text
stringlengths 1
1.21M
| meta
dict |
|---|---|
797 F.2d 980
*U.S.v.Jackson
85-7781
United States Court of Appeals,Eleventh Circuit.
7/25/86
1
N.D.Ala.
AFFIRMED
2
---------------
* Fed.R.App.P. 34(a); 11th Cir.R. 23.
| {
"pile_set_name": "FreeLaw"
} |
55 F.Supp. 375 (1944)
UNITED STATES
v.
WILLIAMS
No. 7522.
District Court, D. Minnesota, Fourth Division.
April 26, 1944.
NORDBYE, District Judge.
O. A. Blanchard, of St. Paul, Minn., for defendant in support of said motion.
Victor E. Anderson, U. S. Atty., and John W. Graff, Asst. U. S. Atty., both of St. Paul, Minn., for United States of America in opposition thereto.
On November 2, 1943, defendant was indicted by the Grand Jury upon six counts for alleged violations of the Mann Act, 36 Stat. 825, 18 U.S.C.A. § 397 et seq. The case was tried before this Court and a jury during the March, 1944, term of court. A verdict of guilty was returned on all counts. At the trial the Government called one Esther Jensen Williams as a witness. When she testified in answer to the Government's first question that she and defendant had been married in January, 1944, defendant objected to her being further questioned, contending that she was an incompetent witness because of the marriage. The marriage took place after the offenses involved herein. After argument in the jury's absence, the Court overruled the objection, and Esther Jensen Williams proceeded to testify concerning six trips which she made from Minneapolis, Minnesota, to Mason City, Iowa, in 1943 for the purposes of practicing prostitution at Mason City, and of defendant's connection therewith.
Although other witnesses were called, and although their testimony, to some extent, at least, corroborated that of the allegedly transported woman, there seems little doubt that without the testimony of the wife the Government would not have been able to prove its case. Defendant's *376 counsel now moves for a new trial upon the ground that the Court committed error in permitting Esther Jensen Williams to testify. Defendant contends that she was an incompetent witness according to the common law by which this Court is bound. There is no contention that the question of privilege between husband and wife with respect to confidential communications is involved. And, so far as the record shows, the wife did not object to testifying.
There is no doubt that at the old common law a wife generally could not testify against her husband. Stein v. Bowman, 1839, 38 U.S. 209, 13 Pet. 209, 10 L. Ed. 129; Bassett v. United States, 1890, 137 U.S. 496, 11 S.Ct. 165, 34 L.Ed. 762. Such a rule was and still is sustained upon the ground that the contrary rule would disturb the marital happiness of the couple. 8 Wigmore on Evidence, 3d Ed., Sec. 2227 et seq. But an exception to this rule was made and the wife was permitted to testify against her husband when she suffered personal injury through his actions. That exception was based upon the necessity of the situation, for the absence of such an exception would leave the wife without protection against personal injury from her husband. Lord Audley's Case, 1631, 3 How.St.Tr. 401, 402, 414; 8 Wigmore on Evidence, 3d Ed., Sec. 2239.
These were the rules already existing in 1789,[1] and which the Circuit Court of Appeals for the Eighth Circuit considered binding in Johnson v. United States, 1916, 221 F. 250. In that case the court did hold that a wife whose husband transports her across interstate lines for immoral purposes could not testify against him. But the case was predicated upon the ground that at common law a woman could not testify against her husband unless she had suffered personal violence at his hands. That rule, the court held, could only be changed by statute. There is no doubt that when the Johnson case was decided the court was assumed to be bound by the common law as it was then interpreted,[2] although its application to the factual situation in the Johnson case may be open to doubt in view of the subsequent discussion.
But, in any event, the United States Supreme Court now has held in Funk v. United States, 1933, 290 U.S. 371, 54 S.Ct. 212, 78 L.Ed. 369, 93 A.L.R. 1136, that henceforth Federal courts are not bound by the common-law rules which governed a wife's competency and privilege to testify in 1789 or any other year. It held that the Federal courts can expand or contract these common-law rules as modern experience and necessity demand in the interest of justice. Legislation was held not to be necessary to change the common-law rules. United States v. Wood, 1936, 299 U.S. 123, 144, 57 S.Ct. 177, 81 L.Ed. 78; see, also, McNabb v. United States, 1942, 318 U.S. 332, 63 S.Ct. 608, 87 L.Ed. 819. Thus it would seem that, with one stroke, reinforced by subsequent decisions, the Supreme Court destroyed the very foundations of the Johnson decision.
The Eighth Circuit Court of Appeals also has recognized this conclusion since the Johnson case was decided. In a strong dictum in Tinsley v. United States, 1930, 43 F.2d 890, that court declared that the ancient rules of the common law were no longer binding upon the court and clearly indicated that Judge Stone's dissent in Adams v. United States, 8 Cir., 1919, 259 F. 214, 215, was the sounder view.[3] Consequently, both the United States Supreme Court and the Appellate Court for this Circuit authorize this Court to depart from the old common-law rules applied in the Johnson case if good reason and public policy exist therefor. So the question is not, as defendant's counsel seems to assume and the Johnson case holds, What was the common law in the beginning? But, on the contrary, the question is, What should the common law be now in light of reason and experience? As stated by the Supreme Court in the Funk case page 381 of 290 U.S., page 215 of 54 S.Ct., 78 L.Ed. 369, 93 A.L.R. 1136: "The fundamental basis upon which all rules of evidence must rest if they are to rest upon reason is their adaptation to the successful development of the truth. And, since experience is of all teachers the most dependable, and since experience also is a continuous process, it follows that a rule of *377 evidence at one time thought necessary to the ascertainment of truth should yield to the experience of a succeeding generation whenever that experience has clearly demonstrated the fallacy or unwisdom of the old rule."
The old common-law general rule that a wife cannot testify against her husband without his consent has been attacked often and forcefully. See Wigmore on Evidence, 3d Ed., Sec. 2228. But whatever soundness and justification these attacks may possess (and there seems little doubt but that they do possess some soundness), neither they nor the general rule need be dealt with in this case except indirectly. The soundness of the general rule and the justification for its existence (the preservation of marital happiness) may be, for the purposes of this discussion, assumed. We are concerned, however, only with the question of whether a woman who has been transported or caused to be transported in interstate commerce for immoral purposes by one who is now her husband can testify against the husband when he is prosecuted criminally for that crime. Certainly, experience, sound reasoning, and good public policy, based upon modern understanding, require the question to be determined adversely to the defendant's contention.
We are dealing here with a problem which does not appear to have confronted the common-law courts, in that transportation of women in commerce for immoral purposes is a modern statutory crime which does not seem to have existed at common law. That is, although prostitution may have been rampant in common-law days, interstate transportation of women for such purposes obviously was then no crime. Moreover, the old common-law cases which are cited as involving exceptions to the general rule that a wife cannot testify against her husband do not appear to consider crimes which corrupted the wife's morality. See Denning v. United States, 5 Cir., 1918, 247 F. 463. Crimes like seduction before marriage, assault and battery, and rape, all involve personal violence to the wife. Although crimes like adultery and fraud on the part of the husband may not involve personal violence and may be a moral wrong to the wife, certainly they involve no injury to her morals. The Mann Act violations of the character now under consideration do involve injury to the wife's morals. Consequently, cases coming down to us from the old common law of 1789, and still followed by some courts today, really pertain only to crimes of personal violence by the husband against his wife and not to crimes like the instant one which result in moral violence to the wife. So it seems fallacious to suggest that a wife cannot testify against her husband even if he has injured her morals merely because the common law provided for a wife's testifying against her husband only when he had used violence upon her person. The common law seems never to have had occasion to consider the question of exceptions to the general rule further than the personal injury situation.
No one can doubt that the common-law exception invoked when the husband uses personal violence against his wife is sound. Moreover, it is securely rooted in the foundations of modern justice, and no reason to unearth it has been suggested. As some courts which have considered the question of moral injury have pointed out, the acts like those which this defendant has committed are the same, in practical thinking, as an act of personal violence against the wife. See Denning v. United States, supra; Cohen v. United States, 9 Cir., 1914, 214 F. 23, certiorari denied 235 U.S. 696, 35 S.Ct. 199, 59 L.Ed. 430; United States v. Rispoli, D.C. Pa.1911, 189 F. 271; see, also, Pappas v. United States, 9 Cir., 1917, 241 F. 665; United States v. Bozeman, D.C.Wash.1916, 236 F. 432. It is undoubtedly an offense against the wife, and it operates directly and immediately upon her. And the inevitable and foreseeable physical violence following the transportation cannot be divorced from the transportation, at least in so far as the injuries to the wife are concerned.
In fact, Lord Audley's Case, supra, upon which the exception regarding personal violence is founded, involved a situation in which the husband does not seem to have committed the act of violence against his wife. He instigated the rape of his wife. See Denning v. United States, supra. In "white slave" cases the husband, in practical effect, likewise instigates another to commit a personal act upon his wife by transporting her or causing her to be transported to a house of prostitution for purposes of prostitution. Consequently, the "white slave" cases seem really to be within the very spirit, if not the letter, of *378 the case which is the basis for the so-called personal injury exception which permits a wife to testify against her husband.
The fact that in the Mann Act cases the wife may consent to the transportation at the time is of no significance. Section 3, 18 U.S.C.A. § 399, of the Mann Act itself provides that the consent of the woman to the transportation is irrelevant to the existence of the crime. The defendant is indicted under this section. For a court to declare that such consent could not only prevent the transported wife from testifying, but also prevent the husband's conviction for the crime (and the court would be saying this where the transported wife was the only witness), obviously would be thwarting both the spirit and the purpose of this section. The procedural and substantive law policies must agree if the public welfare is to be protected according to the intent of Congress. Moreover, consent by the wife to the commission of the crime should create no necessary inference of marital happiness at the time of trial. The contrary is often true.
That the "white slave" activities by the husband with reference to his wife injure her morals cannot be doubted, and such fact itself seems to justify an extension of the exceptions to the general rule that a wife cannot testify against her husband. Some cases seem to have extended it for this reason. See United States v. Mitchell, 2 Cir., 1942, 137 F.2d 1006, pages 1008, 1009, where the court stated:
"* * * The exception itself is well settled; the only question at all doubtful is whether it can be properly applied to a violation of the White Slave Traffic Act. Here the argument is made that this is not a crime against the person of the wife, but a crime against interstate commerce. But, as Wigmore, id. § 2239, says generally of all cases of enticing to prostitution or white slave traffic involving the wife, `of course morally it is a shameless offense against wifehood'; and we agree, as do all the authorities, with a single exception, which deal with the specific question under this statute. Denning v. United States, 5 Cir., 247 F. 463; Pappas v. United States, 9 Cir., 241 F. 665; Cohen v. United States, 9 Cir., 214 F. 23, certiorari denied 235 U.S. 696, 35 S.Ct. 199, 59 L.Ed. 430; United States v. Rispoli, D.C. E.D. Pa., 189 F. 271; United States v. Bozeman, D.C. W.D. Wash., 236 F. 432. In the only case which has ruled otherwise, Johnson v. United States, 8 Cir., 221 F. 250, the court, as Wigmore, id., points out, failed to consider the exception at all. In Yoder v. United States, 10 Cir., 80 F.2d 665, the defendant's divorced wife was allowed to testify in denial of the defendant's testimony, but Judge McDermott rested the court's decision on the broader ground of the wife's competency. See also Cohen v. United States, 5 Cir., 120 F.2d 139. In Kerr v. United States, 9 Cir., 11 F.2d 227, certiorari denied 271 U.S. 689, 46 S.Ct. 639, 70 L.Ed 1153, on a prosecution for violation of the mails, a wife was allowed to testify that her husband had mailed her poisoned candy.
"To say of this statute at bar that all it does is to preserve the purity of our federal compact is to shut our eyes to the realities of modern federal crime, where the federal ground, whatever it may be, is the constitutional excuse and justification, rather the reason for being, of the legislation. Cf. Chamberlain, Federal Criminal Statutes, 1934, 20 A.B.A.J. 501; Federal Co-operation in Criminal Law Enforcement, 48 Harv. L. Rev. 489; 1 Law & Contemp. Prob. 399-508. Whatever else this statute may do, it strikes at the exploitation of women, and comes directly within the reason of the exception. After all, the situation of the injured wife deserves some consideration; and in circumstances such as are here presented, we think it would be shocking to deny her the right to testify. With Denning v. United States, supra, 247 F. at page 466, we believe that `a woman is as much entitled to protection against complete degradation as against a simple assault.'"
The Mitchell case is a strong decision upon the question and clearly represents a modern approach to the problem.
Necessity also demands that the wife be permitted to testify against her husband when he has injured her morally. At common law the courts recognized that if a man could commit personal violence against his wife at will, she would have no protection against his violent acts. Likewise, in the "white slave" situations, if a husband can corrupt his wife's morals without fear of her testifying against him in a prosecution therefor, she would have little or no means of protecting her morals against him. Certainly, the domestic happiness of the couple will be impaired no more if the wife testifies as to the moral injuries which the husband inflicts upon *379 her than it would be when she testifies as to the physical injuries he inflicted upon her. The need to be practical and realistic and to recognize the necessity that a wife should, over her husband's objection, be permitted to testify against him as to moral wrongs he has committed against her seems apparent. It seems reasonably sound, therefore, to adopt the rule previously adopted by all Federal courts which have considered the question in recent times, and that is that a wife can testify against her husband when he commits an act against her harmful to her morals. Denning v. United States, 5 Cir., 247 F. 463; Pappas v. United States, 9 Cir., 241 F. 665; Cohen v. United States, 9 Cir., 214 F. 23; United States v. Rispoli, D.C., 189 F. 271; United States v. Bozeman, D.C., 236 F. 432; United States v. Mitchell, 2 Cir., 137 F.2d 1006. As the court pointed out in the Denning case, supra, at page 466 of 247 F.: "* * * They should not be permitted to invoke a sacred institution, and the rules established for its protection, to secure immunity from punishment for the most infamous crime that could be devised for its degradation."
Apparently recognizing that this exception to the general rule is sound, defendant attempts to distinguish the instant case because the transportation here in question, and therefore any injuries Esther Jensen Williams suffered at defendant's hands, occurred prior to marriage. The common-law exception, he argues, protected the wife only against personal wrongs committed during their marriage. Such was undoubtedly the common-law rule of the States with respect to personal violence to the wife and still is their rule. Note, 76 A.L.R. 1006. And in United States v. Gwynne, 1914, 209 F. 993, the United States District Court of Pennsylvania adapted that rule to white slave cases in the only Federal decision which appears to exist as to that particular situation. But, like the Johnson case, the Gwynne case is based upon the old common law with the observation that only the Congress, not the courts, can change the common-law rule. Modern experience and conceptions of justice which the court must recognize do not seem to permit the old common-law rule to be followed with reference to a wife's right to testify against her husband as to the moral injuries which he inflicted upon her by transporting her for immoral purposes prior to their marriage. Perhaps because of this fact the most recent case upon the question of a wife's right to testify as to transportations for immoral purposes during coverture referred to the Gwynne case as making a "curious" distinction. See United States v. Mitchell, supra, page 1008 of 137 F.2d, note 3. The Gwynne case apparently recognized that a wife could testify against her husband as to injuries to her morals during coverture, but not to such injuries occurring before coverture. The Court would arrive at a very anomalous position if defendant's distinction were adopted. If the defendant were married to the woman at the time of the transportation and trial, she could testify against him, and if the defendant and the woman were not married when she was transported, or at the time of trial, she could testify against him. But, according to defendant, the Court would be bound to deny the woman the right to testify against the defendant if a combination of these circumstances existed; that is, if the transportation occurred prior to marriage. In other words, the Court, by its rules of evidence, would protect the husband from punishment for a crime against which Congress intended to protect the woman. The Mann Act then would give the woman no protection against a procurer's acts prior to their marriage.
Moreover, the question of whether a wife can testify as to her transportation by her husband prior to marriage is markedly different from the question of whether a wife can testify as to personal violence which her husband committed against her prior to marriage. In the latter situation, some sort of forgiveness of the wrong to her may be assumed by the marriage, and if the injured person desires to forget the matter and desires to live in a happy marital state with the one who injured her, a certain aversion to requiring or permitting her to testify against her husband whom she has forgiven, is readily understandable. In denying a wife the right to testify against her husband when he was being prosecuted for a crime of personal violence which he committed against her prior to marriage, the Minnesota Supreme Court said in State v. Feste, 205 Minn. 73, 76, 285 N.W. 85, 87: "We are here concerned, however with an offense which occurred prior to the marriage. In such a case the proper inference appears to be that any grievance existing between the parties was settled before the ceremony. Under these circumstances *380 the considerations which support the general rule are applicable."
But, on the contrary, in Mann Act cases no forgiveness of the wrong to the woman seems inferable from the mere fact of marriage, for in this case and in the usual Mann Act cases, the woman consented to the transportation. She was a party to the act of transportation. It was not a situation in which the man was the only actor in the wrong. Consequently, as far as the woman was concerned, there was nothing to forgive by the marriage. No forgiveness resulting in a happy marital relationship seems inferable in white slave cases merely by marriage of the procurer and the woman. Even if marriage after transportation did constitute consent and forgiveness of previous transportation, it must be remembered that a woman has frequently been permitted to testify to her being transported by her husband during their marriage even though she consented to the transportations. See United States v. Mitchell, supra; Denning v. United States, supra; Pappas v. United States, supra; Cohen v. United States, supra; United States v. Rispoli, supra.
The instant case may also be distinguished from the problem of personal violence prior to marriage upon another basis. When personal violence is used upon a woman, she is the only one injured. Society may be injured very little, if at all. When the woman's body has healed from the personal violence inflicted upon it, the wrong has disappeared. But in transportation for immoral purposes the woman is not the only one injured. Those who come in contact with the woman at the house of prostitution where she would not be but for the transportation obviously are injured morally (and often physically) as a result of the transportation. And the morals of a transported prostitute who marries the procurer often cannot be rehabilitated by society as easily as the physical injuries of a girl who marries her assailant can be healed. Even when the transported woman is rehabilitated, the problem is not solved, as it is substantially when the physically injured woman's injuries are healed. The many young men whose moral and physical condition has been degraded by the woman's activities at the places to which she has been transported must still be dealt with by society. Society is seriously affected both morally and physically by these transportations, and the marriage of the parties and the rehabilitation of the prostitue does not alleviate the difficulties. Public justice, which often is termed a partial basis for permitting the wife to testify against her husband as to personal injuries received during coverture, State v. Feste, supra seems to require a rule different from that applied when a wife seeks to testify against her husband as to personal injuries she suffered from him prior to marriage. Unlike personal violence cases, society and its members are also injured by the transportation. If, as stated in United States v. Mitchell, United States Supreme Court, 64 S.Ct. 896, "practically the whole body of the law of evidence governing criminal trials in the federal courts has been judgemade," it would seem that, under the circumstances herein, this Court should apply a rule of evidence in light of the public policy of this generation, and not blindly adhere to a rule of evidence which does not seem sound in light of reason and experience, nor in the interest of justice, when applied to the facts herein. As stated in the recent pronouncement of the Supreme Court in the Mitchell case, "* * * rules of evidence for criminal trials in the federal courts are made a part of living law and not treated as a mere collection of wooden rules in a game." Finally, it must be remembered that Congress passed the Mann Act to protect "weak women from bad men." Denning v. United States, supra. Certainly, the purpose of Congress would be thwarted if the woman's lips were sealed against a vicious and degraded man just because he may have induced the "weak woman" to marry him, probably in contemplation of evading justice by reason of the very rule which is now sought to be invoked.
It seems sound, therefore, to conclude that, under the common law interpreted in light of modern experience, reason, and in the furtherance of justice, a woman may testify against her husband when he has transported her in interstate commerce for the purposes of prostitution in violation of the Mann Act, and this rule of evidence should apply whether the transportation occurred during or prior to coverture.
The motion for new trial, therefore, will be denied. An exception is allowed to the defendant.
NOTES
[1] For significance of the year 1789, see Funk v. United States, 1933, 290 U.S. 371, 54 S.Ct. 212, 78 L.Ed. 369, 93 A.L.R. 1136, and cases therein cited.
