosing Attorney General's memorandum of same date. Since the Attorney General's exercise of discretion, like a court's decision to grant bail in a criminal case, may be affected by a change in current circumstances, it is appropriate that the INS District Director be given the opportunity to reexercise that discretion (which is his and not that of the District Court) in light of all of the present relevant circumstances. Moreover, since the case must be remanded, the INS District Director should not be precluded, in the reexercise of his discretion, from taking into consideration the factors referred to in his March 15, 1982 affidavit, which were not introduced until after the District Court's March 5, 1982 decision.
36
Accordingly, the judgment of the District Court is reversed and the case is remanded with directions to permit the INS District Director to reexercise his discretion in accordance with the foregoing, which may then, upon petitioners' application, be reviewed by the District Court in accordance with the principles set forth in this decision.
KEARSE, Circuit Judge, concurring:
37
I concur in the result and in the reasoning of the majority opinion, although I have a somewhat different perception as to the details of some of the district court's analysis. Whereas the majority views the district court as having improperly substituted its own judgment and policies for those of District Director Sava "on several occasions," it appears to me that on some of the occasions referred to the district court was merely making credibility evaluations. Thus, in reviewing some of the factors outlined by Sava as to the likelihood of abscondence, the district court was making an effort to determine whether these were bona fide factors in Sava's own conclusion. This emerged most clearly in the matter of Sava's inclusion of State Department action or inaction as a pertinent factor, which the district court found "disingenuous", 535 F.Supp. at 1014, and in the discussion of documentation in which the court referred to one feature as "the most incredible aspect of Sava's testimony,"1 id. at 1012 n.15.
38
To the extent that the district court was making credibility assessments, its review was consistent with the strictures of Kleindienst v. Mandel, 408 U.S. 753, 92 S.Ct. 2576, 33 L.Ed.2d 683 (1972). But I agree with the majority that with regard to at least one of Sava's factors-i.e., the preferability of family sponsorship over group sponsorship-the district court did indeed substitute its own judgment and its own weighing of the relevant considerations for those of the District Director; and as to certain other factors, it is not clear from the opinion whether the district court was engaging in an impermissible reevaluation or a permissible assessment of credibility.
39
Since it is clear that at least to some extent the district court impermissibly substituted its judgment for those of Sava and that these substitutions were essential to the court's conclusion that the 8 Haitians were indistinguishable from the 12 non-Haitians, and thus to the finding of impermissible discrimination, I agree with the majority that the case must be remanded. In that a remand is required, I concur in the remand to the District Director for a fresh evaluation of the parole applications in light of the current circumstances.
*
The Honorable Jose A. Cabranes of the United States District Court for the District of Connecticut, sitting by designation
1
For convenience, we use the term "unadmitted" alien as synonymous with "non-resident," "excluded" or "excludable" alien or "an alien denied entry." Each of these terms has been used, in different contexts, to describe the alien who has reached our border but has not been formally permitted to enter the country. Even though physically present in the country, he is "treated as if stopped at the border," Shaughnessy v. United States ex rel. Mezei, 345 U.S. 206, 215, 73 S.Ct. 625, 630, 97 L.Ed. 956 (1953); if temporarily admitted on parole, the "unadmitted" alien "gains no foothold in this country and is regarded as having been stopped at the threshold." 1A C. Gordon and H. Rosenfield, Immigration Law and Procedure § 3.17c at 3-173 (Rev. ed. 1980)
The word "deportation" has occasionally been used by Congress and others to refer to the process for the removal of unadmitted aliens, "but its use (in this context) reflects none of the technical gloss accompanying its use as a word of art in (the parts of the immigration laws dealing with the process of removing resident aliens,)" Leng May Ma v. Barber, 357 U.S. 185, 187, 78 S.Ct. 1072, 1073, 2 L.Ed.2d 1246 (1958). See also Mayet Palma v. Verdeyen, 676 F.2d 100 at 104 n.4 (4th Cir. 1982) (same).
One commentator in 1962 attempted to sort out terminological confusion in INS proceedings as follows:
Technically, exclusion refers to the refusal to admit a non-resident alien; expulsion refers to the required departure of a resident alien; and deportation refers to any process by which an alien physically within this country or detained at a border is removed. Since aliens can be physically present without having made an entry in contemplation of law, deportation can be the removal of either an excluded (or unadmitted alien) or (an) expelled (resident) alien.
(In a non-technical sense,) "exclusion" is the process of excluding and deporting a non-resident alien; "deportation" is the process of expelling and deporting a resident alien.
Comment, Deportation and Exclusion: A Continuing Dialogue Between Congress and the Courts ("Deportation and Exclusion"), 71 Yale L.J. 760, 761 n.8 (1962).
2
Such prompt scheduling of exclusion hearings is not unusual. Proceedings to "exclude" an alien are often completed shortly after the alien's arrival; even after judicial review of INS decisions to exclude, the whole process by which an unadmitted alien may be turned back at our border may take no longer than several days. See, e.g., Petition of Cahill, 447 F.2d 1343 (2d Cir. 1971) (unadmitted alien scheduled for exclusion hearing one day after arrival at New York airport; judicial review of INS refusal to parole the alien pending INS exclusion hearing completed by District Court and Court of Appeals only two days after unadmitted alien's arrival and detention)
Indeed, we were informed at oral argument that in the case of detained unadmitted aliens from contiguous countries it is the practice of the INS simply to "turn them around and put them out." See Shaughnessy v. United States ex rel. Mezei, supra, 345 U.S. at 215, 73 S.Ct. at 630. ("(a)liens seeking entry from contiguous lands obviously can be turned back at the border without more"); Ahrens v. Rojas, 292 F.2d 406, 410 (5th Cir. 1961) (same); Doe v. Plyler, 458 F.Supp. 569, 591 (E.D.Tex.1978), aff'd, 628 F.2d 448 (5th Cir. 1980), aff'd, --- U.S. ----, 102 S.Ct. 2382, 72 L.Ed.2d 786 (1982) (federal government protects "domestic labor market" by turning aliens "back at the border ... rather than (letting them) enter"); see also United States ex rel. Polymeris v. Trudell, 284 U.S. 279, 52 S.Ct. 143, 76 L.Ed. 291 (1932) (alien held at the Canadian border).
3
See note 1 supra. 8 U.S.C. § 1182(d)(5)(A) provides, in pertinent part, as follows:
The Attorney General may ... in his discretion parole into the United States temporarily under such conditions as he may prescribe for emergent reasons or for reasons deemed strictly in the public interest any alien applying for admission to the United States, but such parole of such alien shall not be regarded as an admission of the alien and when the purposes of such parole shall, in the opinion of the Attorney General, have been served the alien shall forthwith return or be returned to the custody from which he was paroled and thereafter his case shall continue to be dealt with in the same manner as that of any other applicant for admission to the United States.
4
8 C.F.R. § 212.5(a) provides, in pertinent part, as follows:
The district director in charge of a port of entry may, prior to examination by an immigration officer, or subsequent to such examination and pending a final determination of admissibility in accordance with sections 235 and 236 of the Act and this chapter, or after a finding of inadmissibility has been made, parole into the United States temporarily in accordance with section 212(d)(5) of the Act (8 U.S.C. § 1182(d)(5) ) any alien applicant for admission at such port of entry under such terms and conditions, including the exaction of a bond (,) ... as such officer shall deem appropriate.
8
C.F.R. § 212.5 was promulgated pursuant to 8 U.S.C. § 1182(d)(5), supra note 3
5
It is noteworthy that the petitioners have been detained, absent parole, because they have accepted opportunities afforded them by law to pursue applications for political asylum and otherwise to resist the Government's efforts to deny them admission to the United States and the relevant proceedings have not yet been completed. At the conclusion of their exclusion/asylum proceedings they will either be admitted to the country or be deported; they would be released at any time if they chose to return to Haiti or go to another country that would receive them
6
In the third count, the petitioners also assert claims under the Fifth Amendment to the Constitution. Although the District Court's opinions of March 5, 1982 and April 5, 1982 appear to be substantially based upon constitutional considerations, petitioners on appeal assert that "(t)his case was not decided on constitutional grounds(,)" Brief for the Petitioners-Appellees at 28 n.23 (filed April 27, 1982); they seem to rely only on allegations of abuse of discretion. In any event, to the extent that the Fifth Amendment arguably forbids the INS from discriminating against the petitioners on the basis of race or national origin, such discrimination would constitute an abuse of discretion. See note 12, infra, and accompanying text
The petitioners make much of the fact that they have been detained in allegedly "substandard facilities" since their arrival in July 1981. It may be noted that the petitioners had been detained barely four months at the time these lawsuits were begun. The District Court, acting with commendable dispatch, issued its order and judgment (after holding hearings and receiving much documentary evidence) a little more than four months later. During the time the courts have had these cases under advisement, exclusion/asylum hearings have proceeded apace. We have been informed since oral argument that the hearings in all fifty-three exclusion proceedings have been completed; that an initial decision has been made by an immigration judge (in each case, apparently, the judge denied the application for political asylum and ordered the exclusion of the alien); and that these cases are now before the BIA (from whose decision an appeal may be taken to this Court). If a petitioner prevails in his exclusion proceeding, he presumably will be admitted into the country. If he does not, he presumably will return to Haiti or go to another country that will receive him. In either case, his detention will end when he has exhausted his remedies under our laws; his detention is in no sense indefinite or permanent. See note 2, supra.
Apart from unsubstantiated conclusory statements made in passing by the District Court that the petitioners have been confined in "substandard" or "inadequate" facilities and in "a harsh environment," 535 F.Supp. at 1007, 1030, 1031, not a single finding of fact was entered by the District Court on the conditions of their confinement, and questions regarding those conditions are not before us on this appeal.
7
See 535 F.Supp. at 1010-1013. The District Court determined that there were twelve members of the "comparable" group in the following manner. The court first found that there were 183 non-Haitian parole applicants about whom the petitioners had presented statistical information. From this group, the court then subtracted the 84 non-Haitian aliens whose parole applications had been granted prior to Sava's appointment as INS District Director in New York on July 6, 1981, leaving 99 non-Haitians to be considered. The court then reduced that number to 90 by removing from consideration nine non-Haitians who had withdrawn, or never filed, political asylum applications. Of the remaining 90 non-Haitian aliens, the court found that 78 presented compelling humanitarian concerns that warranted their parole and set them apart from the petitioners. This left twelve non-Haitian aliens who, in the court's view, were "indistinguishable" in all relevant respects from the eight original petitioners. Significantly, the court expressly concurred with Sava's conclusion that the petitioners did not "possess 'humanitarian factors' sufficient to warrant parole." 535 F.Supp. at 1008 & n.5
8
The Government has vigorously and consistently denied that Sava's decisions were based on any national policy with respect to unadmitted Haitian aliens, and the District Court concluded that the existence of any such policy had not been proved. 535 F.Supp. at 1017, n.27. Accordingly, neither the District Court nor this Court has considered whether or how our conclusions regarding judicial review of administrative action denying parole might be affected by the existence of a national policy to deny parole to unadmitted aliens of a particular race or from a particular country
9
One commentator has described failure to consider a case as a species of "abuse of discretion": "The courts will not usually review on habeas corpus the Attorney General's refusal to exercise a discretionary power to admit aliens within (unadmitted) classes. Failure to consider a case, however, is an abuse of discretion." Developments in the Law: Immigration and Nationality ("Immigration and Nationality"), 66 Harv.L.Rev. 643, 672 (1953) (footnotes omitted). The same commentator notes that "(h)abeas corpus has been available from the first cases to test the legality of the alien's detention.... It seems clear that there is implicit in this history of judicial intervention a theory of due process, of judicial supervision of administrative action arising out of our pervading constitutional concept of a rule of law." Id. at 675. It has also been observed that "(e)ven if the non-resident (or unadmitted) alien were entitled to no constitutional protection, it would not follow that the exclusion power is unlimited, for to allow Congress to act totally at will-let alone to delegate such authority to an administrative agency-is inconsistent with the concept of responsible government. The logic of the (resident alien) cases rests not simply on the rights of residents, but on the requirement that agents of the government may not act arbitrarily." Deportation and Exclusion, supra, at 785-786 (footnotes omitted)
10
Petition of Cahill, 447 F.2d 1343 (2d Cir. 1971) does not support the argument that courts are wholly without power to review discretionary actions of INS District Directors on parole requests. In that case we expressly reached the merits of the petitioner's claim of abuse of discretion, finding that "(p)etitioner's allegation that the denial of bail or parole ... was arbitrary and capricious ... is without merit." Id. at 1344. In any event, that case was markedly different from the one now before us. In Petition of Cahill the individual petitioner was detained at New York's Kennedy Airport on September 1, 1971 upon his arrival from Dublin. Judicial review of the decision to deny him parole, pending an exclusion hearing to be held less than a week later, was completed by the Court of Appeals (after a decision by the District Court) on September 3, 1971. There were no allegations in Petition of Cahill of unlawful discrimination on the basis of race or national origin by the Attorney General's delegates, and there was no suggestion in that case that the Government had deviated from its normal practices regarding parole requests because of such discrimination
11
The broad power of the political branches of our national government to regulate the admission of aliens (and to determine rights to be accorded to unadmitted aliens) is directly traceable to the nation's sovereignty, Congress' power over foreign commerce and the President's power to control foreign affairs. United States ex rel. Knauff v. Shaughnessy, 338 U.S. 537, 542, 70 S.Ct. 309, 312, 94 L.Ed. 317 (1950). See generally, 8 M. Whiteman, Digest of International Law 581 et seq. (1967); 3 G. Hackworth, Digest of International Law 725 et seq. (1942); 4 J. B. Moore, Digest of International Law 151 et seq. (1906); Immigration and Nationality at 647
12
Invidious discrimination against a particular race or group by a public official is a type of irrational conduct generally not countenanced by our law; such discrimination ordinarily is inconsistent with a "facially legitimate and bona fide reason" for government action. However, as the District Court recognized, and no one disputes, "Congress may employ race or national origin as criteria in determining which aliens to exclude from the country(.)" 535 F.Supp. at 1016. The wide latitude historically afforded to the political branches of our national government in immigration matters permits them to adopt even wholly irrational policies in this area. Nevertheless, as the District Court noted, the constitutional authority of the political branches of the federal government to adopt immigration policies based on criteria that are not acceptable elsewhere in our public life would not permit an immigration official, in the absence of such policies, to "apply neutral regulations to discriminate on (the basis of race and national origin)." Id.; see notes 6 and 8, supra, and accompanying text
13
The following colloquy between Sava and the court appears to be the basis for the court's finding regarding Sava's "generalizations":
The Court: Just generally, what kinds of things do you know about (petitioners)? Do you know about their education, things like that about them?
Sava: Well to the extent it is documented, I know that for the most part they are illiterate-
The Court: How do you know that?
Sava: I think most of them in their affidavits make that ... admission.
The Court: Do you know about their employment skills?
Sava: Most of them were farmers, working land in Haiti.
535
F.Supp. at 1014, n.21
14
The petitioners argue that the Government's "reliance on generalized Haitian statistics only reinforces the impression that petitioners were treated on the basis of their nationality rather than their individual characteristics (,)" Petitioners' Brief at 22, and thereby suggest that the use of such data in immigration matters is either unusual or probative of invidious discrimination. We disagree. It is entirely reasonable that statistics on persons arriving in the United States be maintained, at least in part, on the basis of national origin. Far from necessarily suggesting impropriety or unlawfulness, the compilation and use of information on groups which have been moved en masse to our shores-data on persons of common background and experience-is an integral part of any reasonable system for the control of our borders. It is precisely in those cases most likely to evoke humanitarian concern for the fate of large numbers of similarly situated escapees from intolerable circumstances abroad-for example, the mass movements of people from Southeast Asia, Haiti and Cuba-that group statistics may be most helpful in determining claims to admission to the United States and related questions. For example, the Select Commission on Immigration and Refugee Policy (Rev. Theodore M. Hesburgh, C.S.C., Chairman), which was appointed by President Carter and reported in March 1981 to President Reagan and to Congress, recommended that "the processing of asylum claims could be expedited and improved by developing group profiles based on evidence about how members of particular religious and ethnic groups or those with particular political and social affiliations are treated in different countries." U.S. Immigration Policy and the National Interest at 169, 171 (Mar. 1, 1981) (The Final Report and Recommendations of the Select Commission on Immigration and Refugee Policy to the Congress and the President of the United States)
15
See note 7, supra and accompanying text. The Government's evidence demonstrated that none of the petitioners possessed any official travel documents and that none of the petitioners presented, in Sava's opinion, political asylum applications that were likely to "fly." In addition, it showed that none of the petitioners had ever been in the United States before, so that the INS did not have any prior experience with them to permit Sava to conclude that they were disposed to comply with American immigration laws. None of the petitioners offered to post bond and most had offers of sponsorship from large organizations, which the INS regarded as disfavored sponsors. There appears to be no evidence in the record indicating that any of the petitioners had any means of supporting themselves in the event they were paroled. In addition, none of the petitioners had any relatives in the United States who could confer on them "immigration benefits" in the near future
The Government also presented evidence concerning the ninety non-Haitian aliens whose parole applications had been decided by Sava. First, the Government showed (and the trial court itself found) that seventy-eight of the ninety non-Haitian aliens paroled by Sava had compelling humanitarian reasons to justify their release. There is no dispute among the parties that the release of these seventy-eight persons was fully justified. With regard to the remaining twelve non-Haitians, the Government presented evidence that they did not pose great risks of absconding. Eleven of the twelve were shown to have some form of official travel documentation; of these eleven, ten had been through a consular screening process, including four who had been screened by an American consulate. Two of the twelve had entered the United States on prior occasions and, during those visits, had complied with our immigration laws. Three of the twelve had relatives living in the United States who are (or, in the near future, would be) in a position to confer an "immigration benefit" on the alien seeking parole. All twelve of these aliens, in Sava's view, presented "serious" asylum applications. Finally, two of the twelve posted bond to secure parole, thus giving them a monetary interest in not absconding.
Much of the information concerning the twelve non-Haitians with whom the court chose to compare the petitioners was presented in an affidavit filed by Sava on March 15, 1982. Indeed, the only direct evidence concerning these twelve persons before the court at the time of its March 5, 1982 ruling was contained in the statistical summary sheets that had been prepared by the Government and filed by the petitioners. Joint Appendix at 1497-1679. We do not rely on the March 15, 1982 affidavit to support our conclusion that the District Court committed legal error in substituting its judgment for that of the INS District Director. The affidavit does, however, suggest that this substitution may have led the court to err in concluding that the petitioners were indistinguishable from the 12 non-Haitian members of the comparison group and that Sava had engaged in invidious discrimination. In any event, the parties in any subsequent evidentiary hearing before the District Court should be permitted to present evidence on the matters treated in the affidavit of March 15, 1982, as well as on other matters that have transpired since the earlier hearings which may have a bearing on a determination of the petitioners' allegations under the applicable principles of law.
16
"Documentation" is relevant on the absconding issue because the existence of valid travel documents permits the INS to determine an alien's identity and it is much more difficult for an accurately identified alien to abscond while paroled. The fact that the petitioners are unlikely to succeed on their immigration applications also suggests that they pose such a risk if paroled; the more likely it is that an alien's application will succeed, the less likely it is that he will abscond while on parole and thereby risk his long-term chances of legal admission to the United States. The existence of relatives able to confer an "immigration benefit" is relevant to this inquiry because an alien likely to achieve the goal of lawful entry into the United States is less likely to abscond than one whose prospects are more doubtful. The fact that the petitioners have not previously entered the United States is relevant because it precludes the Government from concluding that, based on past experience, the alien will comply with our immigration laws if given the opportunity to do so
17
Having erroneously concluded that "petitioners are indistinguishable from aliens paroled by Sava" the District Court, applying by analogy the principles of domestic discrimination cases under the Fifth and Fourteenth Amendments, held that a showing of highly disproportionate discriminatory impact had been made, and that the burden of proof thereupon shifted to the Government "to rebut the presumption of invalidity by showing that the results were reached through racially neutral criteria," which Sava assertedly had not met. Whatever shifting of burden may be permissible in cases based upon the Government's affirmative duty not to discriminate in employment and housing, none is permissible here. We are satisfied that the Government is entitled to a broader range of discretion in deciding whether an unadmitted alien should be released on parole. In any event, the present record fails to support the District Court's finding of highly discriminatory impact
18
See Ming v. Marks, 505 F.2d 1170, 1171 n.1 (2d Cir. 1974) (per curiam), cert. denied, 421 U.S. 911, 95 S.Ct. 1564, 43 L.Ed.2d 776 (1975) (history of United States accession to Protocol and relationship of Protocol to the Convention)
1
While recognizing the deference due a district court's evaluations as to a witness's credibility, I agree with the majority that the court's finding here of a rigid categorization by Sava as to the meaning of "documentation" was clearly erroneous, since it ignored portions of Sava's testimony that clearly indicated that he recognized different types or degrees of documentation
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19 So.3d 933 (2007)
MARVIN ROLAND GRAVES
v.
MARY GOLTHY.
No. 2070156.
Court of Civil Appeals of Alabama.
December 14, 2007.
Decision of the Alabama Court of Civil Appeal Without Published Opinion. Transferred to Sup. Ct. for lack of subject-matter jurisdiction.
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751 P.2d 733 (1988)
Howard Dean MILLER, Appellant,
v.
STATE of Oklahoma, Appellee.
No. F-85-211.
Court of Criminal Appeals of Oklahoma.
February 17, 1988.
Lisbeth McCarty, Asst. Appellate Public Defender, Norman, for appellant.
Michael C. Turpen, Atty. Gen., William H. Luker, Asst. Atty. Gen., Oklahoma City, for appellee.
*735 OPINION
PARKS, Judge:
Howard Dean Miller, A/K/A Howard Dean Deckard, appellant, was tried and convicted of Second Degree Rape [21 O.S. Supp. 1984, § 1114] (Count I), Forcible Sodomy [21 O.S.Supp. 1984, § 888] (Count II), Second Degree Rape by Instrumentation [21 O.S.Supp. 1984, § 1114] (Count III), and First Degree Burglary [21 O.S. 1981, § 1431] (Count IV), in Case No. CRF-84-233, in the District Court of Comanche County, the Honorable Kenneth L. Youngblood, District Judge, presiding. The jury set punishment at incarceration for fifteen (15) years on Count I, fifteen (15) years on Count II, fifteen (15) years on Count III, and ten (10) years on Count IV. Judgments and sentences were imposed in accordance with the jury's verdict, the sentences to run consecutively. We affirm.
On May 4, 1984, P.B. fell asleep in a recliner while watching television and awoke at approximately 10:00 p.m. when she felt a hand on her shoulder. The intruder, who wore panty hose over his head, forced P.B. at knife point to accompany him to her bedroom. The intruder cut the telephone wire in the bedroom and threatened to harm P.B.'s children if she did not undress. She complied. The intruder then raped and anally sodomized her, forced a shoe polish bottle into her vagina, and raped her once again. At some point during the attack, the attacker touched certain items in the bedroom and pocketed several items, including the victim's driver's license. As the attacker left the bedroom, he warned the victim that if she "charged" him, he would return and "break every bone in her body." The attacker returned *736 to the bedroom and asked where her husband kept his pistol. She responded that her husband, who was away for military training, did not own a gun. The attacker had rearranged the panty hose over his head by this time, and the victim could see his eyes and nose. P.B. recognized her attacker as the appellant, a sixteen-year-old neighbor who occasionally mowed her lawn.
After the appellant fled, P.B. awoke her children, took them to a neighbor, and called the police. The police took her to a hospital, where she was examined, treated, and a rape kit prepared. P.B. identified her attacker to the police, although she could not give them his name, and identified the various items touched in the bedroom and the items stolen by the appellant. A fingerprint expert lifted latent prints from two of the items in the bedroom. The prints matched the appellant's prints on file with the police department. Furthermore, the victim picked the appellant out of a photographic line-up.
Based upon the fingerprint and photographic identifications, the police obtained a search warrant for the appellant's home. The appellant lived with his parents. The warrant was served on the appellant's sister. The appellant's bedroom door was padlocked from the outside. The sister obtained a key and unlocked the door. The police found the telephone stolen from the victim and a box containing military insignia belonging to her husband on a shelf, and also found the victim's driver's license between the mattress and box springs of the appellant's bed. The police then arrested the appellant at school.
Prior to trial, appellant's counsel raised the issue of the appellant's competency to stand trial. The court sent the appellant to Eastern State Hospital in Vinita, Oklahoma, for observation. The Senior Staff Psychiatrist reported the appellant able to appreciate the nature of the charges against him and able to consult with his lawyer and rationally assist in the preparation of his defense. No mental problems were discovered. The court scheduled a competency hearing for August 30, 1984. Appellant requested that a six-person jury hear the question of his competency to stand trial. The jury, by a vote of five to one, found the appellant competent to stand trial. Appellant had already been certified to stand trial as an adult.
At trial the appellant testified that P.B. asked him into her home and seduced him. He denied inserting a shoe polish bottle into her vagina, anally sodomizing her, or stealing any of the items found in his room. He claimed the victim loaned the telephone to him. When first arrested, the appellant claimed he found the telephone in a dumpster. The appellant claimed the military insignia seized in his locked bedroom belonged to him and reflected his R.O.T.C. rank. On cross-examination, however, the State brought out that R.O.T.C. insignia differs from regular Army insignia and that the appellant held a different rank in the R.O.T.C. from the insignia found in his room. An insanity defense was not raised at trial.
The appellant's first three assignments of error concern his competency hearing: first, that he was not competent to stand trial as defined by 22 O.S. 1981, § 1175.1; second, that the court erred by failing to instruct the competency jury that the State has the burden of proving competency beyond a reasonable doubt once the accused presents clear and convincing evidence of incompetency; and third, that it was error for the jury to find him competent by a 5-1 vote, rather than by a unanimous verdict. The appellant's assignments of error are grounded on two assumptions: first, that the standards for a competency hearing are the same as for an insanity defense raised at trial; second, that the appellant has a constitutional right to a jury trial at a competency hearing with a concomitant right to a unanimous jury verdict. We disagree.
The question of an accused's present competency to stand trial is a separate matter from a defense of insanity, that is, the inability to distinguish right from wrong at the time of the offense. Competency is defined as "the present ability of a person arrested for or charged with a *737 crime to understand the nature of the charges and proceedings brought against him, and is able to effectively and rationally assist in his defense." 22 O.S. 1981, § 1175.1(1). See Clark v. State, 718 P.2d 375, 377 (Okl.Crim.App. 1986). See also Dusky v. United States, 362 U.S. 402, 80 S.Ct. 788, 789, 4 L.Ed.2d 824 (1960). Indeed, it is error for the trial court to find the accused competent to stand trial based solely upon the determination that he knew right from wrong at the time of the offense. Campbell v. State, 636 P.2d 352, 355 (Okl.Crim.App. 1981), cert. denied, 460 U.S. 1011, 103 S.Ct. 1250, 75 L.Ed.2d 479 (1983). See also Pate v. Robinson, 383 U.S. 375, 86 S.Ct. 836, 15 L.Ed.2d 815 (1966). Conviction of an accused while legally incompetent violates due process. Id. at 378, 86 S.Ct. at 838.
Here, appellant's counsel brought the appellant's competency into issue. The appellant was professionally examined and found to be competent to stand trial. The court then ordered a competency hearing.
The court, at the hearing on the application, shall determine by clear and convincing evidence, if the person is incompetent. The person shall be presumed to be competent for the purposes of the allocation of the burden of proof and burden of going forward with the evidence.
22 O.S. 1981, § 1175.4(B). If the court deems it necessary, or if demanded by the accused, or by a relative, friend, or person with whom the accused resides, a six-person jury shall be impaneled to determine the question of competency and the need for treatment. See Scott v. State, 730 P.2d 7 (Okl.Crim.App. 1986). Section 1175.4 contemplates that competency shall be determined by the trial court, unless an affirmative demand is made for a jury. Section 1175.4 further presumes competency and places the burden of proof and the burden of persuasion on the accused to prove his incompetence by clear and convincing evidence. If the finder of fact determines the accused is presently incompetent to stand trial, all criminal proceedings must stop and the accused must receive appropriate treatment, therapy or training to achieve competency. 22 O.S. 1981, §§ 1175.2(A), 1175.6(2). If the accused is found incompetent and not capable of achieving competency within a reasonable period of time, and qualifies as mentally ill under Title 43A, the criminal case shall be dismissed without prejudice. 22 O.S. 1981, § 1175.6(3). Once competency is restored, the criminal proceedings shall resume. 22 O.S. 1981, § 1175.8. Therefore, a finding of present incompetency is not a final adjudication on the merits, requiring the State to prove competency beyond a reasonable doubt, but rather a postponement of all criminal proceedings until competency is restored.
The appellant argues that he has a constitutional right to a unanimous jury vote in a competency hearing, relying on Burch v. Louisiana, 441 U.S. 130, 99 S.Ct. 1623, 60 L.Ed.2d 96 (1979). In Burch, the Supreme Court ruled that, in a trial of a nonpetty offense to a jury of six, the verdict must be unanimous to convict. Id. at 138, 99 S.Ct. at 1627. The appellant's reliance on Burch is misplaced. He overlooks the obvious a jury finding in an incompetency hearing is not a conviction. If the accused is found incompetent, all criminal proceedings are suspended until competency is regained. If found competent, criminal proceedings are resumed. We previously found that the constitutional right to a unanimous verdict attaches when the finder of fact determines the ultimate question of guilt or innocence of the crime charged, Rounds v. State, 679 P.2d 283, 287 (Okl.Crim.App. 1984), or when the possible punishment includes incarceration. Williams v. City of Tulsa, 740 P.2d 737, 738 (Okl.Crim.App. 1987). Such is not the case in a competency hearing.
Title 22, O.S. 1981, §§ 1175.1 1175.8 and 22 O.S.Supp. 1987, § 1176 apply only to those accused of a crime. The right to have a jury hear the question of the accused's competency is statutory and must be demanded, otherwise the hearing will be by the court. No finding of the ultimate question of guilt or innocence is involved, nor is an accused subject to fine *738 or incarceration as a result of a competency hearing. Consequently, a competency hearing is a special proceeding for the purpose of ensuring full compliance with due process requirements, but is not itself a criminal prosecution. Therefore, there is no right under the Sixth and Fourteenth Amendments of the United States Constitution, or under Art. II, §§ 19, 20, of the Oklahoma Constitution, to a jury trial in a competency hearing or to a unanimous jury finding of incompetency.
The remaining question is whether the appellant has a statutory right to a unanimous jury vote in a competency hearing. Title 22 O.S. 1981, §§ 1175.1 1175.8 and 22 O.S.Supp. 1987, § 1176, are silent on whether a finding of incompetence by a jury must be by unanimous vote. The court, in jury instruction number 12, instructed the competency jury that they could reach a finding by a vote of five of the six jurors. The appellant asserts the vote by the jury must be unanimous to find the accused incompetent. We disagree. We previously addressed this question in Weiland v. State, 58 Okl.Cr. 108, 50 P.2d 741 (1935):
The trial of the question of present sanity is in the nature of a special proceeding not involving any question of guilt or innocence, but a collateral issue. The court here followed the civil procedure, that is, he ruled and instructed that the burden was on the defendant on that issue, and that he was entitled to the opening and closing in presenting his testimony and in the argument, and further ruled and instructed that nine of the jurors might return a verdict. His ruling was in conformity to the statute regulating the procedure in such cases.
Id. at 744 (emphasis added). See also Tarter v. State, 359 P.2d 596, 603 (Okl.Crim. App. 1961). Nonunanimous, three-fourths, verdicts are permissible in special actions in the nature of civil proceedings where defendants are not subject to a fine or incarceration. State v. McCain, 637 P.2d 72, 74 (Okl. 1981). Furthermore, the jury vote in the instant case was five for competence and one for incompetence, not five for incompetence and one for competence. The appellant has failed to prove incompetency by clear and convincing evidence.
The question of present competency is a determination of fact, and the standard of review on appeal is whether there is any competent evidence reasonably supporting the finding of the trier of fact on the question. O'Dell v. State, 455 Pd.2d 750, 752 (Okl.Crim.App. 1969). In reviewing the record evidence, we find the question of appellant's present competence supported by the evidence. These assignments of error are without merit.
For his fourth assignment of error, the appellant asserts that he was denied a fair trial because of four instances of prosecutorial misconduct. Two statements were made by the prosecutor during closing argument. The first concerned a photograph entered into evidence which depicted P.B.'s bedroom after the attack. The photograph clearly shows clothing pulled from drawers, the bedroom telephone with the cut wire, a stool kicked over, and the condition of the bedcovering. The prosecutor asked the jury: "Look at these pictures. Does this room look like the room where two people go and have sexual intercourse willingly and voluntarily or does it look like it has been ransacked?" The second statement analogized the stolen telephone, the military insignia, and the driver's license to trophies.
Appellant also argues that the prosecutor's question on cross-examination whether he had been previously adjudicated a delinquent constitutes error. Appellant timely objected to this question and his prior juvenile record was not revealed to the jury.
Finally, appellant argues it was error to question him whether he resisted having his fingerprints taken during the trial. Appellant's fingerprint card introduced into evidence listed a different middle name from that listed on the information. Appellant put the State to the test of proving he was the same person as that named on the fingerprint card. The State attempted to fingerprint him during recess, but because the appellant refused to cooperate, the officer *739 only obtained one clear print. The court sustained Defense counsel's objection to this question, and admonished the jury to disregard the question.
The right of argument contemplates a liberal freedom of speech, and the range of discussion, illustration and argumentation is wide. Both the accused and the State have a right to freely discuss the evidence from their respective viewpoints and draw inferences and deductions arising from the evidence. Only when argument by the prosecutor is grossly improper and unwarranted, and affects the accused's rights, will a reversal be based upon improper argument. Hartsfield v. State, 722 P.2d 717, 720 (Okl.Crim.App. 1986) (Parks, P.J., dissenting on other grounds). Here, the photographs were introduced into evidence and testimony elicited concerning the condition of the bedroom after the attack. We find the characterization of the bedroom as ransacked, after reviewing the photographs entered into evidence, is a reasonable inference and deduction from the evidence, as was the prosecutor's characterization that the stolen items were trophies. Additionally, the appellant did not object to the trophy analogy, and we will not consider the question on appeal. Walker v. State, 723 P.2d 273, 286 (Okl.Crim. App. 1986), cert. denied, ___ U.S. ___, 107 S.Ct. 599, 93 L.Ed.2d 600 (1987).
The prosecutor's attempt to unsuccessfully bring in the appellant's prior juvenile record was met with a timely objection and sustained. The appellant's prior record was not revealed to the jury. And the trial court sustained the appellant's objection to the question concerning his resistence to having his fingerprints taken and admonished the jury to disregard the question, thereby curing any alleged error. Walker, supra, at 286. This assignment of error is without merit.
For his fifth assignment of error, the appellant asserts that because his bedroom was padlocked from the outside, indicating a reasonable expectation of privacy within his room, the police officers had no authority to enter the room without his consent absent exigent circumstances; therefore, the items seized in his room were the fruits of an illegal search and inadmissible at trial. Again, the appellant overlooks the obvious. The concept of exigent circumstances applies in warrantless searches and seizures. Exigent circumstances permit an officer to substitute his judgment for that of a neutral and detached magistrate as to the existence of probable cause to make a search. Blackburn v. State, 575 P.2d 638, 642 (Okl.Crim. App. 1978). See also Fisher v. State, 668 P.2d 1152, 1156 (Okl.Crim.App. 1983).
Here, the police searched the appellant's bedroom under the authority of a warrant issued by a neutral and detached magistrate. The affidavit in support of the warrant was based on the fingerprint evidence found in the victim's home and by her identification of the appellant from a photographic line-up. The evidence amply supported the magistrate's determination that probable cause existed to search the residence. The warrant described with particularity the place to be searched and the items to be seized. The only item seized which was not named with particularity in the warrant was the victim's driver's license, which she did not know was stolen before the warrant was issued. The officers could rely on the warrant and search the entire residence, including the appellant's bedroom, without his consent. This assignment of error is without merit.
For his sixth assignment of error, the appellant asserts that the sentence imposed was excessive under the circumstances. The facts and circumstances of this case reveal the evidence supports the jury's verdict; the record is free from error which would justify a modification or reversal; and the punishment imposed is within the statutory range. Fincher v. State, 711 P.2d 940, 942-43 (Okl.Crim.App. 1985). Nor does the fact that the sentences are to be served consecutively shock the conscience of the Court, requiring modification of the sentence. Shultz v. State, 715 P.2d 485, 488 (Okl.Crim.App. 1986). We will not substitute our judgment for that of the trier of *740 fact in the absense of error at trial. This assignment of error is without merit.
For his seventh assignment of error, the appellant asserts that he was denied effective assistance of counsel at trial. During closing argument, appellant's counsel stated to the jury:
[A]nd as I say, he's young and insophis unsophisticated, and he may be a thief. Whether or not he stole the telephone or after being in Mrs. Benson's house with her permission as he stated, that I can't tell you. He may be afraid to admit to any wrong doing thinking thinking that you will take it that uh, everything he did was wrong.
Appellant failed to provide any credible explanation for his possession of the items belonging to the victim seized in his room. Counsel attempted to explain away the appellant's possession of those items. The appellant was not charged with theft, but with burglary and three counts of sexual assault. Counsel did not admit appellant's guilt to any of the charged offenses.
There is a strong presumption that counsel's conduct is professional, and the appellant must overcome the presumption that counsel's conduct was sound trial strategy. Strickland v. Washington, 466 U.S. 668, 689, 104 S.Ct. 2052, 2065, 80 L.Ed.2d 674 (1984). We review an ineffectiveness claim by considering counsel's challenged conduct on the facts of the case viewed at the time of counsel's conduct, Id. at 690, 104 S.Ct. at 2066, and determine whether, if the conduct was in fact professionally unreasonable, the error effected the judgment. Id. at 691, 104 S.Ct. at 2066. We find the appellant has failed to rebut the presumption that counsel's conduct was sound trial strategy. This assignment of error is without merit.
For his final assignment of error, the appellant asserts that he was denied a fair trial because the jury improperly considered the possibility of parole in setting his sentence. During sentencing deliberations, the jury sent a note to the court asking two questions: first, "Does the jury determine whether jail term is run concurrently, coincide, consecutive?"; second, "Do we consider parole factors?" The court responded negatively to both questions. Appellant's counsel expressly agreed with the court's response. Furthermore, appellant offers no evidence in support of his assignment of error, other than to infer that because the jury asked the question concerning parole, they considered the possibility of parole in their deliberations. The court properly responded to the jury's questions. Rice v. State, 666 P.2d 233, 235 (Okl.Crim.App. 1983). The record evidence does not support the appellant's bare allegation that the jury considered the possibility of parole in reaching their decision. This assignment of error is without merit.
Accordingly, for the foregoing reasons, the judgments and sentences should be, and hereby are, AFFIRMED.
BRETT, P.J., and BUSSEY, J., concur.
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303 S.W.2d 393 (1957)
The STATE of Texas, Appellant,
v.
Wayne RICHARDS et al., Appellees.
No. 15777.
Court of Civil Appeals of Texas, Fort Worth.
May 31, 1957.
Howard M. Fender, Crim. Dist. Atty., of Tarrant County, and Hugh F. King, Asst. Crim. Dist. Atty., Fort Worth, for appellant.
Wardlaw, Bradley & Cochran and Ernest May, Fort Worth, for appellees.
PER CURIAM.
Appellant The State of Texas filed suit under the terms of Article 725d, Vernon's Penal Code, to confiscate and forfeit a motor vehicle owned by appellee Wayne Richards and which was used by Dean Portwood in the unlawful transportation of *394 narcotics. The possession of the vehicle was obtained by Portwood by his representation to Richards that he wanted to borrow it for thirty or forty minutes in order to drive from Richards' place of business in the City of Fort Worth, where Portwood was a customer, to the apartment of Portwood's brother, in another part of the city, for the purpose of changing clothes. Richards did not know or suspect that Portwood possessed narcoties, or would transport narcotics in the vehicle.
The trial court rendered judgment for Richards, holding that if by the Article in question the Legislature intended to authorize the forfeiture and confiscation of an automobile, the owner of which is innocent of knowledge of or complicity in any offense defined by that Article, to that extent the Article was not within the power of the Legislature as limited by the Bill of Rights, Vernon's Ann.St., and denied the relief sought against Richards.
An appeal from said judgment was brought to this court, which certified to the Supreme Court the questions whether the Legislature intended that the vehicle of an innocent owner which is used by another in the violation of the Article should be forfeited, and, if so, whether the Article in that respect contravenes the due process clause or any other provision of the State Constitution.
The Supreme Court, in an opinion rendered on April 24, 1957, State of Texas v. Richards, 301 S.W.2d 597, answered the first question in the affirmative, and answered the second question in the negative, and ordered the questions certified. That opinion is referred to for a discussion of the facts and the law.
It having thus been determined that Article 725d is applicable to appellee Richards' motor vehicle under the facts of this case, and does not contravene any provision of the State Constitution, it follows that the trial court erred in rendering judgment denying forfeiture of the motor vehicle to the Texas Department of Public Safety, Narcotics Section.
The judgment is reversed and judgment is here rendered for appellant.
The costs incurred in the Supreme Court, in this Court and in the trial court are adjudged against appellees Richards and Portwood.
Reversed and rendered.
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783 P.2d 178 (1989)
Loy A. JENNINGS, Appellant (Defendant),
v.
Robert D. JENNINGS, Appellee (Plaintiff).
No. 89-107.
Supreme Court of Wyoming.
November 29, 1989.
Richard M. Davis, Jr. of Burgess & Davis, Sheridan, for appellant.
Charles R. Hart, Sheridan, for appellee.
Before CARDINE, C.J., and THOMAS, URBIGKIT, MACY and GOLDEN, JJ.
CARDINE, Chief Justice.
Appellant, Loy A. Jennings, seeks child support from appellee, Robert D. Jennings, for a child who has reached the age of majority. The district court denied her petition for modification of the divorce decree. She identifies the issue as:
"The sole issue before the Court is whether the District Court erred in finding that it lacked jurisdiction to enter an Order providing for support for a minor child in a divorce action after that child attained the age of majority."
Appellee identifies the issue as:
"[W]hether the District Court erred in finding that it lacked jurisdiction to enter an Order providing support for a non-disabled adult child based upon a post divorce *179 modification petition filed after the child attained the age of majority."
We affirm.
FACTS
Robert and Loy Jennings were divorced on April 6, 1987. Under the divorce settlement, Loy obtained custody of the couple's two children, and Robert was required to pay child support for each child until that child became emancipated. The parties' agreement, which was incorporated into the final divorce decree, defined emancipation as occurring when a child either reaches the age of 19, marries, dies or enters into the United States armed forces. Wyoming law recognizes emancipation when a person reaches the age of 19, marries, or enters the United States military. Additionally, a 17-year-old minor may apply for emancipation provided he is willingly living separate and apart from his parents with at least his parents' acquiescence, is managing his own financial affairs, and has a legal means of income. See W.S. 14-1-101 through -206.
During August 1988, the Fourth Judicial District Court of Wyoming placed Christopher, the child whose support is at issue here, on probation after a guilty plea to a criminal charge. Christopher had been charged as an adult. The terms of Christopher's probation required that he live with his mother. On October 28, 1988, he attained the age of 19 years.
During November 1988, Robert petitioned the district court to modify the divorce decree to terminate his child support obligations. Christopher's attainment of age 19, in part, prompted the petition. Loy counter-petitioned for modification of the divorce decree extending Robert's child support obligations for Christopher during the time Christopher remained on probation and lived with Loy. The district court denied Loy's petition, noting that Robert had no legal obligation to support his son beyond age 19 years.
DISCUSSION
W.S. 20-2-113(a) (1988 Cum.Supp.) gave a district court continuing jurisdiction over matters involving child custody and support arising out of divorce by providing in pertinent part as follows:
"In granting a divorce * * * the court may make such disposition of the children as appears most expedient and beneficial for the well-being of the children. * * * On petition of either of the parents, the court may revise the decree concerning the care, custody, visitation and maintenance of the children * * *."
The legislature revised this statute in 1989 to clarify this continuing jurisdiction. See W.S. 20-2-113. In Kamp v. Kamp, 640 P.2d 48 (Wyo. 1982), we held that the language of this statute did not necessarily limit its applicability to minor children of divorced parents. 640 P.2d at 50-51.
The Kamp case concerned the obligation of a divorced father to provide support for a child so severely disabled that she required around-the-clock attention. Id. at 49. The child in Kamp suffered from severe mental deficiencies, cerebral palsy, and spastic paraplegia and was beyond the age of majority when the question arose. We held that the child fell "within the category of `children' with respect to whom the legislature intended the divorced parent would be called upon to support." Id. at 51.
Although we held in Kamp that W.S. 20-2-113(a) had broad application, we noted as well that its reach was not without limit. The circumstances in Kamp did not require us to determine that limit. 640 P.2d at 51. Without disturbing the premise that "[t]he obligation to support such a child ceases only when the necessity for support ceases," id., we hold that the factual circumstances of this case fall beyond the limit where a parent is required to support a child.
In the instant case, appellant and appellee agreed in their settlement that emancipation would terminate appellee's child support obligation. Such provisions are frequently found in divorce settlements, and their validity, here and in general, is beyond question. See Broyles v. Broyles, 711 P.2d 1119, 1126 (Wyo. 1985). *180 The divorce decree incorporated this settlement agreement. When a decree incorporates a settlement agreement, we are reluctant to disturb the decree because doing so would infringe upon the freedom of contract, as well as concerns of finality. Parry v. Parry, 766 P.2d 1168, 1170 (Wyo. 1989). Therefore, when a decree for termination of support upon attaining the age of majority as provided in the parties' incorporated agreement is entered, the obligation to support terminates upon the date the age of majority is attained, except that there is a duty of parental support of a child beyond the age of majority in the case of a physically or mentally disabled child because the continuing disability prevents such a child from becoming emancipated. See Kamp, 640 P.2d at 53 (Rooney, Justice, specially concurring). See Annotation, Postmajority Disability as Reviving Parental Duty to Support Child, 48 A.L.R.4th 919, 923 (1986).
In conclusion, appellant's reasons for allowing Christopher to live in her home, despite his attainment of the age of majority, are her own, and we laud her acceptance of a perceived moral duty as a parent. However, she was under no legal duty to provide a residence for Christopher. His living arrangement was a term of his probation imposed upon him as an adult. The court imposing Christopher's probation had no authority to require appellant to abide by its terms. She agreed to them of her own volition.
Affirmed.
URBIGKIT, J., files a specially concurring opinion.
URBIGKIT, Justice, specially concurring.
It is apparent from the text of the majority that this court now adopts from our earlier case of Kamp v. Kamp, 640 P.2d 48 (Wyo. 1982) the special concurrence written by Justice Rooney and eschews the majority decision authored by Chief Justice Rose. I specially concur in present decision to deny the father's support obligation for his nineteen-year-old son by conclusion that on this subject judicial legislating should come to a present end. The legislature should urgently undertake to establish within this complex subject of parental responsibility for their children what that obligation should be for support and maintenance, if any, after their children have achieved the age of majority set by present law at nineteen.
Candidly, I find an equal if not greater obligation and opportunity for consecration of parental responsibility in this case to benefit the nineteen-year-old son as compared with the devotion and abiding affection related by the mother, Marguerite, for her daughter, Marlana, in Kamp.
I cannot accept the rather blase denial of parental obligation and opportunity for Christopher Jennings. This young man was clearly at the cross-roads of life and the trial court in criminal sentencing had already recognized in parole order how important completion of a high school education and his maintenance at the home of his parents might be for his future. At no time of parenting was the immediacy, difficulty and intensive challenge to be greater than at that time for Robert and Loy Jennings to their son Christopher.[1] For Christopher, the year of continued education required by his parole order commenced in *181 August 1988 before he had achieved adulthood and would have ended in May or June of 1989. What now may be the status about which this litigation is continued is certainly not to be revealed in present appellate file.
What I see from Kamp Jennings is total confusion that urgently seeks thoughtful legislative attention within its constitutional responsibility for the public well-being. The rules of responsibility of parents for their children should be set as a matter of statute and not ad hoc judicial reaction to individual cases. Now clouded and questioned are the general subjects of responsibility for post-majority advanced education, effectiveness of divorce separation agreements or decrees considering post-majority obligation to the litigants' children and the obligation, if any, of the parents following incapacitation of their children post-adulthood.
The text of academic reviews and annotation analyses broadly consider the scope of society's concern and the opportunity for legislative decision. It was said in 1987 that Wyoming was only one of four states lacking statutes relating to disabled adult children. Horan, Postminority Support for College Education A Legally Enforceable Obligation in Divorce Proceedings?, 20 Fam.L.Q. 589, 589 n. 1 (1987). Comprehensive consideration can be additionally found in Washburn, Post-Majority Support: Oh Dad, Poor Dad, 44 Temp. L.Q. 319 (1971); Note, Express Provision for Post-Majority Child Support in Dissolution Decree Is Valid By Operation of the Marriage Dissolution Act of 1973. In re Marriage of Melville, 11 Wash. App. 879, 526 P.2d 1228 (1974), 10 Gonz.L.Rev. 933 (1975); and H. Clark, Law of Domestic Relations ch. 15 at 495 (1968). See also Annotation, Parent's Obligation to Support Adult Child, 1 A.L.R.2d 910 (1948 & 1985 Supp.); Annotation, Responsibility of Noncustodial Divorced Parent to Pay For, Or Contribute To, Costs of Child's College Education, 99 A.L.R.3d 322 (1980); and Annotation, Post-Majority Disability as Reviving Parental Duty to Support Child, 48 A.L.R.4th 919 (1986).
The special concurrence in Kamp, 640 P.2d at 52 quoted from the Iowa case of Davis v. Davis, 246 Iowa 262, 67 N.W.2d 566, 568 (1954):
"It is true, as respondent suggests, that generally at common law a parent's obligation to support his child ends when the latter becomes of age. But there is an important, widely recognized exception to this rule where the child because of weak body or mind is unable to care for itself upon attaining majority. The obligation to support such a child ceases only when the necessity for the support ceases. Courts throughout the land have so held emphatically and eloquently."
Rationally, in this world of 1989, it is absurd and perhaps almost criminal to believe that a nineteen-year-old without advanced education is realistically able "to care for [him]self upon obtaining majority" within this computer world or that the "necessity for the support ceases" for further education which is pursued by the young individual.
In this era of divorce, Kamp Jennings will have a broad social affect and it is my conviction that Wyo. Const. art. 2, § 1 constitutes for the legislature a call to establish by an enacted statute where the limitations of enforceable responsibility of parents to their children should end. I would hope that the legislature would be constitutionally summoned to that task in order that this court does not continue to be responsible to substitute an ad hoc case-to-case adjudication.[2]
I specially concur on the basis that the legislature has provided, for me, no direction for enforceable parental obligation *182 for support or maintenance of their children after the age of majority has been achieved, except within the small enclave this court has previously carved out in Kamp. The balancing of rights and responsibilities within the fundamental relationship of parent and child calls first for the legislature to regulate and define and then only for the judiciary to apply, differentiate with set standards and finally to enforce. See a discussion of these problems with the answers provided in Griffin v. Griffin, 384 Pa.Super. 188, 558 A.2d 75 (1989) and the cited scholastic reviews which provide both interesting thought and exciting challenge.[3]
NOTES
[1] The record does not inform whether Christopher was sentenced under the deferred conviction process of W.S. 7-13-301 in order that good behavior and probation term compliance would save him being tagged a FELON A CONVICT a person who had lost many civil liberties including the right to vote, serve on a jury or own a firearm. Marlana Kamp could only be loved, maintained and protected. Christopher might be saved. When half of the American adult population becomes felons and convicts and that fact comes to be recognized by the remaining voters, perhaps the untainted legislators, the judiciary and even the decisional public will understand the permanent and pervasive scars of felony conviction and destroyed capacity and lost opportunity for societal contribution. See W.S. 6-10-106(a), which states that "[a] person convicted of a felony is incompetent to be an elector or juror or to hold any office of honor, trust or profit within this state, * * *." See also 18 U.S.C.A. app. §§ 1201 and 1202 (West 1985), federal Firearms Act.
[2] The authorities also agree that the Viet Nam war motivated reduction in the age of majority to nineteen or, in some states, eighteen, and had, conversely, great detriment in problems relating to the young people of our society. We reduce the age of majority, but at the same time by economic and societal developments, delay the earliest age at which most young people can realistically expect to be economically emancipated. At least by the prior majority age of twenty-one, aspiring students were well underway in pursuing college education or technical training.
[3] Griffin casually notes another problem which deserves realistic attention by the legislature. What participation should the young, near-adult or adult child have in the litigative proceeding for their support and to whom should the payments be made? It may well be that surrogate litigating by the parents in the name of or for the benefit of the older child might providently be benefitted by direct litigation or at least participation by the person whose interests are most immediately involved.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-1560
NATHANIEL E. DOZIER, JR.,
Plaintiff - Appellant,
v.
HENRY PARKER; WILLIAM A. ROBERTSON, JR.; JOSEPH A. LEMING,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond. James R. Spencer, Chief
District Judge. (3:09-cv-00019-JRS)
Submitted: September 10, 2009 Decided: September 14, 2009
Before KING, DUNCAN, and AGEE, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Nathaniel E. Dozier, Jr., Appellant Pro Se. Charles Richard
Cranwell, CRANWELL MOORE & EMICK, PLC, Roanoke, Virginia, Mark
Quentin Emick, Jr., CRANWELL MOORE & EMICK, PLC, Vinton,
Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:
Nathaniel E. Dozier, Jr., appeals the district court’s
order dismissing without prejudice his civil action against
Henry Parker and William A. Robertson, Jr., members of the Board
of Supervisors of Prince George County, Virginia, and Joseph A.
Leming, a former member. We have reviewed the record and find
no reversible error. Accordingly, we affirm for the reasons
stated by the district court. Dozier v. Parker, No. 3:09-cv-
00019-JRS (E.D. Va. Apr. 22, 2009). We deny the Appellees’
motion to dismiss the appeal or disregard Dozier’s informal
reply brief. We dispense with oral argument because the facts
and legal contentions are adequately presented in the materials
before the court and argument would not aid the decisional
process.
AFFIRMED
2
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FILED
TNCO URT OF
W ORKERS' OOYP,INSATIO N
<CLAIMS
Time 7: 15 . W
.
TENNESSEE BUREAU OF WORKERS' COMPENSATION
IN THE COURT OF WORKERS' COMPENSATION CLAIMS
AT NASHVILLE
Brenda N owman, ) Docket No. 2016-06-1944
Employee, )
v. )
Gap, Inc., ) State File No. 61440-2016
Employer, )
And )
Safety National Casualty Corp., ) Judge Kenneth M. Switzer
Carrier. )
EXPEDITED HEARING ORDER DENYING REQUESTED RELIEF
This case came before the undersigned Workers' Compensation Judge on March
29, 2017, on Ms. Nowman's Request for Expedited Hearing. The present focus of this
case is her entitlement to medical and temporary disability benefits. Gap, Inc. asserted
she failed to provide adequate notice and she did not sustain an injury arising primarily
out of and in the course and scope of employment. For the reasons set forth below, the
Court finds she is not likely to prevail at a hearing on the merits that she gave sufficient
notice of an incident resulting in injury that occurred at work or that she suffered an
injury as defined in the Workers' Compensation Law. Accordingly, her request for
benefits is denied.
History of Claim
Ms. Nowman worked at Gap as a merchandise handler. She testified that on May
26, 2016, at approximately 7 p.m., she reached over to her left side to grab a box to scan
when she felt a sharp pain in her low back that brought her to her knees for five to ten
minutes. 1 She walked to the office and spoke with her supervisor, Eddie Whitehead, and
told him, "I'm in pain, [and] that I needed to go to the E.R. He then said, 'OK. I hope
1
Although Ms. Nowman listed the date of injury on her Petition for Benefit Determination as May 25,
2016, she insisted at the Expedited Hearing that the actual date of injury is May 26, 2016. The emergency
room records from Sumner Regional Medical Center stated the date of service as May 25, 2016, time
10:02 p.m. The Court finds the date of injury is May 25, 2016.
1
you feel better,' and turned around and walked out." Ms. Nowman's affidavit contains
similar statements regarding the mechanism of injury and the manner in which she
notified her supervisor. Ms. Nowman acknowledged she did not tell him her pain related
to a work event. She further acknowledged an understanding that Gap's policy is to
report work injuries "the day of or the day after," as contained in Gap's employee
handbook. Mr. Whitehead did not testify.
Ms. Nowman sought treatment at Sumner Regional Medical Center later that
evening, where providers noted, in part:
The patient presents with pain that appears to be acute on chronic. The
symptoms are located in the low back. Onset: the symptoms/episode
began/occurred one year ago when the patient fractured her coccyx. She
states that the pain began gradually increasing one month ago and became
even worse today after pushing and pulling on boxes. . . . The problem
was sustained from a chronic condition.
The notes further document provider's impression as "low-back back, problem is an
acute exacerbation," but are silent regarding excusing Ms. Nowman from work or
restricting her work abilities. (Ex. 2 at 33-35.)
Mitchell Spivey, Gap's Human Resources Manager, testified that Ms. Nowman
came to him on May 26 and provided an off-work slip from the hospital, but no one
offered the slip into evidence. 2 According to Mr. Spivey, Ms. Nowman "did not say she
injured herself' at that time, and they arranged for paid time off for the next few days.
Mr. Spivey spoke with her again after a May 31 visit with her primary care physician.
He maintained Ms. N owman did not state in either conversation that she suffered a
workers' compensation claim and that if she had, he would have followed a different
procedure. Tiffany Brawner, Gap's Campus Safety Leader, who manages the initial
stages of workers' compensation claims, similarly testified that Gap's process for work
accidents is distinct from when an employee reports a non-work-related health condition,
which may or may not be documented.
After the emergency room treatment, Ms. Newman followed up with her primary
care physician, Dr. John Taylor, with a series of office visits over the next two months.
2
Gap filed a Motion to Amend Witness List before the Expedited Hearing to allow Mr. Spivey to testify
although Gap did not identify him as a potential witness in its March 15 Witness List. Gap argued his
testimony was necessary because Ms. Nowman testified in her deposition that she gave notice of her work
injury to Mr. Spivey. Tennessee Compilation Rules and Regulations 0800-02-21-.14(l)(b) (2016)
requires a party opposing a hearing request to list witnesses it intends to call at an expedited hearing.
Subsection (c) further states that witnesses not disclosed in accordance with the rule "will not be
considered unless good cause is shown as to why the evidence/witness was not disclosed." The Court
found good cause and granted Gap's motion.
2
!d. at 4 7-5 5. At the May 31 initial visit, the note states that she complained of "low-back
pain for 5 days new onset[.] ... Started while she was working at GAP last Thursday."
Dr. Taylor wrote a letter stating she "was seen in the office today [and] was found to have
a back injury with muscle spasm and sacroiliitis of the right side." The letter excused
Ms. Nowman from work through June 3 but did not state that the injury related to work.
!d. at 70. During subsequent visits, Dr. Taylor referred Ms. Nowman to physical therapy,
completed FMLA papers, placed her on restrictions, and finally recommended she
consult a back specialist.
At some point in early June, Ms. Nowman began short-term disability leave.
Neither party moved into evidence a copy of her application. Ms. Nowman was unable
to recall if she certified on the application whether she indicated the injury was work-
related. She testified that at some point, she spoke with "Chelsea" in Human Resources
at Gap, who told her that, "I can't do both - I can't do short-term disability and also
workmen's comp, so I chose workmen's comp."
According to Mr. Spivey, Ms. Nowman contacted Gap on August 2 to request a
referral to a back specialist as recommended by Dr. Taylor. Ms. Nowman testified she
did not recall that conversation. At that time, an unidentified Gap employee prepared an
"Accident/Incident Investigation Report," which Gap attempted to introduce into
evidence through Ms. Brawner's testimony, but could not establish the business-record
exception to the hearsay rule.
As a result of Ms. Nowman's contact on August 2, Ms. Brawner offered a panel,
and Ms. Nowman selected Family Health Care of Gallatin. Ms. Nowman saw Susan
Anderson, FNP on August 4. Gap sought to introduce medical records from this visit
into evidence, but the Court ruled they are inadmissible because they did not bear a
physician's signature nor were they accompanied by a certification from the physician or
records custodian that they are true and accurate. See Tenn. R. & Regs. 0800-02-21-
.16(b) (2016). The Court, likewise, declined to admit a "check-the-box" causation letter
from providers at Family Health Care, finding sufficient indicia to undermine the letter's
reliability.
After the Family Health Care visit, Gap denied Ms. Nowman's claim on August
11. She has not returned to work at Gap.
During the hearing, Ms. Nowman repeatedly denied prior back problems.
However, Gap identified several medical records indicating a history of emergency room
and regular doctor visits for low-back complaints. (Ex. 2 at 10-32, 37-46.) The earliest
record documents emergency care at Sumner Regional Medical Center in October 2013,
stating, "[S]he was lying on her stomach at home with [sic] her 3-year-old fell onto her
md back." The next record, from April 2014, states she presented to the E.R. "with
complaints of Back Pain- no know [sic] injury, was drinking on Friday .... Unknown
3
is [how] she injured herself or fell, but she woke the next morning with pain in her low
back and over her tailbone." Then in September 2015, Ms. Nowman returned to the
emergency room "with pain in her tailbone after she twisted at work. She has history of
coccyx fracture in the past." Ms. Nowman followed up with Dr. Taylor after the incident
in 2015. Notes from an October 15, 2015 visit contain a history of her lifting a sixty-
pound box at work followed by sharp back pain. Ms. Nowman either stated she did not
recall these visits and/or insisted that some of these visits related to her "tailbone" only or
her hip. She acknowledged that some of them were for back issues.
Findings of Fact and Conclusions of Law
As in all workers' compensation actions, Ms. Nowman, as the injured employee,
has the burden of proof on the essential elements of her claim. Scott v. Integrity Staffing
Solutions, 2015 TN Wrk. Comp. App. Bd. LEXIS 24, at *6 (Aug. 18, 2015). However,
since this is an expedited hearing, she only has to come forward with sufficient evidence
from which the Court can determine she is likely to prevail at a hearing on the merits in
order to meet her burden. McCord v. Advantage Human Resourcing, 2015 TN Wrk.
Comp. App. Bd. LEXIS 6, at *7-8, 9 (Mar. 27, 2015).
Resolution of the two central issues in this case (adequate notice and medical
causation) requires that this Court make credibility determinations. The Tennessee
Supreme Court gave indicia of witness credibility, so that trial courts consider whether a
witness is "calm or agitated, at-ease or nervous, self-assured or hesitant, steady or
stammering, confident or defensive, forthcoming or deceitful, reasonable or
argumentative, honest or biased." Kelly v. Kelly, 445 S.W.3d 685, 694-695 (Tenn. 2014).
In this case, this Court observed Ms. Nowman's demeanor and finds that, in addition to
frequently being unable to recall critical events, she appeared agitated, nervous, hesitant,
defensive and argumentative. She was generally not a credible witness.
Applying the general principles of burden of proof and assessing credibility to the
facts of this case, the Court first considers whether she gave legally sufficient notice. The
Workers' Compensation Law mandates that "[e]very injured employee . . . shall,
immediately upon the occurrence of an injury, or as soon thereafter as is reasonable and
practicable, give or cause to be given to the employer who has no actual notice, written
notice of the injury." Tenn. Code Ann. § 50-6-201(a)(l) (2015). The statute additionally
provides that "[n]o compensation shall be payable ... unless the written notice is given to
the employer within thirty (30) days after the occurrence of the accident, unless
reasonable excuse for failure to give the notice is made to the satisfaction of the tribunal
to which the claim for compensation may be presented." Id. (emphasis added). 3 The
notice requirement contained in section 50-6-201 "exists so that the employer will have
the opportunity to make a timely investigation of the facts while still readily accessible,
3
For injuries occurring after July 1, 2016, the notice requirement is fifteen days rather than thirty.
4
and to enable the employer to provide timely and proper treatment for the injured
employee." Buckner v. Eaton Corp., et al., 2016 TN Wrk. Comp. App. Bd. LEXIS 84, at
*6-7 (Nov. 9, 2016).
The credibility finding is significant to resolve the notice issue because Ms.
Nowman did not provide written notice as the statute generally requires. Thus, the Court
looks to whether Gap had actual notice and must discern this from the competing
versions of conversations between Ms. Nowman and other Gap employees. By her own
admission, Ms. Nowman did not tell Mr. Whitehead that she injured her back while
reaching over to grab a box on May 25. Rather, she merely told him she was "in pain."
The Court further accredits Mr. Spivey's testimony and finds that Ms. Nowman did not
convey to him on May 26 or after May 31 that the work incident caused her back pain. It
is also telling to this Court that Ms. Nowman admitted she "chose" workers'
compensation over short-term disability. In sum, Ms. Nowman first told Gap her back
pain was work-related on August 2, well past the timeframe required under the Workers'
Compensation Law. Therefore, the Court holds at this time she is not likely to prevail at
a hearing on the merits regarding notice and, accordingly, no benefits are payable under
the statute.
As to the remaining issue in this case, Ms. Nowman disputed that she suffered
preexisting back problems. She testified that she could not recall visits to the emergency
room or Dr. Taylor complaining of low-back pain, or she attempted to characterize the
visits as treatment only for her "tailbone" or hip. The Court finds her testimony was not
credible and accredits the medical records themselves as persuasive proof that she had an
approximate three-year history of low-back problems predating the alleged incident.
The Workers' Compensation Law requires that, for the Court to find Ms. Nowman
sustained a compensable injury, she must show that she suffered an "injury by accident ..
. arising primarily out of and in the course and scope of employment[.]" Tenn. Code
Ann. § 50-6-102(14) (2016). She must further show that "the employment contributed
more than fifty percent (50%) in causing the death, disablement or need for medical
treatment, considering all causes," and this must be shown "to a reasonable degree of
medical certainty." Id. at § 50-6-102(14)(B)-(C). Applying these standards, the Court
concludes Ms. Nowman failed to demonstrate at this time that the employment is more
than fifty percent responsible for her need for treatment, given her previous back
problems, and that, other than noting the history she gave, the providers she saw after
May 25, 2016, did not relate her condition to work.
Thus, the Court concludes she failed to demonstrate a likelihood of success at a
hearing on the merits on the issues of adequate notice and medical causation, and
therefore, at this time, the Court denies her requested relief.
IT IS, THEREFORE, ORDERED as follows:
5
1. Ms. Nowman's request for workers' compensation benefits is denied at this time.
2. This matter is set for a Scheduling Hearing on May 22, 2017, at 8:30a.m. Central.
You must call 615-532-9552 or toll-free at 866-943-0025 to participate in the
Hearing. Failure to call may result in a determination of the issues without
your further participation.
ENTERED this the 4th day of April, 2017.
ge Kenneth M. Switzer
Court of Workers' Com pens
APPENDIX
Exhibits:
1. Ms. Nowman's Affidavit
2. Compilation Medical Records
3. First Report of Injury
4. Wage statement
5. C-42 Choice of Physician
6. Denial
7. Degenerative Disc Disease-Topic Overview
8. Facebookposts, March 17, September 18,2015, October 2, 2015
9. Facebook post, September 11, 2016
10. Facebook post, September 15
11. Facebook posts, September 23, November 29, 2016, December 25, 2016
12. Family Health Care of Gallatin records (for identification only; includes causation
letter contained within DCN)
Technical record:
1. Petition for Benefit Determination
2. Employer's Position Statement
3. Dispute Certification Notice
4. Request for Expedited Hearing
5. Employer's Response to Employee's Request for Expedited Hearing
6. Employer's Witness List
7. Employer's Motion to Amend Witness List
6
CERTIFICATE OF SERVICE
I certify that a true and correct copy of the Expedited Hearing Order Denying
Requested Relief was sent to the following recipients by the following methods of service
on this the 4th day of April, 20 17.
Name Certified Via Via Service sent to:
Mail Fax Email
Brenda Nowman, X [email protected]
Self-represented
Stephen Morton, X Ste12hen. morton@mgclaw .com
Employer's Counsel
enny; hrum, Clerk of Court
Court of Workers' Compensation Claims
[email protected]
7
| {
"pile_set_name": "FreeLaw"
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Nebraska Supreme Court Online Library
www.nebraska.gov/apps-courts-epub/
08/09/2019 01:06 AM CDT
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Nebraska Supreme Court A dvance Sheets
303 Nebraska R eports
STATE v. BIGELOW
Cite as 303 Neb. 729
State of Nebraska, appellant, v.
Shannon D. Bigelow, appellee.
___ N.W.2d ___
Filed July 19, 2019. No. S-18-006.
1. Jury Instructions: Appeal and Error. Whether jury instructions are
correct is a question of law, which an appellate court resolves indepen-
dently of the lower court’s decision.
2. Jury Instructions: Proof: Appeal and Error. To establish reversible
error from a court’s refusal to give a requested instruction, an appel-
lant has the burden to show that (1) the tendered instruction is a correct
statement of the law, (2) the tendered instruction is warranted by the
evidence, and (3) the appellant was prejudiced by the court’s refusal to
give the tendered instruction.
3. Insanity: Proof. The insanity defense requires proof that (1) the defend
ant had a mental disease or defect at the time of the crime and (2) the
defendant did not know or understand the nature and consequences of
his or her actions or that he or she did not know the difference between
right and wrong.
4. Jury Instructions. Jury instructions are not prejudicial if, when taken as
a whole, they correctly state the law, are not misleading, and adequately
cover the issues supported by the pleadings and the evidence.
Petition for further review from the Court of Appeals,
R iedmann, Bishop, and Welch, Judges, on appeal thereto from
the District Court for Lancaster County, K evin R. McM anaman,
Judge. Judgment of Court of Appeals affirmed.
Mark E. Rappl for appellant.
Douglas J. Peterson, Attorney General, Melissa R. Vincent,
and Derek T. Bral, Senior Certified Law Student, for appellee.
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STATE v. BIGELOW
Cite as 303 Neb. 729
Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke,
Papik, and Freudenberg, JJ.
Miller-Lerman, J.
NATURE OF CASE
After ingesting methamphetamine, Shannon D. Bigelow
was in a hospital emergency room, where hospital person-
nel administered medications which, instead of relaxing him
caused him to become agitated, whereupon he assaulted an
officer. We granted Bigelow’s petition for further review of the
decision of the Nebraska Court of Appeals which affirmed his
conviction in the district court for Lancaster County for third
degree assault on an officer. On further review, Bigelow raises
issues regarding jury instructions refused and given on the
defenses of insanity and intoxication.
We agree with the Court of Appeals that the district court did
not err when it refused Bigelow’s proposed insanity defense
instruction and instead gave an instruction regarding both vol-
untary and involuntary intoxication. We affirm.
STATEMENT OF FACTS
The charge against Bigelow arose from an incident which
occurred in July 2016 when he was admitted to a hospital after
he ingested methamphetamine and exhibited bizarre behav-
ior. Bigelow became agitated and restless at the hospital, so
nurses injected him with three medications—Haldol, Ativan,
and Benadryl—which were intended to relax him. However,
Bigelow became more agitated, left his room, and began pac-
ing around the emergency room. After personnel called for
security, an off-duty police officer working for hospital secu-
rity arrived and told Bigelow that he needed to leave the emer-
gency room. Bigelow punched the officer in the face, “took
him to the ground,” and punched the officer several more times
while reaching for the officer’s gun. He then fled the emer-
gency room, pursued by the security officer.
A sheriff’s deputy responding to an emergency dispatch
saw Bigelow running out the doors of the emergency room
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STATE v. BIGELOW
Cite as 303 Neb. 729
followed by the security officer. The deputy pointed his Taser
at Bigelow and told him to stop and get on the ground.
Bigelow immediately stopped running and complied with the
deputy’s command to get on the ground. Bigelow also imme-
diately complied with subsequent orders to roll over and put
his hands behind his back. The deputy testified at trial that
Bigelow was “completely compliant,” that he did not resist and
was not aggressive but instead was “[t]he opposite,” and that
he was compliant with other police officers who arrived and
helped complete the capture.
Bigelow was arrested, and the State charged him with third
degree assault on an officer in violation of Neb. Rev. Stat.
§ 28-931 (Reissue 2016). The State later amended the informa-
tion to allege that Bigelow was a habitual criminal.
Prior to trial, Bigelow filed a notice of intent to rely on
an insanity defense. After a competency evaluation, the court
determined that Bigelow was competent to stand trial.
In his defense at trial, Bigelow called Dr. Klaus Hartmann
as a witness. Hartmann had conducted an evaluation in January
2017 to determine whether Bigelow was insane at the time
of the incident in July 2016. Although Hartmann noted that
at times prior to the incident, Bigelow had been diagnosed
with various mental disorders, including schizophrenia, the
general thrust of Hartmann’s testimony was that he attributed
Bigelow’s behavior in the emergency room to the effects of
the three drugs given to him at the hospital. Hartmann also
testified that the methamphetamine Bigelow had ingested prior
to being admitted to the hospital would have made him “more
energized,” but Hartmann disagreed with an evaluation by
another doctor who concluded that the assault was “precipi-
tated by the voluntary use of amphetamine.” When asked to
opine on whether Bigelow knew what he was doing when the
assault took place, Hartmann opined that “he was sufficiently
impaired by the effects of these medicines that he did not
know what he was doing.” When asked whether the effect
of the three drugs could be described as “some sort of either
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STATE v. BIGELOW
Cite as 303 Neb. 729
a mental disease or defect or disorder,” Hartmann declined
to use one of those terms and instead described the effect as
“a temporary drug-induced impairment.” Hartmann had also
described the effect of the three drugs as being “almost like
[Bigelow] had been drinking alcohol excessively and he was
not in a position to control his actions and be in full possession
of his faculties.”
During his cross-examination by the State, Hartmann testi-
fied that it was “the three drugs [Bigelow] was given at the
hospital” and “[n]ot the methamphetamine” that had “caused
his problems” at the time of the assault. At the end of the
cross-examination, the State specifically asked Hartmann,
“And your opinion is not that he was suffering from the men-
tal disease to the extent that he did not know the difference
between right and wrong with respect to what he was doing, it
was the impairment due to the three drugs, correct?” Hartman
replied, “Yes.”
After Bigelow rested his case, the State moved the court
for an order that Bigelow would not be entitled to submit an
insanity defense to the jury. The State noted Hartman’s tes-
timony that it was not mental disease that caused Bigelow’s
behavior and that instead, he was impaired due to the drugs
he had been given. Bigelow argued in response that “the men-
tal disorder was essentially an involuntary intoxication . . .
caused by the three drugs.” The court found that Bigelow’s
evidence did not present a prima facie case for the insanity
defense and granted the State’s motion. In connection with
the ruling, the court commented that it thought Bigelow’s
evidence showed both voluntary and involuntary intoxication
but not the mental disease, defect, or disorder necessary for an
insanity defense. The court also stated its understanding that
insanity required a permanent “diagnosed mental condition,
not a temporary intoxication” caused by “externally applied
chemical” agents.
At the jury instruction conference, Bigelow objected to the
court’s draft instruction regarding the elements of the crime
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STATE v. BIGELOW
Cite as 303 Neb. 729
charged; he instead proposed an instruction that incorporated
the insanity defense. The language of the proposed instruction
regarding the insanity defense followed NJI2d Crim. 7.0 and
set forth the elements of the defense as being that Bigelow
“had a mental disease, defect or disorder” that “impaired his
mental capacity” such that he either “did not understand the
nature and consequences of what he was doing” or “did not
know the difference between right and wrong with respect to
what he was doing.” The court overruled Bigelow’s objec-
tion to its draft instruction, and it refused Bigelow’s proposed
insanity instruction on the basis that the evidence did not
justify it.
The court gave an intoxication instruction, including both
voluntary and involuntary intoxication, to which neither the
State nor Bigelow objected. The intoxication instruction is set
forth in full in our analysis below.
The jury found Bigelow guilty of third degree assault on an
officer. The court entered judgment based on the verdict, and
it later found Bigelow to be a habitual criminal. The court sen-
tenced Bigelow to imprisonment for a mandatory minimum of
10 years and a maximum of 12 years.
Bigelow appealed his conviction to the Court of Appeals. He
claimed that the district court erred when it (1) refused his pro-
posed insanity defense instruction and (2) gave the intoxication
instruction. Bigelow also set forth certain claims of ineffec-
tive assistance of counsel, each of which the Court of Appeals
found to be either refuted by the record or not capable of
review on direct appeal; Bigelow does not seek further review
of the ineffective assistance claims, and they are not further
discussed herein.
The Court of Appeals rejected Bigelow’s assignments of
error regarding the instructions and affirmed Bigelow’s con-
viction. State v. Bigelow, No. A-18-006, 2019 WL 286641
(Neb. App. Jan. 22, 2019) (selected for posting to court web-
site). Regarding the proposed insanity instruction, the Court
of Appeals agreed with the district court’s determination that
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STATE v. BIGELOW
Cite as 303 Neb. 729
the evidence did not support an insanity defense. The Court of
Appeals noted Hartmann’s testimony that it was not a mental
disease, defect, or disorder that caused Bigelow to act the way
he did but instead that he was suffering impairment from the
three drugs he had been given at the hospital.
Regarding the intoxication instruction, the Court of Appeals
noted that Bigelow had not objected to the instruction and it
therefore reviewed the instruction only for plain error. The
Court of Appeals cited Neb. Rev. Stat. § 29-122 (Reissue 2016)
and determined that the instruction given by the district court
“was an accurate statement of the involuntary intoxication
defense in Nebraska,” because the instruction tracked the pro-
visions of § 29-122. State v. Bigelow, 2019 WL 286641 at *4.
The Court of Appeals further determined that the evidence sup-
ported the intoxication instruction, because there was evidence
that Bigelow was injected with three drugs and Hartmann testi-
fied that those drugs had an intoxicating effect on Bigelow and
impaired his judgment.
We granted Bigelow’s petition for further review.
ASSIGNMENT OF ERROR
Bigelow claims that the Court of Appeals erred when it con-
cluded that the evidence did not support an insanity instruction.
STANDARD OF REVIEW
[1] Whether jury instructions are correct is a question of
law, which an appellate court resolves independently of the
lower court’s decision. State v. Mann, 302 Neb. 804, 925
N.W.2d 324 (2019).
ANALYSIS
Bigelow claims on further review that the Court of Appeals
erred when it determined that the evidence did not support an
insanity instruction and concluded that the district court had
correctly refused his proposed instruction. He generally con-
tends that under Nebraska law, involuntary intoxication can
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STATE v. BIGELOW
Cite as 303 Neb. 729
support an insanity defense. He specifically contends that the
evidence he presented regarding the effect of the three drugs
given to him at the hospital caused him to be involuntarily
intoxicated which, in turn, resulted in legal insanity, thus sup-
porting an insanity defense instruction.
[2] To establish reversible error from a court’s refusal to
give a requested instruction, an appellant has the burden to
show that (1) the tendered instruction is a correct statement
of the law, (2) the tendered instruction is warranted by the
evidence, and (3) the appellant was prejudiced by the court’s
refusal to give the tendered instruction. State v. Mann, supra.
In the present case, the Court of Appeals determined that there
was no reversible error because Bigelow’s tendered insanity
instruction was not warranted by the evidence; the Court of
Appeals therefore did not need to determine whether the ten-
dered instruction correctly stated the law.
As noted, Bigelow contends that evidence of his involun-
tary intoxication supported an insanity defense. He argues
that although case law such as State v. Hotz, 281 Neb. 260,
795 N.W.2d 645 (2011), and statutes such as § 29-122 and
Neb. Rev. Stat. § 29-2203(4) (Reissue 2016) establish that
the insanity defense is not available in cases involving a
temporary condition resulting from voluntary intoxication,
we have not addressed whether the insanity defense is avail-
able when the defendant’s mental state is altered by involun-
tary intoxication.