[2] For the history of this doctrine, see Funk v. United States, supra.
[3] In the Adams case, Judge Stone points out that the common-law rule as to a wife's testifying is not necessarily sound and should be changed according to modern concepts.
| {
"pile_set_name": "FreeLaw"
} |
940 So.2d 668 (2006)
Joshua A. SURRENCY, Individually and on Behalf of the Minor Child, Raven Pearl Surrency
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Rickey Colligan, Jr., Lawrence Krava, and the State of Louisiana, Through the Department of Social Services.
No. 2006-CC-1944.
Supreme Court of Louisiana.
November 3, 2006.
Denied.
VICTORY, J., would grant.
| {
"pile_set_name": "FreeLaw"
} |
J-A34006-15
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
JEFFREY AMSLER, KAREN AMSLER, AND IN THE SUPERIOR COURT OF
KATHRYN CORRIGAN PENNSYLVANIA
Appellees
v.
ORCHARD HOUSE PROPERTIES LLC,
FRED R. AMSLER JR., FRED R. AMSLER
JR. LIVING TRUST, DONNA J. AMER, AND
CAMBRIDGE TRAINING PARTNERS L.P.
Appellants No. 1029 MDA 2015
Appeal from the Order May 14, 2015
In the Court of Common Pleas of Sullivan County
Civil Division at No(s): 2013-CV-253
BEFORE: PANELLA, J., OTT, J., and JENKINS, J.
MEMORANDUM BY PANELLA, J. FILED FEBRUARY 17, 2016
Appellants, Orchard House Properties LLC, Fred R. Amsler Jr., Fred R.
Amsler Jr. Living Trust, Donna J. Amer, and Cambridge Training Partners
L.P., appeal from the order entered May 14, 2015, in the Court of Common
Pleas of Sullivan County, which denied their preliminary objection to compel
arbitration. We vacate and remand this case for further proceedings.
By way of background, Appellant Fred R. Amsler is the father of
Appellees, Jeffrey Amsler and Karen Amsler. In 2010, Fred Amsler divorced
the siblings’ mother, Ilene Amsler, after more than 50 years of marriage.
Appellant Donna J. Amer is the purported paramour of Fred R. Amsler. The
entities at issue, Orchard House Properties, LLC and Cambridge Training
J-A34006-15
Partners, L.P., were formed to own and control various assets and income
belonging to Fred R. Amsler. The trial court summarized the relevant details
of this internecine familial dispute as follows.
A. The Orchard House Properties, LLC Operating
Agreement
On or about November 21, 2002, Orchard House
Properties, LLC was organized and established as a Nevada
limited liability company. An Operating Agreement was prepared
on November 5, 2002 establishing and delineating the company
purpose, scope, company interests, management, members,
applicable law, venue, etc. Said agreement was signed by the
following members with their signatures witnessed: Karen M.
Amsler, Kathryn A. Corrigan, Patricia M. Becknell and Jeffrey S.
Amsler. Exhibit A of the Operating Agreement set forth that
these four (4) members were listed with a capital percentage of
twenty five percent (25%) each and capital contributions of Ten
Dollars ($10.00) each.
On November 29, 2002[,] Jeffrey S. Amsler signed a
Certificate of Acknowledgement, wherein he acknowledged and
accepted his appointment as President of Orchard House
Properties, LLC and assented to “all provisions and stipulations
as herein imposed and expressed in the foregoing Limited
Liability Company Agreement.” Jeffrey S. Amsler’s signature was
witnessed and notarized. On or about November 29, 2002[,]
Karen M. Amsler signed a Certificate of Acknowledgement,
wherein she acknowledged and assented to “all provisions and
stipulations as herein imposed and expressed in the foregoing
Limited Liability Company Agreement.” Karen M. Amsler’s
signature is witnessed and notarized.
Article one Section 1.10 of the Operating Agreement states
“[v]enue for any dispute arising under this Operating Agreement
or any disputes among any members or the Limited Liability
Company shall be in the county of the Registered Office of the
Limited Liability Company.” See, Operating Agreement, p.6.
Article 1.07 states “the registered office of the Limited Liability
Company is 250 S. Center Street, Suite 500, Reno, Nevada
89501.”
-2-
J-A34006-15
Orchard House Properties, LLC held annual meetings in
accordance with the Operating Agreement wherein all officers
were present, the officers attended to the Limited Liability
Company’s business as delineated in the Operating Agreement
for approximately eleven (11) years until [Appellees] instituted
the instant action.
B. The Cambridge Trading Partners Limited Partnership
On or about October 15, 1991[, an] Agreement of Limited
Partnership [for] Cambridge Trading Partners was executed
among Fred. R. Amsler as General Partner and Fred R. Amsler
and Ilene A. Amsler each as a Limited Partner. On or about
November 5, 2002, an Amendment and Restatement was
executed in accordance with the Nevada Limited Partnership Act
“for purpose of forming and continuing a limited partnership (the
“Partnership”) in accordance with the provisions of the Nevada
Limited Partnership Act (the “Act”) and set forth by Fred R.
Amsler, as the General Partner and, the Fred R. Amsler Trust
and the Ilene A. Amsler Trust as Limited Partners.[”] (P.1 of
Cambridge Trading Partners Amendment and Restatement). The
Amended Restatement Agreement of Limited partnership (the
“Agreement”) consists of twenty[-]nine (29) provisions related to
the formation, scope, objective, partnership duties and
responsibilities. (See Paragraph 23, Misc. C). The Arbitration of
Disputes [provision] states “[a]ny dispute arising out of or in
connection with this Agreement, if not settled by mediation, shall
be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and
any decision rendered in such arbitration shall have the same
effect as if made by a court having proper jurisdiction.” (P. 55 of
the Agreement).
On or about October 18, 2010[,] an Assignment of fifty
percent (50%) of limited partnership interests held by the Ilene
A. Amsler Trust were assigned to the Fred R. Amsler Trust. The
Trustees of the Fred R. Amsler Trust then desired to assign five
percent (5%) of the limited partnership interests to Jeffrey S.
Amsler. On or about November 9, 2009[,] at the Annual Meeting
of the Members of the Cambridge Training Partners, LP, the
limited partners desired to transfer interests in Cambridge
Trading Partners, LP to reflect the above assignments. Members
Fred R. Amsler, Jeffrey S. Amsler and Ilene A. Amsler were
present at said meeting. At this Annual Meeting of the members
of the Cambridge Trading Partners, LLC the resolution was
-3-
J-A34006-15
adopted which confirmed “that on May 29, 2010, Ilene A. Amsler
transferred her 50% (fifty percent) Limited Partnership interest
to Fred R. Amsler, Jr. Following the transfer on the same date,
Fred R. Amsler, Jr. transferred 41% (forty[-]one percent) of his
Limited Partnership interest to the Fred R. Amsler, Jr. Trust and
5% (five percent) of his Limited Partnership [interest] to Jeffrey
S. Amsler.” See, Minutes of the 2010 Meeting of the Members.
Members Fred R. Amsler, Jr. and Jeffrey S. Amsler were present
at the meeting.
C. [Appellees’] Complaint
On or about October 16, 2013, [Appellees] filed a civil
action against Fred R. Amsler, Jr. and Orchard House Properties,
LLC. Thereafter on or about July 23, 2014, [Appellees] filed a
Complaint and Praecipe to Join Additional Defendants, namely
Cambridge Trading Partners, LP, Fred R. Amsler Revocable Living
Trust and Donna Amer. In their Complaint, [Appellees] assert
that Fred R. Amsler, Jr. was a fiduciary that dominated the
affairs of Cambridge Trading Partners, LP, in which Jeffrey
Amsler was the only limited partner, in comp[l]ete secrecy and
in breach of his confidential and fiduciary relationships between
he and the sibling Amsler. More specifically, the Complaint sets
forth the following causes of action:
Count I: Breach of the Operating Agreement
Plaintiffs against the Defendant LLC parties
Count II: Unjust Enrichment
Plaintiffs against the Defendant LLC parties
Count III: Conversion
Plaintiffs against the Defendant LLC parties
Count IV: Breaches of Fiduciary Duty
Plaintiffs against Fred Amsler
Count V: Breaches of the Partnership Agreement
Jeff Amsler against Fred Amsler and the
Defendant Partnership
Count VI: Unjust Enrichment
Jeffrey Amsler against the Defendant
Partnership Parties
Count VII: Conversion
Jeffrey Amsler against the Defendant
Partnership Parties
Count VIII: Breaches of Fiduciary Duty
Jeffrey Amsler against Fred Amsler
-4-
J-A34006-15
Count IX: Aiding and Abetting Breaches of Fiduciary
Duty
Plaintiffs against Donna Amer
Count X: Civil Conspiracy
Plaintiffs against Defendants
County XI: Equitable Accounting
Plaintiffs against Fred Amsler and the
Defendant Entities
Count XII: Declaratory Judgment
Plaintiffs against Defendants
Count XIII: Preliminary and Permanent Injunctive Relief
Plaintiffs against Fred Amsler and Donna
Amer
D. [Appellants’] Preliminary Objections
On or about September 8, 2014[,] [Appellants] filed
Preliminary Objections to [Appellees’] Complaint. …
[Appellants’] Preliminary Objections [maintain, inter alia,]
that [the trial court] lacked subject jurisdiction and that venue in
the Court of Common pleas of Sullivan County was improper.
Specifically, [Appellants] claimed that [the trial court] could not
properly assert subject matter jurisdiction over Counts V, VI,
VII, VIII, X, XI, and XII which related to [Appellee], Jeffrey S.
Amsler[’s] claims over [Appellants,] Fred A. Amsler, Jr. and
Cambridge Trading Partners, LP, since a valid arbitration
agreement existed. [Appellants] asserted that Jeffrey S. Amsler
accepted and agreed to the terms and conditions within the
Partnership Agreement which included the agreement to
arbitrate “[a]ny dispute arising out of or in connection with [the
Partnership] Agreement.” Furthermore, the Partnership
Agreement of Cambridge Trading Partners, LP (hereinafter
“Partnership Agreement”) required mediation and if the dispute
could not be settled, then arbitration. As such, [Appellants]
argued that counts V, VI, VII, VIII, X, XI, and XII must be
resolved under and in accordance with the commercial
arbitration rules of the American Arbitration Association since
that was specifically agreed to by the parties in the Partnership
Agreement and [the trial court] lacked subject matter
jurisdiction as a result.
Trial Court Opinion, 12/2/15 at 2-7.
-5-
J-A34006-15
After hearing argument on the Appellants’ preliminary objections, the
trial court issued an order on May 14, 2015, which summarily overruled the
preliminary objections to Appellees’ complaint in their entirety.
Appellants filed a timely appeal from the May 14, 2014, order denying
preliminary objections.1 Subsequent thereto, Appellees filed a motion to
quash the appeal as having been taken from an order that is interlocutory
and not appealable. Appellants filed an answer to that motion, asserting that
the subject order denied a request to compel arbitration. This Court issued
an order denying the application to quash to the extent the May 14 order
denied Appellants’ preliminary objection invoking the parties’ arbitration
agreement. To the extent that the May 14 order denied Appellants’
preliminary objections that raised issues unrelated to arbitration, we granted
the application to quash. This matter is now ripe for our review.
Appellants frame the limited issue on appeal as follows.
____________________________________________
1
On May 27, 2015, Appellants filed a motion for reconsideration of the trial
court’s May 14 order denying the preliminary objections to Appellees’
complaint. Argument was held on the motion on September 16, 2015, after
which, the trial court granted Appellants’ motion for reconsideration. In their
appellate brief, Appellees argue that the trial court’s order granting the
motion for reconsideration, issued after the thirty-day appeal period under
Pa.R.A.P. 903(a) expired, is void ab initio. See Appellees’ Brief at 3 n.4.
However, we note that our review in the instant appeal is limited solely to
the propriety of the trial court’s May 14 order denying the preliminary
objections invoking the parties’ arbitration agreement. As such, we do not
reach a determination as to the validity of the order granting
reconsideration.
-6-
J-A34006-15
Whether the trial court committed an error of law and/or an
abuse of discretion in denying Appellants’ Preliminary Objections
to compel arbitration since a valid arbitration clause was
contained in the Partnership Agreement and the dispute was
within the scope of the arbitration clause.
Appellants’ Brief at 4.
As a prefatory matter, we must address Appellees’ assertion that this
court is without jurisdiction to entertain the instant appeal. We note that
[o]ur jurisdiction to review the propriety of the trial court’s order
overruling preliminary objections in the nature of a motion to
compel arbitration is conferred by Pa.R.A.P. 311(a)(8), which
provides that an interlocutory appeal may be taken as of right
from any order made appealable by statute, and by 42 Pa.C.S. §
7320(a)(1) of the Uniform Arbitration Act, which authorizes an
appeal from [a] court order denying an application to compel
arbitration.
Collier v. National Penn Bank, --- A.3d ---, ---, 2015 WL 7444713 at *2
(Pa. Super, filed Nov. 24, 2015) (internal quotation marks and a citation
omitted).
A party may appeal directly from the order denying a preliminary
objection invoking an arbitration agreement; a separate petition to compel
arbitration is not required. See Stewart v. GGNSC-Canonsburg, L.P., 9
A.3d 215, 218 (Pa. Super. 2010). As the current appeal is properly before
us, we deny Appellees’ request to quash the appeal. We proceed to the
merits.
Our review of a claim that the trial court improperly denied the
Appellants’ preliminary objection in the nature of a petition to compel
arbitration is limited to determining whether the trial court’s findings are
-7-
J-A34006-15
supported by substantial evidence and whether the trial court abused its
discretion in denying the petition. See Walton v. Johnson, 66 A.3d 782,
787 (Pa. Super. 2013).
“We employ a two-part test to determine whether the trial court
should have compelled arbitration: 1) whether a valid agreement to arbitrate
exists, and 2) whether the dispute is within the scope of the agreement.”
Washburn v. Northern Health Facilities, Inc., 121 A.3d 1008, 1012 (Pa.
Super. 2015) (citation omitted). “Whether a claim is within the scope of an
arbitration provision is a matter of contract, and as with all questions of law,
our review of the trial court's conclusion is plenary.” MacPherson v.
Magee Memorial Hospital for Convalescence, --- A.3d ---, ---, 2015 WL
7571937 at *7 (Pa. Super., filed Nov. 25, 2015) (citation omitted) (en
banc).
The arbitration clause at issue provides as follows.
23. Miscellaneous
...
C. Arbitration of Disputes. Any disputes arising out of or in
connection with this Agreement, if not settled by mediation, shall
be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and
any decision rendered in such arbitration shall have the same
effect as if made by a court having proper jurisdiction.
Amendment and Restatement to Agreement of the Cambridge Trading
Partners, 11/5/02 at 55.
-8-
J-A34006-15
There appears to be no disagreement that the claims at issue, namely,
Counts V, VI, VII, VIII, X, XI and XII of the Complaint averring breach of the
partnership agreement, are within the scope of the agreement to arbitrate.
Therefore, we must determine whether a valid arbitration agreement exists.
In its opinion, the trial court revisited its earlier decision overruling
Appellants’ preliminary objection to enforce the arbitration agreement and
concluded that the arbitration provision should, in fact, be enforced. In so
finding, the court determined that all parties agreed to the terms of the
partnership agreement and that the arbitration clause was valid and
enforceable. See Trial Court Opinion, 12/2/15 at 10. The court further stated
that both parties had relied upon the terms of the Partnership Agreement
and “[t]o now ignore the … arbitration terms of the Partnership Agreement
would require this [c]ourt to enforce certain terms of the … Partnership
Agreement while ignoring others. To do so would be inconsistent with the
laws of the Commonwealth.” Id. at 10-11.
Appellees counter that the arbitration agreement is unenforceable for
numerous reasons. First and foremost, Appellees aver that a confidential
relationship existed between Appellant, Fred Amsler and his son, Jeffrey
Amsler, and that the arbitration agreement was not knowingly entered into.
See Appellees’ Brief at 10-11.
“A confidential relationship is marked by such a disparity in position
that the inferior party places complete trust in the superior party’s advice
and seeks no other counsel, so as to give rise to a potential abuse of power.”
-9-
J-A34006-15
Lenau v. Co-eXprise Inc., 102 A.3d 423, 443 (Pa. Super. 2014) (citation
omitted), appeal denied, 113 A.3d 280 (Pa. 2015). “[T]he existence of a
confidential relationship requires a fact-sensitive inquiry not to be disposed
rigidly as a matter of law.” Yenchi v. Ameriprise Financial Inc., 123 A.3d
1071, 1079 (Pa. Super. 2015).
A contract that is the product of a confidential relationship is
presumptively voidable “unless the party seeking to sustain the
validity of the transaction affirmatively demonstrates that it was
fair under all of the circumstances and beyond the reach of
suspicion.” Frowen v. Blank, 493 Pa. 137, 145, 425 A.2d 412,
416 (1981). More precisely, “the proponent of the contract must
prove by clear and convincing evidence ‘that the contract was
free, voluntary and an independent act of the other party,
entered into with an understanding and knowledge of its nature,
terms and consequences.’” Biddle v. Johnsonbaugh, 444
Pa.Super. 450, 456, 664 A.2d 159, 162 (1995) (quoting Kees v.
Green, 365 Pa. 368, 375, 75 A.2d 602, 605 (1950)). In
Frowen, the Supreme Court explained the basis for this
presumption:
When the relationship between the parties to an
agreement is one of trust and confidence, the normal
arm’s length bargaining is not assumed, and overreaching
by the dominant party for his benefit permits the
aggrieved party to rescind the transaction. This is so
because the presence of a confidential relationship negates
the assumption that each party is acting in his own best
interest. Frowen, 493 Pa. at 144, 425 A.2d at 416
(citations omitted). Thus, “[o]nce a confidential
relationship is shown to have existed, it then becomes the
obligation of the party attempting to enforce the terms of
the agreement to establish that there has not been a
breach of that trust.” Id. at 144, 425 A.2d at 416; Iron
Worker's Sav. and Loan Ass'n v. IWS, Inc., 424
Pa.Super. 255, 270, 622 A.2d 367, 375 (1993) (citing
Frowen, 493 Pa. at 144, 425 A.2d at 416).
- 10 -
J-A34006-15
Paone v. Dean Witter Reynolds, Inc., 789 A.2d 221, 226 (Pa. Super.
2001).
Here, although Appellees alleged in response to Appellants’ preliminary
objections that a confidential relationship existed between Fred Amsler and
Jeffrey Amsler and that the arbitration agreement was a product of that
relationship, the trial court failed to conduct an inquiry into the existence of
the confidential relationship prior to ruling on the merits of the preliminary
objections.2 As previously noted, our judicial inquiry when determining the
validity of an arbitration agreement is limited to 1) whether a valid
agreement to arbitrate exists, and 2) whether the dispute is within the scope
of the agreement. See Washburn, supra. The fact-sensitive inquiry into
the existence of a confidential relationship clearly falls outside of this limited
scope of review.
Accordingly, we are constrained to vacate the trial court’s order
overruling Appellant’s preliminary objection to enforce the arbitration
agreement and remand this case for a hearing wherein the trial court must
determine whether the evidence supports the existence of a confidential
relationship. “If so, the trial court must determine whether the proponent of
the arbitration provision (presumably the stronger party) has met its burden
____________________________________________
2
Appellees raise the existence of a confidential relationship in Count VIII of
their Complaint. At this stage in the proceedings, we offer no opinion as to
the sufficiency with which Appellees allege the existence of the a confidential
relationship.
- 11 -
J-A34006-15
of showing that the provision is fair under all the circumstances, Frown, 493
Pa. at 145, 425 A.2d at 416, that it was entered into with knowledge of its
nature and consequences, Biddle, 664 A.2d at 162, and thus that the
provision was not itself a result of a violation of the trust reposed in the
confidential relationship.” Paone, 789 A.2d at 227. Where the evidence
suggests that a confidential relationship did not exist, then the arbitration
agreement is enforceable.
Order vacated. Motion to quash appeal denied. Case remanded for
proceedings consistent with this memorandum. Jurisdiction relinquished.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 2/17/2016
- 12 -
| {
"pile_set_name": "FreeLaw"
} |
348 Ill. App. 161 (1952)
108 N.E.2d 508
Helen O. Ney, Plaintiff-Appellee,
v.
Yellow Cab Company, Defendant-Appellant.
Gen. No. 45,580.
Illinois Appellate Court.
Opinion filed October 22, 1952.
Released for publication November 17, 1952.
*162 JESMER and HARRIS, and LEO S. KARLIN, all of Chicago, for appellant; LEO S. KARLIN of Chicago, of counsel.
CHARLES D. SNEWIND, of Chicago, for appellee.
MR. JUSTICE KILEY delivered the opinion of the court.
This is an action to recover for damages to plaintiff's automobile. Defendant's motion to dismiss and for judgment was denied. Defendant stood by the motion, and the court after hearing the evidence of plaintiff entered judgment for plaintiff in the amount of $450. Defendant has appealed.
The motion to dismiss admitted the following facts: Defendant's employee while in the scope of his employment left a taxicab of defendant unattended with key *163 in the ignition lock and the motor running. The cab was stolen. In making his escape, the thief negligently drove the cab into the plaintiff's parked car.
The conduct of the cab driver leaving the cab unattended, etc., violated a provision (sec. 189 (a)) of the Uniform Traffic Act (ch. 95 1/2 [1951 Ill. Rev. Stats.; Jones Ill. Stats. Ann. 85.221, subd. (a)]). The question presented to the trial court by the defendant's motion was whether the issue of defendant's liability, and more precisely the question of proximate cause, should go to the jury.
In February, 1948 the First Division of this court in Ostergard v. Frisch, 333 Ill. App. 359, (Niemeyer, P.J. dissenting) involving a similar question affirmed a judgment for the plaintiff. Subsequently, in November, 1951 the Appellate Court for the Third District of Illinois in Cockrell v. Sullivan, 344 Ill. App. 620, reversed a judgment for the plaintiff in a similar case. That court thought "that the greater weight of authority in Illinois and other jurisdictions" supported the dissent in the Ostergard case. The dissent was written on the premise, contrary to the majority premise, that flight was not shown. In the instant case, and in Cockrell v. Sullivan, the thief was in flight when the accident happened.
Defendant contends that the majority opinion in the Ostergard case was founded on decisions of courts in the District of Columbia based on a different doctrine than followed in Illinois; in Louisiana where the majority view in the Ostergard case does not prevail; and in Massachusetts where, since the Ostergard case, the decision relied on in the Ostergard case has been reversed. Defendant argues that since the Ostergard decision was rendered, courts of other jurisdictions have announced a contrary doctrine. The defendant urges us to follow the decision in Cockrell v. Sullivan *164 as sounder and more logical than the Ostergard v. Frisch decision.
In the District of Columbia in similar cases where the primary negligence consists of the violation of a statute or ordinance, that negligence is itself the legal or proximate cause of the subsequent injury which the law violated was intended to prevent. Ross v. Hartman, 78 U.S. App. D.C. 217, 139 F.2d 14. Defendant correctly states that this holding goes further than the holdings in Illinois courts. In the absence of a violation of an ordinance or statute the District of Columbia courts apply the foreseeability rule. Schaff v. R.W. Claxton, Inc., 79 U.S. App. D.C. 207, 144 F.2d 532.
We think that the decisions cited in the briefs to the Louisiana Court of Appeals in cases similar to the instant case depend upon whether or not the primary negligence consisted in the violation of a statute or ordinance. Where it has not, the rule announced in Slater v. T.C. Baker Co., 261 Mass. 424 is followed. Maggiore v. Laundry & Dry Cleaning Service, Inc. (La. App), 150 So. 394; Castay v. Katz & Besthoff (La. App.), 148 So. 76. If the primary negligence is a violation, the rule annnounced in Ostergard v. Frisch will probably be followed. Fulco v. City Ice Service, Inc. (La. App.), 59 S. (2d) 198, 201; Midkiff v. Watkins (La. App.), 52 S. (2d) 573, 575.
In Massachusetts in a similar case (Galbraith v. Levin, 323 Mass. 255), the Supreme Court repudiated Malloy v. Newman, 310 Mass. 269, cited by the court in Ostergard v. Frisch, and reaffirmed the rule in Slater v. T.C. Baker Co. The rule in the Slater case was that larceny of an automobile and its negligent use by the thief were intervening independent acts which the defendant was not bound to anticipate and guard against. There no statute or ordinance was involved. The cases cited for the rule were Horan v. Inhabitants of Watertown, 217 Mass. 185; Jacobs v. New York, *165 New Haven and Hartford R. Co., 212 Mass. 96; Glassey v. Worcester Consol. Ry. Co., 185 Mass. 315.
In the Horan case the court held that where dynamite insecurely stored in a box, stolen by children, thrown into a fire, and injuring children, the negligent storing of the dynamite was not the proximate cause of the injury. In the Jacobs case the court held that where the plaintiff, a child, was killed by an exploding torpedo which had been negligently dropped from the baggage car of a train onto the platform, carried off the premises, and days later was exploded, the negligence of the railroad was not the proximate cause of the injury. In the Glassey case the court held that where a large reel placed on the side of the highway, in violation of a village by-law, and rolled down the highway so as to injure the plaintiff, the wrongful act of the railroad was not the proximate cause of the injury. In each of these cases the foreseeability rule was applied. The Massachusetts court therefore decides this kind of cases upon the foreseeability rule.
In Superior Court of New Jersey in the absence of the violation of a statute, the foreseeability rule applies. Reti v. Vaniska, Inc., 14 N.J. Super. 94, 81 A. (2d) 377; Saracco v. Lyttle, 11 N.J. Super. 254, 78 A. (2d) 288. In Minnesota, the Supreme Court in Anderson v. Theisen, 231 Minn. 369 followed the Slater, Castay, and Galbraith cases. It applied the foreseeability rule in favor of the defendant.
Sec. 448 (b) of the Restatement of Torts is cited in the Ostergard dissent, in Reti v. Vaniska, Inc., and in Anderson v. Theisen. In substance it is that the act of the third person in committing a crime or intentional tort is a superseding cause of the injury to another, although the actor's negligent conduct created a situation which afforded an opportunity to the third person to commit such a tort or crime, unless there were special circumstances from which the actor reasonably should have known that his actions were availing such *166 a third person the opportunity to commit such a tort or crime.
Sec. 447 (c) of the Restatement of Torts is cited in Galbraith v. Levin. In substance it states that the fact that an intervening act is negligent per se or done negligently does not supersede the original negligence which substantially contributed to causing the harm to another, if the intervening act is a "normal" response to the situation created by the original negligence, and the manner in which the act is done is not extraordinarily negligent. The word "normal" here means not extraordinary under the circumstances, including as a circumstance the character of the persons subjected to the stimulus of the situation. (Comment on clause (c).)
In Cockrell v. Sullivan, the court disagreed with the majority opinion in the Ostergard case, that the thief of a car will not be concerned about care in driving while fleeing the scene of the theft, and thought the thief would be "meticulous" in flight in order to avoid arrest. It thought the paucity of theft cases reaching the upper courts in relation to the "tremendous number" of car thefts in the United States substantiated its view.
[1] In Ross v. Hartman and Schaff v. R.W. Claxton, Inc., the United States Court of Appeals recognized that statutes and ordinances similar to the Illinois statute were safety and not anti-theft measures. There was no division on this point in Ostergard v. Frisch. The effect of the statute is to specify a rule of conduct which in the absence of statute would be left to the standard of what was expected of a reasonably prudent man. The legislature having enacted the statute in the aid of public safety must have contemplated preventing whatever injuries could be reasonably attributed to the violation of the statute.
*167 [2, 3] In Illinois, the violation of a statute is prima facie negligence. Johnson v. Pendergast, 308 Ill. 255. The question whether the negligence is the proximate cause is governed by the customary rule in tort cases. The latest statement of the rule is in Johnston v. City of East Moline, 405 Ill. 460, 464. The injury must be the natural and probable result of the negligence and such as an ordinarily prudent person ought to have foreseen as likely to result, and an intervening act will not itself become the proximate cause if it was itself probable and foreseeable. In the Ostergard case this rule was applied by the majority. It appears therefore that fundamentally the same rule was applied in Illinois, Massachusetts, Minnesota and New Jersey but with different results. The decision in each case, whatever the result, depends upon what the court in retrospect thinks the primary tort-feasor knew or should have known for prudent foresight at the time.
[4] The Illinois Supreme Court recently, in Tatham v. Wabash R. Co., 412 Ill. 568, a Federal Employers' Liability suit, adopted an interpretation of the United States Supreme Court (Lillie v. Thompson, 332 U.S. 459) under which an employer was held to the duty of making reasonable provision against a foreseeable danger involving intentional misconduct of a third person. The Lillie case involved a violation of the Federal Employers' Liability Act which imposed a duty upon the employer in favor of the employee. In the instant case, the Uniform Traffic Act imposed a duty upon the defendant in favor of the public.
[5] We think reasonable men might differ on the question whether defendant's driver should not have foreseen that leaving his taxicab unattended, with the key in the ignition at or near 400 W. 63rd Street in Chicago on December 20, 1947 would probably result in someone stealing it, and, while in flight, driving it *168 negligently into plaintiff's automobile. We think that reasonable men might differ on the question whether the response to the situation created by the defendant's driver in the instant case was, or was not, an extraordinary response for the thief, so as to be or not be the proximate cause of the injury. We think that they might differ on the question whether there were special circumstances surrounding the defendant's violation of the statute which made it the proximate cause of the damage that followed. For these reasons we conclude that no showing has been made upon which we should decide differently in this case than the majority in the First Division did in Ostergard v. Frisch. We think that the question of the defendant's liability was for the jury, and we therefore follow Ostergard v. Frisch and affirm the judgment.
Affirmed.
LEWE, P.J. and FEINBERG, J., concur.
| {
"pile_set_name": "FreeLaw"
} |
342 F.Supp.2d 69 (2004)
MERRY CHARTERS, LLC and Carl Shillo, Plaintiffs,
v.
TOWN OF STONINGTON, et al., Defendants.
No. 3:02CV336 (MRK).
United States District Court, D. Connecticut.
October 27, 2004.
*70 Frank J. Szilagyi, Josephine A. Spinella, Silvester, Daly & Delaney, Hartford, CT, Scott Roger Chadwick, Murdo T. Smith, Christopher R. Stone, Chadwick, Libbey & Stone, East Hartford, CT, for Plaintiffs.
Thomas R. Gerarde, Beatrice S. Jordan, Howd & Ludorf, Hartford, CT, for Defendants.
MEMORANDUM OF DECISION
KRAVITZ, District Judge.
Plaintiffs Merry Charters, LLC ("Merry Charters") and Carl Shillo ("Mr.Shillo") bring this action against the Town of Stonington, the Stonington Planning and Zoning Commission (the "Commission"), Edward T. Sullivan (Chairman of the Commission at all times relevant to this action), and George Thayer (Chairman of the Stonington Zoning Board of Appeals (the "ZBA") at all times relevant to this action). The lawsuit arises from Defendants' denial of Plaintiffs' applications for special use permits and for a variance. Plaintiffs claim that these actions violated their rights to equal protection and due process under the Fourteenth Amendment and also contravened Connecticut's common law. Defendants have moved for summary judgment and to strike an exhibit offered in support of Plaintiffs' Local Rule 56(a)(2) Statement [doc. # 60]. For the reasons stated below, the Court GRANTS Defendants' Motion for Summary Judgment [doc. # 49] and Defendants' Motion to Strike [doc. # 65].
I.
In the summer of 2000, Mr. Shillo began operating a commercial tour boat business called "Merry Charters" from a dock owned by Mr. Robert Valenti located on the Mystic River in Stonington, Connecticut. Defs.' Local Rule 56(a)(1) Statement at ¶4 [doc. # 51].[1] Because Mr. Valenti's dock was subject to a Commission-imposed stipulation requiring a zoning permit if the dock were to be used commercially, on August 11, 2000, Plaintiffs applied to the Commission for a special use permit to run a tour boat operation from the Valenti dock. Id. at ¶¶10, 12 & Ex. F. The Commission held public hearings on the application on October 5 and 17, 2000. Id. at ¶¶ 22-23 & Ex. J.
In connection with those proceedings, the Connecticut Department of Environmental Protection ("DEP") raised concerns about a number of aspects of Plaintiffs' application in a letter to the Town Planner. In particular, the DEP expressed concerns about reconciling the tour boat operation with an existing public access easement at the site, handling sewage generated by the tour boat, and determining whether state coastal permits for the dock and pier had been previously issued. Id. at ¶24 & Ex. K.
Another problematic aspect of Plaintiffs' application was that it did not provide for any on-site parking for tour boat customers or employees. Section 7.10 of the Stonington Zoning Regulations (the "Zoning Regulations") on "Off-street Parking Requirements" states that "parking shall be a required accessory use for each use proposed and shall be shown on all site *71 plans and evaluated in terms of need and sufficiency of design," and Section 7.10.1.2 emphasizes that parking spaces must be on-site. Id. at ¶24 & Ex. UU ("Required spaces shall be on the lot proposed for development and be under single ownership and control."). Section 7.10.4 further states:
Parking Space Requirements by District. Parking spaces shall be provided in sufficient number to accommodate the motor vehicles of all occupants, employees, customers and any others normally visiting the premises at any one time as may be required by the Commission. Spaces shall be provided in not less than the number indicated in Table 7-10.
Id. Because Table 7-10 of the Zoning Regulations does not specifically list parking requirements for tour boats, the Commission exercised its powers under Section 7.10.4.1 to determine the appropriate number of required on-site parking spaces for a tour boat operation.[2] The Commission decided that the parking requirements for restaurants (which are found in Table 7-10 of the Zoning Regulations) should be applied to Plaintiffs' tour boat operation. As such, the Commission determined that Plaintiffs' tour boat operation would require fifteen on-site parking spaces. Id. at ¶¶ 29-31.
Because of DEP's concerns and Plaintiffs' failure to provide for any on-site parking, the Commission on October 17, 2000 denied Plaintiffs' application for a special use permit without prejudice to renewal. Id. at ¶ 32. Plaintiffs submitted a second application for a special use permit on November 16, 2000. Id. at ¶ 33 & Ex. O. The DEP informed the Commission that Plaintiffs' new application adequately addressed DEP concerns. Id. at ¶34 & Ex. P. As to on-site parking, Plaintiffs' second application proposed satisfying that requirement by leasing fifteen parking spaces from St. Patrick's Church, located approximately 1200 to 1300 feet from the Valenti dock. Id. at ¶¶ 35-36. Plaintiffs also asked the Commission to use its discretion under Section 7.10.2 of the Zoning Regulations to reduce the on-site parking requirements from fifteen to zero.[3]Id. at ¶38.
The Commission sought an opinion from the Town Attorney on whether it could reduce the on-site parking requirements to zero as Plaintiffs requested. The Town Attorney advised the Commission that it had discretion to do so under the Zoning Regulations and that it had further discretion to impose substantial conditions on the special use permit specifically related to the use of the off-site parking at St. Patrick's Church.[4]Id. at ¶¶40-43 & Ex. Z.
*72 Mary Villa, the Town Planner at the time, submitted a memorandum to the Commission recommending denial of Plaintiffs' application. Id. at ¶46 & Ex. S. Ms. Villa arrived at this recommendation in part because (1) there was no existing contractual agreement between Plaintiffs and St. Patrick's Church for the lease of the fifteen parking spaces at the church; (2) the Stonington Board of Police Commissioners had expressed their concern about Plaintiffs' application due to the lack of adequate parking in the area; (3) satellite or off-site parking was not expressly permitted by the Zoning Regulations, and therefore should be considered prohibited; (4) the public on-street parking adjacent to the site had already been counted toward the parking requirements of other area businesses; and (5) the Town would have difficulty monitoring compliance with use of the off-site parking at the church, especially considering that most people would prefer to park as close as possible to their destination. Id. at Ex. S.
Robert Granato, a member of the Commission at the time, also submitted a memorandum to the Commission recommending denial of Plaintiffs' application. Id. at ¶47 & Ex. BB. Mr. Granato's memorandum noted the following factors that led to his recommendation: (1) on-site parking requirements are important in maintaining the balance between business needs, the density of the area, and traffic considerations; (2) commercial use of the fifteen spaces at St. Patrick's Church would constitute an impermissible change from the parking lot's intended use as church parking; (3) two prior cases where off-site parking was approved by the Commission involved nearby parking (100 yards in one case, and diagonally across the street in the other) that could only be used by employees (not patrons) of the business; and (4) allowing the off-site parking proposed by Plaintiffs would set a precedent for every other business in Mystic and might lead to uncontrolled density use in the area. Id.
The Commission considered Plaintiffs' second application on May 15, 2001, and denied it by a vote of three to two. Id. at ¶¶ 45-48 & Ex. DD. The Commission offered the following reasons for denying Plaintiffs' second application:
1. No on-site parking provided as required by [Zoning Regulation] 7.10.
2. The applicant was unable to provide adequate and appropriate parking.
3. The off-site parking proposed is not expressly permitted in the Regulations and therefore is prohibited.
4. There are existing and well documented parking problems and congestion in the vicinity of the proposed activity, which is in downtown Mystic. Approval of this project may contribute to such existing problems and thereby threaten the safety of residents and merchants, as well as visitors to the downtown area.
*73 Id. at Ex. DD. Plaintiffs appealed the Commission's denial to the Connecticut Superior Court on June 4, 2001. Id. at ¶ 50 & Ex. EE.
On June 15, 2001, Plaintiffs applied to the ZBA for a variance from the parking regulations, requesting that the required number of on-site parking spaces for the tour boat operation be reduced to zero. Id. at ¶ 51 & Ex. FF. On July 31, 2001, Defendant George Thayer (Chairman of the Commission) sent a memorandum to Defendant Edward T. Sullivan (Chairman of the ZBA) expressing the Commission's opposition to Plaintiffs' variance application. Id. at Ex. LL. On August 14, 2001, the ZBA held a public hearing on Plaintiffs' application, and the ZBA denied the variance request on September 11, 2001, by a vote of three in favor, and two opposed. Id. at ¶ 63 & Ex. NN. According to Section 8.10.7 of the Zoning Regulations, a supermajority vote of four out of five votes was required to approve a variance. Id. at Ex. UU. The ZBA's stated reason for denying Plaintiffs' variance application was as follows: "No parking providedcommercial ventures require at least one designated spot." Id. at Ex. NN. Plaintiffs also appealed the ZBA's decision to the Connecticut Superior Court. Id. at U 69.
The Connecticut Superior Court rejected Plaintiffs' appeals from the denial of their applications for a special use permit and for a variance. See Merry Charters, LLC v. Stonington Planning & Zoning Com'n, 2002 WL 1376054, *l-2 (Conn.Super., May 29, 2002); Merry Charters, LLC v. Towm of Stonington Zoning Bd. of Appeals, 2002 WL 1455709, *l-2 (Conn.Super., May 29, 2002). The court held that Plaintiffs failed to establish "aggrievement"a "specific, personal and legal interest in the subject matter of the decision" that had been "specially and injuriously affected"because, by the time their appeals were heard, Plaintiffs no longer had a lease for the Valenti dock. Id.
On February 4, 2002, Plaintiffs filed this action in Connecticut Superior Court seeking damages from Defendants, and Defendants removed this action to this Court on February 26, 2002. See Notice of Removal [doc. # 1]. Following discovery, Defendants filed a motion for summary judgment.
II.
Summary judgment is appropriate when there is no dispute as to a genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). See Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party carries the burden of demonstrating that there is no genuine material dispute of fact. Carlton v. Mystic Transp., Inc., 202 F.3d 129, 133 (2d Cir.2000). "[I]n determining whether a genuine issue has been raised, the inferences to be drawn from the underlying facts revealed in the affidavits, exhibits, interrogatory answers, and depositions must be viewed in the light most favorable to the party opposing the motion." Tomka v. Seiler, 66 F.3d 1295, 1304 (2d Cir.1995).
Plaintiffs challenge the Commission's and ZBA's actions on two constitutional grounds: equal protection and substantive due process. See Second Am. Compl., Counts 1-4 [doc. # 35]. Plaintiffs also assert two state common law claims. See id., Counts 5-6.