In order to address Bigelow’s argument, we first review
Nebraska law relating to the insanity defense, the intoxica-
tion defense, and the interplay of the two. We then consider
whether, based on such law, an insanity instruction was war-
ranted based on the evidence in this case. Thereafter, we
consider whether an intoxication instruction was warranted
instead of an insanity instruction and, if so, whether the
intoxication instruction given by the district court in this case
was appropriate.
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STATE v. BIGELOW
Cite as 303 Neb. 729
Insanity Defense and Intoxication Defense
Developed in Nebraska Common Law
and Are Controlled to Some
Extent by Statute.
Bigelow’s arguments raise issues regarding the insanity
defense, the intoxication defense, and the interplay of the two.
The two defenses have developed in Nebraska as separate
defenses which operate distinctly, and each defense applies to a
different circumstance. However, our case law has recognized
a degree of intersection between the two concepts.
[3] In Nebraska, as a general matter, the insanity defense
and the intoxication defense were each developed by case law.
The two developed to address different issues, and they oper-
ate in distinct ways. Generally, under Nebraska’s common-law
definition, the insanity defense requires proof that (1) the
defendant had a mental disease or defect at the time of the
crime and (2) the defendant did not know or understand the
nature and consequences of his or her actions or that he or
she did not know the difference between right and wrong. See
State v. Williams, 295 Neb. 575, 889 N.W.2d 99 (2017). As it
developed under common law in Nebraska, the intoxication
defense required that “the defendant must not have become
intoxicated to commit the crime and, because of the intoxi-
cation, must have been rendered wholly deprived of reason.
The excessive intoxication must support a conclusion that the
defendant lacked the specific intent to commit the charged
crime.” State v. Dubray, 289 Neb. 208, 239, 854 N.W.2d 584,
611-12 (2014).
The two defenses operate in different ways. Although a suc-
cessful insanity defense operates as a complete defense to the
offense, the intoxication defense does not and instead is treated
as a factor the jury may consider when determining whether
the defendant had the requisite mental state. We stated in State
v. Hotz, 281 Neb. 260, 270, 795 N.W.2d 645, 653 (2011),
“[i]n Nebraska, the intoxication defense has been available to
a defendant under common law almost as long as the insanity
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Cite as 303 Neb. 729
defense.” However, we described the intoxication defense as
not being a “justification or excuse for a crime,” but as a factor
that could be “considered to negate specific intent.” Id. As we
noted in State v. Hood, 301 Neb. 207, 217, 917 N.W.2d 880,
889 (2018), with regard to an intoxication defense:
In State v. Vosler, [216 Neb. 461, 345 N.W.2d 806
(1984),] we noted that “although there is but one type of
insanity which will support a finding of not guilty or not
responsible by reason of insanity, there are a variety of
mental conditions which bear upon the ability to form a
specific intent.”
We stated in State v. Dubray, 289 Neb. at 239, 854 N.W.2d at
611-12, that “[u]nder Nebraska common law, intoxication is
not a justification or excuse for a crime, but it may be consid-
ered to negate specific intent.”
In past cases, most notably in State v. Hotz, supra, we have
recognized some interplay between intoxication and insanity.
Bigelow notes case law such as Hotz and the Legislature’s
amendment of § 29-2203, which amendment became effective
after we filed our decision in Hotz, to include subsection (4)
which provides, “For purposes of this section, insanity does not
include any temporary condition that was proximately caused
by the voluntary ingestion, inhalation, injection, or absorption
of intoxicating liquor, any drug or other mentally debilitating
substance, or any combination thereof.” See 2011 Neb. Laws,
L.B. 100, § 2. Bigelow relies on such case law and the spe-
cific references in § 29-2203(4) to a “temporary” condition
caused by “voluntary” intoxication to argue that Nebraska law
recognizes an insanity defense based on either a temporary
condition caused by involuntary intoxication or a permanent
condition caused by long-term alcohol or drug use. However,
as discussed further below, we need not examine this precedent
or determine the effect of § 29-2203(4) on such precedent in
the present case. The evidence presented by Bigelow does
not establish that his condition at the time of the incident was
“insanity” as defined in our case law, regardless of whether the
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Cite as 303 Neb. 729
condition was temporary or permanent or whether the condi-
tion was caused by voluntary or involuntary intoxication.
Having reviewed the current state of Nebraska law on the
insanity defense and the intoxication defense, we apply the law
to the specifics of the present case.
District Court and Court of Appeals Correctly
Concluded That Evidence in This Case
Did Not Support Insanity Defense
Instruction Proposed by Bigelow.
Applying the law just discussed, we note that in order to
support an insanity defense, regardless of the cause of the
insanity, a mental disease or defect must be shown. The evi-
dence presented by Bigelow did not show that Bigelow suf-
fered from such disorders.
Contrary to Bigelow’s arguments, Hartmann’s testimony
did not support a finding of insanity caused by involuntary
intoxication. Hartmann testified that Bigelow’s behavior in
the emergency room was caused by the “effect” of the three
drugs given to him at the hospital. However, Hartmann did
not characterize such “effect” as “insanity,” because he did not
testify that the intoxication caused a mental disease or defect.
Hartmann did not accept that description when defense counsel
posed a question using the language of “mental disease, defect
or disorder,” and he instead referred to the “effects” of the
drugs. On cross-examination, when the State posited that it was
not mental disease that caused Bigelow’s behavior but instead
“impairment due to the three drugs,” Hartman agreed. Neither
“effects” of drugs nor “impairment” caused by drugs estab-
lishes the mental disease or defect required in the law to sup-
port an insanity defense. Without evidence linking intoxication
to a mental disease or defect or disorder, there is no evidence
to support an insanity defense. Although Hartmann’s testimony
attributing Bigelow’s behavior to the effects of the three drugs
or impairment caused by the three drugs was sufficient to sup-
port an involuntary intoxication defense, it did not support an
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Cite as 303 Neb. 729
insanity defense. We therefore agree with the Court of Appeals
that the district court did not err when it refused Bigelow’s
proposed insanity instruction, because it was not supported by
the evidence.
Evidence Supported Intoxication Instruction.
As the district court noted, there was evidence in this case
of both voluntary intoxication, caused by Bigelow’s use of
methamphetamine, and involuntary intoxication, caused by the
three drugs given to him at the hospital. The court therefore
gave an intoxication instruction that addressed both voluntary
and involuntary intoxication. We agree with the district court
and Court of Appeals that an intoxication instruction was war-
ranted by the evidence.
Regarding the district court’s determination that there was
evidence of involuntary intoxication in this case, we do not
appear to have addressed whether use of prescribed medica-
tion or drugs given by medical personnel can be considered
involuntary intoxication. We note that other jurisdictions have
determined that one type of “involuntary intoxication is when
the substance was taken pursuant to medical advice.” 2 Wayne
R. LaFave, Substantive Criminal Law § 9.5(g) at 69-70, n.65
(3d ed. 2018) (citing cases). But see People v. McMillen, 2011
IL App (1st) 100366, 961 N.E.2d 400, 356 Ill. Dec. 304 (2011)
(stating that defendant’s intoxication due to unexpected inter-
action between prescription medicine and voluntarily ingested
cocaine did not render defendant involuntarily intoxicated). We
believe that under § 29-122, use of medically advised drugs
could be involuntary intoxication if the defendant did not know
the intoxicating effect of the drug or did not voluntarily take
the drug.
From the evidence in this case, the jury could have found
Bigelow’s behavior in the emergency room was caused by
his voluntary ingestion of methamphetamine before he was
brought to the hospital or by an interaction of the drugs given
at the hospital with the methamphetamine he had voluntarily
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ingested. In contrast, based on Hartmann’s testimony, the jury
could have found that his behavior was caused solely by the
effect of the three drugs given to him at the hospital, in which
case, Bigelow was involuntarily intoxicated. Finally, based on
evidence such as the deputy sheriff’s testimony that shortly
after assaulting the security officer, Bigelow was “completely
compliant” with the deputy sheriff’s show of force, the jury
could have determined that neither the methamphetamine nor
the three drugs given at the hospital had affected Bigelow to
the point that he did not have the mental ability to consciously
form the requisite intent when he assaulted the security officer
minutes earlier.
Because each of these findings was cognizable under
Nebraska law and because each finding could be supported
by the evidence, it was proper for the court to instruct the
jury on these options. It is appropriate for a court to instruct
on alternate theories if each is supported by the evidence. By
its verdict of guilty, the jury determined that either Bigelow’s
behavior was caused by his voluntary use of methamphetamine
or, if his behavior was caused by involuntary intoxication, his
mental state was not affected by any of the substances to the
point that he could not form the requisite intent.
In sum, we conclude that based on the evidence in this case,
the district court did not err when it refused Bigelow’s pro-
posed insanity instruction and did not err when it instead gave
an instruction on intoxication.
Intoxication Instruction Given by District Court
Correctly Stated Law, Was Not Misleading, and
Adequately Covered Intoxication Issues
Supported by Evidence in This Case.
Because it does not appear that since the enactment of
§ 29-122 in 2011 we have considered an appeal in a case in
which there was evidence that supported giving an involuntary
intoxication instruction, we take this opportunity to review
the intoxication instruction given in this case to consider how
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issues of intoxication should be presented to a jury in light of
§ 29-122.
In cases we have decided since the enactment of § 29-122
in which the defendant had sought an intoxication instruction,
we have determined that the case involved only evidence of
voluntary intoxication and that therefore, the court below cor-
rectly refused to instruct on an intoxication defense. See, State
v. Mueller, 301 Neb. 778, 920 N.W.2d 424 (2018); State v.
Abejide, 293 Neb. 687, 879 N.W.2d 684 (2016). In addition,
we have not had the opportunity to consider the propriety of a
court’s instruction in light of § 29-122 when there is evidence
of involuntary intoxication and, as in this case, evidence of
both voluntary and involuntary intoxication.
The district court in this case gave the following instruction
regarding intoxication:
There has been evidence that [Bigelow] was intoxi-
cated at the time that the crime with which he is charged
was committed.
Voluntary intoxication is not a defense to the crime
charged. You may not consider his voluntary intoxication
in determining whether he had the required intent to com-
mit the crime charged.
Evidence that . . . Bigelow was involuntarily intoxi-
cated may be taken into consideration if he proves by
clear and convincing evidence that he did not:
(1) know that it was an intoxicating substance when
he or she ingested, inhaled, injected, or absorbed the sub-
stance causing the intoxication; or
(2) ingest, inhale, inject, or absorb the intoxicating sub-
stance voluntarily.
Such involuntary intoxication is a defense only when a
person’s mental abilities were so far overcome by the
involuntary intoxication that he could not have had the
required intent.
In this case . . . Bigelow has the burden of proving
involuntary intoxication by clear and convincing evidence.
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Clear and convincing evidence means evidence that
produces a firm belief or conviction about the fact to be
proved. Clear and convincing evidence means more than
the greater weight of the evidence and less than proof
beyond a reasonable doubt.
[4] We have stated that jury instructions are not prejudicial
if, when taken as a whole, they correctly state the law, are not
misleading, and adequately cover the issues supported by the
pleadings and the evidence. State v. Mann, 302 Neb. 804, 925
N.W.2d 324 (2019). Under these standards, we conclude the
intoxication instruction given by the court in this case cor-
rectly stated the law as set forth in § 29-122, by stating that
voluntary intoxication is not a defense; that intoxication could
be considered in connection with the required mental state if
such intoxication is shown to be involuntary, consistent with
§ 29-122; and that Bigelow had the burden to show by clear
and convincing evidence that he was involuntarily intoxicated.
We further determine that the instruction was not misleading
and that it adequately covered the issues relating to intoxica-
tion that were supported by the pleadings and evidence in
this case.
CONCLUSION
We conclude that the Court of Appeals was correct when
it concluded that the district court did not err when it refused
Bigelow’s proposed insanity defense instruction. We further
conclude that the evidence in this case did support an instruc-
tion regarding both voluntary and involuntary intoxication
and that the intoxication instruction given by the district court
in this case correctly stated the law, was not misleading, and
adequately covered the issues relating to intoxication that were
supported by the pleadings and evidence. We therefore affirm
the decision of the Court of Appeals which affirmed Bigelow’s
conviction for third degree assault on an officer.
A ffirmed.
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Opinion filed February 2, 2012, Withdrawn; Appeal Dismissed and Memorandum
Opinion filed March 1, 2012.
In The
Fourteenth Court of Appeals
____________
NO. 14-11-01053-CV
____________
RWLS, L.L.C., Appellant
V.
GRAY WIRELINE SERVICE, INC., Appellee
On Appeal from the 133rd District Court
Harris County, Texas
Trial Court Cause No. 2011-68513
SUBSTITUTE OPINION ON REHEARING
We issued our original opinion in this case on February 2, 2012. Appellant filed a
motion for rehearing. We overrule the motion for rehearing, withdraw our previous
opinion, and issue this substitute opinion.
This is an attempted appeal from two orders signed November 28, 2011.
Generally, appeals may be taken only from final judgments. Lehmann v. Har-Con Corp.,
39 S.W.3d 191, 195 (Tex. 2001). Interlocutory orders may be appealed only if permitted
by statute. Bally Total Fitness Corp. v. Jackson, 53 S.W.3d 352, 352 (Tex. 2001); Jack B.
Anglin Co., Inc. v. Tipps, 842 S.W.2d 266, 272 (Tex. 1992) (orig. proceeding).
Appellant attempts to appeal two orders: (1) an order denying appellant's motion to
stay and application to transfer appellee's application for order compelling compliance
with arbitration subpoenas; and (2) an order granting appellee's application for order
compelling compliance with arbitration subpoenas. Neither of these orders are appealable
interlocutory orders under section 51.014 or under any other statute. See Tex. Civ. Prac.
& Rem.Code Ann. § 51.014 (Vernon Supp. 2011).
On January 2, 2012, notification was transmitted to all parties of the court's
intention to dismiss the appeal for want of jurisdiction. See Tex. R. App. P. 42.3(a).
Appellant filed a response and argued that these orders constitute a final judgment. We do
not agree that these orders constitute a final judgment. Appellant’s response fails to
demonstrate that this Court has jurisdiction to entertain the appeal. Accordingly, we
dismiss the appeal and order all pending motions denied as moot.
PER CURIAM
Panel consists of Justices Frost, Brown, and Christopher.
2
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In the
United States Court of Appeals
For the Seventh Circuit
____________________
No. 18-2432
S. DAVID GOLDBERG,
Plaintiff-Appellant,
v.
MICHAEL W. FRERICHS, Treasurer of Illinois,
Defendant-Appellee.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 16 C 3792 — Charles P. Kocoras, Judge.
____________________
SUBMITTED DECEMBER 14, 2018 — DECIDED JANUARY 2, 2019
____________________
Before EASTERBROOK, KANNE, and ROVNER, Circuit Judges.
EASTERBROOK, Circuit Judge. An earlier opinion in this
case concluded that people whose property is taken into cus-
tody by Illinois under the state’s Disposition of Unclaimed
Property Act, 765 ILCS 1026/15-607, are entitled to receive
the time value of their property (that is, interest or other
earnings), less reasonable custodial fees. Kolton v. Frerichs,
869 F.3d 532 (7th Cir. 2017); see also Cerajeski v. Zoeller, 735
F.3d 577 (7th Cir. 2013). On remand the district court de-
2 No. 18-2432
clined to certify the proposed class, ruling that, despite what
our opinion said, owners of property in the state’s custody
are entitled to be compensated for the time value of money
only if the property was earning interest at the moment the
state took it into custody. 2018 U.S. Dist. LEXIS 51062 (N.D.
Ill. Mar. 28, 2018). This meant that the class had internal di-
visions that made certification inappropriate. The court then
granted summary judgment to the state on the claim of S.
David Goldberg, one of the putative class representatives,
whose property had not been earning interest before the
state took custody of it. The judge entered a partial final
judgment under Fed. R. Civ. P. 54(b), leading to this appeal.
For the proposition that the owner receives the proper-
ty’s time value only if the property was earning interest in
private hands the district court relied principally on Cwik v.
Topinka, 389 Ill. App. 3d 21 (2009), a state court’s decision
that precedes both Kolton and Cerajeski and interprets a state
statute rather than the Takings Clause of the Constitution.
The proposition is untenable, as we have already explained:
The Supreme Court has held that the Takings Clause protects the
time value of money just as much as it does money itself. Brown
v. Legal Foundation of Washington, 538 U.S. 216, 235 (2003); Phillips
v. Washington Legal Foundation, 524 U.S. 156, 165–72 (1998); Webb’s
Fabulous Pharmacies, Inc. v. Beckwith, 449 U.S. 155, 162–65 (1980).
In Cerajeski v. Zoeller, 735 F.3d 577 (7th Cir. 2013), we applied
these precedents to an Indiana statute like the Illinois statute in
this case. We held that a state may not take custody of property
and retain income that the property earns. A state may charge a
bookkeeping fee, which for small accounts may exceed the prop-
erty’s time value, but must allow the owner the benefit of the
property’s earnings, however large or small they turn out to be.
Id. at 578–80.
No. 18-2432 3
Kolton, 869 F.3d at 533. The property’s owner is entitled to
“income that the property earns” less custodial fees; what
the property earns in the state’s hands does not depend on
what it had been earning in the owner’s hands.
To see this, consider a simple example. Owner puts a rare
coin in a safe deposit box, then neglects to pay the annual
rental. Bank turns the coin over to the state under the Dispo-
sition of Unclaimed Property Act. The state sells the coin and
invests the proceeds. The coin was not earning interest while
in the safe deposit box but was an investment property:
Owner hoped that its market price would rise. If the state
kept the coin and returned it to Owner on demand, then the
state would not owe interest; Owner could sell the coin and
obtain any change in value while it was in the state’s custo-
dy. But if the state sells the coin and cuts off the possibility of
appreciation, then Owner is entitled to the earnings on the
invested cash as the best substitute. The fact that the coin
was not earning interest in the safe deposit box would not
detract from the fact that its price could rise. The loss of that
time value is compensated by giving Owner the benefit of
interim earnings.
Goldberg did not have a coin. He had a check—or, ra-
ther, the payor that had made out a check to Goldberg had
the instrument because he had not claimed it, and the payor
delivered it to the state when the statute required. A check
represents cash, which cannot appreciate as a coin, stamp, or
painting might. But the principle is the same: cash has time
value even if not invested. Holding cash is sensible for a per-
son who fears that prices of stocks, bonds, and other invest-
ments will decline. If the state turns the check into cash and
makes an investment on the owner’s behalf (and against the
4 No. 18-2432
wishes of someone who did not want to invest), then it is vi-
tal to turn any gain over to the owner. The Takings Clause
does not set up a situation in which someone who wanted to
be “in cash” bears the risk of loss as market conditions
change without any prospect of offseming gain. That would
make the owner worse off. (To put this differently, cash has
an option value—the option to invest or refrain from invest-
ing—that is lost if the state invests without the owner’s con-
sent. That loss has a compensable value.)
Brown v. Legal Foundation of Washington holds that a state
need not hand over earnings if the amount of the principal is
so small that (in the Court’s words) it “cannot earn net inter-
est”—in other words, when administrative expenses exceed
the return on investment. 538 U.S. at 224. The statutory sys-
tem under review in Brown required lawyers to turn over
small client trust funds so that they could be pooled, and
when pooled earn net interest. The principal would be re-
turned to counsel when they needed to disburse it to clients;
the state kept the interest for other uses. The Justices con-
cluded that this system did not offend the Takings Clause
because, by definition, the money could not have earned a
net return in the absence of the pooling and the owner could
not have lost anything. No loss, no need for compensation.
Id. at 235–41. Illinois could use Brown on remand to contend
that it does not owe interest on small amounts, such as the
$100 it held on behalf of Goldberg. Amounts as slight as $100
probably cannot earn net interest. But this has nothing to do
with how the owner held or invested the money or other
property before it came into the state’s hands.
It may be hard to administer the line established by
Brown. That will be among the district court’s tasks if the
No. 18-2432 5
state contends on remand that particular parcels in its custo-
dy could not earn net interest in private hands. All we decide
today is that it does not mamer under Brown, or any other
decision by the Supreme Court or this court, whether prop-
erty that is able to earn net interest was in an interest-bearing
account before its transfer to the state. (This conclusion also
may lead the district court to reconsider its ruling on class
certification.)
The judgment is vacated, and the case is remanded for
proceedings consistent with Kolton and this opinion.
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. AP-75,813
EX PARTE RODNEY CURTIS BIBLE, Applicant
ON APPLICATION FOR A WRIT OF HABEAS CORPUS
CAUSE NO. F05-51098-Q IN THE 204TH DISTRICT COURT
FROM DALLAS COUNTY
Per curiam.
O P I N I O N
Pursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the
clerk of the trial court transmitted to this Court this application for a writ of habeas corpus. Ex parte
Young, 418 S.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant was convicted of robbery and
sentenced to twenty-five years' imprisonment. The Fifth Court of Appeals affirmed his conviction.
Bible v. State, No. 05-05-01200-CR (Tex. App.-Dallas, delivered May 4, 2006, no pet.).
Applicant contends that his appellate counsel rendered ineffective assistance because counsel
failed to timely notify Applicant that his conviction had been affirmed and failed to advise him of
his right to petition for discretionary review pro se.
Based on our independent review of the record, we find that Applicant is entitled to the
opportunity to file an out-of-time petition for discretionary review of the judgment of the Fifth Court
of Appeals in Cause No. 05-05-01200-CR that affirmed his conviction in Case No. F05-51098-Q
from the 204th Judicial District Court of Dallas County. Ex parte Wilson, 956 S.W.2d 25 (Tex. Crim.
App. 1997); Ex parte Owens, 206 S.W.3d 670 (Tex. Crim. App. 2006). Applicant shall file his
petition for discretionary review with the Fifth Court of Appeals within 30 days of the date on which
this Court's mandate issues.
Applicant's remaining claims are dismissed. Ex parte Torres, 943 S.W.2d 469 (Tex. Crim.
App. 1997).
Delivered: January 16, 2008
Do not publish
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Not for Publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 05-1568
No. 05-1862
MADELUX INTERNATIONAL, INC.,
Plaintiff, Appellant,
v.
BARAMA CO. LTD. ET AL.,
Defendants, Appellees.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Héctor M. Laffitte, U.S. District Judge]
Before
Selya, Lynch and Lipez,
Circuit Judges.
Freddie Perez-Gonzalez, with whom Freddie Perez-Gonzalez &
Assoc., P.S.C. was on brief, for appellant.
Jorge Martinez Luciano, with whom Alfredo Acevedo Cruz and Law
Offices of Pedro E. Ortiz Álvarez, PSC were on brief, for appellee
Aljoma Lumber, Inc.
Kenneth C. Suria, with whom William Estrella Law Offices, PSC
was on brief, for remaining appellees.
June 16, 2006
SELYA, Circuit Judge. This is an appeal in which the
applicable standard of review determines the outcome. In the
underlying action, plaintiff-appellant Madelux International, Inc.
(MII) sued three defendants — Barama Co. Ltd. (Barama), Sterling
Wood Products Corp. (Sterling), and Aljoma Lumber, Inc. (Aljoma) —
for pecuniary damages. Its amended complaint (the operative
pleading for present purposes) alleged that the lead defendant,
Barama, had transgressed the Dealer's Act, P.R. Laws Ann. tit. 10,
§ 278a (Law 75), by terminating, without the required statutory
notice or cause, a purported exclusive distributorship agreement
relating to the importation and sale of certain plywood panels in
Puerto Rico. Relatedly, the amended complaint alleged that another
defendant, Aljoma, had tortiously interfered with these exclusive
distribution rights.1 See P.R. Laws Ann. tit. 31, § 5141.
The case went to trial before the district court on
December 6, 2004. After MII rested, the court, ruling ore sponte,
granted Aljoma's motion to dismiss. At the conclusion of all the
evidence, the court took the remaining issues under advisement. It
subsequently wrote a thoughtful rescript, in which it exonerated
Barama and Sterling from liability under Law 75. See Madelux
1
The allegations against Sterling were vague and, in all
events, the parties have treated Sterling as a marketing arm of
Barama. Accordingly, there is no need to discuss Sterling’s
liability separately.
-2-
Int'l, Inc. v. Barama Co., 364 F. Supp. 2d 68, 75 (D.P.R. 2005).
This appeal followed.
We need not tarry. The district court, as evidenced by
its rescript, id. at 73-74, correctly understood the applicable law
(indeed, MII's appellate counsel, when pointedly questioned at oral
argument, was unable to identify any material error of law). The
case against Barama and Sterling therefore turns on the
supportability of the district court's factual findings. See
Sierra Fria Corp. v. Donald J. Evans, P.C., 127 F.3d 175, 180 (1st
Cir. 1997). We can disturb those findings if, and only if, they
are clearly erroneous, that is, if "after careful evaluation of the
evidence, we are left with an abiding conviction that those
findings . . . are simply wrong." State Police Ass'n v. Comm'r,
125 F.3d 1, 5 (1st Cir. 1997); accord Cumpiano v. Banco Santander
P.R., 902 F.2d 148, 152 (1st Cir. 1990); Reliance Steel Prods. Co.
v. Nat'l Fire Ins. Co., 880 F.2d 575, 576 (1st Cir. 1989). In
conducting this tamisage, credibility determinations must be
regarded as falling squarely within the trier's domain. See, e.g.,
Anthony v. Sundlun, 952 F.2d 603, 606 (1st Cir. 1991). It follows
inexorably that the loser in a bench trial invariably faces a steep
uphill climb when it aspires to impugn the trial court's factual
findings.
Here, the attempt is hopeless. The applicability of Law
75 depends, inter alia, on proof that protected distributorship
-3-
rights exist. See Borschow Hosp. & Med. Supplies, Inc. v. Cesar
Castillo Inc., 96 F.3d 10, 14 (1st Cir. 1996); Vulcan Tools of P.R.
v. Makita USA, Inc., 23 F.3d 564, 569 (1st Cir. 1994). The lower
court found, on conflicting facts and shades of meaning, that MII
never enjoyed any such protected distributorship rights. See
Madelux Int’l, 364 F. Supp. 2d at 74-75. We are satisfied, after
close perscrutation of the record, that this finding was not
clearly erroneous. Thus, we must respect it.
MII argues that two pieces of correspondence — one dated
December 11, 1995, and the other dated June 19, 1999 — compel a
contrary finding. We do not agree. While those letters, in
combination with other evidence, might have supported an inference
favorable to MII, the district judge, sitting as the finder of the
facts, chose not to draw such an inference. See id. at 75. Where,
as here, the trier chooses between competing inferences, each of
which is reasonable in light of the evidence as a whole, that
choice cannot be deemed clearly erroneous.2 See Anderson v. City
2
MII also argues that, apart from Law 75, it was entitled to
recover on one or more other theories, namely, (i) for breach of
contract, (ii) as a sales representative under Law 21, P.R. Laws
Ann. tit. 10, § 279, and (iii) under common law. These arguments
were not raised below and, accordingly, cannot be advanced on
appeal. See Teamsters, Chauffeurs, Warehousemen & Helpers Union,
Local No. 59 v. Superline Transp. Co., 953 F.2d 17, 21 (1st Cir.
1992) ("If any principle is settled in this circuit, it is that,
absent the most extraordinary circumstances, legal theories not
raised squarely in the lower court cannot be broached for the first
time on appeal.").
-4-
of Bessemer City, 470 U.S. 564, 573-74 (1985); Cumpiano, 902 F.2d
at 152.
The same sort of reasoning applies to the entry of
judgment in favor of Aljoma. Pertinently, Federal Rule of Civil
Procedure 52(c) provides that "[i]f during a trial without a jury
a party has been fully heard on an issue and the court finds
against the party on that issue, the court may enter judgment"
against that party without further ado. That is precisely what
transpired here.
When a trial court enters judgment under Rule 52(c), we
scrutinize its findings of fact for clear error.3 See Marina Bay
Realty Trust LLC v. United States, 407 F.3d 418, 423 (1st Cir.
2005). In this instance, the court found as a fact that Aljoma had
no awareness of any protected distributorship rights held by MII
(and, thus, was not liable for tortious interference with the
same). See New Comm Wireless Servs., Inc. v. SprintCom, Inc., 287
F.3d 1, 10 (1st Cir. 2002) (explaining that, in bringing such a
claim under Puerto Rico law, "the plaintiff must show that the
defendant intended to interfere with the contract, knowing that
this interference would cause injury to the plaintiff"). Bearing
in mind that MII had the burden of proof on the issue of knowing
3
With respect to Aljoma, as was the case with respect to
Barama and Sterling, MII has not shown that the ruling appealed
from is infected by any material error of law.
-5-
interference, see id., this finding, though perhaps not inevitable,
was surely not clearly erroneous.
There is one remaining loose end. MII requests for the
first time on appeal that we certify a question as to the meaning
and scope of Law 75 to the Puerto Rico Supreme Court. We deny that
request. MII chose a federal forum and eschewed any request to the
district court for certification. Even in far more auspicious
circumstances, we have not been receptive to requests for
certification newly asserted on appeal, see, e.g., Nieves v. Univ.
of P.R., 7 F.3d 270, 278 (1st Cir. 1993), and here, the district
court’s supportable factual finding that no protected
distributorship rights existed undermines the argument that some
unsettled issue of Puerto Rico law might be controlling. Under
these inauspicious circumstances, we once again refuse a belated
request for certification. See, e.g., id.; Fischer v. Bar Harbor
Banking & Trust Co., 857 F.2d 4, 8 (1st Cir. 1988).
We need go no further.4 For the reasons elucidated
above, we affirm the judgment of the district court.
Affirmed.
4
MII also complains of an error regarding the lower court’s
handling of expert testimony. That testimony, however, related
almost exclusively to damages. Since we affirm the district
court's finding of no liability, the issue of damages (and, hence,
the evidentiary issue) is moot. See Tiernan v. Blyth, Eastman,
Dillon & Co., 719 F.2d 1, 5 n.5 (1st Cir. 1983).
-6-
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522 P.2d 217 (1974)
EQUITABLE SAVINGS & LOAN ASSOCIATION, an Oregon Corporation, Respondent,
v.
Velma S. JONES et al., Appellants, Joseph J. Kocsis et al., Defendants.
Supreme Court of Oregon.
Argued and Submitted November 9, 1973.
Decided May 2, 1974.
*218 Leo Levenson, Portland, argued the cause for appellants. With him on the briefs were Ben Day, and Day & Brian, Medford.
John R. Faust, Jr., Portland, argued the cause for respondent. With him on the brief were Cake, Hardy, Buttler, McEwen & Weiss, Portland, and Carl M. Brophy, and Brophy, Wilson & Duhaime, Medford.
Before O'CONNELL, C.J., and DENECKE, HOLMAN, TONGUE, HOWELL and BRYSON, JJ.
HOLMAN, Justice.
Plaintiff sought a judgment on the note of the defendants Kocsis and O'Neill upon which the unpaid balance was approximately $121,000, as well as the foreclosure of a mortgage on the real property of Mr. and Mrs. Jones (Jones) and Mr. and Mrs. Whittle (Whittle) which was security for the payment of the note. No personal judgment was requested against Kocsis and O'Neill for any deficiency that remained on the note after the application of the proceeds from the sale of the mortgaged property. Defendants Jones and Whittle appealed from a decree foreclosing the mortgage upon the real property.
Jones and Whittle were the owners of real property which they leased for a long term to a corporation called Imperial `400' National, Inc. The corporation built a motel upon the leased property with borrowed money to which obligation Jones and Whittle subordinated their fee. The corporation subsequently went into reorganization under Chapter X of the Bankruptcy Act. The federal court appointed the defendant O'Neill as the trustee to manage the affairs of the corporation during reorganization. O'Neill entered into a partnership agreement with Kocsis under which Kocsis was to manage the motel in return for a partial interest in the motel. New financing was necessary to secure working capital and plaintiff loaned $135,000 to O'Neill and Kocsis on their note. O'Neill, Kocsis, Jones and Whittle all signed the mortgage on the motel property to secure the payment of the loan. Jones and Whittle did not sign the note. The balance on the original note by which money was raised to build the motel was paid off and the remainder of the funds secured from plaintiff was used as operating capital by O'Neill and Kocsis.
The operation of the motel again fell upon evil days and plaintiff sought to foreclose its mortgage. It petitioned the federal court for permission to foreclose the mortgage, offering not to ask for a judgment against O'Neill or Kocsis in excess of the amount the mortgaged property brought on foreclosure. The federal court granted permission to foreclose, but only on the basis that plaintiff seek no judgment against O'Neill or Kocsis in excess of the amount the mortgaged property would bring. No notice of the proceeding before the federal court to secure permission to foreclose the mortgage was given to Jones or Whittle.
*219 I.
The defendants Jones and Whittle contend that when they mortgaged their property to secure the obligation of O'Neill and Kocsis they became sureties, not primary obligors.[1] Plaintiff does not contest this premise.
Defendants also contend that their property was released from the lien of the mortgage and their obligation as sureties was discharged because the promise of the debtors (the principals) was modified by plaintiff (the creditor) without defendants' (the sureties') consent in that plaintiff agreed with the federal court that O'Neill and Kocsis would be relieved of the payment of that part of their note over and above the sum which the mortgaged property would bring upon foreclosure. Plaintiff's position, on the other hand, is that defendants were not discharged by their agreement not to seek a deficiency because Jones and Whittle were sureties only to the extent of the value of their property, and the part of the debt that was forgiven was that part which was in excess of the value of that property, and which excess they had not promised to pay. Therefore, plaintiff claims, defendants suffered no detriment or change in circumstances by the modification of the obligation of O'Neill and Kocsis.
Jones and Whittle rely on the rule of strictissimi juris which provides that a surety is discharged by any alteration of the contract between the principal and the creditor whom he assures whether the change is material or not.[2] The modern rule requires that the alteration be material.[3] What constitutes a material alteration is probably best cast in the following statement:[4]
"* * * Probably what is meant is that an unauthorized alteration in the contract will release the surety where it changes the nature of the contract, thus changing the real meaning and legal import of the surety's obligation and placing him in a position different from that which he occupied before it was made * * *." (Footnotes omitted.)
However, even this rule is generally further qualified in the case of a compensated surety.[5] Presently, a compensated surety is usually not discharged unless the change is detrimental to the surety, either actually or potentially.[6] Between a compensated surety and a gratuitous surety lie many situations in which the surety is not compensated but neither is he acting as such for the sole purpose of helping another. The present situation is one of this hybrid nature in which the defendants originally subordinated their property to induce a loan which would make possible increased rental from the developed land. Having once subordinated their property they were in a position where it was necessary to refinance or lose their property. In a situation where a surety's self-interest is of this proportion, it does not seem reasonable or equitable to release the surety from his obligation because of an unconsented-to change in the principal's obligation, even though material, unless the change is actually or potentially detrimental to the surety.[7]
*220 II.
Before examining the present circumstances for the purpose of determining whether the release of the principals, O'Neill and Kocsis, from any deficiency was actually or potentially detrimental to the defendants' position as sureties, another aspect of the law of suretyship must be considered. This aspect of the law is encompassed within the Restatement of the Law of Security, as follows:[8]
"Where the creditor releases a principal, the surety is discharged, unless
"* * * * *.
"(b) the creditor in the release reserves his rights against the surety."
The rationale of this rule is stated in the Restatement, as follows:[9]
"Where the creditor releases the principal but reserves his rights against the surety, this is construed as a covenant not to sue the principal. Historically, the covenant not to sue did not prevent a suit in violation of the covenant, although a liability might be incurred by such a suit. The creditor, by a release with reservation of rights against the surety, was in effect notifying the principal that, in spite of the release, the surety might pay as the result of compulsion or voluntarily and that the principal would then be liable to reimburse the surety. Since the release was regarded as only a covenant not to sue, even the surety's right of subrogation was technically preserved. The reservation of rights showed that the creditor had no intention to release the surety. The principal had no cause for complaint since, having accepted his release with the reservation, he necessarily accepted the consequence that the liability might still be enforced against him through action by the surety."
Certainly, the motion for and the order received from the federal court would, under Section 122 of the Restatement, be treated as a release of part of the obligation of O'Neill and Kocsis with a retention of full rights against the sureties Jones and Whittle.
However, the rule of Section 122 is seemingly contrary to the zealous protection which the law affords sureties by means of the rule that any material change in the status of the principal's obligation releases the surety, especially if the change is at least potentially detrimental to the surety.[10] This conflict has resulted in criticism of continuing to hold the surety by the means of analogizing a reservation of the creditor's rights against the surety to that of a covenant not to sue the principal,[11] although the application of such an analogy is almost universal.[12]
Arant, in his treatise, has the following to say:[13]
"* * * The fallacy of the reasoning by which the surety is held liable under such circumstances resides in the assumption that there is no reason which requires the surety's discharge so long as the creditor's act does not destroy his right to sue the principal in the creditor's name in the law courts. It also assumes that the creditor has the power to surrender his privilege of proceeding against the principal and preserve unimpaired his claim against the surety. If this is so, the creditor can at will change *221 the risk borne by the surety. When the surety contracts, he assumes the risk of having to pay the debt if it is not paid by his principal, but he contemplates that his principal shall continue to have all the compulsion to perform that his undertaking originally placed upon him. By the creditor's release, whether with or without reservation of rights against sureties, some of this compulsion is removed, and the creditor thereby makes it certain that the principal, who was originally expected by all parties to perform as he agreed, will not do so. To hold the surety liable under such circumstances is unjust, because it imposes upon him a wholly different risk from that which he intended to assume."
The principals' contract with the creditor was to pay a balance of $121,000. The payment of this sum was secured by the sureties to the extent of the value of their mortgaged land. Upon the principals' being told by the creditor that no judgment would be taken against them for any amount which was owing in excess of the value of the land, the principals were relieved of any possibility that their immediate loss upon foreclosure would be more than their equity in the motel, if any such equity existed. In such a situation, the principals' ultimate decision could not help but be affected, by the fact that no judgment for a deficiency would be taken against them, when considering whether they should attempt to refinance the venture again or to commit to it other assets that might be available to them. By thus changing the obligation of O'Neill and Kocsis the possibility that they would continue their efforts to comply with their promise to repay their note was materially lessened, because the detrimental effect upon them of non-payment had been substantially alleviated when they were relieved of the possibility of a deficiency judgment.[14] The extent of any compulsion upon O'Neill and Kocsis to pay which existed at the time defendants undertook to become sureties was materially lessened, and thus there would be imposed upon defendants a different risk than that which they intended to assume.
Plaintiff's contention is similar to that found in Becker v. Faber,[15] a case involving a reduction of interest, and leniency in demanding payment by the creditor, wherein the New York Court of Appeals stated a rule as to when changes in the contract between debtor and creditor would discharge the surety:[16]
"In this case the surety claims that unqualified benefit bestowed upon the principal debtor and leniency and consideration shown to the principal debtor discharges the surety. That is not the law of this State. The surety guaranteed the performance of the obligation of the principal debtor. The creditor's agreement to forego part of his rights does not discharge the surety from responsibility for failure of performance by the principal debtor of that part of the original obligation which still remains and which remains untouched and unaffected by the creditor's remission of the remainder of the obligation. The surety is held to no obligation which he did not assume and if the surety meets that obligation he will be subrogated to the creditor's cause of action against the principal debtor, in accordance with the terms of the original contract." (Emphasis in original.)
Plaintiff Equitable claims essentially that the duty of the sureties was to assure payment of the part of the obligation existing before any deficiency judgment. Therefore, the obligation of the sureties was "untouched and unaffected by the creditor's remission of the remainder of the obligation," i.e., the deficiency judgment. This position is untenable in the case at bar for two reasons. First, the deficiency *222 judgment is not like a proportionate remission. Such a remission would reduce the surety's potential liability pro tanto. The loss of a right to a deficiency, however, would not. It is a remedy of the creditor to enable him to collect the entire debt owed. It is therefore a remedy to which a surety would be subrogated upon payment. It follows that its loss would be an impairment of the surety's right of subrogation. Second, and more important, the detriment to the sureties in this case is found not in simple monetary terms, but in the effect such a waiver may have on the economic compulsion on the principal debtor to continue to work to pay off his debts. Unlike the remission of a right to a deficiency, after a proportionate remission a debtor would be just as likely to fulfill his promises and, indeed, more able to fulfill them. Therefore, the surety's risk of loss is reduced. However, when a right to a personal deficiency decree is foregone, it reduces the economic compulsion on a debtor to pay because it is a remission of that part of the debtor's obligation which he may possibly have to pay out of any nonmortgaged assets he may own.
We feel compelled to swim against the usual stream of adjudicated cases and to hold that a reservation of rights by the creditor against the surety is insufficient, without statutory authority, to hold the surety to his obligation if the alteration is actually or potentially detrimental to the surety. This means that in the absence of any further factor, Jones and Whittle would be released of their obligation as sureties to plaintiff because plaintiff made a material change, without the sureties' consent, in the obligation of O'Neill and Kocsis which was potentially detrimental to Jones and Whittle.[17] However, there is another factor which does affect the outcome.
III.
A variation of the principal's contract or of its performance which has been consented to by the creditor to the detriment of the surety does not discharge the surety if such variation measures up to the standard of ordinary business prudence on the part of the creditor or should have been anticipated by the surety as a possibility under the circumstances.[18] At the time the loan was made, Imperial `400' National, Inc., was in reorganization under Chapter X of the Bankruptcy Act and the loan was made to the trustee in reorganization. The order issued by the federal court approving the petition for reorganization contains the usual language prohibiting until further order all persons from doing any act or commencing any proceeding which would interfere with the trustee's possession of the property of Imperial `400' National, Inc. This order was in effect at the time of the signing of the mortgage by Jones and Whittle by which they mortgaged their interest in property in the possession of the trustee for a debt of the trustee who was under the federal court's protection. If, under such circumstances, ordinary business prudence indicated that a creditor foreclosing a mortgage on property securing the debt which was in the possession of the trustee would be required to sue with the consent of and under such conditions as would be imposed by the federal court, it must be said that it should have been anticipated by the surety that the possibility existed that concessions in favor of the trustee might be made by the mortgagee or imposed by the court.
In a Chapter X reorganization, there will normally be a stay of all pending actions against the debtor corporation. Upon approval of a petition to reorganize under *223 Chapter X, an automatic stay is effected. 11 U.S.C.A. § 548 (Ch. X, § 148) provides:
"Until otherwise ordered by the judge, an order approving a petition shall operate as a stay of a prior pending bankruptcy, mortgage foreclosure, or equity receivership proceeding, and of any act or other proceeding to enforce a lien against the debtor's property."
It is not clear whether the automatic stay affects subsequent suits against the trustee. Collier indicates that it does because "[t]here is no compelling reason why the commencement of actions to enforce liens after the approval of a petition should not be covered * * *."[19] However, 11 U.S.C.A. § 516(4) (Ch. X, § 116(4)) also grants the power to
"* * * enjoin or stay until final decree the commencement or continuation of a suit against the debtor or its trustee or any act or proceeding to enforce a lien upon the property of the debtor."
Thus, it seems clear that the federal court could have enjoined the commencement of any lien foreclosure suits commenced without its permission. The problem in the case arises because of a separate statute authorizing suits against trustees without leave of the court appointing them. 28 U.S.C.A. § 959(a) provides:
"Trustees, receivers or managers of any property, including debtors in possession, may be sued, without leave of the court appointing them, with respect to any of their acts or transactions in carrying on business connected with such property. Such actions shall be subject to the general equity power of such court so far as the same may be necessary to the ends of justice, but this shall not deprive a litigant of his right to trial by jury."
While it appears from the face of the statute that a trustee giving a mortgage in continuing a business in reorganization under Chapter X could be sued without leave of the federal court, the rule is apparently otherwise where title or possession of property held by the receiver or trustee is involved.[20] The leading bankruptcy treatise[21] states the rule to be that,
"Leave of the appointing court is also necessary where the suit involves title to or possession of the property held by the receiver or trustee."
The reason for this exception appears to be that suits in other jurisdictions which do not directly affect interests in property may be pursued because no property of the debtor will be directly affected until a levy is executed on the judgment. At that time, the claimant must come before the reorganization court. Where a suit directly affects interests in property, however, the ability of the reorganization court to pursue its appointed tasks successfully is threatened. Without its consent, a debtor could be dismembered; therefore, suits affecting property interests must be by leave of the reorganization court.[22]
The power of the reorganization court to protect the debtor's property is implemented by granting to the court exclusive jurisdiction over property of a debtor wherever located.[23] The court in this case *224 not only had exclusive jurisdiction over the debtor's property, but implemented that jurisdiction by issuing a stay of all proceedings against the debtor corporation's property. There are two reported cases involving Imperial[24] where the stay granted was in question. While neither of those cases specifically involves 28 U.S.C.A. § 959 permitting suits without leave of court, it is clear from both that the control of all motel properties is so vital to the successful reorganization of Imperial that a suit in state or federal court affecting title or possession would be enjoined.[25]
Whether it was necessary to seek leave of the reorganization court because of its exclusive jurisdiction of property, or because the suit had been or would be enjoined, it is clear that Equitable would have to submit to the jurisdiction of that court in order to foreclose its mortgage. In Diners Club, Inc. v. Bumb,[26] the contention was made that 28 U.S.C.A. § 959(a) granted plaintiff an absolute right to sue the trustee because the cause of action arose out of a breach of contract by the trustee in carrying on the business of the debtor. The court stated as follows:[27]
"If the first sentence of the statute stood alone, we might be persuaded, since appellant's suit clearly was in respect of the Trustee's transactions in carrying on the debtor's business. [Citations.] But the first sentence's broad grant of permission to sue is limited by the second, which makes suits subject to the general equity power of the appointing court. We are of opinion that this proviso, considered in the light of the legislative history of § 959(a), is sufficient to refute appellant's contention." (Footnotes omitted.)
There is a distinction between contracts of suretyship in ordinary business affairs and those connected with judicial proceedings. A surety's continued liability is justified whenever he obligates himself for the performance of an action which is dependent on judicial proceedings because his liability is assumed with reference to the power of the court to do those things which are within the scope of its authority. Clark v. Dreyer, 9 Colo. App. 453, 48 P. 818 (1897); Weingarten v. Kramer, 139 Misc. 74, 247 N.Y.S. 657 (City Ct.N.Y. 1931); The People v. Vilas, 36 N.Y. 459, 93 Am. Dec. 520 (1867); Jamieson v. Capron, 95 Pa. 15 (1880).
In the case of a reorganization trustee, the principal is a judicial officer who is continuing the ordinary business affairs of a debtor. Thus, the elements of business surety and judicial surety are indivisibly intermingled. Therefore, one who stands as surety for a business obligation of a reorganization trustee may be held to his obligation though the court may make alterations which materially increase the surety's risk.
There must be, however, some limit to the changes that can be made without discharging the surety. Risks should not be imposed upon the surety which are wholly and completely different from those which he expected to assume. The surety should be held only if the alterations judicially made are such that are normally expected in the type of judicial proceeding in question. In this case we have a reorganization under Chapter X. The court is the protector of the property of the debtor with a view to getting the debtor back on its feet. Therefore, alterations which require a creditor to give something up in order to recover on its debt may well be required by such a court. If such alterations have effects on parties other than a creditor, such effects are to be expected by those who assure obligations of a debtor in reorganization.
*225 That a court may, in allowing alterations, materially increase the risk of a surety is clear from the case of Hocker v. Woods's Executor, 33 Pa. 466 (1859). There a surety had bound himself for joint principals, i.e., two guardians. The court, however, released one principal. Such a release of one of several principals would normally discharge the surety.[28] However, the surety is held to have contracted with a view to the possible exercise of the inherent power of a court to discharge its officers and agents. Therefore, the surety was not discharged. Similarly, it is an inherent power of a reorganization court to protect property of a debtor. Therefore, conditions placed on permission to sue or levy against such property may be expected, and should be held to have been expected here.
When O'Neill signed the note and mortgage as "Trustee under Ch X," Jones and Whittle were put on notice that plaintiff would have to seek leave of the court to pursue any property within the possession of the trustee which was given as security for the payment of the note. They therefore may be held to some knowledge that the reorganization court might permit the creditor's remedies on conditions somewhat inimical to the right of the sureties.
It can be argued that plaintiff did not treat the sureties fairly because they were not informed of the application which was being made to the federal court to foreclose the mortgage and because plaintiff originally proposed in its petition the giving up of the deficiency judgment against the trustee and his partner, Kocsis. Be that as it may, the ultimate authority to restrain the foreclosure or to permit it upon such conditions as the court would specify lay with the federal court. We hold that the making of such an application and the bargaining with the court by the creditor were the chances Jones and Whittle took when they became sureties for the debt of a trustee in reorganization by mortgaging their interest in property which was in the exclusive possession of the court and necessary to the kind of business which the court was reorganizing.
The decree of the trial court is affirmed.
NOTES
[1] See Cross et al. v. Allen, 141 U.S. 528, 12 S.Ct. 67, 35 L.Ed. 843 (1891); Denny v. Seeley, 34 Or. 364, 366, 55 P. 976 (1899); Gray v. Holland, 9 Or. 512 (1881).
[2] See, e.g., Becker v. Faber, 280 N.Y. 146, 19 N.E.2d 997, 999 (1939). See 50 Am.Jur. 939, Suretyship § 50 (1944).
[3] See Wehrung v. Denham, 42 Or. 386, 391-393, 71 P. 133 (1903). Stearns, The Law of Suretyship 109, § 6.3 (Elder Rev. 1951); Simpson on Suretyship 329-31, § 72 (1950).
[4] 50 Am.Jur. 939, Suretyship § 50 (1944).
[5] A compensated surety has generally been interpreted to mean a surety company, i.e., one whose business is insuring certain risks for a premium. See Stearns, supra note 3 at § 5.1; Restatement of the Law of Security 233-34, § 82, comment i (1941).
[6] Simpson, supra note 3 at 347-48, § 72; Restatement of the Law of Security 340, § 128 (b) (1941).
[7] See Wehrung v. Denham, supra note 3, 42 Or. at 392-393, 71 P. 133; United Concrete Pipe Corp. v. Spin-Line Co., 430 S.W.2d 360, 366 (Tex. 1968). See generally, Annotation, 121 A.L.R. 1014 (1939); Restatement of the Law of Security 340, § 128 (1941). Simpson, supra note 3 at 330, § 72; Stearns, supra note 3 at 127, § 6.12; 10 Williston on Contracts 776, § 1243 (3d ed. Jaeger 1967).
[8] Restatement of the Law of Security § 122 (1941).
[9] Id. at 324, comment d.
[10] Note, 50 Yale L.J. 1485, 1489 (1941).
[11] Simpson, supra note 3 at 302-04, § 64. See generally, Annotation, Reserving Rights Against Surety, 139 A.L.R. 85 (1942). Cf. Gholson v. Savin, 137 Ohio St. 551, 31 N.E. 2d 858 (1941) (Zimmerman, J., dissenting).
[12] See, e.g., Meyn v. Schutte, 20 Misc.2d 471, 186 N.Y.S.2d 965 (Sup.Ct. 1959). See generally, Note, 50 Yale L.J. 1485 (1941).
[13] Arant on Suretyship 185, § 50 (1931). See also Simpson, supra note 3 at 303, § 64.
[14] Cf. Note, 50 Yale L.J. 1485, 1489-490 (1941).
[15] 280 N.Y. 146, 19 N.E.2d 997 (1939).
[16] Becker v. Faber, 280 N.Y. 146, 19 N.E.2d 997, 1000, 121 A.L.R. 1010 (1939).
[17] Cf. Restatement of the Law of Security 340-41, § 128 (1941).
[18] Simpson, supra note 3 at 345, § 72; Williston, supra note 7 at 775, § 1242. Cf. Arant, Why Release of Security Discharges Surety, 14 Minn.L.Rev. 725, 739-40 (1930).
[19] 6 Collier on Bankruptcy 1065, ¶ 6.12 n. 15 (Moore ed. 1972).
[20] See discussion in McGreavey v. Straw, 90 N.H. 130, 5 A.2d 270 (1939).
[21] 6 Collier on Bankruptcy 249, ¶ 2.36 (Moore ed. 1972). Also see id. at 479, ¶ 3.09; 646-51, ¶ 3.31.
[22] See Thompson v. Texas Mexican Ry. Co., 328 U.S. 134, 140-141, 66 S.Ct. 937, 90 L.Ed. 1132, 1136-1137 (1946).
[23] 11 U.S.C.A. § 511; In re Imperial `400' National, Inc., 429 F.2d 680, 682 (3d Cir.1970).
[24] In re Imperial `400' National, Inc., 429 F.2d 671, 674 (3d Cir.1970); In re Imperial `400' National, Inc., 429 F.2d 680 (3d Cir.1970).
[25] See 429 F.2d at 678-679, 682-683.
[26] 421 F.2d 396 (9th Cir.1970).
[27] Id. at 398.
[28] Simpson on Suretyship 298, § 63 (1950).
| {
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68 F.3d 485
U.S.v.Martinez* **
NO. 94-4360
United States Court of Appeals,Eleventh Circuit.
Sept 26, 1995
1
Appeal From: S.D.Fla., No. 93-06157-CR-KLR
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
**
Local Rule 36 case
| {
"pile_set_name": "FreeLaw"
} |
953 P.2d 1130 (1998)
152 Or. App. 525
Jude HANZO, Respondent,
v.
Paul dePARRIE, Appellant, and
State of Oregon, Intervenor.
9603-02315; CA A94099.
Court of Appeals of Oregon.
Submitted on Record and Briefs August 29, 1997.
Decided February 18, 1998.
*1131 Paul deParrie filed the briefs pro se.
Katherine A. McDowell, Deborah K. Smith and Stoel Rives LLP, Portland, filed the brief for respondent.
Hardy Myers, Attorney General, Virginia L. Linder, Solicitor General, and Robert M. Atkinson, Assistant Attorney General, filed the brief for intervenor.
Norman L. Lindstedt, Lindstedt & Buono, P.C., Portland, and Walter M. Weber, of Counsel, New Hope, KY, filed the brief for Amicus Catholics United for Life.
Before De MUNIZ, P.J., and DEITS, C.J., and HASELTON, J.
HASELTON, Judge.
Respondent Paul deParrie appeals from the judgment in this action under ORS 30.866, the civil stalking statute, in which petitioner Jude Hanzo sought and obtained a permanent stalking protective order (SPO) against deParrie.[1] We conclude, on de novo review, that petitioner failed to prove that respondent, on two or more occasions, engaged in conduct constituting "a threat or something that does not differ meaningfully from one." State v. Rangel, 146 Or.App. 571, 577, 934 P.2d 1128, rev. allowed 325 Or. 367, 939 P.2d 43 (1997). Accordingly, we reverse the judgment granting the SPO.
At all material times, petitioner was the executive director of All Women's Health Services, a Portland health center that provides gynecological health care and counseling services, including performing abortions. In 1985, the clinic was the target of a mail bomb.
Respondent is a leader of Advocates for Life Ministries, a group that opposes abortion, and is also the editor of Life Advocate magazine. At various times, Life Advocate magazine has editorialized that the use of "godly force" is "morally justified" in defense of "innocent life." In addition, on two occasions, respondent signed declarations or manifestos of support for anti-abortionist activists who killed abortion providers. In 1993, respondent and 28 other activists signed the following statement concerning Michael Griffin, who shot and killed Dr. David Gunn in Pensacola, Florida:
"We, the undersigned, declare the justice of taking all godly action necessary to defend innocent human life including the use of force. We proclaim that whatever force is legitimate to defend the life of a born child is legitimate to defend the life of an unborn child.
"We assert that if Michael Griffin did in fact kill David Gunn, his use of lethal force was justifiable provided it was carried out for the purpose of defending the lives of unborn children. Therefore, he ought to be acquitted of the charges against him."
The primary sponsor of that declaration was a group called "Defensive Action," whose director, Paul Hill, also signed the statement. In July 1994, Hill shot and killed Dr. John Britton and James Barrett, Britton's escort, and wounded Barrett's wife at another clinic in Pensacola. Respondent and 30 others subsequently signed a declaration that reiterated the earlier declaration and stated that Hill's "actions are morally justified if they were necessary for the purpose of defending innocent human life."
In 1994, respondent described Shelley Shannon, who had attempted to kill Dr. George Tiller, a Kansas abortion provider, as "a hero."[2] In January 1995, respondent publicly *1132 stated that John Salvi was "morally justified" in killing two receptionists at a Boston abortion clinic.
There is no evidence that respondent himself has ever engaged in violent activity against abortion providers. Nor is there any evidence that he has ever directed others to engage in violent activities. Respondent has twice been arrested for trespass in connection with protests at abortion clinics, but the record does not disclose that he was convicted in either instance.
Although the record does not say so explicitly, it appears that, for some time before the spring of 1995, respondent had organized and participated in anti-abortion protests at the All Women's Health Services clinic. None of that activity, however, was directed to petitioner at her home.
In April 1995, that changed. Respondent and others initiated a so-called "S.H.A.M.E." ("Stigmatize, Harangue, Agitate, Mortify, and Expose") campaign that centered on petitioner's home. Although the parties vehemently disagree about the specific purpose of that campaigni.e., whether it was intended to "coerce" and "terrorize" petitioner or merely to cause her to "reconsider" and "repent"no one disputes that the S.H.A.M.E. campaign was generally calculated to bring anti-abortion efforts "home" to petitioner's personal life and personal space.[3]
Conduct and communications allegedly associated with the S.H.A.M.E. campaign gave rise to petitioner's stalking complaint. Specifically:
On April 14, 1995, a copy of Life Advocate magazine was left on petitioner's doorstep and was distributed throughout her neighborhood. That issue included articles on a variety of anti-abortion activities and legal developments,[4] coverage of "rescue" operations, two pieces on an upcoming "no place to hide" campaign in Mississippi (which appears to be functionally indistinguishable from a S.H.A.M.E. campaign), and an essay by respondent, which commented on Planned Parenthood's alleged response to anti-abortion television advertisements and on reactions to anti-abortion signs at the Portland Rose Festival Parade. There is no direct evidence that respondent either personally delivered, or caused someone else to deliver, the publication to petitioner's residence and neighborhood. Although the publication includes references to abortion providers as "child killers," and an excerpt from an essay by a woman imprisoned for aiding and abetting the destruction of a clinic, it does not include any explicit advocacy of violence against abortion providers.
On April 15, 1995, petitioner received, at her home, a postcard picturing a fetus on a cross, bearing the legend "Father, forgive them, for they know not what they do." On the postcard was a handwritten note, "Please stop killing kids," signed, "a neighbor." Petitioner described the postcard as "a well-known Advocates for Life postcard"; there is, however, no direct evidence that respondent personally mailed the postcard or caused it to be mailed.
On April 22, 1995, respondent led a group of approximately nine anti-abortion protestors who picketed on public streets and sidewalks in front of petitioner's home and distributed written materials in petitioner's neighborhood. Before initiating those activities, respondent gave the Portland Police Bureau written notice of the anticipated picket. Before picketing, respondent and the others distributed bumper stickers reading "Free Paul Hill, Jail Abortionists." They also passed out handbills that bore petitioner's picture, as well as her name, home address, *1133 and work telephone number. The handbill was captioned, "YOUR NEIGHBOR IS AN ABORTIONIST," and included the following text:
"[Petitioner] lives comfortably in her home in your neighborhood because she makes good money as an abortionist who kills children.
"Let her know that you think she should not kill children for a living.
"Write her at the above home address or call her at her office."
During the ensuing picketing, respondent and the others stood on the public street and sidewalk in front of respondent's home displaying a large sign that read "FREE PAUL HILL! JAIL ABORTIONISTS!" and other signs bearing anti-abortion slogans, none of which advocated violence against abortion providers.[5] The picketing activity was peaceful and involved no direct interaction between petitioner and respondent or the other participants. There is no evidence that respondent or the others trespassed on Hanzo's property or, for that matter, even engaged in shouting or chanting.
In June 1995, Advocates For Life mailed a flyer to the medical director of petitioner's clinic. That flyer,[6] which was captioned "THESE ABORTIONISTS HAVE BEEN EXPOSED!", included the pictures, names, addresses, and telephone numbers of five abortion providers, including petitioner, with check marks indicating that their residences had been picketed on certain dates. The text of the flyer continued:
"All of these have had their grisly trade revealed to their neighbors and friends by Advocates for Life Ministries pickets and leafleting. Advocates is committed to the regular exposure of abortionists through peaceful, non-violent activism.
"IF YOU'RE AN ABORTIONIST WE WILL BE VISITING YOUR NEIGHBORHOOD SOON!"
The reverse side of the flyer showed a picture of the April 22, 1995 picket at petitioner's residence, with the caption, "An AFLM picket in front of abortionist Jude Hanzo's house," and the following text:
"Advocates For Life Ministries has exposed one abortionist a month for the last six months through home picketing, leafleting and other activities protected under the First Amendment.
"We plan to continue these activities as a public service so that patients, colleagues, neighbors, and friends of these abortionists will know that this person kills children for a living.
"Inside is a list of those already picketed and addresses and phone numbers where they might be contacted. Please use whatever influence you have to convince them to practice real medicine in keeping with their Oath.
"COMING SOON TO YOUR NEIGHBORHOOD!"
Later in June 1995, respondent called petitioner at her home, despite the fact that she had an unlisted phone number and had never given respondent her phone number. Petitioner asked respondent how he had obtained her phone number; he responded that it had appeared on an Advocates for Life Ministries' caller-identification device;[7] she told him never to call again and then hung up. Respondent never called petitioner at her home again.
Finally, on January 6, 1996, respondent and a group of between ten and fifteen others again engaged in pamphleting in petitioner's neighborhood and picketing of her residence. The handbills were similar to those distributed in April 1995; however, they included *1134 petitioner's unlisted home telephone number, in addition to her work number, and included the following text:
"Hanzo is a notorious Portland child-killer who directs two Oregon abortuaries and resides in your neighborhood. She is also one of the abortionists involved in suing local activists to prevent them from conducting legal pickets and engaging in free speech debate on the issue.
"Pray that she will repent of her child-killing. Write her at the above address or call her at her clinic * * * or home * * * to let her know that you think her abortion practice is wrong."
As with the April 1995 picket, respondent gave the police prior notice of the January 1996 residential picket, a police officer was present throughout and, as with the April 1995 picket, the January 1996 picket was peaceful and conducted entirely on public streets and sidewalks. The protestors carried a large sign bearing petitioner's photograph, with the words "ABORTIONIST" above and "Hanzo" below. They also carried other signs of various sizes and types, which included pictures of aborted fetuses with such captions as "Freedom of Choice?" and "Stop Abortion Now." Respondent himself carried a sign with a picture of an aborted fetus and the single word "Abortion."
However, the January 1996 demonstration differed from the April 1995 demonstration in one material respect. Unlike the earlier demonstration, in which there was no direct interaction between petitioner and respondent or any of the protestors, the January demonstration involved interactionand, indeed, confrontation.
The videotape of the January 1996 demonstration, see 152 Or.App. at 530 n. 5, 953 P.2d. at 1133 n. 5, shows the protestors standing uneventfully on the sidewalk for approximately 40 minutes. At that point, respondent announced that the group would conduct a "Jericho walk," which consisted of walking around the block carrying their signs. When only one or two of the protestors remained on the sidewalk in front of her home, petitioner emerged from her front door and ran, cutting across the lawn, pursuing the other protestors who were moving away from her home. A few seconds later, two other women, carrying coffee mugs, emerged from the house and walked across the lawn to join petitioner. The women, including petitioner, positioned themselves behind the bulk of the picketers, walking beside some of the picketers in the street and on the parking strip.
The groups exchanged comments, with the women in petitioner's group initiating the interaction by telling the protestors that they were "invading private space." The women told the protestors to "get out of this neighborhood; we don't want you here" and "be gone." One of the women taunted the protestors for hiding their faces behind their signs. The protestors responded with statements such as, "You kill babies," "You're a murderer," "You're rotten to the core," and "You women are a disgrace."
During that exchange, which lasted several minutes, petitioner took photographs of the protestors. The demeanor of both groups was somewhat confrontational; it was by no means a matter of one group engaging in aggressive conduct, while the other group cowered. The only person who appeared afraid was one of the protestors, a woman who left the group and walked out into the street toward the uniformed police officer, who was observing the protest from the other side of the street. Petitioner followed that woman, who appeared intimidated when petitioner approached and took her photograph.
Throughout the exchange, respondent stood several yards behind both groups, videotaping the scene and making no remarks. As petitioner and her companions turned back and walked towards her home, they said to respondent: "Here's Mr. Terrorist himself." "Jesus, Paul, go on a diet. You're disgusting." "American Coalition for Life Activists? How embarrassing; they can't show their face." One of petitioner's companions said to respondent, "Nobody's going to believe you're healthy or even sane. All they have to do is look at you." Respondent did not answer.
Petitioner and the other women with her then returned to her home and stood on her *1135 front walk. Respondent rejoined a couple of the protestors who had remained behind and were speaking with an unidentified woman. When the woman commented, "It is not reasonable to expect a human being, an adult person, to never have sex," respondent replied, "Yeah, you can't expect an adult to have self-control after all. Only kids can have it." The women in petitioner's group then remarked: "You oughta talk about self-control." "Yeah, really." "I've seen you in action * * * and it's pretty sickening."
A minute later, the remainder of the protestors returned from their walk, and petitioner and her companions went back inside the house. The protestors gathered for a prayer, which was conducted quietly. As they were praying, several of petitioner's companions left the house and slowly walked away. The demonstration ended shortly thereafter.
On March 26, 1996, petitioner filed a stalking complaint in Multnomah County Circuit Court seeking an SPO against respondent pursuant to ORS 30.866(1),[8] as well as attorney fees and costs pursuant to ORS 30.866(4)(c).[9] Petitioner alleged that each of the six incidents just described constituted an "unwanted contact" that had "alarm[ed] or coerce[d]" her, and she sought to enjoin respondent from contacting her in nine of the eleven ways described in ORS 163.730(3).[10] See ORS 163.730 (definitions in ORS 163.730 apply to ORS 30.866). Petitioner asserted that, given respondent's consistent declarations in support of those who have committed violence against abortion providers, as well as a nationwide escalation of violence against abortion providers and, particularly, those who have been "targeted" by certain anti-abortion groups, it was objectively reasonable for her to have been alarmed by respondent's alleged conduct.
Respondent, appearing pro se, filed an answer, which included counterclaims for "infliction of emotional distress" and for deprivation of civil rights under 42 U.S.C. § 1983. Respondent also filed a variety of pretrial motions, all of which were denied.[11]
In May 1996, following a two-day hearing, the trial court issued a permanent SPO. The trial court found that respondent had organized and led the April 1995 and January 1996 demonstrations outside petitioner's home, and it identified those demonstrations as the "predicate contacts" upon which it based its ruling. The court further found that those demonstrations were part of a "S.H.A.M.E. campaign" directed against petitioner and that those contacts were calculated to alarm or coerce petitioner into ceasing her abortion-related employment. Finally, the court found that, given "the intensity of the contacts and their potentially violent and confrontational nature," it was objectively reasonable for petitioner to feel alarmed or coerced and that she was in fact alarmed or coerced. In addition to issuing the SPO, the court awarded petitioner attorney fees pursuant to ORS 30.866(4)(c).[12]
*1136 On appeal, respondent raises twelve assignments of error, many of which pertain to rulings on pretrial motions and some of which broadly challenge the constitutionality of the anti-stalking statutes on their face and as applied to the facts of this case. In particular, respondent's eleventh assignment of error asserts broadly, albeit somewhat inartfully, that issuance of a permanent SPO on the basis of the "contacts" alleged and proved here offends the free expression protections of both the Oregon Constitution and the United States Constitution. As amplified below, we agree and reverse on that basis. Accordingly, we do not consider respondent's other assignments of error.
Before addressing the substance of respondent's eleventh assignment of error, we must clarify our standard of review on questions of fact underlying the issuance of SPOs. ORS 30.866 does not specify any standard of review, and we have never previously resolved that question.
The classification of a claim, for standard of review purposes, depends upon "the essential nature of the case, including the nature of the relief sought." State Farm Fire v. Sevier, 272 Or. 278, 299, 537 P.2d 88 (1975). When a claim arises from a statute, we examine the statute to determine whether the legislature intended the claim to be legal or equitable in nature. See Goodyear Tire & Rubber Co. v. Tualatin Tire & Auto, 322 Or. 406, 414-19, 908 P.2d 300 (1995), mod. on other grounds 325 Or. 46, 932 P.2d 1141 (1997). Legislative and judicial treatment of claims arising under analogous statutes is pertinent to that inquiry.
Here, two cases involving the Family Abuse Protection Act (FAPA), ORS 107.700 to ORS 107.732, are particularly enlightening as to the proper standard of review of civil SPOs issued pursuant to ORS 30.866. Similarities between the two statutory schemes, in structureand, to a large extent, in purposeare apparent. In State ex rel. Hathaway v. Hart, 300 Or. 231, 241-42, 708 P.2d 1137 (1985), the Supreme Court concluded that a defendant in a criminal contempt proceeding for violating a restraining order under FAPA is not entitled to a trial by jury, because a FAPA "restraining order is analogous to traditional injunctions preventing spouses from harassing each other during a pending divorce suit." In Strother and Strother, 130 Or.App. 624, 629, 883 P.2d 249 (1994), rev. den. 320 Or. 508, 888 P.2d 569 (1995), we concluded that, given Hathaway's analysis, FAPA restraining orders are "decrees in a suit in equity" and, thus, subject to de novo review under former ORS 19.125(3).[13]
SPOs issued under ORS 30.866 provide relief similar to that provided by FAPA orders, i.e., injunctive relief preventing one party from engaging in conduct with respect to another party. Both are intended to forestall potentially violent interaction. Given those similarities, we conclude that, as with FAPA orders, our review of SPOs issued pursuant to ORS 30.866 is de novo.[14]
Proceeding to the merits, respondent asserts generally that the issuance of the SPO in the circumstances presented here was unconstitutional. Respondent's fundamental argument, as we understand it, is that the "contacts" upon which the issuance of the SPO was premised involved constitutionally protected expression. That argument is not framed explicitly in the terms of our analysis of the anti-stalking statutes in State v. Rangel, 146 Or. App. 571, 934 P.2d 1128, rev. allowed 325 Or. 367, 939 P.2d 43 (1997), and Delgado v. Souders, 146 Or. App. 580, 934 P.2d 1132, rev. allowed 326 Or. 43, 943 P.2d 633 (1997), which were decided after the issuance of the SPO in this case. However, the ultimate success of that argument depends on our analysis in those two cases and, particularly, in Rangel.
In Rangel, we sustained ORS 163.732, which describes the crime of stalking, against *1137 a facial overbreadth challenge. Our analysis implicated two statutes, ORS 163.730 and ORS 163.732. ORS 163.730, which applies equally to civil and criminal stalking proceedings, provides, in part:
"As used in ORS 30.866 and 163.730 to 163.750, unless the context requires otherwise:
"(1) `Alarm' means to cause apprehension or fear resulting from the perception of danger.
"(2) `Coerce' means to restrain, compel or dominate by force or threat.
"(3) `Contact' includes but is not limited to:
"(a) Coming into the visual or physical presence of the other person;
"(b) Following the other person;
"(c) Waiting outside the home, property, place of work or school of the other person or of a member of that person's family or household;
"(d) Sending or making written communications in any form to the other person;
"(e) Speaking with the other person by any means;
"(f) Communicating with the other person through a third person;
"(g) Committing a crime against the other person;
"(h) Communicating with a third person who has some relationship to the other person with the intent of affecting the third person's relationship with the other person;
"(i) Communicating with business entities with the intent of affecting some right or interest of the other person;
"(j) Damaging the other person's home, property, place of work or school; or
"(k) Delivering directly or through a third person any object to the home, property, place of work or school of the other person.
"* * * * * *
"(7) `Repeated' means two or more times."
ORS 163.732 provides, in part:
"(1) A person commits the crime of stalking if:
"(a) The person knowingly alarms or coerces another person or a member of that person's immediate family or household by engaging in repeated and unwanted contact with the other person;
"(b) It is objectively reasonable for a person in the victim's situation to have been alarmed or coerced by the contact; and
"(c) The repeated and unwanted contact causes the victim reasonable apprehension regarding the personal safety of the victim or a member of the victim's immediate family or household."
In Rangel, in sustaining ORS 163.732, we applied the same sort of "narrowing construction" that the Supreme Court employed in sustaining the harassment statute, now codified as ORS 166.065(1)(c), in State v. Moyle, 299 Or. 691, 705 P.2d 740 (1985):
"Although, unlike [the harassment statute at issue in Moyle,] the stalking statute does not expressly require that a `threat' be made to the victim, a combination of provisions in ORS 163.730 and ORS 163.732 makes it clear that a threat or its equivalent must have been made in order for the crime of stalking to be found: ORS 163.730(1) defines `alarm' as meaning `to cause apprehension or fear resulting from the perception of danger'; ORS 163.730(2) defines `coerce' as entailing `force or threat'; and ORS 163.732(1)(c) requires that the victim's apprehension must relate to his or her personal safety or that of a family or household member. Considered together with the requirements of ORS 163.732(1) [ (b) and (c) ], that the alarm be subjectively experienced and objectively reasonable, these provisions demonstrate that, at least where the alleged activity is carried out in whole or in part by communicative means, proof of stalking requires the establishment of a threat or something that does not differ meaningfully from one: For the victim to have an objectively reasonable fear or apprehension of a danger *1138 to personal safety, the communication giving rise to the fear must reasonably be perceivable as threatening.
"[T]he term `knowing,' as used in this statute, is subsumed in the meaning of `intentional.' ORS 163.732 requires that the victim's alarm be objectively reasonable and that its focus be on the victim's personal safety or that of someone personally close to the victim. We agree with the state's suggestion that the requisite subjective and objective conditions for the application of the stalking statute could not exist if the actor had not communicated the intent and did not have the ability to cause the harm that the victim reasonably fears. Here, as in Moyle, the need to show the actor's intent and ability to carry out the feared harm may be found in or implied from the statute, even though, here as there, `the statute, as written, requires' proof of neither.
"Further, if the threatened harm to personal safety is itself intended by the actor, it is highly unlikely that the alarm that the communication of the threat engenders would not also be intended. Therefore, analogously to the court's implication in Moyle that the threatened harm must be intended under a statute that specified only the victim's alarm must be intentionally caused, we interpret the stalking statute to require proof that the alarm as well as the threatened act must be intended by the speaker." Rangel, 146 Or. App. at 577-78, 934 P.2d 1128 (emphasis supplied).
In Delgado, we affirmed the issuance of a civil SPO under ORS 30.866. There, the respondent, who had no acquaintance with the petitioner, had repeatedly, and for no apparent reason, appeared outside the building where the petitioner lived and put himself in close proximity to the petitioner on sidewalks, in a library, and in other public places. Delgado, 146 Or.App. at 582, 934 P.2d 1132. In sustaining the SPO, we considered a variety of constitutional challenges to ORS 30.866(1) and to ORS 163.730 as incorporated into the civil stalking statute. ORS 30.866(1) provides:
"A person may bring a civil action in a circuit court for a court's stalking protective order * * * against a person, if:
"(a) The person intentionally, knowingly or recklessly engages in repeated and unwanted contact with the other person or a member of that person's immediate family or household thereby alarming or coercing the other person;
"(b) It is objectively reasonable for a person in the victim's situation to have been alarmed or coerced by the contact; and
"(c) The repeated and unwanted contact causes the victim reasonable apprehension regarding the personal safety of the victim or a member of the victim's immediate family or household."
We rejected the respondent's argument that various terms in ORS 30.866i.e., "contact," "alarm," and "personal safety"were impermissibly vague. Further, and of particular importance to this case, we held that, because none of the alleged predicate "contacts" in Delgado involved expression, it was unnecessary to address whether ORS 30.866 otherwise impermissibly restrained protected expression:
"[Souders] contends that the statute cannot be invoked against him `without [evidence of a] genuine and imminent threat of violence which is necessary to remove the accused's actions from constitutional [speech] protection.' We held in Rangel that ORS 163.732, the criminal analog of ORS 30.866, could survive under the constitutional speech provisions only if construed in such a manner that the actor's expression giving rise to the victim's apprehension for safety must be accompanied by the intent and ability to commit the threatened harm. That conclusion may be equally applicible to the civil stalking statute but it is unnecessary to decide that question here." 146 Or. App. at 585-86, 934 P.2d 1132 (emphasis supplied).
Thus, in Delgado, we explicitly reserved the question of whether our construction of the criminal stalking statute in Rangel, as predicated on Moyle, applied equally to ORS 30.866.
*1139 We now reach and decide that issue. All of the alleged "contacts" in this case involved expression. The proper construction of the statute, in turn, drives our assessment of respondent's "as applied" argument.
ORS 30.866(1) does not differ materially from ORS 163.732(1) with respect to the critical elements addressed in Rangel. The two statutes provide, respectively, as follows:
"(a) The person intentionally, knowingly or recklessly engages in repeated and unwanted contact with the other person or a member of that person's immediate family or household thereby alarming or coercing the other person[.]" ORS 30.866(1) (emphasis supplied).
"(a) The person knowingly alarms or coerces another person or a member of that person's immediate family or household by engaging in repeated and unwanted contact with the other person[.]" ORS 163.732(1) (emphasis supplied).
In addition, ORS 30.866(1)(b) and (c), which require that the complainant's alarm or coercion be both subjectively experienced and objectively reasonable, are identical to ORS 163.732(1)(b) and (c). Further, although the remedies afforded by the civil and criminal stalking schemes differ somewhat, both implicate the coercive use of governmental authority, including criminal sanctions, to restrain conduct involving expression. See, e.g., ORS 163.750(1) (defining crime of "violating a court's stalking protective order" as including violation of order issued under ORS 30.866). Given those material similarities, we conclude that our construction of ORS 163.732(1) in Rangel applies equally to ORS 30.866(1).
Thus, just as a criminal stalking prosecution can, constitutionally, be predicated on unwanted "contact" involving expression, so too can the issuance of a civil SPO under ORS 30.866. In both cases, however, the constitutionality of the statute's application depends on whether the statutory requisites distilled in Rangel have been satisfied: The underlying expression must represent "a threat or something that does not differ meaningfully from one"; the complainant must actually experience "fear or apprehension of a danger to personal safety"; and that alarm must be objectively reasonable. Rangel, 146 Or.App. at 577-78, 934 P.2d 1128.
We begin with the requirement of a "threat or something that does not differ meaningfully from one." The civil and criminal stalking statutes do not define a "threat." Nor in Rangel did we. However, in two recent decisions, which also involved the construction of criminal statutes that did not include a definition of "threat" or "threaten," we employed the following dictionary definition of "threat":
"1: an indication of something impending and usu[ally] undesirable or unpleasant * * * a: an expression of an intention to inflict evil, injury, or damage on another usu[ally] as retribution or punishment for something done or left undone * * * b: expression of an intention to inflict loss or harm on another by illegal means and [especially] by means involving coercion or duress of the person threatened[.]" Webster's Third New International Dictionary 2382 (unabridged 1993).
See State v. Hall, 149 Or.App. 358, 364-65 n. 4, 942 P.2d 882, mod. on other grounds 149 Or. App. 757, 944 P.2d 1000 (1997), rev. allowed 326 Or. 389, 952 P.2d 62 (1998) (construing ORS 164.395(1), which prohibits robbery in the third degree); State v. Chakerian, 135 Or. App. 368, 376-77, 900 P.2d 511 (1995), aff'd 325 Or. 370, 938 P.2d 756 (1997) (construing "anti-rioting" statute, ORS 166.015).[15]
As noted, Rangel was predicated on Moyle. Although Moyle itself did not explicitly define "threat" or "threaten," it did describe certain attributes of constitutionally proscribable "threats." In Rangel, 146 Or. App. at 576-77, 934 P.2d 1128, we quoted that description:
"The statute, as written, requires neither proof of a specific intent to carry out the threat nor of any present ability to do *1140 so. However, the elementsactual alarm and the reasonableness of the alarm under the circumstanceshave a similar purpose and effect. These elements limit the reach of the statute to threats which are so unambiguous, unequivocal and specific to the addressee that they convincingly express to the addressee the intention that they will be carried out. [Moyle, 299 Or.] at 703-04, 705 P.2d 740." (Emphasis supplied.)