A. Equal Protection
Plaintiffs assert a "class of one" selective enforcement equal protection claim based upon the Supreme Court's decision in Village of Willowbrook v. Olech, 528 U.S. 562, 120 S.Ct. 1073, 145 L.Ed.2d 1060 (2000). *74 To establish their selective enforcement claim, Plaintiffs must show "(1) that they were treated differently from other similarly situated individuals, and (2) that such differential treatment was based on impermissible considerations such as race, religion, intent to inhibit or punish the exercise of constitutional rights, or malicious or bad faith intent to injure a person." Harlen Associates v. Village of Mineola, 273 F.3d 494, 499 (2d Cir.2001) (internal quotation omitted). As to the first prong, "[a]s a general rule, whether items are similarly situated is a factual issue that should be submitted to the jury. This rule is not absolute, however, and a court can properly grant summary judgment where it is clear that no reasonable jury could find the similarly situated prong met." Id. at 499 n. 2 (citations omitted). As to the second prong, a "class of one" plaintiff may survive a summary judgment motion by showing that "there was no rational basis for the unequal treatment received." Id. at 500 (citing Olech, 528 U.S. at 565, 120 S.Ct. 1073).[5]
1. Variance. Applying the equal protection standards of Harlen Associates to the ZBA's denial of Plaintiffs' variance request, this Court must first determine whether there is evidence of any parties similarly situated to, yet treated differently from, Plaintiffs. Plaintiffs allege that the tour boat Mystic River Queen was similarly situated because it was also a tour boat operation that submitted an application to the ZBA regarding parking regulations. See Pls.' Opp'n Defs.' Mot. Summ. J. at 17-18 [doc. # 59].
The parties agree that in 1990 the Mystic River Queen asked the ZBA to determine the number of on-site parking spaces it would need for its tour boat operation and that on or about May 30, 1990, the ZBA determined that the Mystic River Queen would require three to four on-site parking spaces. See Defs.' Local Rule 56(a)(1) Statement at Ex. S [doc. #51]; Pls.' Opp'n Defs.' Mot. Summ. J. at 18 [doc. # 59]. However, from the record before the Court and counsels' representations at oral argument, it appears that the Mystic River Queen merely requested an interpretation of the Zoning Regulations, not a variance. Because neither party could provide the Court with a clear record that the Mystic River Queen actually sought and received a variance from the ZBAsuch as a notice of decision issued by the ZBAthe Mystic River Queen cannot be considered similarly situated to Plaintiffs, since Plaintiffs sought a variance and it appears that Mystic River Queen did not.
In any event, even if the Court assumed that the Mystic River Queen did seek a variance from the on-site parking Zoning Regulations and thus was similarly situated to Plaintiffs in that they were both tour boat operations that sought variances from the Zoning Regulations regarding parking requirements, the record shows that Mystic River Queen was not treated differently from Plaintiffs. In denying Plaintiffs' variance request, the ZBA stated that "commercial ventures require at least one designated spot," a ruling that is not inconsistent with the ZBA's advice to the Mystic River Queen that it needed three to *75 four on-site parking spaces for its operation. Indeed, if anything, by requiring only "at least one designated spot," the ZBA treated Plaintiffs more generously than the Mystic River Queen.
Even assuming that the Mystic River Queen and Plaintiffs were similarly situated yet treated differently, the question would still remain whether there was a rational basis for the ZBA's alleged unequal treatment of the Plaintiffs. According to the Second Circuit, "a zoning board's decision can be considered irrational only when the board acts with no legitimate reason for its decision." Harlen Associates, 273 F.3d at 500 (citing Crowley v. Courville, 76 F.3d 47, 52 (2d Cir.1996)) (internal quotations omitted). Plaintiffs must produce evidence from which a trier of fact could conclude that there was no rational basis for the alleged unequal treatment. Yet, Plaintiffs have provided no such evidence. The ZBA's requirement of at least one designated parking spot for a commercial venture such as Plaintiffs' proposed tour boat operation appears on its face to be a legitimate reason for the ZBA's denial of Plaintiffs' variance request. See Bloom v. Zoning Bd. of Appeals of City of Norwalk, 233 Conn. 198, 206-07, 658 A.2d 559 (1995) ("Courts are not to substitute their judgment for that of the [ZBA] ... and decisions of local boards will not be disturbed so long as honest judgment has been reasonably and fairly exercised after a full hearing.... A variance constitutes permission to act in a manner that is otherwise prohibited under the zoning law of the town.... It is well established, however, that the granting of a variance must be reserved for unusual or exceptional circumstances.") (internal quotations and citations omitted).
Because Plaintiffs have failed to establish either of the two prerequisites for their equal protection claim relating to the ZBA's denial of Plaintiffs' variance request, Defendants are entitled to judgment on that claim.
2. Special Use Permits. Turning next to the Commission's denial of the Plaintiffs' special use permits, the Court first must determine whether there are any parties similarly situated to Plaintiffs, yet treated differently by the Commission. Plaintiffs allege that Anthony J's restaurant and the Argia tour boat are similarly situated to the Plaintiffs. See Pis.' Opp'n Defs.' Mot. Summ. J. at 17, 19-20 [doc. #60].
Before turning to Plaintiffs' claim regarding Anthony J's, the Court must address Defendants' motion to strike certain evidence that Plaintiffs submitted in support of that claim. See Motion to Strike Exhibit 10 of Plaintiffs' Local Rule 56(a)(2) Statement [doc. # 65]. "A motion to strike is the correct vehicle to challenge materials submitted in connection with a summary judgment motion." Newport Elec, Inc. v. Newport Corp., 157 F.Supp.2d 202, 208 (D.Conn.2001). "The principles governing admissibility of evidence do not change on a motion for summary judgment.... Therefore, only admissible evidence need be considered by the trial court in ruling on a motion for summary judgment." Raskin v. Wyatt Co., 125 F.3d 55, 66 (2d Cir.1997). "[A] motion to strike is appropriate if documents submitted in support of a motion for summary judgment contain inadmissible hearsay or conclusory statements, are incomplete, or have not been properly authenticated." Spector v. Experian Information Services Inc., 321 F.Supp.2d 348, 352 (D.Conn.2004).
Plaintiffs' Exhibit 10 consists of notes and a hand-drawn schematic created by a member of the community, Mr. Kirkpatrick, purportedly relating to a Commission hearing on a special use permit application *76 by a business called Trader Jacks. Even though the document was created in connection with Trader Jacks' hearing, Plaintiffs produced this document in an attempt to establish from it that Anthony J's restaurant had 21 parking spaces on the street adjacent to the restaurant and no on-site parking. See Pls.' Local Rule 56(a)(2) Statement at 13 ¶ 35 [doc. # 60].
Defendants allege that the information presented in Exhibit 10 is unreliable, unauthenticated, hearsay that would not be admissible at trial under the Federal Rules of Evidence. See Defs.' Mot. to Strike at 1-2 [doc. # 65]. "Hearsay is a statement, other than one made by the declarant while testifying at trial or hearing, offered in evidence to prove the truth of the matter asserted." Fed.R.Evid. 801(c). Plaintiffs offered these notes to prove the truth of the matter asserted in them, and as such the document is clearly inadmissible hearsay unless a hearsay exception applies.
Even though Plaintiffs refer to Exhibit 10 as "Commission's Notes," they were created by a member of the public attending a Commission hearing and as such are clearly not official records of the Commission's proceedings. Plaintiffs appear to acknowledge this because they assert that the notes were submitted to the Commission and marked as an exhibit during the Trader Jacks public hearing, and that therefore the notes are admissible under the public records exception to the hearsay rule. See Fed.R.Evid. 803(8)(C). Rule 803(8)(C) states in relevant part that the following is not excluded by the hearsay rule: "Records, reports, statements, or data compilations, in any form, of public offices or agencies, setting forth ... [(C)] factual findings resulting from an investigation made pursuant to authority granted by law, unless the sources of information or other circumstances indicate lack of trustworthiness." On its face, Exhibit 10 is not a record of a public agency setting forth factual findings, and in any event Exhibit 10's source indicates a lack of trustworthiness. Therefore, Exhibit 10 is inadmissible hearsay, and the Defendants' Motion to Strike [doc. # 65] is granted.
Although now struck from the record, even if the Court were to have accepted all of the Plaintiffs' information regarding Anthony J's restaurant as true, the Court's conclusion would not change because Plaintiffs and Anthony J's were not, in fact, similarly situated. The documents before this Court show that Anthony J's never applied for a special use permit regarding its parking requirements, see Pls.' Objection to Defs.' Mot. to Strike Pls.' Ex. at 8 [doc. #67]; Defs.' Reply to Pls.' Opp'n at 3 [doc. # 64], and at oral argument, the parties agreed. Because Anthony J's neither applied for nor needed a special use permit related to its parking, Anthony J's cannot be considered similarly situated to Plaintiffs for purposes of their equal protection claim.
As to Plaintiffs' claim that they are similarly situated to the Argia tour boat, it is undisputed that the Argia's dock was a pre-existing nonconforming use that did not require a special permit in order to support a commercial tour boat operation. See Pls.' Local Rule 56(a)(2) Statement at 14 ¶¶ 40-41 [doc. # 60]. As such, the Argia was in an entirely different situation from Plaintiffs. The dock Plaintiffs intended to usethe Valenti docknot only was not a preexisting nonconforming use, but also was subject to a specific stipulation demanded by the Commission that required a special use permit if the dock were ever used by a commercial entity. Defs.' Local Rule 56(a)(1) Statement at ¶¶ 10, 12 & Ex. F [doe. #51]. Because the Argia neither applied for nor needed a special use permit related to its parking, *77 the Argia cannot be considered similarly situated to Plaintiffs for purposes of their equal protection claim.
In sum, Plaintiffs have failed to produce a single similarly situated party that sought and was granted a special use permit from the Commission to reduce its onsite parking requirements to zero or to use off-site parking roughly 1200 to 1300 feet away as a substitute for the on-site parking requirements. Therefore, Plaintiffs' equal protection claim fails as a matter of law.
Even if Plaintiffs had satisfied the similarly situated prong of their equal protection claim, they would still have to produce evidence from which a trier of fact could conclude that there was no rational basis for the treatment Plaintiffs received from the Commission. As stated above, "a zoning board's decision can be considered irrational only when the board acts with no legitimate reason for its decision." Harlen Associates, 273 F.3d at 500 (citing Crowley, 76 F.3d at 52) (internal quotations omitted). While Plaintiffs allege that the Commission behaved arbitrarily and maliciously, see Pls.' Opp'n to Defs.' Mot. Summ. J. at 24-30 [doc.# 59],[6] they fail to produce any evidence demonstrating that the Commission had "no legitimate reason for its decision." On the contrary, the stated reasons for the Commission's denials of the Plaintiffs' first applicationenvironmental concerns and a lack of on-site parkingas well as Plaintiffs' second applicationa lack of on-site parking, the determination that off-site parking at St. Patrick's Church was prohibited, and the existing parking problems and congestion in the vicinityappear entirely rational and legitimate, and Plaintiffs have produced no evidence to the contrary. Indeed, the legitimacy of the Commission's concerns was all but conceded by Plaintiffs at oral argument, and this Court need not delve more deeply into the reasons offered by a local zoning authority. As the Second Circuit has sensibly emphasized, "federal courts should not become zoning boards of appeal to review nonconstitutional land-use determinations by the Circuit's many local legislative and administrative agencies." Zahra v. Town of Southold, 48 F.3d 674, 679-80 (2d Cir.1995) (internal quotations omitted).
Because Plaintiffs failed as a matter of law to establish either of the two prerequisites for their equal protection claim against the Commission, Defendants are entitled to judgment on that claim as well.
B. Substantive Due Process
To survive a motion for summary judgment on a substantive due process challenge to the decisions of a local zoning authority, "a plaintiff must show both (1) that he had a valid property interest in the granting of the permit, and (2) that the defendants infringed that property interest in an arbitrary or irrational manner." *78 Harlen Associates, 273 F.3d at 503. The Second Circuit applies a "strict `entitlement test' in land use regulation cases to determine if the abridgement of an asserted property right is cognizable under the substantive component of the Due Process Clause." Id. As a general rule, "entitlement turns on whether the issuing authority lacks discretion to deny the permit, i.e., is required to issue it upon ascertainment that certain objectively ascertainable criteria have been met." Natale v. Town of Ridgefield, 170 F.3d 258, 263 (2d Cir.1999). As to the second requirement, a denial by a local zoning authority violates substantive due process standards only if the denial "is so outrageously arbitrary as to constitute a gross abuse of governmental authority." Natale, 170 F.3d at 263. On the basis of the undisputed facts in the record, Plaintiffs cannot satisfy either of these requirements.
As the Second Circuit noted in Natale, whether Plaintiffs have established a valid property interest in an application for a variance or special use permit hinges on whether the decisionmaking body had discretion to deny the application. Section 8.10.3 of the Zoning Regulations empowers the ZBA to grant variances in cases of hardship, stating as follows:
Hardship. Where there is difficulty or unreasonable hardship, but not economic hardship, in the way of carrying out the strict letter of the Zoning Regulations, the Zoning Board of Appeals shall have power in a specific case to vary the application of any bulk provision of the ordinance, if such variance will be in harmony with the general purpose and intent of the ordinance, the Town Plan of Development, and if the public health, safety and welfare will be served and substantial justice done.
Defs.' Local Rule 56(a)(1) Statement at Ex. UU [doc. # 51]. According to Section 8.10.1 of the Zoning Regulations, the power to grant variances in cases of hardship (and, indeed, any other power or duty of the ZBA) "shall be exercised subject to appropriate conditions and safeguards in harmony with the purpose and intent of these [zoning] regulations, the Plan of Development, and in accordance with the promotion of the health, safety, welfare and maintenance of property values in the Town of Stonington." Id.
It is readily apparent from the text of Sections 8.10.3 and 8.10.1 that the ZBA is vested with broad discretion to grant or deny a variance. The ZBA's broad discretion is also confirmed by case law. See, e.g., Crowley 76 F.3d at 52 (holding that similar language in the Village of Southampton Zoning Regulations "vested the Zoning Board with extremely broad discretion to grant or deny a variance."); Pleasant View Farms Development, Inc. v. Zoning Bd. of Appeals, 218 Conn. 265, 269, 588 A.2d 1372 (1991) ("In reviewing the actions of a zoning board of appeals we note that such a board is endowed with a liberal discretion, and its actions are subject to review by the courts only to determine whether they were unreasonable, arbitrary or illegal") (internal quotations and citations omitted). In fact, at argument, Plaintiffs' counsel conceded that the ZBA has discretion in ruling on variance requests.
Plaintiffs' sole argument that they were entitled to a variance is founded on their claim that their application met all the guidelines in Section 6.4 of the Zoning Regulations, see Pls.' Opp'n to Defs.' Mot. Summ. J. at 34 [doc.# 59]. But this argument is unavailing. A variance, by definition, allows a ZBA to exercise its discretion and deviate from the Zoning Regulations for those who specifically do not comply with the Zoning Regulations and can demonstrate hardship. Plaintiffs' assertion that they met all the Zoning *79 Regulations would have obviated the need for a variance, not entitled them to one. In fact, by seeking a variance, Plaintiffs essentially admitted that they did not conform to the Zoning Regulations, and the ZBA had broad discretion to determine whether it would relieve Plaintiffs of those Zoning Requirements.
So, too, did the Commission have discretion to evaluate and deny Plaintiffs' applications for special use permits. Section 6.4 of the Zoning Regulations outlines the "Standards for Granting a Special Permit," stating in relevant part:
After a public hearing held according to applicable Statutes, the Commission must find that the following conditions are fulfilled by the proposal [for a special use permit]: ...
6.4.3 That transportation services are adequate and no undue traffic generation will result that would cause a deleterious effect on the local welfare or the safety of the motoring public....
6.4.5 That no adverse effect will result to the character of the district, property values, historic features, prosperity, nor to the public health, safety and welfare of the residence of the area or the Town.
Defs.' Local Rule 56(a)(1) Statement at Ex. UU [doc. # 51]. Section 6.5 of the Zoning Regulations outlines the "Commission Powers Relative to Action on a Special Permit Use," providing in relevant part that the "Commission shall have the power to approve, deny or modify any proposal and set forth special stipulations of approval or modification." Id.
The Connecticut Supreme Court has long "recognized that the special permit process is, in fact, discretionary." Irwin v. Planning & Zoning Comm'n, 244 Conn. 619, 626, 711 A.2d 675 (1998). See also Double I Ltd. Partnership v. Plan & Zoning Comm'n, 218 Conn. 65, 72, 588 A.2d 624 (1991) ("In applying the law to the facts of a particular case, the board is endowed with a liberal discretion, and its action is subject to review by the courts only to determine whether it was unreasonable, arbitrary or illegal.") (internal citations and quotations omitted). As is relevant to this case, the Connecticut Supreme Court has also held that "before [a] zoning commission can determine whether [a] specially permitted use is compatible with the uses permitted as of right in [a] particular zoning district, it is required to judge whether any concerns, such as parking or traffic congestion, would adversely impact the surrounding neighborhood." Barberino Realty & Development Corp. v. Planning & Zoning Comm'n, 222 Conn. 607, 613, 610 A.2d 1205 (1992) (emphasis added). Only if the Commission determined that a special permit met all of the applicable zoning requirements would the Commission no longer have had discretion to deny a special permit. As the Connecticut Supreme Court explained in Irwin:
Although it is true that the zoning commission does not have discretion to deny a special permit when the proposal meets the standards, it does have discretion to determine whether the proposal meets the standards set forth in the regulations. If, during the exercise of its discretion, the zoning commission decides that all of the standards enumerated in the special permit regulations are met, then it can no longer deny the application. The converse is, however, equally true. Thus, the zoning commission can exercise its discretion during the review of the proposed special exception, as it applies the regulations to the specific application before it. *80 Irwin, 244 Conn, at 628, 711 A.2d 675 (emphasis in original). Therefore, Connecticut law establishes that the Commission, at the very least, had discretion to determine whether Plaintiffs' special use permit proposal satisfied the relevant standards set forth in the Zoning Regulations.
Despite Plaintiffs' argument they were entitled to their special use permits because their applications met all the guidelines in Section 6.4 of the Zoning Regulations, see Pls.' Opp'n Defs.' Mot. Summ. J. at 34 [doc.# 59], the undisputed facts show that neither of Plaintiffs' applications for a special use permit met all the applicable Zoning Regulations. As evident from the undisputed facts outlined above, both special use permit applications sparked considerable concern and discussion by the Commission and other interested parties such as the DEP regarding parking, traffic generation and environmental issues. The record certainly does not establish that either application met all the guidelines of Section 6.4 of the Zoning Regulations as submitted. In any event, under Connecticut law, the Commission had discretion to determine whether Plaintiffs' special use permit proposal satisfied the relevant standards set forth in the Zoning Regulations, and the Commission exercised that discretion to conclude that the applications did not satisfy those standards.
Furthermore, as described above, Plaintiffs' August 11, 2000 application required the Commission to exercise its discretion in determining how many on-site parking spaces were needed for the tour boat operation, because this use had not been expressly addressed in the Zoning Regulations. The Plaintiffs' November 16, 2000 application explicitly asked the Commission to exercise its discretion under Section 7.10.2 of the Zoning Regulations to reduce the number of on-site spaces required. By invoking Section 7.10.2, Plaintiffs effectively acknowledged that the Commission had discretion to retain the number of required on-site parking spaces at fifteen, and therefore also had discretion to deny Plaintiffs' application for a special permit. Similarly, the Plaintiffs' proposed off-site parking at St. Patrick's Church was an alternative arrangement not explicitly provided for in the Zoning Regulations. Therefore, with respect to the offsite parking at St. Patrick's Church, the Commission was required to exercise its discretion in interpreting the Zoning Regulations by evaluating the potential impact of such an arrangement on traffic generation, public safety, and local welfare, among other concerns.
In sum, because both the ZBA and the Commission had discretion to deny Plaintiffs' applications for a variance and a special use permit, Plaintiffs cannot show that they had a "valid property interest" in the granting of either. See Harlen Associates, 273 F.3d at 503. Therefore, Plaintiffs have failed to satisfy the first requirement of their substantive due process claims.
Furthermore, even if (contrary to relevant regulations and case law) the ZBA's and Commission's decisions were not solely within their discretion, Plaintiffs' substantive due process challenge would still fail because they cannot show that Defendants' decisions were "outrageously arbitrary" and thus constituted a "gross abuse of governmental authority." Natale, 170 F.3d at 263. Both parties agreed at oral argument that this was an issue for the Court to decide as a matter of law, based on the submissions of the parties.
Plaintiffs allege that the Defendants' decisions were arbitrary and irrational because they failed to follow the Zoning Regulations and they failed to apply'their own precedent on special parking arrangements and tour boat operations. See Pls.' Opp'n to Defs.' Mot. Summ. J. at 34 [doc. *81 #59]. As to Plaintiffs' first argument, the preceding discussion highlighted the fact that there were no clear guidelines in the Zoning Regulations on tour boat operations or on substituting distant off-site parking for on-site parking. Since the ZBA and Commission had no specific guidelines to follow, they legitimately exercised their discretion under the Zoning Regulations to interpret and apply the general principles of the Zoning Regulations to the Plaintiffs' special parking requests. Characterized thusly, the ZBA and the Commission followed the Zoning Regulations and came to their decisions in a rational manner. Plaintiffs' second argument that Defendants failed to follow precedent is equally without merit because it is nothing more than Plaintiffs' equal protection argument in due process guise, and this Court has already rejected Plaintiffs' claim that they were irrationally treated differently from similarly situated parties. In sum, a review of the record before the Court reveals no evidence that either the ZBA or the Commission acted in a manner that might remotely be considered "outrageously arbitrary" or a "gross abuse of governmental authority." Natale, 170 F.3d at 263; see also Harlen Associates, 273 F.3d at 503. Therefore, Plaintiffs' due process claims fail as a matter of law, and Defendants are entitled to judgment.
C. State Law Claims
Having disposed of the federal claims in this case, the Court has discretion to dismiss the state claims as well under 28 U.S.C. § 1367(c)(3). "In exercising its discretion with respect to retaining supplemental jurisdiction, the district court balances several factors `including considerations of judicial economy, convenience, and fairness to litigants.'" Correspondent Services Corp. v. First Equities Corp. of Florida, 338 F.3d 119, 126 (2d Cir.2003) (quoting Purgess v. Sharrock, M.D., 33 F.3d 134, 138 (2d Cir.1994)). While considerations of judicial economy and convenience do not lean strongly in either direction, the nature of the case and Defendants' status as state actors suggest that it would be more appropriate and fair for a state court to determine whether the behavior of the town officials in this case was sufficient to violate state law. In fact, both parties agreed at oral argument that if this Court were to dismiss all the federal claims, the Court should not exercise supplemental jurisdiction over the state law claims. The Court agrees. Accordingly, the Court will decline the exercise of supplemental jurisdiction over Plaintiffs' state law claims. The state claims are dismissed without prejudice.
III.
The Court GRANTS Defendants' Motion for Summary Judgment [doc. # 49] and Defendants' Motion to Strike [doc. # 65]. The Clerk shall enter judgment for Defendants on Plaintiffs' equal protection and due process claimsCounts One through Four of Plaintiffs' Second Amended Complaint [doc. # 35]. The Court declines to exercise supplemental jurisdiction over Plaintiffs' state law claimsCounts Five and Six of Plaintiffs' Second Amended Complaint [doc. # 35]and therefore a judgment shall enter dismissing these Counts without prejudice to Plaintiffs' right to pursue those claims in state court. The Clerk is directed to close this file.
IT IS SO ORDERED.
NOTES
[1] Merry Charters' tour boatthe Mystic Bellehad a maximum capacity of 57. Pls Local Rule 56(a)(2) Statement at 8-9 ¶¶1-3 [doc. # 60].
[2] Section 7.10.4.1 of the Zoning Regulations states as follows: "The Commission shall determine the required parking for all uses not included in Table 7-10. Standards as promulgated by the Institute of Traffic Engineers shall be used as a guide in determining such required parking." Defs.' Local Rule 56(a)(1) Statement at Ex. UU [doc. # 51].
[3] Section 7.10.2 of the Zoning Regulations states in relevant part:
Reductions. In DB-5 . . . Districts, the total parking requirement may be reduced by an amount equal to the public parking area immediately adjacent to the site, or an amount or area deemed proper for that use in question by the Commission. The Commission shall use the findings from Special Use Permit requirements as guidelines.
Defs.' Local Rule 56(a)(1) Statement at Ex. UU [doc. #51],
[4] The Town Attorney suggested the following conditions be placed on Plaintiffs' use of the off-site parking at St. Patrick's Church:
1. St. Patrick's lot must remain open during the hours of operation[;] if the parking lot is closed the operation must close;
2. A written agreement for the 15 spaces with St. Patrick's Church in which the church and the applicant will notify the Town of Stonington if the agreement is terminated. 3. If the applicant represents that a certain number of patrons will arrive by bus, the applicant should be made to keep records of the clients and whether they arrived by bus, car and if by car, where did they park. Only in this way will the Town be able to evaluate the representation made by the applicant that a specific percentage of patrons will come by bus rather than by car. 4. Since it can be expected that St. Patrick's parking lot may be full during its mass schedule, perhaps no cruises should be scheduled during the mass schedule of St. Patrick's.
Defs.' Local Rule 56(a)(1) Statement at Ex. Z [doc. #51].
[5] There is an open question in the Second Circuit whether a "class of one" plaintiff must also show that the "denial of the application was motivated by animus." Harlen Associates, 273 F.3d at 500. The Second Circuit has indicated in dicta that "proof of subjective ill will is not an essential element of a `class of one' equal protection claim." Jackson v. Burke, 256 F.3d 93, 97 (2d Cir.2001). Because Plaintiffs cannot demonstrate that there was no rational basis for the alleged unequal treatment, the Court has no need to address whether a showing of personal animus is also required.
[6] In support of their claims of malice, bad faith, and arbitrariness on the part of the Commission, Plaintiffs allege, inter alia, that the Commission (1) maliciously led Plaintiffs to believe that their application would be approved, even though it eventually was not; (2) misinterpreted the Zoning Regulations with respect to both the on-site parking requirements and the prohibition on off-site parking at St. Patrick's Church; (3) did not conduct a study of how much the Plaintiffs' operation would impact the safety and traffic congestion concerns; (4) did not follow the opinion of the Town Attorney in the Plaintiffs case, even though they had purportedly followed his opinion in all prior cases; and (5) interfered with the Plaintiffs' rights to apply to the ZBA for a variance. See Pls.' Opp'n to Defs.' Mot. Summ. J. at 24-30 [doc.# 59]. Regardless whether any of these allegations are true, they at most question the Commission's process and do little to demonstrate that the reasons offered by the Commission for denying Plaintiffs' application were irrational.
| {
"pile_set_name": "FreeLaw"
} |
486 F.2d 1396
Robersonv.White
73-1534, 73-1535
UNITED STATES COURT OF APPEALS Second Circuit
5/10/73
1
D.Conn.
DISMISSED AS MOOT
| {
"pile_set_name": "FreeLaw"
} |
811 F.2d 610
*Huntv.Bowen
86-7412
United States Court of Appeals,Eleventh Circuit.
1/29/87
1
S.D.Ala.
AFFIRMED
2
---------------
* Fed.R.App.P. 34(a); 11th Cir.R. 23.
| {
"pile_set_name": "FreeLaw"
} |
498 F.2d 1261
Francis LOVELY, Plaintiff, Appellant,v.Oscar LALIBERTE et al., Defendants, Appellees.
No. 74-1062.
United States Court of Appeals, First Circuit.
Argued June 4, 1974.Decided June 24, 1974.
Charles G. Douglas, III, Concord, N.H., with whom Perkins, Douglas & Brock, Concord, N.H., were on brief, for plaintiff, appellant.
N. George Papademas, Lebanon, N.H., for Oscar Laliberte, defendant, appellee.
Before COFFIN, Chief Judge, McENTEE and CAMPBELL, Circuit Judges.
LEVIN H. CAMPBELL, Circuit Judge.
1
Francis Lovely brought an action in the federal district court against Oscar Laliberte, alleging that Laliberte was maliciously and unconstitutionally employing state process to evict him from Laliberte's mobile home park. Allegedly Laliberte's true motivation for the eviction stemmed from Lovely's public protests over the condition and scarcity of mobile home parks, his petitions to alter local zoning ordinances, and his 'tenant group activities'. The action, brought under 42 U.S.C. 1983, seeks to bring Lovely's situation within the logic of Lavoie v. Bigwood, 457 F.2d 7 (1st Cir. 1972), and Edwards v. Habib, 130 U.S.App.D.C. 126, 397 F.2d 687 (1968). After hearing, the district court dismissed the action on the ground that it was barred by res judicata. We affirm.
2
Laliberte had originally sought a Writ of Possession, N.H.R.S. 540:12, against Lovely in the Lebanon District Court, Lebanon, New Hampshire. The court ordered issuance of the writ, and Lovely exercised his right to a de novo trial in the New Hampshire Superior Court, a court of general jurisdiction in which legal and equitable defenses are broadly available and counterclaims may be filed. At the superior court hearing the controversy centered around whether Lovely and his family by keeping rabbits and dogs and engaging in other purportedly offensive conduct, had violated the landlord's rules. Lovely did not raise his First Amendment claim either as a defense1 or as a counterclaim. The court ordered Lovely's eviction, and Lovely did not appeal, preferring instead to institute the present federal court proceeding.
3
Res judicata precludes even 'perfect defenses . . . of which no proof was offered . . .. (A) judgment estops not only as to every ground of recovery or defense actually presented in the action, but also as to every ground which might have been presented, . . .' Cromwell v. County of Sac, 94 U.S. 351, 352-353, 24 L.Ed. 195 (1877). In Preiser v. Rodriguez, 411 U.S. 475, 497, 93 S.Ct. 1827, 36 L.Ed.2d 439 (1973), the Supreme Court indicated that res judicata would be fully applicable to 1983 actions. Two of the cases cited therein with approval reiterated that res judicata, even in the context of 1983, bars all grounds that might have been, but were not, presented to the state court. Coogan v. Cincinnati Bar Ass'n, 431 F.2d 1209, 1211 (6th Cir. 1970); Rhodes v. Meyer, 334 F.2d 709, 716 (8th Cir. 1964), cert. denied, 379 U.S. 915, 85 S.Ct. 263, 13 L.Ed.2d 186 (1964). And see, e.g., Garner v. Louisiana State Board of Education, 489 F.2d 91 (5th Cir. 1974); Frazier v. East Baton Rouge Parish School Board, 363 F.2d 861, 862 (5th Cir. 1966).
4
Res judicata is, of course, different from collateral estoppel, which we have discussed and applied in recent cases. Mastracchio v. Ricci,498 F.2d 1257 (1st Cir. 1974); Cardillo v. Zyla, 486 F.2d 473 (1st Cir. 1973); Bricker v. Crane, 468 F.2d 1228 (1st Cir. 1972), cert. denied, 410 U.S. 930, 93 S.Ct. 1368, 35 L.Ed.2d 592 (1973); P I Enterprises v. Cataldo,457 F.2d 1012 (1st Cir. 1972). In those there were different parties in the suit preceding the federal suit. We applied the doctrine of collateral estoppel as to issues actually litigated and decided by the first judgment. Res judicata, when the suit is between the same parties and concerns the same operative nucleus of fact, is of broader scope and bars issues even if unlitigated. This familiar role is not diminished because Lovely's federal case alleges a violation of constitutional rights; state courts, too, are guardians of the federal constitution.2 Robb v. Connolly, 111 U.S. 624, 637, 4 S.Ct. 544, 28 L.Ed. 542 (1884).
5
Citing England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440 (1964), Lovely argues that decision of the federal constitutional issue is not precluded as it was not presented to and decided by the state tribunal. The case does not support this position. It in stead indicates that if a constitutional issue is so presented and decided, it cannot be reargued in federal court. It does not discuss the consequences of failing to raise the issue in the state proceedings, although it suggests, in abstention cases in which the plaintiff has initially chosen a federal forum only to be told to take state law issues back to the state, that the plaintiff may preserve his federal issue for the federal court by telling the state court of the existence of the issue and expressly reserving it. It is possible that a parallel reservation might preserve a federal constitutional defense and counterclaim in a state possession action. But the proper procedure would be for the defendant to notify the state court that he was preserving the issue. Lovely did not do so, and therefore cannot escape the ordinary effect of res judicata.3
6
Finally, Lovely seems to argue that he should be spared the harsh application of res judicata because his attorney in the state proceeding was derelict in failing to present the constitutional defense. But the principle behind res judicata, the prevention of duplicative litigation, has the same force regardless of the ultimate 'reason' for the second suit. An attorney's actions in litigation bind the client and the client's later doubts concerning the course pursued by his attorney are not a good justification for subjecting the opposing party to continuous litigation.
7
Affirmed.
1
There is mention in the transcript of the superior court hearing of the possibility that Laliberte was 'retaliating' against Lovely for his speech activities. It arises, however, in the context of a denial by Laliberte, elicited by his attorney, that such motivation existed. Lovely's attorney at the Possession action testified in federal court at the hearing on November 14, 1973, that he had declined to press the First Amendment defense in the state action; although he was aware that he could do so he thought it would be unwise. The attorney did, however, with the knowledge and acquiescence of opposing counsel, visit the chambers of the superior court judge and leave with him copies of the Lavoie and Habib opinions
2
There is no general right of removal based upon a federal defense, whether statutory or constitutional. The ALI proposals that would make it so have met with some criticism. H. Friendly, Federal Jurisdiction: A General View 124-27 (1973); Currie, The Federal Courts and the American Law Institute II, 36 U.Chi.L.Rev. 271-75 (1969). The only statute providing for federal constitutional defense removal, 28 U.S.C. 1443, has been severely limited by the Supreme Court. City of Greenwood v. Peacock, 384 U.S. 808, 86 S.Ct. 1800, 16 L.Ed.2d 944 (1966); Georgia v. Rachel, 384 U.S. 780, 86 S.Ct. 1783, 16 L.Ed.2d 925 (1966). The plaintiff's proposed use of 1983 would effectively allow removal based upon federal defenses by allowing collateral attack of state judgments that include, or could include, federal elements. Whatever may be the pros and cons of such a development, it is not presently a part of our law
3
We need not decide whether circumstances of this nature would ever justify a state defendant's bringing a federal 1983 action before the state trial seeking an injunction or declaratory judgment. See Mitchum v. Foster, 407 U.S. 225, 92 S.Ct. 2151, 32 L.Ed.2d 705 (1972); Steffel v. Thompson, 415 U.S. 452, 94 S.Ct. 1209, 39 L.Ed.2d 505 (1974)
| {
"pile_set_name": "FreeLaw"
} |
242 P.3d 611 (2010)
349 Or. 230
James PATTON, Plaintiff,
v.
TARGET CORPORATION, Defendant,
v.
State of Oregon, Plaintiff-Intervenor.
(USCA 08-35177; SC S057752).
Supreme Court of Oregon, En Banc.
Argued and Submitted June 8, 2010.
Decided November 12, 2010.
*612 Rolf C. Moan, Supreme Court Coordinator, Office of the Attorney General, Salem, argued the cause and filed the brief for plaintiff-intervenor. With him on the brief were John R. Kroger, Attorney General, and Jerome Lidz, Solicitor General.
Michael A. Griffin, of Jackson Lewis LLP, Seattle, argued the cause and filed the brief for defendant. With him on the brief was John M. Cowden. Lori Irish Bauman, of Ater Wynne LLP, Portland, for plaintiff James Patton, adopted the brief of Michael A. Griffin.
Jennifer J. Middleton, of Chanti & Middleton, PC, Eugene, filed the brief for amicus curiae Oregon Trial Lawyers Association.
GILLETTE, J.
This case is before the court on a certified question of Oregon law from the United States Court of Appeals for the Ninth Circuit. See Patton v. Target Corp., 580 F.3d *613 942 (9th Cir.2009) (certifying question); ORS 28.200-28.255 (granting authority to answer certified questions and describing procedure). Plaintiff Patton sued his employer, defendant Target, in the United States District Court for the District of Oregon for wrongful discharge, alleging that Target demoted and later fired him because of his service in the National Guard. Patton alleged that Target's acts violated both federal and state law. A jury found in Target's favor on Patton's federal claim, but in Patton's favor on his state law claim. The jury awarded Patton approximately $85,000 in compensatory damages and $900,000 in punitive damages. Under ORS 31.735, set out post, the state would be entitled to 60 percent of any eventual punitive damages payment.
After the verdict was rendered, but before judgment was entered in the case, Patton and Target reached a settlement and jointly moved the court to approve a stipulated judgment dismissing the case. The terms of the settlement have not been disclosed, but it is undisputed that the settlement does not include any payment for punitive damages and, hence, there is no provision in the settlement for any payment to the state. The state moved to intervene in the case in order to object to the stipulated final judgment. The state argued that the settlement was reached without regard to the state's interest in a share of the punitive damages award under ORS 31.735(1), which provides that, "[u]pon the entry of a verdict including an award of punitive damages, the Department of Justice shall become a judgment creditor as to the punitive damages portion of the award." The court granted that motion, concluding that the state had a significant protectable statutory interest, but did not make a ruling as to the nature and scope of that interest under ORS 31.735.
The state then filed a complaint in intervention. There, the state argued that it had a vested interest in 60 percent of the jury's punitive damages award, that the parties therefore were precluded from settling the case without its consent, and that the court should reject the settlement. The district court ultimately held that the state did not have a vested or enforceable property right in any punitive damages award until a final judgment was entered awarding such damages, and, therefore, the state's consent to a settlement was not required. Patton v. Target Corp., No. 03-CV-1722-BR, 2008 WL 361201 (D. Or., February 8, 2008). For that reason, the court granted the original parties' motion to approve the stipulated judgment and it dismissed the complaint with prejudice. Id. The state sought reconsideration, and the district court affirmed its earlier decision.
The state appealed the district court's ruling to the Ninth Circuit, arguing that, under ORS 31.735(1), the state became a judgment creditor upon the entry of a verdictbefore the entry of a judgmentand, therefore, the state's consent was required for any settlement that would reduce or eliminate the state's share of punitive damages awarded by the verdict. The Ninth Circuit concluded that ORS 31.735 did not clearly indicate what powers the legislature intended the state to possess as a prejudgment "judgment creditor," and that the correct interpretation of ORS 31.735 was an important and unanswered question of Oregon law that would be dispositive in the case. Patton, 580 F.3d at 947-48. Accordingly, the Ninth Circuit certified to this court the following question:
"When a jury has returned a verdict that includes an award of punitive damages under Oregon law, is the State of Oregon's consent necessary before a court may enter a judgment giving effect to any settlement between the parties that would result in a reduction or elimination of the punitive damages to which the State would otherwise be entitled under Oregon Revised Statutes § 31.735?"
580 F.3d at 948-49. This court accepted the certified question.
We begin, as usual, by considering the text and context of the statute at issue. Since 1987, Oregon has had a "split recovery" statute that requires that a part of any punitive damages award be paid into the state's crime victim compensation account. In its current iteration, that statute is codified at ORS 31.735 and provides:
*614 "(1) Upon the entry of a verdict including an award of punitive damages, the Department of Justice shall become a judgment creditor as to the punitive damages portion of the award to which the Criminal Injuries Compensation Account is entitled pursuant to paragraph (b) of this subsection, and the punitive damage portion of an award shall be allocated as follows:
"(a) Forty percent shall be paid to the prevailing party. The attorney for the prevailing party shall be paid out of the amount allocated under this paragraph, in the amount agreed upon between the attorney and the prevailing party. However, in no event may more than 20 percent of the amount awarded as punitive damages be paid to the attorney for the prevailing party.
"(b) Sixty percent shall be paid to the Criminal Injuries Compensation Account of the Department of Justice Crime Victims' Assistance Section to be used for the purposes set forth in ORS chapter 147. However, if the prevailing party is a public entity, the amount otherwise payable to the Criminal Injuries Compensation Account shall be paid to the general fund of the public entity.
"(2) The party preparing the proposed judgment shall assure that the judgment identifies the judgment creditors specified in subsection (1) of this section.