Consistently with Rangel and Moyle, we conclude that, at least where predicate "contacts" involve expression, a civil SPO can constitutionally issue only if that expression or other associated conduct so unambiguously, unequivocally, and specifically communicated the respondent's determination to cause harm that an objectively reasonable person in the petitioner's situation would fear for his or her personal safety, or for the safety of a member of his or her immediate family or household.
The contacts that petitioner pleaded and proved here did not meet that requirement.[16] We begin with the two incidents that the trial court characterized as "the predicate contacts"the April 1995 and January 1996 demonstrations at petitioner's home.
Viewed in isolation, there was nothing "unambiguously" or "unequivocally" threatening about respondent's conduct during the April 1995 demonstration. As noted previously, see 152 Or.App. at 529-531, 953 P.2d at 1132-1133, that demonstration was peaceful and was conducted entirely on public sidewalks and streets. The demonstration lasted for less than an hour and involved only a handful of protestors; there was no physical interaction between petitioner and any of the demonstrators, including respondent. The signs respondent and the others carried, and the pamphlets they distributed, did not urge violence against abortion providers. The only conduct that even alluded to such violence was the distribution of the "Free Paul Hill! Jail Abortionists!" bumper stickers and the display of a sign bearing the same legend. Whatever message of endorsement may have been conveyed by "Free Paul Hill," it is equally apparent that the sign and bumper stickers urged that abortion providers be "jail[ed]," not assaulted or killed.
Petitioner asserts, however, that neither the April 1995 demonstration nor the January 1996 demonstration, which we consider below, can, or should, be viewed in the abstract. She points, particularly, to: (1) the contemporaneous proliferation and escalation of violence against abortion providers, specifically including those who were "targeted" by certain anti-abortion groups; and (2) respondent's declarations of support for, and acquaintance with, persons who committed such violence.[17]
We reject petitioner's "contextual overlay" arguments for two related reasons. First, even if the declarations that respondent signed are reasonably read as advocating violence against abortion providers, that advocacy is abstract advocacy.[18] Nothing in the stalking statutes, as construed in Rangel, suggests that such advocacy alone, or even when coupled with manifestly nonviolent protest activity, can constitute an actionable "unwanted contact." Second, in a related sense, if petitioner were correct, then any contact between petitioner and respondent would, necessarily be an actionable "unwanted contact." That is, any contactfrom saying "hello" to petitioner in a grocery store to peaceful picketing at her clinicwould be *1141 transmuted into an actionable "unwanted contact" by virtue of respondent's generic and constitutionally protected statements. Respondent's endorsement of the "defense of life" manifestos would, effectively, preclude him from engaging in any picketing/protest activity directed, not just against petitioner and her clinic, but against any abortion provider. ORS 30.866 does not, and cannot, yield that result.
In so holding, we emphasize that this is not a case in which respondent previously engaged in violence against persons in petitioner's position or had incited others to do so. Rather, as noted, there is no evidence that respondent has acted violently towards abortion providersor indeed, towards anyoneor that he has directed anyone else to act violently.
We appreciate the practical consequences of our holding for petitioner and others in similar positions. It is unpleasant to be picketed at one's homeor even at one's office. But that is the essence of picketing. It is, no doubt, upsetting to be denounced as a "murderer" merely for assisting others to exercise their constitutional rights. But respondent, too, is entitled to exercise his constitutional rights, so long as his conduct is not unlawful.
Our assessment of the second demonstration, in January 1996, is similar. Again, that demonstration was peaceful; it did not involve any trespass or other unlawful activity. Because respondent had given prior notice to the Portland Police Bureau, a uniformed officer was present and visible. The signs the demonstrators carried and the pamphlets they distributed did not advocate violence against abortion providers. The only interpersonal contact between petitioner and respondent and the other demonstrators was contact that petitioner herself initiated, when she and some other women pursued the protestors as they were moving away from her house. The ensuing colloquy between the two groups did not involve any threats of violence. See 152 Or.App. at 533-34, 953 P.2d at 1134. We conclude that, given the totality of those circumstances, the second demonstration was not an actionable "unwanted contact" for purposes of ORS 30.866.
Although the trial court based its issuance of the SPO exclusively on the two demonstrations and did not consider the four other alleged "contacts," it is necessary on de novo review for us to consider the other four incidents. We conclude that none of those incidents constituted an actionable "unwanted contact." With respect to the delivery of the Life Advocate magazine to petitioner's residence, there is no evidence that respondent was personally responsible for that delivery. In all events, nothing in that publicationand, particularly, respondent's commentaryadvocated violence against abortion providers, much less in such a way as to constitute an "unequivocal" and "unambiguous" threat against petitioner. The same is true of the postcard depicting the fetus on the cross, which simply bore the biblical quotation "Father, forgive them, for they know not what they do" and the handwritten notation "Please stop killing kids."
The fifth alleged "contact," the mailing of the flyer in June 1995, was insufficient for many of the same reasons. Nothing in that mailing espoused violenceand, indeed, the flyer stated that Advocates for Life Ministries "is committed to the regular exposure of abortionists through peaceful, non-violent activism." The message of the flyer was one of persuasion, not violence: "Please use whatever influence you have to convince [abortion providers] to practice real medicine in keeping with their Oath."
The final alleged "contact," respondent's June 1995 call to petitioner's unlisted home telephone number, was brief and did not involve any mention of abortion or violence. That call consisted entirely of respondent calling, petitioner asking him how he had obtained the unlisted number, respondent answering, and petitioner then telling respondent never to call again and hanging up. Respondent did not call again. We agree with petitioner that, although the content of the call was ostensibly neutral, respondent's reasons for making the call were hardly innocuousthat is, that he wanted petitioner to know that even her private phone number was not private, that she had "no place to hide" from respondent's anti-abortion efforts.
*1142 Although such harassment was, no doubt, upsetting, it did not unambiguously and unequivocally communicate a determination to injure petitioner unless she ceased her abortion-related activity.
We thus conclude that none of the six alleged contacts satisfied the requisites for issuance of an SPO under ORS 30.866. Accordingly, the trial court erred in granting the SPO and in awarding petitioner attorney fees pursuant to ORS 30.866(4)(c).
Judgment on petitioner's complaint for issuance of stalking protective order and award of attorney fees reversed; judgment dismissing respondent's counterclaims affirmed.
DEITS, Chief Judge, concurring.
I agree with the majority's implicit conclusion that petitioner experienced no subjective alarm or apprehension as a result of respondent's contacts. Because that conclusion is independently dispositive of the appeal, I would not reach and I express no view regarding many of the other issues that the majority decides.
It is unnecessary to the decision of this case to resolve the questions of whether any alarm that the contacts could have caused, but did not, would have been "objectively reasonable," ORS 30.866(1)(b), or whether the contacts entailed a constitutionally proscribable "threat." See State v. Rangel, 146 Or. App. 571, 934 P.2d 1128, rev. allowed 325 Or. 367, 939 P.2d 43 (1997). I note in particular that I would not reach and, accordingly, do not join in the majority's disposition of petitioner's argument that respondent's alleged earlier declarations of support for violent acts against abortion providers may have bearing on the answers to those questions.
I concur in the result.
NOTES
[1] In civil stalking proceedings, the party applying for relief is denominated the "petitioner" and the party against whom relief is sought is the "respondent." Obviously, that nomenclature can be confusing in an appeal like this, where the "respondent" below is the appellant and the "petitioner" below is the respondent. Nevertheless, for consistency and in accordance with our own rules governing designation of parties in briefs, ORAP 5.15, all references to "respondent" are to deParrie and all references to "petitioner" are to Hanzo.
[2] Respondent was personally acquainted with Shannon, formerly an Oregon resident. They jointly participated in picketing of Oregon clinics in the late 1980s and early 1990s.
In the fall of 1994, based, in part, on respondent's association with Shannon, the Multnomah County Sheriff's Office suspended a concealed weapons permit that respondent had obtained in 1992.
[3] The "S.H.A.M.E." campaign was not directed solely against petitioner. Beginning at least as early as November 1994, respondent and other members of Advocates for Life Ministries picketed the homes of at least five other Portland area abortion providers. Other groups in the national anti-abortion movement have also staged home pickets.
[4] Among the articles was a summary of the United States Supreme Court's decision in Madsen v. Women's Health Center, 512 U.S. 753, 114 S.Ct. 2516, 129 L.Ed.2d 593 (1994), pertaining to picketing and other protest activities at abortion clinics.
[5] Respondent videotaped both the April 1995 demonstration and a subsequent demonstration, in January 1996. That videotape was received as an exhibit during the stalking proceeding. Much of our recitation of the details of those two demonstrations is based on our review of that videotape.
[6] One of petitioner's witnesses testified that the FBI refers to such mailings as "hit lists," in that they signal that certain individuals have been "singled out for an escalated level of harassment, intimidation, stalking and other activities."
[7] Petitioner testified that she sometimes called the Advocates for Life Ministries hotline because a recorded message would provide information about the S.H.A.M.E. campaign's forthcoming activities.
[8] The text of ORS 30.866(1) is set out below. 152 Or.App. at 540-41, 953 P.2d at 1138.
[9] ORS 30.866(4)(c) provides that a prevailing "plaintiff" may recover "[r]easonable attorney fees and costs."
[10] Petitioner sought to restrain respondent from:
"a) Coming into the visual or physical presence of petitioner (ORS 163.730(3)(a));
"b) Following petitioner (ORS 163.730(3)(b));
"c) Waiting outside petitioner's home or place of work (ORS 163.730(3)(c));
"d) Sending or making written communications in any form with petitioner (ORS 163.730(3)(d));
"e) Speaking with petitioner (ORS 163.730(3)(e));
"f) Committing a crime against petitioner (ORS 163.730(3)(g));
"h) Communicating with business entities with the intent of affecting petitioner's rights or interests (ORS 163.730(3)(i));
"i) Damaging petitioner's home, property or place of work (ORS 163.730(3)(j));
"j) Delivering directly or through a third person any object to petitioner's home, property or place of work (ORS 163.730(3)(k))."
[11] Respondent assigns as error the rulings on those motions. However, given the nature of our disposition, we need not, and do not, address those assignments of error.
[12] The trial court's judgment, from which this appeal was originally taken, did not adjudicate respondent's counterclaims. However, upon remand pursuant to former ORS 19.033(4) (now ORS 19.270(4)), the trial court entered an amended judgment dismissing the counterclaims. Respondent does not assign error to the dismissal of his counterclaims.
[13] Former ORS 19.125(3) (now ORS 19.415(3)) states:
"Upon an appeal from a decree in a suit in equity, the Court of Appeals shall try the cause anew upon the record."
[14] Under ORS 30.866(1) and (4), a petitioner in a civil stalking proceeding may also recover monetary damages. Because petitioner here did not seek damages, we need not consider what our standard of review would be in the event a petitioner sought or recovered such relief.
[15] See also State v. Scott, 63 Or. 444, 447, 128 P. 441 (1912) (construing then-current version of theft by extortion statute).
[16] Under ORS 30.866(1), a petitioner must prove "repeated" contacts. "Repeated" means "two or more times." ORS 163.730(7). As described below, we conclude that petitioner did not prove even a single actionable "contact" in this case.
[17] Petitioner also introduced evidence that respondent owned firearms and that his concealed weapons permit had been revoked, in part because of his declarations in support of persons who had committed violence against abortion providers. Petitioner did not, however, introduce any evidence that she was aware of those facts at the time of either of the two demonstrations.
[18] See, e.g., Brandenburg v. Ohio, 395 U.S. 444, 447, 89 S.Ct. 1827, 1829, 23 L.Ed.2d 430 (1969) ("[T]he constitutional guarantees of free speech and free press do not permit a State to forbid or proscribe advocacy of the use of force or of law violation except where such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or produce such action.").
| {
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384 So.2d 1243 (1980)
Newbern Ray WILSON
v.
STATE.
6 Div. 245.
Court of Criminal Appeals of Alabama.
June 17, 1980.
Al Tidwell, Hamilton, for appellant.
Charles A. Graddick, Atty. Gen., and George Hardesty, Jr., Sp. Asst. Atty. Gen., for appellee.
HARRIS, Presiding Judge.
Appellant was convicted of robbery and the court sentenced him to forty years in the penitentiary. Prior to arraignment appellant was found to be indigent and counsel was appointed to represent him. At arraignment, in the presence of counsel, he waived reading of the indictment and pleaded not guilty. After sentence was imposed he gave notice of appeal and was furnished a free transcript. Trial counsel represents him on this appeal.
Prior to trial a motion to suppress an alleged confession was conducted out of the presence and hearing of the jury. At the conclusion of the hearing the trial court ruled that the incriminating statement made by appellant to an investigator from the District Attorney's Office and a Deputy Sheriff of Marion County was voluntary. These two witnesses were assigned to transport appellant from the Jefferson County Jail to the jail in Hamilton, Marion County, Alabama, to stand trial on a robbery indictment, following an order from the Circuit Judge of Marion County. Appellant was given the Miranda rights and warnings on at least two occasions and responded that he knew his constitutional rights, but declined to sign a waiver of rights form.
*1244 At no time was the inculpatory statement of appellant even referred to during the robbery trial in Marion County and it would serve no useful purpose or add anything to this opinion to further refer to the statement made by appellant. The case against appellant was tried on the testimony of two eye witnesses to the robbery who made positive in-court identifications of appellant as one of the bandits who robbed the drug store in Winfield, Marion County, Alabama.
Appellant did not testify during the trial in chief nor did he offer any evidence in his behalf.
There was no motion to exclude the State's evidence; there was no motion for a new trial; no exceptions were reserved to the court's oral charge to the jury, and there were no objections to the introduction of testimony which contained any merit. There was a request for the affirmative charge which was refused.
Mr. David Corbin testified that he was employed as a pharmacist at the Oden Shirey Drug Store, Incorporated, on November 2, 1978, when the store was robbed between 5:30 and 6:00 p. m. He first saw appellant standing about twelve feet from him waving a .45 caliber automatic in the air. Appellant ordered everyone to lie down. There were eight or nine persons in the drug store at the time of the robbery and all lay face down on the floor at the command of the bandit. The bandit asked who was the druggist and Mr. Corbin stated he was the pharmacist. The bandit ordered Mr. Corbin to get off the floor and to give him all the narcotics in the store. Mr. Corbin started putting the narcotics in a paper bag and the bandit passed him a pillow case and told him to put the drugs in it. Mr. Corbin filled the pillow case full of narcotics and handed the pillow case to the robber. Mr. Corbin looked at the bandit several times while he was putting the drugs in the pillow case and the bandit ordered Mr. Corbin not to look at him, but every time the bandit said anything Mr. Corbin would look at him. The store was brightly lighted and at times the bandit was about two feet from him and he got a clear and unobstructed view of the bandit's face. The bandit did not have his face disguised in any manner.
While Mr. Corbin was getting the drugs an employee was on the floor about three or four feet away and he made a move. The bandit told the employee that if he moved again he would blow his head off. In addition to the drugs four or five hundred dollars were taken from a brief case on top of the drug cabinet.
After giving the pillow case to the bandit, the bandit asked Mr. Corbin for his car keys and Mr. Corbin told him he did not have a car. The bandit asked the employee whom he threatened to shoot for his car keys and was told he did not have his car with him as he walked to work that day. The bandit then asked who owned the Lincoln that was parked nearby and he was told it belonged to Mr. Henry Lindsey. Mr. Lindsey was one of the owners of the drug store and he surrendered his keys to the bandit.
Mr. Corbin described the bandit as having a mustache and scars on his face. He also had long brown hair and was larger in stature than Mr. Corbin and he had very distinctive eyes. He was not wearing a suit but Mr. Corbin did not remember the type of clothing he had on. Mr. Corbin further stated the bandit had a companion who was armed with an old type pistol and was wearing a ski mask. He could not identify this man.
After the robbery was completed everyone in the store was ordered to pile up in a back room and remain there for ten minutes after they left the store.
The indictment listed some thirty different type drugs, all under the Controlled Substances Act, in addition to a 1978 Lincoln automobile, as being taken during this robbery. The warrant of arrest stated the combined value of the stolen items to be $14,700.00.
The only other witness who testified for the State was Mrs. Gerry Ann Sanford who was employed as a clerk at the time of the robbery. She made a positive in-court identification of appellant as one of the robbers. *1245 She stated her identification was based solely on seeing appellant at close range in a well lighted store at the time of the robbery.
Appellant contends that the State failed to prove venue and he was entitled to a directed verdict for that reason. We do not agree. Venue may be established by the testimony of one witness. White v. State, 55 Ala.App. 58, 312 So.2d 639; Ligon v. State, 50 Ala.App. 658, 282 So.2d 97.
From the record:
"Q. David (Corbin) is Oden Shirey Drug Company you testified about where this robbery took place, is it located in Marion County?
"A. Yes, sir."
Appellant next asserts that he was deprived of a fair trial by the action of the court in not granting him a continuance so that he could adequately prepare for trial.
The law is well settled that a motion for a continuance in a criminal case is addressed to the sound discretion of the trial court, the exercise of which will not be disturbed on appeal unless clearly abused. Fletcher v. State, 291 Ala. 67, 277 So.2d 882; Rogers v. State, Ala.Cr.App., 365 So.2d 322.
The record reflects that appellant was transported to Marion County no later than February 23, 1979, a month before trial. Counsel for appellant had ample time to prepare this case for trial. Appellant's astute and resourceful counsel performed a very remarkable and professional job in defending him both at trial and on appeal.
"The conviction of a client does not prove lack of skill or zeal on the part of counsel." Torris v. State, Ala.Cr.App., 339 So.2d 1073.
We find no abuse of discretion on the part of the trial court in denying a continuance in this case.
We have carefully searched the record for errors injuriously affecting the substantial rights of appellant and have found none. This was such a clear-cut case of robbery it took the jury only 15 minutes to return a guilty verdict. The judgment of conviction is, in all things, affirmed.
AFFIRMED.
All the Judges concur.
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DISMISS; and Opinion Filed April 8, 2013.
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-13-00396-CV
IN RE LAKEITH AMIR-SHARIF, Relator
On Appeal from the 255th Judicial District Court
Dallas County, Texas
Trial Court Cause No. DF-09-7655-S
MEMORANDUM OPINION
Before Justices O'Neill, Lang-Miers, and Evans
Opinion by Justice Lang-Miers
Relator contends that the trial judge improperly issued an order setting a trial date on
February 19, 2013, after his motion to recuse was filed, and that the Honorable Judge John
Ovard did not properly handle his recusal motion. The facts and issues are well known to the
parties, so we need not recount them herein. With respect to the trial judge, based on the record
before us, we conclude relator has not shown he is entitled to the relief requested. See TEX. R.
APP. P. 52.8(a); Simon v. Levario, 306 S.W.3d 318, 320-21 (Tex. Crim. App. 2009) (orig.
proceeding); State of Tex. ex rel. Hill v. Court of Appeals for the Fifth Dist., 34 S.W.3d 924, 927
(Tex. Crim. App. 2001) (orig. proceeding). Accordingly, we DENY relator’s petition for writ of
mandamus to the extent it seeks relief against the trial court.
With respect to the administrative judge, this Court does not have mandamus jurisdiction
over Judge Ovard for actions he takes as presiding judge of the administrative region. See TEX.
GOV’T CODE ANN. § 222.221 (West 2004); In re ES Energy Solutions, LP, No. 05-10-01158-CV,
2010 WL 3720219, at * 1 (Tex. App. – Dallas Sept. 24, 2010, orig. proceeding); In re Hill, No.
05-10-00463-CV, 2010 WL 1633716, at *1 (Tex.App.-Dallas Apr. 23, 2010, orig. proceeding).
Accordingly, we DISMISS relator’s petition for writ of mandamus for want of jurisdiction to the
extent it seeks relief against Judge Ovard.
/Elizabeth Lang-Miers/
ELIZABETH LANG-MIERS
JUSTICE
130396F.P05
–2–
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No. 2--07--1031 Filed: 6-25-08
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
WILFREDO CRUZ, MATTHEW ALLBEE, ) Appeal from the Circuit Court
GUADALUPE VARELA, RAUL TORRES, ) of Kane County.
and KENNETH JOSEPH, Individually and )
on Behalf of a Class of Similarly Situated
)
Persons, )
)
Plaintiffs-Appellants, )
)
v. ) No. 05--CH--259
)
UNILOCK CHICAGO, INC., ) Honorable
) Michael J. Colwell,
Defendant-Appellee. ) Judge, Presiding.
______________________________________________________________________________
JUSTICE O'MALLEY delivered the opinion of the court:
Plaintiffs, Wilfredo Cruz, Matthew Allbee, Guadalupe Varela, Raul Torres, and Kenneth
Joseph, timely filed a petition for leave to appeal pursuant to Supreme Court Rule 306(a)(8) (210
Ill. 2d R. 306(a)(8)), seeking to appeal the order of the circuit court of Kane County denying
plaintiffs' motion for class certification. We granted plaintiffs leave to appeal. On appeal, plaintiffs
contend that the trial court abused its discretion and relied on improper legal standards in denying
their motion for class certification. We reverse and remand the cause with instructions.
The following summary of facts is taken from the allegations of plaintiffs' complaint as well
as the evidence compiled and presented by the parties in support of their positions on the class
certification. In our factual recitation, we also seek to present the purported factual issues identified
No. 2--07--1031
by the parties. Plaintiffs are five current and former employees in the Aurora manufacturing plant
of defendant, Unilock Chicago, Inc. Cruz worked for defendant from May 2002 to March 2004.
During his employment, Cruz performed assembly line work in the tumbler department, and, at some
point, Cruz became a line supervisor with certain clerical responsibilities. Allbee was employed by
defendant from June 2000 to September 2004 in the maintenance department, repairing and servicing
defendant's equipment. Varela worked for defendant from May 1995 to September 2004 in the
quality control department and as a tumbler, strapper, and loader driver. Torres is currently
employed by defendant, having begun his employment in 1997. Torres has worked in quality
control, in maintenance, and in the yard as a machine operator and as a strapper. Joseph was
employed by defendant from April 2002 to September 2005 in defendant's maintenance department.
Plaintiffs seek to represent a class of former and current hourly wage employees who have worked
for defendant in production and maintenance positions since June 1999. Plaintiffs assert that the
proposed class consists predominantly of Spanish-speaking persons of Mexican descent who speak
English as a second language, many of whom have a limited ability to read and write both Spanish
and English. Plaintiffs further assert that the proposed class is geographically dispersed because
many of its members have relocated to Mexico or to other states in the United States.
Defendant is an Aurora-based manufacturer of decorative paving stones used in, e.g.,
driveways, patios, and retaining walls. The paving stones are not actually stones but are fabricated
from concrete into various shapes, sizes, colors, and textures. Defendant's facility operates all year,
but its busiest time coincides with construction season--March through the middle of November.
During its peak operations, defendant employs about 100 hourly production and maintenance
workers. Defendant lays off most of the production employees in November, at the end of the peak
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No. 2--07--1031
season. Defendant usually rehires most of the laid-off production employees in the following March,
when the peak season begins again.
During its peak season, defendant's facility operates 24 hours a day, 6 days a week, in 2
shifts: predominantly a 6 a.m. to 6 p.m. shift, and a 6 p.m. to 6 a.m. shift. Some employees work
on a different schedule but maintain the 12-hour shift structure. Employees are given a one-half hour
lunch period during the day, so they receive wages for an 11.5-hour work day.
Plaintiffs assert that, before this suit was filed, defendant had a rule and a uniform practice
that employees were required to be at their work areas 10 to 15 minutes before the start of their shift.
Plaintiffs allege that this was to allow the workers from the previous shift to brief the workers from
the next shift about any events that had occurred during the previous shift. Plaintiffs also assert that
employees were required to wear uniforms at their work stations and that they typically would arrive
15 to 30 minutes before the scheduled start of the shift to change into their uniforms and still make
it to the work area 10 to 15 minutes before the scheduled start of the shift. According to plaintiffs,
this preshift time was recorded by defendant but it was not counted as compensable time.
Defendant purports to controvert plaintiffs' assertions. Defendant asserts that there was no
rule or practice that employees were expected to arrive at their work areas before the scheduled
beginning of the shift. Defendant also asserts that there was no mandatory briefing of the next shift
by the previous shift. Instead, defendant asserts that employees, of their own volition and in order
to begin their shifts on time, would typically arrive at the facility anywhere from 10 to 30 minutes
before the start of their shift. Employees would punch in, talk, eat, drink coffee, read the newspaper,
and otherwise wait for the beginning of their shift. They did not perform any work before the
beginning of the shift even though they had already punched in. Defendant asserts that employees
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No. 2--07--1031
knew that they could punch in whenever they wished because they understood that they worked only
their scheduled times. Defendant implemented grace periods for punching in to account for the early
punches, but not all of the employees were subject to the grace periods.
Defendant also asserts that its policy regarding uniforms was different from what plaintiffs
portrayed it to be. Defendant states that it did not require each employee to wear a uniform but that
any employee was allowed to wear a uniform if he chose to do so. Defendant also disputes that
employees had a consistent practice of changing into uniforms--defendant claims that some
employees changed into their uniforms at home and wore them to work and some wore the uniforms
home at the end of the day. Defendant also asserts that many employees changed into their uniforms
on the clock. Defendant illustrates this point with excerpts from the depositions of plaintiffs Allbee,
Varela, and Torres. Defendant points to Allbee's deposition testimony that he, along with "most
maintenance guys," "had a set of uniforms." According to Allbee, the maintenance workers "always
wore a different change of clothes, but it was never the uniform." Varela and Torres testified in their
depositions that they changed out of their uniforms on the clock at the end of the day.
Plaintiffs assert that the end-of-shift requirements were a mirror image of the preshift
requirements. According to plaintiffs, employees were not permitted to leave their work areas until
they were relieved by the next shift. They were required to clean up the work area and participate
in briefing the next shift. After this was accomplished, they were allowed to wash up and change
out of their dusty and dirty uniforms. Occasionally, according to plaintiffs, employees would stay
late at their work areas, working, but any time recorded after the scheduled end of the shift was not
counted as compensable time.
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No. 2--07--1031
Defendant, by contrast, asserts that employees were paid for any after-shift work. Further,
according to defendant, employees finished working at the scheduled end of the shift and, in many
instances, stopped working a few minutes before the scheduled end of the shift. Defendant also
asserts that employees were not required to wait for the next shift's employees to relieve them.
Defendant also notes that employees were given cleanup duties for their work areas, but the
cleaning work was completed well before the scheduled end of the shift. Defendant asserts that
cleaning up the concrete and other materials used in its manufacturing process took a considerable
amount of time. Defendant asserts that the cleanup work was performed on the clock and that
employees were paid for all of the cleanup time. Cleanup, according to defendant, typically started
about two hours before the end of the shift. After the cleaning was finished, employees could wash
(and change their clothes, if they desired) and then they restarted the machines for the next shift.
According to plaintiffs, employees regularly were required to cut short their lunchtimes or
to work through their lunchtimes. Employees were not paid for their lunch breaks. According to
plaintiffs, defendant had programmed its timekeeping system to deduct automatically 30 minutes
from each employee's daily time to reflect a lunch break. Plaintiffs assert that an employee who
worked during his lunchtime was not paid for that time.
Defendant agrees that the 30-minute lunch period was uncompensated. However, defendant
asserts that all employees were provided with their full 30-minute lunch breaks. Defendant denies
that there was a practice of requiring employees to work during all or part of their lunch breaks.
Defendant asserts that, if an employee took a short lunch and began working again, he was paid for
the extra time. Defendant also asserts that the time records did not always reflect the actual lunch
period taken by an employee, as many employees would punch back into the timekeeping system
-5-
No. 2--07--1031
in the middle of their lunch breaks so that they would not forget to do so when their lunch breaks
ended. Defendant also asserts that, likewise, many employees would forget to punch in or out for
lunch.
Plaintiffs assert that defendant maintained a single timekeeping and payroll system for all of
its hourly production and maintenance employees. All employees were subject to the same policies
and rules. According to plaintiffs, none of the plant employees had very much knowledge about the
time records and most of them had never seen their time records. During the time period covered
by plaintiffs' allegations, plant employees were required to punch in and out accurately, including
during the lunch period. Plaintiffs concede that the time records kept before this action was filed
were generally accurate regarding the compensable time worked by plant employees. Defendant
does not specifically controvert plaintiffs' assertions.
Plaintiffs assert that defendant programmed and designed the timekeeping system.
According to plaintiffs, the system has a "preshift default" that automatically disregards and deducts
up to 30 minutes of recorded time before the scheduled start of the shift, a "postshift default" that
automatically disregards and deducts up to 15 minutes of recorded time after the scheduled end of
the shift, and a "lunch default" that automatically deducts 30 minutes for lunch regardless of whether
employees actually worked during their lunch breaks. The defaults applied to almost every pre-2005
employee. Plaintiffs assert that the defaults were created in order to "force [the] employee's [sic] to
fit within the 11.5 hours [daily] budget." Defendant did not specifically provide any factual
statements or evidence to controvert plaintiffs' assertions.
Plaintiffs assert that, in addition to the automatic defaults programmed into the timekeeping
system, defendant manually edited the time records. Plaintiffs assert that manual editing would be
-6-
No. 2--07--1031
used when an employee punched into the system earlier than 30 minutes before the scheduled start
time. Plaintiffs assert that defendant had a practice and pattern of manually editing the proposed
class's time records and that this editing applied equally to almost all pre-2005 employees.
According to plaintiffs, the plant manager would have the time records printed out every week in
order to make edits to the time records. Plaintiffs estimate that the plant manager would make
between 50 to 55 edits for each pay period by crossing out time recorded for employees on the
printout. An administrative assistant would change the time records in the computerized
timekeeping system. After the changes were made to employees' time records, the (now edited)
records would be sent to defendant's payroll service provider, who would then pay the employees
based on the edited time records. Plaintiffs assert that defendant's editing affected all plant
employees, no matter the department or the pay classification.
Defendant disputes plaintiffs' assertions, justifying the necessity of editing the time records
to adjust for the laxity of its timekeeping practices and the irregularity of employees' practices.
According to defendant, it edited the time records in order to make them accurately reflect the time
that employees actually worked. Defendant asserts that the edits added missing punches or deleted
extra punches. Edits both added and took away compensable time. Defendant asserts that its review
of "all of the edits over the years relevant to this case established that, as a whole, the edits involving
time adjustments actually increased the time worked, and that [defendant's] employees were not
actually shorted any pay." (Emphasis in original.)
Plaintiffs assert that, following the instigation of this case, defendant implemented a new
timekeeping policy, effective June 24, 2004. According to plaintiffs, plant employees are required
to punch in and out within seven minutes of the beginning and the end of their shifts (the seven-
-7-
No. 2--07--1031
minute rule), and defendant no longer automatically deducts 30 minutes for their lunch breaks.
Plaintiffs assert that, when defendant first implemented the seven-minute rule, it instructed
employees not to punch in more than seven minutes before the beginning of the shift and not to
punch out more than seven minutes after the end of the shift. According to plaintiffs, defendant
modified the timekeeping system to prevent it from recording time more than seven minutes before
a shift begins and more than seven minutes after a shift ends. Plaintiffs conclude that the seven-
minute rule "results in a rounding practice that almost always inures to the benefit of the employer."
Defendant did not provide any factual recitation or evidence that specifically responded to plaintiffs'
allegations.
Plaintiffs further assert that, since the implementation of the seven-minute rule, employees'
work routines remain the same. According to plaintiffs, any pre- or postshift work, including
donning and doffing uniforms and washing up, is done off the clock, either before punching in at the
start of the shift or after punching out at the end of the shift. Plaintiffs further assert that it is now
defendant's explicit policy not to pay employees for donning or doffing their uniforms or work
clothes. Defendant does not specifically reply to these assertions.
Plaintiffs instituted this action in order to recover wages allegedly not paid for time worked
and to recover overtime wages allegedly not paid for work in excess of 40 hours a week. Plaintiffs
alleged that these claims cover time periods from June 1999 through the present day. Plaintiffs
alleged that defendant's conduct violated the Illinois Wage Payment and Collection Act (820 ILCS
115/1 et seq. (West 2004)) and the Minimum Wage Law (820 ILCS 105/1 et seq. (West 2004)).
Plaintiffs also moved to certify a plaintiff class consisting of all current and former employees of
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No. 2--07--1031
defendant who were paid hourly. Plaintiffs contended that the class contained more than 300
persons.
The parties submitted evidence and argument on the motion to certify the class. The trial
court denied plaintiffs' motion for certification. It considered the evidence submitted by both parties
and determined that plaintiffs had failed to demonstrate any of the elements of numerosity, common
questions of fact or law, predominance of common questions, adequacy of representation, or
appropriateness of a class action to fairly and efficiently adjudicate the controversy. Considering the
numerosity requirement, the trial court ruled that plaintiffs had established that no more than 10
employees had claimed to have been harmed by defendant's compensation and timekeeping policies.
Specifically, the trial court determined that, while defendant required employees to be present 10
to15 minutes before the start of their shift, it also allowed them to leave 10 to15 minutes before the
end of their shift. The trial court also found that many employees believed that they were paid
correctly for the hours they worked. Further, considering an expert witness's report, the court
concluded that the manual edits of time records increased employees' compensable time and that
employees were not actually shorted any pay. The trial court further determined that plaintiffs'
allegations concerning the geographical distribution of the proposed class, the knowledge and
sophistication of the proposed class members, the amounts of the claims of the individual class
members, and the nature of the cause of action were not germane, because plaintiffs had not
demonstrated the existence of a class size of between 25 and 40 members but, instead, had
demonstrated that not even as many as 10 employees had been harmed. The trial court concluded
that plaintiffs' proposed class did not satisfy the numerosity prerequisite.
-9-
No. 2--07--1031
The trial court also held that common questions of fact or law did not predominate over
questions affecting the individual class members. The trial court determined that defendant's time
records would show only that an employee's time was edited and would not show that the time had
been properly or improperly edited. Further, the trial court held that plaintiffs had not established
the existence of a company-wide policy concerning wearing uniforms or working through lunch.
It concluded that the successful adjudication of plaintiffs' claims would not establish a right of
recovery for the unnamed members of the class and that the level of individualized proof to
determine whether an individual employee was harmed at all would overwhelm any possible
common issues of fact or law. Accordingly, the trial court held that commonality and predominance
were lacking.
The trial court also held that adequacy of representation was lacking. One of the named
plaintiffs, Cruz, held a supervisory position. The trial court noted that supervisors may be
inappropriate as named plaintiffs because of conflicts between them and hourly employees and
because supervisors may be the cause of class members' complaints. The trial court noted that there
was evidence that supervisors would roust hourly employees and force them to their work areas 10
to 15 minutes before the scheduled start of their shift. The trial court held that, because of this
potential conflict of interest between supervisors and hourly employees, the named plaintiffs were
inadequate to represent the interests of the class. Further, the trial court held that, because plaintiffs
had failed to show numerosity and commonality and predominance of common questions of fact or
law, a class action would be an inappropriate means by which to resolve the issues in this action.
Accordingly, the trial court denied plaintiffs' motion to certify the class.
-10-
No. 2--07--1031
Plaintiffs filed a timely motion for leave to appeal pursuant to Supreme Court Rule 306(a)(8)
(210 Ill. 2d R. 306(a)(8)). We granted the motion and now consider plaintiffs' contentions on appeal.
On appeal, plaintiffs contend that the trial court abused its discretion or applied
impermissible legal criteria in denying the motion for class certification. Plaintiffs assert that the
trial court improperly made findings of fact and improperly assessed the credibility of witnesses
regarding disputed facts, making rulings that determined the merits of plaintiffs' claims. Plaintiffs
also contend that the trial court's determination on each of the class prerequisites (numerosity,
commonality, adequacy of representation, and appropriateness of a class action) was erroneous.
Plaintiffs also argue that the trial court erred by failing to address or rule upon plaintiffs' post-seven-
minute-rule claims.
As an initial matter, we consider the standard of our review, noting that the parties sharply
disagree on the role of the trial court in passing upon a motion for class certification. Plaintiffs,
relying upon some Illinois authority, argue that the trial court must take their allegations as true.
Defendant, relying upon federal authority, argues that the trial court may conduct limited inquiries
into the factual record pertaining to class certification.
The parties agree about the basic framework governing class certification. Section 2--801
of the Code of Civil Procedure (Code) sets forth the requirements necessary to maintain a class
action:
"An action may be maintained as a class action in any court of this State and a party
may sue or be sued as a representative party of the class only if the court finds:
(1) The class is so numerous that joinder of all members is impracticable.
-11-
No. 2--07--1031
(2) There are questions of fact or law common to the class, which common questions
predominate over any questions affecting only individual members.
(3) The representative parties will fairly and adequately protect the interest of the
class.
(4) The class action is an appropriate method for the fair and efficient adjudication
of the controversy." 735 ILCS 5/2--801 (West 2006).
Section 2--801 is patterned after Rule 23 of the Federal Rules of Civil Procedure and, because of this
close relationship between the state and federal provisions, "federal decisions interpreting Rule 23
are persuasive authority with regard to questions of class certification in Illinois." Avery v. State
Farm Mutual Automobile Insurance Co., 216 Ill. 2d 100, 125 (2005). The proponent of the class
action bears the burden to establish all four of the prerequisites set forth in section 2--801. Avery,
216 Ill. 2d at 125.
The decision regarding class certification is within the discretion of the trial court and will
not be disturbed on appeal unless the trial court abused its discretion or applied impermissible legal
criteria. Smith v. Illinois Central R.R. Co., 223 Ill. 2d 441, 447 (2006). The trial court's discretion
regarding the certification of a class is not without limits; the trial court's discretion is bounded by
and must be exercised within the framework of the rules of civil procedure governing class actions.
Smith, 223 Ill. 2d at 447.
The scope of appellate review is limited. Health Cost Controls v. Sevilla, 365 Ill. App. 3d
795, 805 (2006). The appellate court is limited to an assessment of the trial court's exercise of
discretion; the appellate court cannot indulge in an independent, de novo evaluation of the facts
alleged and the facts of record to justify class certification. Health Cost Controls, 365 Ill. App. 3d
-12-
No. 2--07--1031
at 805. In reviewing the trial court's decision on the question of class certification, the appellate
court "is only to assess the discretion exercised by the trial court and may not instead assess the facts
of the case and conclude for itself that a case is well-suited for a class action." Health Cost Controls,
365 Ill. App. 3d at 805. Where, for example, the trial court has denied class certification, in order
to reverse, the appellate court would have "to find that no other reasonable conclusion could be
reached but that a class action would be appropriate." Health Cost Controls, 365 Ill. App. 3d at 805.
The parties are divided regarding the scope of the trial court's inquiry. While plaintiffs note
that the trial court is to conduct a rigorous analysis of the certification issue, plaintiffs rely upon
Clark v. TAP Pharmaceutical Products, Inc., 343 Ill. App. 3d 538, 545 (2003), citing Johns v.
DeLeonardis, 145 F.R.D. 480, 482 (N.D. Ill. 1992), which states that the trial court is to accept the
allegations of the complaint as true. The appellate court in Clark did not explain why, in order "[t]o
determine whether the proposed class should be certified, the court accepts the allegations of the
complaint as true." Clark, 343 Ill. App. 3d at 544-45. The court's factual recitation does not entirely
clarify the procedural posture of the case; however, the court references evidence taken from
depositions and affidavits and not solely from allegations in the plaintiff's complaint in setting forth
the facts of the case. Clark, 343 Ill. App. 3d at 542-43. Thus, Clark appears not to actually follow
its own statement that the allegations of the complaint be taken as true.
Defendant contends that the trial court must be allowed to conduct a factual inquiry into the
propriety of class certification based on the evidence contained in the record at the time certification
is sought. In support of its contention, defendant cites Szabo v. Bridgeport Machines, Inc., 249 F.3d
672 (7th Cir. 2001). Szabo explained:
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No. 2--07--1031
"The proposition that a district judge must accept all of the complaint's allegations when
deciding whether to certify a class cannot be found in Rule 23 and has nothing to recommend
it. The reason why judges accept a complaint's factual allegations when ruling on motions
to dismiss under Rule 12(b)(6) is that a motion to dismiss tests the legal sufficiency of a
pleading. Its factual sufficiency will be tested later--by a motion for summary judgment
under Rule 56, and if necessary by trial. By contrast, an order certifying a class usually is the
district judge's last word on the subject; there is no later test of the decision's factual premises
(and, if the case is settled, there could not be such an examination even if the district judge
viewed the certification as provisional). Before deciding whether to allow a case to proceed
as a class action, therefore, a judge should make whatever factual and legal inquiries are
necessary under Rule 23." (Emphasis in original.) Szabo, 249 F.3d at 675-76.
Szabo further discussed the scope of the factual inquiry:
"Questions such as these require the exercise of judgment and the application of
sound discretion; they differ in kind from legal rulings under Rule 12(b)(6). And if some of
the considerations under Rule 23(b)(3), such as 'the difficulties likely to be encountered in
the management of a class action', overlap the merits--as they do in this case, where it is not
possible to evaluate impending difficulties without making a choice of law, and not possible
to make a sound choice of law without deciding whether Bridgeport authorized or ratified
the dealers' representations--then the judge must make a preliminary inquiry into the merits."
Szabo, 249 F.3d at 676.
Szabo concluded its comments on factual inquiries, noting that, "[w]hen jurisdiction or venue
depends on contested facts--even facts closely linked to the merits of the claim--the district judge
-14-
No. 2--07--1031
is free to hold a hearing and resolve the dispute before allowing the case to proceed." Szabo, 249
F.3d at 676-77.
In considering the issue of whether the trial court may conduct a factual inquiry, we
discovered cases supporting each party's position. For example, Ramirez v. Midway Moving &
Storage, Inc., 378 Ill. App. 3d 51, 53 (2007), quoting Clark, 343 Ill. App. 3d at 544-45, stated that,
" '[t]o determine whether the proposed class should be certified, the court accepts the allegations of
the complaint as true.' " Like Clark, however, Ramirez offered no further analysis of why the trial
court should do this. In its discussion of commonality and predominance, Ramirez offered the
following:
" 'Determining whether issues common to the class predominate over individual issues
requires the court to identify the substantive issues that will control the outcome, assess
which issues will predominate, and then determine whether these issues are common to the
class. [Citation.] Such an inquiry requires the court to look beyond the pleadings to
understand the claims, defenses, relevant facts, and applicable substantive law.' " Ramirez,
378 Ill. App. 3d at 54-55, quoting Smith, 223 Ill. 2d at 449.
This recitation of the law surrounding the commonality and predominance element of class
certification would seem to call for a more searching inquiry and, potentially, some sort of factual
determination. Ramirez, then, is not entirely clear and consistent in its suggestion that the
allegations of the complaint be accepted as true in resolving a motion for class certification.
On the other hand, in Enzenbacher v. Browning-Ferris Industries of Illinois, Inc., 332 Ill.
App. 3d 1079, 1084 (2002), this court explained:
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No. 2--07--1031
"The appropriate way to determine whether to certify a class is by a motion for class
certification. At the time such a motion is presented for hearing, the trial court may consider
any matters of law or fact properly presented by the record, including pleadings, depositions,
affidavits, answers to interrogatories, and any evidence adduced at hearing on the motion."
Likewise, in Brown v. Murphy, 278 Ill. App. 3d 981, 989 (1996), quoting Gordon v. Boden, 224 Ill.
App. 3d 195, 199 (1991), the court stated that, in deciding whether to certify a class, the court may
consider " 'any matters of fact or law properly presented by the record, including the pleadings,
depositions, affidavits, answers to interrogatories and any evidence that may have been adduced at
hearings.' " These cases too, however, offer little in the way of explanation as to why the court
should do this. Additionally, we note that the Clark-Ramirez line of cases appears to exist separately
from the Enzenbacher line of cases and that neither line appears to acknowledge, let alone question,
any elements of the statements of law in the other. Thus, neither line provides a particularly forceful
rationale for its adoption. On the other hand, Clark's statement of the law seems unduly cursory,
while Szabo takes the time to explain why the trial court cannot unreflectingly accept the allegations
of the complaint as true.
Having considered the arguments and authorities presented by the parties, as well as our own
research, we believe that Szabo provides a sound and cogent explanation of why the trial court is to
look beyond the allegations of the complaint when a party seeks class certification. Enzenbacher,
332 Ill. App. 3d at 1084, appears to imply that it has adopted this idea even if it is silent as to why.
Given the reasoned and thoughtful explanation in Szabo versus the cursory and unexplained
statement in Clark, we choose to follow the guidance suggested by Szabo. Accordingly, we hold that
the trial court may conduct any factual inquiry necessary to resolve the issue of class certification
-16-
No. 2--07--1031
presented by the record. However, we emphasize that the trial court's discretion is limited to an
inquiry " 'into whether [the] plaintiff is asserting a claim which, assuming its merits, will satisfy the
requirements of [section 2--801] as distinguished from an inquiry into the merits of [the] plaintiff's
particular individual claims.' " Szabo, 249 F.3d at 677, quoting Eggleston v. Chicago Journeymen
Plumbers' Local Union No. 130, 657 F.2d 890, 895 (7th Cir. 1981). Thus, the trial court is not to
determine the merits of the complaint, but only the propriety of class certification, and its factual
inquiry and resolution of factual issues is to be limited solely to that determination.
Stating the rule, however, is only the first step; we must implement the rule, too. While the
parties have cited no authority illustrating how the factual inquiry surrounding class certification is
to be conducted, certain of the federal circuit courts of appeal have provided us with guidance. For
example, Szabo is exceedingly clear that a trial court need not accept a plaintiff's assertion that the
class size is 10,000 where the evidence shows it to be only 10. Szabo, 249 F.3d at 676. It is the trial
court's proper role to resolve such a dispute. Likewise, in In re New Motor Vehicles Canadian
Export Antitrust Litigation, 522 F.3d 6 (1st Cir. 2008), the court acknowledged that "weighing
whether to certify a plaintiff class may inevitably overlap with some critical assessment regarding
the merits of the case," but it justified this overlap by reasoning that "[i]t would be contrary to the
'rigorous analysis of the prerequisites established by [section 2--801] before certifying a class' to put
blinders on as to an issue simply because it implicates the merits of the case." Canadian Export, 522
F.3d at 17, quoting Smilow v. Southwestern Bell Mobile System, Inc., 323 F.3d 32, 38 (1st Cir.
2003). The court cautioned, however, that, while the trial court is required to make findings
regarding the class certification issue, the
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"use of the term 'findings' in this context should not be confused with binding findings on the
merits. The judge's consideration of merits issues at the class certification stage pertains only
to that stage; the ultimate factfinder, whether judge or jury, must still reach its own
determination on these issues." Canadian Export, 522 F.3d at 24.
We also note the danger of allowing a defendant to assist in determining class certification, because
it is "a bit like permitting a fox, although with a pious countenance, to take charge of the chicken
house." Eggleston, 657 F.2d at 895. Following these guidelines, we will therefore carefully consider
whether the trial court's determinations were limited to the issue of class certification or whether they
impermissibly strayed into resolving the merits of plaintiffs' claims against defendant.
We turn to plaintiffs' contentions on appeal. Plaintiffs first contend that the trial court
improperly decided the merits of certain factual issues. This contention, however, essentially
coincides with plaintiffs' specific contention that the trial court ruled improperly regarding
numerosity. Thus, rather than split our discussion into parts, we will address plaintiffs' general
contentions regarding fact finding (which are all related to numerosity issues) together with plaintiffs'
specific contention regarding the trial court's ruling on numerosity.
Accordingly, we turn first to plaintiffs' general contentions about impermissible fact finding.
Plaintiffs initially challenge the numerosity determination with instances of general and
impermissible fact finding on the part of the trial court. Plaintiffs contend that the trial court
conclusively determined that employees were required to be at their work stations 10 to 15 minutes
before their scheduled starting times. According to plaintiffs, the trial court also determined that
employees who were at their stations early all left their stations a similar number of minutes early.
Plaintiffs further contend that the trial court improperly credited defendant's expert witness's
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conclusion that "employees as a whole were not shorted pay," and improperly concluded that the
plant manager checked with the supervisors to determine whether each employee had actually
worked the time appearing in the time records. Plaintiffs argue that these issues were properly the
province of the finder of fact at trial and should not have been decided at the class certification
stage. We agree.
We begin by analyzing the trial court's ruling on numerosity in light of plaintiffs' general fact-
finding contentions. The trial court began its consideration of numerosity by first noting each party's
position--plaintiffs asserted that the proposed class contained at least 200 to 300 members; defendant
asserted that it was much smaller. The trial court then reviewed the evidence submitted regarding
the composition of the class. The trial court noted, in that context, that the "early arrival policy" was
"apparently accompanied by an 'early out policy' " and recounted deposition testimony and pleadings
that supported the existence of an "early out policy." The issue with the early-out policy, however,
is whether the class members affected by it were through working at the point they left their stations,
or whether they still performed work functions by washing up, or changing their uniforms. The trial
court also accepted as conclusive defendant's evidence on the existence of an early-out policy. In
our view, then, the trial court erred in assessing pretrial the effect of the early-out policy, as it bears
directly on the issue of whether the proposed class was not fully paid for its time.
Also, in attempting to ascertain the size of the proposed class, the trial court noted that a
number of employees' affidavits submitted on the motion for class certification indicated that they
believed that they had been paid correctly for the time they worked. The trial court concluded that,
rather than a class size of 200 to 300, the evidence supported a class size of no more than 10
employees expressly claiming to have been harmed by defendant's policies. The trial court
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confirmed this conclusion by referring to the report of defendant's expert witness, which concluded
that there was no sound statistical evidence contained in the time records to support the allegation
that defendant's employees were required to work off the clock or were shorted compensable time.
This too, intrudes upon ultimate questions. The trial court viewed the approximately 30 affidavits
defendant submitted, indicating that the affiants believed themselves to have been fully compensated,
as meaning that the rest of the 160 to 260 or so class members who had not been asked to submit any
evidence must also have believed themselves to have been fully compensated. Likewise, the expert's
conclusion that the employees, as a whole, had not been shorted time, begs the question whether
plaintiffs and any other individual class members were shorted time and compensation. The issue
to be resolved here is not whether defendant's employees in general had been fully compensated, but
whether a sufficient number had not, making their joinder in the action impracticable. Nevertheless,
we recognize that it is plaintiffs' burden to demonstrate the existence of the elements necessary for
class certification. It is the trial court's burden to resolve factual issues pertaining to those elements.
We hold that, in some of its factual determinations, the trial court crossed the line into the ultimate
issues of plaintiffs' complaint.
The conclusion regarding the purpose of the edits to the time cards is also an intrusion into
the ultimate merits. At this point, the issue is not why they changed, but, rather, were they changed.
The parties can then explain why at trial. Further, if plaintiffs demonstrate that everyone was subject
to editing, then they would appear to have made a reasonable case that the class is sufficiently
numerous. The trial court erred in resolving the why of this issue rather than determining whether
there existed a policy to edit time.
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Next, we consider plaintiffs' specific contentions concerning numerosity. Plaintiffs contend
that the trial court either applied impermissible legal standards or abused its discretion by ignoring
critical evidence regarding each of the four elements necessary to support class certification and
identified in section 2--801. With respect to numerosity, plaintiffs argue that the trial court
erroneously determined that the proposed class was insufficiently numerous to support a class action
and to make joinder impracticable.
Plaintiffs specifically challenge the trial court's determination in four respects. First,
plaintiffs argue that the trial court erroneously required that each class member must believe or be
aware of his injury in order to be included in the proposed class. Second, plaintiffs contend that the
trial court erroneously concluded that the early-out policy acted as an offset to the early-in policy,
thereby relieving defendant of liability for the early-in policy. Third, plaintiffs contend that the trial
court erred in crediting the report of defendant's expert witness and in using it to determine that
members of the proposed class had not been underpaid. Last, plaintiffs contend that the trial court
did not consider all the evidence in the record in rendering its decision regarding numerosity.
We do not precisely address each of the specific points raised by plaintiffs, because we
believe a few examples will demonstrate the errors in the trial court's analysis. For the first example,
we note that plaintiffs submit time sheet evidence, their exhibit T from their motion for class
certification, to demonstrate that upwards of 90 employees were denied correct overtime pay.
Defendant does not expressly controvert exhibit T. Instead, defendant, conclusorily, argues that
plaintiffs manipulated the time sheets to reach their conclusion concerning the underpayment of
overtime wages. If the trial court were to resolve this dispute, then defendant would have to
demonstrate how plaintiffs manipulated the data or offer a competing exhibit that expressly
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demonstrates the error of plaintiffs' claims. Tellingly, defendant does not do this. In its appellate
response brief, defendant does not cite to any submission it made that might controvert either
plaintiffs' contention or their conclusion stemming from their exhibit T. Contrary to defendant's
argument, we believe that the existence of 80 to 90 employees who have been denied full overtime
wages in one pay period certainly supports a finding of numerosity. Further, both sides in this appeal
appear to be comfortable with the idea that one general example suggests that others may exist too.
Based on the fact that 80 to 90 persons can be identified as having been denied their full
compensation in one pay period, it would not be unreasonable to believe that others in other pay
periods may also exist. Defendant points to nothing in the record to refute this reasoning. The trial
court should, therefore, have determined that plaintiffs satisfied the numerosity requirement, and its
failure to do so amounts to an abuse of discretion.
Our next example is the approximately 30 affidavits defendant submitted to oppose class
certification. The trial court drew from them the conclusion that the approximately 30 affiants
represented that they had been fully compensated, because they checked their pay stubs and the
amounts they had been paid were accurate according to the number of hours they purportedly worked
as reflected on the pay stubs. This, however, begs the question of whether the time reflected on the
pay stubs was accurate. At most, it suggests that the affiants believed they worked 11.5 hours every
day and were paid accordingly. It does not answer the question of whether the time was properly
recorded and attributed to each affiant. Thus, each affiant's belief that he had been fully
compensated does not really help to determine if defendant's timekeeping policies inured to the
benefit or detriment of its employees. The trial court erroneously accepted the affidavits as serving
to undermine plaintiffs' allegations of numerosity. Additionally, based on the roughly 30 defendant-
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submitted affidavits, the trial court improperly concluded that those employees had not been harmed
by its timekeeping policies. The most the trial court was entitled to conclude was that the affiants
were unaware of the effect of the policies. Evidence in the record establishes that few employees
had access to or understood the weekly time cards. The affiants' belief that they had been fully paid
does not answer the question of whether all of their time had been counted.
Additionally, we are troubled that the trial court would accept only express statements of
harm as sufficient to qualify an employee for class membership. If, as is supported by the record,
employees did not review their time cards, then they cannot know if they were credited for all of the
hours worked. Verifying their pay based on the hours reflected on their pay stubs is a mechanical
calculation, but it does not shed any light on the ultimate question of whether all of the compensable
time was included on each employee's pay stub. The trial court erred in concluding that the
defendant-submitted affidavits foreclosed plaintiffs' certification attempt.
Another example is the trial court's determination of the effect of the "apparent" early-out
policy. The trial court first determined that the evidence established the existence of an early-in
policy for the production and maintenance employees. This would appear to support a finding of
numerosity. Then, based on three depositions (one was of defendant's former plant manager), the
trial court concluded that defendant had a reciprocal early-out policy that canceled any and all harm
attributable to the early-in policy. We find that this is a conclusion on the ultimate merits of the case
and thus impermissible. The effect of the early-in and early-out policies is precisely what plaintiffs
are attempting to litigate through the vehicle of a class action suit. For the trial court to conclude that
the early-out policy nullifies all harm from the early-in policy improperly usurps the role of the trier
of fact. Further, in concluding that the early-out policy balances the early-in policy, the trial court
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has effectively determined that it is an offset nullifying one of plaintiffs' claims. Yet, there are
unanswered questions surrounding the early-out policy, such as, did employees continue to work or
otherwise perform activities necessary and integral to their employment for which they should
continue to be compensated? Just because any employee may have been able to leave his station
early does not mean that he could not be paid for cleaning up and changing his uniform. The trial
court erred in reaching a factual conclusion on this issue. These examples, then, demonstrate the
trial court's error in concluding that plaintiffs did not sufficiently demonstrate the numerosity
requirement.
We turn to defendant's arguments in support of the trial court's rulings, beginning with
defendant's responses to plaintiffs' specific arguments regarding numerosity, followed by its
responses to plaintiffs' general fact-finding issues. Defendant maintains that the trial court correctly
determined that plaintiffs' proposed class definition was conclusory and overbroad. Defendant points
particularly to the fact that plaintiffs have suggested no way to identify those employees who were
in fact shorted time and pay. Defendant urges that, as a result, this case is analytically identical to
Petty v. Wal-Mart Stores, Inc., 148 Ohio App. 3d 348, 773 N.E.2d 576 (2002), and Jackson v. Wal-
Mart Stores, Inc., No. 258498 (Mich. App. November 29, 2005). In Petty, the plaintiff defined the
proposed class as all past and present employees of the defendant. According to the plaintiff, this
amounted to around 174,000 persons. The trial court denied the class certification because the
evidence showed that not all of the proposed class members had suffered the harm of working off
the clock. Petty, 148 Ohio App. 3d at 354, 773 N.E.2d at 580. The appellate court agreed, finding
that the huge size of the class divorced it from any connection with the alleged harm, rendering the
proposed class members unidentifiable. Petty, 148 Ohio App. 3d at 355, 773 N.E.2d at 581.
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Likewise, in Jackson, the plaintiff attempted to define the class of persons required to work off the
clock as all current and former hourly employees, totaling some 96,000 persons. The plaintiff
offered no allegations or evidence regarding the number of persons who actually experienced the
harm of working off the clock, and the trial court could not ascertain whether the numerosity
requirement had been met. Jackson, slip. op at ___.
Defendant asserts that plaintiffs' allegations here sufficiently parallel those in Petty and
Jackson to warrant following the rationales in those cases. Defendant argues that, because plaintiffs
have not provided a means to identify those class members who experienced the harm complained
of, namely, working uncompensated for periods of time, plaintiffs cannot satisfy the numerosity
requirement. We disagree.
Plaintiffs' evidence in this case distinguishes it from both Petty and Jackson. Here, plaintiffs
have presented evidence, which the trial court accepted, of an early-in policy affecting all members
of the class. At least at this point in the proceedings, this raises the likelihood that all members were
required to work off the clock. The trial court's conclusion that the early-in policy was balanced or
offset by an early-out policy is unwarranted as an impermissible intrusion upon the merits of
plaintiffs' claims, and is inappropriate for purposes of determining class certification. In addition,
plaintiffs specifically point to a pay period in which 80 to 90 workers were shorted overtime
compensation. Defendant does not specifically controvert this evidence; rather, defendant
conclusorily asserts only that plaintiffs somehow manipulated the time records. While this evidence
covers a smaller portion of the proposed class and a much smaller period of time than the proposed
class period, it is illustrative of the existence of a sufficient number of individuals who have been
harmed by defendant's conduct and policies. See Marcial v. Coronet Insurance Co., 880 F.2d 954,
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957 (7th Cir. 1989) (noting that numerosity issues may be resolved later on in a suit, after initial class
certification). Likewise, even though plaintiffs define the proposed class as all current and former
production and maintenance employees, it is narrowly targeted to only one of defendant's facilities,
and the number of persons eligible is relatively small--200 or 300. Thus, Petty and Jackson are
factually distinct and provide little guidance in the circumstances plaintiffs have presented here.
Accordingly, plaintiffs have presented sufficient evidence at this stage in the proceedings to satisfy
their burden of showing the numerosity of the class. We reject defendant's argument.
Defendant also assails plaintiffs' evidentiary submission in support of their motion for class
certification. However, from this submission, the trial court was able to determine the existence of
an early-in policy on defendant's part. Likewise, the trial court found that the evidence established
that employees' time was edited, even if the court did not believe that plaintiffs established a
motivation for the edits. Plaintiffs' submission also established the existence of a time-rounding
algorithm employed by defendant. We believe, then, that the evidence plaintiffs submitted is
sufficient to demonstrate that plaintiffs have met their numerosity requirement.
Defendant also highlights the trial court's determination that "the class size is overbroad and
conclusory. Plaintiffs have offered no detailed information on the number of persons in the class,
nor a method by which the court may ascertain the number of persons in the class." Of course,
plaintiffs need not demonstrate a precise figure for the class size, because a good-faith,
nonspeculative estimate will suffice (Arenson v. Whitehall Convalescent & Nursing Home, Inc., 164
F.R.D. 659, 662 (N.D. Ill. 1996)); rather, plaintiffs need demonstrate only that the class is
sufficiently numerous to make joinder of all of the members impracticable (Ramirez, 378 Ill. App.
3d at 54). Our analysis above confirms that plaintiffs have offered sufficient evidence and a good-
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faith estimate of the class size approaching 200 individuals. While we do not disagree with the trial
court's implicit conclusion that plaintiffs' class definition may be problematic, plaintiffs have,
nevertheless, presented sufficient evidence to carry their burden of showing that they have met the
numerosity requirement. We reject defendant's contention.
Defendant argues that its affidavits indicate that there is no company-wide policy to require
employees to work off the clock. That conclusion, however, is effectively on the ultimate merits of
the complaint--plaintiffs contend that there is such a policy and defendant contends that there is no
such policy. This issue is squarely for the merits at trial, and the trial court erred by reaching it at
the class certification stage. We reject defendant's contention.
Defendant makes a similar point regarding the editing of time records. Again, we believe
that this is a question pertaining to the ultimate merits. Plaintiffs have identified widespread editing
to which all or virtually all of the proposed class members were subject. The effect of the editing,
however, needs to be proved in order for plaintiffs to prevail on their complaint. The trial court erred
in holding that there was no evidence to indicate that the edits were made to deprive employees of
their earned wages, because that is a question of the merits. Rather, the trial court should have
stopped once it ascertained that plaintiffs demonstrated that all or nearly all of the class members
were subjected to having their time edited. Plaintiffs also demonstrated that in a number of cases
the edits decreased the time compensated. This alone establishes sufficient numerosity of the
proposed class. Defendant's evidence that the edits, considered as a whole, actually increased the
time compensated is evidence directed at the merits of the complaint and not at the numerosity of
the class. The trial court erroneously considered it at the class certification stage. We reject
defendant's contention.
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Defendant contends that the trial court was correct to consider its expert's report in deciding
the motion for class certification. According to defendant, the expert reported that plaintiffs'
conception of the evidence so far adduced in discovery was flawed, that the time records did not
support plaintiffs' contentions, and that the time records did not support the conclusion that
defendant had shorted its employees any time or pay lawfully due to them. While we agree that the
trial court could consider the report of defendant's expert (see Kitzes v. Home Depot U.S.A., Inc.,
374 Ill. App. 3d 1053, 1060 (2007) (considering submissions from the defendant's experts in
deciding a motion for class certification)), here the report was directed at the success of plaintiffs'
claims and not the propriety of class certification, particularly numerosity. Defendant's argument
is misplaced.
Summing up our discussion regarding numerosity, we have identified several areas in which
the trial court overstepped its bounds and improperly intruded on the ultimate issues of plaintiffs'
complaint. Defendant's contentions show a similar bent toward the merits of plaintiffs' complaint
as opposed to controverting and rebutting the allegations that would establish numerosity. As a
result, we believe that the trial court relied upon impermissible criteria in determining that plaintiffs
failed to satisfy the numerosity requirement. Our consideration of the record demonstrates that
plaintiffs adequately established the requisite evidence to show that joinder of all members of the
class would be impracticable.
We next consider the commonality and predominance prerequisites for class certification.
See 735 ILCS 5/2--801(2) (West 2006). Section 2--801(2) sets forth the requirement that there must
be questions of fact or law that are common to the class and that predominate over any questions
affecting only individual members of the class. 735 ILCS 5/2--810(2) (West 2006). "The purpose
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of the predominance requirement is to ensure that the proposed class is sufficiently cohesive to
warrant adjudication by representation, and it is a far more demanding requirement than the
commonality requirement." Smith, 223 Ill. 2d at 448. Predominance is shown not by whether
common issues outnumber individual issues, but by whether common issues or individual issues will
be the focus of most of the efforts of the parties and the court. Smith, 223 Ill. 2d at 448-49. In order
to determine whether common issues predominate over individual issues, the court is required to
identify the substantive issues that will control the outcome, assess which issues will predominate,
and then determine whether these issues are common to the class. Smith, 223 Ill. 2d at 449. In order
to satisfy the predominance requirement, the proponent must show that favorable adjudication of the
claims of the named plaintiffs will establish a right of recovery in other class members. Smith, 223
Ill. 2d at 449. In other words, where predominance is established, a judgment in favor of the class
members should decisively settle the controversy, and all that should remain is for the other class
members to file proof of their claims. Smith, 223 Ill. 2d at 449.
With these principles in mind, we turn to the trial court's decision. The trial court held:
"The commonality requirement is not met in this case. There is no evidence of a
company-wide policy, or even a department-wide policy[,] depriving proposed class
members of their lawfully earned wages. Plaintiff has offered no evidence supporting the
contention that Plant Manager Jonathon Harn edited employee's [sic] time records to stay
within budget. Nor is there evidence that the time edits by Harn were anything other than
the corrections he claimed them to be. Instead, the evidence indicates that Harn checked
with employees' supervisors in an attempt to determine whether an employee had actually
worked the time appearing in the record. Some employees *** testified they had worked
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through lunch but were not paid, but far more employees testified they always got their
lunch, making the prospect of a class[-]wide lunch violation unlikely. [Citation.] Further,
it was clear that some employees were required to wear uniforms and/or safety equipment,
while others were not. Some employees testified they changed into and/or out of the
uniforms or cleaned up on work time, others did so on their own time, still others did not
change clothes at all. ***
Whether the programmed parameters of [defendant's] timekeeping system resulted
in unlawful deductions from hours worked pre-shift, post-shift, and during lunch, whether
defendant[']s manual edits of class members' time, and whether defendants [sic] failed to pay
class members for all overtime hours worked in excess of 40 hours in the work week based
on missed lunches or time spent changing clothes are thus questions requiring individualized
determinations. They cannot be answered simply by reviewing defendant's time system
records."
As to the predominance issue specifically, the court first reviewed a number of cases provided by
the parties. Then it held:
"Contrary to plaintiff's [sic] contention, the use of defendant's records here will only
show that an employee's time was edited, not that the employee's time was properly or
improperly edited. No company-wide policy required employees to wear uniforms, or
required employees to work through lunch. As a result, the successful adjudication of these
questions of law and fact as to plaintiffs Allbee, Varela, or Torres will not establish a right
of recovery for the proposed class of 200-300 persons generally. While individualized
damages determinations are proper and will not defeat a class action, individualized
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determinations of liability are not. The level of individualized proof required here to
establish whether or not an employee was harmed at all overwhelms any possible common
issues. As a result, commonality and predominance are lacking."
Plaintiffs argue that the trial court erred in finding that they had not established commonality
and predominance. Regarding the trial court's commonality determination, plaintiffs challenge that
there was no evidence submitted of any company-wide policies. Plaintiffs argue that the trial court
made impermissible determinations of the substantive merits as to the existence of company policies,
or else ignored the evidence altogether. Plaintiffs specifically identify the "no-pay" policies they
assert defendant followed: the early-in policy, the requirement of changing into uniform and cleaning
up, and the automatic time deductions programmed into the timekeeping system (including the time-
rounding system). Plaintiffs assert that all class members were affected by these policies and that
the trial court improperly ignored the evidence or resolved the merits in denying the existence of
company policies that affected the pay employees received.
Defendant argues that the trial court determined that plaintiffs raised four common factual
issues: (1) the editing of time records by the plant manager for the purpose of staying within the
budget; (2) a class-wide practice of requiring employees to work through lunch; (3) a company or
plant-wide practice regarding changing into and out of uniforms; (4) and time-rounding practices that
had the effect of shorting employees compensable time. Defendant then argues that the trial court
properly determined that there was no evidence to support any of the factual issues it identified.
Contrary to defendant's argument, the trial court repeatedly acknowledged the existence of evidence
supporting plaintiffs' contentions. For a single example, the trial court cited specific evidence
demonstrating that some employees changed into and out of uniforms on work time, others changed
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on their own time at work, and others never changed or never wore a uniform. This is hardly "no
evidence." Instead, the trial court impermissibly overstated its conclusion. Moreover, the trial
court's conclusion of "no evidence" in the face of contradictory evidence supplied by plaintiffs
suggests that it considered and weighed the evidence to resolve the evidentiary dispute. And this,
in turn, concedes plaintiffs' point that the trial court improperly determined the merits of the common
factual issues.
The issue of the purpose of the edits to time records appears to be common across the
proposed class. Employees whose time was not edited would not have been harmed by the practice;
employees whose time was edited may have been harmed, depending on the resolution of the issue
of the purpose of the editing practice. Resolution of this issue would appear to advance the merits
of the claims and, thus, we hold this to be a common issue.
The trial court erred by resolving the merits of the time-editing issue to conclude that there
was no evidence to support plaintiffs' conception of the time-editing issue. At the class certification
stage of this matter, the trial court was only to ascertain the existence of common factual issues and
not to resolve their merits. By resolving the merits, the trial court effectively conditioned class
certification on plaintiffs' ability to prevail on the merits. This practice is strongly disapproved.
Eggleston, 657 F.2d at 895 (trial court may not conduct a preliminary inquiry into the merits of the
suit in order to determine whether it may be maintained as a class action).
Likewise, the existence of a policy or practice of requiring employees to work through their
lunch periods is a common issue under plaintiffs' allegations. That the evidence advanced at the
class certification stage may be weak should not foreclose plaintiffs' opportunity to attempt to prove
the issue. See Eggleston, 657 F.2d at 895. Similarly, the issues relating to uniforms, time-rounding,
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and automatic time deductions are all common issues that, at this stage in the proceedings, plaintiffs
should be allowed to develop.
Defendant generally approves of the trial court's holding that "[t]here is no evidence" to
support the common issues identified above. As we explained, however, the trial court overstated
its conclusion and further erred in weighing and determining the effect of the evidence in relation
to common issues. Its judgment went more to the ultimate success of plaintiffs' case than to whether
it could identify common issues, the resolution of which would determine the matter. As a result,
we reject defendant's argument.
Once again, we note that the trial court encroached into the merits of plaintiffs' claims when
attempting to resolve the issue of commonality. In deciding the issue of commonality, the trial court
did not need to weigh and resolve the evidence; rather, it needed only to identify the common factual
and legal questions present in this matter. The resolution of the common factual and legal issues will
occur during proceedings on the merits. Given that any discovery at this stage should have been
aimed at ascertaining the existence of a class, crediting defendant's evidence on the merits was
erroneous and premature. Accordingly, we hold that the trial court impermissibly resolved factual
disputes in order to conclude that plaintiffs failed to present common factual and legal issues, and
this represents the application of an improper legal standard in the trial court's judgment.
We now turn to whether the trial court appropriately determined if common issues
predominated over individual issues. The trial court held, pertinently, that individualized liability
determinations overwhelmed any possible common issues. Plaintiffs argue that the issues of whether
employees were required to wear uniforms and whether the time spent donning and doffing uniforms
was compensable affect all of the class members. Likewise, the time-rounding, automatic time
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deductions, and editing apply to all class members, and favorable determinations would entitle all
affected class members to recover; any individual variations would be in the amount of damages and
not in liability. Defendant counters by arguing that the effect on each individual of each issue will
determine defendant's liability to that individual. Thus, defendant argues that the uniform issue must
be determined for each individual employee. While true, this overlooks plaintiffs' contention that
the automatic time deductions were initiated to account for the donning and doffing of uniforms.
Based on this, plaintiffs' view that resolution of the issue will be more in the nature of a calculation
of damages appears correct. If a trial on the merits of the uniform issue reveals that there was a
policy regarding wearing uniforms, a policy regarding compensating donning and doffing uniforms,
and an automatic time deduction to account for donning and doffing uniforms, then it would become
a damages calculation to determine those employees who were harmed by these policies. The bulk
of the parties' efforts apparently would be directed toward the legal resolution of the issues, and
individual damages determinations would be accomplished by mechanically processing defendant's
time records. Accordingly, the trial court erred in determining that this issue would not predominate
over individual issues associated with it.
The effect of time-rounding appears to be a common issue as well. If plaintiffs establish that
the time-rounding practice favors defendant and that defendant further implemented the early-in
policy to take advantage of the time-rounding, then class members would be entitled to recover.
Likewise, working through lunch is a predominantly common issue. If there were a policy
and if defendant's timekeeping system automatically deducted a lunch period, then establishing these
facts would entitle the class members to recover.
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We also believe that time-editing is a predominantly common issue. Plaintiffs are attempting
to demonstrate that time-editing was done for the purpose of depriving workers of compensable time.
We can see that evidence showing that defendant was attempting to stay within budget, or to come
in under budget, or showing that defendant's managers were pressured to meet expense budgets, or
to reduce expenses, would be relevant to this inquiry. We note, however, that at the class-
certification stage plaintiffs do not have to make that showing--it is for the merits.
Based on these considerations, we hold that the trial court erred in determining that common
issues did not predominate over individual issues. While we discern that, if the common issues are
proved in favor of plaintiffs, the trial court would face significant individual variations in damages,
this should not defeat the determination that the commonality/predominance prerequisite is satisfied.
Clark, 343 Ill. App. 3d at 549 ("[i]ndividual questions of injury and damages do not defeat class
certification"). The establishment of these common issues would allow class members affected by
each issue to recover. The individual determination of whether each member was affected is more
in the nature of a damages calculation than a liability determination.
Defendant relies on Avery and Smith in arguing that individual determinations of liability
outweigh any common issues. We disagree. In Avery, the individual issues of determining the
wording of each separate and distinct contract that each class member agreed to and its legal effect
outweighed any conceivable common issues. Avery, 216 Ill. 2d at 135. Here, by contrast,
determining, for example, whether there was a policy to wear a uniform, who was affected, and
whether donning and doffing the uniform was "work" are all issues that will affect many if not all
class members in the same fashion. There is not the individuality in the inquiry as in determining
the legal effect of a number of different insurance policies. Likewise, in Smith, proximate causation
-35-
No. 2--07--1031
depended on individual assessments to determine liability. Smith, 223 Ill. 2d at 454. Here, the
determination of defendant's policies and practice regarding timekeeping, uniforms, and the like will
affect the members of the proposed class in the same way. Resolution of the issues can be had as
a mass, rather than individually--the individuality will come in the damages calculations (assuming,
as we must at this stage, that plaintiffs' claims are meritorious (see Szabo, 249 F.3d at 677, quoting
Eggleston, 657 F.2d at 895 (inquiry into class certification is limited to determining " 'whether [the]
plaintiff is asserting a claim which, assuming its merits, will satisfy the requirements' " for class
certification)), and individual variations in damages will not defeat class certification (Clark, 343
Ill. App. 3d at 549 ("[i]ndividual questions of *** damages do not defeat class certification")).
Defendant also defends the trial court's factual resolutions of the issues of time editing,
uniforms and safety equipment, and time-rounding. This argument is without merit because the trial
court should have identified that the issues existed, rather than resolved the issues on their merits.
Accordingly, the trial court erred in holding that plaintiffs failed to demonstrate that the common
issues predominated.
Section 2--801(3) requires that the representative parties will fairly and adequately protect
the interests of the class. 735 ILCS 5/2--801(3) (West 2006). "The purpose of the adequate
representation requirement is to ensure that all class members will receive proper, efficient, and
appropriate protection of their interests in the presentation of the claim." P.J.'s Concrete Pumping
Service, Inc. v. Nextel West Corp., 345 Ill. App. 3d 992, 1004 (2004). The test of adequate
representation is whether the interests of the named parties are the same as the interests of those who
are not named. P.J.'s, 345 Ill. App. 3d at 1004. The trial court held that, because named plaintiff
Cruz had been a supervisor, and some of the claims involved employees being "rousted" by
-36-
No. 2--07--1031
supervisors, this could cause a conflict between class members and the named plaintiffs. The trial
court concluded, based on this, that the named plaintiffs were inadequate to represent the class
interests.
Plaintiffs argue that this was error. Plaintiffs argue that, because Cruz was a low-level
supervisor and experienced the same detriments of uncompensated time, his interests are not
antagonistic to those of class members who suffered the same detriment but were not supervisors.
Plaintiffs further argue that, even if Cruz's interests are not identical to those of the class as a whole,
the proper procedure would be to decertify Cruz alone if the other named plaintiffs are otherwise
adequate. We agree.
The trial court relied on defendant's argument that there is an inherent conflict of interest
between supervisors and their subordinates in determining that Cruz would not satisfy the adequacy
prerequisite. In turn, defendants quoted from Allen v. City of Chicago, 828 F. Supp. 543, 553 (N.D.
Ill. 1993), in making that argument. Allen, however, does not stand for such a proposition. Instead,
it found that conflict actually existed between the class representatives and the class members where
multiple class members and representatives would be competing to be reinstated to the same
position. Allen, 828 F. Supp. at 553. There is no similar argument raised here that the class
members would be competing amongst themselves for limited relief. The trial court also relied on
Harrison v. Wal-Mart Stores, Inc., 170 N.C. App. 545, 554, 613 S.E.2d 322, 329 (2005), for the
proposition that, as a result of the conflict between supervisors and their subordinates, supervisors
may be inappropriate class representatives because they may be the cause of another class member's
complaint. In Harrison, however, there was uncontroverted evidence in the record that some of the
supervisor-named representatives denied causing subordinates to work off the clock, even while
-37-
No. 2--07--1031
there was other evidence that the same supervisor-named representatives directed or knowingly
allowed their subordinates to work off the clock. Here, by contrast, the trial court noted that other
supervisors (but it did not specify whether they were also class members) had been complained about
for "rousting" class members to attend to their work stations before their shifts began, but Cruz was
not among those supervisors. We therefore find the trial court's reliance on Allen and Harrison to
be misplaced.
Instead, we note that the supervisor-subordinate conflict may disappear when the supervisor
shares the same interest as the subordinate in ending the improper practice. Jefferson v. Windy City
Maintenance, Inc., No. 96--C--7686 (N.D. Ill. August 4, 1998). Here, Cruz alleges that he, like all
other class members, was not given credit for the compensable time that he worked before and after
his shift and during lunch. His interest in receiving all the pay due him for the time he worked is
identical to that of the other class members. Moreover, in the absence of any allegations or evidence
that Cruz directed other class members to work off the clock, or that, as in Harrison, Cruz denied
giving such directions in spite of directly contradicting evidence, we do not believe it was
appropriate to deny his adequacy as a class representative given his identical interest in receiving full
pay for all the time he worked. If such evidence were to come to light during discovery, however,
then he could be discharged as a class representative.
Moreover, we do not believe that, even if Cruz was not an adequate representative for the
class, this destroyed the adequacy of the remaining named plaintiffs. The trial court held that,
because of the inchoate and unsubstantiated conflict between Cruz, a supervisor, and the other
named plaintiffs (nonsupervisors), all of the named plaintiffs were not adequate class representatives.
This holding was clearly erroneous. Rather than invalidating all class representatives, an inadequate
-38-
No. 2--07--1031
representative may be removed and leave may be granted to the plaintiffs to seek a substitute
representative who adequately represents the class. See In re Discovery Zone Securities Litigation,
169 F.R.D. 104, 109 (N.D. Ill.1996) (where a conflict of interest is likely with a class representative,
he or she may be discharged and a replacement may be sought). We fail to see the logic in denying
certification to a class that includes nonsupervisors simply because a supervisor was proposed to be
a class representative. Instead, it seems better to discharge the supervisor and allow the class to be
certified if the other prerequisites are met. Accordingly, we hold that the trial court applied improper
legal criteria in holding that all of the named plaintiffs would not adequately represent the interests
of the class.
The last prerequisite is that a class action must be an appropriate method to fairly and
efficiently adjudicate the controversy. 735 ILCS 5/2--801(4) (West 2006). The appropriateness
requirement is satisfied if the plaintiff can demonstrate that "the class action (1) can best secure the
economies of time, effort, and expense and promote a uniformity of decision or (2) can accomplish
the other ends of equity and justice that class actions seek to obtain." Clark, 343 Ill. App. 3d at 552.