"(3) Upon the entry of a verdict including an award of punitive damages, the prevailing party shall provide notice of the verdict to the Department of Justice. In addition, upon entry of a judgment based on a verdict that includes an award of punitive damages, the prevailing party shall provide notice of the judgment to the Department of Justice. The notices required under this subsection must be in writing and must be delivered to the Department of Justice Crime Victims' Assistance Section in Salem, Oregon within five days after the entry of the verdict or judgment.
"(4) Whenever a judgment includes both compensatory and punitive damages, any payment on the judgment by or on behalf of any defendant, whether voluntary or by execution or otherwise, shall be applied first to compensatory damages, costs and court-awarded attorney fees awarded against that defendant and then to punitive damages awarded against that defendant unless all affected parties, including the Department of Justice, expressly agree otherwise, or unless that application is contrary to the express terms of the judgment.
"(5) Whenever any judgment creditor of a judgment which includes punitive damages governed by this section receives any payment on the judgment by or on behalf of any defendant, the judgment creditor receiving the payment shall notify the attorney for the other judgment creditors and all sums collected shall be applied as required by subsections (1) and (4) of this section, unless all affected parties, including the Department of Justice, expressly agree otherwise, or unless that application is contrary to the express terms of the judgment."
The state argues that subsection (1) of ORS 31.735, which makes the Department of Justice a "judgment creditor" at the time that a verdict is entered, clearly demonstrates that the legislature intended to give the state a protected interest in its share of the punitive damages award. The state acknowledges that the text of subsection (1) creates some ambiguity about the extent of the rights that the state possesses at that point, but argues that the legislative history makes it plain that the legislature intended to prevent parties from entering into post-verdict settlements that reduce or eliminate the state's share of a punitive damages award without its consent. Patton and Target, for their part, contend that, in common understanding and under applicable statutory definitions of the key terms in ORS 31.735, the notion of a "judgment creditor" is meaningless before a judgment has been entered and, even if the legislature intended to give the state the rights of a judgment creditor before a judgment has been entered, going so far as to include a right to block a settlement that did not protect its rights, the *615 legislature failed to express that intent in the words of ORS 31.735.
It is helpful to begin our analysis of ORS 31.735 by examining the historical development of that statute. As noted, the legislature created the split recovery scheme in 1987, making it part of chapter 18, dealing with judgments.[1] Or. Laws 1987, ch. 774, § 3. At that time, former ORS 18.540 (the original split recovery statute) provided, simply, that half of any part of a punitive damages award remaining after the plaintiff's attorney was paid was to be paid to a state crime victim compensation fund.[2] Subsequently, in 1990, the Court of Appeals held, in Eulrich v. Snap-On Tools Corp., 103 Or. App. 610, 613, 798 P.2d 715 (1990), that, under that statute, the state had no right to any part of a punitive damages award until a fund that was capable of distribution was created. In 1991, and apparently in response to that holding, the legislature amended former ORS 18.540 to add the following, among other provisions:
"Upon the entry of a judgment including an award of punitive damages, the Department of Justice shall become a judgment creditor as to the punitive damages portion of the award * * *."[3]
Or. Laws 1991, ch. 862, § 1.
The phrase "judgment creditor" was not defined in the statute in 1991, nor is it today.[4] However, there is no indication that, at the time of the 1991 amendments, the legislature intended that phrase to be understood other than according to its common and usual meaningthat is, as a term that was intrinsically dependent on the existence of a judgment. At that time, Black's Law Dictionary defined "judgment" as the
"final decision of the court resolving the dispute and determining the rights and obligations of the parties. The law's last word in a judicial controversy, it being the final determination by a court of the rights of the parties upon matters submitted to it in an action or proceeding."
Black's Law Dictionary 841-42 (6th ed. 1990). "Judgment creditor" was defined as "[a] person in whose favor a money judgment is entered or a person who becomes entitled to enforce it." Id. at 844-45. Those concepts are consistent with the common understanding of the phrase "judgment creditor" today. See Black's Law Dictionary 921 (9th ed. 2009) ("judgment creditor" is a person with "a legal right to enforce execution of a judgment for a specific sum of money"); see also Webster's Third New Int'l Dictionary 1223 (unabridged ed.2002) ("judgment creditor" is "creditor having a legal right to enforce execution of a judgment for a sum of money"). It also is consistent with later-enacted definitions of key words and phrases set out in ORS chapter 18. For example, chapter 18 defines the term "judgment" as follows:
"`Judgment' means the concluding decision of a court on one or more requests for relief in one or more actions, as reflected in a judgment document."
ORS 18.005(8). "Judgment document," in turn, is defined as "a writing in the form provided by ORS 18.038 that incorporates a court's judgment." ORS 18.005(9). In addition, "judgment remedy" is defined to include the "ability of a judgment creditor to enforce *616 a judgment through execution." ORS 18.005(11)(a).
In 1995, the legislature again amended former ORS 18.540, changing the word "judgment" in the first sentence of subsection (1) to "verdict," so that that subsection provided that, "upon entry of a verdict including an award of punitive damages, the Department of Justice shall become a judgment creditor as to the punitive damages portion of the award." Former ORS 18.540(1) (1995) (emphasis added); Or. Laws 1995, ch 688, § 1.[5] At that time, the legislature did nothing to signal that it intended to alter the common understanding of any term used in the statute. That is, without changing the definition of the word "judgment" or the phrase "judgment creditor," or otherwise clarifying through definitions or in some other way what it intended to accomplish, the legislature purported to make the state a judgment creditor upon entry of a verdict, before there is any judgment in a case.
The state suggests that, although chapter 18 "generally declares that `judgment creditor' status is created by a judgment," the more "particular intent" to give the state rights at the time of a verdict reflected in chapter 31 renders "the more general provisions in chapter 18 * * * essentially irrelevant." (Emphasis in original.) That is, according to the state,
"although chapter 18 * * * suggests that a `judgment creditor' generally is a creditor whose entitlement to a debt is documented by a `concluding' judgment, chapter 18 makes no effort to apply any such definition to ORS 31.735 or to any other provision outside of chapter 18. Similarly, nothing in ORS 31.735, and nothing in any other portion of chapter 31, purports to incorporate definitions from chapter 18. In short, nothing in chapter 18 suggests that the legislature was without authority to declare, via ORS 31.735, that the state becomes a `judgment creditor'as a matter of lawupon entry of a punitive-damages verdict."
That argument does not advance the state's position. As our description of the historical development of ORS 31.735 makes clear, at the time that the legislature made the state a "judgment creditor" upon entry of a judgment that included a punitive damages award in 1991, the split recovery statute was a part of chapter 18. As we explained above, although the definitions set out in ORS 18.005 were not part of chapter 18 in 1991 or 1995, those definitions are consistent with the common understanding of the relevant terms at that time. It is true that, when former ORS 18.540 was renumbered as ORS 31.735 in 2003, the legislature did not expressly make applicable the newly enacted definitions set out in ORS 18.005. However, it goes without saying that the mere fact that the split recovery statute was renumbered in 2003 and now is found in chapter 31 has no bearing on the intent of the legislature in 1991 or 1995, when it enacted the amendments at issue in this case.
Of course, the legislature is free to define words to mean anything that it intends them to mean, including defining words "in a manner that varies from a dictionary definition or common understanding." Cook v. Workers' Compensation Department, 306 Or. 134, 143 n. 5, 758 P.2d 854 (1988) (for purposes of workers' compensation reimbursement, a nurse practitioner is a "doctor or physician" under applicable statute, which *617 defined "doctor or physician" as person licensed to practice in the "healing arts"). The problem, however, is that the legislature never purported to expand or otherwise redefine the phrase "judgment creditor" when, in 1995, it changed the word "judgment" to "verdict" in former ORS 18.540(1), or in 2003, when former ORS 18.540 was renumbered.
The question before the court thus comes down to what it means for the state to be a "judgment creditor" before there is a judgment. The state concedes that it does not mean that the state has the right to execute on the verdict alone to collect its share of the punitive damages awarded by the jurya right ordinarily associated with the status of judgment creditor. Indeed, collection at the time of the verdict would seem to be precluded by the fact that, under ORS 31.730, any award of punitive damages is subject to court review and reduction if the court determines, inter alia, that the amount is not within the range that a rational jury would be entitled to award, or that the defendant has taken reasonable remedial measures to prevent recurrence of the conduct that gave rise to the punitive damages award. See ORS 31.730(2) and (3) (so providing). It follows that, upon entry of a verdict, the state has, at most, an economic expectancy of 60 percent of whatever portion of punitive damages, if any, eventually is memorialized in a judgment. However, the statute is silent as to what rights a "judgment creditor" with such an expectancy interest deriving from a verdict would have before entry of judgment.
The state further concedes that ORS 31.735 does not expressly define the extent of the state's rights as a prejudgment "judgment creditor," but it argues that the plain text of the statute does give the state a "protected interest" in 60 percent of a punitive damages award upon entry of a verdict.[6] And that "protected interest," the state asserts, means that the parties may not agree to settle a case in such a way as to reduce or eliminate the state's share of any punitive damages award. The problem with the state's position is that nothing in ORS 31.735(1)where the "judgment creditor" status at issue in this case is createdspeaks to, much less expressly requires the state's consent to, a settlement. By contrast, subsections (4) and (5) each provide that certain actions may not be taken "unless all affected parties, including the Department of Justice, expressly agree otherwise."[7] In our view, that contrast prevents us from reading the wording in subsection (1) as making the *618 state's consent a prerequisite to any post-verdict settlement between the parties.
As noted above, however, the state contends that, to the extent that its rights as a prejudgment "judgment creditor" under ORS 31.735 remain undefined after an examination of the text of that statute, the legislative history fleshes out the nature of its protected interest.[8] The legislative history that the state asserts to be compelling was quoted at length in a recent Court of Appeals opinion, MAN Aktiengesellschaft v. DaimlerChrysler AG, 218 Or.App. 117, 179 P.3d 675 (2008), rev. dismissed, 346 Or. 214, 208 P.3d 964 (2009). In particular, the state points to certain statements made to a committee of the 1995 legislature. First, with respect to the proposed amendment to change, among other things, the word "judgment" to "verdict" in former ORS 18.540(1), Senator Miller commented,
"`I heard Attorney General Kulongoski describe that in some situations after a verdict is reached that maybe the parties go back and rework the settlement * * *. The State's interest in these awards sometimes is defeated by some maneuvering that seems to enrich and maybe even more thanwindfall might be a kind of a gentle phrase to describe the activity but it seems like maybe the plaintiff and their lawyer come out a lot better than perhaps they should.'"
MAN Aktiengesellschaft, 218 Or.App. at 128, 179 P.3d 675, quoting Tape Recording, Senate Judiciary Subcommittee on Civil Process, SB 482, Feb. 27, 1995, Tape 28, Side A (statement of Randy Miller). In addition, John DiLorenzo, a spokesperson for the sponsor of the amendment, testified the same day as follows:
"`The Attorney General's right does not vest until after the judgment is entered. And so if the parties are smart and if there is a large punitive damages award entered, the parties will sit down and construct a * * * settlement which will provide that no final judgment will be awarded or that they will stipulate to a final judgment that will provide an award of general damages of a certain amount. And parties do that quite often, by the way, because they like to avoid the expense of appeal potentially. But they can under the present statute essentially cut out the Attorney General from that portion of the award because again, the Attorney General does not have the right to intervene until the judgment is entered.'"
Id. (statement of John DiLorenzo). Finally, DiLorenzo also made the following statement:
"I don't think you can discount too much * * * what happens to parties when the verdict comes in and before judgment is rendered. There is a real incentive for both parties to settle the case and to change the judgment around a little bit so that the Attorney General does not take half of whatever is available."
Tape Recording, Senate Judiciary Subcommittee on Civil Process, SB 482, Feb. 27, 1995, Tape 27, Side B.
Although the comment of a single legislator at one committee hearing generally is of dubious utility in determining the intent of the legislature in enacting a statute (and the comment of a nonlegislator witness even less helpful),[9] we can agree that those passages clearly describe a problem that the legislature appears to have been attempting to address: Under the 1991 version of the statute, the parties to litigation sometimes *619 eliminated the state's potential interest in a punitive damages award by settling the case before a judgment was entered. The passages quoted above do speak directly about the state's interest in a punitive damages award being "defeated" and the parties sometimes achieving a "windfall." However, that legislative history does not disclose how the legislature intended to solve that problem. The state's argument, essentially, is that the legislature clearly intended to give the state some right that it did not have before the amendment, and because, in the state's view, the best way to address the legislature's clear concern over collusive settlements was to give the state the right to block all settlements, then that right must be what the legislature intended to confer.
The problem, however, is that there is an unbridged gap between what the legislature is said to have intended and what the words that the legislature chose to use actually do: The statute simply does not create any right or rights in the state as a prejudgment "judgment creditor" to accomplish that possible objective. Moreover, even assuming, arguendo, that the legislative history showed that the legislature did intend to enable the state to block parties from settling without its consent by bestowing "judgment creditor" status on the state upon entry of a verdict that includes punitive damages, the method that the legislature chosechanging the word "judgment" to "verdict" in subsection (1)failed to "translate [that] intent into operational language" to accomplish that goal. Monaco v. U.S. Fidelity & Guar., 275 Or. 183, 188, 550 P.2d 422 (1976). The court is "not at liberty to give effect to any supposed intention or meaning in the legislature, unless the words to be imported into the statute are, in substance at least, contained in it." Whipple v. Howser, 291 Or. 475, 480, 632 P.2d 782 (1981) (internal quotation marks and citations omitted). As we have discussed, the statute does not provide that the state's consent to a settlement is required, although it does plainly require the state's consent to the application of payments made by or on behalf of a defendant after judgment. ORS 31.735(4) and (5). Thus, even if the legislative history clearly suggested that the 1995 amendment was intended to require the state's consent to settlement, "the words to be imported into the statute" are not, in substance, contained in it.
In this case, it simply is not possible for us to conclude that ORS 31.735 as presently worded makes the state's consent necessary before a court may enter a judgment giving effect to a settlement between the parties that would reduce or eliminate punitive damages to which the state otherwise would be entitled, even if that is what the legislature intended. The answer to the certified question is "no."
The certified question is answered.
NOTES
[1] In 2003, former ORS 18.540 was moved to a newly created chapterchapter 31and renumbered as ORS 31.735.
[2] Former ORS 18.540 (1987) provided:
"The punitive damage portion of an award shall be distributed as follows:
"(1) The attorney for the prevailing party shall be paid the amount agreed upon between the attorney and the prevailing party.
"(2) One-half of the remainder shall be paid to the prevailing party.
"(3) One-half of the remainder shall be paid to the Criminal Injuries Compensation Account to be used for the purposes set forth in ORS chapter 147."
[3] Former ORS 18.540 (1991) also included provisions, among others, requiring the party preparing the proposed judgment to ensure that the judgment identified all judgment creditors, and requiring the prevailing party to provide notice of any judgment that included punitive damages to the Department of Justice. Or. Laws 1991, ch. 862, § 1.
[4] In fact, chapter 18 included no definitions whatsoever until 2003. Or. Laws 2003, ch. 576, § 1 (adding ORS 18.005, which sets out definitions).
[5] In addition to that change, the 1995 amendment increased the state's share of the punitive damages award from 50 to 60 percent, former ORS 18.540(b) (1995); limited the amount of the punitive damages award that the prevailing party's attorney was entitled to receive, former ORS 18.540(a) (1995); and required the prevailing party to notify the Department of Justice of the entry of a verdict awarding punitive damages, former ORS 18.540(3) (1995). Or. Laws 1995, ch. 688, § 1. The 1995 amendment to subsection (3) actually erroneously required the prevailing party, on "entry of a verdict including an award of punitive damages," to "provide notice of the judgment to the Department of Justice." Former ORS 18.540(3) (1995) (emphasis added). That error was corrected in 1997. Or. Laws 1997, ch. 73, § 1. The 1997 version provided (and continues to provide):
"Upon the entry of a verdict including an award of punitive damages, the prevailing party shall provide notice of the verdict to the Department of Justice. In addition, upon entry of a judgment based on a verdict that includes an award of punitive damages, the prevailing party shall provide notice of the judgment to the Department of Justice."
Former ORS 18.540(3) (1997).
[6] The state has abandoned the argument, which it made in the federal district court, that it has a "vested" interest in its share of a punitive damages award. It was correct to do so. As this court explained in DeMendoza v. Huffman, 334 Or. 425, 449, 51 P.3d 1232 (2002), in the context of a discussion of the constitutionality of former ORS 18.540,
"The question is whether a vested property right in a punitive damages award can accrue before entry of a final judgment for the purposes of Article I, section 18. The answer is that it cannot."
(Emphasis in original.) As the court further stated,
"`A vested right must be something more than a mere expectation based upon the anticipated continuance of existing laws; it must have become a title legal or equitable to the present or future enjoyment of property.'"
Id., quoting Coshun v. Hurlburt et al., 102 Or. 240, 243, 201 P. 870 (1921).
[7] Subsection (4) provides:
"Whenever a judgment includes both compensatory and punitive damages, any payment on the judgment by or on behalf of any defendant * * * shall be applied first to compensatory damages, costs and court-awarded attorney fees awarded against that defendant and then to punitive damages awarded against that defendant unless all affected parties, including the Department of Justice, expressly agree otherwise * * *."
(Emphasis added.) Similarly, subsection (5) provides:
"Whenever any judgment creditor of a judgment which includes punitive damages governed by this section receives any payment on the judgment by or on behalf of any defendant, the judgment creditor receiving the payment shall notify the attorney for the other judgment creditors and all sums collected shall be applied as required by subsections (1) and (4) of this section, unless all affected parties, including the Department of Justice, expressly agree otherwise * * *."
(Emphasis added.)
It is also noteworthy that, as the emphasized wording above highlights, the state's express consent only is required when there is a judgment in the casethat is, a time when a "judgment creditor" ordinarily has rights.
[8] Under ORS 174.020(3), the court may consider legislative history to the extent it deems appropriate to assist in its construction of a statute. See State v. Gaines, 346 Or. 160, 166, 206 P.3d 1042 (2009) (construing ORS 174.020 to that effect). Accordingly, we consider the legislative history that the state has presented to us in this case. Id. (court may limit its consideration of legislative history to the information provided by the parties; court need not independently research legislative history).
[9] See Thompson v. IDS Life Ins. Co., 274 Or. 649, 652-53, 549 P.2d 510 (1976) (whether or not comment before legislative committee could be construed as favoring one interpretation of statute, "it is only the comment of one individual and of little or no help in determining legislative intent"); State v. Guzek, 322 Or. 245, 260, 906 P.2d 272 (1995) (nonlegislator's statements say little about the intent of the Oregon Legislative Assembly as a whole).
| {
"pile_set_name": "FreeLaw"
} |
2 Kan. App. 2d 341 (1978)
579 P.2d 164
H. LYNN WHITE, INC., Appellant,
v.
JOHN T. LEFTWICH, Appellee.
No. 49,134
Court of Appeals of Kansas.
Opinion filed May 26, 1978.
Richard L. Reid, of Kansas City, for the appellant.
Robert E. Lastelic, of Anderson, Granger, Nagels and Lastelic, Chartered, of Overland Park, for the appellee.
Before PARKS, P.J., ABBOTT and MEYER, JJ.
PARKS, J.:
This is a suit brought by H. Lynn White, Inc. (hereafter referred to as plaintiff or White) against John T. Leftwich (defendant or Leftwich) for damages incurred from wrongful delivery of carpet valued at $1,867.42. The trial court, after hearing evidence, found in favor of defendant. Plaintiff appeals.
The lawsuit arose from a complex series of transactions involving the purchase, sale and delivery of the carpet. In early 1974, Mr. and Mrs. Kenton Granger ordered carpet for their home from Casa Bella, a Johnson County, Kansas, retail interior decorating firm. The Casa Bella representative who was responsible for the Granger transaction was John Harris. Because Casa Bella did not have the carpet in stock, Harris ordered it from plaintiff, a wholesale carpet dealer in Kansas City, Missouri. Casa Bella's delivery instructions requested that the carpet be shipped directly to the defendant, who was to install the carpet in the Granger home.