The fact that we have determined that plaintiffs have established the previous three prerequisites
(numerosity, commonality, representation) makes it evident that a class action is appropriate. See
Clark, 343 Ill. App. 3d at 552. The numerous individuals in the proposed class and the existence of
predominant common questions of fact or law indicate that a class action would serve the economies
of time, effort, and expense as well as prevent inconsistent results. Litigating the claims on an
individual basis would waste judicial resources, while addressing the common issues in a single
proceeding would aid judicial efficiency and administration. Accordingly, we hold that the trial
court erred in determining that a class action was not an appropriate method to adjudicate the matter.
-39-
No. 2--07--1031
Plaintiffs additionally argue that the trial court failed to make any findings regarding their
post-seven-minute-rule claims. Plaintiffs contend that the trial court's ruling encompassed only the
time period before defendant implemented its seven-minute rule requiring employees to punch in
and out within seven minutes of the scheduled beginning and end of their shifts. According to
plaintiffs, this requirement results in employees' performing substantial amounts of uncompensated
work, because defendant's timekeeping system rounds to the quarter-hour. Thus, up to seven
minutes before the shift starts will be rounded forward to the time the shift starts, and up to seven
minutes after the shift ends will be rounded back to the time the shift ends. Plaintiffs maintain that
the class consists of the more-than-300 former and current hourly production and maintenance
employees. Plaintiffs further contend that defendant's records concede that a large number of
employees were affected by the seven-minute rule in conjunction with its rounding policy.
We agree that the trial court did not render a ruling on this issue. However, we also believe
that our determinations above can be extended to the post-seven-minute-rule claims. With regard
to numerosity, plaintiffs identify all current and former production and maintenance employees as
potential members of the class. Plaintiffs note that defendants argue that as many as half of all
current and former production and maintenance employees have not been affected by the policy.
Even if this is so, upwards of 100 individuals have been affected by the policy, and this would satisfy
the numerosity requirement.
The effect of the seven-minute-rule presents a common issue. All of the employees subject
to it would appear to be equally affected. Accordingly, commonality appears to have been shown.
Predominance is likewise apparent, as determining the effect, good or ill, of the seven-minute rule
will resolve the issue. The representation of the proposed class appears to be the same as articulated
-40-
No. 2--07--1031
above. We also note that all of the named plaintiffs except Cruz appear to have been subjected to
the seven-minute rule. The appropriateness requirement is generally satisfied where the preceding
prerequisites have been determined. Thus, we believe that the class can be certified for the post-
seven-minute-rule claims as well and that the trial court's failure to consider the claims was likely
an oversight.
We now consider the relief to grant. Often, where a trial court abuses its discretion by
employing impermissible legal criteria, the reviewing court will point out the proper criteria and
remand for the trial court to exercise its discretion through the application of the appropriate criteria.
However, we note that, in class certification cases with postures similar to this one, there is support
for an outright reversal by the appellate court and a remand to the trial court with instructions to
certify the class. See Ramirez v. Smart Corp., 371 Ill. App. 3d 797 (2007) (denial of class
certification was reversed and the cause remanded for further proceedings consistent with the
appellate court's opinion); In re Nassau County Strip Search Cases, 461 F.3d 219 (2d Cir. 2006)
(denial of certification reversed; district court instructed to certify a class as to liability and to
consider anew whether to certify a class as to damages). We follow these cases here and reverse the
judgment of the trial court denying class certification, remand the cause, and direct the trial court to
certify the class. (We note that, unlike in Nassau County, no issue has been presented or ruled upon
regarding creating a damages class or other subclasses. As a result, our instructions are directed to
the sole issue of class certification presented in this appeal.)
For the foregoing reasons, the judgment of the circuit court of Kane County is reversed, and
the cause is remanded with instructions for further proceedings consistent with this disposition.
Reversed and remanded with instructions.
-41-
No. 2--07--1031
BYRNE and ZENOFF, JJ., concur.
-42-
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268 F.2d 218
SHELL OIL COMPANYv.Gloria MERIDETH et al.THE SUPERIOR OIL COMPANYv.Gloria MERIDETH et al.
Nos. 6034, 6035.
United States Court of Appeals Tenth Circuit.
March 25, 1959.
Appeal and cross-appeal from the United States District Court for the Western District of Oklahoma.
Jesse M. Davis, Tulsa, Okl., for Shell Oil Company.
Russell Thompson, Oklahoma City, Okl., for Merideths.
Richard W. Fowler, Oklahoma City, Okl., for Superior Oil Company.
Before MURRAH, LEWIS and BREITENSTEIN, Circuit Judges.
PER CURIAM.
1
Causes remanded without written opinion, to United States District Court for the Western District of Oklahoma, with directions to vacate the judgment and hold the case in abeyance until final disposition by the Supreme Court of Oklahoma of the proceeding affecting the validity of Order No. 38791 of the Oklahoma State Corporation Commission, entered in cause No. 10901 on February 12, 1959.
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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 10-4224
UNITED STATES OF AMERICA,
Plaintiff – Appellee,
v.
QUINTON WILEY, a/k/a Quintin Oniel Wiley, a/k/a Quinton Oniel
Wiley, a/k/a Quintion Wiley,
Defendant – Appellant.
Appeal from the United States District Court for the District of
South Carolina, at Charleston. Solomon Blatt, Jr., Senior
District Judge. (9:08-cr-00689-SB-1)
Submitted: September 13, 2011 Decided: October 12, 2011
Before MOTZ, GREGORY, and SHEDD, Circuit Judges.
Affirmed by unpublished per curiam opinion.
J. Robert Haley, Assistant Federal Public Defender, OFFICE OF
THE FEDERAL PUBLIC DEFENDER, Charleston, South Carolina, for
Appellant. William N. Nettles, United States Attorney, OFFICE
OF THE UNITED STATES ATTORNEY, Columbia, South Carolina, and
Sean Kittrell, 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:
Quinton Wiley appeals his criminal sentence. For the
reasons that follow, we affirm.
Wiley, who was then a convicted felon, pled guilty to
illegally possessing a firearm in violation of 18 U.S.C.
§ 922(g). Ordinarily, the maximum sentence for a § 922(g) crime
is 10 years of imprisonment, but under the Armed Career Criminal
Act (“ACCA”), if the felon had three previous convictions for a
“violent felony” or “serious drug offense,” the punishment is
increased to a minimum term of 15 years. See 18 U.S.C.
§§ 924(a)(2), 924(e). Without objection, the district court
found that Wiley had three ACCA prior offenses and sentenced him
to a 210-month term of imprisonment.
On appeal, Wiley contends that his prior South
Carolina convictions for assault and battery of a high and
aggravated nature (“ABHAN”) and strong arm robbery do not
constitute violent felonies under § 924(e) and, therefore,
should not have been counted as ACCA prior offenses. Because
Wiley did not object at sentencing to being designated an armed
career criminal, our review is for plain error.
Under Rule 52(b) of the Federal Rules of Criminal
Procedure, “[a] plain error that affects substantial rights may
be considered even though it was not brought to the [district]
2
court’s attention.” Interpreting Rule 52(b), the Supreme Court
has instructed:
[A]n appellate court may, in its discretion, correct
an error not raised at trial only where the appellant
demonstrates that (1) there is an error; (2) the error
is clear or obvious, rather than subject to reasonable
dispute; (3) the error affected the appellant’s
substantial rights, which in the ordinary case means
it affected the outcome of the district court
proceedings; and (4) the error seriously affect[s] the
fairness, integrity or public reputation of judicial
proceedings.
United States v. Marcus, 130 S.Ct. 2159, 2164 (2010) (internal
punctuation and citation omitted). “[T]he burden of
establishing entitlement to relief for plain error is on the
defendant claiming it,” United States v. Dominguez Benitez, 542
U.S. 74, 82 (2004), and “[m]eeting all four prongs is difficult,
as it should be,” Puckett v. United States, 129 S.Ct. 1423, 1429
(2009) (internal punctuation and citation omitted).
Our resolution of this appeal need not proceed past
the second step of the plain error analysis. The district
court’s finding that Wiley’s South Carolina ABHAN and strong arm
robbery convictions are violent felonies is consistent with our
caselaw both at the time of sentencing and today. See United
States v. Wright, 594 F.3d 259, 263 (4th Cir. 2010) (S.C.
aggravated assault and battery [i.e., ABHAN], is a violent
felony); United States v. Moultrie, No. 11-4277 (4th Cir. Sept.
6, 2011) (S.C. ABHAN is a violent felony); United States v.
3
White, No. 10-5140 (4th Cir. July 29, 2011) (S.C. ABHAN is a
crime of violence); United States v. Jones, 312 Fed. Appx. 559
(4th Cir. 2009) (S.C. ABHAN and strong arm robbery are violent
felonies); see also United States v. Walker, 595 F.3d 441 (2d
Cir. 2010) (S.C. strong arm robbery is a crime of violence);
United States v. Guerrero-Robledo, 565 F.3d 940 (5th Cir. 2009)
(S.C. ABHAN is a crime of violence).*
In light of this caselaw, if we now revisit the issue
and assume for the sake of argument that Wiley is correct that
his South Carolina ABHAN and/or strong arm robbery convictions
are not ACCA violent felonies, we cannot say that the district
court’s error in sentencing him in accord with our prior
precedent is “plain” within the meaning of Rule 52(b). See
United States v. Beasley, 495 F.3d 142, 149-50 (4th Cir. 2007)
(rejecting plain error argument where there “was no controlling
‘current law’ in this circuit” at the time of sentencing “nor is
there any today”); Guerrero-Robledo, 565 F.3d at 946 (“It
*
The language defining a “violent felony” in § 924(e) is
nearly identical to language defining a “crime of violence” in
various provisions of the United States Sentencing Guidelines.
Consequently, we rely on case law interpreting all of these
sections when examining whether a prior crime is an ACCA violent
felony or a crime of violence under the Guidelines. See United
States v. Rivers, 595 F.3d 558, 560 n.1 (4th Cir. 2010); United
States v. Carillo-Pineda, 238 Fed. Appx. 912, 913 n.1 (4th Cir.
2007).
4
certainly is not plain error for the district court to rely on
an unpublished opinion that is squarely on point.”).
Based on the foregoing, we affirm Wiley’s sentence.
We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the
court, and argument would not aid the decisional process.
AFFIRMED
5
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771 F.2d 805
1986 A.M.C. 305
SUN OIL COMPANY OF PENNSYLVANIA, Sun International, Ltd., Appellants,v.M/T CARISLE, Her Engines, Boilers, Tackle, etc., In Rem, OreSea Transport S.A. of Panama, and Tradax Gestion, S.A.
No. 84-1536.
United States Court of Appeals,Third Circuit.
Argued May 14, 1985.Decided Sept. 4, 1985.
Francis J. Deasey (argued), Kevin J. O'Brien, Deasey, Scanlan & Bender, Ltd., Philadelphia, Pa., for appellants.
James F. Young (argued), Thomas Fisher, III, Krusen Evans and Byrne, Philadelphia, Pa., for appellees.
Raul Betancourt, Jr., Edward T. Connelly, Palmer Biezup & Henderson, Philadelphia, Pa., (Elton A. Ellison, Koch Industries, Inc., Wichita, Kan., of counsel), for amicus curiae Koch Industries, Inc.
Before HUNTER and SLOVITER, Circuit Judges, and COHEN, District judge.*
OPINION OF THE COURT
SLOVITER, Circuit Judge.
I.
Issue
1
This appeal represents another skirmish in the long battle between shippers, who send their goods by sea, and carriers, whose vessels transport the goods. The issue, briefly stated, concerns the existence and validity of a trade custom relieving the carrier of the responsibility for delivering 0.5% of crude oil delivered to it for transport. It is one of first impression for an appellate court.
2
The parties have stipulated that the Sun Oil Company of Pennsylvania and Sun International, Ltd. (jointly "Sun") chartered the M/T Carisle to transport Zarzatine crude oil from La Skhirrah, Tunisia to Marcus Hook, Pennsylvania. The ship loaded the oil on October 13, 1980, and measurements showed 540,401 barrels on board. When it arrived at Marcus Hook on October 31, measurements showed 537,566 barrels on board. Sun then filed a complaint in admiralty against the ship in rem and against Ore Sea Transport, S.A. of Panama, the time charter owner,1 in personam, later amended to include Tradax Gestion, S.A., the owner, in personam, seeking damages for the missing 2835 barrels of oil.
3
The present case is one of four similar cases filed by Sun in 1980 and 1981 in the same district court. In each case, one of the defendants raised the affirmative defense that by custom and practice the carrier has a 0.5% trade allowance, which was an implied term in the charter party contract. Pursuant thereto, unexplained losses of less than 0.5% do not give rise to any claim against the carrier, and unexplained losses of more than 0.5% give rise to claims only for the amount by which the loss exceeds that figure. Thus, the carrier would be obligated to deliver only 99.5% of the oil loaded unless the loss was due to some specific, known cause, such as a collision, in which case the allowance would not apply.
4
Pursuant to a stipulation of counsel for all parties, approved by the three district court judges to whom these cases were assigned, the four cases were consolidated for an evidentiary hearing before a panel consisting of those three judges. App. at 268-71. After hearing the testimony and receiving the documentary evidence submitted on the alleged trade custom, the judges ruled that a custom as alleged was proven and was an implied term in the contracts at issue. Sun Oil Co. of Pennsylvania v. M/T Mercedes Maria, 1983 A.M.C. 718 (E.D.Pa.1982) (as amended January 24, 1983).2 The cases were then severed, and returned to the individual judges for disposition.3
5
Cross motions for summary judgment were filed in this case. The district court, finding the "oil shipping industry's customary 0.5% trade allowance [to be] controlling," App. at 127, gave summary judgment for the defendants. Sun was awarded recovery only for 133 barrels of oil, the amount by which its loss of 2835 barrels of oil exceeded 0.5% of the cargo.
6
In its appeal, Sun argues first that the Carriage of Goods by Sea Act, 46 U.S.C. Secs. 1300 et seq. (1982) (COGSA), precludes the implication of the alleged custom into the contract; second, that certain factual determinations of the district judges were clearly erroneous; and third, that the judges erred in the legal standards they applied to the facts in determining that the custom alleged was an implied term in the contract. We first summarize the holding of the district court and then turn to Sun's COGSA argument, which we find dispositive.
II.
The Holding of the District Court
7
The district court judges explained that the 0.5% customary trade allowance in the bulk oil transportation industry developed because of inexact measurement and inevitable loss associated with the transportation of liquid cargoes. 1983 A.M.C. at 719. To measure the amount of oil in a tanker, one drops a tape measure into each tank to determine the "ullage," i.e., the degree to which the tank is not full. The measurement may be imprecise because of factors such as human error, rolling of the vessel, its failure to lie level in the water, physical changes in the dimensions of the cargo tanks, and variation of the volume of the oil with temperature.4 Although the court noted that ships generally employ conversion tables that correct for the degree to which the ship is not level and for the variations in temperature, it characterized measurement as an art rather than an exact science. Id. at 720. It also explained that actual loss of cargo may occur due to clingage, settlement, sedimentation and evaporation, which result from the inherent properties of oil as a cargo. Id. at 720-21.
8
The court stated that under the measurement techniques and transport methods in existence at the earliest days of bulk oil carriage by sea, "sound reasons ... did exist" for the custom of a trade allowance. Id. at 721, 727.5 The court did not directly meet Sun's contention that improved methods of measurement have made application of the custom unreasonable now. It stated merely that, "it would be desirable if more sophisticated and exact cargo measurement technology might be available to the industry in the future, so that disputes of this type might be avoided." Id. at 727.
9
The court determined that there was an enforceable customary trade allowance by applying legal standards from the Uniform Commercial Code Sec. 1-205(2) and the Restatement (Second) of Contracts Sec. 222(1).6 Although these are not controlling in a federal maritime case such as this, the court held that because of their broad acceptance, they were appropriate standards to be used in what is essentially a commercial dispute. Both sources require a finding of "regularity of observance" sufficient to "justify an expectation" that a usage of trade "will be observed." The court found sufficient evidence to meet this standard, primarily in the testimony of the expert witnesses. 1983 A.M.C. at 724. The court also relied on evidence of attempts by Sun to negotiate "a 0.25% allowance as an express written contract term in its charter parties" to show "the degree to which the 0.5% allowance has been accepted and treated by those in the industry as a custom and usage of trade." Id. at 725 (emphasis in original).7
10
The court also rejected Sun's argument that the trade custom was inconsistent with COGSA, which establishes a statutory scheme of responsibilities with regard to carriage of cargo and for determination of liability with regard to claims for short delivery of cargo. The court reasoned that the customary trade allowance determined what the carrier was obligated to deliver in the first place. Having decided that "there is no non-delivery if the cargo is not contractually obligated to be delivered," the court concluded that recognition of a trade allowance is not inconsistent with COGSA. Id. at 721 (emphasis in original).
III.
COGSA: History and Relevant Provisions
11
COGSA "was lifted almost bodily from the Hague Rules of 1921, as amended by the Brussels Convention of 1924." Robert C. Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297, 301, 79 S.Ct. 766, 769, 3 L.Ed.2d 820 (1959). The Hague Rules were themselves based in part on the Harter Act of 1893, 46 U.S.C. Secs. 190-196 (1982), now largely superseded by COGSA, which was passed in 1936. For accounts of the history leading to the passage of COGSA, see, e.g., G. Gilmore & C. Black, The Law of Admiralty 139-44 (2d ed. 1975); 2A Benedict on Admiralty Secs. 11-16 (6th ed. 1985); A. Knauth, The American Law of Ocean Bills of Lading 118-31 (4th ed. 1953); Yancey, The Carriage of Goods: Hague, COGSA, Visby, and Hamburg, 57 Tul.L.Rev. 1238, 1238-45 (1983).
12
Under the general law of maritime carriage, the carrier was strictly liable for cargo loss, subject to certain exceptions, such as acts of God. See 2A Benedict on Admiralty, supra at 2-1. In the nineteenth century the carriers used their superior bargaining power to insert into bills of lading clauses which exempted them from liability for loss of or damage to the cargo even if caused by their own negligence. In England, which enjoyed a preeminent position in shipping at that time, these clauses of exculpation were enforced, but the federal courts of this country held them invalid as against public policy. G. Gilmore & C. Black, supra at 142.
13
With the passage of the Harter Act of 1893, Congress sought a compromise between the opposing interests. The Act imposed an obligation of due diligence on the carrier to make the vessel seaworthy and provided that if it did so, the carrier was absolved of liability for "faults or errors" in navigation or management of the vessel. At the same time, it made unenforceable contract provisions that relieved carriers from liability for negligence in loading, storage or delivery of goods or for failure to exercise due diligence to make the vessel seaworthy. See 46 U.S.C. Secs. 190-192 (1982). Nonetheless, English courts often refused to enforce "Harter Act clauses" when there were also contradictory exculpatory clauses in the bill of lading. See A. Knauth, supra at 122. Furthermore, carriers remained free to write in exculpatory clauses not covered by the terms of the Act. See 2A Benedict on Admiralty, supra at 2-9. See also Yancey, supra at 1240-41. Thus, momentum grew for an international agreement on uniform rules governing bills of lading which would be more favorable to shippers.
14
The Hague Rules, which emerged from a 1921 multinational Conference, reflected such an agreement. The Rules were refined and put in legislative form by the International Conference on Maritime Law in a series of meetings held in Brussels between 1921 and 1924. The United States took a leading role in this process, and the Hague Rules are based in large part on the Harter Act. See 2A Benedict on Admiralty, supra at Sec. 15; A. Knauth, supra at 126-28.
15
Representatives of twenty-four countries signed the final document in Brussels in 1924. Since then, many countries have passed legislation known as Carriage of Goods by Sea Acts which are, in most pertinent respects, simply the Hague Rules.8 Adoption of COGSA in the United States was delayed until a Supreme Court decision interpreted the Harter Act in a manner adverse to the interests of carriers.9 Thereafter, the Act was passed as law in 1936, and the United States ratified the convention in 1937. See A. Knauth, supra at 128-30. This international agreement "define[d] by law the rights and liabilities of water carriers and shippers in foreign commerce," H.R.Rep. No. 2218, 74th Cong., 2d Sess. 1 (1936), and has done so in a way that, broadly speaking, has satisfied both shippers and carriers.10
16
COGSA applies to foreign commerce and may, by agreement of the parties through a stipulation in the bill of lading, apply to domestic voyages as well. Absent such a stipulation, the Harter Act applies to shipments by water from one port of the United States to another. See G. Gilmore & C. Black, supra at 147-48. The Harter Act also applies, even in foreign trade, while the goods are in the custody of the carrier, but before loading and after unloading. Id. at 148. The charter party contract at issue here specifically states that it shall have effect "subject to the provisions of [COGSA]" and that COGSA "shall be deemed to be incorporated herein." App. at 42. Even if it did not so specify, COGSA would still apply, see 46 U.S.C. Secs. 1300, 1312 (1982).
17
Section 3 of COGSA sets forth the basic obligations of the carrier, including due diligence to make the ship seaworthy and fit for the cargo to be carried, 46 U.S.C. Sec. 1303(1), and exercise of proper care for the goods, 46 U.S.C. Sec. 1303(2). Section 4 sets forth the rights and immunities of the carrier, 46 U.S.C. Sec. 1304.
18
Under COGSA, the owner of the cargo makes its prima facie case of cargo loss by proving delivery of the cargo to the vessel in good condition and short delivery by the vessel. Quaker Oats Co. v. M/V Torvanger, 734 F.2d 238, 240 (5th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 959, 83 L.Ed.2d 965 (1985). The burden then shifts to the carrier to show either due diligence or due care under section 4(2)(q) or that the loss or part thereof was due to one of the causes enumerated in section 4(2)(a)-(p) which specify causes of cargo damage or loss for which the carrier is not responsible. Id. at 240-41; 46 U.S.C. Sec. 1304. Cf. PPG Industries, Inc. v. Ashland Oil Co.--Thomas Petroleum, 592 F.2d 138 (3d Cir.1978), cert. denied, 444 U.S. 830, 100 S.Ct. 58, 62 L.Ed.2d 38 (1979).
19
The specific provisions on which Sun relies for its claim of inconsistency between COGSA and the customary trade allowance enforced in this case are sections 3(2), 4(2)(m), 4(2)(q) and 3(8) of the Act. Section 3(2) provides, "The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried." 46 U.S.C. Sec. 1303(2). Under section 4(2)(m), the carrier is not liable for loss resulting from "wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods." 46 U.S.C. Sec. 1304(2)(m). Section 4(2)(q) is a catch-all provision which exempts the carrier from liability for damage or loss "arising without the actual fault and privity of the carrier and without the fault or neglect of the agents or servants of the carrier." Under this subsection, "the burden of proof shall be on the person claiming the benefit of this exception." 46 U.S.C. Sec. 1304(2)(q). Thus, if the carrier wants to escape liability under COGSA without reference to a cause specified in section 4(2)(a)-(p), it must prove that its negligence did not contribute to the loss. The final relevant provision is section 3(8) of COGSA, 46 U.S.C. Sec. 1303(8), which provides in pertinent part:
20
Any clause, covenant, or agreement in a contract of carriage relieving the carrier or the ship from liability for loss or damage to or in connection with the goods arising from negligence, fault, or failure in the duties and obligations provided in this section, or lessening such liability otherwise than as provided in this chapter, shall be null and void and of no effect.
21
It is Sun's position that because COGSA establishes the carrier's liabilities and responsibilities with respect to the carriage of cargo and also establishes the burden of proof concerning claims for cargo loss or damage, the district court's decision to apply a customary trade allowance contravenes both the letter and the spirit of the statute.
IV.
Analysis
22
For purposes of this opinion we treat as a factual finding the district court's determination that a 0.5% customary trade allowance existed in the oil shipping industry.11 As such, it is subject to review under the "clearly erroneous" standard of Fed.R.Civ.P. 52(a).12 We assume arguendo that maritime law would apply general commercial law reflected in the Uniform Commercial Code and the Restatement of Contracts to define such a custom of the trade. On the other hand, the district court judges' conclusion that such a customary trade allowance should be treated as an implied term of each contract notwithstanding COGSA is subject to our plenary review.
23
The court held that recognition of a trade allowance is not inconsistent with COGSA because the trade allowance was to be construed as a term of the contract of carriage. That hardly advances the analysis since the issue before us is whether COGSA precludes implying such a trade allowance into the contract. Resolution of that issue in turn depends to a large extent on the history, policy, and construction of COGSA, none of which the district court judges analyzed in their opinion.
24
We recognize that the 0.5% allowance has apparently remained unchallenged until relatively recently. As the district court judges noted, the motivation of shippers "to challenge the trade allowance has increased commensurate with the increase in the price of oil." 1983 A.M.C. at 720. The brief of the amicus, Koch Industries, Inc., offers the following illustration. "A standard size tanker in the 1960s was 35,000 deadweight tons (DWT) with a capacity of 262,000 barrels. At 1960s prices assuming a tanker of 35,000 DWT, the value of a 0.5 percent loss was $2,500.00. Today, the typical size of a very large crude carrier (VLCC) is 250,000 DWT with a cargo capacity of 1,875,000 barrels of oil. At today's prices with today's VLCC the value of a 0.5 percent loss may be $325,000.00." Amicus Brief at 34-35.
25
Other district courts have divided on whether a 0.5% allowance should be enforced. Some have refused to honor the allowance, essentially because neither the bill of lading nor the charter party refers to such an allowance. See Esso Nederland v. M.T. Trade Fortitude, 1977 A.M.C. at 2148. See also Amoco Oil Co. v. M/V Lorenzo Halcoussi, 1984 A.M.C. 1608, 1615-16 (E.D.La.1983); Kerr-McGee Refining Corp. v. M/V La Libertad, 529 F.Supp. 78, 85, 1982 A.M.C. 340 (S.D.N.Y.1981). Others have given it effect without considering whether it is inconsistent with COGSA. See Wesco International, Inc. v. M/V Tide Crown, 1985 A.M.C. 189, 200-01 (S.D.Texas 1983); Northeast Petroleum Corp. v. S.S. Prairie Grove, 1977 A.M.C. 2139 (S.D.N.Y.1977). But see Palmco, Inc. v. American Presidental Lines, Ltd., 1978 A.M.C. 1715, 1722 (D.Ore.1978) (0.5% trade allowance not in conflict with COGSA because exercise of due diligence does not preclude a normal 0.5% loss). See generally Textor, COGSA: Petroleum Shortage Transit Allowance: Sun Oil Company v. The Mercedes Maria, 14 J.Mar.L. & Com. 269 (1983) (criticizing the district court's reliance on Palmco ); Thomajan, Tanker Problems in Arbitration: The 0.5% Allowance, 14 J.Mar.L. & Com. 225, 228-29 (1983) (loss allowance is inconsistent with the scheme of COGSA).
26
The practical effect of enforcing a customary trade allowance can be illustrated by comparing the course of litigation with or without the allowance. In either instance, the shipper would first produce evidence of the amount of the short delivery, usually through a comparison of ullages taken after loading and before unloading. The carrier (vessel) would then have the burden of rebutting the prima facie case by presenting evidence that it exercised due diligence to avoid and prevent the loss. 46 U.S.C. Sec. 1304(1), that it was free from negligence in the preparation of the ship and care and stowage of the cargo, 46 U.S.C. Sec. 1304(2)(q), or that the loss resulted from an "excepted cause," such as the "inherent defect, quality or vice of the goods," 46 U.S.C. Sec. 1304(2)(m). In this case, although not obliged by COGSA to do so, Sun undertook to show by expert testimony that the expected loss due to the "inherent vice" of the cargo for this particular voyage would be 704 barrels. Assuming that this were established, the carrier would, under COGSA and in the absence of the trade custom, be liable for the loss exceeding 704 barrels, which would amount to 2131 barrels at $38.01 per barrel, or $80,999.31 plus interest.
27
On the other hand, if the trade allowance is enforced, the litigation would proceed as it did here. Sun proved its loss, and the carrier offered no evidence as to cause of loss, existence of a statutory exception, or its exercise of due diligence, relying instead on the 0.5% allowance, which amounted to 2702 barrels. It was, therefore, liable for 133 barrels at $38.01 per barrel, or $5,055.31 plus interest, which is the amount of the judgment entered for Sun below. The carrier might also attempt to avoid liability for the amount over 0.5% by shouldering its statutory burden of proof.
28
In any event, it is clear that the effect of enforcing the trade custom alters the statutorily prescribed method of litigating claims. The district court placed on the shipper the burden of proving that some specific cause, such as carrier's negligence, was responsible for the loss, rather than following COGSA's scheme which places the risk of unexplained losses on the carrier.
29
The legislative history shows that Congress viewed the shift in the burden of proof on negligence from the shipper to the carrier as one of the major advances of COGSA over prior law. The House Report stated:
30
Under present law, if the carrier can show that the loss or damage complained of was caused by one any or more of the excepted causes, the carrier is exonerated from liability unless the cargo owner can show that the negligence of the carrier or servants contributed to the loss (Clark v. Barnwell ) [53 U.S. (12 How.) 290, 299, 13 L.Ed. 985 (1851) ]....
31
In practice it is frequently very difficult, and often impossible, for the cargo owner to carry such a burden because, in most instances, the information is entirely in the possession of the carrier. Under this bill, however, the exemption of the carrier from liability from causes such as these and many other causes now excepted would depend upon the carrier sustaining the burden of proving that the loss or damage resulted from a cause without the actual fault or privity of the carrier or the fault or neglect of the agents or servants of the carrier. This shift in the burden of proof will constitute a tremendous advantage to cargo owners.
32
H.R.Rep. No. 2218, 74th Cong., 2d Sess. 8-9 (1936) (emphasis added).
33
As the Second Circuit noted, "[t]he burden of proof which COGSA has placed on the carrier is a major weapon in the shipper's arsenal." Encyclopaedia Britannica, Inc. v. SS Hong Kong Producer, 422 F.2d 7, 16 (2d Cir.1969), cert. denied, 397 U.S. 964, 90 S.Ct. 998, 25 L.Ed.2d 255 (1970). See also Copco Steel & Engineering Co. v. Prins Frederik Hendrik, 129 F.Supp. 469 (E.D.Mich.1955); George F. Pettinos, Inc. v. American Export Lines, Inc., 68 F.Supp. 759 (E.D.Pa.1946), aff'd, 159 F.2d 247 (3d Cir.1947).
34
The resolution by the district court judges was to "simply stat[e], this matter is one of contract, within the power of both carriers and charterers to negotiate." Sun Oil Co. v. M/T Mercedes Maria, 1983 A.M.C. at 727. This resolution has some facial plausibility until it is examined in light of section 3(8) of COGSA, which renders void clauses which relieve the vessel of liability for negligence. 46 U.S.C. Sec. 1303(8).
35
The statement of Gilmore & Black that, "Cogsa allows a freedom of contracting out of its terms, but only in the direction of increasing the shipowner's liabilities, and never in the direction of diminishing them," G. Gilmore & C. Black, The Law of Admiralty 145 (2d ed. 1975) (emphasis in original), has been frequently adopted in court opinions. See, e.g., Jamaica Nutrition Holdings, Ltd. v. United Shipping Co., Ltd., 643 F.2d 376, 379 n. 4 (5th Cir.1981); Mitsui & Co., Ltd. v. American Export Lines, Inc., 636 F.2d 807, 814 n. 6 (2d Cir.1981); Hanover Insurance Co. v. Shulman Transport Enterprises, Inc., 581 F.2d 268, 273 n. 8 (1st Cir.1978); Portland Fish Co. v. States Steamship Co., 510 F.2d 628, 632-33 (9th Cir.1974). The validity of this rule is supported by an impressive array of authority. In United States v. Atlantic Mutual Insurance Co., 343 U.S. 236, 239-42, 72 S.Ct. 666, 668-70, 96 L.Ed. 907 (1952), the Supreme Court held that under COGSA shipowners could not by stipulation in the bill of lading deprive cargo owners of a part of their recovery from a non-carrying ship. If this was too burdensome on carriers, their remedy was to go to Congress.
36
Similarly, the Second Circuit relied on section 3(8) to invalidate a clause authorizing the carrier to store goods on deck unless informed otherwise by the shipper, a clause which had the effect of absolving the carrier from risk of damage to goods so stored. Encyclopaedia Britannica, Inc. v. SS Hong Kong Producer, 422 F.2d at 16. Such a clause was invalid because it would "strip[ ] the shipper of all the protections afforded it by COGSA." Id. at 13. See also A. Knauth, supra at 184.
37
So strong is COGSA's policy to preclude clauses lessening the carrier's liability that the same court, overturning its own precedent of the prior decade, held that section 3(8) precluded a clause that required an American plaintiff to assert his claim only in a foreign court. Indussa Corp. v. S.S. Ranborg, 377 F.2d 200 (2d Cir.1967) (en banc). Judge Friendly, writing for the court, reasoned that "[s]uch a clause puts a 'high hurdle' in the way of enforcing liability." Id. at 203. It was precluded by section 3(8) because "requiring trial abroad might lessen the carrier's liability" and that section "can well be read as covering a potential and not simply a demonstrable lessening of liability." Id. at 203-04 (emphasis in original). See also G. Gilmore & C. Black, supra at 145-46 n. 23; Union Insurance Society of Canton, Ltd. v. S.S. Elikon, 642 F.2d 721, 724-25 (4th Cir.1981). Cf. The Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 10 n. 11, 92 S.Ct. 1907, 1913 n. 11, 32 L.Ed.2d 513 (1972) (upholding choice of forum clause but noting specifically that COGSA did not apply).
38
The commentators agree that section 3(8) of COGSA is the vehicle by which the courts can enforce the basic policy of the Act. See A. Knauth, supra at 137. According to G. Gilmore & C. Black, supra at 189 n. 156,
39
Sec. 3(8) is in a sense the key to the Act, for it assures that the cargo interest will receive the broad benefits granted to it without gradual erosion by carefully contrived clauses in the bills of lading drawn up by carriers in concert. The only way it can fulfil this function is by being construed to mean what it says, without too great attention to arguments based on a "convenience" which usually turns out to be carrier's convenience.
40
As the Fifth Circuit has stated, albeit in a case raising a different issue,
41
Perhaps the major impetus to COGSA's enactment was the seemingly insufferable condition imposed upon shippers (and, in turn, upon their insurers) by clauses in bills of lading limiting the carrier's liability to very low amounts. These clauses were thought to be the natural result of the carriers' superior bargaining position vis-a-vis shippers.
42
Spartus Corp. v. S/S Yafo, 590 F.2d 1310, 1316 (5th Cir.1979). The Act was designed "to achieve a fair balancing of the interests of the carrier, on the one hand, and the shipper, on the other." Encyclopaedia Britannica, Inc. v. SS Hong Kong Producer, 422 F.2d at 11. If clauses which relieve the carrier from liability for loss or damage to goods arising from negligence, fault or failure in fulfilling obligations specified in COGSA cannot be enforced, it follows that clauses, whether originating in trade custom or otherwise, cannot be implied if they would have the same effect.
43
While some customs may be implied into the bill of lading, see e.g., M. Golodetz Export Corp. v. S/S Lake Anja, 751 F.2d 1103, 1109-10 (2d Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 2361, 86 L.Ed.2d 261 (1985) (applying "custom" that carrier of tallow is responsible for keeping it at proper temperature), and COGSA itself directs its interpreters to customs of the trade for some purposes, see 46 U.S.C. Sec. 1310 (1982) (weight in bill of lading not prima facie evidence if third-party weighing is custom of trade); 46 U.S.C. Sec. 1304(5) (valuation of cargo not shipped in packages is to be per "customary freight unit"), this can occur only if the matter is not governed directly by COGSA or is left open by the statutory language. However, no custom can properly be implied into the contract that conflicts with COGSA's provisions or purposes.
44
A custom that lessens or might lessen the carrier's liability under COGSA patently cannot be implied. For example, in The Portuguese Prince, 209 Fed. 995 (S.D.N.Y.1913), Judge Hough, who was later to be instrumental in the process leading to the Hague Rules, held that a customary clause in the bill of lading specifying the carrier's authorization to make a substituted delivery did not violate the Harter Act's analog to section 3(8) because a reasonable substituted delivery was not inconsistent therewith. Presumably if it had been, the clause, explicit or implied, would not have been enforced. Although the carrier argues that there is no difference between the custom of using the 60? F. temperature as a measurement norm, see note 3 supra, and the 0.5% trade allowance, in the former instance COGSA is silent and the custom implicates no policy underlying the statute whereas in the latter instance the custom may conflict with explicit COGSA provisions and the Act's underlying policies.
45
It remains, therefore, only to consider whether enforcement of the customary trade allowance of 0.5% does present such a conflict. We believe that it manifestly does. The carrier's principal argument is that it is "grossly unreasonable or absurd" to require 100% correspondence between the quantity loaded and that delivered, because of "the inherent qualities of crude oil" and the lack of technology to measure the quantities of oil with precision. Brief of Appellee at 4-5. COGSA takes into account the apparently undisputed fact that for some types of cargo it will not be possible for the carrier to deliver all of the cargo it received for carriage. COGSA provides that in such circumstances the carrier can be relieved of its obligation, but only after the carrier has borne the burden of showing that the shortage in that instance resulted from an "inherent vice."
46
In one of the numerous arbitrations on this issue discussed in Thomajan, supra at 233, it was the opinion of the majority of the panel "that certain losses do, in fact, occur during the transit and discharging which are inherent to the nature of the cargo, the mode of transportation and also attributable to the manner in which quantities are measured, which cannot and should not be held against the Owners," but it concluded nonetheless that an allowance of 0.5% was arbitrary. As the testimony in this case demonstrates, the "inherent vice" of most oil on most voyages, which encompasses both actual loss and measurement imprecision, is considerably less than 0.5%. Thus, enforcing a 0.5% trade allowance both undermines the "inherent vice" provision and shifts the burden of proof to the shipper, thereby limiting the carrier's liability beyond that recognized by COGSA. The same rationale compels rejection of defendant's argument, accepted by the district court judges, that the term "deliver" in the contract of carriage can be interpreted by trade custom to encompass only 99.5% of the cargo loaded. 1983 A.M.C. at 719-20.
47
Furthermore, the district court's suggestion that the parties should negotiate an agreement if they wish to change or eliminate the trade allowance is unrealistic, because if the courts enforce the 0.5% allowance there will be no incentive for the carriers to negotiate a lower figure for claims settlement purposes even in the face of markedly improved technology to measure and discharge oil. Judicial enforcement of the 0.5% allowance contravenes COGSA's policy as expressed in section 3(8) since it would perpetuate the carrier's superior bargaining power despite legislative history clearly demonstrating that that section was designed to prevent the carrier's use of such power to limit its liability. While customs may permissibly fill the interstices in COGSA's provisions specifying rights and obligations between shippers and carriers, the customary trade allowance that permits carriers to deliver only 99.5% of the cargo without making the showing required by COGSA is plainly inconsistent therewith. The parties remain free to settle cargo losses in a manner of their own choosing. However, we hold that COGSA precludes giving the carrier a legally enforceable right to a customary trade allowance in a contract governed by COGSA. Accord, Esso Nederland v. M.T. Trade Fortitude, 1977 A.M.C. at 2148 ("the fact that an allowance may be used in settlements of cargo disputes does not entail that it should be treated as a rule of law").
48
The dissent argues that COGSA has nothing to do with the 0.5% trade allowance because it is not a "loss" allowance but is instead an "allowance for imprecision of measurement." With deference to the dissent, we disagree, relying on what the district court judges themselves said and what the evidence showed. The district court judges characterized the allowance as a "customary transit loss allowance." 1983 A.M.C. at 719 (emphasis added). They explained that the allowance arose from the factors of "inexact measurement and inevitable loss associated with the transportation of liquid cargoes," id. (emphasis added); described the allowance "as a reasonable response to the inherent difficulties in measurement and carriage of bulk oil cargoes," id. at 720 (emphasis added); and consistently referred not only to measurement imprecision but also to the "inevitable" loss of bulk oil cargo, id. at 721. The judges summarized the evidence and testimony as establishing "that the difficulty of measuring a cargo such as oil, together with the inevitable loss of some portion of cargo with the inherent properties of oil," led to the trade allowance at issue. Id. at 724. Thus, it appears that the judges ascribed the allowance to both factors, as did the carrier's expert witnesses. See, e.g., App. at 607, 687, 782. In fact, even the carrier does not argue that the loss is only due to measurement imprecision; on the contrary, it affirmatively argued that actual loss of oil is part of the rationale for the trade allowance. See, e.g., Transcript of Oral Argument at 20-22.
49
Nor can we agree with the dissent that the district court judges held that measurements are "likely to be accurate only to within plus or minus 0.5%". Neither the opinion of the three district court judges nor that of the district court in this case so stated. Indeed there was no testimony at all, even by the carrier's expert witnesses, that the measurements were accurate only to within 0.5%. Carrier's witnesses testified only that there was a custom of 0.5% and expressed uncertainty as to whether it was reasonable for a ship's discharge ullage to be only 99.5% of its loading ullage. App. at 696-709, 824, 1228-30. Sun's witnesses testified affirmatively that average measurement inaccuracies were far less than 0.5%. See, e.g., App. at 359-66, 913-20, 1030-34.
50
Since the dissent has conceded that the trade allowance "would run afoul of COGSA's procedural and substantive provisions" were it to be a "loss" allowance, and the district court and the evidence confirm that it is at least in part a "loss" allowance, it follows even under the dissent's logic that we must hold the trade allowance unenforceable.13
V.
Conclusion
51
Accordingly, we will reverse the summary judgment entered by the district court in favor of the defendant and will remand for further proceedings. On remand, Tradax Gestion will have the opportunity, and the burden, to show that all or part of the loss falls within a provision of COGSA that limits its liability.14
JAMES HUNTER, III, Circuit Judge, dissenting:
52
Despite my admiration for the majority opinion's excellent and thoughtful discussion of the history and policies of COGSA, I am compelled to dissent because I believe that COGSA has nothing to do with the 0.5% trade allowance at issue in this case.
53
The majority characterizes the trade allowance as exonerating carriers from liability carriers for "unexplained losses" of less than 0.5% of cargoes of crude oil, unless the shipper is able to show that the "loss was due to some specific, known cause...." I do not doubt that the majority is correct in concluding that implying such an allowance into charter parties as a custom of the industry would run afoul of COGSA's procedural and substantive provisions. I do, however, disagree with the majority's characterization of the trade allowance as a "loss" allowance.
54
As the district court found, the primary purpose of the trade allowance is to recognize that measurement of crude oil in bulk "is better characterized as an art than as an exact science." Sun Oil Co. v. Mercedes Maria, 1983 A.M.C. 718, 720 (E.D.Pa.1982). Because of the rather protean qualities of crude oil, measurement by the customary technique of taking ullages is likely to be accurate only to within plus or minus 0.5%. Id. This finding is amply supported by the record. Thus, although the allowance may also take account of "inevitable" problems such as "clingage" of some oil to the insides of tankers, id., it is inaccurate to characterize it as a "loss allowance." It is, rather, an allowance for imprecision of measurement.1 For this reason, the allowance does not run afoul of COGSA's substantive prohibition against disclaimers of carriers' liability for lost or damaged cargo resulting from negligence or other fault. See 46 U.S.C. Sec. 1303(8).
55
Nor does the allowance offend COGSA's allocations of burdens of proof between shippers and carriers. As the majority opinion correctly notes, a shipper must show short delivery to make out a prima facie case for lost cargo against a carrier. See Quaker Oats Co. v. M/V Torvanger, 734 F.2d 238, 240 (5th Cir.1984), cert. denied, --- U.S. ----, 105 S.Ct. 959, 83 L.Ed.2d 965 (1985). The burden of proof then shifts to the carrier to show its due diligence, or that the loss was due to one of the causes for which COGSA exempts carriers from liability. See 46 U.S.C. Sec. 1304(1). As the district court found, however, measurement of a cargo of crude oil at point of delivery may deviate by as much as 0.5% from the measurement at point of departure, even where no loss has occurred. A shipper of crude oil would not, therefore, be able to show short delivery if the measurement differential was less than 0.5%, unless the shipper could show that there was actual loss due to some specific cause. The trade allowance's requirement that shippers make such a showing does not, as the majority concludes, alter the statutory allocation of burdens of proof by relieving carriers of the burden of proving that they were without fault. It merely recognizes that unless a shipper of crude oil can show a shortfall of more than 0.5% of its cargo, or that a measurement differential of less than 0.5% is due to actual loss from a specific cause, it cannot make out a prima facie case against the carrier.
56
Because I believe that the trade allowance in no way implicates any provision of COGSA, I dissent from the majority opinion's holding that the allowance is unlawful. The only other issue in this case--whether the allowance is a custom of the industry implied into charter parties for crude oil--depends upon findings of fact by the district court which, I believe, are not clearly erroneous. I would, therefore, affirm the judgment of the district court.
*
Honorable Mitchell H. Cohen, United States District Court for the District of New Jersey, sitting by designation
1
Ore Sea is not participating in this appeal pursuant to a stipulation of dismissal with prejudice signed by all parties and approved by the district court. App. at 130-31
2
This opinion will be referred to throughout as the opinion of the district court judges. The citation A.M.C. refers to the American Maritime Cases series of reports
3
The three other cases were: Sun Oil Co. of Pennsylvania v. M/T Mercedes Maria, No. 80-4862; Sun Oil Co. of Pennsylvania v. M/T Mercedes Maria, No. 81-1033; and Sun Oil Co. of Pennsylvania v. Robina Shipping, Inc., No. 81-1083, all filed in the Eastern District of Pennsylvania. The three-judge panel denied Sun's motion for certification of the question pursuant to 28 U.S.C. Sec. 1292(b) (1982) before returning the cases to the individual judges. App. at 267. The other three cases have apparently been concluded, but the record before us provides no further information as to the use of the three judge opinion in the disposition of these cases
4
By convention, the volume of oil is always given on the assumption that the oil is at 60? F
5
One commentator suggests that the actual figure, 0.5%, derives from "the standard deductible used in the insurance industry on cargoes of crude oil." Thomajan, Tanker Problems in Arbitration: The 0.5% Allowance, 14 J.Mar.L. & Com. 225, 226 (1983)
6
The Uniform Commercial Code Sec. 1-205(2) states, in pertinent part:
A usage of trade is any practice or method of dealing having such regularity of observance in a place, vocation or trade as to justify an expectation that it will be observed with respect to the transaction in question.
The Restatement (Second) of Contracts Sec. 222(1) states, in pertinent part:
A usage of trade is a usage having such regularity of observance in a place, vocation, or trade as to justify an expectation that it will be observed with respect to a particular agreement.
7
Sun contends that there is no evidence to support these findings, arguing that its experts never acknowledged the alleged custom and that the negotiations referred to by the court did not concern the alleged trade allowance but rather the shippers' right to deduct freight for cargo lost or remaining on board after discharge. It further contends that the evidence shows that, if anything, the 0.5% allowance represents a "settlement device," not a term in the contract. See Appellants' Reply Brief at 19-22. The district court specifically rejected this contention. 1983 A.M.C. at 725 n. 2. As noted previously in the text, we do not reach these arguments
8
See generally Chandler, A Comparison of "COGSA", the Hague/Visby Rules, and the Hamburg Rules, 15 J.Mar.L. & Com. 233, 289-91 (1984) (listing countries adopting Hague Rules in some form)
9
In May v. Hamburg-Amerikanische Packetfahrt Aktiengesellschaft, 290 U.S. 333, 350-54, 54 S.Ct. 162, 166-68, 78 L.Ed. 348 (1933) (The Isis ), the Court held that the Harter Act allowed a shipper to recover even without a causal connection between the unseaworthiness of the vessel and loss of cargo if it could show the shipowner did not exercise due diligence in making the vessel seaworthy
10
Later developments are described in Chandler, supra note 7 at 233-91, and Yancey, supra at 1246-59
11
Ordinarily, the quantity of oil is measured four times: on shore before loading; on ship after loading; on ship prior to discharge; and on shore after discharge. Although the issue before us arises in the context of ullage-to-ullage losses, i.e., the difference between the measurement in the ship's tank after loading and before unloading, the opinion of the district court judges did not always distinguish between the various measurement points. Several statements suggest that they were concerned with inadequate discharge of the cargo. For example, in explaining one of the reasons for the allowance, the opinion states that "not all oil could be removed from the inner surface of the tank." Sun Oil Co. of Pennsylvania v. M/T Mercedes Maria, 1983 A.M.C. 718, 720 (1982)
Shore-to-shore losses present different problems than ullage-to-ullage losses, because there are the intervening steps of loading and discharge for which a party other than the carrier, such as the shore facility, may be partly responsible. See, e.g., Esso Nederland v. M.T. Trade Fortitude, 1977 A.M.C. 2144, 2147 (S.D.N.Y.1977), aff'd mem., 573 F.2d 1294 (2d Cir.1977). COGSA covers only the rights of shippers against carriers for cargo shipped under bills of lading, and does not purport to govern claims against independent shore facilities or others. See Robert C. Herd & Co. v. Krawill Machinery Corp., 359 U.S. 297, 301-03, 79 S.Ct. 766, 769-70, 3 L.Ed.2d 820 (1959). In cargo loss cases, courts generally use the ullage-to-ullage measurements because these figures are usually the best measure of the loss occurring while the cargo is, under COGSA, the carrier's responsibility. See Amoco Oil Co. v. M/V Lorenzo Halcoussi, 1984 A.M.C. 1608, 1614-15 (E.D.La.1983) (using shore measurements only because ullage measurements admittedly inaccurate). When shore figures are used simply as the best estimate of the carrier's liability for cargo loss, the issue would be the same as that presently before us.
12
Although we do not determine whether the factual finding is "clearly erroneous," we note that there is some support for Sun's position that this is so in light of the equivocal and conflicting testimony. The carrier's three expert witnesses testified to the existence of a 0.5% customary trade allowance, App. at 606-07 (Abugel), 787 (Palmer), 1155-56 (Kingston), but Sun raised substantial challenges to the qualifications of all three based on their lack of relevant experience negotiating charter parties or settling cargo claims. Furthermore, cross-examination and rebuttal witnesses significantly weakened the force of their testimony. Sun's witnesses testified relatively steadfastly to the unreasonableness of the 0.5% figure and to the consistent refusal of the oil companies in recent years to recognize the alleged custom, except perhaps as a basis for settlement of cargo loss claims. See, e.g., App. at 347, 362 (Muccini); 883, 897 (Flanagan)
13
Even if the dissent were correct in characterizing the trade allowance solely as a mismeasurement allowance, we see no reason why measurement imprecision could not be encompassed within the inherent vice provision of COGSA, 46 U.S.C. Sec. 1304(2)(m). It would, therefore, still be inconsistent with COGSA for the reasons set forth above
14
Sun argues that Tradax's stipulation to the fact that Sun's expert would testify as described requires summary judgment in its favor. Tradax, however, has not stipulated to the truth of what the expert will say and must have the opportunity to litigate its COGSA defenses
1
The majority correctly characterizes the district court judges as attributing the 0.5% allowance to both problems of measurement and "inevitable loss." We disagree, however, that this "loss" is the kind of fault-based loss addressed by COGSA. On the contrary, "inevitable loss," like problems of measurement, follows from the inherent characteristics of the oil and the nature of the carriage
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718 F.Supp.2d 1352 (2010)
In re: CHECKING ACCOUNT OVERDRAFT LITIGATION,
This Document Relates to: Johnson
v.
KeyBank National Association; S.D. Fla. Case No. 1:10-cv-21176-JLK W.D. Wa. Case No. 2:10-cv-304.
No. 09-MD-02036-JLK, MDL 2036.
United States District Court, S.D. Florida, Miami Division.
June 16, 2010.
*1355 Mark A. Griffin, Karin B. Swope, Keller Rohrback LLP, Seattle, WA, Bruce S. Rogow, Robert C. Gilbert, Alter, Boldt, Brown, Rash, Culmo, Miami, FL, Edward Adam Webb, G. Franklin Lemond, Jr., Webb, Klase & Lemond, LLC, Atlanta, GA, Robert C. Josefsberg, Victor M. Diaz, Jr., John Gravante, III, Podhurst Orseck, P.A., Miami, FL, Barry R. Himmelstein, Michael W. Sobol, Jordan Elias, Mikaela Bernstein, Lieff Cabraser Heimann & Berstein LLP, San Francisco, CA, Ruben Honik, Kenneth J. Grunfeld, Golomb & Honik, PC, Philadelphia, PA, Ted E. Trief, Barbara E. Olk, Trief & Olk, New York, NY, Russell W. Budd, Bruce W. Steckler, Melissa K. Hutts, Baron & Budd, PC, Dallas, TX, for Plaintiffs.
Alan G. Kipnis, John M. Cooney, Arnstein & Lehr, LLP, Fort Lauderdale, TX, for Defendants KeyBank National Association.
ORDER DENYING MOTION TO COMPEL ARBITRATION
JAMES LAWRENCE KING, District Judge.
THIS CAUSE comes before the Court upon KeyBank's Motion to Compel Arbitration (DE # 425) filed May 3, 2010. On May 20, 2010, Plaintiff Responded (DE # 493) and on June 1, 2010, Defendant Replied (DE # 530).
Currently the Court has ruled on six (6) previously filed Motions to Compel Arbitration. Five were denied (DE # 447) and one was granted (DE # 514). This Court's May 10th Order Denying Motions to Compel Arbitration and May 25th Order Granting the Motion to Compel Arbitration are incorporated into this Order by reference and the Court will not restate the factual background or legal basis for those Opinions.
In this Order the Court addresses: (A) whether Ohio or Washington law applies; and (B) whether the arbitration provision and its un-severable class action waiver are unconscionable under the applicable law.
A. Choice of Law Analysis
The parties disagree on whether the state law of Ohio or Washington applies to the interpretation of this Agreement. Ohio law is the law specified by the Agreement. (Agreement at ¶ 26, Ex. A to Def. Mot. to Compel Arb. ("This Agreement and all Accounts shall be governed by the laws of the State of Ohio (without regard to conflict of law rules) and applicable federal law, but with respect to all fees and charges related to your Account, federal law alone controls.").) Washington law, on the other hand, is the law of the forum state; the case was filed in the Western District of Washington.
In a multi-district litigation case, the transferee court applies the choice of law rules of the state in which the action was filed. Menowitz v. Brown, 991 F.2d 36, 40 (2d Cir.1993) (citations omitted). The Court must therefore undertake a choice of law analysis under Washington law to determine whether Washington or Ohio law applies. See James Russell Engineering Works, Inc. v. Clean Fuels, LLC, No. C08-1427-MJP, 2009 WL 2406331 (W.D.Wa., August 3, 2009). Under Washington law, "choosing the applicable law is a two-part inquiry: first a court must determine whether there is an actual and meaningful difference between the potentially applicable laws; and second, a court must determine whether the parties' choice-of-law is actually effective." Coneff v. AT & T Corp., 620 F.Supp.2d 1248, 1252 (W.D.Wash.2009).
*1356 First, "there must be an actual conflict between the laws or interests of Washington and the laws or interests of another state...." Id. (citation omitted). Here, an actual conflict exists. As the court in Coneff noted, "there is a split of authority in this country over the enforceability of class-action waivers." 620 F.Supp.2d at 1253 (citing Scott v. Cingular Wireless, 160 Wash.2d 843, 161 P.3d 1000, 1004-05 (2007) (collecting cases)) (finding Washington law in contrast with Virginia, Illinois, and Alabama law which have all upheld arbitration clauses). Generally, Washington courts have invalidated class action waivers, whereas Ohio courts have upheld these waivers. See e.g., Scott, 161 P.3d at 1004-05; Credit Acceptance Corp. v. Davisson, 644 F.Supp.2d 948 (N.D.Ohio 2009). For example, a Washington court invalidated a class action waiver when applied to Washington's Consumer Protection Act (Scott, 161 P.3d at 1006), whereas an Ohio court upheld the waiver in connection with Ohio's Consumer Protection Act (Credit Acceptance Corp., 644 F.Supp.2d at 958-59). Further, whereas Ohio law requires both substantive and procedural unconscionability to invalidate a provision, under Washington law a provision may be deemed unenforceable based solely upon substantive unconscionability. See e.g., Hayes v. Oakridge Home, 122 Ohio St.3d 63, 908 N.E.2d 408, 412 (2009); Coneff, 620 F.Supp.2d at 1256. Thus, there is an actual conflict between Washington and Ohio law.
Regarding the second inquiry, the Court must determine whether the parties' contractual choice of law is effective. Washington follows the Restatement (Second) of Conflict of Laws. Id. Thus, under Washington law, a contractual choice of law provision is binding unless:
(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.
Restatement (Second) of Conflicts of Laws § 187(2).
The exception outlined in Section (a) does not apply. Ohio has a substantial connection to the parties. Defendant Key-Bank is headquartered in the state of Ohio and deemed to be a citizen of Ohio. Thus, the Court must consider the complex inquiry required for the exception under section (b).
According to Washington law, section (b) requires a three part inquiry: (i) whether Washington law governs absent an enforceable choice of law clause; (ii) whether the contract would violate a fundamental public policy of Washington; and (iii) whether Washington has a materially greater interest in adjudicating the dispute than the other possible forum.
The first inquiry under section (b) is whether Washington law would apply absent the provision. Coneff, 620 F.Supp.2d at 1253. Washington courts have considered various factors when making this inquiry. Id. Courts have applied the `most significant relationship' test which asks a court to consider "(1) the place of contracting, (2) the place of negotiation of the contract, (3) the place of performance, (4) the location of the subject matter of the *1357 contract, and (5) the domicile, residence, or place of incorporation of the parties." Id. (citations omitted). Here, the contract was negotiated, signed and performed in Washington. Plaintiff entered a Washington branch of KeyBank, signed a contract with a local, Washington KeyBank representative, and deposited and withdrew funds from a local, Washington KeyBank. (Dec. of David M. Johnson, Ex. 1 to Opp. to Mot. to Compel.) The statements and Notice of Arbitration were all sent to Plaintiff's Washington home and his domicile and residence is Washington. (Id.)
Defendant contends that the place of injury factor is not as important in a class action; rather, "the state in which the fraudulent conduct arises has a stronger relationship to the action." (Def.'s Reply at 7 (quoting Coneff, 620 F.Supp.2d at 1254).) Here, Defendant asserts that the alleged deceptive conduct, the implementation of KeyBank's nationwide overdraft policy, arose in Ohio. This argument fails based on the asserted facts of this case. The alleged fraudulent conduct occurred in Washington. All conduct related to Plaintiff's relationship with KeyBank, the only relationship currently at issue in this case, took place in the state of Washington. The Agreement outlining the overdraft fees at issue was signed in Washington, Plaintiff made the alleged overdrafts in Washington, and he was charged all overdraft fees in Washington. Although Defendant urges the Court to view the issue in terms of many, as yet, non-existent class members, the Court currently has only one named Plaintiff before it. Thus, the Court finds that Washington has the most significant relationship to this case and that Washington law applies absent the contractual provision.
The Court must next determine whether the arbitration provision (and its class action waiver) violates a fundamental policy of Washington law. This is not an inquiry into whether this class action ban is unconscionable or whether a class action ban may be unconscionable under Washington law; rather, the Court must determine whether Washington has declared a strong public policy against class action waivers. The Court finds that it has.
Washington courts have found that Washington has a strong public policy in favor of class actions. See e.g., Coneff, 620 F.Supp.2d at 1255; Scott, 161 P.3d at 1007-08; McKee v. AT & T Corp., 164 Wash.2d 372, 191 P.3d 845, 852 (2008). "Washington courts favor a liberal interpretation of CR 23 [Class Actions] as the rule avoids multiplicity of litigation, `saves members of the class the cost and trouble of filing individual suits[,] and ... also frees the defendant from the harassment of identical future litigation.'" Scott, 161 P.3d at 1007 (quoting Smith v. Behr Process Corp., 113 Wash.App. 306, 54 P.3d 665, 672-73 (2002) (alteration in original)). Thus, "the interests of justice require that in a doubtful case . . . any error, if there is to be one, should be committed in favor of allowing the class action." Scott, 161 P.3d at 1008 (citations omitted). Moreover, while undergoing a similar choice of law analysis, the court in McKee explained Washington's public policy in favor of class actions: "Protecting parties in a position of weaker bargaining power from exploitation is among the types of fundamental public policy contemplated by [the Restatement]." McKee, 191 P.3d at 852. Under Ohio law, however, class action waivers can be upheld, contrary to Washington's strong public policy against these waivers. See e.g. Credit Acceptance Corp., 644 F.Supp.2d at 959 ("[An] overwhelming majority of courts have enforced class action *1358 waivers [under Ohio law]") (citations omitted). Thus, the Court finds that the second element of the Restatement, that there be a violation of a fundamental public policy, has been met.
Lastly, the Court must determine whether Washington has a materially greater interest in adjudicating this dispute than Ohio. The Court finds that it does. Washington has an interest in protecting its consumers who bank at Key-Bank and regulating a business that operates in its state. This interest is greater than that of Ohio which does not have the same interest in protecting Washington consumers. Thus, the Agreement's choice of law provision is not binding and the Court will apply Washington law to determine whether the arbitration provision of this Agreement is valid and enforceable.
B. Unconscionability
Under Washington law, a court may invalidate a provision of an Agreement if it is either substantively or procedurally unconscionable. Coneff, 620 F.Supp.2d at 1256 (citing Scott, 161 P.3d at 1006 n. 4). "Substantive unconscionability involves those cases where a clause or term in the contract is alleged to be onesided or overly harsh, while procedural unconscionability relates to impropriety during the process of forming a contract." Schroeder v. Fageol Motors, Inc., 86 Wash.2d 256, 544 P.2d 20, 23 (1975). The Court finds that the arbitration provision of the Agreement is substantively unconscionable and therefore limits this analysis to substantive unconscionability. See Scott, 161 P.3d at 1006 n. 4 ("Because we find the class action waiver substantively unconscionable, we find it unnecessary to address plaintiffs' claims of procedural unconscionability.").
A Washington court found a similar class action waiver substantively unconscionable in Scott, 161 P.3d at 1006-07. In Scott the court explained that class actions are "often the only meaningful type of redress available for small but widespread injuries.... Without it, many consumers may not even realize that they have a claim." Id. at 1007. Further, the court explained that individuals are not likely to pursue these types of small claims because of the cost, time, energy and stress necessary to pursue such small claims individually. Id. at 1007. Thus, even though on its face a class action waiver does not exculpate a corporation from liability, "where the cost of pursuit outweighs the potential amount of recovery," a corporation is in effect exculpated. Id. The Scott court therefore found that the class action waiver "effectively prevents one party to the contract, the consumer, from pursuing valid claims, effectively exculpating the drafter from potential liability for small claims, no matter how widespread." Id.
Similarly, the class-action waiver in this Agreement, effectively shields Defendant from liability since the cost of pursuing arbitration on an individual basis outweighs the potential amount of recovery. Plaintiff's claims are for $39 overdraft charges which total only $555 in alleged damages. A class action is therefore the only means available to adequately redress this injury. "The realistic alternative to a class action is not 17 million individual suits, but zero individual suits, as only a lunatic or a fanatic sues for $30." Id. (quoting Carnegie v. Household Intern., Inc., 376 F.3d 656, 661 (7th Cir.2004)). As addressed in the Court's previous Order Denying Motions to Compel Arbitration, an individual Plaintiff would likely be deterred from pursuing an individual action against a large bank for such a small *1359 amount of possible recovery. Under the facts in this case, the Court finds that the potential costs of arbitrating a claim would deter potential plaintiffs from seeking to vindicate their rights in an arbitral forum.
Moreover, the confidentiality provision in this Agreement is one-sided and only benefits the Defendant. (Agreement at ¶ 25 (both parties must "keep confidential any decision of an arbitrator").) The court in Zuver v. Airtouch Communications found that a confidentiality provision, in an individual statutory context, "undermines an employee's confidence in the fairness and honesty of the arbitration provision and thus, potentially discourages that employee from pursuing a valid discrimination claim." 153 Wash.2d 293, 103 P.3d 753, 756 (2004). In this case, Defendant's onesided access to information would similarly discourage a plaintiff from bringing a suit. KeyBank would have the benefit of knowing what happened in past arbitrations while Plaintiff would not. Defendant responds that the confidentiality provision is severable. Severing the clause, however, would not affect Plaintiffs incentive to bring a suit. Even if future plaintiffs could learn the outcome of this arbitration, Plaintiff would still be denied information regarding previous arbitrations. Plaintiff would therefore still not have access to the same information as Defendant, even if the clause was severed from this particular Agreement and Plaintiff would continue to be discouraged from bringing a suit.
Defendant asserts that this clause is not substantively unconscionable because (i) Defendant will pay part of Plaintiffs arbitration costs; (ii) Washington's Consumer Protection Act ("WCPA") provides for mandatory prevailing plaintiffs attorneys fees; and (iii) Plaintiff could have opted out of the arbitration provision.
The Agreement states that:
At your written request, we will pay all fees up to $100.00 charged by the arbitration administrator for any Claim(s) asserted by you in the arbitration, after you have paid an amount equivalent to the fee, if any, for filing such Claim(s) in state or federal court (whichever is less) in the judicial district in which you reside.... If you are required to pay any fees in excess of $100.00 to the arbitration administrator ("additional fees") we will consider a request by you to pay all or part of the additional fees. To the extent that we do not approve your request, the arbitrator will decide whether we or you will be responsible for paying any such additional fees.
(Agreement at 11.) Defendant is therefore not offering to cover all of Plaintiffs arbitration costs; rather, after a plaintiff has paid a fee of up to a $100, by written request, Defendant will reimburse Plaintiff $100 of that fee. A plaintiff, deterred by the costs of individual arbitration, would not decide to bring a claim for the promise of a $100 reimbursement. Defendant asserts that Plaintiffs costs for an arbitrator will be limited to either $125 (if the American Arbitration Association provides the arbitrator) or $250 (if the Judicial Arbitration and Mediation Services presides). Nevertheless, as discussed in this Court's previous Order, those limitations are up to the arbitrator's discretion and the possibility that a plaintiff would be charged more is enough to deter a plaintiff from bringing an individual claim. Further, there are other costs to arbitration, such as room fees, that Defendant's $100 reimbursement would not cover. The Court is unpersuaded by Defendant's argument that Plaintiff would be induced to bring an individual claim for only $555 in damages.
Similarly, while the WCPA does provide for mandatory prevailing plaintiffs attorney's *1360 fees, this is not sufficient to induce a Plaintiff to bring an individual claim in these circumstances. Evaluating a class action waiver for a claim brought under the WCPA, the court in Scott explained that even with a prevailing plaintiffs attorney's fees provision the plaintiffs attorney is only paid if the plaintiff wins, whereas defendant's attorneys are paid regardless.[1]See 161 P.3d at 1007. Further, the court held that "[e]ven if all of the contingencies are met and attorney fees are awarded, the arbitrator may consider the amount in controversy in awarding fees. While technically the plaintiffs are not prevented from hiring an attorney, practically, attorneys are generally unwilling to take on individual arbitrations to recover trivial amounts of money." Id. Further, the award of attorney's fees does not address the arbitration costs that the Plaintiff would be required to expend to bring the case. Even with the promise of attorney's fees, a plaintiff would still be disinclined to bring an individual claim under this Agreement.
Finally, Defendant asserts that the optout provision in the Agreement validates the arbitration provision. In his Declaration, Ray Freas[2] stated that an "Arbitration Statement Message" was sent to Plaintiffs home on June 30, 2004.[3] (Dec. of Ray Freas, Ex. 1 to Reply at 4.) This Message included the newly added arbitration provision and informed the account owner that he had until November 1, 2004 to reject the provision. (Id.)
The Court agrees with Defendant that generally an opt-out provision can affect whether an agreement is procedurally unconscionable. A court considering procedural unconscionability addresses the relative bargaining positions of the contracting parties. One factor to consider in an analysis of procedural unconscionability is whether the Plaintiff signed the Agreement on a take-it-or-leave-it basis. An opt-out provision may affect this analysis, as a contract is not offered on a takeit-or-leave-it basis if the Plaintiff has the option to reject the terms of the arbitration provision without any adverse consequences. See Honig v. Comcast of Ga., LLC, 537 F.Supp.2d 1277 (N.D.Ga.2008).
An analysis of substantive unconscionability, however, is different. To determine substantive unconscionability, a court addresses whether, in effect, the clause is too one-sided or harsh. Defendant asserts that the opt-out provision provides a plaintiff with the opportunity to access the courts by opting out of the arbitration provision. Thus, Defendant contends that the provision does not prohibit a plaintiff from vindicating his or her rights. The Court, however, finds this argument lacking. *1361 The Court's determination that the potential costs of arbitrating a claim would deter potential plaintiffs from seeking to vindicate their rights is not affected by the fact that Plaintiff could have opted out previously. As discussed above, it may affect whether Plaintiff can contend he had no option but to agree to the waiver, but it does not affect whether Plaintiff would be deterred from bringing a claim under the terms of the Agreement now. In other words, the prohibitive costs of bringing an individual claim in arbitration are not ignored simply because Plaintiff was not forced to agree to them at the outset. Moreover, while Defendant cites to a myriad of cases that found an opt-out provision affected procedural unconscionability, none of Defendant's cases specifically found that an opt-out provision affects substantive unconscionability. See e.g., Martin v. Del. Title Loans, Inc., No. 08-3322, 2008 WL 4443021 (E.D.Pa. Oct. 1, 2008) (finding plaintiff could not establish procedural unconscionability under Pennsylvania law in light of 15 day opt-out right); Enderlin v. XM Satellite Radio Holdings, Inc., No. 06-0032, 2008 WL 830262 (E.D.Ark. March 25, 2008) (finding plaintiff could not establish procedural unconscionability in light of opt-out right). Therefore, the existence of an opt out provision does not affect the Court's finding of substantive unconscionability in this case.
In sum, based on the facts before this Court, this arbitration provision will have the practical effect of precluding consumers from bringing an action against Key-Bank and is therefore substantively unconscionable and invalid under Washington law.
Accordingly, after a careful review of the record, and the Court being otherwise fully advised, it is ORDERED, ADJUDGED and DECREED that KeyBank's Motion to Compel Arbitration (DE # 493) be, and the same is hereby, DENIED.
NOTES
[1] Under the Agreement at issue in Scott, a plaintiff may only recover attorney's fees if the Plaintiff is awarded the full amount of their demand. Here, the Agreement does not impose the same limitation on a plaintiff; nevertheless, the same principles apply. Defendant's attorneys are still guaranteed payment, whereas Plaintiff's attorney must win to be paid, and even then the amount is in the arbitrator's discretion.
[2] The National Manager of Print and Statement Rendering at KeyBank.
[3] Plaintiff disagrees with Defendant, stating in his Declaration: "I never recall a notice telling me KeyBank was adding an arbitration provision to my agreement.... I also do not recall ever agreeing to an arbitration provision of any dispute that would arise out of my deposit agreement." The Court will not resolve this factual dispute at this time because it finds that the opt-out provision does not affect its finding of substantive unconscionability in this action.
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57 F.3d 1069NOTICE: 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.
Gregory D. JOHNSON, Petitioner-Appellee,v.Joseph ABRAMAJTYS, Defendant-Appellant.
No. 94-1879.
United States Court of Appeals, Sixth Circuit.
June 8, 1995.
Before: KENNEDY and NORRIS, Circuit Judges; and WEBER, District Judge.*
PER CURIAM.
1
Respondent, a Michigan warden, appeals the District Court's order granting petitioner a writ of habeas corpus pursuant to 28 U.S.C. Sec. 2254. Petitioner was convicted of sexually abusing his girlfriend's five-year old son, in violation of Michigan Compiled Laws Sec. 750.520b(1)(a). The District Court found that petitioner was convicted based upon insufficient evidence in violation of the right to due process guaranteed by the Fourteenth Amendment. After examining the trial transcript and the briefs submitted in this case, we agree with the District Court's conclusion. Accordingly, we affirm the District Court's grant of the writ of habeas corpus based upon the reasoning in the District Court's opinion.
*
The Honorable Herman J. Weber, United States District Judge for the Southern District of Ohio, sitting by designation
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107 F.3d 18
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellee,v.Carrell Adrin HAUGHT, Defendant-Appellant.
No. 96-16275.
United States Court of Appeals, Ninth Circuit.
Submitted Jan. 21, 1997.*Decided Jan. 27, 1997.
Before: O'SCANNLAIN, LEAVY, and KLEINFELD, Circuit Judges.
1
MEMORANDUM**
2
Carrell Adrin Haught appeals pro se the district court's grant of summary judgment in favor of the United States and issuance of an injunction requiring him to submit a plan of operations and post a reclamation bond for his unpatented lode mining claims located in Arizona's Tonto National Forest. We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm.
3
Haught contends that the district court erred by granting summary judgment for the United States because the United States Forest Service ("USFS") did not have the authority to require Haught to submit a plan of operations or to post a reclamation bond. This contention lacks merit.
4
We review de novo the district court's grant of summary judgment. Bagdadi v. Nazar, 84 F.3d 1194, 1197 (9th Cir.1996). We must determine, viewing the evidence in the light most favorable to the nonmoving party, whether there are any genuine issues of material fact and whether the district court correctly applied the relevant substantive law. Id. "Whether a plan of operation is required is a question of law that we review de novo." United States v. Brunskill, 792 F.2d 938, 940 (9th Cir.1986).
5
The General Mining Law of 1872, 30 U.S.C. § 22, permits an individual to "enter and explore land in the public domain in search of valuable mineral deposits." Swanson v. Babbitt, 3 F.3d 1348, 1350 (9th Cir.1993). If minerals are discovered, the claimant may file a mining claim with the Bureau of Land Management which, if approved, entitles the claimant to exclusive possession of that claim. Id. Ownership of a mining claim does not confer fee title in the land to the claimant, unless that mining claim is patented. Id.
6
The Organic Administration Act of 1897, 16 U.S.C. §§ 478 & 551, authorizes the Secretary of Agriculture to promulgate rules and regulations for the protection and preservation of national forests. United States v. Weiss, 642 F.2d 296, 298 (9th Cir.1981). The purpose of these regulations is to ensure that authorized mining operations are "conducted so as to minimize adverse environmental impacts on National Forest System surface resources." 36 C.F.R. § 228.1; see also Brunskill, 792 F.2d at 940. "If the District Ranger determines that such operations will likely cause significant disturbance of the surface resources, the operator shall submit a proposed plan of operations to the District Ranger." 36 C.F.R. § 228.4(a).
7
Here, the complaint alleges that Haught violated various regulations by maintaining structures, vehicles, and equipment on the subject lands in the Tonto National Forest without first submitting a plan of operations and posting a reclamation bond. See 36 C.F.R. §§ 228.4, 228.5, 261.9, and 261.10. It is undisputed that Haught refused to obtain a plan of operations or post a reclamation bond.
8
Haught's argument that the "claims validity adjudication in 1963 and 1964 resulted in a grant of rights to [Haught] tantamount to fee title" is without merit because Haught's mining claims were not patented and he has not applied for a patent. See Swanson, 3 F.3d at 1350. Haught's additional argument that the applicable regulations do not apply to him since the regulations were promulgated in 1978 and Haught's mining activities pre-date 1978 is without merit. The "regulations apply to operations hereafter conducted under the United States mining laws of May 10, 1872...." 36 C.F.R. § 228.2; see also Brunskill, 792 F.2d at 939 (applying the regulations to a mining claim purchased in 1959).
9
Although Haught concedes that he has "worked" the claims since 1977, he argues that he should not be required to submit a plan of operations because he is not conducting "mining operations" and does not "intend to do so for the foreseeable future." If Haught intends to cease operations temporarily, he must file a statement to that effect with the District Ranger and appropriate procedures may ensue. 36 C.F.R. § 228.10; see also Brunskill, 792 F.2d at 940. If Haught intends to maintain the structures on the surface of his mining claim for present or future mining operations, he is subject to the requirement that he submit a plan of operations. See id. at 941.
10
Because the USFS has the power to require Haught to submit a plan of operations and post a reclamation bond or file a statement of intent to cease operations, see id., the district court did not err by granting summary judgment for the United States, see Bagdadi, 84 F.3d at 1197. Moreover, the district court did not err by enjoining Haught from further mining activity until he submitted a plan of operations and posted a reclamation bond. See Brunskill, 792 F.2d at 941; Weiss, 642 F.2d at 299.
AFFIRMED.1
*
The panel unanimously finds this case suitable for decision without oral argument. See Fed.R.App.P. 34(a); 9th Cir.R. 34-4. Accordingly, Haught's request for oral argument is denied
**
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
1
While district courts should not grant summary judgment motions without a hearing if the nonmoving party requests oral argument, see Dredge Corp. v. Penny, 338 F.2d 456, 461 (9th Cir.1964), the failure to conduct a hearing is only reversible error if there is a showing of prejudice, see Lake at Las Vegas Investors Group, Inc. v. Pacific Malibu Dev. Corp., 933 F.2d 724, 728-729 (9th Cir.1991). Here, Haught was represented by counsel below and filed a written opposition to summary judgment. Because Haught has not shown that he was prejudiced by the denial of oral argument, we reject Haught's contention that he should have been allowed to argue his opposition to summary judgment before the district court. See id
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826 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.Irwin DESMONDE, Plaintiff-Appellant,v.LANE BRYANT, INC., Defendant-Appellee.
No. 86-1675
United States Court of Appeals, Sixth Circuit.
Aug. 12, 1987.
Before CORNELIA G. KENNEDY and DAVID A. NELSON, Circuit Judges, and CELEBREZZE, Senior Circuit Judge.
PER CURIAM:
1
Plaintiff-appellant, Irwin Desmonde, died on November 30, 1984. Betty Desmonde, plaintiff-appellant's widow and personal representative, made a motion for substitution pursuant to Fed. R. Civ. Pro. 25(a)(1). This Court hereby grants this motion.
2
Upon consideration of the entire record and the briefs filed herein, we affirm the judgment of the District Court for the reasons stated by Judge Pratt in his Memorandum Opinion filed June 26, 1985.
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462 U.S. 476 (1983)
PLANNED PARENTHOOD ASSOCIATION OF KANSAS CITY, MISSOURI, INC., ET AL.
v.
ASHCROFT, ATTORNEY GENERAL OF MISSOURI, ET AL.
No. 81-1255.
Supreme Court of United States.
Argued November 30, 1982
Decided June 15, 1983[*]
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
*477 Frank Susman argued the cause and filed briefs for petitioners in No. 81-1255 and respondents in No. 81-1623.
John Ashcroft, Attorney General of Missouri, pro se, argued the cause for respondents in No. 81-1255 and petitioners in No. 81-1623. With him on the briefs was Michael L. Boicourt, Assistant Attorney General.[]
Briefs of amici curiae urging affirmance were filed by Sylvia A. Law, Nadine Taub, and Ellen J. Winner for the Committee for Abortion Rights and Against Sterilization Abuse et al.; and by James Bopp, Jr., for the National Right to Life Committee, Inc.
Briefs of amici curiae were filed by Solicitor General Lee, Assistant Attorney General McGrath, and Deputy Solicitor General Geller for the United States; by Alan Ernest for the Legal Defense Fund for Unborn Children; by Judith Levin for the National Abortion Federation; by Phyllis N. Segal, Judith I. Avner, and Jemera Rone for the National Organization for Women; by Eve W. Paul and Dara Klassel for the Planned Parenthood Federation of America, Inc., et al.; by Nancy Reardan for Women Lawyers of Sacramento et al.; and by Susan Frelich Appleton and Paul Brest for Professor Richard L. Abel et al.
*478 JUSTICE POWELL announced the judgment of the Court in Part VI and delivered the opinion of the Court with respect to Parts I and II and an opinion with respect to Parts III, IV, and V, in which THE CHIEF JUSTICE joins.
These cases, like City of Akron v. Akron Center for Reproductive Health, Inc., ante, p. 416, and Simopoulos v. Virginia, post, p. 506, present questions as to the validity of state statutes or local ordinances regulating the performance of abortions.