Plaintiff in turn ordered the carpet from a California mill for *342 delivery to defendant's place of business in Lenexa, Kansas. There had been no arrangements between plaintiff and defendant regarding the carpet, yet it was addressed to Decorator's Showroom, plaintiff's trade name, in care of defendant. The sidemarks read Casa Bella/Granger and Harris/Granger. The carpet arrived in two shipments, one on March 6, 1974, and another on April 17, 1974. It was later installed in the Granger home between May 8th and 15th, 1974.
After the carpet was delivered, defendant called the Grangers to set an installation date. Granger told defendant that he was not ready for the carpet because the painters were still working in his house. Granger also asked defendant, and defendant agreed, to hold the carpet for him until he was ready for the installation.
Following this conversation with Granger, defendant received a telephone call from plaintiff advising him not to release the carpet. Defendant admits receiving these instructions which were later reduced to writing on May 3 and May 6, 1974. However, he contends that the telephone calls and letters from the plaintiff were received after he had advised Granger that the carpet had arrived and after he had agreed to hold it for him. It appears from the record that Casa Bella "went into bankruptcy" in early May, 1974.
The trial court held that "(1) Under K.S.A. 84-2-702(1), where the seller discovers the buyer to be insolvent, he may refuse delivery except for cash and stop delivery of goods in the possession of seller's bailee under certain conditions as provided by K.S.A. 84-2-705. (2) The Defendant in the present case is a bailee of the carpet in question. (3) The seller (Plaintiff) could not stop delivery of the carpet after notification to the buyer (Granger) by the bailee (Defendant) that the bailee holds the goods for the buyer. K.S.A. 84-2-705(2)(b)."
The issue is whether plaintiff's order to stop delivery of the carpet was binding on the defendant. K.S.A. 84-2-705 provides:
"(1) The seller may stop delivery of goods in the possession of a carrier or other bailee when he discovers the buyer to be insolvent.
"(2) As against such buyer the seller may stop delivery until
"(a) receipt of the goods by the buyer; or
"(b) acknowledgment to the buyer by any bailee of the goods except a carrier that the bailee holds the goods for the buyer; or
"(c) such acknowledgment to the buyer by a carrier by reshipment or as warehouseman...."
*343 The issue before us was addressed by the U.S. Court of Appeals in Donegal Steel Foundry Co. v. Accurate Products Co., 516 F.2d 583 (3rd Cir.1975). There the court construed a New Jersey statute which is identical in pertinent part to K.S.A. 84-2-705 and held that the existence of a bailment relationship is a prerequisite to finding a third party liable for wrongful delivery of goods.
The Donegal facts are strikingly similar to those presently before this court. In both cases, the buyer requested that the seller ship the goods directly to a third party. Each seller complied with the shipping instructions but later became aware of the buyer's insolvency, at which time it ordered the third party who held the goods to stop delivery. No contractual relationship existed between the seller and the third party, and in both cases, the goods were delivered notwithstanding the stoppage order.
In refusing to penalize the third party in Donegal, the Court of Appeals reasoned that the concepts of 12A N.J.S.A. § 2-705 (like our K.S.A. 84-2-705) contemplate a bailment for mutual benefit. Shipment to a third party, rather than to the buyer directly, is merely an incident of accommodation resulting from the buyer and seller's contract as opposed to a bailment contract "voluntarily entered into" by the third party and the seller.
Kansas, like New Jersey, defines bailment for mutual benefit as follows:
"If the custody or use of the bailed article is incidental to some other business transaction between the parties, it may result in a bailment for mutual benefit, even though the loan is gratuitous and for the use of the bailee. 4 Williston on Contracts (Rev. ed. 1936), § 1040. Thus, if the gratuitous loan is made for trial purposes to induce a purchase ... or if a promise, express or implied, that a later gratuitous loan will be made forms part of the consideration for the purchase, a bailment for mutual benefit results...." (Global Tank Trailer Sales v. Textilana-Nease, Inc., 209 Kan. 314, 316, 496 P.2d 1292 [1972], quoting the view expressed in Nelson v. Fruehauf Trailer Co., 20 N.J. Super. 198, 202-203, 89 A.2d 455 [1952].)
See also Adventure Line Mfg. Co. Inc. v. Western Casualty & Surety Co., 214 Kan. 820, 826, 522 P.2d 359 (1974).
Because the transaction in the present case is so closely akin to that of Donegal, we conclude that no bailment relationship existed between White and Leftwich. The delivery of the carpet to Leftwich rather than directly to Casa Bella or Granger was an incident of accommodation and not a bailment contract with White. In the absence of a bailment relationship, as contemplated *344 by K.S.A. 84-2-702 and K.S.A. 84-2-705, Leftwich may not be held liable for disregarding White's demand to withhold delivery of the carpet to Granger.
The conclusion we have reached makes it unnecessary for us to discuss the other points raised on appeal.
Judgment is affirmed.
| {
"pile_set_name": "FreeLaw"
} |
760 F.2d 273
Gracev.Heartland Transp.
84-2613
United States Court of Appeals,Eighth Circuit.
3/6/85
1
E.D.Mo.
DISMISSED
| {
"pile_set_name": "FreeLaw"
} |
547 F.2d 1165
U. S.v.Fasick
No. 76-2155
United States Court of Appeals, Third Circuit
1/18/77
1
E.D.Pa.
AFFIRMED
| {
"pile_set_name": "FreeLaw"
} |
37 F.3d 1504NOTICE: 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.
Arturo M. BOWMANE, Plaintiff-Appellant,v.Ron ANGELONE; Brenda Burns; and Ralph Owens, Defendants-Appellees.
No. 94-15579.
United States Court of Appeals, Ninth Circuit.
Submitted Sept. 20, 1994.*Decided Sept. 27, 1994.
Before: SNEED, WIGGINS, and FERNANDEZ, Circuit Judges.
1
MEMORANDUM**
2
Nevada state prisoner Arturo M. Bowmane appeals pro se the district court's dismissal without prejudice of his action for failure to pay a partial filing fee. Bowmane alleges that the district court's policy of requiring a partial filing fee is an abuse of the court's power under 28 U.S.C. Sec. 1915. We have jurisdiction pursuant to 28 U.S.C. Sec. 1291. We review the district court's decision to impose a partial filing fee pursuant to 28 U.S.C. Sec. 1915 for an abuse of discretion. Alexander v. Carson Adult High School, 9 F.3d 1448, 1449 (9th Cir.1993). We affirm.
3
Recently, we upheld the Nevada District Court's policy of determining a pro se prisoner's partial filing fee on "either the value of [his] assets, or the average income over the past six months, whichever is greater." Id. We noted, however, that the district court cannot apply this formula mechanically. Id. The district court "may consider the plaintiff's cash flow in the recent past, and the extent to which the plaintiff has depleted his savings on nonessentials." Id. Thus, if a prisoner cannot pay a partial filing fee because he depleted a previously adequate account, the district court may require the prisoner to justify the depletion. Id.
4
The record in this case indicates that the district court imposed a five dollar filing fee based on Bowmane's average monthly net deposits over the past six months which totalled $34.20. On 8 September 1993, Bowmane filed a response to the district court's order imposing the five dollar filing fee. While it is unclear, it seems that Bowmane was arguing that although his average income over the past six months was $34.20 he could not pay the partial filing fee because he had depleted all of his assets. Bowmane, however, did not provide the district court with any information indicating how he had depleted his account or why his cash flow was insufficient to pay the partial filing fee. Bowmane never paid the five dollar partial filing fee. The district court, therefore, dismissed Bowmane's action without prejudice.
5
Because Bowmane did not provide the district court with specific information indicating how he had depleted his account or why his cash flow was insufficient to pay the partial filing fee, and because the district court dismissed Bowmane's action without prejudice, we conclude that the district court did not abuse its discretion. See id. at 1449. Should Bowmane wish to refile his action and seek leave to proceed in forma pauperis, he should provide the district court with information relevant to his cash flow in the recent past and the extent to which he depleted his account on nonessentials. See id. at 1449-50.
6
AFFIRMED.
*
The panel unanimously 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
| {
"pile_set_name": "FreeLaw"
} |
785 F.Supp.2d 757 (2011)
Sara M. SANGEL, Plaintiff,
v.
Michael J. ASTRUE, Commissioner of Social Security, Defendant.
No. C10-4070-PAZ.
United States District Court, N.D. Iowa, Western Division.
May 23, 2011.
*760 David A. Scott, Cornwall Avery Bjornstad Scott, Spencer, IA, for Plaintiff.
Stephanie Johnson Wright, U.S. Attorney's Office, Cedar Rapids, IA, for Defendant.
MEMORANDUM OPINION AND ORDER
PAUL A. ZOSS, United States Chief Magistrate Judge.
Introduction
This matter is before the court for judicial review of a decision by an administrative law judge ("ALJ") denying the plaintiff's application for disability insurance benefits under Title II of the Social Security Act, 42 U.S.C. § 401 et seq. The plaintiff Sara M. Sangel claims substantial evidence on the record as a whole fails to support the ALJ's decision that she is not disabled.
Sangel filed her application on November 21, 2005, alleging a disability onset date of March 15, 2001.[1] Her claim was *761 denied initially and on reconsideration. She filed a request for hearing, and a hearing was held on November 16, 2007, before an ALJ. Sangel was represented by an attorney at the hearing. Sangel's mother and husband testified at the hearing, and Sangel testified on her own behalf. A vocational expert ("VE") also testified. On December 12, 2007, the ALJ issued his decision, finding that although Sangel has several severe impairments, her impairments do not, singly or in combination, reach the Listing level of severity. The ALJ found Sangel is able to perform light work, and she is able to return to her past relevant work as a production line solderer. He therefore concluded Sangel is not disabled. On May 26, 2010, the Appeals Council issued its decision denying Sangel's request for review, making the ALJ's decision the final decision of the Commissioner.
Sangel filed a timely Complaint in this court, seeking judicial review of the ALJ's decision. On September 8, 2010, with the parties' consent, Judge Mark W. Bennett transferred the case to the undersigned for final disposition and entry of judgment. The parties have briefed the issues, and the matter is now fully submitted and ready for review.
The court must decide whether the ALJ applied the correct legal standards, and whether his factual findings are supported by substantial evidence based on a review of the record as a whole. 42 U.S.C. § 405(g); Page v. Astrue, 484 F.3d 1040, 1042 (8th Cir.2007). In this deferential review, the court will consider the record in its entirety to determine whether a reasonable mind would find the evidence adequate to support the Commissioner's conclusion. Krogmeier v. Barnhart, 294 F.3d 1019, 1022 (8th Cir.2002) (citations omitted); Pelkey v. Barnhart, 433 F.3d 575, 578 (8th Cir.2006). The court first will summarize the testimony at the ALJ hearing, and the other evidence in the Record.
Hearing Testimony
Sangel was thirty-one years old at the time of the hearing. She and her husband live in Milford, Iowa. She is 5'7" tall and, at the time of the hearing, weighed about 280 pounds. She stated she has had weight problems all of her life. She does not believe her weight contributes to her health issues, noting that she has always been very heavy but prior to her alleged onset date, she was able to work with no weight-related problems.
She finished high school and took one year of college, but she had panic attacks and was unable to cope with the stresses of college. She last worked at a jewelry store during the Christmas season in 2003. Due to the stress and large numbers of patrons, she "ended up in the emergency room [her] last night of work with a panic attack." R. 584. Her longest job was with Walmart, where she worked for three years. According to Sangel, she was fired for using the telephone without being punched out on a break. Sangel's husband owns a video store, and they live in an apartment in back of the business. She does not help out with the business because it requires too much standing and physical work.
Sangel described her physical symptoms as follows: "I have severe pain in my lower back and I ... get muscle spasms. I have pain in both of my legs but my right leg is the primary leg with the most pain, the most consistent. Basically, every day. It's just, standing is, is a very big problem[.]" R. 571. She has had two surgeries on her back, and she has daily pain in her low back for which she has been seen at a pain clinic. She also has irritable bowel syndrome and stated she is "in the bathroom constantly" with diarrhea. R. 573-74. She has had her gall bladder *762 removed, which she stated "made the problem much worse." R. 573. Sangel is an insulin-dependent diabetic, and she uses insulin four times a day. She also suffers from arthritis in several areas.
Sangel stated her physical problems "[a]bsolutely" would prevent her from working. She appeared at the ALJ hearing with a cane which she purchased about two years earlier, when her legs became painful, and it gives her "slight assistance" with walking. R. 491. Most days, just taking a shower tires her and causes her physical pain. She stated her "general everyday pain is an 8." R. 575. She experiences pressure, pain and spasms in her back, and her "leg throbs to the point where [she] would, if it were feasible to do bodily harm, because it hurts so much [sic]." Id. According to Sangel, her back surgeon imposed a permanent fifteen-pound lifting restriction on her, but no other doctor has placed any limitations on her.
She can stand for no more than fifteen minutes before she begins having muscle spasms in her leg. The pain "puts [her] out of [her] mind," and she spends a lot of her time in a recliner with her feet elevated. R. 576. She sees a family doctor for her pain medication. When the ALJ noted that the last progress notes submitted were from March 2006, Sangel stated she takes Percocet for pain, and she sees the doctor every few months for medication checks. She stated she had taken 7.5 mg of Percocet and 500 mg of Tylenol twice daily for quite some time, but two days before the hearing, she was put on Oxycodone, 15 milligrams at a time, four times a day. It gives her good pain relief but she experiences several side effects, including double vision, dizziness, and extreme sleepiness. She also takes Neurontin "to alleviate the nerve pain in [her] legs." R. 577. She also has a prescription for muscle relaxers, but they give her "massive headaches," so she only uses them when absolutely necessary. Id.
With regard to her mental health, Sangel stated she has "severe depression," "panic attacks," "anxiety issues [and] agoraphobia." R. 578. When she is in a public place or around a lot of people, she "will have panic attacks and anxiety is overwhelming." Id. She does her grocery shopping late at night, when there are few shoppers, but even "the simple workers doing their job, throwing their freight, just the repetitive sound, [she] had a panic attack just because it was just sounds, and [she] had to leave." Id. She sat in the car while her husband finished the shopping.
Sangel attempted suicide in 1998, when she had problems in her previous marriage. She still has "lots of suicidal thoughts," and she hears "voices in [her] head and they tell [her] that suicide is a good thing." R. 579. She stated she has "to fight off those voices all the time, just so [she] can not focus so much on suicide." Id. She has suicidal thoughts "every day, all day," but she tries not to listen to "the bad voices." Id. She has frequent panic attacks, and stated she was "on the verge of a panic attack" during the hearing, but she was "trying to stay very calm." Id.
In June 2007, Sangel was seen at the Seasons Center after she had a "breakdown" in her home. She awoke in the morning and "started to have a full-blown panic attack." R. 590. She called her doctor, who advised her to call 911. Paramedics responded and calmed her down, and she "had to be on oxygen for awhile." R. 590.
For her mental health issues, Sangel takes Xanax and Klonopin, which help her relax and sleep better, and Prozac, an antidepressant. The medications affect her ability to "stay focused on any one particular task for very long," and she is unable even to "sit and watch an entire television *763 show." R. 580. On some days, she is very lethargic all day. She stated her panic attacks have worsened as she has gotten older, and they are triggered more easily than they used to be.
Sangel stated she loves to work and would like to be able to keep working. She feels guilty and worthless because she is unable to work, and feels that she is a burden on her family. She stated she cannot process even the mildest of stressors, and she has difficulty concentrating on much of anything. Physically, she can barely stand long enough to cook a simple meal, and her family members have to help out with household chores because she is unable to do them herself. She stated her pain is really a struggle for her and she is "heartbroken at the fact that [she] can't live a life like everybody else." R. 583.
Sangel's husband, Thomas Sangel, stated he and his wife have been married since September 4, 2004. He stated Sangel experiences anxiety "when she's around certain noises like children, TV commercials." R. 593. He stated they have to pause television commercials "because they can set her off, music in the car, if it's a certain repetitive sound." Id. On occasion, he has asked Sangel to help out in the video store for brief periods while he runs an errand, but he stated it "usually turns out bad." Id. Sangel will call him after a short time because dealing with the customers is agitating her, and Thomas will have to turn around and return to the store. R. 594. He stated the only household chore Sangel is able to handle regularly is the laundry. They eat a lot of TV dinners because Sangel "can't stand long enough to cook a real meal." Id.
At the time Sangel had her panic attack in June 2007, her husband awoke to her crying, breathing erratically, and shaking. They called 911 because her condition was more than he could handle on his own. R. 595.
Thomas also has observed his wife's difficulties from her irritable bowel syndrome. He stated that on many occasions, she will have trouble making it to the bathroom in time. R. 596-97.
Sangel's mother, Rose Ann Harris, stated Sangel has "suffered from depression and panic most of her life, and raising her wasn't easy[.]" R. 598. Sangel once had a panic attack when she was working at Walmart, and when Harris arrived at Sangel's apartment, Sangel was "in a corner... [and] couldn't breathe." R. 598. Harris stated she and Sangel used to enjoy doing things together, but they no longer can to go the mall or the fair or other places because of Sangel's fear of crowds. According to Harris, if anyone touches Sangel or bumps into her, "she just kind of has a meltdown.... She panics. She can't breathe. She ... looks for an escape anywhere that she can be alone." Id. Harris said that over time, Sangel "has changed into an introvert where she ... has bad dreams" and hears voices. R. 599.
Harris does not believe Sangel could work at any type of job. She stated Sangel tried a telemarketing job once but she was unable to do the job because even "the ringing of a phone ... makes her crazy-acting" and "she just can't cope with it." Id.
The Vocational Expert indicated none of Sangel's acquired skills from her past work would transfer to less physical but semi-skilled occupations. The ALJ asked the VE to consider an individual of Sangel's age with her educational background and work history who "has diagnosed health problems causing the same work related limitations described in the testimony of the witnesses[.]" If the witnesses' testimony were given full weight *764 and credibility, the VE stated the vocational effect would be as follows:
A couple things stand out. Poor standing tolerance of 15 minutes, and the other problem is problems with mental disorder and working around people. Almost all [her] jobs involved at least some degree of working around people and probably long-term standing, with the exception of the, the production line solderer. But anyways, she also needs to keep her feet elevated, spends time... in a recliner most of the day, has some side effects from her medication, has frequent diarrhea attacks, things like that. I don't see her as being able to return to her past work, nor do I see any other work that she's capable of doing. She tried a relatively sedentary job and it doesn't appear that she's capable of that either. So I don't see her being employable.
R. 602-03.
The ALJ then asked the VE to consider the same individual, but with limitations consistent with the state agency's assessment, as follows:
Assume the person who could occasionally lift or carry 20 pounds, frequently 10 pounds, could stand, walk, or sit, with normal breaks, about six hours of an eight hour day, in each capacity, push, pull is unlimited, postural activities are occasional with two exceptions. Balancing could be done frequently and climbing of ladders, ropes or scaffolds should... never be done. Assume further, no manipulative or visual or communicative limits. Environmentally, they would avoid concentrated exposures to respiratory irritants and to hazardous working conditions. Could such a person, in your expert opinion, perform any past work of ... the claimant's?
R. 603. The VE responded, "The only job that fits the hypothetical is the production assembler," a light, unskilled job. Id. He indicated the solderer position would be exposed to fumes, and the store clerk would require "more than occasional postural kinds of things like stooping, bending[.]" R. 604. The VE stated there are other jobs the individual could perform, such as small products assembler, which is light duty, unskilled, and involves routine, repetitive-type work. Id. He stated the small products assembler could be performed even with a fifteen-pound lifting restriction.
Summary of Medical Evidence
On September 14, 2000, Sangel was seen in the emergency room complaining of neck pain after being in a motor vehicle accident. She was diagnosed with a cervical strain and sprain, and was treated with Flexeril and Tylenol. She was told not to work the next day, and to follow up with her regular physician.
On September 28, 2000, Sangel saw Bruce A. Feldmann, M.D. with a complaint of dizziness, feeling "strange" and "a bit light headed at times." R. 274. Her symptoms had begun about five months earlier when she had been started on Paxil by another doctor "for anxiety[,] depression, social phobia that type of symptoms." Id. She stated she suffered from depression, and a "phobia of crowds and people." Id. The doctor discontinued the Paxil and started her on Celexa. Id.