I
Planned Parenthood Association of Kansas City, Missouri, Inc., two physicians who perform abortions, and an abortion clinic (plaintiffs) filed a complaint in the District Court for the Western District of Missouri challenging, as unconstitutional, several sections of the Missouri statutes regulating the performance of abortions. The sections relevant here include Mo. Rev. Stat. § 188.025 (Supp. 1982), requiring that abortions after 12 weeks of pregnancy be performed in a hospital;[1] § 188.047, requiring a pathology report for each abortion performed;[2] § 188.030.3, requiring the presence of a second *479 physician during abortions performed after viability;[3] and § 188.028, requiring minors to secure parental or judicial consent.[4]
*480 After hearing testimony from a number of expert witnesses, the District Court invalidated all of these sections except the pathology requirement. 483 F. Supp. 679, 699-701 (1980).[5] The Court of Appeals for the Eighth Circuit *481 reversed the District Court's judgment with respect to § 188.028, thereby upholding the requirement that a minor secure parental or judicial consent to an abortion. It also held that the District Court erred in sustaining § 188.047, the pathology requirement. The District Court's judgment with respect to the second-physician requirement was affirmed, and the case was remanded for further proceedings and findings relating to the second-trimester hospitalization requirement. 655 F. 2d 848, 872-873 (1981). On remand, the District Court adhered to its holding that the second-trimester hospitalization requirement was unconstitutional. The Court of Appeals affirmed this judgment. 664 F. 2d 687, 691 (1981). We granted certiorari. 456 U. S. 988 (1982).
The Court today in City of Akron, ante, at 426-431, has stated fully the principles that govern judicial review of state statutes regulating abortions, and these need not be repeated here. With these principles in mind, we turn to the statutes at issue.
II
In City of Akron, we invalidated a city ordinance requiring physicians to perform all second-trimester abortions at general or special hospitals accredited by the Joint Commission on Accreditation of Hospitals (JCAH) or by the American Osteopathic Association. Ante, at 431-432. Missouri's hospitalization requirements are similar to those enacted by Akron, as all second-trimester abortions must be performed in general, acute-care facilities.[6] For the reasons stated in City of *482 Akron, we held that such a requirement "unreasonably infringes upon a woman's constitutional right to obtain an abortion." Ante, at 439. For the same reasons, we affirm the Court of Appeals' judgment that § 188.025 is unconstitutional.
III
We turn now to the State's second-physician requirement. In Roe v. Wade, 410 U. S. 113 (1973), the Court recognized that the State has a compelling interest in the life of a viable fetus: "[T]he State in promoting its interest in the potentiality of human life may, if it chooses, regulate, and even proscribe, abortion except where it is necessary, in appropriate medical judgment, for the preservation of the life or health of the mother." Id., at 164-165. See Colautti v. Franklin, 439 U. S. 379, 386-387 (1979); Beal v. Doe, 432 U. S. 438, 445-446 (1977). Several of the Missouri statutes undertake such regulation. Postviability abortions are proscribed except when necessary to preserve the life or the health of the woman. Mo. Rev. Stat. § 188.030.1 (Supp. 1982). The *483 State also forbids the use of abortion procedures fatal to the viable fetus unless alternative procedures pose a greater risk to the health of the woman. § 188.030.2.
The statutory provision at issue in this case requires the attendance of a second physician at the abortion of a viable fetus. § 188.030.3. This section requires that the second physician "take all reasonable steps in keeping with good medical practice . . . to preserve the life and health of the viable unborn child; provided that it does not pose an increased risk to the life or health of the woman." See n. 3, supra. It also provides that the second physician "shall take control of and provide immediate medical care for a child born as a result of the abortion."
The lower courts invalidated § 188.030.3.[7] The plaintiffs, respondents here on this issue, urge affirmance on the *484 grounds that the second-physician requirement distorts the traditional doctor-patient relationship, and is both impractical and costly. They note that Missouri does not require two *485 physicians in attendance for any other medical or surgical procedure, including childbirth or delivery of a premature infant.
The first physician's primary concern will be the life and health of the woman. Many third-trimester abortions in Missouri will be emergency operations,[8] as the State permits these late abortions only when they are necessary to preserve the life or the health of the woman. It is not unreasonable for the State to assume that during the operation the first physician's attention and skills will be directed to preserving the woman's health, and not to protecting the actual life of those fetuses who survive the abortion procedure. Viable fetuses will be in immediate and grave danger because of their premature birth. A second physician, in situations where Missouri permits third-trimester abortions, may be of assistance to the woman's physician in preserving the health and life of the child.
By giving immediate medical attention to a fetus that is delivered alive, the second physician will assure that the State's interests are protected more fully than the first physician alone would be able to do. And given the compelling interest that the State has in preserving life, we cannot say that the Missouri requirement of a second physician in those unusual *486 circumstances where Missouri permits a third-trimester abortion is unconstitutional. Preserving the life of a viable fetus that is aborted may not often be possible,[9] but the State legitimately may choose to provide safeguards for the comparatively few instances of live birth that occur. We believe the second-physician requirement reasonably furthers the State's compelling interest in protecting the lives of viable fetuses, and we reverse the judgment of the Court of Appeals holding that § 188.030.3 is unconstitutional.
IV
In regulating hospital services within the State, Missouri requires that "[a]ll tissue surgically removed with the exception of such tissue as tonsils, adenoids, hernial sacs and prepuces, shall be examined by a pathologist, either on the premises or by arrangement outside of the hospital." 13 Mo. Admin. Code § 50-20.030(3)(A)7 (1977). With respect to abortions, whether performed in hospitals or in some other facility, § 188.047 requires the pathologist to "file a copy of the tissue report with the state division of health . . . ." See n. 2, supra. The pathologist also is required to "provide a copy of the report to the abortion facility or hospital in which the abortion was performed or induced." Thus, Missouri appears to require that tissue following abortions, as well as from almost all other surgery performed in hospitals, must be submitted to a pathologist, not merely examined by the performing doctor. The narrow question before us is whether the State lawfully also may require the tissue removed following *487 abortions performed in clinics as well as in hospitals to be submitted to a pathologist.
On its face and in effect, § 188.047 is reasonably related to generally accepted medical standards and "further[s] important health-related state concerns." City of Akron, ante, at 430. As the Court of Appeals recognized, pathology examinations are clearly "useful and even necessary in some cases," because "abnormalities in the tissue may warn of serious, possibly fatal disorders." 655 F. 2d, at 870.[10] As a rule, it is accepted medical practice to submit all tissue to the examination of a pathologist.[11] This is particularly important following abortion, because questions remain as to the long-range *488 complications and their effect on subsequent pregnancies. See App. 72-73 (testimony of Dr. Willard Cates, Jr.); Levin, Schoenbaum, Monson, Stubblefield, & Ryan, Association of Induced Abortion with Subsequent Pregnancy Loss, 243 J. A. M. A. 2495, 2499 (1980). Recorded pathology reports, in concert with abortion complication reports, provide a statistical basis for studying those complications. Cf. Planned Parenthood of Central Missouri v. Danforth, 428 U. S. 52, 81 (1976).
Plaintiffs argue that the physician performing the abortion is as qualified as a pathologist to make the examination. This argument disregards the fact that Missouri requires a pathologist not the performing physician to examine tissue after almost every type of surgery. Although this requirement is in a provision relating to surgical procedures in hospitals, many of the same procedures included within the Missouri statute customarily are performed also in outpatient clinics. No reason has been suggested why the prudence required in a hospital should not be equally appropriate in such a clinic. Indeed, there may be good reason to impose stricter standards in this respect on clinics performing abortions than on hospitals.[12] As the testimony in the District *489 Court indicates, medical opinion differs widely on this question. See 4 Record 623; 5 Record 749-750, 798-800, 845-847; n. 11, supra. There is substantial support for Missouri's requirement. In this case, for example, Dr. Bernard Nathanson, a widely experienced abortion practitioner, testified that he requires a pathologist examination after each of the 60,000 abortions performed under his direction at the New York Center for Reproductive and Sexual Health. He considers it "absolutely necessary to obtain a pathologist's report on each and every specimen of tissue removed from abortion or for that matter from any other surgical procedure which involves the removal of tissue from the human body." App. 143-144. See also id., at 146-147 (testimony of Dr. Keitges); 5 Record 798-799 (testimony of Dr. Schmidt).[13]
In weighing the balance between protection of a woman's health and the comparatively small additional cost of a pathologist's examination, we cannot say that the Constitution requires that a State subordinate its interest in health to minimize to this extent the cost of abortions. Even in the early weeks of pregnancy, "[c]ertain regulations that have no significant impact on the woman's exercise of her right [to *490 decide to have an abortion] may be permissible where justified by important state health objectives." City of Akron, ante, at 430. See Danforth, supra, at 80-81. We think the cost of a tissue examination does not significantly burden a pregnant woman's abortion decision. The estimated cost of compliance for plaintiff Reproductive Health Services was $19.40 per abortion performed, 483 F. Supp., at 700, n. 48, and in light of the substantial benefits that a pathologist's examination can have, this small cost clearly is justified. In Danforth, this Court unanimously upheld Missouri's record-keeping requirement as "useful to the State's interest in protecting the health of its female citizens, and [as] a resource that is relevant to decisions involving medical experience and judgment," 428 U. S., at 81.[14] We view the requirement for a pathology report as comparable and as a relatively insignificant burden. Accordingly, we reverse the judgment of the Court of Appeals on this issue.
V
As we noted in City of Akron, the relevant legal standards with respect to parental-consent requirements are not in dispute. See ante, at 439; Bellotti v. Baird, 443 U. S. 622, 640-642, 643-644 (1979) (Bellotti II) (plurality opinion); id., at 656-657 (WHITE, J., dissenting).[15] A State's interest in *491 protecting immature minors will sustain a requirement of a consent substitute, either parental or judicial. It is clear, however, that "the State must provide an alternative procedure whereby a pregnant minor may demonstrate that she is sufficiently mature to make the abortion decision herself or that, despite her immaturity, an abortion would be in her best interests."[16]City of Akron, ante, at 439-440.[17] The issue here is one purely of statutory construction: whether Missouri *492 provides a judicial alternative that is consistent with these established legal standards.[18]
The Missouri statute, § 188.028.2,[19] in relevant part, provides:
"(4) In the decree, the court shall for good cause:
"(a) Grant the petition for majority rights for the purpose of consenting to the abortion; or
"(b) Find the abortion to be in the best interests of the minor and give judicial consent to the abortion, setting forth the grounds for so finding; or
"(c) Deny the petition, setting forth the grounds on which the petition is denied."
On its face, § 188.028.2(4) authorizes Juvenile Courts[20] to choose among any of the alternatives outlined in the section. *493 The Court of Appeals concluded that a denial of the petition permitted in subsection (c) "would initially require the court to find that the minor was not emancipated and was not mature enough to make her own decision and that an abortion was not in her best interests." 655 F. 2d, at 858. Plaintiffs contend that this interpretation is unreasonable. We do not agree.
Where fairly possible, courts should construe a statute to avoid a danger of unconstitutionality. The Court of Appeals was aware, if the statute provides discretion to deny permission to a minor for any "good cause," that arguably it would violate the principles that this Court has set forth. Ibid. It recognized, however, that before exercising any option, the Juvenile Court must receive evidence on "the emotional development, maturity, intellect and understanding of the minor." Mo. Rev. Stat. § 188.028.2(3) (Supp. 1982). The court then reached the logical conclusion that "findings and the ultimate denial of the petition must be supported by a showing of `good cause.' " 655 F. 2d, at 858. The Court of Appeals reasonably found that a court could not deny a petition "for good cause" unless it first found after having received the required evidence that the minor was not mature enough to make her own decision. See Bellotti II, 443 U. S., at 643-644, 647-648 (plurality opinion). We conclude that the Court of Appeals correctly interpreted the statute and that § 188.028, as interpreted, avoids any constitutional infirmities.[21]
*494 VI
The judgment of the Court of Appeals, insofar as it invalidated Missouri's second-trimester hospitalization requirement and upheld the State's parental- and judicial-consent provision, is affirmed. The judgment invalidating the requirement of a pathology report for all abortions and the requirement that a second physician attend the abortion of any viable fetus is reversed. We vacate the judgment upholding an award of attorney's fees for all hours expended by plaintiffs' attorneys and remand for proceedings consistent with Hensley v. Eckerhart, 461 U. S. 424 (1983).
It is so ordered.
JUSTICE BLACKMUN, with whom JUSTICE BRENNAN, JUSTICE MARSHALL, and JUSTICE STEVENS join, concurring in part and dissenting in part.
The Court's decision today in Akron v. Akron Center for Reproductive Health, Inc., ante, p. 416, invalidates the city of Akron's hospitalization requirement and a host of other provisions that infringe on a woman's decision to terminate her pregnancy through abortion. I agree that Missouri's hospitalization requirement is invalid under the Akron analysis, and I join Parts I and II of JUSTICE POWELL'S opinion in the present cases. I do not agree, however, that the remaining Missouri statutes challenged in these cases satisfy the constitutional standards set forth in Akron and the Court's prior decisions.
I
Missouri law provides that whenever an abortion is performed, a tissue sample must be submitted to a "board eligible *495 or certified pathologist" for a report. Mo. Rev. Stat. § 188.047 (Supp. 1982). This requirement applies to first-trimester abortions as well as to those performed later in pregnancy. Our past decisions establish that the performance of abortions during the first trimester must be left " `free of interference by the State.' " Akron, ante, at 430, quoting Roe v. Wade, 410 U. S. 113, 163 (1973). As we have noted in Akron, this does not mean that every regulation touching upon first-trimester abortions is constitutionally impermissible. But to pass constitutional muster, regulations affecting first-trimester abortions must "have no significant impact on the woman's exercise of her right" and must be "justified by important state health objectives." Akron, ante, at 430; see ante, at 489-490.
Missouri's requirement of a pathologist's report is not justified by important health objectives. Although pathology examinations may be "useful and even necessary in some cases," ante, at 487, Missouri requires more than a pathology examination and a pathology report; it demands that the examination be performed and the report prepared by a "board eligible or certified pathologist" rather than by the attending physician. Contrary to JUSTICE POWELL'S assertion, ibid., this requirement of a report by a pathologist is not in accord with "generally accepted medical standards." The routine and accepted medical practice is for the attending physician to perform a gross (visual) examination of any tissue removed during an abortion. Only if the physician detects abnormalities is there a need to send a tissue sample to a pathologist. The American College of Obstetricians and Gynecologists (ACOG) does not recommend an examination by a pathologist in every case:
"In the situation of elective termination of pregnancy, the attending physician should record a description of the gross products. Unless definite embryonic or fetal parts can be identified, the products of elective interruptions *496 of pregnancy must be submitted to a pathologist for gross and microscopic examination.
.....
". . . Aspirated tissue should be examined to ensure the presence of villi or fetal parts prior to the patient's release from the facility. If villi or fetal parts are not identified with certainty, the tissue specimen must be sent for further pathologic examination . . . ." ACOG, Standards for Obstetric-Gynecologic Services 52, 54 (5th ed. 1982).[1]
Nor does the National Abortion Federation believe that such an examination is necessary:
"All tissue must be examined grossly at the time of the abortion procedure by a physician or trained assistant and the results recorded in the chart. In the absence of visible fetal parts or placenta upon gross examination, obtained tissue may be examined under a low power microscope for the detection of villi. If this examination is inconclusive, the tissue should be sent to the nearest suitable pathology laboratory for microscopic examination." National Abortion Federation Standards 6 (1981) (emphasis deleted).
As the Court of Appeals pointed out, there was expert testimony at trial that a nonpathologist physician is as capable of performing an adequate gross examination as is a pathologist, and that the "abnormalities which are of concern" are *497 readily detectable by a physician. 655 F. 2d 848, 871, n. 37 (CA8 1981); see App. 135.[2] While a pathologist may be better able to perform a microscopic examination, Missouri law does not require a microscopic examination unless "fetal parts or placenta are not identified." 13 Mo. Admin. Code § 50-151.030(1) (1981). Thus, the effect of the Missouri statute is to require a pathologist to perform the initial gross examination, which is normally the responsibility of the attending physician and which will often make the pathologist's services unnecessary.
On the record before us, I must conclude that the State has not "met its burden of demonstrating that [the pathologist requirement] further[s] important health-related State concerns." Akron, ante, at 430.[3] There has been no showing that tissue examinations by a pathologist do more to protect health than examinations by a nonpathologist physician. Missouri does not require pathologists' reports for any other surgical procedures performed in clinics, or for minor surgery performed in hospitals. 13 Mo. Admin. Code § 50-20.030(3)(A)(7) (1977). Moreover, I cannot agree with JUSTICE POWELL that Missouri's pathologist requirement has "no significant impact" ante, at 489, on a woman's exercise of her right to an abortion. It is undisputed that this requirement may increase the cost of a first-trimester abortion by as much as $40. See 483 F. Supp. 679, 700, n. 48 (WD Mo. 1980). Although this increase may seem insignificant from the Court's comfortable perspective, I cannot say that it is equally insignificant to every woman seeking an abortion. *498 For the woman on welfare or the unemployed teenager, this additional cost may well put the price of an abortion beyond reach.[4] Cf. Harper v. Virginia Board of Elections, 383 U. S. 663, 668 (1966) ($1.50 poll tax "excludes those unable to pay"); Burns v. Ohio, 360 U. S. 252, 255, 257 (1959) ($20 docket fee "foreclose[s] access" to appellate review for indigents).
In Planned Parenthood of Central Missouri v. Danforth, 428 U. S. 52, 81 (1976), the Court warned that the minor recordkeeping requirements upheld in that case "perhaps approach[ed] impermissible limits." Today in Akron, we have struck down restrictions on first-trimester abortions that "may in some cases add to the cost of providing abortions." Ante, at 447-448; see ante, at 449-451. Missouri's requirement of a pathologist's report unquestionably adds significantly to the cost of providing abortions, and Missouri has not shown that it serves any substantial health-related purpose. Under these circumstances, I would hold that constitutional limits have been exceeded.
II
In Missouri, an abortion may be performed after viability only if necessary to preserve the life or health of the woman. Mo. Rev. Stat. § 188.030.1 (Supp. 1982). When a postviability abortion is performed, Missouri law provides that "there [must be] in attendance a [second] physician . . . who *499 shall take control of and provide immediate medical care for a child born as a result of the abortion." Mo. Rev. Stat. § 188.030.3 (Supp. 1982). The Court recognized in Roe v. Wade, 410 U. S., at 164-165, that a State's interests in preserving maternal health and protecting the potentiality of human life may justify regulation and even prohibition of postviability abortions, except those necessary to preserve the life and health of the mother. But regulations governing postviability abortions, like those at any other stage of pregnancy, must be "tailored to the recognized state interests." Id., at 165; see H. L. v. Matheson, 450 U. S. 398, 413 (1981) ("statute plainly serves important state interests"); Roe, 410 U. S., at 155 ("legislative enactments must be narrowly drawn to express only the legitimate state interests at stake").
A
The second-physician requirement is upheld in these cases on the basis that it "reasonably furthers the State's compelling interest in protecting the lives of viable fetuses." Ante, at 486. While I agree that a second physician indeed may aid in preserving the life of a fetus born alive, this type of aid is possible only when the abortion method used is one that may result in a live birth. Although Missouri ordinarily requires a physician performing a postviability abortion to use the abortion method most likely to preserve fetal life, this restriction does not apply when this method "would present a greater risk to the life and health of the woman." Mo. Rev. Stat. § 188.030.2 (Supp. 1982).
The District Court found that the dilatation and evacuation (D&E) method of abortion entails no chance of fetal survival, and that it will nevertheless be the method of choice for some women who need postviability abortions. In some cases, in other words, maternal health considerations will preclude the use of procedures that might result in a live birth. 483 *500 F. Supp., at 694.[5] When a D&E abortion is performed, the second physician can do nothing to further the State's compelling interest in protecting potential life. His presence is superfluous. The second-physician requirement thus is overbroad and "imposes a burden on women in cases where the burden is not justified by any possibility of survival of the fetus." 655 F. 2d, at 865-866.
JUSTICE POWELL apparently believes that the State's interest in preserving potential life justifies the State in requiring a second physician at all postviability abortions because some methods other than D&E may result in live births. But this fact cannot justify requiring a second physician to attend an abortion at which the chance of a live birth is nonexistent. The choice of method presumably will be made in advance,[6] and any need for a second physician disappears when *501 the woman's health requires that the choice be D&E. Because the statute is not tailored to protect the State's legitimate interests, I would hold it invalid.[7]
B
In addition, I would hold that the statute's failure to provide a clear exception for emergency situations renders it unconstitutional. As JUSTICE POWELL recognizes, ante, at 485, n. 8, an emergency may arise in which delay could be dangerous to the life or health of the woman. A second physician may not always be available in such a situation; yet the statute appears to require one. It states, in unqualified terms, that a postviability abortion "shall be performed . . . only when there is in attendance" a second physician who "shall take control of" any child born as a result of the abortion, and it imposes certain duties on "the physician required by this section to be in attendance." Mo. Rev. Stat. § 188.030.3 (Supp. 1982) (emphasis added). By requiring the attendance of a second physician even when the resulting delay may be harmful to the health of the pregnant woman, the statute impermissibly fails to make clear "that the woman's life and *502 health must always prevail over the fetus' life and health when they conflict." Colautti v. Franklin, 439 U. S. 379, 400 (1979).
JUSTICE POWELL attempts to cure this defect by asserting that the final clause of the statute, requiring the two physicians to "take all reasonable steps . . . to preserve the life and health of the viable unborn child; provided that it does not pose an increased risk to the life or health of the woman," could be construed to permit emergency postviability abortions without a second physician. Ante, at 485, n. 8. This construction is contrary to the plain language of the statute; the clause upon which JUSTICE POWELL relies refers to the duties of both physicians during the performance of the abortion, but it in no way suggests that the second physician may be dispensed with.
Moreover, since JUSTICE POWELL'S proposed construction is not binding on the courts of Missouri,[8] a physician performing an emergency postviability abortion cannot rely on it with any degree of confidence. The statute thus remains impermissibly vague; it fails to inform the physician whether he may proceed with a postviability abortion in an emergency, or whether he must wait for a second physician even if the woman's life or health will be further imperiled by the delay. This vagueness may well have a severe chilling effect on the physician who perceives the patient's need for a postviability abortion. In Colautti v. Franklin, we considered a statute that failed to specify whether it "require[d] the physician to make a `trade-off' between the woman's health and additional percentage points of fetal survival." 439 U. S., at 400. The Court held there that "where conflicting duties of this magnitude are involved, the State, at the least, must proceed with greater precision before it may subject a physician to possible *503 criminal sanctions." Id., at 400-401.[9] I would apply that reasoning here, and hold Missouri's second-physician requirement invalid on this ground as well.[10]
III
Missouri law prohibits the performance of an abortion on an unemancipated minor absent parental consent or a court order. Mo. Rev. Stat. § 188.028 (Supp. 1982).
Until today, the Court has never upheld "a requirement of a consent substitute, either parental or judicial," ante, at 491. In Planned Parenthood of Central Missouri v. Danforth, 428 U. S., at 74, the Court invalidated a parental-consent requirement on the ground that "the State does not have the constitutional authority to give a third party an absolute, and possibly arbitrary, veto over the decision of the physician and his patient to terminate the patient's pregnancy, regardless of the reason for withholding the consent." In Bellotti v. Baird, 443 U. S. 622 (1979) (Bellotti II), eight Justices *504 agreed that a Massachusetts statute permitting a judicial veto of a mature minor's decision to have an abortion was unconstitutional. See id., at 649-650 (opinion of POWELL, J.); id., at 654-656 (opinion of STEVENS, J.). Although four Justices stated in Bellotti II that an appropriately structured judicial-consent requirement would be constitutional, id., at 647-648 (opinion of POWELL, J.), this statement was not necessary to the result of the case and did not command a majority. Four other Justices concluded that any judicial-consent statute would suffer from the same flaw the Court identified in Danforth: it would give a third party an absolute veto over the decision of the physician and his patient. 443 U. S., at 655-656 (opinion of STEVENS, J.).
I continue to adhere to the views expressed by JUSTICE STEVENS in Bellotti II:
"It is inherent in the right to make the abortion decision that the right may be exercised without public scrutiny and in defiance of the contrary opinion of the sovereign or other third parties. . . . As a practical matter, I would suppose that the need to commence judicial proceedings in order to obtain a legal abortion would impose a burden at least as great as, and probably greater than, that imposed on the minor child by the need to obtain the consent of the parent. Moreover, once this burden is met, the only standard provided for the judge's decision is the best interest of the minor. That standard provides little real guidance to the judge, and his decision must necessarily reflect personal and societal values and mores whose enforcement upon the minor particularly when contrary to her own informed and reasonable decision is fundamentally at odds with privacy interests underlying the constitutional protection afforded to her decision." Ibid. (footnote omitted).
Because Mo. Rev. Stat. § 188.028 (Supp. 1982) permits a parental or judicial veto of a minor's decision to obtain an abortion, I would hold it unconstitutional.
*505 JUSTICE O'CONNOR, with whom JUSTICE WHITE and JUSTICE REHNQUIST join, concurring in the judgment in part and dissenting in part.
For reasons stated in my dissent in Akron v. Akron Center for Reproductive Health, ante, p. 416, I believe that the second-trimester hospitalization requirement imposed by § 188.025 does not impose an undue burden on the limited right to undergo an abortion. Assuming, arguendo, that the requirement was an undue burden, it would nevertheless "reasonably relat[e] to the preservation and protection of maternal health." Roe v. Wade, 410 U. S. 113, 163 (1973). I therefore dissent from the Court's judgment that the requirement is unconstitutional.
I agree that the second-physician requirement contained in § 188.030.3 is constitutional because the State possesses a compelling interest in protecting and preserving fetal life, but I believe that this state interest is extant throughout pregnancy. I therefore concur in the judgment of the Court.
I agree that the pathology-report requirement imposed by § 188.047 is constitutional because it imposes no undue burden on the limited right to undergo an abortion. Because I do not believe that the validity of this requirement is contingent in any way on the trimester of pregnancy in which it is imposed, I concur in the judgment of the Court.
Assuming, arguendo, that the State cannot impose a parental veto on the decision of a minor to undergo an abortion, I agree that the parental-consent provision contained in § 188.028 is constitutional. However, I believe that the provision is valid because it imposes no undue burden on any right that a minor may have to undergo an abortion. I concur in the judgment of the Court on this issue.
I also concur in the Court's decision to vacate and remand on the issue of attorney's fees in light of Hensley v. Eckerhart, 461 U. S. 424 (1983).
NOTES
[*] Together with No. 81-1623, Ashcroft, Attorney General of Missouri, et al. v. Planned Parenthood Association of Kansas City, Missouri, Inc., et al., also on certiorari to the same court.
[] Dennis J. Horan, Victor G. Rosenblum, Patrick A. Trueman, and Thomas J. Marzen filed a brief for Americans United for Life as amicus curiae urging reversal.
[1] Missouri Rev. Stat. § 188.025 (Supp. 1982) provides: "Every abortion performed subsequent to the first twelve weeks of pregnancy shall be performed in a hospital."
[2] Missouri Rev. Stat. § 188.047 (Supp. 1982) provides:
"A representative sample of tissue removed at the time of abortion shall be submitted to a board eligible or certified pathologist, who shall file a copy of the tissue report with the state division of health, and who shall provide a copy of the report to the abortion facility or hospital in which the abortion was performed or induced and the pathologist's report shall be made a part of the patient's permanent record."
[3] Missouri Rev. Stat. § 188.030.3 (Supp. 1982) provides:
"An abortion of a viable unborn child shall be performed or induced only when there is in attendance a physician other than the physician performing or inducing the abortion who shall take control of and provide immediate medical care for a child born as a result of the abortion. During the performance of the abortion, the physician performing it, and subsequent to the abortion, the physician required by this section to be in attendance, shall take all reasonable steps in keeping with good medical practice, consistent with the procedure used, to preserve the life and health of the viable unborn child; provided that it does not pose an increased risk to the life or health of the woman."
[4] Missouri Rev. Stat. § 188.028 (Supp. 1982) provides:
"1. No person shall knowingly perform an abortion upon a pregnant woman under the age of eighteen years unless:
"(1) The attending physician has secured the informed written consent of the minor and one parent or guardian; or
"(2) The minor is emancipated and the attending physician has received the informed written consent of the minor; or
"(3) The minor has been granted the right to self-consent to the abortion by court order pursuant to subsection 2 of this section, and the attending physician has received the informed written consent of the minor; or
"(4) The minor has been granted consent to the abortion by court order, and the court has given its informed written consent in accordance with subsection 2 of this section, and the minor is having the abortion willingly, in compliance with subsection 3 of this section.
"2. The right of a minor to self-consent to an abortion under subdivision (3) of subsection 1 of this section or court consent under subdivision (4) of subsection 1 of this section may be granted by a court pursuant to the following procedures:
"(1) The minor or next friend shall make an application to the juvenile court which shall assist the minor or next friend in preparing the petition and notices required pursuant to this section. The minor or the next friend of the minor shall thereafter file a petition setting forth the initials of the minor; the age of the minor; the names and addresses of each parent, guardian, or, if the minor's parents are deceased and no guardian has been appointed, any other person standing in loco parentis of the minor; that the minor has been fully informed of the risks and consequences of the abortion; that the minor is of sound mind and has sufficient intellectual capacity to consent to the abortion; that, if the court does not grant the minor majority rights for the purpose of consent to the abortion, the court should find that the abortion is in the best interest of the minor and give judicial consent to the abortion; that the court should appoint a guardian ad litem of the child; and if the minor does not have private counsel, that the court should appoint counsel. The petition shall be signed by the minor or the next friend;
.....
"(3) A hearing on the merits of the petition, to be held on the record, shall be held as soon as possible within five days of the filing of the petition.. . . At the hearing, the court shall hear evidence relating to the emotional development, maturity, intellect and understanding of the minor; the nature, possible consequences, and alternatives to the abortion; and any other evidence that the court may find useful in determining whether the minor should be granted majority rights for the purpose of consenting to the abortion or whether the abortion is in the best interests of the minor;
"(4) In the decree, the court shall for good cause:
"(a) Grant the petition for majority rights for the purpose of consenting to the abortion; or
"(b) Find the abortion to be in the best interests of the minor and give judicial consent to the abortion, setting forth the grounds for so finding; or
"(c) Deny the petition, setting forth the grounds on which the petition is denied;
.....
"3. If a minor desires an abortion, then she shall be orally informed of and, if possible, sign the written consent required by section 188.039 in the same manner as an adult person. No abortion shall be performed on any minor against her will, except that an abortion may be performed against the will of a minor pursuant to a court described in subdivision (4) of subsection 1 of this section that the abortion is necessary to preserve the life of the minor."
[5] The District Court also awarded attorney's fees for all hours claimed by the plaintiffs' attorneys. The Court of Appeals affirmed this allocation of fees. See 655 F. 2d 848, 872 (CA8 1981). The petition for certiorari raises the issue whether an award of attorney's fees, made pursuant to 42 U. S. C. § 1988 (1976 ed., Supp. V), should be proportioned to reflect the extent to which plaintiffs prevailed.
[6] Missouri does not define the term "hospital" in its statutory provisions regulating abortions. We therefore must assume, as did the courts below, see 483 F. Supp. 679, 686, n. 10 (1980); 664 F. 2d 687, 689-690, and nn. 3, 5, and 6 (1981), that the term has its common meaning of a general, acute-care facility. Cf. Mo. Rev. Stat. § 188.015(2) (Supp. 1982) (defining "abortion facility" as "a clinic, physician's office, or any other place or facility in which abortions are performed other than a hospital"). Section 197.020.2 (1978), part of Missouri's hospital licensing laws, reads:
" `Hospital' means a place devoted primarily to the maintenance and operation of facilities for the diagnosis, treatment or care for not less than twenty-four hours in any week of three or more nonrelated individuals suffering from illness, disease, injury, deformity or other abnormal physical conditions; or a place devoted primarily to provide for not less than twenty-four hours in any week medical . . . care for three or more nonrelated individuals. . . ."
Cf. Mo. Rev. Stat. § 197.200(1) (1978) (defining "ambulatory surgical center" to include facilities "with an organized medical staff of physicians" and "with continuous physician services and registered professional nursing services whenever a patient is in the facility"); 13 Mo. Admin. Code § 50-30.010(1)(A) (1977) (same). The regulations for the Department of Social Services establish standards for the construction, physical facilities, and administration of hospitals. §§ 50-20.010 to 50-20.030. These are not unlike those set by JCAH. See City of Akron, ante, at 432, and n. 16.
[7] The courts below found, and JUSTICE BLACKMUN'S partial dissenting opinion agrees, post, at 499-500, that there is no possible justification for a second-physician requirement whenever D&E is used because no viable fetus can survive a D&E procedure. 483 F. Supp., at 694; 655 F. 2d, at 865. Accordingly, for them, § 188.030.3 is overbroad. This reasoning rests on two assumptions. First, a fetus cannot survive a D&E abortion, and second, D&E is the method of choice in the third trimester. There is general agreement as to the first proposition, but not as to the second. Indeed, almost all of the authorities disagree with JUSTICE BLACKMUN'S critical assumption, and as the Court of Appeals noted, the choice of this procedure after viability is subject to the requirements of § 188.030.2. See id., at 865, and n. 28. Nevertheless, the courts below, in conclusory language, found that D&E is the "method of choice even after viability is possible." Id., at 865. No scholarly writing supporting this view is cited by those courts or by the partial dissent. Reliance apparently is placed solely on the testimony of Dr. Robert Crist, a physician from Kansas, to whom the District Court referred in a footnote. 483 F. Supp., at 694, n. 25. This testimony provides slim support for this holding. Dr. Crist's testimony, if nothing else, is remarkable in its candor. He is a member of the National Abortion Federation, "an organization of abortion providers and people interested in the pro-choice movement." 3 Record 415-416. He supported the use of D&E on 28-week pregnancies, well into the third trimester. In some circumstances, he considered it a better procedure than other methods. See id., at 427-428. His disinterest in protecting fetal life is evidenced by his agreement "that the abortion patient has a right not only to be rid of the growth, called a fetus in her body, but also has a right to a dead fetus." Id., at 431. He also agreed that he "[n]ever ha[s] any intention of trying to protect the fetus, if it can be saved," ibid., and finally that "as a general principle" "[t]here should not be a live fetus," id., at 435. Moreover, contrary to every other view, he thought a fetus could survive a D&E abortion. Id., at 433-434. None of the other physicians who testified at the trial, those called both by the plaintiffs and defendants, considered that any use of D&E after viability was indicated. See 2 Record 21 (limiting use of D&E to under 18 weeks); 3 Record 381, 410-413 (Dr. Robert Kretzschmar) (D&E up to 17 weeks; would never perform D&E after 26 weeks); 5 Record 787 (almost "inconceivable" to use D&E after viability); 7 Record 52 (D&E safest up to 18 weeks); id., at 110 (doctor not performing D&E past 20 weeks); id., at 111 (risks of doing outpatient D&E equivalent to childbirth at 24 weeks). See also 8 Record 33, 78-81 (deposition of Dr. Willard Cates) (16 weeks latest D&E performed). Apparently Dr. Crist performed abortions only in Kansas, 3 Record 334, 368, 428, a State having no statutes comparable to § 188.030.1 and § 188.030.2. It is not clear whether he was operating under or familiar with the limitations imposed by Missouri law. Nor did he explain the circumstances when there were "contraindications" against the use of any of the procedures that could preserve viability, or whether his conclusory opinion was limited to emergency situations. Indeed, there is no record evidence that D&E ever will be the method that poses the least risk to the woman in those rare situations where there are compelling medical reasons for performing an abortion after viability. If there were such instances, they hardly would justify invalidating § 188.030.3.
In addition to citing Dr. Crist in its footnote, the District Court cited with no elaboration Dr. Schmidt. His testimony, reflecting no agreement with Dr. Crist, is enlightening. Although he conceded that the attendance of a second physician for a D&E abortion on a viable fetus was not necessary, he considered the point mostly theoretical, because he "simply [did] not believe that the question of viability comes up when D&E is an elected method of abortion." 5 Record 836. When reminded of Dr. Crist's earlier testimony, he conceded the remote possibility of third-trimester D&E abortions, but stated: "I personally cannot conceive that as a significant practical point. It may be important legally, but [not] from a medical standpoint . . . ." Ibid. Given that Dr. Crist's discordant testimony is wholly unsupported, the State's compelling interest in protecting a viable fetus justifies the second-physician requirement even though there may be the rare case when a physician may think honestly that D&E is required for the mother's health. Legislation need not accommodate every conceivable contingency.
[8] There is no clearly expressed exception on the face of the statute for the performance of an abortion of a viable fetus without the second physician in attendance. There may be emergency situations where, for example, the woman's health may be endangered by delay. Section § 188.030.3 is qualified, at least in part, by the phrase "provided that it does not pose an increased risk to the life or health of the woman." This clause reasonably could be construed to apply to such a situation. Cf. H. L. v. Matheson, 450 U. S. 398, 407, n. 14 (1981) (rejecting argument that Utah statute might apply to individuals with emergency health care needs).
[9] See American College of Obstetricians and Gynecologists (ACOG) Technical Bulletin No. 56, p. 4 (Dec. 1979) (as high as 7% live-birth rate for intrauterine instillation of uterotonic agents); Stroh & Hinman, Reported Live Births Following Induced Abortion: Two and One-Half Years' Experience in Upstate New York, 126 Am. J. Obstet. Gynecol. 83, 83-84 (1976) (26 live births following saline induced-abortions; 9 following hysterotomy; 1 following oxtyocin-induced abortion) (1 survival out of 38 live births); 5 Record 728 (50-62% mortality rate for fetuses 26 and 27 weeks); id., at 729 (25-92% mortality rate for fetuses 28 and 29 weeks); id., at 837 (50% mortality rate at 34 weeks).
[10] A pathological examination is designed to assist in the detection of fatal ectopic pregnancies, hydatidiform moles or other precancerous growths, and a variety of other problems that can be discovered only through a pathological examination. The general medical utility of pathological examinations is clear. See, e. g., ACOG, Standards for Obstetric-Gynecologic Services 52 (5th ed. 1982) (1982 ACOG Standards); National Abortion Federation (NAF) Standards 6 (1981) (compliance with standards obligatory for NAF member facilities to remain in good standing); Brief for American Public Health Association as Amicus Curiae, O. T. 1982, Nos. 81-185, 81-746, 81-1172, p. 29, n. 6 (supporting the NAF standards for nonhospital abortion facilities as constituting "minimum standards").
[11] ACOG's standards at the time of the District Court's trial recommended that a "tissue or operative review committee" should examine "all tissue removed at obstetric-gynecologic operations." ACOG, Standards for Obstetric-Gynecologic Services 13 (4th ed. 1974). The current ACOG Standards also state as a general rule that, for all surgical services performed on an ambulatory basis, "[t]issue removed should be submitted to a pathologist for examination." 1982 ACOG Standards, at 52. JUSTICE BLACKMUN'S partial dissent, however, relies on the recent modification of these Standards as they apply to abortions. ACOG now provides an "exception to the practice" of mandatory examination by a pathologist and makes such examination for abortion tissue permissive. Ibid. Not surprisingly, this change in policy was controversial within the College. See 5 Record 799-800. ACOG found that "[n]o consensus exists regarding routine microscopic examination of aspirated tissue in every case," though it recognized on the basis of inquiries made in 29 institutions that in a majority of them a microscopic examination is performed in all cases. ACOG, Report of Committee on Gynecologic Practice, Item #6.2.1 (June 27-28, 1980).
[12] The professional views that the plaintiffs find to support their position do not disclose whether consideration was given to the fact that not all abortion clinics, particularly inadequately regulated clinics, conform to ethical or generally accepted medical standards. See Bellotti v. Baird, 443 U. S. 622, 641, n. 21 (1979) (Bellotti II) (minors may resort to "incompetent or unethical" abortion clinics); Planned Parenthood of Central Missouri v. Danforth, 428 U. S. 52, 91, n. 2 (1976) (Stewart, J., concurring). The Sun-Times of Chicago, in a series of special reports, disclosed widespread questionable practices in abortion clinics in Chicago, including the failure to obtain proper pathology reports. See The Abortion Profiteers, Chicago Sun-Times 25-26 (Special Reprint 1978). It is clear, therefore, that a State reasonably could conclude that a pathology requirement is necessary in abortion clinics as well as in general hospitals.
In suggesting that we make from a "comfortable perspective" the judgment that a State constitutionally can require the additional cost of a pathology examination, JUSTICE BLACKMUN'S partial dissent suggests that we disregard the interests of the "woman on welfare or the unemployed teenager." Post, at 498. But these women may be those most likely to seek the least expensive clinic available. As the standards of medical practice in such clinics may not be the highest, a State may conclude reasonably that a pathologist's examination of tissue is particularly important for their protection.
[13] JUSTICE BLACKMUN'S partial dissent appears to suggest that § 188.047 is constitutionally infirm because it does not require microscopic examination, post, at 496-497, but that misses the point of the regulation. The need is for someone other than the performing clinic to make an independent medical judgment on the tissue. See n. 12, supra; 5 Record 750 (Dr. Pierre Keitges, a pathologist). It is reasonable for the State to assume that an independent pathologist is more likely to perform a microscopic examination than the performing doctor. See H. Cove, Surgical Pathology of the Endometrium 28 (1981) ("To the pathologist, abortions of any sort are evaluated grossly and microscopically for the primary purpose of establishing a diagnosis of intrauterine pregnancy") (emphasis added).
[14] The Danforth Court also noted that "[t]he added requirements for confidentiality, with the sole exception for public health officers, and for retention for seven years, a period not unreasonable in length, assist and persuade us in our determination of the constitutional limits." 428 U. S., at 81. Missouri extends the identical safeguards found reassuring in Danforth to the pathology reports at issue here. See Mo. Rev. Stat. §§ 188.055.2, 188.060 (Supp. 1982).
[15] The dissenters apparently believe that the issue here is an open one, and adhere to the views they expressed in Bellotti II. Post, at 503-504. But those views have never been adopted by a majority of this Court, while a majority have expressed quite differing views. See H. L. v. Matheson, 450 U. S. 398 (1981); Bellotti II (plurality opinion); 443 U. S., at 656-657 (WHITE, J., dissenting).
[16] The plurality in Bellotti II also required that the alternative to parental consent must "assure" that the resolution of this issue "will be completed with anonymity and sufficient expedition to provide an effective opportunity for an abortion to be obtained." Id., at 644. Confidentiality here is assured by the statutory requirement that allows the minor to use her initials on the petition. Mo. Rev. Stat. § 188.028.2(1) (Supp. 1982). As to expedition of appeals, § 188.028.2(6) provides in relevant part:
"The notice of intent to appeal shall be given within twenty-four hours from the date of issuance of the order. The record on appeal shall be completed and the appeal shall be perfected within five days from the filing of notice to appeal. Because time may be of the essence regarding the performance of the abortion, the supreme court of this state shall, by court rule, provide for expedited appellate review of cases appealed under this section."
We believe this section provides the framework for a constitutionally sufficient means of expediting judicial proceedings. Immediately after the effective date of this statutory enactment, the District Court enjoined enforcement. No unemancipated pregnant minor has been required to comply with this section. Thus, to this point in time, there has been no need for the State Supreme Court to promulgate rules concerning appellate review. There is no reason to believe that Missouri will not expedite any appeal consistent with the mandate in our prior opinions.
[17] Cf. H. L. v. Matheson, supra, at 406-407, and n. 14, 411 (upholding a parental notification requirement but not extending the holding to mature or emancipated minors or to immature minors showing such notification detrimental to their best interests). The lower courts found that § 188.028's notice requirement was unconstitutional. 655 F. 2d, at 873; 483 F. Supp., at 701. The State has not sought review of that judgment here. Thus, in the posture in which it appears before this Court for review, § 188.028 contains no requirement for parental notification.
[18] The Missouri statute also exempts "emancipated" women under the age of 18 both from the requirement of parental consent and from the alternative requirement of a judicial proceeding. Plaintiffs argue that the word "emancipated" in this context is void for vagueness, but we disagree. Cf. H. L. v. Matheson, supra, at 407 (using word to describe a minor). Although the question whether a minor is emancipated turns upon the facts and circumstances of each individual case, the Missouri courts have adopted general rules to guide that determination, and the term is one of general usage and understanding in the Missouri common law. See Black v. Cole, 626 S. W. 2d 397, 398 (Mo. App. 1981) (quoting 67 C. J. S., Parent and Child § 86, p. 811 (1950)); In re Marriage of Heddy, 535 S. W. 2d 276, 279 (Mo. App. 1976) (same); Wurth v. Wurth, 313 S. W. 2d 161, 164 (Mo. App. 1958) (same), rev'd on other grounds, 322 S. W. 2d 745 (Mo. 1959).
[19] See n. 4, supra. This Court in Danforth held unconstitutional Missouri's parental-consent requirement for all unmarried minors under the age of 18. 428 U. S., at 75. In response to our decision, Missouri enacted the section challenged here. This new statute became effective shortly before our decision in Bellotti II.
[20] We have indicated in prior opinions that a minor should have access to an "independent decisionmaker." H. L. v. Matheson, supra, at 420 (POWELL, J., concurring). Missouri has provided for a judicial decisionmaker. We therefore need not consider whether a qualified and independent nonjudicial decisionmaker would be appropriate. Cf. Bellotti II, 443 U.S., at 643, n. 22.
[21] Plaintiffs also argue that, in light of the ambiguity of § 188.028.2(4), as evidenced by the differing interpretations placed upon it, the appropriate course of judicial restraint is abstention. This Court has found such an approach appropriate. See Bellotti v. Baird, 428 U. S. 132, 146-147 (1976) (Bellotti I). Plaintiffs did not, however, argue in the Court of Appeals that the court should abstain, and Missouri has no certification procedure whereby this Court can refer questions of state statutory construction to the State Supreme Court. See 655 F. 2d, at 861, n. 20; 17 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 4248, p. 525, n. 29 (1978 and Supp. 1982). Such a procedure "greatly simplifie[d]" our analysis in Bellotti I, supra, at 151. Moreover, where, as here, a statute is susceptible to a fair construction that obviates the need to have the state courts render the saving construction, there is no reason for federal courts to abstain.
[1] See also ACOG, Standards for Obstetric-Gynecologic Services 66 (1982):
"Tissue removed should be submitted to a pathologist for examination.. . . An exception to the practice may be in elective terminations of pregnancy in which definitive embryonic or fetal parts can be identified. In such instances, the physician should record a description of the gross products. Unless definite embryonic or fetal parts can be identified, the products of elective interruptions of pregnancy must be submitted to a pathologist for gross and microscopic examination."
[2] The District Court made no findings on this point, noting only that some witnesses for the State had testified that "pathology should be done" for every abortion. 483 F. Supp. 679, 700, n. 49 (WD Mo. 1980).
[3] JUSTICE POWELL appears to draw support from the facts that "questionable practices" occur at some abortion clinics, while at others "the standards of medical practice . . . may not be the highest." Ante, at 489, n. 12. There is no evidence, however, that such questionable practices occur in Missouri.
[4] A $40 pathologist's fee may increase the price of a first-trimester abortion by 20% or more. See 655 F. 2d 848, 869, n. 35 (1981) (cost of first-trimester abortion at Reproductive Health Services is $170); F. Jaffe, B. Lindheim, & P. Lee, Abortion Politics: Private Morality and Public Policy 36 (1981) (cost of first-trimester clinic abortion ranges from approximately $185 to $235); Henshaw, Freestanding Abortion Clinics: Services, Structure, Fees, 14 Family Planning Perspectives 248, 255 (1982) (average cost of first-trimester clinic abortion is $190); National Abortion Federation Membership Directory 18-19 (1982/1983) (NAF clinics in Missouri charge $180 to $225 for first-trimester abortion).
[5] The District Court relied on the testimony of Doctors Robert Crist and Richard Schmidt. Doctor Crist testified that in some instances abortion methods other than D&E would be "absolutely contraindicated" by the woman's health condition, 3 Record 438-439, giving the example of a recent patient with hemolytic anemia that would have been aggravated by the use of prostaglandins or other labor-inducing abortion methods, id., at 428. Doctor Schmidt testified that "[t]here very well may be" situations in which D&E would be used because other methods were contraindicated. 5 Record 836. Although Doctor Schmidt previously had testified that a postviability D&E abortion was "almost inconceivable," this was in response to a question by the State's attorney regarding whether D&E would be used "[a]bsent the possibility that there is extreme contraindication for the use of prostaglandins or saline, or of hysterotomy." Id., at 787. Any inconsistencies in Doctor Schmidt's testimony apparently were resolved by the District Court in the plaintiffs' favor.
The Court of Appeals upheld the District Court's factual finding that health reasons sometimes would require the use of D&E for postviability abortions. 655 F. 2d, at 865. Absent the most exceptional circumstances, we do not review a District Court's factual findings in which the Court of Appeals has concurred. Branti v. Finkel, 445 U. S. 507, 512, n. 6 (1980).
[6] In addition to requiring the physician to select the method most likely to preserve fetal life, so long as it presents no greater risk to the pregnant woman, Missouri requires that the physician "certify in writing the available method or techniques considered and the reasons for choosing the method or technique employed." Mo. Rev. Stat. § 188.030.2 (Supp. 1982). This ensures that the choice of method will be a reasoned one.
[7] The State argues that its second-physician requirement is justified even when D&E is used, because "[i]f the statute specifically excepted D&E procedures, abortionists would be encouraged to use it more frequently to avoid the expense of a second physician, to ensure a dead fetus, to prevent the presence of a second professional to observe malpractice or the choice of a questionable procedure from a safety viewpoint, a fetus-destroying procedure, or to avoid their own awakening to concern for the newborn." Brief for Petitioners in No. 81-1623, p. 44. The Court rejected this purported justification for a second physician in Doe v. Bolton, 410 U. S. 179, 199 (1973): "If a physician is licensed by the State, he is recognized by the State as capable of exercising acceptable clinical judgment. If he fails in this, professional censure and deprivation of his license are available remedies. Required acquiescence by co-practitioners has no rational connection with a patient's needs and unduly infringes on the physician's right to practice."
[8] "Only the [Missouri] courts can supply the requisite construction, since of course `we lack jurisdiction authoritatively to construe state legislation.' " Gooding v. Wilson, 405 U. S. 518, 520 (1972), quoting United States v. Thirty-seven Photographs, 402 U. S. 363, 369 (1971).
[9] A physician who fails to comply with Missouri's second-physician requirement faces criminal penalties and the loss of his license. Mo. Rev. Stat. §§ 188.065, 188.075 (1978 and Supp. 1982).
[10] Because I would hold the statute unconstitutional on these grounds, I do not reach the question whether Missouri's second-physician requirement impermissibly interferes with the doctor-patient relationship. I note, however, that Missouri does not require attendance of a second physician at any other medical procedure, including a premature birth. There was testimony at trial that a newborn infant, whether the product of a normal birth or an abortion, ordinarily remains the responsibility of the woman's physician until he turns its care over to another. App. 133; see ACOG, Standards for Obstetric-Gynecologic Services 31 (5th ed., 1982) ("The individual who delivers the baby is responsible for the immediate post-delivery care of the newborn until another person assumes this duty").
This allocation of responsibility makes sense. Consultation and team-work are fundamental in medical practice, but in an operating room a patient's life or health may depend on split-second decisions by the physician. If responsibility and control must be shared between two physicians with the lines of authority unclear, precious moments may be lost to the detriment of both woman and child.
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929 A.2d 1139 (2007)
395 N.J. Super. 548
Mortimer HETSBERGER, Plaintiff-Appellant
v.
DEPARTMENT OF CORRECTIONS and George W. Hayman, Commissioner,[1] Defendants-Respondents.
Superior Court of New Jersey, Appellate Division.
Submitted March 27, 2007.
Decided August 24, 2007.
*1140 Mortimer Hetsberger, appellant pro se.
Stuart Rabner, Attorney General, for respondent (Patrick DeAlmeida, Assistant Attorney General, of counsel; Dewan N. Arefin, Deputy Attorney General, on the brief).
Before Judges KESTIN, WEISSBARD and LIHOTZ.
The opinion of the court was delivered by
KESTIN, P.J.A.D. (retired and temporarily assigned on recall).
Plaintiff, Mortimer Hetsberger, appeals from the summary judgment dismissal of his single-count complaint filed against the Department of Corrections (DOC or the Department) and the Commissioner of the Department. The only claim for relief asserted in the complaint charged that Department regulations and actions "impose[ ] a substantial burden on plaintiff's religious exercise, in violation of the Religious Land Use and Institutionalized Persons Act of 2000, [(RLUIPA)], 42 U.S.C.A. § 2000cc-1"; however, in the complaint's "preliminary statement," plaintiff also invoked 42 U.S.C.A. § 1983. Plaintiff sought an injunction permitting him to participate in practices he outlined in the complaint that he viewed as central to his religious beliefs, and he also sought $100,000 in compensatory damages.
In a letter opinion dated April 10, 2006, the motion judge expressed the reasons for his ruling dismissing the claim for injunctive relief.[2] The rationale employed relied solely on two cases addressing claims of First Amendment violations. Turner v. Safley, 482 U.S. 78, 107 S.Ct. 2254, 96 L.Ed.2d 64 (1987), predated the adoption of RLUIPA; and Fraise v. Terhune, 283 F.3d 506 (3d Cir.2002), did not consider that relatively recently enacted statute, noting that such issues had not been raised. See id. at 515 n. 5. The judge in the instant matter made no mention of RLUIPA or of the allegations of the complaint invoking that statute.
The criteria governing RLUIPA claims are different in particular ways from those standards employing First Amendment considerations. In order to apply RLUIPA standards, a determination must be made, not only that a compelling State interest is involved, but also as to whether the Department's policies represent the least restrictive means of furthering the compelling governmental interest. Accordingly, we vacate the order of dismissal and remand for a determination whether genuine issues of material fact exist in respect of the standards of RLUIPA, and for such proceedings as may be necessary to resolve those issues.
In reviewing summary judgment orders, we apply the same standards that govern the trial courts. Prudential Property & Casualty Ins. Co. v. Boylan, 307 N.J.Super. 162, 167, 704 A.2d 597 (App.Div.), certif. denied, 154 N.J. 608, 713 A.2d 499 (1998). In determining whether a genuine issue of material fact exists, the matter must be viewed in the factual light most favorable to the non-moving party. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540, 666 A.2d 146 (1995).
Throughout the pendency of this matter, plaintiff has been an inmate in one or another of the Department's correctional facilities. On July 12, 2003, plaintiff became a member of the Nation of Gods and *1141 Earths, known variously as "the Nation," the "Five Percent Nation," or the "Five Percenters." This group is perceived by DOC officials to be a security threat, and plaintiff has been disciplined administratively for possessing the group's materials.
Plaintiff purports to be a sincere believer in the Nation's teachings. Since becoming a member, plaintiff has considered himself "resurrected from a life of total unrighteousness." Plaintiff asserts: "[a]lthough the Nation is technic[ ]ally a religion, all members refrain from using that term in describing the Nation because the term "religion" generally connotes belief in a mystery God which the Nation's doctrine specifically rejects."
As a member, plaintiff is "required and compelled to practice certain activities," including:
(a) teaching others about the knowledge of who God is, (b) study the Supreme Mathematics, Supreme Alphabets, 120 Degrees, Universal Flag, monthly National Statements, and newspaper periodicals, (c) observe holy days, which include the anniversaries of the birth and death of our founder, Clarence 13X Smith, also known as Father Allah, and the birthdays of Elijah Muhammad and Fard Muhammad, (d) conduct Civilization Classes, in which senior members educate newer members about the lessons and how they can be applied, and (e) gather monthly for "Parliaments" and "Rallies", during which members make collective decisions and help one another learn their lessons.
According to plaintiff, the recited activities are "compelled by, and central to, the Nation's system of religious beliefs."
Plaintiff asserts that, as a result of the Nation having been designated by the Department as a security threat group (STG) on March 4, 1998, "it is a serious prison infraction for plaintiff to participate in Nation activities or to exhibit anything related to the Nation, including lessons, literature, and periodicals"; or for him to attempt to engage in such activities.
Also according to plaintiff, if an inmate is found to be a member of the Nation, the inmate can be assigned to the Security Threat Group Management Unit (STGMU). In STGMU, an inmate loses reduced custody status and remains in maximum custody until successfully completing "a three-phase behavior modification and education program."
To complete that program, a Nation member "must sign a form renouncing affiliation" with the Nation. Plaintiff asserts that these policies "totally prevent [him] from exercising his religious beliefs, and impose[ ] a substantial burden on [his] religious exercise."
Plaintiff further alleges that "inmates of other religions[,] such as Muslims[,] are a greater [STG], not only because they commit a greater number of infractions than members of the Nation, but because the infractions they commit are more serious in nature." Moreover, he asserts "[t]he Nation does not advocate violence or disruptive behavior but encourages all members to be law abiding. Members of the Nation who violate prison rules are, therefore, also violating Nation principles."
In support of its summary judgment motion, the Department submitted several certifications. Among these was one from Roland Holvey, a Principal Investigator within the Department's Intelligence Section, Special Investigation Division. Holvey's duties included "monitoring [ ] gangs or [STGs] within [DOC,] identif[ying] inmates as members of gangs or [STGs,]" and referring the names of those inmates to the committee that decides whether to place those inmates in the STGMU. Holvey was a member of national *1142 and regional law enforcement organizations that performed similar work in identifying and investigating gangs and STGs. He had conducted extensive research investigation into the various STGs designated by the Department, including the Nation. Between 1994 and 1997, Holvey collected data on incidents involving members of the Nation, which Holvey compiled in a December 1997 report that was used to support the Department's designation of the Nation an STG. In making his assessment of the Nation as an STG, Holvey considered the following events:
(a) In August 1990, at the New Jersey State Prison, seven inmates were charged with attempted murder of staff after a planned attack. A captain was stabbed seven times and two corrections officers were severely beaten. One of the inmates charged and convicted of aggravated assault was a [Nation] member. . . .
(b) In May 1993[,] at East Jersey State Prison, an anonymous letter was received threatening the lives of custody staff. . . . An investigation revealed that the threat came from an unidentified [Nation] member. . . . It was learned that there were approximately forty members in the gang in the prison and that they planned to meet en-masse to celebrate the anniversary of the death of their founder, Clarence Smith.
(c) In December 1993[,] at Northern State Prison, a group of thirty to thirty-five inmates participated in a group demonstration in the gymnasium during afternoon recreation. The group gathered in a large circle and dispersed only after ordered to do so by custody staff. . . . [S]ubsequent investigation revealed that the group was planning to assault staff because the prison administration refused to recognize the Five Percenters as a legitimate inmate organization/religion.
(d) In November 1994[,] in Lakewood . . . and Asbury Park . . ., twelve Five Percent Nation members were arrested by police and received drug charges after a year-long investigation.
(e) In March 1995[,] at Southern State Correctional Facility, two inmates identified as Five Percent Nation members were involved in a physical altercation in a housing unit. Later that evening[,] both inmates fought again and additional inmates became involved. A homemade weapon was recovered in the housing unit bathroom. Three identified inmates received disciplinary charges.
(f) In May 1996[,] at Mountainview Youth Correctional Facility, a large group of NETA [another security threat group] and Five Percent Nation members conducted an unauthorized meeting during evening recreation.
(g) In August 1996[,] at New Jersey State Prison, a major disturbance occurred during evening recreation between members of the Five Percenters and the Sunni Muslims. The Special Operation Group was activated to maintain order within the facility.
(h) In November 1996[,] at the Albert G. Wagner Youth Correctional Facility, three incidents involving members of the Latin Kings [another security threat group], NETA, and the Five Percent Nation gangs occurred in one day. A total of twenty-four inmates total were involved in the three separate incidents which were determined [to relate] to the dispute between black and Hispanic inmates.
(i) In February 1997[,] at East Jersey State Prison, a [Nation] member was involved in a fight with another inmate in the big yard. After this fight, numerous Sunni Muslims became involved in a larger altercation with one of the combatants. *1143 Five inmates received disciplinary charges.
(j) In February 1997[,] at Riverfront State Prison, a corrections officer was attacked and seriously injured by a [Nation] member. . . . The assault occurred in a gymnasium. Subsequently, four other Five Percenters barricaded themselves in the gymnasium, where they set fires and damaged site property. The injured corrections officer was stabbed with a homemade knife and narrowly escaped death due to a punctured lung.
(k) In March 1997[,] at Riverfront State Prison, information was received which indicated that members of the Five Percent Nation gang had contracted with NETA gang members to assault staff members.
(l) In July 1997[,] at Middlesex County jail, [Nation] members participated in a hunger strike. Tensions between Five Percenters and NETA gang members were high due to a homicide in South Brunswick. County officers were required to use smoke and concussion grenades to enter two barricaded housing units.
Also according to Holvey, since 1994, almost 2,000 New Jersey inmates have been identified as Nation members. Most of them had been incarcerated for drug-related offenses, and much of their "activity while they are incarcerated" was related to drug sales and distribution. Holvey added: "There is also a propensity for violence committed by Five Percenters throughout the prison system." Holvey stated that the corrections departments in California, Maryland, North Carolina, South Carolina, Connecticut, and Wisconsin had designated the Nation as an STG. Holvey further reported that since the opening of the STGMU on March 4, 1998, the Department had experienced a 66% decrease in assaults on staff and a 73% decrease in organized violent behavior statewide.
He noted, as well, that April 1995 and November 1995 editions of the Nation's monthly newspaper contained headlines stating: "We are not a religion."
James F. Barbo, Director of the Department's Division of Operations, certified that he had examined the Department's records and determined that plaintiff had never been assigned to the STGMU. Barbo supplied a copy of the Inmate Handbook that each inmate would receive upon assignment to the STGMU. The handbook states: "Your success in any portion of the program described herein is achieved through desire and attitude." It continues: "If you demonstrate a desire to renounce your [STG] affiliation and activities, you will be afforded an opportunity to participate in the [STGMU's] Phase Program, which allows you to participate in a series of programming focusing on behavior alternatives." The handbook explains that there are three phases of the STGMU program, and that upon successful completion of the third, inmates are required to complete a "Renunciation Letter" in order to allow for "reintegration" into the general prison population.
Pursuant to the Department's February 27, 1998 policy statement for managing members of STGs, "Security Threat Group Activities" are defined as
activities or actions of an inmate which relate either directly or indirectly to goals of [an STG]. These activities include but are not limited to: Possession of [STG] literature such as, lessons, membership lists, manuals and artwork; Possession of [STG] paraphernalia such as, beads, artwork, medallions and clothing articles; Observation by staff of known [STG] hand-signs and/or signals; Participation in [STG] related assaults, disturbances, meetings, gatherings, incidents *1144 and events; Sending or receiving [STG] related correspondence; Recruiting of other inmates to join [an STG].
The policy document further states that there is a "Zero Tolerance" level for STG activity within the Department's correctional facilities. Accordingly, "[a]ny signs of [STG] activity shall be immediately dealt with, using the inmate disciplinary process. Disciplinary action shall result in every instance of an inmate's involvement in an activity related to [an STG]." A March 4, 1998 notice to the inmate population listed the STG designations, including that of the Nation, and set forth the prohibition on STG activities.
Under the Department's regulations on inmate discipline, N.J.A.C. 10A:4-4.1, "[a]sterisk offenses" are prohibited acts considered to be the most serious violations, resulting in the most severe sanctions. N.J.A.C. 10A:4-4.1 lists offense "*. 010" as "participating in an activity(ies) related to [an STG]" and lists offense "*. 011" as "possession or exhibition of anything related to [an STG]."
The record on appeal discloses that, on August 1, 2002, plaintiff was issued a disciplinary report citing him for offense *.011, stating that he "possessed [STG] `Five Percenters' materials within his property." Plaintiff reportedly told the investigating officer that the FBI had sent him the papers in question, and that he needed the materials for use on another inmate's court appeal, in which plaintiff was serving as a paralegal. For this infraction, plaintiff was sanctioned with ten days of detention, sixty days loss of commutation time, and confiscation of the STG material.
Plaintiff contends the trial court erred in evaluating his complaint as embodying a First Amendment issue, instead of applying the RLUIPA, which was the only claim specifically pled. He asserts that the standard to be applied for an RLUIPA claim is a "compelling interest/least restrictive means" analysis, instead of the "rationally related/legitimate interest" test used for First Amendment claims raised by prison inmates.
We reject defendants' suggestion that, because plaintiff was never removed from the general prison population or confined in the STGMU, he may lack standing to propound the challenge this action entails. Plaintiff suffered consequences such as detention, loss of commutation time, and confiscation of items under the policy he challenges. Those consequences are sufficient to meet basic standing requirements. See Jackson v. Department of Corrections, 335 N.J.Super. 227, 230-32, 762 A.2d 255 (App.Div.2000).
Moreover, plaintiff's interest in the Department's policy goes beyond the disciplinary action already taken against him. The "Zero Tolerance" policy set forth in the Department's materials, and published to the inmates, puts an admitted Nation member like plaintiff in peril of assignment to the STGMU at any time that he participates in the activities that plaintiff asserts are central to his religious beliefs.
We regard, as sound, the argument plaintiff advances that his challenge required the trial court to consider and apply the standards embodied in RLUIPA. That statute protects prisoners' rights to exercise their religion, providing as follows:
No government shall impose a substantial burden on the religious exercise of a person residing in or confined to an institution, . . . even if the burden results from a rule of general applicability, unless the government demonstrates that imposition of the burden on that person
(1) is in furtherance of a compelling governmental interest; and
*1145 (2) is the least restrictive means of furthering that compelling governmental interest.
[42 U.S.C.A. § 2000cc-1.]
The statute further specifies that its provisions "shall be construed in favor of a broad protection of religious exercise, to the maximum extent permitted by the terms of this Act and the Constitution." 42 U.S.C.A. § 2000cc-3(g).
In Cutter v. Wilkinson, 544 U.S. 709, 125 S.Ct. 2113, 161 L.Ed.2d 1020 (2005), the Supreme Court upheld RLUIPA against a challenge that it was an unconstitutional violation of the First Amendment's Establishment Clause.
RLUIPA applies only to burdens on religious exercise that occur "in a program or activity that receives Federal financial assistance. . . ." 42 U.S.C.A. § 2000cc-1(b); however, the Court, in Cutter, observed that "[e]very State . . . accepts federal funding for its prisons." Cutter, supra, 544 U.S. at 716 n. 4, 125 S.Ct. at 2118 n. 4, 161 L.Ed.2d at 1030 n. 4.
House of Fire Christian Church v. Zoning Board of Adjustment of Clifton, 379 N.J.Super. 526, 545, 879 A.2d 1212 (App. Div.2005), is the only reported New Jersey State court case under RLUIPA to date. It involved a land use matter, not a challenge from an inmate. In that opinion, we discussed the burdens of persuasion under RLUIPA, reciting the essence of 42 U.S.C.A. § 2000cc-2(b) as follows:
If a plaintiff produces prima facie evidence to support a claim alleging a violation of the Free Exercise Clause [of the First Amendment to the United States Constitution] or a violation of [RLUIPA], the government shall bear the burden of persuasion on any element of the claim, except that the plaintiff shall bear the burden of persuasion on whether the law (including a regulation) or government practice challenged by the claim substantially burdens the plaintiff's exercise of religion.
[House of Fire, supra, 379 N.J.Super. at 545, 879 A.2d 1212.]
We explained:
Thus, to prevail on a RLUIPA claim, the plaintiff has the initial burden of demonstrating that the . . . regulation "actually imposes a `substantial burden' on religious exercise." Civil Liberties for Urban Believers v. City of Chicago, 342 F.3d 752, 760 (7th Cir.2003), cert. denied, 541 U.S. 1096, 124 S.Ct. 2816, 159 L.Ed.2d 262 (2004). If the plaintiff makes such a showing, then the burden shifts to the . . . government to demonstrate that the challenged regulation "is in furtherance of a compelling governmental interest" and "is the least restrictive means of furthering that compelling governmental interest." 42 U.S.C.A. § 2000cc(a)(1)(A)-(B).
[Ibid.]
We noted that the term "`religious exercise' is broadly defined by RLUIPA to include `any exercise of religion, whether or not compelled by, or central to, a system of religious belief.'" Id. at 546, 879 A.2d 1212 (quoting 42 U.S.C.A. § 2000cc-5(7)(A)).
The term "substantial burden" is not defined by RLUIPA; rather, its proponents intended that the term "be interpreted by reference to Supreme Court jurisprudence," and that it "not . . . be given any broader interpretation than the Supreme Court's articulation of the concept of substantial burden o[n] religious exercise." [146 Cong. Rec. S7774-01 at S7776 (July 27, 2000) (joint statement of Sens. Hatch and Kennedy)]. In Midrash Sephardi, Inc. v. Town of Surfside, 366 F.3d 1214 (11th Cir.2004), cert. denied, [543] U.S. [1146], 125 S.Ct. 1295, 161 L.Ed.2d 106 (2005), the court explained *1146 that the Supreme Court's "articulation of what constitutes a `substantial burden' has varied over time." Id. at 1226 (citations omitted). After reviewing a number of federal cases, the Eleventh Circuit concluded:
[A] "substantial burden" must place more than an inconvenience on religious exercise; a "substantial burden" is akin to significant pressure which directly coerces the religious adherent to conform his or her behavior accordingly. Thus, a substantial burden can result from pressure that tends to force adherents to forego religious precepts or from pressure that mandates religious conduct.
[Id. at 1227.]
[House of Fire, supra, 379 N.J.Super. at 546-47, 879 A.2d 1212.]
Allah v. Department of Corrections, 326 N.J.Super. 543, 546-49, 742 A.2d 162 (App. Div.1999), although not involving RLUIPA because the case antedated the statute, addressed and affirmed the Department's policy of assigning a Nation member to the STGMU. There, we addressed constitutional claims according to the standard whether the restriction was "reasonably related to legitimate penological interests." Similarly, in In re Long Term Administrative Segregation of Inmates Designated as Five Percenters, 174 F.3d 464 (4th Cir.), cert. denied, 528 U.S. 874, 120 S.Ct. 179, 145 L.Ed.2d 151 (1999), also decided prior to RLUIPA's enactment, the court upheld, against constitutional challenges, the South Carolina prison system's classification of the Nation as a security threat group, along with provisions for multi-year administrative confinement in a program similar to New Jersey's STGMU program.
Although our State courts have not addressed RLUIPA in any reported cases involving prison inmates' claims, Marria v. Broaddus, 200 F.Supp.2d 280, 282 (S.D.N.Y.2002), furnishes guidance. There, an inmate plaintiff, who was a member of the Nation, raised both constitutional claims and RLUIPA claims challenging the New York State prison system's absolute ban on both the Nation's literature and the assembly of its members. Even under the "rationally related" test for First Amendment analysis, the court found there were fact questions as to whether accommodating the plaintiff's requests would result in a rise in gang violence, and whether any alternatives to the absolute bans on literature and assembly could be implemented without undermining the prison system's need to prevent recruitment of inmates for criminal activities. Id. at 296-97. The same questions precluded summary judgment under RLUIPA's more stringent test involving whether the absolute bans on literature and assembly represented the least restrictive means of furthering a compelling governmental interest. Id. at 298-99.
Some other federal cases, not involving the Nation, furnish further insight into how RLUIPA cases have been handled at the summary judgment stage. In Williams v. Bitner, 359 F.Supp.2d 370 (D.Pa.2005), aff'd on other grounds, 455 F.3d 186 (3d Cir.2006), the court denied summary judgment on the inmate plaintiff's RLUIPA claim that his religious beliefs as a Muslim were substantially burdened when prison officials required him to work as a cook in the prison cafeteria, preparing pork. On the premise that the inmate was advancing sincere beliefs, the court determined that "[t]he issuance of a misconduct and sanction of cell restriction could constitute a `substantial burden'" on the inmate's beliefs, where those punitive measures were threatened, and later imposed by prison officials to induce the inmate to assist in the preparation of pork. Id. at 376. The misconduct "carried with *1147 it an increase in Williams's security classification, precluding him from certain benefits, and [a] cell restriction limited his freedom of movement for several weeks, forcing him to miss a religious ceremony." Ibid. Accordingly, the inmate "was placed in the unenviable position of choosing between punishment by prison officials or observance of religious teachings. This is the type of choice that the RLUIPA was enacted to prevent." Ibid.
The court in Williams further considered, but rejected, the assertion that the prison officials' actions were the "least restrictive means" of furthering a "compelling" interest. Ibid. The court explained:
Maintaining institutional order and security is certainly a compelling interest. But the actions taken here did not further that interest. Williams was apparently not acting improperly or being disruptive on March 3, 2005. He was completing the tasks to which he had been assigned in the kitchen. He objected only when officials directed him to assist in activities that violated his sincere religious beliefs, and these protests were limited to a simple refusal and explanation, without threat or show of disrespect. No disturbance was seemingly caused by Williams's actions, and issuance of a misconduct was not necessary to ensure inmate discipline.
[Ibid. (citations omitted).]
The court noted conflicting evidence in the summary judgment record and, thus, an issue that remained open for trial, regarding whether a failure to publicly discipline Williams because witnesses were present arguably could have threatened institutional security. Ibid.
The Eighth Circuit has reversed a summary judgment dismissal of a RLUIPA claim. See Murphy v. Missouri Department of Corrections, 372 F.3d 979 (8th Cir.), cert. denied, 543 U.S. 991, 125 S.Ct. 501, 160 L.Ed.2d 378 (2004). The plaintiff inmate, Murphy, was a "practicing member of the Christian Separatist Church Society (CSC), a religious group that holds as a central tenet the belief that its members must all be Caucasian because they are uniquely blessed by God and must separate themselves from all non-Caucasian persons." Id. at 981. Murphy sought formal recognition and group worship accommodation for CSC. Ibid. Prison officials denied CSC group worship rights, asserting the need "to preserve security and to reduce the likelihood of racial violence"; the officials contended that racial violence "can be easily fueled by racial separation and inflammatory rhetoric." Id. at 982. Murphy raised four constitutional claims, and "an independent statutory claim under RLUIPA . . ., which is subject to review under a different standard." Id. at 983.
On Murphy's RLUIPA claim, the court concluded that the district court "improperly concluded on summary judgment that Murphy's religion was not substantially burdened and that `group worship and group discussion and study, cannot be said to be tenets or beliefs central to his religion.'" Id. at 988. The court held that "a substantial burden to free exercise rights may exist when a prisoner's sole opportunity for group worship arises under the guidance of someone whose beliefs are significantly different from his own." Ibid. (internal quotation and citation omitted). Murphy had asserted that numerous beliefs and aspects of his faith were incompatible with Protestant Christian beliefs, and that communal worship was an important part of his religion. Ibid. Accordingly, "[w]hether Murphy can establish the truth of these allegations and the existence of a substantial burden on the exercise of his religion is a matter to be determined by the district court in the first instance *1148 following a trial on the merits on this issue." Ibid.
The Eighth Circuit court added that, even if the inmate could show that his religious practice had been substantially burdened, the defendant correctional department "can still prevail if it establishes that its choice to give Murphy only solitary practitioner status was the least restrictive means to further a compelling interest." Ibid. Although the court found that the defendant's actions were justified under the Turner reasonableness analysis, there was "insufficient evidence to conclude that [they] have satisfied the heavier burden imposed upon them under RLUIPA." Ibid.
The court acknowledged that prison authorities have "a compelling interest in institutional security," but added that they "must do more than merely assert a security concern" and "must do more than offer conclusory statements and post hoc rationalizations for their conduct." Id. at 988-89. To satisfy RLUIPA's higher standard of review, prison authorities "must provide some basis for their concern that racial violence will result from any accommodation of CSC's request." Id. at 989. The court would not "require evidence that racial violence has in fact occurred in the form of a riot, but we do require some evidence that the MDOC [Missouri Department of Corrections] decision was the least restrictive means necessary to preserve its security interest." Ibid. The court explained:
there exists a question of fact as to whether there are means available to MDOC less restrictive than the total preclusion of group worship for CSC members. It is not clear that MDOC seriously considered any other alternatives, nor were any explored before the district court. The only evidence MDOC submitted to support its claim of security concern was testimony suggesting that Murphy is a racist and that his religion requires that only Anglo-Saxon individuals may participate. We cannot conclude from this limited evidence that MDOC has met its burden of establishing that its limitation on Murphy's religious practices constituted the least restrictive means necessary to ensure the prevention of racial violence within the prison. Accordingly, we remand for further fact finding on this issue.
[Ibid.]
The Seventh Circuit's decision in Borzych v. Frank, 439 F.3d 388, 390-91 (7th Cir.2006), provides a contrast in result, but not approach. There, summary judgment in favor of the defendant prison officials was affirmed. The inmate, Borzych, contended that prison officials in Wisconsin had violated the Constitution and RLUIPA by refusing to allow him to possess the books Creed of Iron, Temple of Wotan, and The NPKA Book of Blotar, which he said were necessary to practice his religion. Id. at 390. He identified his religion as Odinism (or Odinic Rite), which like Asatru and Wotanism, entailed the worship of Norse gods. Ibid. Borzych maintained that the books were religious texts, but Wisconsin's prison officials considered them to be non-religious texts promoting white-supremacist violence. Ibid.
The defendants conceded that Odinism was a religion, and the district court assumed that denying Borzych these books substantially burdened that religion's exercise. Ibid. The district court concluded, however, that the defendants' interest in preserving security in the prison system was compelling because those particular books advocated violence. Ibid. The court determined that banning the books was the least restrictive means to advance that interest, which meant that Borzych could not prevail under RLUIPA. Ibid.
*1149 The Court of Appeals agreed with the district court, stating:
We doubt that keeping these books out of the prison substantially burdens anyone's religious exercise. Borzych's only evidence on this point is his unreasoned say-so, plus equivalent declarations by other inmates. This is insufficient to create a material dispute that would require a trial. No objective evidence supports his assertion that the books are important to Odinism.
[Ibid. (citations omitted).]
The Court of Appeals held, further, that the record "establishe[d] that the prison system's ban is the least restrictive means to promote a compelling state interest in safety." Ibid. Borzych had not seriously disputed that the books advocated violence, and "[a]n interest in curtailing violence within prison walls is compelling." Id. at 390-91. Noting the defendants' principal argument that the books promoted violence to exalt the status of whites and demean other races, the court concluded that "it is the means rather than the underlying racist view that the defendants contend (and we hold) may be forbidden in prisoners' reading matter." Id. at 391.
In the light of the foregoing approaches, we hold that the trial court in the instant matter erred by limiting its analysis to Turner First Amendment standards when called upon to rule on plaintiff's RLUIPA claim. It is well established that the standards governing the two types of claims are different. Plaintiff was entitled to a summary judgment evaluation by the separate standards of RLUIPA.
In remanding, we hold no further than to require such an analysis, i.e., whether a genuine issue of material fact has been presented in respect of RLUIPA requirements. The Department's rules and actions must be governed by the test that requires it to have used the least restrictive means necessary to meet a compelling governmental interest. We do not reject the Department's argument that prison security is a compelling State interest. We leave to the trial court, in the first instance, an evaluation of that assertion in the face of the statutory requirement that the restrictions at issue must be considered the "least restrictive means" for achieving a compelling governmental interest, as well as the determination whether the issues may be decided on summary judgment or require further proceedings. See, e.g., Marria v. Broaddus, 200 F.Supp.2d 280 (S.D.N.Y.2002), and, for such guidance as it may furnish, the unpublished decision in that matter following trial, Marria v. Broaddus, 2003 WL 21782633, 2003 U.S. Dist. Lexis 13329 (S.D.N.Y.2003).
Reversed and remanded.
NOTES
[1] The action, as originally filed, named the former Commissioner of the Department of Corrections. Pursuant to Rule 4:34-4, the current Commissioner has been substituted.
[2] Apparently, in an earlier motion for summary judgment, the trial court had dismissed plaintiff's claims for compensatory damages.
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536 F.2d 388
Saia Electric, Inc.v.C. I. R.
No. 75-1954
United States Court of Appeals, Fifth Circuit
7/16/76
1
T.C., La.
2
AFFIRMED***
***
Opinion contains citation(s) or special notations
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} |
255 B.R. 285 (2000)
In re Ronald and Linda HOEKSTRA, Debtors.
Ronald and Linda Hoekstra, Plaintiffs-Appellees,
v.
United States of America, Defendant-Appellant.
Bankruptcy No. 99-12361-SSM. CIV.A. No. 00-1115-A. Adversary No. 99-1297-SSM.
United States District Court, E.D. Virginia, Alexandria Division.
November 7, 2000.
*286 Steven B. Ramsdell, Tyler, Bartl, Burke & Albert, Alexandria, VA, for Plaintiff.
Jason S. Zariin, Trial Attorney Civil Trial Section Eastern Region Tax Division, United States Department of Justice, Richmond, VA, for Defendant.
MEMORANDUM OPINION
LEE, District Judge.
THIS Matter is before the Court on appeal from the Bankruptcy Court's Order granting summary judgment for Plaintiffs-Appellees Ronald and Linda Hoekstra. The issue before this Court is whether the Court should affirm the bankruptcy court's decision finding that the United States' federal tax lien against the Hoekstras' property is void for lack of value in the Hoekstras' townhouse.
The Hoekstras own a townhouse in Alexandria, Virginia that is subject to four liens. The United States is a creditor in interest to a federal tax lien against the *287 Hoekstras' real and personal property, which includes the townhouse. The United States' lien against the townhouse is third in priority.[1] The Hoekstras argued to the bankruptcy court that the federal tax lien against the townhouse should be voided because the first two liens against the townhouse exceeded the value of the townhouse. The bankruptcy court agreed, and held that the federal tax lien was void because there was no value in the townhouse to which the lien could attach. The United States appealed to this Court.
For the reasons stated below, this Court holds that the decision of the bankruptcy court should be and is REVERSED. The Court holds that the United States' federal tax lien is only undersecured, and therefore not void.
I. Factual and Procedural Background
Plaintiffs-Appellees Ronald and Linda Hoekstra ("Debtors"), husband and wife, reside in a townhouse located at 2318 Sanford Street, Alexandria, Virginia ("Townhouse").[2] The Townhouse is subject to the following liens in order of priority: (1) a first-lien deed of trust held by First Union National Bank, upon which Debtors owed $192,191.24 as of the filing date of the Chapter 7 petition; (2) a second-lien deed of trust held by Emily M. Glaub, upon which Debtors owed $41,960.00; (3) federal tax liens for unpaid 1990 and 1992 federal income taxes, upon which Debtors owed $29,626.00; and (4) homeowner's association liens held by Oak Cluster Community Council, upon which Debtors owed $9,568.67. The fair market value of the Townhouse is $210,000.00. The sum of the value of the first two liens equals $234,151.24; this value exceeds the value of the Townhouse. Therefore, the first two liens exhaust the value of the Townhouse, leaving no value underlying the homeowners' association lien and the federal tax lien against the Townhouse.
Debtors filed a voluntary petition under Chapter 13 of the Bankruptcy Code in the United States Bankruptcy Court for the Eastern District of Virginia on May 6, 1999. No plan was confirmed, and Debtors converted their case to Chapter 7 bankruptcy on August 6, 1999. The trustee filed a report of no distribution, and Debtors received a discharge of their dischargeable debts on December 3, 1999.
Debtors brought an action in bankruptcy court on November 8, 1999 seeking to avoid the federal tax liens and the homeowners' association liens. Debtors asserted that the liens were void under 11 U.S.C. § 506(d), because there was no value in the property to which the liens could attach. Asserting that there were no genuine issues of material fact, both the United States ("Creditor") and Debtors filed motions for summary judgment. The bankruptcy court entered an Order on May 5, 2000 granting the Debtors' motion for summary judgment and denying Creditor's motion for summary judgment. The bankruptcy court held that the federal tax liens and the homeowners' association liens were void because there was no value in the Townhouse to which the liens could attach.
The bankruptcy court relied on the sections of the Bankruptcy Code codified in 11 U.S.C. §§ 506(a) and (d) to arrive at its decision. The bankruptcy court first noted that the general rule in bankruptcy is that a creditor whose claim is secured by property which is worth less than the amount of the debt is treated as being secured only to the extent of the value of the collateral, with the balance of the claim being treated as unsecured. See In re Hoekstra, 253 B.R. 193, 195 (Bankr. *288 E.D.Va.2000) (unpublished memorandum opinion). This rule is derived from § 506(a) of the Bankruptcy Code, which provides in relevant part:
(a) An allowed claim of a creditor secured by a lien on property in which the estate has an interest, or that is subject to setoff under section 553 of this title, is a secured claim to the extent of the value of such creditor's interest in the estate's interest in such property, or to the extent of the amount subject to setoff, as the case may be, and is an unsecured claim to the extent that the value of such creditor's interest or the amount so subject to setoff is less than the amount of such allowed claim.
11 U.S.C. § 506(a) (1993). The bankruptcy court then noted that § 506(d) provides that:
(d) [t]o the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void.
See In re Hoekstra, 253 B.R. 193, 195 (citing 11 U.S.C. § 506(d)). The court noted that, despite the fact that § 506(a) states that a portion of a creditor's claim is unsecured if the property underlying the claim does not meet the full value of the claim, the Supreme Court had held that the unsecured portion of the claim was not void under § 506(d), and that therefore a court could not reduce, or "strip down,"[3] the creditor's claim to the value of the collateral underlying the lien. See Dewsnup v. Timm, 502 U.S. 410, 417, 112 S.Ct. 773, 116 L.Ed.2d 903 (1992). The court noted that the property underlying the lien in Dewsnup had not depreciated to $0.00, and therefore still had value; while the Townhouse underlying the lien in this case had $0.00 value, having been completely exhausted by the first two priority liens. The bankruptcy court therefore distinguished Dewsnup from this case, holding that Dewsnup prohibited only a "strip down" of an undersecured claim, and not a "strip off" of a wholly unsecured claim. See In re Hoekstra, 253 B.R. 193, 195 Consequently, the bankruptcy court found that Yi v. Citibank (Maryland), N.A., 219 B.R. 394 (E.D.Va.1998), was the proper case under which to evaluate Debtors' effort to avoid the federal tax lien against the Townhouse.
The bankruptcy court relied on Yi to hold that Creditor's claims were void under 11 U.S.C. § 506(d) because they were wholly unsecured under 11 U.S.C. § 506(a). See In re Hoekstra, 253 B.R. 193, 195 (citing Yi, 219 B.R. at 399-400). The court found that the lien was wholly unsecured as per the language of § 506(a), due to the fact that "the value of [the] creditor's interest . . . [was] less than the amount of [the] allowed claim." 11 U.S.C. § 506(a) (defining the extent to which a claim is unsecured). Upon finding the lien to be wholly unsecured, the court held that the lien was void pursuant to the language of § 506(d), because the lien was "not an allowed secured claim." See In re Hoekstra, 253 B.R. 193, 195 (citing 11 U.S.C. § 506(d)).
The bankruptcy court rejected Dewsnup's application to this case, observing that in Yi, the only published decision in this District addressing the issue of Chapter 7 lien stripping, the United States District Court reversed a bankruptcy court ruling that dismissed a Chapter 7 action to strip off a wholly unsecured third deed of trust. See id. at 5; Yi, 219 B.R. at 399, 402. The bankruptcy court's ruling that this District reversed in Yi had relied on Dewsnup. See Yi, 219 B.R. at 396. Therefore, the bankruptcy court in this case concluded that Dewsnup did not apply to this case and did not prohibit the court from "stripping off" Creditor's federal tax lien as against the Townhouse. The bankruptcy court issued its Final Judgment Avoiding *289 and Releasing Liens on May 31, 2000. Creditor appeals.
Creditor argues that the bankruptcy court inappropriately relied on Yi as precedent providing for the complete "strip-off" of Creditor's tax lien in this case. Creditor contends that the bankruptcy court should have followed the Supreme Court's holding in Dewsnup v. Timm. Creditor contends further that the bankruptcy court inappropriately disregarded the fact that both the real property and Debtors' personal property secure the federal tax lien. Creditor asserts that security by the personal property makes the lien undersecured, not unsecured. Accordingly, Dewsnup and its successor cases prevent Debtors from stripping down the federal tax lien. See, e.g., Crossroads of Hillsville v. Payne, 179 B.R. 486, 490 (W.D.Va.1995) (prohibiting the stripping down of liens in Chapter 7 bankruptcies); Rombach v. United States, 159 B.R. 311, 313-14 (Bankr.C.D.Cal.1993) (prohibiting stripping down of liens in Chapter 7); In re Doviak, 161 B.R. 379, 380-81 (Bankr. E.D.Tex.1993) (prohibiting stripping down of liens in Chapter 7).
II. Standard of Review
A district court should set aside findings of fact by a bankruptcy court only if they are clearly erroneous. See FED. R. BANKR. P. 8013; In re Johnson, 960 F.2d 396, 399 (4th Cir.1992). The district court must give questions or conclusions of law de novo review. See Johnson, 960 F.2d at 399; Crossroads of Hillsville, 179 B.R. at 488. There were no disputed issues of material fact in the bankruptcy proceeding. See In re Hoekstra, 253 B.R. 193, 194. Therefore, this Court must give de novo review to the legal issues raised here.
III. Analysis of Law
This Court agrees with the United States that the Supreme Court case Dewsnup v. Timm governs the outcome of this case. The Dewsnup case involved an attempt by a Chapter 7 debtor to "strip-down" the value of a lien to reflect the fair market value of abandoned[4] real property. Dewsnup, 502 U.S. 410, 112 S.Ct. 773, 116 L.Ed.2d 903. The debtor had secured a loan on a parcel of land for $120,000. After defaulting on the loan and filing for bankruptcy under Chapter 7, the debtor sought to avoid the portion of the $120,000 loan that exceeded the $39,000 value of the depreciated property. Just as Debtors attempt to do in this case, the debtor in Dewsnup proposed to utilize § 506(a) of the Code to establish the extent to which the lien was secured, and § 506(d) to void the remainder of the lien. See id. at 413, 112 S.Ct. 773. The Supreme Court rejected this argument, holding that § 506(a) and § 506(d) need not be read as "rigidly tied" to each other. See id. at 415, 417, 112 S.Ct. 773. "Rather, the words [in § 506(d)] should be read term-by-term to refer to any claim that is, first, allowed, and, second, secured." Id. at 415, 112 S.Ct. 773 (setting forth the respondent's argument, with which the court agreed). The Dewsnup Court held that the debtor could not avoid the unsecured portion of the lien because the lien was both allowed under § 502 and secured by the collateral. It did not matter that the value of the collateral was less than the value of the lien. See id. at 417, 112 S.Ct. 773; see also Yi, 219 B.R. at 396; In re Doviak, 161 B.R. at 380 (summarizing and interpreting Dewsnup).
The bankruptcy court did not recognize Dewsnup's application to this case because this case presents a situation unique from *290 the situation in Dewsnup, as well as that in Yi. Dewsnup involved an effort to decrease, or "strip down," a lien to a value equal to the then decreased value of the property underlying the lien. Yi involved an effort to void a lien on the grounds that absolutely no value remained in the property underlying the lien. This case presents the unique circumstance of an effort to void a federal tax lien only as to the real property underlying the lien which has no remaining value, where the lien encompasses more than one property and includes the debtor's personal property. Because Debtors seek to avoid a portion of a lien that still has value in underlying collateral, this case presents a "strip down" situation more analogous to Dewsnup than to Yi.
The bankruptcy court relied on its reading of 11 U.S.C. §§ 506(a) and (d) and Yi, 219 B.R. 394, in holding that Creditor's lien against the Townhouse was void due to the lack of value of Creditor's equity of redemption. The instant case is distinguishable from Yi in important respects. In Yi, as here, the residential property in question was subject to several liens. See Yi, 219 B.R. at 395 (property subject to three liens). Appellee Citibank (Maryland) N.A. held the third lien in priority. Citibank's lien was wholly unsecured because the amount of the claims secured by the first and second deeds of trust exceeded the value of the property. When the debtors sought to avoid Citibank's lien, the bankruptcy court in Yi dismissed the complaint for failure to state a claim, relying on the Supreme Court's holding in Dewsnup as controlling and dispositive authority. See id. (citing Dewsnup v. Timm, 502 U.S. 410, 112 S.Ct. 773, 116 L.Ed.2d 903). The District court reversed the bankruptcy court, finding that Dewsnup was not dispositive because "stripping off" a lien was different from "stripping down" a lien. See id. at 397. The Yi court held that Citibank's lien was void. See id. at 399. Yi and its progeny can be distinguished from this case, because Yi involved a private loan against property, see Yi, 219 B.R. at 395, and Yi's progeny involved mortgage loans, see, e.g., Farha v. First American Title Insurance, 246 B.R. 547, 548-50 (Bankr.E.D.Mich.2000); Zempel v. Household Finance Corp., 244 B.R. 625, 627, 629 (Bankr.W.D.Ky.1999). Those loans are particular to the named property subject to those liens; in the case of a mortgage, the equity in the lien is measured by the value of the house, condominium, etc., that is subject to the lien. In this case, the federal tax lien attached not only to a residence, but also to Debtors' personal property.
The bankruptcy court's misplaced reliance on Yi resulted from the court's misapprehension of the impact of the three different circumstances under which parties have sought to avoid liens. The bankruptcy court interpreted the facts presented in this case as similar to those in Yi by treating Creditor's federal tax lien as distinct and individual liens as to each component of property underlying the lien. The court concluded that "for the purpose of lien avoidance, each item of collateral must be viewed individually . . . The avoidance of the lien as to that particular parcel does not affect or impair the lien of Creditor as to any other property to which it may have attached." In re Hoekstra, 253 B.R. 193, 195. However, the Internal Revenue Code and case law make clear that a federal tax lien is not divisible in this context.
The lien that Creditor has is a lien for taxes under the Internal Revenue Code, 26 U.S.C. § 6321 (1995). Section 6321 provides that:
[i]f any person liable to pay any tax neglects or refuses to pay the same after demand, the amount . . . shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.
26 U.S.C. § 6321. This language makes clear that the value of a federal lien for taxes is the sum of all the property that is subject to the lien. Section 6321 does not *291 state that there shall be "liens" upon a debtor's real and personal property; it states that there shall be "a lien," or a single lien. Language in Mulligan v. United States demonstrates that a federal tax lien under 26 U.S.C. § 6321 is a single lien: "Defendant obtained a statutory lien under section 6321 on all the Plaintiff's property." Mulligan v. United States, 234 B.R. 229, 232 (Bankr.D.N.H.1999) (emphasis added); see also 5 COLLIER ON BANKRUPTCY ¶ 545.03[4] ("A federal tax lien arises and attached to all the taxpayer's property and rights to property, real and personal."). Therefore, even if one or more properties subject to Creditor's lien is without value, if any of the property retains value, Debtors cannot bifurcate Creditor's undersecured claim into secured and unsecured claims. See Rombach, 159 B.R. at 313 (preventing creditors from bifurcating a nonconsensual federal tax lien and holding that the lien could not be "stripped down" to the value of the property subject to the lien). Under § 506(a), a claim is secured "to the extent of the value of [the] creditor's interest in the estate's interest in such property . . . and is an unsecured claim to the extent that the value of such creditor's interest . . . is less than the amount of such allowed claim." 11 U.S.C. § 506(a). Thus, Creditor's lien against Debtors is undersecured in the amount of $29,626.00 (the unpaid 1990 and 1992 federal income taxes) minus the value of Debtors' personal property. Consequently, this case presents a "strip down" situation that must be analyzed under Dewsnup.
The Dewsnup court held that § 506(d) does not void a claim that has been "allowed pursuant to § 502 of the Code and is secured by a lien with recourse to the underlying collateral." Dewsnup, 502 U.S. at 414-15, 112 S.Ct. 773. Because the creditor's lien in Dewsnup could still be partially satisfied by the fair market value of the property in that case, the court found that the creditor's lien was secured under § 506(a). See id. at 415-17, 112 S.Ct. 773. The instant case is similar in that Creditor's lien is partially secured under § 506(a). Again, § 506(a) provides that a claim is secured "to the extent of the value of [the] creditor's interest in the estate's interest in such property . . . and is an unsecured claim to the extent that the value of such creditor's interest . . . is less than the amount of such allowed claim." 11 U.S.C. § 506(a). Debtors have not disputed that Creditor's federal tax lien was an allowed claim. Nor have Debtors disputed that value remains in Debtors' personal property that is subject to the federal tax lien. Therefore, a component of Creditor's lien, as against the Townhouse, is wholly unsecured, but the federal tax lien is still partially secured by Debtors' personal property. Because there remains "recourse to collateral" underlying the United States' federal tax lien, the lien is not void. See Crossroads of Hillsville, 179 B.R. at 490 (interpreting Dewsnup, 502 U.S. at 415-17, 112 S.Ct. 773, to define "allowed secured claim" in § 506(d) to mean "any lien that is an allowed claim and also secured by underlying collateral regardless of the collateral's value"). This holding is supported by Dewsnup's successor cases, which hold that a lien cannot be avoided unless the lien has been disallowed or is not secured by any collateral. See, e.g., Yi, 219 B.R. at 397 (stating that the Court in Dewsnup held the existence of some collateral sufficient to render the lien a secured claim, notwithstanding that the collateral's value is less than the value of the lien); Cross-roads of Hillsville, 179 B.R. at 490; Rombach, 159 B.R. at 314 (involving a federal tax lien). Therefore, the "strip down" prohibited by the Supreme Court is also prohibited in the situation presented here. Considering this in connection with the differences between this case and the situation presented in Yi, this Court must reverse the bankruptcy court's Final Judgment Avoiding and Releasing Liens in the matter of Ronald and Linda Hoekstra.
IV. Conclusion.
The Supreme Court in Dewsnup established the firm rule that a claim that is not *292 void, but only undersecured, cannot be "stripped down." The debtors in Dewsnup sought to avoid a portion of a lien where the underlying collateral still had value. This is the same situation presented in the instant case; Creditor's federal tax lien against Debtors is undersecured because the Townhouse has no value.
Debtors' circumstances here are distinguishable from the debtors in Yi, who sought to avoid an entire lien where the underlying collateral had no value. Debtors here seek to avoid a portion of a lien where a component of the collateral has no value but other components of collateral have value. The Dewsnup Court's clear prohibition against "stripping down" liens leads this Court to reverse the bankruptcy court's judgment voiding Creditor's lien against the Townhouse.
The Clerk is directed to forward a copy of this Memorandum Opinion to counsel of record.
NOTES
[1] The Oak Cluster Community Council held a homeowners' association lien that was fourth in priority against the property. Oak Cluster Community Council does not appeal the bankruptcy court's decision voiding the homeowners' association lien.
[2] The legal description of the property is Lot 25, Oak Cluster subdivision, City of Alexandria, Virginia.
[3] "Strip down" refers to decreasing a creditor's lien to a judicially-determined value of the collateral, to the extent that the fair market value of the collateral is less than the claim, while still maintaining the lien. "Strip off" refers to the total erasure or voiding of a debt.
[4] Property is "abandoned" under § 554 of the Code. Upon abandonment, the trustee in bankruptcy is divested of control of the property because it is no longer part of the debtor's estate. Abandonment constitutes a divestiture of all of the estate's interests in the property. Property may be abandoned to any party with a possessory interest in it (e.g., the debtor or the secured creditor). See 5 COLLIER ON BANKRUPTCY ¶ 554.02[3] (Lawrence P. King ed., 15th ed. rev.1999). A trustee is permitted to abandon property that is burdensome to the estate. See id. at ¶ 554.02[1].
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673 N.E.2d 394 (1996)
284 Ill. App.3d 1065
220 Ill.Dec. 482
Richard CANNELLA, Gerald A. Brier, Edward W. Brzinski, George Fischer, William D. Goodman, Russell C. Harvey, Joseph M. Holwell, Walter J. Klimek, John Pentz, Anthony Oleynichak, Richard Ryan, Thomas O. Sparrow, William Stanton, Anthony Sicillian, Salvatore Zambuto, and Joseph Miller, Plaintiffs-Appellees,
v.
The VILLAGE OF BRIDGEVIEW, Defendant-Appellant.
No. 1-95-0544.
Appellate Court of Illinois, First District, Fifth Division.
November 8, 1996.
*396 Sharon L. Eiseman, Mark A. Balkin, Ancel, Glink, Diamond, Cope & Brush, P.C., Chicago, for Defendant-Appellant.
Perry M. Berke, Baskin, Server, Berke, Weinstein & Spiro, Susan P. Malone, Chicago, for Plaintiffs-Appellees.
Justice COUSINS delivered the opinion of the court:
Plaintiffs, former and present police officers of the Village of Bridgeview (defendant), filed a two-count complaint against defendant seeking declaratory relief and damages related to a claim for 15 minutes of overtime compensation for attendance at daily roll call. Count I of the second amended complaint sought damages for officers who were employed by the village at the time of its filing. Count II sought damages for former police officers. On July 30, 1993, the trial court entered a judgment order finding defendant liable to the plaintiffs for overtime compensation for their attendance at patrol division roll call. Defendant appeals, contending that: (1) the doctrine of laches and waiver preclude plaintiffs from claiming entitlement to overtime compensation for roll call; (2) there was no prior appropriation of monies to pay overtime for roll call; (3) there was no contract between the police officers and the village during the relevant time period; (4) plaintiffs did not work in excess of eight hours because meal time was not included as work time; (5) the trial court erred by not granting summary judgment against Kenneth Osterman because Osterman released the village from any and all claims arising from his employment; and (6) the court erred by not granting summary judgment against plaintiffs because plaintiffs refiled their claim on more than one occasion, in violation of section 13-217 of the Illinois Code of Civil Procedure. 735 ILCS 5/13-217 (West 1992).
BACKGROUND
In 1971, police department general order 71-10, entitled "Reporting Time for All Roll Calls," was implemented and stated:
"1. All members of this command shall report for duty 15 minutes prior to starting time. Example: 1st Watch shall report at 23.45 hours, 2nd Watch shall report at 15.45 hours and 3rd Watch shall report at 0745 hours. All Watch Commanders shall conduct a 15-minute roll call and all personnel report to `his or her' assignments on the hour.
2. Watch commanders shall set an example by reporting at the prescribed time."
In 1974, the Village of Bridgeview passed an ordinance that included a provision that police officer employees of the village would be entitled to overtime pay for hours worked beyond the eight-hour day. The ordinance further provided that such work must be approved by the department head. In September 1975, the ordinance was amended to provide:
"Any duties required by the head of any department or any member of that department to be performed in off-duty periods shall be classified as overtime work and shall be compensated for in the manner above prescribed."
Stanley Sarbarneck was chief of police for Bridgeview from 1971 until 1983. At that time, most of the police officer employees were "part time" employees. Chief Sarbarneck *397 testified that the officers were required to be present for roll call. Roll call was used for training, reports, duty assignments, and bulletins as to things to watch during the tour of duty.
After the roll call was completed, the tour of duty of the officers consisted of eight hours. There were no written directives authorizing compensation or time off for missed or interrupted meal periods. Officer Kenneth Osterman testified that meal periods were interrupted more frequently than not. He was never informed of the existence of any procedure for obtaining compensation or additional time because of a missed or interrupted meal period.
Chief Sarbarneck testified he participated in the preparation of the police department budgets during his tenure. Each year the budgets included money for payment of overtime. There were no separate line items for overtime. Sarbarneck could not recall the numbers that were in the budgets, stating he would only be "guessing or lying" if he were to state what those numbers might have been.
Plaintiffs were hired at varying dates from 1965 to 1982. In October 1983, after the retirement of Chief Sarbarneck, Kenneth Osterman became the chief of police for Bridgeview, a position he held until January 1987. Prior to that time, he was assigned as a lieutenant in investigations. Shortly after the first claim for roll call compensation was filed, then-Lieutenant Osterman attended a mandatory supervisors meeting held by Chief Sarbarneck. Chief Sarbarneck instructed the supervisors that no requests for overtime for roll call were to be taken by the supervisors and that they were to instruct the officers not to include the roll call as an activity on their daily activity sheets. Osterman believed this occurred in August 1982. The officers were so instructed by the supervisors.
Chief Osterman testified that from 1983 through 1987 he prepared the police budgets. Those budgets generally made "educated guesses" on overtime needs. It was commonplace to expend moneys as needed, regardless of whether there were funds in the particular line item.
Vladomir Ivkovich became chief after this litigation had been pending for approximately six months. By the time the case was tried, both the ranking officers and patrol officers had reached agreements with the village concerning their duty day. Chief Ivkovich stated that the 1988 agreement provided that the tour of duty consisted of 8.25 hours, including the roll call. If a police officer or sergeant worked an extra day, he or she would be credited with 8.25 hours. If a police officer took off a day, 8.25 hours would be deducted form his or her "time due." The 8.25 hours currently include the roll calls and meal periods.
Chief Ivkovich testified that at some time either before or after the 8.25-hour agreements were in effect, he prepared some budgets for the department. In preparing such budgets, he never determined how much money would or would not have been needed to pay for roll call overtime.
In 1982, certain police officers filed a complaint against Chief Sarbarneck and the village in state court. The village filed a verified petition seeking and obtaining removal to the federal court on the basis that the complaint raised a federal question. The village then moved to dismiss the complaint for failure to state a claim. Judge Bernard Decker granted the motion as to count II with prejudice for want of prosecution and failure to state a claim upon which relief can be granted. Count I was dismissed without prejudice because count I was based on state law. Some months later, counsel filed an identical complaint in the state court. The complaint was again removed by the village and assigned to Judge Decker. The village again sought to dismiss the case and it was again dismissed without prejudice.
In 1993, the village moved for summary judgment on the basis that the prior filing barred the present one. Plaintiffs opposed the motion and, after a full hearing, the trial court denied the motion. In 1993, defendant also moved for partial summary judgment, asserting that a "release" signed by one plaintiff, Kenneth Osterman, in 1989 precluded that plaintiff from asserting his claim. *398 Plaintiffs opposed the motion, and after a full hearing, the trial court denied the motion.
ANALYSIS
I
Defendant initially contends that plaintiffs' brief fails to comply with Supreme Court Rule 341(f) (134 Ill.2d R. 341(f)), which requires an appellee to provide "Points and Authorities" in the form set forth in Rule 341(e)(1). 134 Ill.2d R. 341(e)(1). Rule 341(e)(1) states that the "Points and Authorities" "shall consist of the headings of the points and subpoints as in the Argument, with the citation under each heading of the authorities relied upon or distinguished, and a reference to the page of the brief on which each heading and each authority appear." 134 Ill.2d R. 341(e)(1).
Plaintiffs' points and authorities are improper in that they do not contain any subpoints, as in the argument section, and the case citations are not listed under each heading, but are listed in a separate "Table of Authorities." Furthermore, the points and authorities section contains improper citation of authority. Plaintiffs' brief also contains an "Introduction" section before the statement of facts, which is not required by Rule 341(e) or (f). Defendant argues that, because of these infractions, plaintiffs' brief, or at least the "Introduction" section, should be stricken. However, we believe that plaintiffs' errors are those of form and not of substance, and we choose to consider the merits of this case. See Lindahl v. City of Des Plaines, 210 Ill.App.3d 281, 288, 154 Ill.Dec. 857, 568 N.E.2d 1306 (1991).
Defendant contends that the principles of laches bar plaintiffs from claiming entitlement to overtime compensation for roll call. Laches is an equitable doctrine that grants or denies relief based upon the facts of the case. Christ Hospital & Medical Center v. Human Rights Comm'n, 271 Ill.App.3d 133, 137, 207 Ill.Dec. 745, 648 N.E.2d 201 (1995). Laches bars an action where, because of delay in bringing suit, a party has been misled or prejudiced or has taken a course of action different from what he otherwise would have taken. Schons v. Monarch Insurance Co., 214 Ill.App.3d 601, 609, 158 Ill.Dec. 289, 574 N.E.2d 83 (1991). A defendant must show prejudice or hardship rather than mere passage of time and must demonstrate that the delay induced him to adversely change his position. Schons, 214 Ill.App.3d at 609, 158 Ill.Dec. 289, 574 N.E.2d 83. To that end, it is essential that the party asserting the defense plead and prove, not only that a considerable period of time has elapsed and that prejudice has resulted, but also that the opposing party had prior knowledge of the facts giving rise to the claim. Patrick Media Group, Inc. v. City of Chicago, 255 Ill.App.3d 1, 7, 193 Ill.Dec. 515, 626 N.E.2d 1066 (1993); Schons, 214 Ill.App.3d at 609, 158 Ill.Dec. 289, 574 N.E.2d 83. However, when a claim or right is not barred by the statute of limitations period, laches will not apply unless a party's conduct or special circumstances make it inequitable to grant the requested relief. Davis v. Board of Review of the Department of Labor, 132 Ill.App.3d 853, 856, 87 Ill.Dec. 716, 477 N.E.2d 842 (1985); Aiardo v. Village of Libertyville, 184 Ill.App.3d 653, 659, 132 Ill.Dec. 939, 540 N.E.2d 861 (1989).
Defendant argues that laches applies because plaintiffs failed to assert a right by never seeking overtime for roll call. Defendant also argues that plaintiffs waited nearly three years after dismissal of the suit to bring the present action, the defendant had every reason to believe this issue had been resolved and had no reason to change its ordinance to indicate that roll call was a part of the regular duty pay. Defendant further argues that it was clearly prejudiced by the plaintiffs' actions because the trial court ordered defendant to pay five years' worth of overtime for roll call at once. Defendant asserts that if plaintiffs had made internal claims for compensation for roll call or had pursued their court claim in a timely fashion, defendant may have deemed it necessary to amend its ordinance.
Under the circumstances of the instant case, we do not believe that defendant has met the requirement to assert a defense of laches. There is no dispute that plaintiffs' claim was filed within the applicable five-year statute of limitations. Also, on this record, we do not believe that plaintiffs' conduct or *399 special circumstances exist to justify equitable relief to defendant. The defendant adopted an ordinance allocating funds for salaries and compensation, including overtime compensation, but the defendant has refused to pay for all overtime services it actually received from its police officers. Plaintiffs timely asserted their right for compensation for roll call duty. Furthermore, defendant has made no showing that it actually would have changed its ordinance to include roll call as a part of the regular duty day, but merely speculates about the matter. Speculation that a party might have proceeded differently is insufficient to prove harm as a result of an opposing party's delay. Lippert v. Property Tax Appeal Board, 273 Ill. App.3d 150, 155, 209 Ill.Dec. 921, 652 N.E.2d 461 (1995); Van Milligan v. Board of Fire & Police Commissioners, 158 Ill.2d 85, 89, 196 Ill.Dec. 665, 630 N.E.2d 830 (1994). Accordingly, the trial court correctly ruled that the doctrine of laches is inapplicable to the instant case.
Defendant also contends that the plaintiffs waived their claims for compensation because they failed to follow the proper procedures for obtaining overtime compensation. However, we note that there was testimony by Osterman that the officers were instructed not to submit overtime compensation requests for roll call and not to record roll call on their daily activity reports. Thus, it would have been futile for officers to adhere to the standard operating procedures for obtaining overtime compensation for roll call.
II
Defendant next contends that the plaintiffs were not entitled to overtime for roll call because there was no prior appropriation for compensation for roll call. Defendant relies on section 8-1-7 of the Illinois Municipal Code, which provides:
"[N]o contract shall be made by the corporate authorities or by any committee or member thereof, and no expense shall be incurred by any of the officers or departments of any municipality, whether the object of the expenditure has been ordered by the corporate authorities or not, unless an appropriation has been previously made concerning that contract or expense. Any contract made, or any expense otherwise incurred, in violation of the provisions of this section shall be null and void * * *." 65 ILCS 5/8-1-7 (West 1992).
Plaintiff argues, however, that the defendant was not bound by the restrictions set forth in section 8-1-7 (65 ILCS 5/8-1-7 (West 1992)) because defendant adopted an alternative to an annual appropriation ordinance as permitted by section 8-2-9.3 of the Municipal Code. 65 ILCS 5/8-2-9.3 (West 1992). That section provides that, in lieu of an appropriation ordinance, a village may pass an annual budget ordinance and may:
"[D]elegate authority to heads of municipal departments, boards, or commissions to delete, add to, change or create sub-classes within object classes budgeted previously to the department, board, or commission, subject to such limitation or * * * prior approval by the budget officer or executive officer of the municipality * * *." 65 ILCS 5/8-2-9.6 (West 1992).
Plaintiffs argue that, pursuant to section 8-2-9.6 (65 ILCS 5/8-2-9.6 (West 1992)), defendant had the option of transferring money within a department or from one department or line item to another and could increase items as it chose, provided it had the money to pay for such increased costs. Defendant asserts that the requirement of section 8-1-7 (65 ILCS 5/8-1-7 (West 1992) is applicable even where a municipality uses a budget ordinance as an alternative to an annual appropriations ordinance because transfers between line items or additional appropriations have to be specifically authorized by the village board and cannot occur informally to remedy defects or cover unanticipated expenses.
Defendant relies on Koudelka v. Village of Woodridge, 91 Ill.App.3d 884, 46 Ill.Dec. 268, 413 N.E.2d 1381 (1980). In Koudelka, the plaintiff had accumulated 1,594 hours of "earned time due," a purpose not provided for in the village's appropriation ordinance. However, the village had an unwritten policy permitting compensatory time off, and, after the plaintiff was terminated from employment, she sought payment for her accumulated hours of earned time due. The court held *400 that the village was not liable for overtime compensation because, although there was an appropriation for overtime compensation, there was no appropriation for the type of extraordinary expense, i.e., earned time due, there claimed by the plaintiff. Koudelka, 91 Ill.App.3d at 887, 46 Ill.Dec. 268, 413 N.E.2d 1381.
However, we believe that Aiardo v. Village of Libertyville, 184 Ill.App.3d 653, 132 Ill.Dec. 939, 540 N.E.2d 861 (1989), and not Koudelka, is more instructive. In Aiardo, police officers brought a declaratory judgement action against the village, police department and chief of police to determine whether they were entitled to overtime compensation for roll call. The trial court found that the village did not have to pay overtime compensation because no appropriation was made for that purpose. The appellate court reversed, holding that overtime compensation was expressly provided for in the village's personnel policy, and payment of any overtime compensation came out of the general line item appropriation for salaries and compensation. Therefore, there was no basis to draw a fine-line distinction between roll call and other overtime compensation, as urged by the village. Aiardo, 184 Ill.App.3d at 659, 132 Ill.Dec. 939, 540 N.E.2d 861.
In the instant case, ordinance No. 84-43, passed in 1984, expressly provided for overtime compensation. Apparently, the defendant paid compensation for overtime from the salary line item. Unlike Koudelka, as well as the other cases cited by defendant, compensation for overtime was provided for in the defendant's annual budget. We do not believe that overtime compensation for roll call was an "extraordinary expense" as found in Koudelka. Like the plaintiffs in Aiardo, the plaintiffs in the instant case are merely seeking compensation for ordinary overtime services to the village. Assuming that a police officer has worked in excess of an eight-hour day or a 40-hour week, the roll call time period will apply towards overtime. We see no reason to differentiate between overtime due to roll call attendance and other overtime compensation.
III
In their second amended complaint, plaintiffs alleged that defendant breached an employment contract by not compensating the police officers for overtime work in excess of the 40-hour work week. Defendant contends, however, that there was no contract between the police officers and the village during the relevant time period because salary ordinances are not contracts. Plaintiffs argue that the salary ordinances are contracts implied in law that establish the rights of the officers to wages.
The essence of a cause of action for contract implied in law, or a quasi-contract, is the defendant's failure to make equitable payment for a benefit that it voluntarily accepted from the plaintiff. Woodfield Lanes, Inc. v. Village of Schaumburg, 168 Ill.App.3d 763, 766, 119 Ill.Dec. 568, 523 N.E.2d 36 (1988). Contracts implied in law, notwithstanding the parties' intentions, result from a duty imposed by law and are contracts merely in the sense that they are created and governed by principles of equity. Zadrozny v. City Colleges, 220 Ill.App.3d 290, 295, 163 Ill.Dec. 93, 581 N.E.2d 44 (1991). In order to recover on an implied contract, the facts and circumstances must show that, at the time the services were rendered, one party expected to receive payment and the other party intended to make payment. Zadrozny, 220 Ill.App.3d at 296, 163 Ill.Dec. 93, 581 N.E.2d 44.
Defendant argues that a contract did not exist because there was not a "meeting of the minds" between the parties. Defendant asserts that none of the plaintiffs ever sought overtime compensation for attending roll call until 1982 and there were no acts on the part of the defendant that would have led the plaintiffs to believe that defendant considered roll call extra time worked. However, the ordinance expressly states that plaintiffs were to receive overtime compensation for any time worked over 40 hours. Because defendants had a duty to enforce the ordinance, plaintiffs could expect to be paid for time spent during roll call. In our view, defendant's acceptance of the benefit of plaintiffs' attending roll call, and defendant's failure to meet its duty to compensate plaintiffs *401 for roll call, constituted unjust enrichment. See Woodfield Lanes, Inc., 168 Ill. App.3d at 768, 119 Ill.Dec. 568, 523 N.E.2d 36.
IV
Defendant next contends that meal time was not work time, and, therefore, even counting roll call, plaintiffs did not work in excess of eight hours. Defendant relies on federal cases to support its argument. Federal courts have decided this issue based on the Federal Labor Standards Act (FLSA). 29 U.S.C. § 201 et seq. (1994). Specifically, the courts have relied on section 785.19 of the Code of Federal Regulations (29 C.F.R. § 785.19 (1996)), which states that a meal period is noncompensable if the employee is completely relieved from duty for the purposes of eating regular meals. The court in Armitage v. City of Emporia, 982 F.2d 430 (10th Cir.1992), stated that the correct standard for determining compensability of a meal period was whether the officer is primarily engaged in work-related duties during meal periods. Armitage, 982 F.2d at 432.
Although defendant does not contend that the FLSA and its regulations are applicable to the instant case, defendant does argue that the plaintiffs' mealtime was primarily for the officers' benefit and not the village's. Defendant relies on a memo from Chief Sarbarneck from Watch Commander Hansen Perkins regarding taking away Cannella's lunch period and breaks because Cannella was late for duty. Defendant argues that this memo is compelling evidence that the meal period was personal time and could therefore be used to make up time that plaintiffs should have been working. Defendant also argues that meal time was personal time because officers were rarely recalled to duty from mealtime, and if an officer was called away from his or her meal period, the officer could receive additional time to finish.
However, we do not believe that these instances negate the fact that meal time is, and always has been, included in the ordinance as part of the "eight hour" shift. Under the defendant's interpretation, if roll call is included in the work day and the lunch break is intended to be uncompensated personal time, plaintiffs' actual work time would be 7¾ hours, which would contradict the ordinance's definition of a work day and work week. We do not believe that the ordinance expresses this interpretation, and we do not believe that the village trustees intended the ordinance to be interpreted in that manner. Accordingly, we conclude that the officers' 30-minute meal period was included as part of the plaintiffs' eight-hour work day. See Aiardo, 184 Ill.App.3d at 657, 132 Ill.Dec. 939, 540 N.E.2d 861.
V
Defendants next contend that the trial court erred by not granting summary judgment against plaintiff Osterman because Osterman released the village from any and all claims arising from his employment with the village. Summary judgment is properly granted when the pleadings, depositions, and affidavits show that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Miller v. Danville Elks Lodge 332, 211 Ill. App.3d 145, 151, 155 Ill.Dec. 549, 569 N.E.2d 1160 (1991). On review, this court reviews the granting of summary judgment de novothat is, this court must determine if the trial court correctly decided that no genuine issues of material fact were present. Makowski v. City of Naperville, 249 Ill. App.3d 110, 115, 187 Ill.Dec. 530, 617 N.E.2d 1251 (1993).
A release is a contract, whereby one party abandons a claim to another against whom the claim exists, and its interpretation is governed by the principles that govern contract law cases. Aqua-Aerobic Systems, Inc. v. Ravitts, 166 Ill.App.3d 168, 171, 117 Ill.Dec. 77, 520 N.E.2d 67 (1988). Defendant argues that on August 29, 1989, Kenneth Osterman executed a "Release of All Claims" that, for the sum of $13,500, released the Village of Bridgeview "from any and all actions, claims and demands of whatsoever kind or nature." The release further stated:
"I further declare that I fully understand that this settlement releases any and all claims against the Village of Bridgeview arising from my employment with the Village *402 of Bridgeview, which employment has terminated with my receipt of a pension from the Village Police Pension Fund."
When this release was executed, Kenneth Osterman was a named plaintiff in the instant action. Therefore, defendant argues that Osterman is not entitled to any compensation in this case. We disagree. The original release was for a personal injury. A release is not valid for a subsequent separate and distinct, injury. See O'Keefe v. Greenwald, 214 Ill.App.3d 926, 935, 158 Ill.Dec. 342, 574 N.E.2d 136 (1991). Clearly, this cause of action for compensation for roll call duty is separate and distinct from the release for the personal injury claim. Furthermore, defendant has failed to include in the record a transcript of the hearing on the issue of the release. The burden rests on the appellant to provide a sufficient record to support the claim of error, and, in the absence of such a record, the reviewing court will presume that the trial court's order was in conformity with established legal principles and had a sufficient factual basis. Foutch v. O'Bryant, 99 Ill.2d 389, 391-92, 76 Ill.Dec. 823, 459 N.E.2d 958 (1984); In re Marriage of Martins, 269 Ill.App.3d 380, 387, 206 Ill.Dec. 562, 645 N.E.2d 567 (1995).
VI
Lastly, defendant contends that the trial court erred by not granting summary judgment against Richard Cannella, George Fischer, William D. Goodman, Russell C. Harvey, Joseph M. Holwell, Walter J. Klimek, John Pentz, Anthony Oleynichak, Richard Ryan, Thomas Sparrow, and William Stanton because those plaintiffs refiled their claim on more than one occasion in violation of section 13-217 of the Code of Civil Procedure. 735 ILCS 5/13-217 (West 1992). Section 13-217 provides:
"Reversal or dismissal. In the actions specified in Article XIII of this Act or any other act or contract where the time for commencing an action is limited, if judgment is entered for the plaintiff but reversed on appeal, or if there is a verdict in favor of the plaintiff and, upon a motion in arrest of judgment, the judgment is entered against the plaintiff, or the action is voluntarily dismissed by the plaintiff, or the action is dismissed for want of prosecution, or the action is dismissed by a United States District Court for lack of jurisdiction, or the action is dismissed by a United States District Court for improper venue, then, whether or not the time limitation for bringing such action expires during the pendency of such action, the plaintiff, his or her heirs, executors or administrators may commence a new action within one year or within the remaining period of limitation, whichever is greater, after such judgment is reversed or entered against the plaintiff, or after the action is voluntarily dismissed by the plaintiff, or the action is dismissed for want of prosecution, or the action is dismissed by a United States District Court for * * * improper venue." (Emphasis added.) 735 ILCS 5/13-217 (West 1994).
Our supreme court has interpreted section 13-217 as permitting "one, and only one, refiling of a claim even if the statute of limitations has not expired." Flesner v. Youngs Development Co., 145 Ill.2d 252, 254, 164 Ill.Dec. 157, 582 N.E.2d 720 (1991).
In the instant case, in 1982, plaintiffs filed a two-count complaint in the circuit court of Cook County. Count I of the complaint sought money damages for overtime compensation for attendance at roll call. Count II of that complaint claimed that defendants were acting under color of law in violation of the plaintiffs' fifth and fourteenth amendment constitutional rights. U.S. Const., amends. V, XIV. Defendant filed a verified petition with the United States District Court seeking removal to the federal court. After removal, defendant filed a motion to dismiss the complaint for failure to state a claim on which relief could be granted, pursuant to Rule 12 of the Federal Rules of Civil Procedure. Fed.R.Civ.P. 12. The court granted that motion to dismiss count I of the complaint without prejudice. In 1983, plaintiffs refiled the identical complaint in state court in 1983. The defendant again removed the case, filing verified petitions asserting that the federal court had jurisdiction. The court dismissed count II, without prejudice, for failure to state a claim upon which relief can be granted, and the court stated that "the *403 plaintiffs are free to refile in any court having jurisdiction of the parties and subject matter in controversy."
Defendant argues that the instant action constituted a second filing after plaintiffs' complaint was dismissed for lack of federal jurisdiction. Therefore, defendant contends that, pursuant to section 13-217, plaintiffs were statutorily barred from filing the 1986 complaint. Defendant relies on Flesner v. Youngs Development Co., 145 Ill.2d 252, 164 Ill.Dec. 157, 582 N.E.2d 720 (1991). In Flesner, the plaintiffs filed a complaint in federal court. This complaint was dismissed for lack of jurisdiction. Plaintiffs filed a second complaint in the circuit court, and this complaint was voluntarily dismissed. Plaintiffs filed a third complaint, and the trial court granted defendants' motion to dismiss the complaint. The court allowed plaintiffs' motion to set aside the order of dismissal and to reinstate the complaint. The appellate court affirmed. The supreme court reversed and dismissed plaintiffs' complaint, holding the plaintiffs had used up their one chance to refile their claim. Flesner, 145 Ill.2d at 254, 164 Ill.Dec. 157, 582 N.E.2d 720.
Defendant also relies on Koffski v. Village of North Barrington, 241 Ill.App.3d 479, 182 Ill.Dec. 61, 609 N.E.2d 364 (1993). In Koffski, plaintiffs filed a complaint in circuit court seeking damages related to a personal injury. Approximately one year later, plaintiffs voluntarily dismissed their state court action against all defendants. Following the dismissal, plaintiffs filed a complaint in federal court, which the court dismissed for lack of subject-matter jurisdiction based upon an absence of diversity of citizenship. Four months later, plaintiffs filed a second complaint in the district court against the same defendants on the same cause of action. Prior to the district court's ruling on defendants' motion to dismiss the second complaint, plaintiffs filed a section 2-1401 motion (735 ILCS 5/2-1401 (West 1992)) in the circuit court to vacate the circuit court's order granting plaintiffs' motion for voluntary dismissal. The defendants moved to dismiss plaintiffs' motion to vacate, which the court granted. The appellate court affirmed, holding that the plaintiffs were not entitled to relief from the order granting voluntary dismissal, where they refiled the same cause of action against the same defendants in federal court which was subsequently dismissed for lack of subject matter jurisdiction. Koffski, 241 Ill.App.3d at 481, 182 Ill.Dec. 61, 609 N.E.2d 364.
We note that defendant has failed to provide a complete record on appeal regarding the claim that plaintiffs' complaint is barred by section 13-217. As we stated earlier, it is the appellant's burden to provide a sufficient record on appeal and, in the absence of such a record, the reviewing court will presume that the trial court's order was in conformity with established legal principles and had a sufficient factual basis. Foutch, 99 Ill.2d at 391-92, 76 Ill.Dec. 823, 459 N.E.2d 958. Therefore, we deem this argument to be waived on appeal. However, assuming arguendo that this issue was not waived, defendant's claim is not well founded. We believe the above cases are inapposite to the case sub judice. First, we disagree with defendant that plaintiffs' cause of action was dismissed by the federal court for lack of jurisdiction. Furthermore, defendant, on its own motion, transferred the case to federal court, which, under section 1441 of the United States Code, required defendant to plead that the federal court had jurisdiction of the claim. 28 U.S.C. § 1441 (1994). Section 1441, which governs removal of actions, provides in pertinent part:
"(a) Except as otherwise expressly provided by Act of Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. * * *
(b) Any civil action of which the district courts have original jurisdiction founded on a claim or right arising under the Constitution, treaties, or laws of the United States shall be removable without regard to the citizenship or residence of the parties. Any other such action shall be removable only if none of the parties in interest properly joined and served as defendants *404 is a citizen of the State in which the action is brought." (Emphasis added.) 28 U.S.C. §§ 1441(a), (b) (1994).
The congressionally mandated procedures for removal are set out in 28 U.S.C. § 1446(a) and require:
"(a) [d]efendant or defendants desiring to remove any civil action * * * shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal * * *." 28 U.S.C. § 1446(a) (1994).
Thus, defendant's argument that the trial court dismissed the case for lack of jurisdiction is inconsistent with defendant's conduct of transferring the case to federal court based on federal jurisdiction.
For the foregoing reasons, the judgment of the circuit court of Cook County is affirmed.
Affirmed.
McNULTY, P.J., and GORDON, J., concur.
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939 P.2d 509 (1997)
NATIONAL JUNIOR COLLEGE ATHLETIC ASSOCIATION, Petitioner-Appellee, and
Board of Assessment Appeals of the State of Colorado, Appellee,
v.
Mary HUDDLESTON, in her official capacity as Property Tax Administrator of the State of Colorado, Respondent-Appellant.
No. 96CA1359.
Colorado Court of Appeals, Div. II.
May 1, 1997.
*510 Wills & Adams, LLP, Wm. Andrew Wills, II, Colorado Springs, for Petitioner-Appellee.
No Appearance for Appellee.
Gale A. Norton, Attorney General, Stephen K. ErkenBrack, Chief Deputy Attorney General, Timothy M. Tymkovich, Solicitor General, Larry A. Williams, First Assistant Attorney General, Denver, for Respondent-Appellant.
Opinion by Judge MARQUEZ.
In this property tax case, respondent, the Property Tax Administrator (PTA), appeals from an order of the Board of Assessment Appeals (BAA) which overturned a ruling of the PTA and granted an exemption from ad valorem taxation to petitioner, the National Junior College Athletic Association (NJCAA), as to its nonresidential personal property for the 1994 and 1995 tax years. We affirm.
At issue in this appeal is whether the NJCAA is entitled, as a matter of law, to the charitable use property tax exemption for such property available to a "qualified amateur sports organization" within the meaning of the provisions of § 39-3-108(1.3), C.R.S. (1994 Repl.Vol. 16B). The PTA contends that the NJCAA does not meet all of the statutory criteria for such an exemption, while the BAA ruled otherwise. We conclude that the exemption was properly granted by the BAA.
Section 39-3-108(1)(a), C.R.S. (1994 Repl.Vol. 16B) provides, in general terms, for the exemption from the levy and collection of property tax as to nonresidential property which is owned and used solely and exclusively for "strictly charitable purposes," and not for private gain or corporate profit. See also Colo. Const. art. X, § 5 (similarly providing broad property tax exemption for property used solely and exclusively for "strictly charitable purposes," among other things).
In more particular terms, § 39-3-108(1.3) provides that:
Nonresidential property that is owned and used solely and exclusively by a qualified amateur sports organization shall be presumed to be owned and used solely and exclusively for strictly charitable purposes. For purposes of this subsection (1.3), the term "qualified amateur sports organization" means any organization organized and operated exclusively to foster local, statewide, national, or international amateur sports competition if such organization is also organized and operated primarily to support and develop amateur athletes for national or international competition in sports; except that no part of the net earnings of such organization inure to the benefit of any private shareholder or individual. So long as a qualified amateur sports organization demonstrates that its membership is open to any individual who is an amateur athlete, coach, trainer, manager, administrator, or official active in such sport or to any amateur sports organization that conducts programs in such sport, or both, the organization shall be presumed to provide public benefits to an indefinite number of persons and to directly benefit the people of Colorado whether or not the right to benefit may depend upon voluntary membership in the organization. (emphasis added)
Section 39-3-108(1.5), C.R.S. (1994 Repl.Vol. 16B) provides:
No requirement shall be imposed that use of property which is otherwise exempt pursuant to the provisions of this section shall benefit the people of Colorado in order to qualify for said exemption.
The facts pertinent to the NJCAA's claim to entitlement to the charitable use property tax exemption under § 39-3-108(1.3) for its nonresidential personal property are not in dispute.
At the evidentiary hearing before the BAA, the PTA's witness admitted that the NJCAA met the statutory criteria to constitute a "qualified amateur sports organization" as that term is defined in the second sentence of § 39-3-108(1.3).
Thus, it is undisputed, for example, that the NJCAA is a non-profit corporation exempt from federal income taxation under § 501(c)(3) of the Internal Revenue Code; *511 that its purpose, under its constitution and by-laws, is to promote and foster "junior college athletics" on intersectional and national levels consistent with the educational program of its member colleges and institutions; and that none of its net earnings inures to the benefit of any private shareholders or individuals.
However, asserting that the NJCAA has not shown that it meets all of the statutory criteria for the presumption under the third sentence of § 39-3-108(1.3), the PTA has consistently taken the position that the NJCAA is not entitled to the benefit of the presumption under § 39-3-108(1.3) that its property is used for "strictly charitable purposes" and thereby qualifies for exemption.
Specifically, in the PTA's view, the charitable use presumption of § 39-3-108(1.3) is not available to the NJCAA because participation in its activities is not "open to any individual" amateur athlete from the general public, but only to amateur athletes enrolled in member schools. The PTA has not otherwise challenged the applicability of the exemption provisions of § 39-3-108(1.3) to the NJCAA's property in any respect, but views the enrollment restriction as fatal to the NJCAA's exemption claim under the third sentence of § 39-3-108(1.3).
Following the hearing, the BAA rejected the PTA's construction of the third sentence of § 39-3-108(1.3) as "over-restrictive." Noting that the record established that the NJCAA includes over 500 member junior colleges involving some 46,000 student-athletes, the BAA ruled that the PTA's strict interpretation of the statute "might preclude an exempt status from such organizations as the Special Olympics, the Colorado High School Activities Association, the N.C.A.A., and other special purpose athletic organizations."
Based on its broader construction of these statutory provisions, the BAA ruled that "the subject personal property qualifies for an exemption under § 39-3-108(1.3)," and it therefore ordered the PTA to grant the NJCAA's exemption claim as to the 1994 and 1995 tax years at issue. This appeal followed.
The PTA contends that the BAA erred as a matter of law in ruling that the NJCAA met all of the statutory criteria to qualify for the exemption presumption under § 39-3-108(1.3) within the meaning of the third sentence of these statutory provisions. We disagree.
Our primary task in construing statutory provisions is to ascertain and give effect to the intent of the General Assembly. And, to discern that intent, we must look first to the language of the statute itself and give effect to the statutory terms in accordance with their commonly accepted meaning. See Douglas County Board of Equalization v. Fidelity Castle Pines, Ltd., 890 P.2d 119 (Colo.1995); Leprino v. Huddleston, 902 P.2d 962 (Colo.App.1995).
Moreover, while tax exemption statutes generally are strictly construed against exemption, each case must be resolved on the basis of its own facts. See American Water Works Ass'n v. Board of Assessment Appeals, 38 Colo.App. 341, 563 P.2d 359 (1976). Further, ambiguous tax statutes generally are construed in favor of the taxpayer. See Douglas County Board of Equalization v. Fidelity Castle Pines, Ltd., supra; Leprino v. Huddleston, supra.
Contrary to the PTA's argument, we conclude that the General Assembly did not intend to exclude "special purpose" amateur athletic organizations such as the NJCAA from the benefit of the charitable use exemption presumption provided by § 39-3-108(1.3). Rather, we agree with the BAA that the PTA's construction of the meaning and scope of the third sentence of the exemption presumption provisions of § 39-3-108(1.3) is too restrictive.
The portion of the statute at issue does not impose an additional requirement to meet the definition of a "qualified amateur sports organization." Rather, it states that, so long as such an organization demonstrates that its membership is open to any individual, the organization is presumed to provide public benefits to an indefinite number of people and to benefit directly the people of Colorado. Thus, the presence of this factor entitles *512 the organization to a presumption supportive of its being tax exempt.
However, the absence of such a presumption does not automatically disqualify the organization from exempt status under the statute. Further, such a requirement would run counter to the provision of § 39-3-108(1.5) which states that no requirement is to be imposed that use of property which is otherwise exempt shall benefit the people of Colorado.
Here, it is undisputed that the NJCAA has met all of the other statutory criteria to constitute a "qualified amateur sports organization" under the other provisions of § 39-3-108(1.3). Thus, we conclude that the BAA properly ruled that the NJCAA's property qualified for the charitable use property tax exemption provided by that statute.
In light of this analysis, we need not address the other contentions of the parties concerning the exemption issues.
Accordingly, the BAA's order is affirmed. CRISWELL and TAUBMAN, JJ., concur.
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. AP-75,204
EX PARTE JUAN BALDIZON, Applicant
ON APPLICATION FOR A WRIT OF HABEAS CORPUS
FROM BEXAR COUNTY
The opinion was Per Curiam.
O P I N I O N
This is an application for a writ of habeas corpus which was transmitted to this
Court by the clerk of the trial court pursuant to the provisions of Texas Code of Criminal
Procedure, Article 11.07. Ex parte Young, 418 S.W.2d 824, 824 (Tex. Crim. App. 1967).
Applicant pled nolo contendere and was convicted of robbery. Applicant's punishment
was assessed at imprisonment for twelve years and a fine in the amount of $1,200.
Applicant did not appeal this conviction.
Applicant contends that his plea was unknowing and involuntary because counsel
misled him into believing that he would receive community supervision if he pled guilty
or no contest.
After a thorough review of the record, including an affidavit from Applicant's trial
attorney, and the trial court's findings and recommendation to grant relief, we find that
Applicant's plea was involuntary due to the ineffective assistance of his trial counsel. As
such, Applicant is entitled to habeas corpus relief. The judgment and sentence in cause
number 2003CR5938W from the 227th Judicial District Court of Bexar County, Texas, is
vacated. Applicant is remanded to the custody of the Sheriff of Bexar County to answer to
the indictment.
A copy of this opinion shall be sent to the Texas Department of Criminal Justice,
Correctional Institutions Division.
DO NOT PUBLISH
DELIVERED: June 22, 2005
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268 S.W.2d 683 (1954)
KOONCE
v.
PERALES et al.
KOONCE
v.
LOPEZ.
Nos. 12688, 12689.
Court of Civil Appeals of Texas, San Antonio.
May 19, 1954.
Lewright, Dyer, Sorrell & Redford and James W. Wray, Jr., Corpus Christi, for appellant.
R. F. Luna, San Diego, for appellees.
POPE, Justice.
Both of these appeals are from orders overruling pleas of privilege. Ofelia V. Perales, a widow, individually and as next friend for her minor child, in the above cause No. 12688, sued M. B. Koonce for damages alleged to have resulted from an automobile collision between a vehicle driven by Koonce and another vehicle in which Jacinto M. Perales was riding. Jacinto M. Perales was the husband of Ofelia Perales and the father of the minor child. The plaintiffs' petition asserts that Jacinto M. Perales was killed in the collision.
The other suit, No. 12689, was commenced by Ponciano Lopez, Jr., who asserts that he was also a passenger in the vehicle which collided with the Koonce automobile.
The points in the two cases are similar, and the evidence in these cases is of the same nature as that discussed in Saenz v. Hinojosa, Tex.Civ.App., 268 S.W.2d 476. The matters there discussed are also pertinent to these cases. As in that case, the appellees have failed to file a brief.
Ernesto Molino, a deputy sheriff, was the only person called to testify. He testified with reference to the causes of the accident, though he arrived at the scene of the collision after it occurred. Other witnesses who saw the accident were available. The defendant, Koonce, objected to Molino's testimony on the grounds that (1) it was hearsay, and (2) that the witness was not qualified as an expert, as a basis for his opinions and conclusions. He did not testify to the facts in support of his conclusions. The witness stated that he first thought the Koonce vehicle was proceeding from west to east, but that he changed his mind after talking with other persons. No effort was made to show that Molino, either by reason of experience or special training, was better *684 able to evaluate the objective evidence than the trier of facts. He did not know the length of the skid marks and did not detail the nature and extent of damage to the vehicles. His testimony was in the nature of conclusions only. Expert opinions and conclusions are permitted when a witness is first shown to "possess special knowledge as to the very matter on which he proposes to give an opinion." McCormick & Ray, Texas Law of Evidence, § 633. Without the necessary qualifying predicate, an officer, as is the case with any other lay witness, must limit his testimony to facts. Union Bus Lines v. Moulder, Tex.Civ.App., 180 S.W.2d 509.
Appellant's objections to the evidence should have been sustained. There being no other competent evidence, the judgments of the trial court are both reversed and the causes ordered transferred to Nueces County, in accordance with the provisions of Rule 89, Texas Rules of Civil Procedure.
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701 F.Supp.2d 38 (2010)
Tonja WICKS, Plaintiff,
v.
AMERICAN TRANSMISSION CO. LLC, et al., Defendants.
Civil Action No. 07-02313 (HHK).
United States District Court, District of Columbia.
March 31, 2010.
*41 Michael J. Hoare, Michael J. Hoare, P.C., Washington, DC, for Plaintiff.
Karla Grossenbacher, Seyfarth Shaw, LLP, Washington, DC, for Defendants.
MEMORANDUM OPINION
HENRY H. KENNEDY, JR., District Judge.
Tonja Wicks ("Wicks"), who is Black, brings this action against her former employer, American Transmission Company, LLC and its corporate manager, ATC Management, Inc. (collectively "ATC").[1] Wicks alleges that ATC unlawfully discriminated against her on the basis of her race and gender in violation of the District of Columbia Human Rights Act ("DCHRA"), D.C.Code §§ 2-1401 et seq.[2] Presently before the Court is ATC's motion for summary judgment [# 26]. Upon consideration of the motion, the opposition thereto, and the record of this case, the Court concludes that the motion must be granted.
I. BACKGROUND
ATC owns and operates transmission lines that are used to convey energy in the upper Midwest part of the United States. In January 2006, Wicks began working for ATC in its D.C. office as Director of Federal Affairs and at some point began working in the D.C. office with William Burlew, who, as Manager of Federal Affairs, reported to Wicks. Before ATC hired Wicks, Burlew expressed interest in becoming the Director of Federal Affairs, but was not considered for the position. However, he was part of the team that interviewed applicants for the position and ultimately recommended that Wicks be hired over other candidates.
Nina Plaushin, Director of Government and Regulatory Affairs, served as Wicks's immediate supervisor and Burlew's second-line supervisor. In November 2006, Plaushin left ATC and was replaced by Randall Satterfield.
*42 A few weeks after Wicks assumed the Director of Federal Affairs position, Burlew and Wicks's relationship began deteriorating. Wicks claims that Burlew was "bad-mouthing" her to people inside and outside ATC and was insubordinate, delaying or failing to complete particular assignments. Wicks also asserts that Burlew made racially offensive comments about her race to other individuals, though not to her.
Burlew also made several complaints about Wicks. According to Plaushin, Burlew "was not satisfied with the distribution of job responsibilities in the DC office and he felt that [Wicks]'s management style failed to adequately show respect for his abilities." Pl.'s Opp'n to Defs.' Mot. for Summ. J., Ex. 4 ("Plaushin Letter") at 1. Burlew also stated in his response to his performance review that he believed Wicks was attacking his ethics and integrity by stating that he engaged in acts of plagiarism. Both Wicks and Burlew made ethics complaints against the other, but neither complaint resulted in any findings of unethical behavior.
In February 2006, Plaushin hired Hope Hills of Circle Consulting Group "to coach [Wicks] and [Burlew] to resolve the conflict." Id. A couple of months after seeking Hills's help, Plaushin met with Wicks and Burlew and advised them that the "end of the year was the timeline [she] had for seeking marked improvement," and that "lacking additional progress in resolving the conflict, other actions would need to be considered." Id. at 2. By the end of the summer, Hills told Plaushin that she "had come to an impasse." Id. According to Plaushin, Hills felt that Burlew "was unable to take responsibility for his role in the conflict and was not open to working to resolve the issues." Id.
In December 2006, Satterfield replaced Plaushin as Director of Regulatory Affairs. Satterfield and Dale Landgren, Vice President and Chief Strategic Officer of ATC, met with Wicks and Burlew in early or mid-December and shared their concerns about the state of the D.C. office. In late December, Satterfield returned to the D.C. office and explained to Burlew and Wicks that he would return in early January with someone in Human Resources to engage in a discussion regarding the roles and responsibilities of Wicks and Burlew and of the D.C. office. Satterfield testified that he informed Wicks and Burlew that "the office had been dysfunctional from that professional communication standpoint for a while and we were going to engage in a process . . . to see if we could fix those difficulties and that if we weren't able to one of the results might be that one or both might lose their jobs." Defs.' Mot. for Summ. J. ("Defs.' Mot."), Satterfield Dep. at 95.[3] Also in December 2006, Satterfield hired another consultant, John Heidke of Right Management, Inc., to "make an assessment as to the ability of the staff of the office to function professionally and competently to the benefit of the company going forward." Id. at 36.
In early January 2007, Heidke met with Satterfield to develop a plan and a time line to improve Burlew and Wicks's relationship. On January 17, 2007, Satterfield returned to D.C., with Jackie Wirth who was employed in the Human Resources Department to meet with Wicks and Burlew. The parties reached an agreement regarding Wicks and Burlew's respective roles and responsibilities. See Defs.' Mot., Wicks Dep., Ex. 12 ("2007 Agreement"). *43 The 2007 Agreement also listed ATC's expectations going forward. At the meeting, Satterfield and Wirth gave Wicks and Burlew specific "to do's" and asked them to create a stakeholder list.
Later in January, on January 25, Heidke met with Wicks and Burlew individually and as a team to assess their working relationship and how their relationship affected the functioning of ATC's D.C. office. In a letter to Maureen Hogan, ATC's Director of Human Resources, and Satterfield, Heidke stated that "[t]he ATC Washington office appears to be functioning poorly and not meeting objectives as required," and "[t]here was plenty of blame to go around." Def.'s Mot., Wicks Dep., Ex. 11 ("Heidke Letter") at 3. Based upon his interaction with Wicks and Burlew, the data he collected from ATC leaders, and a work style instrument Wicks and Burlew completed, Heidke concluded that "such an intractably broken and distrustful relationship is unlikely to be brought back to a fully workable, high functioning level in the near future." Id.
In an email exchange dated February 1, 2007, Wicks and Burlew argued regarding the creation of the stakeholder list that they were asked to construct. Burlew forwarded the email exchange to Wirth, who forwarded the emails to Hogan. In an email to Wicks and Burlew dated February 2, 2007, Hogan wrote that "[c]onsidering the difficulty the two of you are already having on what would seem to be a simple task, [Satterfield] and I have determined that we need to return to your office next week to deal with these issues." Defs.' Mot., Satterfield Decl., Ex. 5. On February 7, 2007, Hogan and Satterfield visited ATC's D.C. office and terminated Wicks and Burlew. Satterfield told Wicks that deficiencies in her "judgment, listening, and management" were factors that led to her termination. Pl.'s Opp'n, Ex. 5 ("Wicks Dep.") at 97. Satterfield stated that Wicks had failed to curtail the behavior of Burlew, her "direct report," and that she had not effectively performed the responsibilities of the office. Id. at 96.
This suit followed.
II. LEGAL STANDARD
A. Summary Judgment
Summary judgment may be granted only where "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)(2); see also Burke v. Gould, 286 F.3d 513, 517 (D.C.Cir.2002). A material fact is one that is capable of affecting the outcome of the litigation. Anderson v. Liberty Lobby, 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine issue is one where the "evidence is such that a reasonable jury could return a verdict for the nonmoving party," as opposed to evidence that "is so one-sided that one party must prevail as a matter of law." Id. at 248, 252, 106 S.Ct. 2505. A court considering a motion for summary judgment must draw all "justifiable inferences" from the evidence in favor of the nonmovant. Id. at 255, 106 S.Ct. 2505. But the non-moving party's opposition must consist of more than mere unsupported allegations or denials and must be supported by affidavits or other competent evidence setting forth specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e)(2); Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
B. District of Columbia Human Rights Act
The DCHRA makes it unlawful for an employer to "fail or refuse to hire, or to *44 discharge, any individual; or otherwise discriminate against any individual, with respect to his compensation, terms, conditions, or privileges of employment" based upon, inter alia, the individual's "race, color [or] sex." D.C.Code § 2-1402.11(a).
Discrimination claims brought under the DCHRA are analyzed in the same manner as claims brought under Title VII of the Civil Rights Act of 1964 ("Title VII"), as amended, 42 U.S.C. §§ 2000e et seq. See Arthur Young & Co. v. Sutherland, 631 A.2d 354, 361 n. 17 (D.C.1993) ("This court has `often looked to cases construing Title VII . . . to aid us in construing the [DCHRA]' [because] [t]he anti-discrimination provisions of both statutes are substantially similar."); see also Mungin v. Katten Muchin & Zavis, 116 F.3d 1549, 1553 (D.C.Cir.1997); Gaujacq v. Electricite de France Int'l North America, Inc., 572 F.Supp.2d 79 (D.D.C.2008). To prove a violation under the DCHRA, a plaintiff "must demonstrate by a preponderance of the evidence that the actions taken by the employer were `more likely than not based on the consideration of impermissible factors'" such as race or sex. Valles-Hall v. Center for Nonprofit Advancement, 481 F.Supp.2d 118, 140 (D.D.C.2007) (quoting Tex. Dep't of Cmty. Affairs v. Burdine, 450 U.S. 248, 254, 101 S.Ct. 1089, 67 L.Ed.2d 207 (1981) (internal quotation marks and citation omitted)). "[T]he plaintiff may prove [her] claim with direct evidence, and absent direct evidence, [s]he may indirectly prove discrimination" under the burden-shifting analysis created by McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). Brady v. Livingood, 456 F.Supp.2d 1, 6 (D.D.C.2006) (quoting Kalekiristos v. CTF Hotel Mgmt. Corp., 958 F.Supp. 641, 665 (D.D.C.1997) (internal quotation marks omitted)).
III. ANALYSIS
A. Direct Evidence of Discrimination
Wicks asserts that she presents direct evidence of discrimination which proves her claims of unlawful discrimination and defeats ATC's motion for summary judgment. Courts have not defined precisely what constitutes direct evidence of discrimination, however "at a minimum, direct evidence does not include stray remarks in the workplace, particularly those made by non-decision makes or statements made by decision makers unrelated to the decisional process itself." Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 96 (1st Cir.1996) (Price Waterhouse v. Hopkins, 490 U.S. 228, 251-52, 109 S.Ct. 1775, 104 L.Ed.2d 268 (1989)) (further citations omitted).
Wicks contends that Daniel Doyle, ATC's Vice President of Human Resources, made derogatory comments that are direct evidence of discrimination. According to Wicks, two months before she was fired, Doyle sat with her at a bar and, "effectively, told her that many executives felt that she was simply too feminine for her job." Pl.'s Opp'n at 12. Doyle testified that he took Wicks aside for the purpose of telling her that the executives were concerned that she was too "sweet and syrupy." Pl.'s Opp'n, Ex. 7 ("Doyle Dep.") at 46-47. According to Doyle, they had a "concern with [her] mannerisms in terms of greeting people that affected in our view not only the greeters but those who were around the greeting," and that such mannerisms "left [one] questioning what her intentions were." Id. at 47. Doyle compared Wicks's behavior to "a dog humping his master's leg." Id. at 49.
Although the comments Doyle made are offensive and derogatory, Wicks has not shown any causal link between the statements and her termination. First, there is *45 no evidence that Doyle was a decision maker insofar as Wicks's termination is concerned. Moreover, in between the time Doyle made the derogatory statements and the time Wicks was fired, in an effort to avoid any terminations, ATC engaged in several steps to try to resolve the tension between Wicks and Burlew, including hiring another outside consultant to attempt to mend the troubled relationship. In sum, Doyle's comments were isolated, remote in time, and have not been shown to have had anything to do with Wicks's termination. Doyle's comments are best characterized as "stray remarks" by an individual who was not involved in the employment decision. Wicks therefore does not present evidence of direct discrimination.
B. Circumstantial Evidence of Discrimination
In the absence of direct evidence of discrimination, courts analyze Title VII discrimination claims under the procedural framework established in McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802-804, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973). See Holcomb v. Powell, 433 F.3d 889, 901 (D.C.Cir.2006). Under this framework, a plaintiff must first establish a prima facie case of discrimination; the defendant must then offer a legitimate nondiscriminatory reason for its actions; if the defendant does so, the plaintiff bears the burden of establishing that the asserted reason is a pretext for unlawful discrimination. Id. Where an employer has asserted a legitimate, nondiscriminatory reason for an employment decision, however, the first steps in the McDonnell Douglas paradigm drop out and "the district court must resolve one central question: Has the employee produced sufficient evidence for a reasonable jury to find that the employer's asserted non-discriminatory reason was not the actual reason and that the employer intentionally discriminated against the employee on the basis of race, color, religion, sex, or national origin?" Brady v. Office of Sergeant at Arms, 520 F.3d 490, 493-94 (D.C.Cir.2008).
A plaintiff bears the burden of persuasion to show that a defendant's proffered nondiscriminatory reason for the challenged action is a pretext. See Morgan v. Fed. Home Loan Mortgage Corp., 328 F.3d 647, 654 (D.C.Cir.2003). A plaintiff can carry this burden by showing that a non-discriminatory reason offered by a defendant is false, Montgomery v. Chao, 546 F.3d 703, 707 (D.C.Cir.2008), or otherwise "presenting enough evidence to allow a reasonable trier of fact to conclude that the employer's proffered explanation is unworthy of credence." Desmond v. Mukasey, 530 F.3d 944, 962 (D.C.Cir.2008) (internal quotation marks omitted). A plaintiff may also "attempt[] to produce evidence suggesting that the employer treated other employees of a different race, color, sex, or national origin more favorably in the same factual circumstances" than the employer treated the plaintiff. Brady, 520 F.3d at 495. Where "the employer's stated belief about the underlying facts is reasonable in light of the evidence, however, there ordinarily is no basis for permitting a jury to conclude that the employer is lying about the underlying facts," and summary judgment is appropriate. Id.; see also Paquin v. Federal Nat. Mortg. Ass'n, 119 F.3d 23, 27-28 (D.C.Cir. 1997) ("[I]f [a plaintiff] is unable to adduce evidence that could allow a reasonable trier of fact to conclude that [the defendant's] proffered reason was a pretext for discrimination, summary judgment must be entered against [the plaintiff].").
ATC asserts that deficiencies in Wicks's "judgment, listening skills, and management style" are legitimate nondiscriminatory *46 reasons for her termination. According to ATC, Wicks "failed to exercise proper judgment and listen effectively when communicating and interacting with Burlew and failed to effectively manage him and the office for which she was responsible." Reply Mem. of P. & A. in Supp. of Defs.' Mot. for Summ. J. ("Defs.' Reply") at 3. Wicks contends that ATC's asserted explanation is a mere pretext for unlawful discrimination. According to Wicks, ATC's stated reasons for her termination are "vague and overly subjective at best." Pl.'s Opp'n at 10. Wicks also claims that there is no evidence of any such deficiency in her performance, "nor is there any evidence that Defendants raised these claimed deficiencies with [her] at any time before her termination." Id.
Wicks's arguments are unpersuasive. At the outset, it is important to note that even if this Court determined that the reasons provided by ATC for its termination of Wicks were "wrong," "[its] action may be justified by a reasonable belief in the validity of the reason given." George v. Leavitt, 407 F.3d 405, 415 (D.C.Cir. 2005); see also Fischbach v. D.C. Dep't of Corr., 86 F.3d 1180, 1183 (D.C.Cir.1996) ("Once the employer has articulated a nondiscriminatory explanation for its action.. . the issue is not the correctness or desirability of the reasons offered but whether the employer honestly believes in the reasons it offers." (internal quotation marks and alterations omitted)). There is considerable evidence in the record that is substantially not rebutted which indicates that ATC reasonably believed that Wicks was having trouble managing Burlew and that Wicks's "judgment, listening skills, and management style," were at least partly to blame for the mismanagement of the D.C. office. Furthermore, contrary to Wicks's contention, there is evidence that these concerns were expressed to Wicks before her termination.
While Plaushin was still employed at ATC, she hired Hills, an outside consultant, to help with Burlew and Wicks's troubled relationship. After Hills engaged in four months of "coaching activity" with Wicks and Burlew, Plaushin traveled to the D.C. office to meet with them. At this meeting, Plaushin "admonished [Wicks] for failing to adequately delegate work to [Burlew]." Plaushin Letter at 2. Plaushin also informed Wicks and Burlew that "lacking additional progress in resolving this conflict, other actions would be considered." Id. Plaushin reiterated her concern about Wicks's ability delegate work in Wicks's 2006 Performance Review and also wrote that Wicks needed to "watch the time management." Defs.' Mot., Plaushin Dep., Ex. 2 at 2.
Plaushin was not the only one who noted Wicks's deficiencies in managing Burlew and the D.C. office. After Plaushin left ATC, Satterfield became the Director of Regulatory Affairs and hired another outside consultant to assist in resolving the problems in the D.C. office. In a letter to Hogan and Satterfield, Heidke provided ATC with an "assessment of the working culture and professional effectiveness of the ATC associates at [its] Washington, D.C. office."[4] Heidke *47 Letter at 1. Heidke stated that the responsibility for Wicks and Burlew's broken relationship rested with both of them. He also stated that he "found little evidence of professional development that [Wicks] has engaged in with [Burlew]," something that he would consider "a requirement of an ATC leader." Id. at 2. According to Heidke, "the accountability for the high level functioning of the ATC DC office falls primarily to [Wicks] as the Director." Id. at 3. In his opinion, "an effective leader is required to establish an office that embodies" trust, openness, accountability, and interdependence. Heidke believed, however, that "all four of these variables seem to be substandard. And, the likelihood of achieving them . . . seems very low." Id. Furthermore, Satterfield and Hogan, who both participated in the decision to terminate Wicks,[5] were fully aware of Heidke's assessment prior to Wicks termination on February 7, 2007. Satterfield testified in his deposition that "[t]he process through which Mr. Heidke went and his judgment and assessment of the process and his conclusions were a data point in my decision." Defs.' Mot., Satterfield Dep. at 96.
Wicks also engaged in an email exchange with Burlew that ATC believed violated the 2007 Agreement regarding Wicks and Burlew's individual roles, responsibilities, and interactions with one another. In the email exchange, Wicks and Burlew argued regarding the creation of the stakeholder list that they were required to construct. Wicks and Burlew could not agree on the tasks that they were required to accomplish in order to create the stakeholder list. The email exchange was forwarded to Wirth, who forwarded the emails to Hogan. Wirth resolved the disagreement between Wicks and Burlew but expressed her disappointment "that these sort of details need[ed] [her] involvement." Satterfield Decl. Ex. 4 at 1. She stated that the email exchange shows that Burlew and Wicks "are continuing to focus more on the details of who does or doesn't do what first" instead of focusing on how to work together effectively in an effort to "build a better working relationship and be more successful in our jobs." Id. ATC believes that the email exchange between Wicks and Burlew violated the 2007 Agreement, which stated inter alia that it is Wicks's "responsibility as the Director to create a collaborative environment where [Burlew] can succeed" and that Wicks and Burlew would "perform their jobs in a professional and cooperative manner." 2007 Agreement at 7. The agreement further stated that "[w]hen/if violations to these agreements/expectations happen [ATC] will take them very seriously." Id. Satterfield stated that the violation of the 2007 Agreement was yet another factor that led to the decision to terminate Wicks. Defs.' Reply, Ex. 1, Satterfield Dep. at 60.
Instead of producing evidence that shows ATC's assessment of her management skills was dishonest or not the real reason for her termination, Wicks disputes the merits of ATC's assessment. She argues that she performed her job well and that it was Burlew who was causing the disruption in the D.C. office. In doing so, however, Wicks only attempts to *48 prove that she and ATC disagreed about her job performance. But "[p]laintiff cannot establish pretext simply based on her own subjective assessment of her own performance, for `plaintiff's perception of h[er]self, and of h[er] work performance is not relevant. It is the perception of the decision maker which is relevant.'" Waterhouse v. District of Columbia, 124 F.Supp.2d 1, 7 (D.D.C.2000) (quoting Smith v. Chamber of Commerce of the United States, 645 F.Supp. 604, 608 (D.D.C.1986)).
Wicks's contention that Plaushin's belief that Burlew was the cause of the problems in the Washington office proves pretext is not persuasive.[6] Wicks alleges that Plaushin recommended that Burlew be placed on probation in early 2007 and that ATC discounted Plaushin's opinion "in favor of the less-informed opinions of men." Pl.'s Opp'n at 11 n. 5. As previously stated, however, Plaushin also expressed concern regarding Wicks's management and delegation skills. Moreover, even if the Court were to find that Plaushin believed that Wicks was completely blameless for the events that transpired in the D.C. office, ATC did not terminate Wicks until almost three months after Plaushin left ATC. During that time, many events occurred that influenced ATC's decision to terminate Wicks. Indeed, two of the events that Satterfield stated played a role in Wicks's termination, Heidke's report to ATC and the violation of the 2007 Agreement, occurred subsequent to Plaushin's departure. Therefore, in light of the evidence, Wicks has failed to show that ATC's stated belief regarding her "judgment, listening skills, and management style" is not reasonable and not the real reason she was terminated.
Finally, Wicks attempts to show that ATC's reasons were pretextual by showing that she was not treated the same as a similarly situated white male. Wicks argues that Satterfield, a white male, once supervised a female employee, Blankenheim, who was terminated for insubordination. According to Wicks, "the important difference" between Satterfield's situation and her situation is that in her situation "the female supervisor (Plaintiff) was then terminated along with the intractable male employee (Mr. Burlew), while the male supervisor (Mr. Satterfield) was allowed to retain his position despite his failure to rein in his `insubordinate' female employee (Ms. Blankenheim)." Pl.'s Surreply at 4.
Wicks's argument is unconvincing. Wicks has only shown that Satterfield, at one time, was deficient in his supervision of an "insubordinate" employee and was not terminated; she has failed to demonstrate, however, that Satterfield is similarly situated in all material respects. See Holbrook v. Reno, 196 F.3d 255, 261 (D.C.Cir.1999) (to prove that she is similarly *49 situated to another employee, a plaintiff must "demonstrate that all of the relevant aspects of her employment situation were nearly identical to those of the [allegedly comparable] employee") (internal quotation marks and citations omitted); Neuren v. Adduci, Mastriani, Meeks, & Schill, 43 F.3d 1507, 1514 (D.C.Cir.1995) (same). Wicks has provided no evidence to show that Satterfield engaged in the same allegedly inappropriate behavior for which she was disciplined when it came to dealing with his "insubordinate" employee.[7] Without any evidence that Satterfield engaged in similar conduct when dealing with his insubordinate employee, Wicks cannot show that she is similarly situated to Satterfield. Therefore, Wicks has failed to produce any evidence of disparate treatment.[8]
In sum, after careful consideration of the summary judgment record, the Court finds that Wicks is unable to present evidence that would permit a reasonable jury to conclude that ATC's proffered reason for terminating her was a pretext for unlawful discrimination.
IV. CONCLUSION
For the foregoing reasons, the Court concludes that ATC's motion for summary judgment [#26] must be granted. An appropriate order accompanies this memorandum opinion.
NOTES
[1] This action was brought in the District of Columbia Superior Court but was removed to this Court when ATC invoked this Court's diversity jurisdiction pursuant to 28 U.S.C. §§ 1332, 1441, and 1446.
[2] In her complaint, Wicks also asserts a racial harassment claim (Count I) and a retaliatory discharge claim (Count III) against ATC. Wicks no longer pursues these claims. See Pl.'s Opp'n at 1, n. 1.
[3] Wicks disputes this assertion. She claims that Satterfield never told her that her job was at risk.
[4] Wicks argues that Heidke's letter is inadmissible hearsay and should not be considered by this Court. See Pl.'s Resp. to Defs.' Statement of Material Facts at 26. The letter is not hearsay, as it is not offered to prove the truth of the matter asserted, only the effect on the reader. See Fed.R.Evid. 801(c). The relevant inquiry is not whether Heidke's assessment of Wicks is accurate. Rather, it is whether ATC had a reasonable belief in the validity of the reason given for Wicks's termination and whether its decision to discharge Wicks was based on that belief. See Hollins v. Federal Nat. Mortg. Ass'n, 760 A.2d 563 at 574 (D.C.2000).
[5] Although Wicks asserts that there is confusing testimony about who made the challenged termination decision, the record indicates that Satterfield, Landgren, Hogan and Wirth participated in some capacity in the decision to terminate Wicks. See Pl.'s Opp'n, Ex. 16 at 5; Defs.' Reply, Ex. 2 ("Declaration of Maureen Hogan"); Pl.'s Opp'n, Ex. 13, ("Satterfield Dep.") at 13-16.
[6] Wicks also states that Hills believed that Burlew was the cause of the problems in the Washington office and that she recommended that Plaushin terminate him. The only evidence of Hills's alleged statement, however, is Plaushin's letter to Landgren where Plaushin states that Hills "urged [her] to move forward with a process to terminate Bill Burlew." Plaushin Letter at 2. A non-moving party must "produce evidence . . . capable of being converted into admissible evidence." Gleklen v. Democratic Cong. Campaign Comm., 199 F.3d 1365, 1369 (D.C.Cir.2000) (citing Celotex Corp., 477 U.S. at 324, 106 S.Ct. 2548); Fed. R.Civ.P. 56(e). Because Hills's statement is hearsay, the Court cannot consider it. See Greer v. Paulson, 505 F.3d 1306, 1315 (D.C.Cir.2007) (stating that "`sheer hearsay'.. . `counts for nothing' on summary judgment") (quoting Gleklen, 199 F.3d at 1369). Furthermore, even if the Court were to consider Hill's alleged statement, it only proves that Hills believed that Burlew should get fireda belief that ATC ultimately shared as evidenced by Burlew's termination.
[7] Wicks also fails to present any evidence regarding the respective positions of Satterfield and Blankenheim and the period of time each was employed at ATC prior to Blankenheim's termination. Such information is also critical in determining whether employees are similarly situated. See Montgomery v. Chao, 546 F.3d 703, 707 (D.C.Cir. 2008) (holding that employees were not similarly situated when they did not have the "same position" or "work[] in the same branch of the agency"); Wilson v. Washington Metro. Area Transit Auth., 631 F.Supp.2d 58, 71 (D.D.C.2009) (holding that plaintiff was not similarly situated to another employee because plaintiff had worked for the employer for a shorter period of time).
[8] In an additional effort to show disparate treatment, Wicks makes two separate but related arguments concerning ATC's severance packages. Neither argument is persuasive. First, Wicks alleges that Burlew received a more generous severance package than she did. Upon their termination, however, both Burlew and Wicks were offered the same severance package, but Burlew later negotiated with ATC to receive additional terms. Decl. of Maureen Hogan at 1-2. The fact that Burlew negotiated with ATC to get a better severance package while Wicks did not is not evidence of disparate treatment. Second, Wicks contends that while ATC granted Burlew's request for several additional months of severance and assistance with COBRA payments, it denied a similar request by Blankenheim, a female employee who was also terminated for insubordination. As ATC notes, however, Blankenheim's initial overall severance package exceeded Burlew's renewed package by over $100,000. See Defs.'s Sur-Surreply, Second Decl. of Maureen Hogan, Ex. 1.
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165 Cal.App.3d 574 (1985)
211 Cal. Rptr. 633
THE PEOPLE, Plaintiff and Respondent,
v.
JAMES RAY DAUGHHETEE, Defendant and Appellant.
Docket No. F002810.
Court of Appeals of California, Fifth District.
March 12, 1985.
*576 COUNSEL
Daniel T. Dauenhauer, under appointment by the Court of Appeal, for Defendant and Appellant.
John K. Van de Kamp, Attorney General, Nancy Sweet, Edmund D. McMurray and Thomas Y. Shigemoto, Deputy Attorneys General, for Plaintiff and Respondent.
[Opinion certified for partial publication.[1]]
OPINION
BEST, J.
In these consolidated cases, defendant, James Ray Daughhetee, appeals from a judgment on a jury verdict finding him guilty in action No. 190017 of robbery (Pen. Code, § 211) and in action No. 190018 of attempted robbery (Pen. Code, §§ 664, 211) and burglary (Pen. Code, § 459). Three prior felonies were charged and found by the jury to be true. Defendant was sentenced to the upper term of five years in state prison for his robbery conviction, plus five years for a prior felony conviction of attempted robbery. The court imposed an additional one-year enhancement for each of defendant's remaining prior felony convictions. A two-year enhancement was stayed pending the completion of the ten-year term. The court also stayed imposition of sentence on the convictions of attempted robbery and burglary until defendant's 10-year term of imprisonment is completed.
On appeal, defendant contends that the trial court committed error in (1) denying defendant's motion to suppress evidence (Pen. Code, § 1538.5); (2) failing to set aside defendant's prior conviction as unconstitutional; (3) ordering physical restraints for defendant throughout the trial; (4) granting defendant's motion to proceed in propria persona; (5) failing to instruct the *577 jury sua sponte on the defense of diminished capacity; and (6) sentencing defendant to the upper term for robbery.
We reject each of defendant's contentions and affirm the judgment.
FACTS
Defendant does not challenge the sufficiency of the evidence presented at trial to support his convictions. The evidence relating to the motion to suppress is without material dispute and may be summarized as follows:
While on regular patrol duty on February 4, 1983, Sergeant Puthuff, a Modesto city police officer, received a dispatch of an armed robbery committed at a drug store. The dispatcher gave a description of the robbery suspect as a white male, in his early 30's, with a mustache and brown hair. Sergeant Puthuff received a second dispatch, which gave the license number of the getaway car as TBS 479. The car was described as a 1966 Buick, "reddish brown" in color, and was registered to William T. Songer living on Blaker Road. An update dispatch was received later by the sergeant, which described the driver of the car as a white female adult with shoulder-length blond hair.
Sergeant Puthuff believed the vehicle might be located at the residence of Miss Cheri Wilson on Vera Cruz Road. He proceeded to the address and found the suspected robbery car parked in the driveway. At this point, he requested officers from the sheriff's department and the police department to assist him in securing the area. Four sheriff's detectives and three police officers in patrol units arrived within thirty-eight minutes.
Ten minutes after the units arrived, a car pulled up to the house. Miss Wilson left the house and walked to the car. Miss Wilson was a suspect in the robbery, and Sergeant Puthuff thought she might be leaving with evidence, so he pulled his unit behind the car and detained Miss Wilson. The sergeant saw two males looking out the front window. To preserve his and the other officers' safety, Sergeant Puthuff approached the front door to the house. He knocked and announced himself twice, but received no answer. He then opened the door just as Mr. Songer was opening the door. Songer and defendant were found inside and were detained there pending the arrival of the search warrant. No search of the house was made prior to the arrival of the warrant.
*578 DISCUSSION
I
DEFENDANT'S MOTION TO SUPPRESS EVIDENCE WAS PROPERLY DENIED
Defendant contends the initial entry by Sergeant Puthuff was improper, thus making unlawful the resulting arrest of defendant and the subsequent search and seizure pursuant to the valid search warrant. Defendant also contends that the residence was secured illegally pending the procurement of the search warrant.
A. THE INITIAL ENTRY
(1) The crux of defendant's argument concerning the initial entry into his residence is that the circumstances confronting the officers were not sufficiently exigent to justify the warrantless entry.
In People v. Ramey (1976) 16 Cal.3d 263, 276 [127 Cal. Rptr. 629, 545 P.2d 1333], the court defined "exigent circumstances" as "an emergency situation requiring swift action to prevent imminent danger to life or serious damage to property, or to forestall the imminent escape of a suspect or destruction of evidence." The court recognized that "There is no ready litmus test for determining whether such circumstances exist, and in each case the claim of an extraordinary situation must be measured by the facts known to the officers." (Ibid.)
Here, Sergeant Puthuff received the dispatch of an armed robbery shortly after it was committed. The dispatch included a description of the robber, a description of the vehicle and its license number, and a description of the female driver. Fourteen minutes later, he observed the vehicle at the Vera Cruz residence. He saw Miss Wilson leave the residence and start to enter another vehicle. Sergeant Puthuff knew that drugs and money had been taken from the pharmacy and felt that the female could be leaving with incriminating evidence. Her detention and arrest were, therefore, necessary and reasonable. The officer saw two males looking out the front window of the residence observing the detention of Miss Wilson. Sergeant Puthuff reasonably could conclude evidence might be destroyed within the house. Also, because he knew a gun had been used during the robbery, he reasonably was concerned with the safety of the officers.
We conclude, under the guidelines of Ramey, that exigent circumstances did, in fact, exist. Furthermore, unlike the facts in People v. Shuey (1975) *579 13 Cal.3d 835 [120 Cal. Rptr. 83, 533 P.2d 211] relied upon by defendant, the emergency situation confronting the officers here was not created by them. The detention and arrest of Miss Wilson were not orchestrated by the officers. Her leaving the house was unexpected, and Sergeant Puthuff merely reacted to the situation. The actions of the officers in this case were reasonable and not of the "do-it-yourself variety" condemned in Shuey.
It is also clear in the instant case that the initial entry into defendant's residence was not for the purpose of securing the premises until a search warrant could be obtained, but was occasioned by the exigent circumstances confronting the officers. (People v. Superior Court (Hulbert) (1977) 74 Cal. App.3d 407, 418 [141 Cal. Rptr. 497].) In Hulbert, the court held that even though an initial entry into the defendant's residence was unlawful because the officers failed to comply with the knock-notice requirements of Penal Code section 844, the securing of the premises for three hours while a search warrant was obtained was reasonable, and evidence seized upon execution of the valid search warrant should not have been suppressed. The court's holding was premised on the finding that "[t]he entry had no demonstrable effect on the issuance of the search warrant." (Hulbert, supra, at p. 417.) The same is true in the case at bench.
B. SECURING THE PREMISES
(2) Defendant also relies upon People v. Shuey, supra, 13 Cal.3d 835, for his contention that securing the residence pending procurement of a search warrant rendered the subsequent search pursuant to the warrant illegal. This reliance is misplaced. The Shuey court did not hold that the securing of premises pending procurement of a search warrant when exigent circumstances exist was constitutionally impermissible, but rather, upon the facts of that case, that the exigent circumstances were of the "do-it-yourself variety" and created by the police officers themselves. Also, as we noted earlier, the court in People v. Superior Court (Hulbert), supra, 74 Cal. App.3d 407, held that the securing of premises for three hours while a search warrant was being obtained was reasonable.
California and federal case law holds that premises may be entered and searched as long as probable cause to search plus exigent circumstances are present. (United States v. Rubin (3d Cir.1973) 474 F.2d 262, 268-269; Cleaver v. Superior Court (1979) 24 Cal.3d 297, 302-303 [155 Cal. Rptr. 559, 594 P.2d 984].) In the case at bench, exigent circumstances plus probable cause to search were present. Under Rubin and Cleaver, then, the police could have entered the premises and conducted a full search without a warrant. Instead of searching the residence, however, the residence and its occupants were secured and the full search conducted only after the *580 warrant was procured. We deem the securing of premises to be a lesser intrusion on Fourth Amendment rights than a full search. (See United States v. Chadwick (1977) 433 U.S. 1, 13 [53 L.Ed.2d 538, 549-550, 97 S.Ct. 2476].) If a warrantless search may be upheld on probable cause to search and exigent circumstances, the securing of premises should be allowed on the same basis.
Also, the United States Supreme Court has established that personal property, such as luggage or other containers, may be secured pending the arrival of a search warrant when probable cause to search the property is present and the exigencies of the circumstances called for the seizure. (United States v. Place (1983) 462 U.S. 696, 700-702 [77 L.Ed.2d 110, 116-117, 103 S.Ct. 2637, 2641]; Arkansas v. Sanders (1979) 442 U.S. 753, 761 [61 L.Ed.2d 235, 243, 99 S.Ct. 2586]; United States v. Chadwick, supra, 433 U.S. 1, 13 [53 L.Ed.2d 538, 549-550].)
In the recent case of United States v. Place, supra, 462 U.S. 696, 703-710, [77 L.Ed.2d 110, 118-123, 103 S.Ct. 2637, 2642-2644], the high court held that exigent circumstances plus a reasonable suspicion that luggage contains contraband or evidence of a crime would justify seizure and temporary detention of the luggage for investigative purposes or pending procurement of a search warrant.
The case at bench is, of course, readily distinguishable from the above cases. A residence, unlike luggage, is unlikely to disappear totally. The danger that crucial evidence of a crime will be lost, however, is the same as in a container case. The occupants of the house easily could have destroyed the drugs and money taken from the pharmacy. Securing the premises seems just as reasonable as securing luggage pending the arrival of the search warrant.
Finally, a number of California cases hold that the securing of premises may be based on probable cause to arrest plus exigent circumstances. (People v. Superior Court (Hulbert), supra, 74 Cal. App.3d 407, 418-419; People v. Freeny (1974) 37 Cal. App.3d 20, 32-33 [112 Cal. Rptr. 33]; Ferdin v. Superior Court (1974) 36 Cal. App.3d 774, 781-782 [112 Cal. Rptr. 66].) In these cases, the exigent circumstances or lack thereof appears to be the focus of the decisions. For example, in People v. Freeny, the court upheld the securing of premises primarily because the destruction of drugs the police knew were located on the premises appeared imminent to the officers. The court noted an additional factor justifying the securement was that probable cause to arrest an occupant of the house was present. (People v. Freeny, supra, 37 Cal. App.3d at pp. 32-33.) A logical extension of the rule *581 applied in these cases is to allow the securing of premises based on exigent circumstances and probable cause to search the premises.
We hold that the totality of circumstances presented here distinguishes this case from People v. Shuey, supra, 13 Cal.3d 835, and that no illegal police conduct so taints the results of the search pursuant to a valid search warrant that those results should be suppressed.
II[*]
.... .... .... .... .... .... .
VII
We affirm the judgment.
Woolpert, Acting P.J., and Randall, J.,[] concurred.
NOTES
[1] Parts II, III, IV, V and VI are not published, as they do not meet the standards for publication contained in rule 976(b), California Rules of Court.
[*] See footnote 1, ante, page 574.
[] Assigned by the Chairperson of the Judicial Council.
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769 F.Supp. 498 (1991)
NORTHWESTERN NATIONAL INSURANCE COMPANY OF MILWAUKEE, WISCONSIN, Plaintiff,
v.
Michael J. ALBERTS, James R. Alberts, Cassandra M. Sheehan, Raymond Cosgrove, Penelope A. Boyle, John C. Maucere, Jerry Silva, Michael L. Metheny, H.U.A. Resources, Inc., Alton Jones, Arthur Lawson, John J. Muller, Michael J. O'Connell, Randolph K. Pace, Southern Companies, Inc., Michael J. McCann, William Curran, James M. McCabe, Harold A. Thau, Patrick J. Rooney, Van Allen Capital Corp., and Robert T. Norton, Defendants.
Raymond COSGROVE, William Curran, James M. McCabe, John J. Muller, Robert T. Norton and Harold A. Thau, Counterclaim Plaintiffs,
v.
NORTHWESTERN NATIONAL INSURANCE COMPANY OF MILWAUKEE, WISCONSIN, and Allan Esrine (a/k/a Ivan Ezrine), Counterclaim Defendants.
No. 88 Civ. 3452 (RWS).
United States District Court, S.D. New York.
July 11, 1991.
*499 *500 *501 Hart & Hume, New York City (Benjamin Lentz, of counsel), for plaintiff.
Irwin & Post, New York City (Frederick B. Polak, Robert A. Goodsell, George W. Keefer, III, of counsel), for Cosgrove Investors.
Brandeis, Bernstein, New York City (Hartley T. Bernstein, of counsel), for counterclaim defendant Allan Esrine.
OPINION
SWEET, District Judge.
Plaintiff and counterclaim defendant Northwestern National Insurance Company ("Northwestern") has moved pursuant to Rule 56, Fed.R.Civ.P. for summary judgment dismissing the First Amended Counterclaim (the "counterclaim") of defendants and counterclaim plaintiffs Raymond Cosgrove ("Cosgrove"), William Curran ("Curran"), James M. McCabe ("McCabe"), John J. Muller ("Muller"), and Robert T. Norton ("Norton"), (collectively the "Cosgrove Defendants"), as well as for summary judgment of its claims against the Cosgrove Defendants. Additionally, counterclaim defendant Allan Esrine ("Esrine") moved pursuant to Rules 9(b), and 12(b)(6) to dismiss the counterclaim against him; in the alternative, pursuant to Rule 56(a), Fed.R.Civ. P., for summary judgment dismissing the counterclaim against him; and also joined in Northwestern's summary judgment motion. For the reasons set forth below, Northwestern's and Esrine's summary judgment motion is granted in part and denied in part.
The Parties
Esrine is a resident of the State of New York.
Northwestern is a corporation organized under the laws of the State of Wisconsin with its principal place of business in the State of Wisconsin.
Norton is a lawyer, Cosgrove is president of a holding company, Curran is president of a mortgage company, McCabe is an industry analyst, and Muller is an executive for Wang Laboratories. All are New Jersey residents. Along with seventeen others, the Cosgrove Defendants were limited partners (the "Limited Partners") in Southern Pipelines Partners ("the Partnership"), an Oklahoma limited partnership formed for the purpose of constructing, owning and operating a pipeline for the transportation of natural gas in southern Oklahoma (the "Pipeline").
Among the general partners in the Partnership was Southern Pipeline Development, Inc. ("Development"), a subsidiary of Southern Reserve, Inc. ("Reserve").
Prior Proceedings
On May 18, 1988 Northwestern filed this diversity action as surety to recover sums of money paid by it on behalf of its principals, the former Limited Partners, including the Cosgrove Defendants.
The Limited Partners filed an answer to the complaint in August, 1988. In an opinion of the court of July 7, 1989 ("July 7, 1989 Opinion"), the Cosgrove Defendants were granted in part leave to amend their initial response to the complaint by filing a counterclaim alleging fraud, breach of duty to disclose, breach of duty of good faith and fair dealing amounting to constructive fraud, and failure to liquidate collateral and/or apply the proceeds thereof on a pro-rata basis to offset the alleged debts.
On March 9, 1990, the court heard oral argument on three motions: a letter of the Cosgrove defendants seeking to resolve certain discovery disputes that was treated as a motion; Northwestern's motion for leave to amend to add a new count asserting its surety rights of exoneration and quia timet and for a preliminary injunction; and the Cosgrove defendant's motion to amend the counterclaim, filed on February 6, 1990.
The counterclaim added Esrine as a counterclaim defendant and asserted a fraud claim in Count I; a breach of fiduciary duty in Count II; breach of duty to disclose in Count III; a breach of duty of fair dealing in Count IV; intentional interference with contractual relations in Count V; aiding and abetting the breach of fiduciary duty in Count VI; state and federal statutory causes of action for securities fraud in *502 Counts VII, VIII, and IX; a violation of RICO in Count X; and failure to liquidate collateral and/or apply the proceeds thereof in Count XI.
In an opinion of June 25, 1990 (the "June 25, 1990 Opinion"), the court granted the motion to compel discovery, Northwestern's motion to amend and for preliminary injunction, and granted in part the motion to amend the counterclaim. An order of July 9, 1990, entered pursuant to the June 25 Opinion, required the Cosgrove Defendants to plead loss causation with respect to Counts I, III, IV, VI, VIII, and X of the Counterclaim.
The Cosgrove Defendants then moved for vacatur of the July 9 Order, and for reconsideration of the June 25 Opinion. In a memorandum opinion of August 29, 1990, the court ruled that the Cosgrove Defendants must plead loss causation with respect to Counts I and III, the common law fraud counts, and also with respect to Counts IV, V, and VI, the common law tort counts. With respect to Counts VII and IX, the memorandum opinion modified the July 9 Order to provide leave to amend to the extent such counts are based upon "control person" liability. The memorandum opinion granted leave to amend with respect to "seller liability" on the condition that the Cosgrove Defendants plead that Northwestern directly solicited the sales for each defendant.
The Cosgrove Defendants, joined by the other defendants in this action, appealed the Court's decision in the quia timet count. Northwestern subsequently filed a motion to dismiss the appeal. In an opinion of June 28, 1991, 937 F.2d 77, the Court of Appeals vacated the injunction based on quia timet as to the Cosgrove Defendants, and dismissed the appeal as to the remaining defendants-appellants.
On December 10, 1990, Esrine filed his motion to dismiss and for summary judgment. Upon agreement of the parties, Esrine's motions were taken on submission on March 4, 1991. On March 19, 1991 Northwestern filed its motion for summary judgment. Oral argument on the Northwestern motion was heard on May 23, 1991.
The Facts
The Partnership
The promoters and organizers of the Partnership were its general partners, Development, Van Allen Capital Corp. ("Van Allen"), and Michael Alberts ("Alberts"), Development's president and principal shareholder. Alberts was the president and principal shareholder of Reserve, which owned 50% of the stock in Development. Development had been formed in August of 1984 chiefly for the purpose of serving as a general partner in the Partnership.
The Partnership solicited potential investors in limited partnership interests by means of a Private Offering Memorandum dated October 11, 1984 (the "POM"). The POM described an offering of 37 limited partnership units at a purchase price of $200,000 per unit, and represented that the unit purchases would ultimately be financed by revenues that the operation of the Pipeline was expected to generate.
As part of their purchase price of the limited partnership units, the Limited Partners, including the Cosgrove Defendants, each executed and delivered promissory notes to the Partnership (the "1985 Notes") in the amount of $185,000 per unit. The Partnership then endorsed, assigned and negotiated these promissory notes to Equilease Corporation ("Equilease") in return for a $6,845,000 loan (the aggregate principal amount of the promissory notes) from Equilease to the Partnership.
In order for it to consent to purchase the 1985 Notes, Equilease required the limited partners to deliver a surety bond (the "1985 Bond") guaranteeing that the limited partners would make timely payments of principal and interest under the 1985 Notes. In order for Northwestern, as their surety, to issue such a bond on behalf of the Limited Partners as principals, each of the Limited Partners executed and delivered to Northwestern an application for surety bond which contained an agreement to indemnify the surety and an estoppel letter. The POM included among the exhibits *503 sample Northwestern bond applications and indemnity agreements.
The offering described in the POM closed on January 25, 1985 (the "1985 Closing"). Esrine attended the Closing, at which time he delivered the 1985 Bond to the Partnership and collected in exchange Northwestern's bond premium.
The Partnership made interest and principal payments on the Equilease loan through the spring of 1986, reducing the principal balance on the loan, and thereby reducing the balance due on each of the Limited Partners' notes. The Partnership was unable to meet payments due in June 1986 and thereafter.
On or about September 30, 1986, and on or about December 16, 1986, Equilease advised Northwestern that the Limited Partners had defaulted on their obligation under their promissory notes, and demanded payment from Northwestern pursuant to the 1985 Bond. Northwestern, as surety, made total payments of $2,095,688.66 to Equilease on behalf of the Limited Partners.
The 1987 Restructuring
In late December of 1986, Development and Reserve advised Northwestern and Equilease of a proposed restructuring of the Limited Partners' promissory notes negotiated to Equilease and bonded by Northwestern (the "Restructuring"). In general the Restructuring consisted of (1) the transfer of the Partnership's assets (including the Pipeline) to Reserve; (2) Reserve's borrowing of $6,845,000 from a new financial institution (the "1987 Loan"); (3) the assumption by the former Limited Partners of the $6,845,000 borrowing by execution of assumption agreements (the "Assumption Agreements") and their receipt of common stock in Reserve, as well as a promissory note payable to each limited partner in the amount of $50,000; (4) Northwestern's issue of a financial guarantee bond in favor of the new financial institution guaranteeing the payments due under the Assumption Agreements (the "1987 Bond"); (5) Reserve and Development indemnifying Northwestern against all loss, cost and expense it would incur by issuing a new financial guarantee bond, and, as collateral security for their promise to indemnify, granting to Northwestern a first security interest/mortgage in the Pipeline; and (6) Reserve's undertaking to use the $6,845,000 loan proceeds to pay Equilease the remaining monies due on the Limited Partners Promissory Notes (less a discount), reimburse Northwestern for the payment it had made to Equilease on behalf of the Limited Partners, and establishment of a fund of $700,000 to make improvements to the Pipeline.
The December 23 Letter
On December 23, 1986 Northwestern distributed to the Limited Partners a letter explaining the terms and conditions of the restructuring (the "Letter"). Counsel for Northwestern reviewed and commented on drafts of the Letter, which Alberts signed.
The Letter contained the following statements: (1) that the purpose of the Restructuring was to obtain an additional $700,000 with which to complete and improve the Pipeline, thereby enabling the Pipeline to generate sufficient funds to amortize the 1987 Loan; (2) that, upon a vote in favor of the Restructuring by a majority of the Limited Partners, all of the Limited Partners would be required to participate in the Restructuring on essentially the same terms, in proportion to their initial percentage investment in the Partnership; (3) that the Limited Partners would receive 10,000 shares of Reserve stock, and a note from Reserve for $50,000 payable pari passu with reductions in the $6,845,000 indebtedness from the 1987 Loan, with such payment anticipated to occur during 1987; (4) that Equilease would discount the Equilease Loan at a maximum of $500,000; (5) that the expenses and costs of the Restructuring would not exceed $225,000; (6) that the Pipeline and other assets transferred to Reserve pursuant to the Restructuring would stand as the primary security for the Cosgrove Defendants' obligations under the Assumption Agreements, and that the liability of the Cosgrove Defendants would stand as a reserve fund in case of the insufficiency of the assets to indemnify fully Northwestern in the event that it *504 would have to make payment pursuant to the 1987 Bond.
In its description of the Restructuring, the Letter allegedly omitted the following information: (1) that Reserve and Development would execute an indemnity agreement in favor of Northwestern; (2) that Reserve and Development would grant Northwestern a mortgage interest in the Pipeline; (3) that Reserve would incur additional debts over the $6,845,000 borrowing in connection with the Restructuring; (4) that approximately one-third of the Limited Partners would be forgiven their obligations in connection with the 1984 Loan and Bond; and that (5) counsel for Northwestern was simultaneously representing the Partnership.
On February 6, 1987, Reserve issued a comfort letter to the Cosgrove Defendants and other Limited Partners enclosing a copy of its investment banker's letter to Northwestern, which stated that the Equilease discount was $300,000.
The 1987 Closing
At the February 12, 1987 closing (the "1987 Closing"), Reserve executed and delivered to the Merchants Bank its promissory note (the "Reserve Note") in the principal amount of $6,845,000 plus interest, and a Pledge and Security Agreement both in favor of the Bank. Esrine procured Merchants Bank as a lender in the Restructuring. Pursuant to the terms of the Reserve Note, the $6,845,000 principal was to be repaid as follows: $2,280,000 on December 31, 1987; $2,280,000 on December 31, 1988; $2,285,000 on December 31, 1989. In addition, quarterly interest payments were to be due on the first day of March, June, September, and December in each of those years. The Reserve Note was secured by the Assumption Agreements executed by the Limited Partners, which were in turn secured by Northwestern's Bond delivered to the Merchant Bank.
To induce Northwestern to issue the Bond on their behalf, each of the Limited Partners executed an "Agreement with Surety" in favor of Northwestern. Pursuant to the "Agreement with Surety" among other things, the Limited Partners/principals requested Northwestern to issue a new bond on their behalf, and agreed to indemnify Northwestern in the event Northwestern suffered a loss by reason of its issuance of such a bond.
As a further inducement to Northwestern to issue the bond, Reserve and Development each executed an indemnity agreement dated February 12, 1987 (the "Indemnity Agreement") in favor of Northwestern pursuant to which, in effect, they both agreed to indemnify and hold harmless from all loss, cost and expense that Northwestern may incur as a result of issuing its bond on behalf of the makers of the Assumption Agreements. As security to Northwestern for their obligation under the indemnity agreement, Reserve and development also executed a "Mortgage, Assignment, Security Agreement and Financing Statement" (the "mortgage") pursuant to which Reserve and Development granted to Northwestern a first mortgage/security interest in the Pipeline.
On February 11, 1987, $247,000.84 was transferred from the E.F. Hutton account of Southern Completion Fund ("Completion"), a limited partnership of which Development is a general partner, Account No. A-12-13425-1, to the E.F. Hutton account of Southern Pipeline, Inc. On February 13, 1987, Reserve opened a new bank account at United Jersey Bank, Account No. XXXX-XXX-X, with an opening balance of $698,603.88.
The $698,603.88 represented the sum of the following three checks: (1) a Merchants Bank check for $403,603.88 payable to Reserve; (2) a Chemical Bank check for $250,000 payable to Esrine and endorsed to Reserve; and (3) a $45,000 check from Idiico, a corporation controlled by Esrine, payable to Reserve. The above checks were received at the 1987 Closing.
In early April 1987, the Limited Partners' 1985 Notes, marked paid, were returned to them by Reserve. The loan agreement between Merchants Bank and Reserve dated February 12, 1987 shows payment of $4,153,743.47 via wire transfer to Equilease for the remaining obligation due under the Limited Partners' notes held by Equilease. *505 A total of $2,242,652.65 was paid to Northwestern. $2,095,688.66 represented reimbursement to Northwestern for its payment to Equilease on behalf of the Limited Partners; $24,380.99 represented interest on the amount; and $122,583.00 represented the increased premium for the Bond. In April, 1987 Equilease returned to Northwestern the Equilease Bond.
Reserve paid the quarterly installment of interest due Merchants' Bank on March 31, 1987, and June 30, 1987. Both Reserve and the makers of the Assumption Agreement (the Limited Partners) defaulted in making each of the subsequent interest payments and the first two annual installments of the principal. Northwestern, pursuant to its obligations under the Bond, made payments from November 15, 1987 through November 22, 1989 totalling $5,816,807.
In May, 1988 Reserve and Development filed petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code. In August 1988 these proceedings were transferred to the United States Bankruptcy Court for the District of New Jersey. In June, 1989, the New Jersey Bankruptcy Court converted the Chapter 11 reorganization into Chapter 7 reorganization proceedings. On April 14, 1989, the New Jersey Bankruptcy Court signed an order approving the abandonment of the Pipeline to Northwestern.
Discussion
With the exception of one of the counterclaims based on New Jersey securities law, the court will apply New York law, as the parties agreed to be bound by New York law in the agreements underlying the Restructuring.
I. The Northwestern Summary Judgment Motion as to the Counterclaim
Summary judgment is authorized if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). Summary judgment is appropriate only in the circumstances where "the evidence is such that a reasonable jury could not return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). The moving party has the burden of demonstrating the absence of any genuine issue as to all the material facts, and the non-moving party is entitled to all favorable inferences that may be drawn from the evidence. Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 444-45 (2d Cir.1980).
A. Loss Causation
Northwestern seeks summary judgment dismissing eight out of the eleven counterclaims on the grounds that the Cosgrove Defendants have not demonstrated loss causation. If such showing is required as matter of law for the eight counterclaims, and the Cosgrove Defendants have not adduced evidence sufficient for such a showing, then summary judgment dismissing the counterclaim should be granted as a matter of law, as the remaining factual disputes relating to such claims would not then be material issues precluding summary judgment.
1. Common Law Fraud and Securities Claims
Loss causation, that is, that the alleged misrepresentations and omissions caused the economic harm, is a required element of both the common law and the securities counterclaims. See Bennett v. United States Trust Co., 770 F.2d 308, 316 (2d Cir.1985); June 25, 1990 Opinion at 26-27, July 9, 1990 Order, and August 29, 1990 Opinion and Order at 3. Loss causation requires a showing that the alleged wrongs proximately caused the loss. Thornock v. Kinderhill Corp., 749 F.Supp. 513, 516 (S.D.N.Y.1990). Therefore, the Cosgrove Defendants' first (common law fraud), third (constructive fraud), fourth (breach of duty of good faith), fifth (tortious interference with contract by aiding and abetting), sixth (aiding and abetting breach of fiduciary duty), eighth (federal securities fraud) and tenth (RICO) counterclaims, in order to survive a summary judgment motion, require a showing of facts from which a reasonable jury could infer loss causation.
*506 2. Breach of Fiduciary Duty Claims
A plaintiff alleging breach of fiduciary duty, however, is not required to meet the higher standard of loss or proximate causation. ABKCO Music, Inc. v. Harrisongs Music, Ltd., 722 F.2d 988, 995 (2d Cir.1983) (plaintiff need not meet loss causation standard where breach of fiduciary duty a prophylactic rule intended to remove all incentive to breach, not simply to compensate for damages in the event of a breach) (citing Diamond v. Oreamuno, 24 N.Y.2d 494, 498, 301 N.Y.S.2d 78, 248 N.E.2d 910 (1969)).
3. The Determination of Loss Causation: The Improvements Fund
The Cosgrove Defendants allege several misrepresentations and omissions as the basis for their counterclaim. Among the alleged misrepresentations are (1) that the primary objective of the restructuring was to obtain a $700,000 improvement fund and that this objective would be accomplished; (2) that all the limited partners would be required to participate in the restructuring; (3) that their investment obligation would be reduced by $50,000 by the end of 1987; (4) that the Equilease discount would not be materially less than $500,000; (5) that the soft costs (expenses incurred in the restructuring) would not materially exceed $225,000; (6) that Northwestern would look first to the pipeline, and second to the principals, for reimbursement; and (7) that the 1987 restructuring would be in accordance with the Partnership Agreement.
The alleged omissions include: (1) that Reserve and Development would execute an indemnity agreement in favor of Northwestern; (2) that Reserve and Development's obligations under the indemnity agreement would be collateralized by the first mortgage in the Pipeline; (3) that Reserve would be incurring debt in addition to the $6.845 million borrowing from the Merchants Bank; (4) that the obligations of approximately one third of the former Limited Partners under the 1985 transaction would be forgiven; and (5) that Elliott Newman, Esq. of the law firm of Finley, Kumble, Wagner, Underberg, Manley, Myerson & Casey was simultaneously representing both the Partnership in the Restructuring and Northwestern in another transaction.
Most of the alleged omissions and misrepresentations go to the issue of transaction causation. While such alleged omissions and misrepresentations might support an inference that the alleged violations caused the Cosgrove Defendants to participate in the transaction, they do not show not loss causation, namely, that such violations caused the transaction to fail. See Bennett, 770 F.2d at 313.
In Bennett, plaintiffs borrowed funds from the U.S. Trust Co. to purchase utility stocks which were then deposited with U.S. Trust as collateral. The stock declined in value, and ultimately U.S. Trust liquidated plaintiffs' account. The Bennetts not only lost their equity in the stock, but also became liable to U.S. Trust for $1,200,000 on unpaid interest and principal on their loan. The Bennetts sued U.S. Trust, alleging that in making the loan, U.S. Trust had knowingly misrepresented to them that the Federal Reserve margin requirements do not apply to public utility stock deposited with a bank as collateral. The Bennetts could not and did not allege, however, that U.S. Trust in any way recommended that they purchase public utility stock in general, or any particular public utility stock.
Likewise in the instant case, any alleged misrepresentations in which Northwestern may have participated about the structure of the Restructuring did not cause the Cosgrove Defendants' loss of their equity in Reserve. Instead, the failure to make the improvements to the Pipeline that would have increased Reserve's income caused this loss.
The instant case is therefore distinguishable from Manufacturers Hanover Trust v. Drysdale Sec. Corp., 801 F.2d 13 (2d Cir.1986) ("MHT"). At issue in MHT was a report authored by defendant Arthur Andersen which misrepresented the assets of the investment vehicle. The Court of Appeals held that the plaintiffs had presented *507 evidence sufficient to link the misrepresentations to the plaintiffs' losses to support a jury verdict where the misrepresentations concerned the quality of the prospective investment, and not merely the "characteristics" of the investment. In contrast, in the instant case, most of the alleged misrepresentations and omissions went to the structure of the deal, and did not concern the likelihood of the Pipeline to increase the company's income. In short, in MHT, Arthur Anderson represented that the company had substantial assets when in fact it had a negative net worth; in the instant case, most of the alleged misrepresentations did not concern Reserve's worth as an investment.
Of the alleged misrepresentations and omissions, therefore, the ones that relate to the loss causation issue are those concerning the $700,000 fund (the "improvements fund"), which, the parties agree, was to be used to turn around the failed investment by allowing it to be connected to additional wells, thereby increasing the transportation fees with which to amortize the debt. Thus, in order to prove loss causation resulting from the alleged misrepresentations relating to the improvements fund the Cosgrove Defendants must show that (1) no $700,000 improvements fund was ever established and (2) that the investment would have turned around with the $700,000 of improvements.
The parties agree that Reserve failed to use the improvements fund for the purpose agreed upon, causing the Pipeline to fail to generate the additional income. Therefore, the question of whether Northwestern's role in the restructuring proximately caused the Cosgrove Defendants' losses turns on whether the improvements fund was properly established in the first place. If the improvements fund was properly established, then Northwestern's role in the restructuring did not proximately cause the alleged losses. See Bloor v. Carro, Spanbock, Londin, Rodman & Fass, 754 F.2d 57, 62 (2d Cir.1985) ("the failure of the corporation to use the proceeds wisely .. was hardly a reasonably foreseeable result, let alone the direct result, of any of Carro Spanbock's alleged actions"); Thornock, 749 F.Supp. at 516 ("Likewise, the investors' losses here were caused not by FCNB's provision of financing, but rather by the Kinderhill defendants' alleged mismanagement of the investments.").
As recounted in the statement of facts above, on February 13, 1987, the day after the closing, Reserve opened a new bank account with an opening balance of $698,603.88, representing the proceeds of three checks received at the closing the day before as stated above.
The Cosgrove Defendants contend that although the $698,603.88 fund was established, it was never viable or available. They argue that the closing costs of the restructuring were so high that they absorbed nearly all the proceeds of the 1987 Loan, leaving behind a balance insufficient to fund the improvements. In support of this contention, the Cosgrove defendants set forth evidence in the form of Alberts' deposition, in which he states that he would personally advance between $215,000 and $250,000 to Reserve, but that he would immediately reimburse himself after the closing from the loan proceeds. The loan documents show that no part of the loan proceeds went directly to Alberts.
In support of its position that the improvements fund was viable immediately after the closing, Northwestern submits loan documents and a cash disbursements schedule concerning (1) the disbursement of the loan proceeds and (2) withdrawals and deposits from the account in to which the $698,603.88 was deposited. The cash disbursements schedule, show that Reserve made two withdrawals from the account in February totalling $132,111.11, and thirteen withdrawals in March totalling $399,174.28. The records show that Alberts made two deposits into this account, $105,000 on March 16, 1987 and $450,000 on March 23, 1987. The net result of these deposits and withdrawals was that the balance of the account was $837,254.97 as of April 7, 1987, an amount well in excess of the $698,603.88 balance existing at closing.
Thus, even assuming that Alberts personally contributed (through entities controlled *508 by him) and later withdrew funds from the account as stated in his deposition, there is uncontroverted evidence that the balance in the account was in excess of $700,000 seven weeks after the closing. Northwestern submits evidence relating to the period after April 7 in the form of a letter from Reserve showing that Reserve continued to represent to Northwestern that $700,000 was preserved in a certificate of deposit. It is Northwestern's position that Reserve's statements about the certificate of deposit was a misrepresentation in that the certificate of deposit was used to collateralize a loan to Development and that this use of the $700,000 accounts for the failure to make the specified improvements.
Whatever the ultimate use of the funds, however, the evidence shows that the funds for improvement were available after the Closing, that Reserve continued to represent the availability of such funds, and that based on such representations, Northwestern had reasonable grounds to believe in the availability of such funds. In short, Alberts' deposition testimony notwithstanding, there is no evidence from which a reasonable jury could conclude that the funds were not available immediately after the closing. Therefore, the Cosgrove defendants have failed to point to a genuine issue of fact sufficient to preclude summary judgment on the claims for which loss causation is an element.
B. Breach of Fiduciary Duty
The second count of the counterclaim alleges Northwestern's breach of a fiduciary duty to the Cosgrove Defendants, based on the fact that the Cosgrove Defendants each gave Northwestern certain limited powers of attorneys, as provided for in both the 1984 Indemnity Agreement and the 1987 Agreement with Surety.
The 1984 Indemnity Agreements provided that the Cosgrove defendants each appoint Northwestern:
as its attorney-in-fact with the right, but not the obligation, to exercise all rights assigned [in favor of Northwestern] ... and in the name of the undersigned to make, execute and deliver, but not be obligated, additional documents deemed necessary to give full effect to the assignment.
The Agreements with Surety likewise provided:
I hereby irrevocably appoint Northwestern as my attorney in fact to execute and deliver to the Bank, Southern Reserve, and any other person, firm or corporation, such written directions and/or instruments and documents as are reasonably required to effectuate the purposes of this Agreement.
The Cosgrove Defendants do not allege that Northwestern exercised such powers of attorney; they contend that by the grant of power of attorney, Northwestern became the Cosgrove Defendants' agent for the purposes of the specific transactions involved with each agreement and that therefore Northwestern had a duty to provide the Cosgrove Defendants with material facts relating to those transactions.
In general, a written power of attorney is a formal contract and creates a principal/agency relationship. However, an agency relationship only exists if the agent acts primarily for the benefit of the principal and not for himself. Restatement of Agency (2d) § 14(k) (1988). In the instant case, Northwestern was not merely acting as an agent of the Cosgrove Investors. As surety, Northwestern played an active role in both the 1985 and 1987 transactions. It stood to benefit from the transactions through the fees it charged. The purpose of the Cosgrove Investors grant of power of attorney to Northwestern was merely to facilitate the transaction.
Moreover, it is undisputed that the powers of attorney were never exercised. Courts have declined to hold the existence of a duty based on an agency relationship where the recipient of a grant of power of attorney never exercised such power. See Stainton v. Tarantino, 637 F.Supp. 1051, 1070 (E.D.Pa.1986) (no fiduciary relationship arose from attorney's acceptance of power of attorney where granted for the purposes of closing a restructuring and where such power never exercised). In *509 sum, the Cosgrove Defendants seek the court to hold as a matter of law that the grant of power of attorney to a surety gives rise to a fiduciary duty on the part of such surety. They point to no cases that stand for this proposition. Therefore, as a matter of law, Northwestern must be granted its motion for summary judgment dismissing this claim.
C. Control Person Liability
Northwestern seeks summary judgment dismissing the seventh and ninth counterclaims on the grounds that it was neither a control person nor a seller under New Jersey Statutes 49:3-71 and § 12(2) of the Securities Act of 1933, 15 U.S.C. § 77l(2) (the "1933 Act"). Esrine has also moved for summary judgment dismissing these claims with respect to him.
1. Primary Liability
Control person liability under the 1933 Act requires a showing that (1) the alleged control person actively participates in the overall management and operation of the alleged controlled entity and (2) that such control person actively participated in the fraud allegedly perpetrated by that entity. Harrison v. Enventure Capital Group, Inc., 666 F.Supp. 473, 478 (W.D.N.Y.1987) (citing Lanza v. Drexel & Co., 479 F.2d 1277 (2d Cir.1973) (en banc)). Moreover, Federal securities law concepts are to be used to define liability under the New Jersey statute, Cola v. Terzano, 129 N.J.Super. 47, 322 A.2d 195 (1974), as well as "control person" under the New Jersey statute, Zendell v. Newport Oil Corp., 226 N.J.Super, 431, 544 A.2d 878 (1988).
In opposition to the motion, the Cosgrove Defendants have adduced memos between Esrine and Reserve in the summer of 1986 discussing the form that the proposed Restructuring was to take, as well as Northwestern's attorney's comments on drafts of the Restructuring documents, as evidence of Esrine's and Northwestern's respective control person status.
Northwestern contends that such evidence relating to pre-closing events is "irrelevant" to the admitted Reserve fraud failing to use the $698,603.88 fund to construct any pipeline improvements "since the purpose of the restructuring was accomplished." This argument, however, applies only to those claims for which loss causation is a necessary element. See supra Part I(A)(3), infra Part I(C)(3).
At the heart of the control person liability claims based on the primary violation is the Letter of December 23 setting forth the terms of the Restructuring, which, along with other documents and representations, the Cosgrove Defendants allege, caused them to participate in the Restructuring.
The evidence of the communications between Esrine and Reserve, demonstrating as it does that Esrine had a leading role in structuring the deal, is sufficient to support an inference that Esrine participated in Reserve's management and in the fraud for the purposes of the control person liability test. Moreover, the memos, in which Esrine advocates Northwestern's interests in the Restructuring (i.e., "the curing of all defaults, the repayment to [Northwestern] of the $462,000 odd dollars of interest, the obtaining of liens on the pipeline and the general releases that would ensue" (Esrine Memo of November 10, 1986)) and in which Esrine refers to his efforts effecting collections for Northwestern, is sufficient to raise a question of fact as to whether Esrine was Northwestern's agent, and therefore as to whether Esrine's alleged control person liability may be imputed to Northwestern.
Northwestern cites Zendell for the proposition that entities that provide professional or other services to the parties to a transaction cannot be control persons under either Federal securities law or New Jersey law. In Zendell, a limited partnership was formed to engage in oil and gas exploration and production in Oklahoma and Kansas. When the venture turned unsuccessful, the limited partners sought rescission alleging, inter alia, violations of federal and New Jersey securities laws. In dismissing a claim against the seller's counsel, the court rejected the contention that the seller's attorneys were liable as "control persons" under the New Jersey Statute. *510 The court noted that the law firm did not act as broker or underwriter, and that the law firm did not have a managerial position with, or investment in, the partnership. Zendell, 544 A.2d at 883.
Zendell is, however, distinguishable on the facts from the instant case. In contrast to the court's findings in Zendell, the Cosgrove Defendants here have pointed to facts sufficient to establish Northwestern's financial interest in the Restructuring: the improvement of Northwestern's position by taking a security interest in the Pipeline. The prospect of bettering its position in relation to the limited partners constitutes enough of a stake in the outcome to distinguish Northwestern's role in the Restructuring from the role of the attorneys in setting up the partnership in Zendell. Therefore, as the Cosgrove defendants have established facts from which Northwestern's and Esrine's control person status may be inferred, a question of material fact exists to preclude summary judgment.
2. Esrine's Motion to Dismiss the Control Person Liability Counterclaims
In addition to joining in Northwestern's summary judgment motion with respect to the control person liability claims, Esrine also seeks dismissal of these claims on statute of limitations grounds.
A plaintiff cannot sue a new defendant after the statute of limitations has expired as to that defendant. Schiavone v. Fortune, 477 U.S. 21, 25-32, 106 S.Ct. 2379, 2382-86, 91 L.Ed.2d 18 (1986). With respect to the § 12(2) claim, Esrine asserts as the applicable statute of limitations the One-Year/Three-Year Rule, which provides that claims are forever barred unless brought within three years of the date on which they accrued and within one year of discovery of the fraud. See Lampf, Pleva, Lipkind, Prupis & Petigrow v. Gilbertson, ___ U.S. ___, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991) (applying One-Year/Three-Year Rule to actions under § 10(b)).
Assuming, without deciding, that the § 12(2) claim is governed by the One-Year/Three-Year rule, the relevant dates for the purposes of such rule are February 12, 1987, the date of closing of the Restructuring; February 6, 1990, the date the Cosgrove Defendants filed their motion to add Esrine as a counterclaim defendant; and the period from November-January 1989-90, when the Cosgrove Defendants say they discovered Esrine's involvement during the course of depositions. The First Amended Counterclaim was served on Esrine in October of 1990.
When a plaintiff seeks to add a new defendant in an existing action, the date of the filing of the motion to amend constitutes the date the action was commenced for statute of limitations purposes. Derdiarian v. Futterman Corp., 36 F.R.D. 192, 194 (S.D.N.Y.1964). Therefore, the Cosgrove Defendants' commencement of the action as against Esrine was within the three year part of the One-Year/Three-Year rule. Moreover, the action was brought within one year of the discovery of the fraud in late 1989. Therefore, as the Cosgrove Defendants action against Esrine meets both prongs of the One-Year/Three-Year rule, Esrine's motion to dismiss the § 12(2) claim is denied.
Esrine also seeks dismissal of the claims based on New Jersey Statutes 49:3-71, which provides a limitations period of "no more than two years after the contract of sale or within two years of the time when the person aggrieved know or should have known of the existence of his cause of action, whichever is later. New Jersey Statues 49:3-71(e).
New Jersey law is consistent with the Second Circuit in establishing the date of the filing of the motion to amend as the date of the commencement of the Cosgrove Defendants' action against Esrine. Campbell v. Union Beach, 153 N.J.Super. 434, 379 A.2d 1295 (App.Div.1977); Ioannou v. Ivy Hill Park Section Four Inc., 112 N.J.Super. 28, 270 A.2d 295 (Law Div.1970). The question thus becomes whether the Cosgrove Defendants should have known of Esrine's participation before their discovery of such knowledge late in 1989. *511 Where, as here, the Cosgrove investors were diligent in pursuing discovery, and where knowledge of Esrine's involvement in the restructuring could not be gleaned from an examination of the Restructuring documents distributed to the Limited Partners, but requires a familiarity with meetings in which the Cosgrove Defendants did not participate, Esrine's alleged participation in the Restructuring could not have been known to the Cosgrove Defendants before discovery was well underway. Therefore, Esrine's motion to dismiss the New Jersey securities fraud claim is denied.
3. Aiding and Abetting
The Cosgrove Defendants allege that in the alternative, Northwestern and Esrine aided and abetted in Reserve's § 12(2) violation. The elements of aiding and abetting a fraud under the federal securities laws consist of (1) securities fraud by a primary party; (2) knowledge of the fraud; and (3) substantial assistance in the achievement of its ends. See IIT v. Cornfeld, 619 F.2d 909, 922 (2d Cir.1980). The plaintiff alleging "substantial assistance" by the aider and abettor must allege that the acts of the aider and abettor proximately caused the harm upon which the primary liability is predicated. Bloor, 754 F.2d 57, 62. As set forth above, the Cosgrove Defendants have failed to set forth facts sufficient to support a finding of loss causation, i.e., proximate causation. Therefore, with respect to the aiding and abetting claims, for the reasons set forth above, summary judgment is granted dismissing these claims against both Esrine and Northwestern.
D. Northwestern's Duty to Offset
In the eleventh counterclaim, the Cosgrove defendants seek an offset against their alleged obligations to Northwestern in the amount of their proportionate interest in the Pipeline. The Cosgrove Defendants have not opposed Northwestern's summary judgment motion with respect to this claim. Therefore, the motion with respect to this claim is granted.
II. Esrine's Motion to Dismiss
The court's grant of summary judgment dismissing the Cosgrove Defendants' counterclaims except for the control person liability counterclaims applies to the counterclaims as they are asserted as against both Esrine and Northwestern. Therefore, with the exception of Esrine's motion to dismiss the control person liability counterclaims, the court need not consider the remainder of Esrine's motion to dismiss the counterclaims.
III. Northwestern's Liability Claims
Northwestern has also moved for summary judgment of its liability claims against the Cosgrove Defendants. There are several issues relevant to the disposition of Northwestern's claims against the Cosgrove defendants: (1) the Cosgrove Defendants' affirmative defenses (2) the factual issue of the valuation of the Pipeline; (3) the legal question as to the application of the proceeds of the Pipeline.
A. Affirmative Defenses
In Celotex, the Supreme Court set forth the standards to be met by parties opposing a summary judgment motion:
In our view, the plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial. In such a situation, there can be "no genuine issue as to any material fact," since a complete failure of proof concerning an essential element of the nonmoving party's case renders all other facts immaterial. The moving party is "entitled to a judgment as a matter of law" because the nonmoving party has failed to make a sufficient showing on an essential element of her case with respect to which she has the burden of proof.
Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 2552, 91 L.Ed.2d 265 (1986). *512 Thus, it is the Cosgrove Defendant's burden to establish that there are factual issues with regard to their affirmative defenses.
The Cosgrove Defendants have contested this motion with regard to two affirmative defenses, that based on fraudulent inducement and that based on failure of condition precedent.
1. Conditions Precedent
In support of its affirmative defense based on the failure of Northwestern's failure to fulfill conditions precedent to the agreement, the Cosgrove Defendants cite, among other cases, the case of Holland Indus., Inc. v. Adamar of New Jersey, Inc., 550 F.Supp. 646, 648 (S.D.N.Y.1982) for the proposition that a contracting party's failure to comply with a condition precedent to an alleged contract bars its recovery for breach of that contract.
In Holland, the parties agreed that Holland would provide bus transportation services to Adamar. The court held the following language, contained in a "memorandum of understanding" between the parties to establish a condition precedent:
Holland understands that any service agreement with Adamar must be approved by the New Jersey Casino Control Commission and further, that Holland must apply for a New Jersey Casino Service Industry License. In the event of a denial of the above application, the agreement is terminated immediately at no cost or liability to Adamar.
Id. at 647-48. The other cases cited by the Cosgrove Defendants similarly concern service, renovation or purchase contracts. In the instant case, the Cosgrove Defendants point to no language in any of the documents underlying the Restructuring similar to that held to state a condition precedent in Holland, i.e., which explicitly states that if a condition is not met, then the agreement is terminated. Therefore, as a matter of law, summary judgment must be granted to Northwestern on the issue of the affirmative defense based on condition precedent.
2. Fraudulent Inducement
The affirmative defense based on fraudulent inducement is based on the claim that the Cosgrove Defendants were fraudulently induced to enter into the Agreements with Surety, in which the former limited partners promised to indemnify Northwestern and thereby made Northwestern subrogee of the Assumption Agreements.
N.Y.U.C.C. § 3-201(1) (McKinney 1964) states that:
Transfer of an instrument vests in the transferee such rights as the transferor has therein, except that a transferee who has himself been a party to any fraud or illegality affecting the instrument ... cannot improve his position by taking from a later holder in due course.
A surety may be a party to fraud for the purpose of barring his subrogation rights, even where the facts do not support of finding of loss or of control person or aider and abettor liability under the securities laws. See National Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 206 (2d Cir. 1989) (affirming district court's view that surety who under the federal securities laws has no duty to disclose material misrepresentations to an investor may merely by remaining silent in the face of superior knowledge become a "party to fraud" as to disable it from enforcing its contractual subrogation rights); Bruce v. Martin, Opinion of April 13, 1990 at 14, 1990 WL 52180; Gaines Service Leasing Corp. v. Carmel Plastic Corp., 105 Misc.2d 694, 432 N.Y.S.2d 760, 762 (Civ.Ct.1980), aff'd, 113 Misc.2d 752, 453 N.Y.S.2d 391 (N.Y.Sup. 1981).
There is sufficient evidence to raise an issue of fact as to whether Northwestern was party to fraud within the meaning of N.Y.U.C.C. § 3-201(1). The Letter of December 23 stated that in case of default triggering Northwestern's obligations to pay the Merchants Bank as the Cosgrove Defendants' surety, Northwestern would look first to the assets of Reserve (including the Pipeline) and then the Cosgrove Defendants for indemnification. The December 23 Letter, however, omitted to state that Northwestern, as a condition *513 of its bond guaranteeing payment of the Assumption Agreements, would also require an indemnification agreement from Reserve and Development holding Northwestern harmless from any losses that might arise from its role of surety to the Cosgrove Investors, and that as collateral security for Reserve's and Development's obligations under the Indemnification Agreement, Northwestern would be taking a first mortgage in the Pipeline. Such omissions are material where, as here, they affected the risk to the Cosgrove Defendants of entering into the Restructuring and consequently the decision to participate in the Restructuring.
By adducing evidence of the circulation of drafts of the Letter of December 23 between Northwestern and Reserve, the Cosgrove Investors have set forth facts from which it can be inferred that Northwestern knew of the alleged omissions. Therefore, the Cosgrove Investors have pointed to material issues of fact sufficient to preclude summary judgment of the fraudulent inducement issue.
B. The Application of the Value of the Pipeline
The Cosgrove Defendants further argue that even if they were not fraudulently induced into participating in the restructuring, Northwestern should nonetheless credit the value of the Pipeline pro rata among all the investors, instead of crediting the Pipeline's value first against the insolvent investors and only then against the solvent investors i.e., the Cosgrove Defendants.
There is no dispute that (1) at the time of the Restructuring, Northwestern accepted as a partial replacement for those investors who did not wish to participate in the Restructuring several new investors who became principals under the 1987 Bond: H.U.A. Resources, Inc., Southern Companies, Inc., and Development, all controlled by Alberts; (2) Northwestern paid the entire $6,845,000 principal plus accrued interest on behalf of the Cosgrove Defendants and others to the Merchants Bank; and (3) the Bankruptcy Trustee of Southern Reserve has abandoned the Pipeline to Northwestern in partial satisfaction of the independent indemnity obligations of Southern Reserve to Northwestern.
The Cosgrove Defendants contend that Northwestern breached its duty to investigate the financial qualifications of the new investors, and that as a matter of law Northwestern is barred from recovery. They point to no case which stands for the proposition that a surety has such a duty.
In general, a surety has no fiduciary duty to its principal. Turtur, 892 F.2d at 207. A surety's failure to investigate financial information provided on a surety application does not in itself make it a perpetrator of fraud. National Union Fire Ins. Co. v. Woodhead, 917 F.2d 752, 757 (2d Cir.1990).
Moreover, notwithstanding the issue of fraudulent inducement, there is nothing contained on the face of the Assumption Agreement that indicates that the parties contemplated what the Cosgrove Defendants are seeking to accomplish by asserting the issue of a surety's duty to his principal: using the value of the Pipeline to offset their obligations under the Assumption Agreements. Paragraph 3 of the Assumption Agreements provides:
It is further understood and agreed that the Promissor obligation hereunder shall be a primary obligation of the Promissor, and that the Promissor shall have no right of indemnification or contribution from, or subrogation against Southern Reserve, Inc. thereof or any other person, it being the intention and understanding of the Promissor that, to the extent of the Maximum Liability hereunder, the Promissor shall bear his portion of the ultimate risk of loss when due, as aforesaid.
For the reasons stated above, as a matter of law, and notwithstanding the issue of fraudulent inducement as discussed above, Northwestern has no duty to the Cosgrove Defendants such that it should offset the value of the Pipeline pro rata among the solvent and insolvent investors.
*514 Therefore, with respect to the issue of the value of the Pipeline as it relates to Northwestern's claim, summary judgment is granted in favor of Northwestern as to the application of the Pipeline's value, with a factual issue remaining as to the actual value of the Pipeline.
Conclusion
For the reasons set forth above, Northwestern's and Esrine's motions for summary judgment dismissing the counterclaims of the Cosgrove Defendants is granted, except with respect to the counterclaims alleging control person liability. As stated above, Esrine's motion to dismiss the control person liability claims against him is denied. Northwestern's motion for summary judgment of its claims against the Cosgrove Defendants is denied, factual issues remaining as to the Cosgrove Defendants' affirmative defense based on fraudulent inducement and as to the value of the Pipeline.
It is so ordered.
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984 F.2d 880
1993 A.M.C. 913
RODI YACHTS, INCORPORATED, Tee Dee Enterprises,Incorporated, and Ron Kolosta, Plaintiffs-Appellees,v.NATIONAL MARINE, INCORPORATED, Defendant/Third-PartyPlaintiff-Appellant.TRANSPORT DISTRIBUTORS, INCORPORATED, Third-PartyDefendant/Fourth-Party Plaintiff-Appellee,v.LEMONT HARBOR AND FLEETING SERVICES, INCORPORATED,Fourth-Party Defendant-Appellant.
Nos. 92-1717, 92-1867.
United States Court of Appeals,Seventh Circuit.
Argued Dec. 9, 1992.Decided Feb. 2, 1993.
George A. Hesik, Willowbrook, IL (argued), for Rodi Yachts, Inc., Tee Dee Enterprises, Inc., and Ron Kolosta.
Paul McCambridge, Warren J. Marwedel, Dennis Minichello (argued), Keck, Mahin & Cate, Chicago, IL for National Marine, Inc., and Lemont Harbor and Fleeting Services, Inc.
Mark F. Devane (argued), Scott G. Reno, Menges, Mikus & Molzahn, Chicago, IL for Transport Distributors, Inc.
Before POSNER and EASTERBROOK, Circuit Judges, and WOOD, Jr., Senior Circuit Judge.
POSNER, Circuit Judge.
1
A barge owned by National Marine, Inc., cast adrift when it slipped its moorings at a dock operated by Transport Distributors, Inc. (TDI), in the Chicago Sanitary and Ship Canal, collided with another dock and two boats, causing damages that have been stipulated in an amount slightly in excess of $100,000. The owners of the damaged property brought suit in admiralty against National Marine, which impleaded TDI, which in turn impleaded the subsidiary of National Marine that had operated the tugboat (Lemont Harbor and Fleeting Services)--but we can ignore that detail and treat parent and subsidiary as one. After a bench trial, the judge ruled that both National Marine and TDI had been negligent and assessed the former's fault at twice the latter's, meaning that National Marine would have to pay two-thirds of the damages. National Marine appeals, contending that TDI was solely at fault. TDI crossappeals, arguing that National Marine was solely at fault.
2
The plaintiffs--oddly, it may seem--take no position on the merits of either the appeal or the cross-appeal, even though a conceivable outcome would be a ruling that neither defendant had been negligent. The defendants appear to agree, however, that at least one of them was negligent; and the plaintiffs must be satisfied that either one is good for the entire damages (which are relatively modest), so that if National Marine succeeds in shifting the entire burden of liability to TDI, or vice versa, the plaintiffs will be none the worse for it. It is true that TDI was not named as a defendant in the plaintiffs' complaint, or for that matter in any other pleading by the plaintiffs. But in an admiralty suit, once a defendant impleads a third party in an effort to shift the burden of liability in whole or part from its own shoulders, and demands judgment in favor of the original plaintiff against that third party, the suit proceeds as if the original plaintiff had sued the third party. Fed.R.Civ.P. 14(c), and Note of the Advisory Committee on the 1966 Amendment thereto; Home Ins. Co. v. Puerto Rico Maritime Shipping Authority, 524 F.Supp. 541, 546 (D.P.R.1981). So the plaintiffs in our case can recover their damages from TDI if the latter was negligent and its negligence a cause of the accident, and of course from National Marine on their original complaint if National Marine was negligent and its negligence a cause of the accident.
3
Although in form a tort case, in economic reality this is a contract case. It involves the respective duties to third parties (the plaintiffs) of two firms engaged in a voluntary undertaking to "park" the barge of one at the dock of the other. National Marine, which owns a fleet of barges, made a contract with a lumber company that is not a party to this case to transport a load of that company's lumber to TDI's dock. TDI is in the business of transloading bulk cargoes. It receives them by rail or barge, unloads them and stores them in its warehouse, and then reloads them onto trucks for further travel. Although at the time of the accident its place of business bordered on the canal and had a seawall at which barges could be moored, TDI received almost all cargo by rail. Only about once a year did it receive a shipment by barge. Because of its infrequent use of the dock, TDI did not have its own crew of maritime workers, and in fact had no maritime capabilities at all. When a barge arrived or was due, TDI would hire a maritime crane, complete with crew, to unload it.
4
National Marine notified TDI to expect a barge on April 22, 1988. A tugboat owned and operated by National Marine brought the barge to the dock that evening. The crew of the tug lashed the barge to the seawall with inch-and-a-half-thick hawsers made of braided plastic rope. It is unclear whether two, three, or four hawsers were used, but probably there were three because a photograph of the barge taken shortly after the accident showed three hawsers dangling from it. No one was at the dock when the tugboat's crew moored the barge. It was understood that when the barge had been unloaded, TDI would notify National Marine and the latter would send a tug to take the barge away.
5
Because of TDI's delay in obtaining a maritime crane and crew, the barge had not yet been unloaded when, in the early morning hours of April 27, almost five days after the barge had arrived, it broke from its moorings and began its fateful journey. During the period while the barge was moored at the dock no one inspected the moorings to make sure they were secure.
6
The cause of the barge's breaking free is unclear, although several hypotheses can be rejected. Apparently the lines broke, rather than being untied or unraveling. The one line that was recovered and is in the record is frayed at the point where it broke, rather than being cut through cleanly. So the hypothesis of intervention by mischievous boys or other vandals can pretty well be excluded, and anyway is not argued. Weather conditions were normal, though there was some wind blowing away from the dock; and there appear to have been no extraordinary perturbations, such as a huge wake stirred up by a passing ship, that might have imparted such force to the barge as to cause a normal line to break even in normal weather. Three hypotheses as to why the lines broke cannot be said to be excluded by the record, although they vary in their plausibility. One is that there were only two lines, and two is not enough--the force exerted by the barge even in a mild wind would cause them to snap. But there was expert testimony that two lines are enough, and anyway there appear to have been at least three. Another hypothesis, also pressed by TDI, is that the line was composed of a type of plastic that if used too long eventually decays from exposure to sunlight, and that the flecks of powder that come off on one's hand when one touches the rope in the record are the telltale clue that the rope had indeed been used too long and had decayed. Still another theory, this one pressed by National Marine, is that the breaking of the lines was caused by chafing, that is, by their rubbing against the seawall. But against this there was evidence that the seawall and the barge were at the same height, rather than the barge's being lower, which would be necessary to generate friction between the seawall and the ropes.
7
Unfortunately the district judge's findings of fact do not resolve the disputed questions bearing on the cause of the accident. The entirety of the relevant discussion is as follows:
8
National Marine was negligent because its employees failed to moor Barge NL264 safely. Ropes provided and tied to the dock by National Marine parted, thus causing the subsequent crash between Barge NL264 and the property of each of the three plaintiffs.
9
Third-party defendant, TDI, was negligent because its employees failed to inspect the barge moored at its dock. Had employees of TDI inspected the moored barge on a regular basis, it is possible that they would have detected unsafe mooring, such as chafing of the ropes, too few ropes or improperly tied ropes, and that the breakaway would have been prevented.
10
Notice that the judge is noncommittal as to whether the accident occurred because of improper mooring, which would be National Marine's responsibility, or because of chafing, which would seem to be TDI's responsibility, not only because chafing would be detectable by even a superficial inspection but also because the effect of chafing is gradual, so presumably would not have caused the rope to part had it not been for TDI's delay in unloading the barge. Therefore if chafing was indeed the cause of the accident it is hard to see why two-thirds of the liability should come to rest on the barge's owner. Moreover, the first paragraph that we quoted suggests that the judge may have thought that the fact that the ropes broke demonstrated without need for any more evidence that the barge had been negligently moored--a conclusion that would equate negligence to strict liability.
11
Although the findings are deficient, both National Marine and TDI believe that we can resolve the case without a remand for better findings. Each believes it demonstrable from the legal authorities and the trial record that the other is solely responsible for the accident. National Marine, claiming that the facts demonstrate that TDI was the bailee of the barge, argues that when a barge breaks away from its moorings the bailee is presumed to be negligent and that TDI has not rebutted the presumption. TDI claims that it has rebutted the presumption, that anyway it was not a bailee, and that the relevant presumption is that the owner of a vessel is presumed negligent if the vessel drifts out of control.
12
The language of presumptions and bailments obscures rather than illuminates the ultimate question, which is that of the relative fault of the parties and cannot be answered without a remand for additional findings and perhaps more evidence. The accident could in principle have been prevented by either the owner of the barge or the operator of the dock. The critical issue, in the absence of an explicit contract between the parties, is their relative costs of prevention. To frame that issue it is helpful to distinguish between preventive measures that could have been taken before the tugboat, having moored the barge, departed, and preventive measures that could have been taken afterward. Before, the accident could have been prevented by someone's making sure that the barge was fastened by enough sound ropes soundly tied; and it is the custom in the inland maritime industry that the owner of the barge is responsible for taking these measures rather than the operator of the dock. The latter would have to maintain a crew on hand whenever a barge was expected and would in any event know less than the owner did about the weight of the barge and therefore about the amount and strength of rope necessary to hold it, though he would probably know more than the owner about local conditions, such as changes in water level or the possibility of waves churned up by passing vessels, that might strain the moorings.
13
After mooring, the sort of accident that happened here can be prevented, or at least the probability of its occurring can be greatly reduced, by regular inspection of the ropes to make sure that they are not chafing, or otherwise fraying, or loosening, or coming untied. Most docks that receive barges are operated by firms that employ people who know something about the mooring of barges, and it is cheaper for those employees to inspect the barges moored at the docks than it is for the owner of the barges to send an inspector from his place of business or employ an inspector at every seawall or pier at which they might dock. TDI, however, employed no one competent to make such an inspection, and it asks us to infer that National Marine was the lower-cost accident avoider after the mooring as well as before. There are many objections to this argument. One is that in the absence of a contract to the contrary National Marine was entitled to rely on the custom of the industry, which is that the operator of the dock inspects the moorings during the period in which a barge is docked in order to make sure they are secure. National Marine had no reason to suppose that TDI was not in compliance with industry custom. If because TDI did not have an inspection capability National Marine would in fact have been the lower-cost after-mooring accident avoider, TDI should have notified National Marine, which might (perhaps for a price) have taken extra measures to moor the barge securely, knowing that it would not be inspected. This is the contract principle of Hadley v. Baxendale, 9 Ex. 341, 156 Eng.Rep. 145 (1854), applied to torts in such cases as EVRA Corp. v. Swiss Bank Corp., 673 F.2d 951 (7th Cir.1982), and Rardin v. T & D Machine Handling, Inc., 890 F.2d 24 (7th Cir.1989). Without a requirement of notice the law would be encouraging a wasteful duplication of safety measures.
14
Notice to National Marine was not TDI's only recourse if it lacked the human, informational, or other resources necessary to do the necessary inspecting itself. Since the need for inspection increases with the length of time the barge is docked, TDI could have made greater efforts to obtain a maritime crane and crew promptly. What in any event is clear is that the fact that a potential injurer fails to equip himself with any means of avoiding injury cannot exonerate him from liability for negligence. Vaughan v. Menlove, 3 Bing. (N.C.) 468, 132 Eng.Rep. 490 (Com.Pl.1837). "The law considers ... what would be blameworthy in the average man, the man of ordinary intelligence and prudence, and determines liability by that. If we fall below the level in those gifts, it is our misfortune; so much as that we must have at our peril." O.W. Holmes, Jr., The Common Law 108 (1881). If you hand over your car to an attendant at a parking lot, and he drives it into a wall while trying to park it, the lot cannot defend on the ground that it had hired an attendant who did not know how to drive and therefore was incapable of preventing the accident. On a par is TDI's argument that the fact that after the barge was discovered missing from its moorings National Marine rather than TDI sent a tug to rescue it shows that TDI was not a bailee. All it shows is that TDI had no capability for rescuing a runaway barge. TDI gets no points for the limitations of its competence.
15
However, the fact that TDI may not have come up to the customary standard of care in its industry, or, even without regard to that point, may have been able to avoid the accident at a cost less than the expected accident cost (simply by notifying National Marine that it had no intention of ever inspecting the barge's moorings), does not establish its sole liability, as National Marine appears to believe. Under a traditional common law regime, where there is no contribution among joint tortfeasors, National Marine could not even have impleaded TDI, but would have had to bear the sole liability because the plaintiffs had decided to sue it alone and ignore TDI, provided of course that the plaintiffs were able to prove both that National Marine was negligent and that the accident would not have occurred had it not been so. The rule in admiralty, however, is that joint tortfeasors are entitled to allocate a plaintiff's damages among themselves in accordance with their relative fault. United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975). That rule allowed National Marine to implead TDI. But the fact that TDI was at fault, even grievously so, would not entitle National Marine to shift the entire burden of liability to TDI's shoulders unless, of course, National Marine was not negligent at all. Even if it was not negligent for failing to send inspectors to check the moorings after the barge was delivered to TDI's docks, it may have been negligent in the original mooring of the barge.
16
Nor can National Marine throw the entire burden of liability onto TDI merely by establishing that the latter was the bailee of the barge at the time it broke away. In maritime law as in common law, a bailee is responsible for exercising due care in the keeping of the good that has been entrusted to him. Riverway Co. v. Trumbull River Services, Inc., 674 F.2d 1146, 1150 (7th Cir.1982); Solano v. Beilby, 761 F.2d 1369, 1373 (9th Cir.1985); Global Tank Trailer Sales v. Textilana-Nease, Inc., 209 Kan. 314, 317, 496 P.2d 1292, 1295 (1972). We may assume for purposes of this discussion that if TDI failed to inspect the barge's moorings it was in violation of a bailee's duty of care. For the fact that National Marine did not pay TDI for the right to park its barge at the latter's dock would not make TDI a gratuitous (that is, unpaid) bailee, who does not owe his bailor a duty of ordinary care, but only one of slight care. Coggs v. Bernard, 2 Ld.Raym. 909, 92 Eng.Rep. 107 (1703); United States v. Lyons, 706 F.2d 321, 334 n. 21 (D.C.Cir.1983); American Enka Co. v. Wicaco Machine Corp., 686 F.2d 1050, 1053 (3d Cir.1982). Even though it was not paid directly by National Marine, TDI was offering transloading services for compensation, not to accommodate friends. It was thus a bailment for mutual benefit, imposing upon the bailee a duty of exercising ordinary care. Id. at 1053-54; Global Tank Trailer Sales v. Textilana-Nease, Inc., supra, 209 Kan. at 316, 496 P.2d at 1294-95; Hartmann v. Black & Decker Mfg. Co., 16 Conn.App. 1, 7, 547 A.2d 38, 42 (1988). But if, therefore, by failing to inspect the lines, TDI violated its bailee's duty of care to National Marine, this would only establish TDI's fault; it would not establish National Marine's freedom from fault.
17
And if TDI was not a bailee, nevertheless this would not, as TDI believes, exonerate it from responsibility. By operating a dock and offering to take delivery of a cargo from a barge that would be moored at the dock, TDI held itself out to the world of inland waterway shipping, a world that includes National Marine, as complying with industry custom, which is that the operator of the dock must exercise due care to prevent a vessel moored at it from breaking away. The duty of due care that resulted from this holding out did not depend on the existence of a bailment. It arose from the implied representation of compliance with an industry custom of due care. Cf. Trevino v. Union Pacific R.R., 916 F.2d 1230, 1237 (7th Cir.1990); Erie R. Co. v. Stewart, 40 F.2d 855 (6th Cir.1930). That custom became an implied term of the implied contract between National Marine and TDI. One could if one wanted say that if TDI by virtue of this implied contract was responsible for the safety of the vessel this made it a bailee. But that would merely be to relabel a conclusion as a criterion. The issue of bailment is a red herring in this case--and for another reason as well. TDI's duty to National Marine to shoulder, if itself negligent, some part of the liability to the plaintiffs does not arise from any bailment, but from the admiralty rule that joint tortfeasors are entitled to an apportionment of liability in accordance with their relative fault. If TDI's negligence was responsible in part for the damage to the plaintiffs' property, then TDI was a tortfeasor, whether or not it was a bailee, and National Marine would be entitled to some contribution from TDI to help defray their joint liability to the plaintiffs.
18
It is true that many cases not only presume the owner of a drifting vessel to be at fault if it collides with an anchored or otherwise stationary vessel or a structure on the shore, but also describe this as a presumption of law in a strong sense, one that shifts the burden of persuasion as well as of production. E.g., The Louisiana, 70 U.S. (3 Wall.) 164, 173, 18 L.Ed. 85 (1866); American Petrofina Pipeline Co. v. M/V Shoko Maru, 837 F.2d 1324 (5th Cir.1988); Weyerhaeuser Co. v. Atropos Island, 777 F.2d 1344, 1348 (9th Cir.1985); contra, Pennsylvania R.R. v. S.S. Marie Leonhardt, 320 F.2d 262, 264 (3d Cir.1963); see generally Thomas J. Schoenbaum, Admiralty and Maritime Law § 13-2 at pp. 454-55 (1987). Such a presumption is not easy to square with the rule that a plaintiff has the burden of proving the essential elements of his case, one of which is the defendant's negligence. It would be more consistent with the general policy of the law to regard this so-called presumption as simply a common-sense inference, akin to the inferences drawn routinely in nonmaritime accident cases in accordance with the principle of res ipsa loquitur (the thing speaks for itself). Neace v. Laimans, 951 F.2d 139, 141-42 (7th Cir.1991). That principle is applied in admiralty law as well, Lone Star Industries, Inc. v. Mays Towing Co., 927 F.2d 1453, 1457 (8th Cir.1991), and its relation to the drifting-vessel presumption has been noted. Schoenbaum, supra, § 13-2, at p. 455; cf. American Petrofina Pipeline Co. v. M/V Shoko Maru, supra, 837 F.2d at 1326 ("the presumption derives from the common-sense observation that moving vessels do not usually collide with stationary objects unless the vessel is manhandled in some way"). Because American law is too complex and should where possible be simplified, we are sympathetic to the suggestion that " 'negligence' at sea does not differ, in principle, from 'negligence' ashore," Grant Gilmore & Charles Black, Jr., The Law of Admiralty § 7-11 at p. 509 (1975), implying that special presumptions applicable only to proof of negligence in admiralty cases should be shunned. What is true is that if a vessel drifting out of control hits a stationary object, and the vessel's owner presents no evidence, the inference of his negligence arising from the circumstances of the accident will be as a practical matter irrebuttable. But there is no need to embellish this sensible observation with the name of presumption, a name that could be thought--that in this context has been thought--to require a shifting of the burden of persuasion.
19
At all events, even if there is a drifting-vessel presumption in some strong sense that differentiates it from the inference-drawing that lawyers call by the name of res ipsa loquitur, it has no application to this appeal. The issue is not the allocation of responsibility for the accident between the owner of the drifting vessel and the owners of the stationary objects that were damaged by it. The issue is the allocation of responsibility between the owner and the third party that let the vessel slip its mooring and drift into collision with the plaintiffs' property. The drifting-vessel presumption is not designed for the allocation of liability between the injurers, as distinct from the allocation of the loss between them and their victims, and although occasionally mentioned in the former context as well it does not control decision there, as well shown by Pasco Marketing, Inc. v. Taylor Towing Service, Inc., 554 F.2d 808 (8th Cir.1977), and Lancaster v. Ohio River Co., 446 F.Supp. 199, 202 and n. 1 (N.D.Ill.1978). For while as between drifting vessel and stationary object struck by it common sense suggests that the former is more likely to have been at fault in the collision than the latter, there is no similar "presumption" when the issue is whether the drifting vessel itself or the dock that, as it were, let it drift was at fault in the subsequent collision of the vessel with a stationary object.
20
National Marine has its own candidate for a presumption to govern in this case: if a vessel that has been docked for a substantial period of time breaks loose from its moorings and an accident results, the operator of the dock shall have the burden of proving that the breaking loose was not the result of his negligence. Id. at 202, and cases cited there. Again it is better to look at the matter in terms of inference. It is indeed natural to infer in such a case that the operator of the dock was at fault in having failed to inspect the moorings from time to time. So in the absence of other evidence the trier of fact will have a solid, perhaps as a practical matter an unshakable, basis for concluding that, as between the owner of the vessel and the operator of the dock, the sole cause of the accident was the latter's negligence. (Which further shows why the drifting-vessel presumption should not be applied in a case where the issue is the allocation of fault between the injurers, not between injurers and victim.) But in this case there is other evidence. Evidentiary presumptions, or, as we prefer to call them, inferences from experience, are designed to fill a factual vacuum. Once evidence is presented, here concerning the action and inaction of the vessel's owner and the dock's operator, presumptions become superfluous because the parties have introduced evidence to dispel the mysteries that gave rise to the presumptions. Pennsylvania R.R. v. S.S. Marie Leonhardt, supra, 320 F.2d at 264.
21
But even if there were no evidence, the method of decision by presumptions could not work in this case, where each party is armed with a presumption--TDI with the presumption that the owner of a drifting vessel is at fault, National Marine with the presumption that (a substantial period of time having elapsed between the mooring and the drifting) the operator of the dock is at fault. When presumptions clash, they disappear, and if there is no other evidence the case must be resolved in accordance with the simplest of default rules, that which exonerates a defendant, such as TDI, whether a defendant to a first-party or a third-party complaint, if the claim against it is not established by a preponderance of the evidence. Utica Mutual Ins. Co. v. Fireman's Fund Ins. Cos., 748 F.2d 118, 120 n. 1 (2d Cir.1984); Schulte & Bruns v. Great Lakes Stevedoring Corp., 300 F.2d 897 (6th Cir.1962).
22
There is evidence here, but the evidence does not establish with the clarity that would permit us to make the findings that the district judge failed to make which party was at fault, and how much at fault. Consider the evidence of National Marine's negligence. The evidence that the number of lines was insufficient is feeble. TDI's alternative theory is that one or more of the lines was defective, as shown by the one in the record. The evidence was in conflict on the point. TDI asks us to resolve the conflict by taking in our hands the line that was recovered and made a part of the record and noting the fine film of dust that it leaves on them. This request misconceives the relation between an appellate court and a trial court in determining the facts of a case. Appellate courts review findings of fact made by trial courts; with immaterial exceptions they do not make their own findings unless the evidence is completely one-sided. They rarely handle evidence, physically, to determine its properties, though there is no difference in principle between feeling and seeing an exhibit in order to determine a contested issue. When the author of this opinion, responding despite his doubts to counsel's invitation, handled the broken hawser, his hands indeed became dirty. But he could not tell whether this was because of dirt on the surface of the rope or because of, as it were, an internal dust constituted of the disintegrated remains of the part of the rope that gave way.
23
TDI's fault is equally uncertain. The district judge said that if TDI had inspected the moorings "on a regular basis" it might have detected National Marine's negligence. But this would depend on how regular is regular. If it means every five days, inspection would have missed the problem entirely if the inspectors had made their rounds in the middle of the day on April 22, before the barge arrived, and had not returned till the same time of day on the twenty-seventh, by which time the barge had broken its moorings and drifted away. The judge made no finding on the industry's custom regarding the frequency of inspections. Nor on the feasibility of TDI's having obtained a maritime crane and crew earlier, knowing that it was not going to inspect the barge.
24
Once the judge has made findings that identify the fault (if any) of each party, which he did not do in this case, he must determine the parties' relative fault, which he also did not do. We have suggested in previous cases that relative fault is in inverse ratio to the costs of accident avoidance to the respective parties. Wassell v. Adams, 865 F.2d 849, 854 (7th Cir.1989); Davis v. United States, 716 F.2d 418, 429 (7th Cir.1983). That is, the party that could have avoided the accident more cheaply, and is therefore more culpable because due care would have been less of a burden to him, pays proportionately higher damages. They were not admiralty cases, but there is no reason to treat admiralty cases differently in this respect; and they involved the issue of comparative negligence (the injurer's negligence relative to the victim's) rather than that of relative fault (one injurer's negligence relative to another's), but again we cannot see why that should make a difference. Suppose, purely hypothetically, that National Marine could have averted the accident by changing its mooring lines more frequently, and the added expense of doing so would have been $1,000. And that TDI could have gotten a maritime crane and crew to unload the barge on April 23, before it broke away, at an additional cost of $2,000. Then National Marine would be two-thirds responsible for the damage to the plaintiffs' property and TDI one-third--as the judge concluded, but without any subsidiary findings that might have justified such a conclusion. Or suppose that TDI could have averted the accident simply by notifying National Marine of its incompetence to inspect. That might have led National Marine, knowing that there would be no back-up safety precautions by the dock operator, to add another mooring line, at a trivial cost, that would have prevented the accident. Suppose that adequate notification could have been given by TDI at the cost of a 20-cent phone call. That might furnish a compelling argument for placing the entire burden of liability on TDI. But the judge made no finding concerning the feasibility of notification or, what is more problematic, National Marine's likely reaction, if any, to such notification.
25
We have mentioned industry custom several times and must in closing try to determine the weight that the district judge should give it on remand in making the necessary determinations concerning the parties' fault. One of the best-known principles of tort law--a principle that received its canonical expression in an admiralty decision written by Learned Hand, T.J. Hooper, 60 F.2d 737, 740 (2d Cir.1932)--is that compliance with custom is no defense to a tort claim. The principle (whose application in admiralty is further illustrated by Tug Ocean Prince, Inc. v. United States, 584 F.2d 1151, 1156-57 (2d Cir.1978)) is obviously sound when one is speaking of the duty of care to persons with whom the industry whose customary standard of care is at issue has no actual or potential contractual relation. For in that situation the costs of the injury can be made costs to the industry, and thus influence its behavior, only through the imposition of tort liability. R.H. Coase, The Problem of Social Cost, 3 J.Law & Econ. 1 (1960). It is different when the potential victims are the customers of the potential injurers. For then the latter, even if they are not subject to any tort liability, will have to ponder the possibility that if they endanger their customers they may lose them or may have to charge a lower price in order to compensate them for bearing a risk of injury. In such a case the market itself fixes a standard of care that reflects the preferences of potential victims as well as of potential injurers and then the principal function of tort law, it could be argued, is to protect customers' reasonable expectations that the firms with which they deal are complying with the standard of care customary in the industry, that is, the standard fixed by the market. United States Fidelity & Guaranty Co. v. Jadranska Slobodna Plovidba, 683 F.2d 1022, 1029 (7th Cir.1982). This consideration is made relevant here by National Marine's argument that by departing without notice from the industry custom regarding inspections by dock operators TDI increased the risk of an accident.
26
This case illustrates the operation of custom in both the contractual and the noncontractual setting. The owners of the dock and boats that were damaged had no actual or potential contractual relationship with the defendants. The latter in deciding what precautions to take would not be influenced, therefore, by the possible effect on transactions they might have with those owners; and as a result, the standard of care in the inland trade with regard to preventing runaway barges might be too low because it ignored some of the accident costs to which such runaways give rise. But at the present stage of this lawsuit the focus is not upon the defendants' duties toward strangers (the plaintiffs); it is upon their duties toward each other; and they had a contractual relationship with each other. It was not a direct or explicit relationship. There was no written contract, no writing at all, no money changing hands, no receipts--not even the maritime equivalent of a parking-lot claim check. But a barge owner and a dock owner (or operator) are knitted together by their contracts with their customers as tightly as they would be by a contract between themselves. Competition among barge owners and among dock owners to provide their respective legs of a unitary transportation service at the lowest possible price, coupled with tort liability to third parties, will give both types of service provider market incentives to adopt optimal safety precautions. Both face potential liability to third parties such as the plaintiffs in this case. They minimize their liability costs by allocating the responsibility for safety measures between them efficiently. They can do this explicitly, cf. Ferentchak v. Village of Frankfort, 105 Ill.2d 474, 480-81, 86 Ill.Dec. 443, 447, 475 N.E.2d 822, 826 (1985), or, implicitly, by abiding by the custom that the market has evolved.
27
Here the custom was for the barge owner (or operator) to moor the barge to the dock with a sufficient number of sound ropes, carefully fastened, and for the dock owner (or operator) to inspect the barge from time to time while it is at the dock, to make sure that the mooring lines remain securely fastened. We do not know whether National Marine violated the duty of care that custom places upon it because we do not know whether the ropes were unsound, insufficient in number (which seems highly unlikely, as we have said), or improperly fastened (also unlikely). And we do not know whether TDI violated the duty that custom imposed upon it to inspect (or in lieu therefore to notify National Marine that it was not inspecting, or to expedite the unloading), because there is no finding about what precisely the duty consists of. Since, however, these customs appear to reflect an undistorted market determination of the best way to minimize runaway-barge accidents, we think the focus of the district court's inquiry should be on the parties' respective compliance with and departures from the customs and that the judge and the parties should not feel compelled to conduct a cost-benefit analysis of barge transportation from the ground up. Cf. United States Fidelity & Guaranty Co. v. Jadranska Slobodna Plovidba, supra, 683 F.2d at 1029.
28
The judgment of the district court is vacated, and the case remanded to that court for further proceedings consistent with this opinion. Should the district judge think it necessary to take additional evidence he is free to do so. Circuit Rule 36 shall not apply.
29
VACATED AND REMANDED, WITH INSTRUCTIONS.
30
HARLINGTON WOOD, Jr., Senior Circuit Judge, concurring.
31
Judge Posner's opinion lucidly examines the facts, customs, and law and comes to a conclusion with which I fully agree.
32
My only hesitation is with the issue as framed. It is stated, referring to the relative fault of the parties, "[T]he critical issue, in the absence of an explicit contract between the parties, is their relative costs of prevention." Ante, at 883. We are reminded, ante, at 888, that in two prior decisions of this court, Wassell v. Adams, 865 F.2d 849, 854 (7th Cir.1989), and Davis v. United States, 716 F.2d 418, 429 (7th Cir.1983), both also written by Judge Posner, a similar issue arose. In those cases it was also suggested "that relative fault is in inverse ratio to the costs of accident avoidance to the respective parties." Ante, at 888.
33
That may well be a more efficient approach, but unfortunately, not being the expert in economics as are my two colleagues, I would prefer, for now, to approach comparative fault determination on the more traditional basis first broadly enunciated in United States v. Reliable Transfer Co., 421 U.S. 397, 95 S.Ct. 1708, 44 L.Ed.2d 251 (1975). I note, however, that this present opinion specifically advises the judge and parties, ante, at 889, that they "should not feel compelled to conduct a cost-benefit analysis of barge transportation from the ground up."
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IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
No. 02-10886
Conference Calendar
SCOTT WADE HOPKINS,
Plaintiff-Appellant,
versus
CHARLES BELL, Warden; JOE NUNN, Assistant Warden;
JO MATTIZA, LMIV,
Defendants-Appellees.
--------------------
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 2:02-CV-154
--------------------
February 19, 2003
Before WIENER, EMILIO M. GARZA, and CLEMENT, Circuit Judges.
PER CURIAM:*
Scott Wade Hopkins, Texas prisoner # 639277, appeals the
dismissal his 42 U.S.C. § 1983 complaint as frivolous and for
failure to state a claim under 28 U.S.C. §§ 1915(e) and 1915A.
Specifically, Hopkins alleges that defendant Mattiza acted with
deliberate indifference by forcing him to work during his 2002
Spring Break from classes he attends in prison. Hopkins asserts
that Mattiza failed to follow prison procedures when completing
*
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. 02-10886
-2-
his work schedule, and that defendants Bell and Nunn failed to
discipline Mattiza for her alleged procedural infraction.
To establish liability under 42 U.S.C. § 1983, Hopkins must
demonstrate a violation of his rights secured by the Constitution
or laws of the United States committed by a person acting under
color of state law. See Leffall v. Dallas Indep. Sch. Dist., 28
F.3d 521, 525 (5th Cir. 1994). Hopkins does not have a
constitutional right to a vacation from the classes he attends in
prison. Furthermore, the failure of prison officials to follow
their own policies does not, without more, constitute a
constitutional violation. Myers v. Klevenhagen, 97 F.3d 91, 94
(5th Cir. 1996). Accordingly, Hopkins’ appeal is DISMISSED as
frivolous, and his motion for the appointment of counsel is
DENIED. See 5TH CIR. R. 42.2.
Hopkins is cautioned that the district court’s dismissal of
his 42 U.S.C. § 1983 complaint as frivolous, and this court’s
dismissal of the appeal as frivolous, both count as “strikes”
pursuant to 28 U.S.C. § 1915(g). See Adepegba v. Hammons, 103
F.3d 383, 387-88 (5th Cir. 1996). Hopkins is advised that once
he accumulates three strikes, he may not proceed in forma
pauperis in any civil action or appeal filed while he is
incarcerated or detained in any facility unless he is under
imminent danger of serious physical injury. See 28 U.S.C.
§ 1915(g).
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COURT OF APPEALS OF VIRGINIA
Present: Judges Humphreys, Clements and McClanahan
Argued at Richmond, Virginia
ANTOINE ALEXANDER MACKLIN
MEMORANDUM OPINION∗ BY
v. Record No. 1079-06-2 JUDGE ELIZABETH A. McCLANAHAN
JUNE 26, 2007
COMMONWEALTH OF VIRGINIA
FROM THE CIRCUIT COURT OF HENRICO COUNTY
Burnett Miller, III, Judge
(Robert P. Geary, on brief), for appellant.
Virginia B. Theisen, Senior Assistant Attorney General (Robert F.
McDonnell, Attorney General, on brief), for appellee.
Antoine Alexander Macklin appeals his sentencing upon convictions of eluding the
police, possession with intent to distribute cocaine, and possession of a firearm while in
possession of cocaine with intent to distribute cocaine. Macklin contends the trial court erred in
allowing two officers to testify in the penalty phase of his jury trial about their injuries and
consequences from the struggle and arrest of Macklin. For the following reasons, we hold the
argument on appeal is barred by Rule 5A:18, and we affirm the trial court’s ruling.
I. BACKGROUND
As the parties are familiar with the record below, we recite only those facts necessary to
the resolution of this appeal.
The trial court convicted Macklin of eluding the police in violation of Code
§ 46.2-817(B), possession of cocaine with intent to distribute in violation of Code § 18.2-248,
∗
Pursuant to Code § 17.1-413, this opinion is not designated for publication.
and possession of a firearm while in possession of cocaine with intent to distribute in violation of
Code § 18.2-308.4. During the penalty phase of trial, the Commonwealth presented testimony
from two officers about the injuries they suffered and the consequences from those injuries after
struggling to arrest Macklin. One officer testified that he fractured his kneecap and sustained a
contusion to his knee. The injuries prevented him from working for several months. The officer
also stated, at the time of the sentencing proceeding, he was still under a doctor’s care and a
determination had not yet been made as to whether he would need surgery on his knee. The
second officer testified that because of the injury to his hand, he was out of work for three
months, the bone had to be broken to be reset, he had been required to undergo rehabilitation,
and he was “given a thirty per cent [sic] disability from work.”
II. ANALYSIS
The sole issue on appeal is whether the trial court erred in allowing the officers’
testimony during the penalty phase of trial. On appeal, Macklin argues the officers’ testimony
violated the requirements of the bifurcated sentencing statute, Code § 19.2-295.1, and was
impermissible under the victim impact statute, Code § 19.2-299.1. Because we find that Rule
5A:18 bars our consideration of both arguments, we affirm.
Rule 5A:18 provides that “[n]o ruling of the trial court . . . will be considered as a basis
for reversal unless the objection was stated together with the grounds therefor at the time of the
ruling, except for good cause shown or to enable the Court of Appeals to attain the ends
of justice.” Applying Rule 5A:18, we have held that “this Court ‘will not consider an argument
on appeal [that] was not presented to the trial court.’” Farnsworth v. Commonwealth, 43
Va. App. 490, 500, 599 S.E.2d 482, 487 (2004) (citation omitted).
The main purpose of requiring timely specific objections is to
afford the trial court an opportunity to rule intelligently on the
issues presented, thus avoiding unnecessary appeals and reversals.
In addition, a specific, contemporaneous objection gives the
-2-
opposing party the opportunity to meet the objection at that stage of
the proceeding.
Weidman v. Babcock, 241 Va. 40, 44, 400 S.E.2d 164, 167 (1991) (citation omitted). Accord
Andrews v. Commonwealth, 37 Va. App. 479, 493, 559 S.E.2d 401, 408 (2002) (explaining that
the purpose of Rule 5A:18 “is to ensure that the trial court and opposing party are given the
opportunity to intelligently address, examine, and resolve issues in the trial court, thus avoiding
unnecessary appeals”).
Macklin contends the Commonwealth failed to introduce the evidence “by proper
methodology” under Code § 19.2-295.1, the bifurcated sentencing statute. Macklin asserts that
the Commonwealth may introduce the officers’ testimony only as rebuttal evidence after the
defendant has introduced relevant, admissible evidence related to punishment. But see
Washington v. Commonwealth, 48 Va. App. 486, 491, 632 S.E.2d 625, 627 (2006) (rejecting the
argument that under Code § 19.2-295.1, victim impact testimony presented pursuant to Code
§ 19.2-295.3 must be limited to rebuttal, reasoning such “result would nullify Code
§§ 19.2-11.01(A)(4)(c), 19.2-264.4, and 19.2-295.3”). Since the defendant offered no evidence
in the penalty phase of trial, he argues on appeal “there could not be and was no rebuttal.”
Macklin never raised this argument below, thus Rule 5A:18 bars our consideration of this issue
on appeal.
Macklin also claims that the officers’ testimony was inadmissible under the victim impact
statute, Code § 19.2-299.1, because the officers were not victims of any of the crimes for which
Macklin was charged or convicted. At trial, however, Macklin objected to the officers’
testimony based on grounds of relevance1 and prejudice. He argued the officers’ injuries have
1
The legal threshold for relevance is well settled: “Evidence is
relevant if it tends to prove or disprove, or is pertinent to, matters
in issue.” Clay v. Commonwealth, 262 Va. 253, 257, 546 S.E.2d
728, 730 (2001). Every fact, however remote or insignificant, that
-3-
“nothing to do with whether or not Mr. Macklin eluded the police, whether or not he possessed
the drugs. . . . If he’s found guilty of assaulting the police officers, Judge. . . . The fact that
officers are injured, as a result of these other offenses,2 Judge, should not prejudice the jury or
should not spill over to the jury to cause them to increase their sentence for this sort of thing.”
The trial court was never presented with the issue of whether the officers were “victims” under
the victim impact statute. Macklin’s objection, therefore, lacked the requisite specificity
required by Rule 5A:18 to preserve the arguments he now makes on appeal. Neal v.
Commonwealth, 15 Va. App. 416, 422, 425 S.E.2d 521, 525 (1992) (stating “a party must notify
the trial court of his position and the specific rule of evidence on which [the party] relies”)
(internal quotation marks and citation omitted).
At trial, Macklin did not argue, as he does now on appeal, that the testimony was barred
as a matter of law under the bifurcated sentencing statute, Code § 19.2-295.1, or the victim
impact statute, Code § 19.2-299.1. As such, Rule 5A:18 bars our consideration of the arguments.
Affirmed.
“tends to establish the probability or improbability of a fact in
issue is relevant.” Velocity Express Mid-Atlantic v. Hugen, 266
Va. 188, 205, 585 S.E.2d 557, 566-67 (2003) (citations omitted).
Put another way, evidence has relevance if it “tends to cast any
light” on any material point. Ricks v. Commonwealth, 39
Va. App. 330, 334, 573 S.E.2d 266, 268 (2002) (citation omitted).
Seaton v. Commonwealth, 42 Va. App. 739, 752, 595 S.E.2d 9, 15 (2004).
2
By stating “these other offenses,” Macklin refers to the crimes for which he was
convicted: eluding the police, possession of cocaine with intent to distribute, and possession of a
firearm while in possession of cocaine with intent to distribute.
-4-
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IN THE SUPREME COURT OF PENNSYLVANIA
EASTERN DISTRICT
COMMONWEALTH OF PENNSYLVANIA, : No. 574 EAL 2017
:
Respondent :
: Petition for Allowance of Appeal from
: the Order of the Superior Court
v. :
:
:
HECTOR G. GONZALES, :
:
Petitioner :
COMMONWEALTH OF PENNSYLVANIA, : No. 575 EAL 2017
:
Respondent :
: Petition for Allowance of Appeal from
: the Order of the Superior Court
v. :
:
:
HECTOR G. GONZALES, :
:
Petitioner :
ORDER
PER CURIAM
AND NOW, this 14th day of May, 2018, the Petition for Allowance of Appeal is
DENIED.
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540 U.S. 977
SWINTONv.UNITED STATES.
No. 03-6442.
Supreme Court of United States.
October 20, 2003.
1
Appeal from the C. A. 3d Cir.
2
Certiorari denied. Reported below: 333 F. 3d 481.
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Opinion issued April 3, 2008
In The
Court of Appeals
For The
First District of Texas
NO. 01-07-00152-CR
MARK ELLIOT MASSIE, Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the 185th District Court
Harris County, Texas
Trial Court Cause No. 1081487
MEMORANDUM OPINION
A jury found appellant, Mark Elliot Massie, guilty of the offense of possession
of a Penalty Group 4 controlled substance, a second degree felony. See Tex. Health
& Safety Code Ann. § 481.118(a) (Vernon 2003). The jury assessed punishment
at five years' imprisonment, and the trial court suspended the sentence and placed
appellant on community supervision for five years. In two issues, appellant
challenges the legal and factual sufficiency of the evidence.
We reverse and render.
Background
Off-duty Houston police officer, Paul Steffenauer met his colleague, Abraham
Vanderberry, who was also off-duty, at a gas station to pick up a pistol for use in a
training class for undercover work in the narcotics division. While at the gas station,
they saw what they believed, based on their narcotics training and experience, to be
a drug deal in process. They called for a patrol unit, and detained appellant and
another man, who had driven the car appellant rode in. At the time, appellant was
found in possession of a Sunkist soda bottle containing a mixture later found to
contain soda, codeine, and promethazine.
Appellant was charged by indictment with possession of a controlled substance
in Penalty Group 4, specifically, "any compound, mixture, and preparation containing
limited quantities of any of the following narcotic drugs that also contain one or more
nonnarcotic active medicinal ingredients in sufficient proportion to confer on the
compound, mixture, and preparation valuable medicinal qualities other than those
possessed by the narcotic drug alone: namely a compound containing not more than
200 milligrams of codeine, and any of its salts per 100 milliliters and per 100 grams,
weighing by aggregate weight, including any adulterants and dilutants, more than 200
grams and less than 400 grams."
At trial, Sharmista Patel, a criminalist for the Houston Police Department
Crime Laboratory, testified about the lab work she performed on the mixture in the
Sunkist bottle. Patel, who has more than sixteen years experience testing drugs at the
crime lab, testified that the liquid in the soda bottle seized at the time of arrest
weighed 308.1 grams. She further testified that she found codeine and promethazine
in the mixture and that the soda was an adulterant or dilutant. On direct examination,
she said that she did not determine the concentration of codeine or promethazine in
the mixture.
Q. Now, do you know--did you perform any type of quality test on this
substance?
A. No, ma'am.
Q. And why not?
A. It's not standard operating procedure in our lab and it does not affect on
[sic] the laws. So, we don't do anymore the percentage.
She again reiterated this on cross-examination.
Q. And it is my understanding that you did not test the amount of codeine
that is in this container? We don't know how much pure substance is in
this container, do we?
A. It's not in standard operating procedure and it does not affect on [sic]
the laws; so, we are not doing the percentage, purity.
Q. Right. So, you don't know how much of this substance in the bottle is
a soft drink as opposed being codeine.
A. I don't know.
Q. Is that correct?
A. I don't know. I cannot tell that.
Q. It could be 99.9 percent soft drink and percentage of codeine; is that
correct?
A. Anything possible.
Q. And the substance that is normally--that you found in this drink, is it
normally used as a cough syrup? Is that what we're talking about?
A. Yes, ma'am.
[State objects.]
A. Cough syrup.
Q. And do you know what that other liquid is?
A. I did not test it, but from the bottle I can say Sunkist. That's it.
Prior to the close of the State's case-in-chief, Patel again took the stand, and
the prosecutor attempted to clarify her testimony regarding the mixture.
Q. Now, the next part on there talks a little bit about--to keep going--a
compound containing not more than 200 milligrams of codeine and any
of its salts per 100 milliliters and per 100 grams, weighing by aggregate
weight, including any adulterants and dilutants, more than 200 grams
and less than 400 grams.
Now, that part. I'd like to talk to you a little bit about that. When we
have something that is a mixture, correct?
A. Yes, ma'am.
Q. Now, you've been testing codeine for, you said, how many years? How
long have you been at the lab?
A. 18 years.
Q. Okay. And when you have a substance that's not pure codeine, okay,
just generally speaking, is it going to be less than 200 grams per
milliliters in the hundred of--let me make sure I get it right--100
milliliters per 100 salts, is that going to be in that lowest penalty group
like that when it's a mixture?
A. Yes, ma'am.
Q. Just so we're clear, you didn't actually do a quantity test, do you, like a
quality?
A. No, no ma'am.
Q. Right. Because you don't do it on a codeine, right?
A. Right.
Q. But in a mixture case, that will fall into this lowest penalty group, right?
A. Generally.
Appellant's counsel moved for an instructed verdict based on Patel's testimony,
arguing that the State did not prove "a compound containing not more than 200
milligrams of codeine and any of its salts per 100 milliliters and per 100 grams." The
trial court denied appellant's motion for instructed verdict, and the jury found
appellant guilty as charged.
Standard of Review
Appellant challenges the legal and factual sufficiency of the evidence to
support his conviction for possession of codeine, arguing that the State did not prove
that the mixture seized from him at his arrest met the Penalty Group 4 definition.
Except as otherwise authorized, a person commits an offense if the person knowingly
or intentionally possesses a controlled substance listed in Penalty Group 4, unless the
person obtained the substance directly from or under a valid prescription or order of
a practitioner acting in the course of practice. Tex. Health & Safety Code Ann.
§ 481.118(a) (Vernon 2003). Penalty Group 4 includes a compound, mixture, or
preparation that includes not more than 200 milligrams of codeine per 100 milliliters
or per 100 grams and one or more nonnarcotic active medicinal ingredients in
sufficient proportion to confer on the compound, mixture, or preparation valuable
medicinal qualities other than those possessed by the narcotic drug alone. Id.
§ 481.105(1) (Vernon 2003). Possession of codeine is a felony of the second degree,
if the amount of codeine possessed is, by aggregate weight, including adulterants or
dilutants, 200 grams or more but less than 400 grams. Id. § 481.118(d).
The State is required to prove every element of the offense listed in the
indictment beyond a reasonable doubt. Sanchez v. State, No. 01-06-00210-CR, 2007
WL 3227744 [Tex. App.--Houston [1st Dist.] Nov. 1, 2007, pet. filed); see Juarez
v. State, 198 S.W.3d 790, 793 (Tex. Crim. App. 2006) (stating that elements of
offense must be charged in indictment, submitted to jury, and proven by State beyond
reasonable doubt). Therefore, the State was required to prove that appellant (1)
possessed (2) a mixture containing not more than 200 milligrams of codeine and any
of its salts per 100 milliliters and per 100 grams, that also (3) contains one or more
nonnarcotic active medicinal ingredients (4) in sufficient proportion to confer on the
mixture valuable medicinal qualities other than those possessed by the codeine alone,
(5) weighing by aggregate weight, including any adulterants or dilutants, more than
200 grams and less than 400 grams. See Sanchez, 2007 WL 3227744 at *4. "Thus,
the mere presence of a nonnarcotic active medicinal ingredient is not sufficient to
establish that the mixture falls within Penalty Group 4. The nonnarcotic must be in
sufficient proportion to confer on the mixture valuable medicinal qualities other than
those possessed by the narcotic alone." Id.
Legal Sufficiency
In evaluating the legal sufficiency of the evidence, we view the evidence in the
light most favorable to the verdict and determine whether any rational trier of fact
could have found the essential elements of the offense beyond a reasonable doubt.
Vodochodsky v. State, 158 S.W.3d 502, 509 (Tex. Crim. App. 2005). We note that
the trier of fact is the sole judge of the weight and credibility of the evidence.
Margraves v. State, 34 S.W.3d 912, 919 (Tex. Crim. App. 2000). Thus, when
performing a legal sufficiency review, we may not re-evaluate the weight and
credibility of the evidence and substitute our judgment for that of the factfinder.
Dewberry v. State, 4 S.W.3d 735, 740 (Tex. Crim. App. 1999). We must resolve any
inconsistencies in the evidence in favor of the verdict. Curry v. State, 30 S.W.3d 394,
406 (Tex. Crim. App. 2000).
Penalty Group 4 Controlled Substance
In Dudley v. State, the Beaumont Court of Appeals held the evidence was both
legally and factually sufficient to support a conviction for possession of a controlled
substance under Penalty Group 4. Dudley v. State, 58 S.W.3d 296, 300 (Tex.
App.--Beaumont 2001, no pet). In Dudley, when the defendant was arrested, the
police seized a styrofoam cup containing a liquid that smelled like cough syrup. Id.
at 297. Although the State's laboratory analyst testified that she did not determine
the concentration of codeine in the liquid, she did testify that the liquid contained
both codeine and promethazine. Id. at 299. She said, "And this is a combination
commonly found in cough syrup type preparations that contain Codeine in a
concentration of less than 200 milligrams per 100 milliliters of syrup." Id. In
addition, the written laboratory report provided identical information about the
codeine concentration. Id.
Likewise, in Reed v. State, the Fourteenth Court of Appeals held the evidence
was both legally and factually sufficient to support a conviction for possession of a
controlled substance under Penalty Group 4. Reed v. State, 158 S.W.3d 44, 51 (Tex.
App.--Houston [14th Dist.] 2005, pet. ref'd). In Reed, the defendant argued that the
laboratory report, which matched the description for Penalty Group 3, conflicted with
the testimony from the laboratory analyst, who "repeatedly testified that the seized
codeine was within Penalty Group 4." Id. The analyst explained that the report did
not contradict his testimony because in some cases a liquid might be included in more
than one Penalty Group. Id. at 50-1.
We recently addressed a related issue in Sanchez v. State, 2007 WL 3227744
In Sanchez, the defendant challenged the legal sufficiency of the evidence that
nonnarcotic promethazine was present in sufficient proportion to confer valuable
medicinal qualities other than those possessed by codeine alone, as the Penalty Group
4 definition requires. Id. at *3. When Sanchez was arrested, the police seized "an
open plastic baby bottle containing residue of a thick, red liquid under the passenger
seat where [the] appellant had been sitting." Id. at *1. The police crime laboratory
chemist testified that the liquid contained both codeine and promethazine and that
promethazine has a valuable medicinal quality and is used as a cough suppressant.
Id. at *2-3. He also testified that he had not seen "any cough syrups more than 200
milligrams per hundred mil." Id. at *3. However, he clearly stated that he did not
quantify the promethazine in the liquid. Id. at *2-3. We held that this evidence was
legally insufficient.
The State was required to prove, as one of the elements of the offense,
that the nonnarcotic active medicinal ingredient was in sufficient
proportion to confer on the mixture valuable medicinal qualities other
than those possessed by the codeine alone. Chu testified repeatedly that
he was not able to quantify the Promethazine in the substance. Without
such quantification, his testimony does no more than establish the mere
presence of Promethazine. Thus the State has failed its burden to prove
that Promethazine was in the mixture in sufficient proportion to confer
on the mixture valuable medicinal qualities other than those possessed
by the codeine alone.
Id. at *5.
Discussion
Here, Patel testified that the liquid seized contained codeine and promethazine
but that she did not quantify either the codeine or the promethazine. Unlike Dudley,
no written laboratory report was admitted into evidence. In addition, Patel did not
clearly testify that "this is a combination commonly found in cough syrup type
preparations that contain Codeine in a concentration of less than 200 milligrams per
100 milliliters of syrup." See Dudley, 58 S.W.3d at 299. Rather, Patel simply agreed
with the prosecutor's question, which incorrectly stated the law, that a substance
"that's not pure codeine . . . is it going to be less than 200 grams per milliliters in the
hundred of . . .100 milliliters per 100 salts, is that going to be in that lowest penalty
group like that when it's a mixture?" Unlike the analyst in Reed, Patel did not testify
that the seized liquid was within Penalty Group 4. See Reed, 158 S.W.3d at 51. We
conclude that the State did not prove that the liquid seized from appellant was a
"mixture containing not more than 200 milligrams of codeine and any of its salts per
100 milliliters and per 100 grams."
In addition, as in Sanchez, the testimony here was not legally sufficient to
prove that promethazine was present in the liquid "in sufficient proportion to confer
on the mixture valuable medicinal qualities other than those possessed by the codeine
alone." Sanchez, 2007 WL3227744 at *5.
Conclusion
Accordingly, we hold that the evidence offered by the State was legally
insufficient to support the jury's verdict. Therefore, we sustain appellant's first issue.
Because we sustain this issue, we do not reach appellant's second issue, the factual
sufficiency of the evidence.
We reverse the judgment of the trial court and render a judgment of acquittal.
Sam Nuchia
Justice
Panel consists of Justices Nuchia, Hanks, and Higley.
Do not publish. Tex. R. App. P. 47.2(b).
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458 Pa. 104 (1974)
Commonwealth, Appellant,
v.
Froelich.
Supreme Court of Pennsylvania.
Argued November 30, 1973.
October 16, 1974.
*105 Before JONES, C.J., EAGEN, O'BRIEN, ROBERTS, POMEROY, NIX and MANDERINO, JJ.
William H. Lamb, District Attorney, with him F. Ned Hand, Assistant District Attorney, for Commonwealth, appellant.
John E. Stively, for appellee.
OPINION BY MR. JUSTICE NIX, October 16, 1974:
Appellee Froelich was indicted and found guilty before a jury of the statutory crimes of blackmail and *106 extortion. Post-trial motions were filed and the trial court after argument granted a motion in arrest of judgment and the Commonwealth appealed. The Superior Court affirmed, per curiam, without opinion. Commonwealth v. Froelich, 224 Pa. Superior Ct. 745, 301 A.2d 884 (1973). We granted allocatur and we now reverse.
Where, as here, a jury has convicted the defendant of certain charges and the Commonwealth appeals from the trial court's grant of a motion in arrest of judgment, our task is to determine whether the evidence offered by the Commonwealth was sufficient to support the jury's verdict. Commonwealth v. Blevins, 453 Pa. 481, 309 A.2d 421 (1973). To sustain the trial judge, we must find that, ". . . accepting all of the evidence and all reasonable inferences therefrom, upon which, if believed the jury could properly have based its verdict, it would be nonetheless insufficient in law to find beyond a reasonable doubt that the appellee is guilty of the crime charged." Commonwealth v. Blevins, supra, 453 Pa. 483, 309 A.2d at 422. See also, Commonwealth v. Williams, 455 Pa. 539, 316 A.2d 888 (1974); Commonwealth v. Ponton, 450 Pa. 40, 299 A.2d 634 (1972); Commonwealth v. Commander, 436 Pa. 532, 260 A.2d 773 (1970); Commonwealth v. Frye, 433 Pa. 473, 252 A.2d 580 (1969).
A review of the record satisfies us that the jury had ample evidence upon which it could properly support its finding of guilt on the bill of indictment charging blackmail and also the indictment charging extortion. We therefore hold that the trial court was in error in the grant of a motion in arrest of judgment and that the verdict of the jury must be reinstated.
The indictment charging blackmail was based upon section 801[1] of The Penal Code which provides: "Whoever *107 by means of written, printed or oral communications, intimidates, or levies blackmail, or extorts money, property or other valuable thing from any person or by such means attempts to intimidate, annoy, or levy blackmail, or extort money, property or other valuable thing from any person, is guilty of a misdemeanor. . . ."
In Commonwealth v. Neubauer, 142 Pa. Superior Ct. 528, 16 A.2d 450 (1940), the Superior Court in discussing substantially the same language as that appearing in Section 801[2] properly observed: "To extort is to wrest from, to exact, to take under a claim of protection, or the exercise of influence contrary to good morals and common honesty. Threats and violence may be used but are not necessarily involved in the offense described. The exercise of dishonest ingenuity in creating the impression of influence to protect from crime may amount to the exacting of money or other property." (Citations omitted.) 142 Pa. Superior Ct. at 533, 16 A.2d at 452.
The other indictment charging extortion was drawn under the Act of June 24, 1939, P.L. 872, § 318, 18 P.S. § 4318, which provides: "Whoever, being a public officer, willfully and fraudulently receives or takes any reward or fee to execute and do his duty and office, except such as is or shall be allowed by some act of Assembly, or receives or takes, by color of his office, any fee or reward whatever, not, or more than is, allowed by law, is guilty of extortion, a misdemeanor. . . ."
The criminality described in this section consists in the willful and fraudulent receipt of and/or taking of a reward or fee by color of office.
Although the taking of or receipt of the fee or reward must be under the color of the official's office, this does not necessarily mean to imply that it must be taken for an act or service which he has a duty to perform or even that he must have the power, by virtue of the authority *108 vested in him, to perform the act. It is sufficient if the official asserted that he possessed the power to perform the act for which the fee was received. Commonwealth v. Wilson, 30 Pa. Superior Ct. 26 (1906).
With this understanding of the nature of the charges we must now turn to the evidence produced during the course of the trial. The Commonwealth offered testimony to establish that Wesley Froelich, the appellee, was a duly certified justice of the peace and in that capacity had received a criminal complaint accusing one Sydney Kaufman of the crime of rape. After his arrest, Kaufman appeared before the appellee for the purpose of having bail set. During this proceeding Froelich is alleged to have suggested a particular individual to post bond to avoid having the matter "go to West Chester and then we cannot pay those pigs (apparently referring to the complainants) off." The next meeting between Kaufman and Froelich occurred at the time of the preliminary hearing. Kaufman described the conversation that then took place as follows: "A. Mr. Froelich told me that it would be in my best interest, because it would preserve my reputation, my job, my wife and family, and all kinds of sad stories; he told me that he could avoid me from having by paying those pigs off that is his words and I told him Q. Do you know who he was referring to? A. Yes. Q. Who? A. These ladies that like Miss Long and Miss Goodwin. Q. And he said you could avoid all this by A. Yes, and it would only be $700. So I told him for no money at all I would want them, if they accused me of rape, and they do it unjustly, then let them go to San Quentin. That is what I told him, and furthermore, I told Mr. Froelich, I don't have any money of that kind. I showed him that I only had a $10 bill of my own and I showed him money that belonged to the company out of another pocket, and while I was telling him that this is not my money, it is company money, *109 he took that money out of my hands, and said, that will quiet those pigs down. Q. How much money was there? A. $200. . . . Q. And what did Mr. Froelich say to you at that point? A. He said to me, to go outside and wait on the grass and he told everybody in the adjacent courtroom, which is in the basement, he told us to walk out, there is a storm door, something like an open door that you can go from the outside into the basement, and he told us all to go on the grass. A few minutes later he opened the door; he says, `It is all over, you can go home.' That is the whole story. . . . Q. What did he tell you he was going to do? A. He was going to call these women and tell them, it is all over."
The evidence further established that the prosecution was terminated after that proceeding and that although the principal complainant did agree to the withdrawal of the charges, she testified that she did not receive any money from the appellee.
From this testimony the jury was free to find, as it apparently did, that a public officer, under the color of his office, unlawfully took a fee to discharge a duty of his office or in the alternative to refrain from performing his duty depending upon whether they viewed the termination of the proceedings at that juncture appropriate in view of the complainant's agreement to withdraw the charges. In either event the charge under section 318 would then have been established. The testimony also supports the finding that the appellee exacted from Kaufman upon a promise to exercise influence contrary to good morals the sum of $200. Thus, the finding of guilt under section 801 was also appropriate.
The court below, however, interpreted our decision in Commonwealth v. Burdell, 380 Pa. 43, 110 A.2d 193 (1955) as requiring a degree of consent on the part of the victim in cases of extortion and blackmail that would be incompatible with any element of coercion or *110 duress. Such a view is obviously erroneous and at variance with the very essence of the crimes of blackmail and extortion.
In Commonwealth v. Burdell, supra, we observed: "In robbery the taking of property is against the will by means of force or violence, while in extortion the taking is with the consent of the victim, induced, as it may be, by the threat of some exposure or the making of some criminal charge whether false or otherwise: People v. Peck, 43 Cal. App. 638, 642, 643, 185 P. 881, 882, 883; State v. Casto, 120 Wash. 557, 207 P. 952; People v. Anderson, 59 Cal. App. 408, 426, 211 P. 254, 261, 262; McKeown v. State, 34 Okla. Cr. 381, 246 P. 659; 77 C.J.S. 447, § 1." 380 Pa. at 48, 110 A.2d at 196. In Burdell, supra, we were merely restating the traditionally accepted distinction between robbery and extortion. This statement, however, is not to imply that for the transfer of possession from the victim to the accused to possess the requisite consent for extortion it must necessarily be free of all compulsion. Extortion and blackmail have always been recognized as embracing an element of coercion or intimidation. However, as has been noted by some text writers, the use of the concept of consent in this context is not necessarily the most informative method of distinguishing between the crimes.
"It is sometimes said that robbery differs from statutory extortion in those states which require property acquisition in that in the former the taking of property must be `against the will' of the victim, while in the latter the taking must be `with the consent' of the victim, induced by the other's unlawful threat; but, in spite of the different expressions, there is no difference here, for both crimes equally require that the defendant's threats induce the victim to give up his property, something which he would not otherwise have done." La Fave & Scott, Criminal Law, 707 (1972).
*111 The historical development of these crimes best explains what may otherwise appear to be an inconsistency. Robbery at common law was a taking from the person accomplished by violence or intimidation and, as a felony, it was punishable by death. Because of the severity of the punishment upon conviction the common law courts were most circumspect, in robberies by intimidation, in limiting the type of threats to be included therein. Where the threat was of immediate personal violence the earlier courts were satisfied that the punishment provided was appropriate.[3] Later, the lesser crimes of extortion and blackmail evolved to cover other types of intimidation which were apparently viewed as presenting a lesser threat to personal security and thus not requiring the same severe punishment.
" doubtless because the severe penalty for robbery, long a capital offense, restrained the courts from expanding robbery to include the acquisition of property by means of other effective threats such as a threat to inflict future rather than immediate bodily harm, or to destroy the victim's property other than his house, or to accuse him of some crime other than sodomy, or to expose his failings or secrets or otherwise to damage his good name or business reputation. To fill this vacuum practically all states have enacted statutes creating what is in effect a new crime in some states called statutory extortion, in others blackmail, and generally carrying a penalty less severe than for robbery." La Fave & Scott, Criminal Law, 705 (1972).[4]
*112 Thus, whether we attempt to distinguish robbery from extortion and blackmail on a theory of "consent" to transfer possession of the property in question or look to the historical development of the crimes, it is evident that the crimes of extortion and blackmail do encompass a degree of coercion or intimidation. Therefore, the fact that Kaufman may well have been moved to allow Froelich to take possession of the $200, because of a fear of the effect of further prosecution upon his family life and general reputation, provides no basis for concluding that the crimes of extortion and blackmail had not been made out by the evidence. Under all of the evidence it is our view that the jury reached a justifiable verdict under an accurate charge on the law.
The order of the Superior Court affirming the order of the Court of Common Pleas is hereby reversed; the order allowing a motion in arrest of judgment is vacated and the jury verdict reinstated. The matter is to be remanded forthwith to the trial court for further proceedings consistent herewith.
NOTES
[1] Act of June 24, 1939, P.L. 872, § 801, 18 P.S. 4801.
[2] Act of June 9, 1911, P.L. 833, § 1, 18 P.S. § 2932.
[3] The common law also recognized as robbery a threat to destroy the victim's dwelling and a threat to accuse the victim of sodomy. See Perkins, Criminal Law, 324-25 (1957).
[4] See also Comment, A Rationale of the Law of Aggravated Theft, 54 Col. L. Rev. 84 (1954); Comment, Criminal Law, A Study of Statutory Blackmail and Extortion in the Several States, 44 Mich. L. Rev. 461 (1945).
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85 F.3d 638
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.UNITED STATES of America, Plaintiff-Appellee,v.Vincent HERMAN, Defendant-Appellant.
No. 95-15002.
United States Court of Appeals, Ninth Circuit.
Submitted Oct. 16, 1995*.Memorandum Filed Oct. 20, 1995.Memorandum Withdrawn Feb. 26, 1996.Decided Feb. 26, 1996.The memorandum disposition filed October 20, 1995 is ordered WITHDRAWN.
1
Before: GOODWIN and HAWKINS, Circuit Judges, and FITZGERALD,** District Judge.
2
MEMORANDUM***
3
Vincent Herman, a federal prisoner, appeals the denial of his 28 U.S.C. § 2255 motion to vacate his sentence. On direct appeal we affirmed Herman's conviction for manufacturing more than 100 marijuana plants, a crime that carries a statutory mandatory minimum sentence of five years. 21 U.S.C. § 841(b)(1)(B)(vii). Herman contends that the district court erred by including "dead" marijuana plants in its calculation of the total number of marijuana plants involved. We have jurisdiction, 28 U.S.C. §§ 1291, 2255, and we affirm.
4
The question about when, or whether, uprooted marijuana ceases to be a "plant" for purposes of 21 U.S.C. § 841(b)(1)(B)(vii), was obviously under consideration by the court and counsel at the time Herman signed his written plea agreement, with the advice of counsel, knowing that the likely sentence was the statutory minimum which he received.
5
After he entered his guilty plea, he was sentenced and appealed his sentence, raising the "dead plant" argument. The judgment was affirmed on the ground that he had waived the "dead plant" argument. He now attempts to raise the same "dead plant" argument by stating that his prior counsel was incompetent in not raising the argument in a timely manner in prior proceedings. This competency of counsel argument does not properly place before the district court, or this court, the validity of the argument which we rejected, on waiver grounds, in Herman's direct appeal. See United States v. Herman, No. 91-10573, unpublished memorandum disposition (9th Cir. Aug. 14, 1992) (holding that Herman's guilty plea to manufacturing 100 plants constituted a waiver of his right to challenge the factual determination that he manufactured over 100 marijuana plants).
6
Issues disposed of on the merits in a direct appeal are not reviewable in a subsequent Section 2255 proceeding unless an intervening change in the law or some other special circumstance so warrants, and here there is no suggestion that any does. Polizzi v. United States, 550 F.2d 1133, 1135-36 (9th Cir.1976); see also United States v. Currie, 589 F.2d 993, 995 (9th Cir.1979).
7
Herman's revelation that his original lawyer gave him bad advice (not to argue that uprooted marijuana plants may not be counted) was ineffective assistance of trial counsel--an effort to revive the issue he has waived--creates no reviewable question on this record. The argument that uprooted marijuana plants may, or may not be counted, may still be open to question in this circuit, but we do not reach it. The failure to make an argument on a debatable question of law may be negligent, or even substandard performance by a lawyer, but a waiver of a debatable argument is not categorically a constitutional defect in a guilty plea (deprivation of right to counsel). Strickland v. Washington, 466 U.S. 668 (1983). Post conviction proceedings are not available to reargue legal questions waived in the trial court.
8
AFFIRMED.
*
The panel unanimously finds this case suitable for submission on the record and briefs and without oral argument. Fed.R.App.P. 34(a); Ninth Circuit Rule 34-4
**
Honorable James M. Fitzgerald, Senior United States District Judge for the District of Alaska, sitting by designation
***
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3
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63 F.2d 466 (1933)
KASCH et al.
v.
COMMISSIONER OF INTERNAL REVENUE.
No. 6821.
Circuit Court of Appeals, Fifth Circuit.
February 18, 1933.
Rehearing Denied April 4, 1933.
R. E. McKie, of San Marcos, Tex., for petitioners.
G. A. Youngquist, Asst. Atty. Gen., Sewall Key and Norman D. Keller, Sp. Assts. to Atty. Gen., and C. M. Charest, Gen. Counsel, *467 Bureau of Internal Revenue, and Harold Allen, Sp. Atty., Bureau of Internal Revenue, both of Washington, D. C., for respondent.
Before BRYAN, HUTCHESON, and WALKER, Circuit Judges.
WALKER, Circuit Judge.
The Board of Tax Appeals approved deficiencies in income tax for the fiscal year ended May 31, 1925, assessed against the petitioners, Ed Kasch and his wife Theodora Kasch. The assessment of the deficiencies resulted from the conclusion that the gross income of each of the petitioners as reported should be increased by an amount which the petitioners claimed was income of Milton Kasch as a member of a partnership composed of the petitioners and said Milton Kasch. The claim that such partnership existed was rejected by the Board of Tax Appeals, which determined that the amount which petitioners contended was income of Milton Kasch belonged to the petitioners as community income.
Prior to the time of Ed Kasch, his wife, Theodora Kasch, and Milton Kasch, the son of Ed Kasch by a former wife, entering into an agreement hereinafter mentioned, Ed Kasch, who lived at San Marcos, Tex., was the sole owner of a cotton-seed selling business which was conducted under his name. At various times during the period of about six months ending May 31, 1924, Ed Kasch and his wife had oral conversations with Milton Kasch in regard to the latter being taken into the business as a partner, and during that time the three orally agreed to form a partnership on the basis of their sharing equally the profits and losses of the business, that nothing be withdrawn from the business, and that Milton Kasch devote his time and attention to the business except when he was attending school. At that time Milton was sixteen years old. From the time that agreement was entered into Milton devoted all his time and attention to the seed business, except when he was attending school. For the period of the school vacation in 1924, he was paid a salary of $75 per month, and was given a small allowance while attending school. The books kept for the seed business during the fiscal year ended May 31, 1925, showed a profit from the business of $124,808.94. By an entry in the journal that entire profit was credited to Ed Kasch; the entry being accompanied by the statement: "To close net profits for year into proprietorship account." By later entries Ed Kash proprietorship account was charged with two-thirds of the $124,808.94, or $83,205.96, and credits were entered in favor of Theodora Kasch and Milton Kasch, each in the sum of $41,602.98, accompanied by the statement: "To set up partnership accounts for Mrs. Theodora Kasch and Milton Kasch, as they were taken in as partners May 31, 1924, to share in profits of business. This entry to distribute profits equally among them, as per profit and loss statement, and income tax return May 31, 1925." In May, 1930, a corporation was organized under the name "Ed Kasch, Inc." and took over the business. $16,600 of the $50,000 capital stock of that corporation was subscribed for and issued in the name of Milton Kasch; the certificate for which remained in the possession of Ed Kasch. A written instrument, dated September 27, 1930, and acknowledged before a notary public on November 15, 1930, was executed by Ed Kasch and Milton Kasch; the latter then being twenty-three years old and married. That instrument, after reciting that during the life of the partnership from June 1, 1924, to June 1, 1930, the net earnings to which Milton Kasch became entitled under the agreement between him and his father amounted to $83,378.46, and that of that amount Milton Kasch had withdrawn and expended $3,460, provided that the balance, $79,918.46, should constitute a trust fund, to remain in the possession and control of Ed Kasch as trustee, with power to handle, control, and invest the sum, including principal and income, in such manner as he may deem best, until Milton Kasch should reach the age of forty years; that if Milton should die prior to the termination of the trust leaving a child or children surviving, the trust should enure to the benefit of the surviving child or children, and should continue for them until Milton would have reached the age of forty years had he lived, and that if Milton should die without issue during the life of the trust, then the father was to pay the surviving wife the sum of $1,000 a year for ten years, and the remainder should revert to the father. It appeared from recitals contained in that instrument that part of the fund covered by the agreement previously had been invested by Ed Kasch in land, the title to which was taken in his own name. So far as appeared, Theodora Kasch never made the application provided for by statute (Rev. St. Tex. 1925, art. 4626) for the removal of her disabilities of coverture, and that she be declared a femme sole for mercantile and trading purposes.
*468 For two or more persons to be partners they must expressly or impliedly agree to be associated in a relationship which has the legal effect of making them partners. White v. McNeil (Tex. Civ. App.) 294 S. W. 928; 20 R. C. L. 802. Under the Texas law, a married woman cannot be a partner in a mercantile business, unless her disabilities of coverture are removed by compliance with a statutory requirement. Purdom v. Boyd, 82 Tex. 130, 17 S. W. 606; Miller v. Marx & Kempner, 65 Tex. 131; Rev. St. Tex. 1925, art. 4626. The only evidence as to an agreement on the subject of a partnership was as to an oral agreement between Ed Kasch, his wife, and Milton Kasch, with reference to a partnership of which each of the three was to be a member. It seems that such a partnership did not come into existence because of the incapacity of the wife to become a partner. No evidence indicated that prior to or during the year beginning June 1, 1924, either Ed Kasch or Milton Kasch consented to a partnership of which no one but themselves was a member. But, without determining whether the just mentioned circumstance did or did not keep the oral agreement from having the effect of creating a partnership of which Milton was a member, we are of opinion that the evidence adduced disclosed another ground supporting the conclusion that during the taxable year in question Milton's relation to the seed business was not such as to make him a partner, having a right to a share of the profits. One is not a member of a business partnership unless he has a proprietary interest in the profits as profits. Sugg v. Hopkins (C. C. A.) 11 F.(2d) 517. In determining whether the parties to the oral agreement did or did not intend Milton Kasch to be the real owner during the taxable year in question of a third or other fractional share of the profits of the business, the terms of the agreement, and also attending circumstances, and what parties to the agreement did with reference to the profits, are to be considered. Southern Surety Co. v. Texas Employers' Ins. Ass'n (Tex. Civ. App.) 2 S.W.(2d) 310; Brown v. Watson, 72 Tex. 216, 221, 10 S. W. 395. By the terms of the agreement Milton was to have no right to withdraw the whole or any part of the share of the profits which nominally was to be his. No provision was made for his ever having the right to withdraw any of the profits. When the oral agreement was made Ed Kasch was the sole owner of the business and had control of its profits. What was done after the agreement was entered into indicated that a relinquishment of his control of any part of the profits was not intended by the family arrangement. In the conduct of the business, as disclosed by its books of account, the profits continued to be treated as his, the entire profits for the year in question being credited to him; the share credited to Milton being shown to come, not directly from the business, but from his father. While Milton did not have or exercise any right to withdraw profits credited to him, his father withdrew profits credited to Milton and invested them in land, the title to which was taken in his own name. Nothing indicated that his doing so was not in accordance with what all parties to the oral agreement intended from the beginning. When the seed business was taken over by a corporation in 1930, Milton then being of full age and married, there was no distribution of profits in which he shared, and, so far as appears, his right to treat as his own any part of the profits was not asserted or recognized. The father's control and domination of the profits nominally credited to the son were continued by an arrangement which could not be changed without the father's consent. It appeared that from the time the oral agreement was made, and with the consent or acquiescence of Milton after he became of full age, Ed Kasch continued to have such control of the profits nominally credited to Milton as was inconsistent with the latter being the real owner or proprietor of them. Evidence adduced fairly tended to prove that the oral agreement relied on did not have, and was not intended to have, the effect of making Milton Kasch the real owner or proprietor of a share of the profits of the seed business carried on in his father's name. The conclusion that the alleged partnership did not exist, being supported by evidence, is not subject to be set aside. It follows that the above-mentioned ruling was not erroneous.
The petition is denied.
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 19a0259p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
VINCENT D. WHITE, JR., ┐
Petitioner-Appellant, │
│
> No. 18-3277
v. │
│
│
WARDEN, ROSS CORRECTIONAL INSTITUTION, │
Respondent-Appellee. │
┘
Appeal from the United States District Court
for the Southern District of Ohio at Columbus.
No. 2:17-cv-00325—James L. Graham, District Judge.
Decided and Filed: October 8, 2019
Before: DAUGHTREY, GRIFFIN, and STRANCH, Circuit Judges
_________________
COUNSEL
ON BRIEF: C. Mark Pickrell, Nashville, Tennessee, for Appellant. William H. Lamb, OFFICE
OF THE ATTORNEY GENERAL OF OHIO, Cincinnati, Ohio, for Appellee. Vincent D.
White, Jr., Youngstown, Ohio, pro se.
_________________
OPINION
_________________
MARTHA CRAIG DAUGHTREY, CIRCUIT JUDGE. Petitioner Vincent White seeks a
writ of habeas corpus pursuant to 28 U.S.C. § 2254.1 He argues that he was deprived of his
Sixth Amendment right to effective counsel when, unbeknownst to him, his trial attorney, Javier
1Following this panel’s request for supplemental briefing, petitioner sought oral argument. We deem oral
argument unnecessary in this case and deny petitioner’s request.
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 2
Armengau, represented him while also under indictment for several serious offenses. White
contends that this situation created potential and actual conflicts of interest that denied him the
effective assistance of counsel. He further asserts that he was prejudiced by the prosecutor and
trial court’s failure to alert him about Armengau’s indictment. The record regarding Armengau’s
alleged conflicts is sparse because White has never received an evidentiary hearing during which
he could develop facts in support of his allegations of ineffective assistance. The warden argues
that, because White filed his motion for post-conviction relief in state court two years beyond the
deadline, White has procedurally defaulted his claim and, accordingly, may not supplement the
record in federal court. We find that due to procedural hurdles in Ohio state court and because
White did not have the aid of an attorney in his post-conviction proceedings, he had no
meaningful opportunity to raise his ineffective-assistance claim. In light of the Supreme Court’s
decision in Trevino v. Thaler, 569 U.S. 413 (2013), which expanded the Court’s earlier ruling in
Martinez v. Ryan, 566 U.S. 1 (2012), we find that White has cause to overcome his default. We
therefore vacate the district court’s denial of a writ and remand the case for further proceedings
consistent with this opinion.
FACTUAL AND PROCEDURAL BACKGROUND
Following a jury trial in Ohio state court, White was convicted of one count of
aggravated burglary, three counts of aggravated robbery, four counts of aggravated murder, two
counts of attempted murder, two counts of felonious assault, and one count of having weapons
while under disability. He was sentenced to an aggregate term of life imprisonment without the
possibility of parole.
As White was preparing for trial, his attorney, Javier Armengau, was indicted—by the
same prosecutor’s office as had charged White—for 18 counts of serious felony offenses related
to, among other things, sexual misconduct, rape, and kidnapping involving his clients, relatives
of his clients, and employees of his law office. See State v. Armengau, 93 N.E.3d 284, 292
(Ohio Ct. App. 2017). White alleges that his attorney, the prosecution, and the court all failed to
inform him about Armengau’s indictment or any issues it might have raised regarding his
representation. As a result, Armengau continued to represent White throughout his trial and
sentencing. Armengau was eventually tried and convicted on nine charges. Id. at 291.
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 3
As White tells it, he did not learn about Armengau’s indictment until he began
assembling his case for direct appeal. With this newfound knowledge, and with the assistance of
different counsel, White appealed his conviction and sentence to the Ohio Court of Appeals. He
raised multiple claims, including the only relevant issue here: whether he suffered
constitutionally ineffective assistance of counsel due to Armengau’s actual and potential
conflicts of interest resulting from the lawyer’s indictment.2 The court denied White’s appeal
and, in doing so, declined to consider his ineffective-assistance claim, explaining that the record
lacked sufficient evidence to allow the court to fully adjudicate the merits. State v. White, No.
14AP-160, 2015 WL 9393518, at *3 (Ohio Ct. App. Dec. 22, 2015). The court further explained
that, because it required factual development unavailable on direct appeal, a direct appeal was
“not the vehicle” for White’s claim, suggesting, but not explicitly stating, that he should raise the
issue in a motion for post-conviction relief. Id. However, the Ohio Court of Appeals did not
issue its ruling until December 22, 2015—almost four months after the deadline for White to file
a post-conviction motion in state court. White sought review of his direct appeal in the Ohio
Supreme Court, but the court declined to accept jurisdiction. State v. White, 49 N.E.3d 321
(Table) (Ohio 2016).
Proceeding pro se, White then timely filed a federal petition seeking a writ of habeas
corpus. After initiating his federal habeas petition, but before receiving a decision, White filed a
motion seeking post-conviction relief in state court, also pro se, but his filing came almost two
years after the deadline to seek such relief. The trial court, unsurprisingly, dismissed White’s
motion as untimely. State v. White, No. 12CR-4418, slip op. (Franklin Cty. Ct. of Common
Pleas, Nov. 30, 2017). His motion for leave to appeal that order was likewise dismissed as
untimely.3 State v. White, No. 18AP-158, slip op. (Franklin Cty. Ct. of Common Pleas, Apr. 4,
2018).
2White’s direct appeal and his state and federal habeas petitions raised multiple claims of ineffective
assistance of counsel separate and distinct from his conflict-of-interest claim. For ease, and because the conflict-of-
interest claim is the only ineffective-assistance claim in front of this panel, for the remainder of this opinion we refer
to it simply as “the ineffective-assistance claim.”
3In the district court, White moved for a stay so that he could continue pursuing his post-conviction appeals
in state court. The district court denied that request, finding that such appeals would be fruitless and that the fact of
White’s assured denial sufficed to establish that he had exhausted his state court remedies.
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 4
In the district court, the warden argued that White procedurally defaulted his ineffective-
assistance claim because his appeal to the Ohio Supreme Court advanced a separate legal theory.
The district court disagreed and proceeded to the merits. Applying the deferential standard laid
out in the Anti-Terrorism and Effective Death Penalty Act of 1996 (AEDPA), 28 U.S.C.
§ 2254(d)(1)–(2), the court rejected White’s ineffective-assistance claim but granted a certificate
of appealability.4
STANDARD OF REVIEW
When considering a petition for a writ of habeas corpus, we review a district court’s legal
conclusions de novo and its factual findings for clear error. Wilson v. Sheldon, 874 F.3d 470,
474 (6th Cir. 2017). Petitions filed after 1996 are generally governed by AEDPA’s exacting
standard. Id. However, AEDPA applies “only to claims that were adjudicated on the merits in
State court proceedings.” Bies v. Sheldon, 775 F.3d 386, 395 (6th Cir. 2014) (internal quotation
marks and citation omitted). Thus, contrary to the district court’s decision, AEDPA does not
control White’s ineffective-assistance claim because no state court ever considered the merits.
The only time a state court addressed this claim was on direct appeal. There, the Ohio
Court of Appeals overruled White’s assignment of error because it “lack[ed] the necessary facts
to fully consider” the claim. White, 2015 WL 9393518, at *3. Although the Supreme Court has
explained that “it may be presumed that [a] state court adjudicated [a] claim on the merits,” this
presumption is limited to situations in which there is an “absence of any indication or state-law
procedural principles to the contrary.” Harrington v. Richter, 562 U.S. 86, 99 (2011).
A dismissal of a claim explicitly acknowledging a court’s procedural inability to sufficiently
consider it constitutes an “indication” that the court did not adjudicate the claim on the merits.
And, if there were any doubt about that, a review of Ohio law puts the uncertainty to rest. In
State v. Cooperrider, 448 N.E.2d 452, 454 (Ohio 1983) (per curiam), the Ohio Supreme Court
considered an ineffective-assistance-of-counsel claim raised on direct review. There, the lower
court had overruled the claim because it could not “determine on the record before [it] whether”
counsel’s assistance was ineffective. State v. Cooperrider, No. 81AP-939, 1982 WL 4121, at *2
4A panel of this court denied White’s motion to expand the certificate of appealability.
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 5
(Ohio Ct. App. Apr. 22, 1982). Based on this language, the Ohio Supreme Court found it “clear
that the court of appeals . . . did not adjudicate the issue,” and that res judicata did not prevent
the defendant from seeking an evidentiary hearing. Cooperrider, 448 N.E.2d at 454.
We likewise find it clear that the Ohio Court of Appeals did not adjudicate the merits of
White’s ineffective-assistance claim. Therefore, AEDPA does not apply here. The district court
should have considered White’s claim de novo, and we now apply that standard. See Bies,
775 F.3d at 396.
DISCUSSION
Federal courts may not consider a petitioner’s claims in federal habeas proceedings
unless he has exhausted his state remedies and “compl[ied] with state procedural rules in
presenting his claim to the appropriate state court.” Williams v. Anderson, 460 F.3d 789, 806
(6th Cir. 2006). The district court determined, and we agree, that, despite the untimeliness of his
post-conviction motion, White has satisfied the exhaustion requirement. See Clinkscale v.
Carter, 375 F.3d 430, 438 (6th Cir. 2004) (holding that petitioner properly exhausted his
ineffective-assistance claim by presenting it on direct appeal even though the court did not
adjudicate the claim on the merits). A question remains, however, as to whether his untimeliness
precludes his federal claim because he did not “meet the State’s procedural requirements for
presenting his federal claims.” Coleman v. Thompson, 501 U.S. 722, 732 (1991).
We engage in a four-part inquiry when determining whether a claim is procedurally
defaulted:
First, the court must determine that there is a state procedural rule that is
applicable to the petitioner’s claim and that the petitioner failed to comply with
the rule. . . . Second, the court must decide whether the state courts actually
enforced the state procedural sanction. . . . Third, the court must decide whether
the state procedural forfeiture is an adequate and independent state ground on
which the state can rely to foreclose review of a federal constitutional
claim. . . . [Fourth, the court must decide whether] there was cause for [the
petitioner] to not follow the procedural rule and [whether] he was actually
prejudiced by the alleged constitutional error.
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 6
Maupin v. Smith, 785 F.2d 135, 138 (6th Cir. 1986) (internal quotation marks and citations
omitted). “To inform this inquiry, we look to the last explained state court judgment.” Stojetz v.
Ishee, 892 F.3d 175, 191 (6th Cir. 2018) (internal quotation marks and citations omitted).
The trial court’s dismissal of White’s motion for post-conviction relief easily satisfies the
first three prongs of the Maupin test. Ohio law contains a statutory deadline for collateral relief,
which requires petitioners to file a motion for post-conviction relief within one year of the filing
of transcripts in the petitioner’s direct appeal. Ohio Rev. Code § 2953.21(A)(2). The parties do
not contest that White failed to meet this deadline or that his untimeliness was the basis of the
trial court’s rejection of his claim and the denial of his motion for leave to appeal. See State v.
White, No. 12CR-4418, slip op. (Franklin Cty. Ct. of Common Pleas, Nov. 30, 2017). And, a
denial of post-conviction relief based on the petitioner’s untimeliness is an independent and
adequate state ground to establish default. See, e.g., Walker v. Martin, 562 U.S. 307, 317 (2011);
Hartman v. Bagley, 492 F.3d 347, 357–58 (6th Cir. 2007).
In applying Maupin’s fourth prong, we are left to consider whether White had cause for
his non-compliance. It is well established that, generally, a claim of ineffective assistance of
appellate counsel is unavailable as a means of showing cause for petitioners whose default
occurs during post-conviction proceedings, as White’s did here. Coleman, 501 U.S. at 752; West
v. Carpenter, 790 F.3d 693, 697 (2015). Because the Constitution does not guarantee a right to
an attorney in collateral proceedings, in most cases, defendants cannot rely on their pro se status
to overcome a procedural default at the post-conviction stage. West, 790 F.3d at 697.
However, “[a] prisoner’s inability to present a claim of trial error is of particular concern
when the claim is one of ineffective assistance of counsel.” Martinez, 566 U.S. at 12. Thus, in
Martinez v. Ryan, the Supreme Court announced a “narrow exception” to the general rule,
available to petitioners who can meet four requirements. The petitioner must show that: (1) he
has a “substantial” claim of ineffective assistance of trial counsel; (2) he had “no counsel or
counsel . . . was ineffective” in his collateral-review proceeding; (3) the collateral-review
proceeding was the “initial” review of the claim; and (4) state law requires ineffective-
assistance-of-trial-counsel claims to be raised in the first instance in a collateral-review
proceeding. Id. at 9, 17.
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 7
The following year, considering Texas’s appellate process, the Court extended the
Martinez exception by modifying the fourth requirement. See Trevino, 569 U.S. at 429. Trevino
v. Thaler applied the Martinez framework to any state where “by reason of its design and
operation, [state procedure] makes it highly unlikely in a typical case that a defendant will have a
meaningful opportunity to raise a claim of ineffective assistance of trial counsel on direct
appeal.” Id.
As an initial matter, White certainly meets the first three Martinez requirements. First, he
raises a “substantial claim of ineffective assistance.” Id. at 416 (quoting Martinez, 566 U.S. at
17). White’s claim is not without “any merit” or “wholly without factual support.” Martinez,
566 U.S. at 16. Although the record is limited, it does establish that Armengau was under
indictment for significant, even shocking charges while serving as White’s counsel. This court
has recognized that “a conflict of interest may arise where defense counsel is subject to a
criminal investigation.” Moss v. United States, 323 F.3d 445, 472 (6th Cir. 2003). Furthermore,
at least one of our sister circuits has found ineffective assistance in a comparable circumstance.
See United States v. DeFalco, 644 F.2d 132, 136–37 (3d Cir. 1979). Other circuits have likewise
acknowledged the possibility that an attorney under investigation or indictment may face
disqualifying conflicts of interest and, as a result, perform ineffectively. See Reyes-Vejerano v.
United States, 276 F.3d 94, 99 (1st Cir. 2002) (deciding that counsel was not ineffective but
recognizing that “[t]he argument is not frivolous that a defense lawyer within the sights of a
targeted criminal prosecution may find his personal interests at odds with his duty to a client.”);
Armienti v. United States, 234 F.3d 820, 824–25 (2d Cir. 2000) (finding an ineffective-assistance
claim “plausible” when defense lawyer was being criminally investigated by same prosecutors
office as had charged defendant); Thompkins v. Cohen, 965 F.2d 330, 332 (7th Cir. 1992)
(“A situation of this sort (the criminal defendant’s lawyer himself under criminal investigation)
. . . can create a conflict of interest.”). Second, the parties do not dispute that White was without
counsel during his state collateral proceedings. And, third, the collateral-review proceeding
would have been the “initial” review of his ineffective-assistance claim because, as we have
already explained, the Ohio Court of Appeals deemed direct appeal an inappropriate forum for
White’s ineffective-assistance claim. State v. White, No. 12CR-4418, slip op. (Franklin Cty. Ct.
of Common Pleas, Nov. 30, 2017).
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 8
That leaves the fourth requirement of the Martinez-Trevino test. Although “[w]e have
held that Martinez does not apply in Ohio because Ohio permits ineffective-assistance-of-trial-
counsel claims on direct appeal,” a question remains regarding the applicability of Trevino to
Ohio prisoners. Williams v. Mitchell, 792 F.3d 606, 615 (6th Cir. 2015). White can only
establish cause to overcome his procedural default if we determine that Trevino applies in his
circumstances—that is, if we find that it was “highly unlikely” that a “meaningful opportunity”
existed for the Ohio Court of Appeals to review his ineffective-assistance claim on direct review.
See Trevino, 569 U.S. at 429.
“Ohio law appears to contemplate two kinds of ineffective assistance of counsel claims,
those based only on evidence in the trial record and those based in part on evidence outside the
record.” McGuire v. Warden, Chillicothe Corr. Inst., 738 F.3d 741, 751 (6th Cir. 2013). The
first type of ineffective-assistance claim is not relevant here, and we make no consideration or
decision as to Trevino’s application to such claims. Instead, we focus on the second variety of
ineffective-assistance claims—those that rely on facts outside of the record.
On direct appeal, Ohio law limits the reviewing court “to the record of the proceedings at
trial.” Id. (quoting Morgan v. Eads, 818 N.E.2d 1157, 1159 (Ohio 2004)). In Trevino, the
Supreme Court recognized that “the need to expand the trial court record” is critical to ensuring
meaningful review. 569 U.S. at 428. Ohio courts, too, have recognized this necessity and have
refused to adjudicate ineffective-assistance claims on direct appeal because of the need for
additional evidence. See, e.g., State v. Smith, 477 N.E.2d 1128, 1131 n.1 (Ohio 1985) (noting
that res judicata may not bar post-conviction relief where a court rejected defendant’s direct
appeal based on the trial record alone); Cooperrider 448 N.E.2d at 454 (holding that when “it is
impossible to determine whether the attorney was ineffective in his representation of appellant
where the allegations of ineffectiveness are based on facts not appearing in the record,”
defendants should avail themselves of post-conviction evidentiary hearing procedures). In these
instances, Ohio effectively requires defendants to raise ineffective-assistance claims in post-
conviction petitions. Indeed, the Ohio Court of Appeals did precisely this in White’s case.
White, 2015 WL 9393518, at *3. Practically speaking, then, Ohio law makes it “virtually
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 9
impossible” for defendants to meaningfully raise an ineffective-assistance-of-trial-counsel claim
on direct appeal if the claim relies on evidence outside the record. Trevino, 569 U.S. at 417.
“Ohio . . . appears to expect appellate counsel to recognize the [two] types of [ineffective-
assistance] claims and follow the proper procedure.” McGuire, 738 F.3d at 751. According to
White, his appellate counsel assured him that the Ohio Court of Appeals would consider his
ineffective-assistance claim on direct appeal, perhaps thinking that the claim was clear on its
face, without further evidence. The record does not contradict White, nor do we have any other
reason to doubt his assertion at this stage. Given this advice, it makes sense that White did not
know that he needed to file a motion for post-conviction relief until after he received the decision
in his direct appeal, but by then his filing was already untimely.
The severity of Ohio’s filing deadline for collateral relief compounded White’s
procedural troubles. As already noted, under Ohio law, a post-conviction petition must be filed
within one year of the filing of transcripts in a defendant’s direct appeal. Ohio Rev. Code
§ 2953.21(A)(2). A review of White’s state court docket shows that his transcripts were filed on
August 6, 2014. Ohio law, then, required that he file his post-conviction petition by August 5,
2015. But the Court of Appeals did not issue its decision alerting White to his need for a post-
conviction petition, or clarifying which claims might be available to him in that forum, until
more than four months after the deadline. White, 2015 WL 9393518, at *3. At that stage, White
did not have the benefit of counsel, further contributing to his default. See Martinez, 566 U.S. at
12 (“The prisoner, unlearned in the law, may not comply with the State’s procedural rules or may
misapprehend the substantive details of federal constitutional law. . . . [And w]hile confined to
prison, the prisoner is in no position to develop the evidentiary basis for a claim of ineffective
assistance.”).
In Martinez, the Supreme Court explained that providing an avenue to overcome
procedural default when a petitioner proceeds pro se in an initial-review collateral proceeding
“acknowledges, as an equitable matter, that the initial-review collateral proceeding, if undertaken
without counsel . . . may not have been sufficient to ensure that proper consideration was given
to a substantial claim.” Id. at 14. Trevino similarly recognized that procedural designs that “do[]
not offer most defendants a meaningful opportunity to present a claim of ineffective assistance of
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 10
trial counsel on direct appeal . . . will deprive the defendant of any opportunity at all for review
of [that] claim.” 569 U.S. at 428. The confluence of Ohio’s general rule requiring the
presentation of ineffective-assistance claims on direct review unless the record lacks sufficient
evidence, the incorrect advice from White’s appellate counsel that his record did contain
sufficient evidence, and the tight procedural timeline imposed by Ohio’s post-conviction-relief
statute left White without a “meaningful opportunity” to obtain review of his substantial
ineffective-assistance claim. See id.
Ohio’s procedural framework effectively “channel[ed] initial review of [White’s]
constitutional claim to collateral proceedings.” Id. at 423. Accordingly, under the Martinez-
Trevino framework, we find that White has cause to overcome his procedural default because:
he raised a substantial ineffective-assistance claim; he was without counsel during his post-
conviction proceedings; the post-conviction proceeding was the initial opportunity for a merits
assessment of the claim; and the design and operation of Ohio procedural law rendered it “highly
unlikely” his claim could be reviewed on direct appeal. Because we find that White has cause,
he satisfies the fourth prong in Maupin and is not barred from raising his claim of ineffective
assistance based on Armengau’s conflict of interest. See Maupin, 785 F.2d at 138; see also
Detrich v. Ryan, 740 F.3d 1237, 1246 (9th Cir. 2013) (en banc) (concluding that after finding
cause under Martinez, the trial court can continue to the merits of a petitioner’s ineffective-
assistance-of-trial-counsel claims); see also Workman v. Superintendent Albion SCI, 915 F.3d
928, 940 (3d Cir. 2019) (same).
Although, having determined that White has overcome his procedural default, we could
proceed to the merits of his ineffective-assistance claim, we decline to do so for two reasons.
First, as explained above, in its initial review of White’s claim, the district court applied an
incorrect standard of review. We therefore think it best that the district court have the first
chance to consider the claim de novo.
Second, White has not yet been able to develop a factual record in support of his
ineffective-assistance claim. The “absence of factual development . . . hamstrings this court’s
ability to determine whether” his trial counsel was constitutionally ineffective. Woolbright v.
Crews, 791 F.3d 628, 637 (6th Cir. 2015). In Woolbright, we faced a similar situation and found
No. 18-3277 White v. Warden, Ross Correctional Inst. Page 11
it appropriate to remand the matter to the district court for “full reconsideration” of the claims,
including a determination of whether to conduct an evidentiary hearing. Id. This measured
approach seems to us the best way forward here as well. See Detrich, 740 F.3d at 1247 (noting
that petitioner demonstrating cause and availing himself of the Martinez exception is entitled to
evidentiary hearing notwithstanding 28 U.S.C. § 2254(e)(2)).
CONCLUSION
For the reasons explained above, we conclude that White is not procedurally barred from
raising his ineffective-assistance claim and that the district court erred by applying the incorrect
standard of review. We deem it most appropriate for the district court to consider, in the first
instance, White’s claim de novo, including whether he is entitled to an evidentiary hearing in
order to supplement the record. We therefore VACATE the district court’s ruling and
REMAND this case for further proceedings consistent with this opinion.
| {
"pile_set_name": "FreeLaw"
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