Sangel saw Dr. Feldmann on October 3, 2000, with a complaint of intermittent right upper quadrant pain with nausea, worse after meals. The doctor suspected gallbladder disease and ordered an ultrasound. R. 273. The ultrasound was "suboptimal," but it was "unremarkable for gallstones, bile duct dilatation, etc." R. 272. The doctor prescribed Prevacid, ordered further tests, and directed Sangel to return in two weeks. Id. On October 10th, Sangel called to say she was feeling much *765 better on the Prevacid. The additional testing was canceled, and her Prevacid prescription was refilled. Id.
Sangel returned to see Dr. Feldmann on October 17, 2000, with an exacerbation of her asthma "with medication noncompliance." Id. She had not been using her inhaler regularly as prescribed. She received a nebulizer treatment in the clinic which improved her breathing. R. 271.
On November 2, 2000, Sangel and her boyfriend saw Dr. Feldmann for "preconceptual counseling" because they wanted to have a baby. Sangel's medication regimen included Depakote and Celexa, which were of concern. She was directed to "see a neurologist about an opinion about a safer regimen that she [could] be on prior to initiating any kind of infertility evaluation." Id.
On March 15, 2001, Sangel was admitted into the hospital through the emergency room after she slipped on the ice, "fell right on her buttocks and complained of back pain." R. 374. She was diagnosed with an "[a]pparent small L-1 anterior/superior lip fracture stable." Id. The doctor ordered a lumbar corset to give Sangel "a little better lumbar tone to hopefully support the back a little better." Id. She was treated with Morphine initially. When she could ambulate, albeit with difficulty, she was switched to Naprosyn 500 mg twice daily, and Ultram 50 mg, one to two tablets every four to six hours. She was directed to return in 24 hours for fitting of the corset, and then to follow up with Dr. Feldmann in one week. R. 373.
On September 26, 2001, Steven Mayhew, Ph.D., performed a consultative psychological examination. R. 526-27. Although Sangel reported to Dr. Mayhew that she had "severe anxiety and depression" that was disabling, Dr. Mayhew noted that Sangel's "[r]ange of affective expression was somewhat narrow but overall unremarkable clinically." R. 526. Sangel also reported that "her mood improves most when she can be with family who live nearby." R. 527. Dr. Mayhew noted that Sangel's reported daily living activities included reading, writing, preparing meals, washing laundry, and shopping for groceries. Sangel also managed her own funds and was able to drive. Id. Dr. Mayhew further noted that Sangel's current seizure medication "has worked well." R. 526. Dr. Mayhew ultimately opined that Sangel was "capable of understanding and remembering simple instructions. She would appear capable of performing activities within a schedule. Her ability to maintain attention and concentration is considered good. She may have difficulty working in proximity to others without being distracted. Her ability to complete a normal workday with few interruptions from her psychiatric symptoms appears fair." R. 527.
On December 18, 2001, Beverly Westra, Ph.D., a state agency medical consultant, assessed Sangel's mental residual functional capacity ("RFC") and completed a psychiatric review technique form ("PRTF"). R. 459-76. Dr. Westra opined that Sangel's major depression did not meet or equal Listing 12.04. R. 462, 476. Rather, Sangel's depression only caused (1) mild restriction in activities of daily living; (2) moderate difficulties in maintaining social functioning; (3) mild difficulties in maintaining concentration, persistence, or pace; and (4) no episodes of decompensation of extended duration. R. 469. In assessing Sangel's mental RFC, Dr. Westra opined that she was moderately limited in her ability to interact with the general public and to respond appropriately to changes in the work setting, but was not otherwise significantly limited. R. 473-74.
On December 19, 2001, another state agency medical consultant, J.D. Wilson, M.D., assessed Sangel's physical RFC. R. *766 477-82. Dr. Wilson opined that Sangel had no exertional, manipulative, visual, communicative, or environmental limitations, other than having to avoid moderate exposure to hazards, such as machinery and heights, because of her previous history of seizures. R. 478-81. Dr. Wilson noted, however, that Sangel did not allege any disability related to her asthma and that she last sought treatment for asthma in June 2001. R. 479.
On January 5, 2002, Sangel was seen in the emergency room for an acute asthma exacerbation. Prednisone was prescribed, as well as an albuterol inhaler as needed, which seemed to be working. Sangel reportedly was "breathing pretty well. Coughing a little [but] much better than it was 5 days ago." R. 266. She was not smoking, but had been around her brother who smoked. She saw Dr. Feldmann for follow-up on January 9, 2002, and reported that the inhaler seemed to be working for her. In addition, she was tolerating Zoloft well and was ready to try a larger dosage of 50 mg. Id.
Sangel saw Jeffry R. Peterson, D.O. on January 28, 2002, complaining of low back pain which she rated at 8 to 9 on a ten-point scale. She stated the pain had begun shortly after an accident on New Year's Eve when she backed into another car. Although the impact was low and she was not thrown around in the car, she began to suffer low back pain and discomfort the following day, and the pain had worsened since then. She was working at Hy-Vee, where she had to stand in one place on a hard floor to do dishes. She stated that after about three minutes of standing, her pain worsened.
On examination, the doctor noted Sangel had "marked lumbar paravertebral muscle spasm and tenderness both on the left and the right," with "no palpable pain or discomfort over the spine itself." R. 265. Straight leg raising elicited "hamstring pain at about 50 degrees bilaterally." Id. She had "fair" range of motion of the lumbar spine, and "some chronic decreased sensation of the right lower lateral leg." Id. X-rays were ordered, and Sangel was started on Flexeril and Naprosyn, with intermittent moist heat packs to her low back. He ordered her to stay off work for three days "with lying preferred, standing and walking recommended and no sitting." Id. He also recommended a physical therapy program, but Sangel declined due to lack of insurance. Id.
Sangel called Dr. Peterson on January 31, 2002, to report continued back pain. The x-rays of her lumbar spine had showed "slight worsening of a very mild compression[] of the superior end plates of T11 and L1," which was noted to correspond to "her discomfort on exam." R. 264. Sangel reported a history of falling on March 15, 2001, and x-rays from that time period showed the same mild superior end plate compressions, but they were less evident than in the new x-rays. The doctor advised her to "continue conservative activity. No prolonged sitting. The same medications and remain off work until Monday 2/4/02 and see if her symptoms are not improving by then." R. 264. If her symptoms continued, Dr. Peterson would have Sangel follow up with Dr. Feldmann.
Sangel called Dr. Peterson's office on February 4, 2002, still complaining of bilateral leg pain. She was referred to orthopedic specialist Philip A. Deffer, Jr., M.D. She saw Dr. Deffer on February 13, 2002, "for evaluation of back and bilateral leg pain ... going on since about a year ago." R. 290. Sangel stated she had pain "going down both of her legs down to her feet but not into her feet." Id. Her pain increased with coughing and sneezing. Sangel weighed 310 pounds at the time of this examination. She exhibited good motor *767 strength of her lower extremities, and positive straight leg raise and cross-straight leg raise. Dr. Deffer diagnosed her with "[l]ow back pain with possible recurrent herniation." Id. He prescribed Vicodin for pain and ordered an MRI. He also directed her to stay off work. Id. Sangel saw Dr. Deffer on February 15, 2002, for follow-up, and he advised her that the MRI showed "apparent recurrent herniation at L-4/5 and bulging at 5/1." R. 289. The doctor planned to refer Sangel to an orthopedist at the University of Iowa for further evaluation.
On March 8, 2002, John Glaser, M.D., performed a consultative examination of Sangel regarding her complaints of low back pain. R. 534-37. Dr. Glaser recommended a rehabilitation program, rather than surgery, because "a good rehab program has a higher success rate than surgery." R. 537. Sangel, however, was "adamantly against rehab." Id.
On May 6, 2002, Sangel was seen in the emergency room with a complaint of sudden low back pain after attempting to lift a laundry basket from the back seat of her car. She was treated with Dilaudid and Valium, and was given a prescription for Vicodin for pain.
On May 11, 2002, another state agency consultant, Dee Wright, Ph.D., assessed Sangel's mental RFC and completed a PRTF. R. 483-500. Dr. Wright opined that Sangel's major depressive disorder and personality disorder did not meet or equal the criteria for Listings 12.04 and 12.08. R. 483-90. Rather, Sangel's condition only caused (1) mild restriction in activities of daily living; (2) moderate difficulties in maintaining social functioning; (3) moderate difficulties in maintaining concentration, persistence, or pace; and (4) no episodes of decompensation of extended duration. R. 493. In assessing Sangel's mental RFC, Dr. Wright opined that she was moderately limited in her ability to (1) carry out detailed instructions; (2) maintain attention and concentration for extended periods; (3) work in coordination with or proximity to others without being distracted by them; (4) complete a normal workday and workweek without interruptions from psychologically based symptoms and to perform at a consistent pace without an unreasonable number and length of rest periods; (5) interact with the general public; and (6) respond appropriately to changes in the work setting. R. 497-97A. Sangel was not otherwise significantly limited. Id.
On May 17, 2002, Chrystalla Daly, D.O., a state agency consultant, assessed Sangel's physical RFC. R. 501-07. Dr. Daly opined that Sangel could lift and/or carry occasionally up to 20 pounds and frequently up to 10 pounds; sit, stand and/or walk for a total of about six hours each in an eight-hour workday; and push/pull without limitation. R. 502. Sangel could occasionally climb ramps and stairs (but never ladders, ropes, or scaffolds), balance, stoop, kneel, crouch, and crawl. R. 504. Further, she had no manipulative, visual, or communicative limitations. R. 504-05. Sangel was to avoid concentrated exposure to extreme cold, fumes and odors, and hazards such as heights because of her asthma and previous history of seizures. R. 505-06. Dr. Daly noted, however, that Sangel's seizure did not apparently impact her functioning and that "[t]here were no allegations of limitation of function due to asthma." R. 503.
Sangel was seen in the emergency room on October 29, 2002, with a complaint of recurrent back pain. On examination, she had spasms in her lower back. She was treated with Vicodin and Toradol.
Sangel saw Dr. Feldmann on March 11, 2003, who noted Sangel's diagnosis of diabetes. R. 403. Dr. Feldmann also noted that Sangel was uncooperative during the *768 examination and refused lab tests for diabetes, even though the doctor informed her that she could obtain state assistance for the tests. Id.
On September 3, 2003, Sangel was seen in the emergency room with complaints of muscle spasms and pain in her left mid-thoracic area. She was treated with Vicodin and Flexeril.
Sangel saw Dr. Feldmann on November 13, 2003. She stated Prevacid was working well for her, but unfortunately was giving her headaches. She asked to try Protonix, and the doctor agreed to a trial of Protonix.
On April 13, 2004, Sangel saw Dr. Feldmann with a complaint of diarrhea, which she stated had been present for seven years. She had been taking Imodium regularly. The doctor opined Sangel likely had irritable bowel syndrome. He ordered lab tests and prescribed Questran. He recommended she "[s]trongly consider seeing [a] gastroenterologist as these problems have been 7 years, long-standing and are disruptive of her lifestyle." R. 397. She saw Dr. Feldmann for follow-up on May 10, 2004. She stated the Questran was "doing wonderful, making her bowels actually normal." Id.
Sangel returned to see Dr. Deffer on June 2, 2004, more than two years since she had last seen him. The doctor's notes indicate that the orthopedists at the University of Iowa had not felt Sangel was a surgical candidate back in 2002, and Sangel "was sent on her way." R. 288. Sangel stated she had "actually done pretty well for the last couple years but now [was] having recurrent pain in her back with pain down her left leg[, ...] similar to what she had back in 1999 when she had a discectomy at 4/5." Id. Her pain primarily was in her left leg. The doctor ordered an MRI to evaluate her condition, and planned to set up an epidural steroid flood for symptomatic relief. He noted Sangel was "getting married in a few months and [was] concerned about being in pain for the wedding and subsequent honeymoon." Id.
The MRI showed the same herniation as the 2002 study, which Dr. Deffer noted had not changed significantly. R. 287. He administered epidural steroid blocks on July 6 and July 12, 2004, with little relief. Sangel was seen in the emergency room on August 27, 2004, with a complaint of back pain, worsening over the past months, with no relief from Vicodin. On examination, the attending physician noted Sangel had muscle spasms with standing. She was treated with Toradol, and was given a prescription for Toradol.
She saw Dr. Deffer on September 2, 2004, complaining that her pain was worsening. The doctor noted he had "offered to send her to a neurosurgeon or an orthopedic spine surgeon in the past [but] she [had] always declined that." R. 286. However, she now was requesting a referral to be evaluated for possible treatments. Dr. Deffer planned to refer Sangel to Dr. Ralph Reeder. Id. In the interim, he increased her hydrocodone dosage.
Sangel saw Dr. Reeder on November 5, 2004, for evaluation of her low back pain and right-sided sciatica pain. A physician's assistant noted the following history of Sangel's condition:
HISTORY OF PRESENT ILLNESS: Sara is a 27-year-old female who comes to the clinic today at the request of Dr. Deffer and is also a patient of Dr. Feldman's [sic]. She has a history of right-sided sciatica with a microsurgical discectomy at L4-5 in 1999 with good relief. In March of 2001, she slipped and fell on the ice, causing a return of her right-sided sciatica pain. Her current complaints include the right-sided sciatica pain as well as some back pain to a lesser degree since her fall in 2001. She *769 states her pain has since plateaued and rates her leg pain at a 7 out of 10. She does have some pain in the left side to a lesser degree. She denies any numbness or tingling in her legs. She also denies any difficulty with bowel or bladder function. She has had some difficulty with ascending stairs but otherwise denies any weakness in her legs.
Again, she currently rates her pain at an average of 7 out of 10 daily, but this does increase through the day, especially with standing, walking, sitting, and bending. Treatment so far has included two epidural floods, the last of which was in August, and neither offered any relief for her. She has been using Vicodin and Flexeril for her medications, which offer some relief at night time. She has not had any oral prednisone. She did have some physical therapy prior to her first discectomy, and this was not beneficial for her.
MEDICAL HISTORY: She had a discectomy at L4-5 on the right side in 1999 with Dr. Chad Abernathy in Cedar Rapids. In 2001, she fell on the ice and states she had a "broken vertebra". Current and past medical conditions being treated include diabetes, anxiety, irritable bowel disease, history of seizures, prior back injuries, asthma, and female organ problems, including polycystic ovarian disease.
R. 316.
The P.A. noted Sangel exhibited "mild discomfort during the examination," exhibiting "some mild tenderness ... over the lower lumbar spine"; "slightly decreased strength in the right lower extremity with dorsiflexion of the right foot and extension of the toes compared to her left"; but otherwise "good strength in the lower extremities with flexion and extension of the knees." R. 317. She had "pain to her right sciatic distribution with walking on her heels"; "slight difficulty with ascending a step with her right foot"; "good sensation to light touch and pinprick in the lower extremities"; and positive straight leg raising on the right "at approximately 45 degrees." Id.
Dr. Reeder noted his agreement with the P.A.'s history and physical findings. R. 318. On the doctor's own examination, he noted Sangel was 5'1" tall and weighed 280 pounds. She had "no palpable tenderness in the lower back," a normal motor exam, "good pulses in both lower extremities," absent reflexes in both ankles, and she was "able to walk on heels and toes and ascend[ ] a stair satisfactorily." Id. Dr. Reeder noted the following impression from his examination of Sangel:
The patient's symptoms are most consistent with sciatica due to problems from the disc herniation at L3-4. Her pain is now chronic. She is neurologically well. Her back pain is a significant problem for her. However, given her widespread degenerative changes and the previous L4-5 problems, I would advise bilateral decompression by microsurgical discectomy rather than proceeding to a fusion operation at the L3-4 level. Would hope that by relieving her leg pain we can have the patient more involved in rehab so that she can avoid additional disc herniations and/or instability problems. The patient understands this rationale and wishes to proceed.... Given her obesity, I feel the patient is best managed as an inpatient with overnight observation.
Id.
Sangel underwent the bilateral microdiskectomy at L3-4 on November 19, 2004. "Large disk fragments" were removed from both the right and left side. The next day, notes indicate Sangel was making "good progress," and she felt her leg pain was improved. She was discharged in stable condition. Prior to her discharge, *770 she saw Arturo Segismundo, M.D. for consultation regarding her diabetes. He recommended Sangel monitor her blood sugars twice daily, eat a proper diabetic diet, exercise, and lose weight.
Sangel saw Dr. Reeder for follow-up on December 14, 2004. She stated she had "no back or leg numbness, tingling, weakness, or pain following her surgery." R. 306. Sangel reported "doing very well, other than the fact that she `walks crooked,' specifying that she feels she leans to the left when she is walking." Id. The doctor noted Sangel's gait was "normal, however, she does lean slightly to the left at the waist." Id. He noted a "slight footdrop on the left," as well. Id. The doctor noted the following impression from his examination:
Overall, Sara is very satisfied with the results of her surgery stating she has had 95% relief from her pain. We did recommend that she participate in some low impact aerobic exercises and also provided her with a copy of the "Back Book" for some exercises for her lower lumbar spine. She is possibly planning to begin working in the upcoming months at a factory that produces farm equipment. We recommended that she keep her lifting at a maximum of 10-15 pounds for the next couple of months and we will see her back in 2 months at Spencer Clinic and possibly advance this at that time.
R. 306.
On January 21, 2005, Dennis A. Weis, M.D., reviewed Sangel's medical records and completed a Physical RFC Assessment form. He opined Sangel would be able to lift/carry up to 20 pounds occasionally and 10 pounds frequently; sit for at least two hours and stand and walk for up to six hours each in an eight-hour workday; and push/pull without limitation. He opined she never should climb ramps or stairs, but she could perform all other postural activities occasionally. R. 296-303. He noted Sangel had a "positive response to recent surgical intervention regarding her back," and none of Sangel's treating sources had given any estimates regarding her RFC. R. 304.
On January 25, 2005, Sangel was seen in the emergency room after she had stretched and felt a "pop" in her neck. She reported pain in the left side of her neck and in her left arm. She had seen a chiropractor without relief. She was treated with Toradol, and was given prescriptions for Darvocet and Flexeril.
Sangel saw a physician's assistant in Dr. Reeder's office for follow-up on February 4, 2005. She reported occasional back discomfort, but no current complaints of pain, numbness, tingling, or weakness in her lower extremities. She reportedly was trying to do her back exercises, but she was not doing them regularly. The P.A. recommended Sangel "continue with her low impact aerobic exercises as well as stretching exercises[.]" R. 305. Dr. Reeder concurred with these recommendations. Id.
Sangel was seen in the emergency room on June 17, 2005, complaining of pain and muscle spasms in her lower right back. She was treated with Demerol, and was directed to "avoid bending, heavy lifting, prolonged sitting, and activities which make the problem worse." R. 333. Discharge instructions noted that a "back exercise rehabilitation program [could] be very helpful in reducing symptoms and preventing further episodes of pain." Id.
Sangel was seen in the emergency room on November 17, 2005, for her chronic back pain. She had run out of her pain medications two weeks earlier and was experiencing pain in her right lower back, radiating into her right buttock. She was treated with Toradol, and given two Percocet pills and 2 Flexeril pills, with instructions *771 to follow up with her physician. R. 325.
On March 3, 2006, Sangel saw Sherry Kolacia-Tighe, M.D. for headache management. The doctor noted the following history:
For a number of years she has had problems with holoacranial two parietal type headaches. I had seen her several days ago and prescribed some Midrin. Prior to that she had Imitrex but reacted with chest palpitations. Her headaches are occurring on a daily basis. She did take 3 Midrin yesterday and had some slight improvement but recurred and she took a Flexeril and a Percocet, which she takes normally for her back. She has done chiropractic care and this has not alleviated her symptoms. She is an insulin dependent type II diabetic but her blood sugars have been within normal range. It was 140 this morning. She also has known history of palpitations and is on Diltiazem for that. She describes the headache on the usual scale of 1-10 for her headaches as being about a 4 and occasionally as severe as an 8. States that this headache has been ongoing now for several weeks. It is not unusual in its character however and it seems to be worse at the end of the day. She has had no blurred vision. No coinciding upper respiratory symptoms.
R. 394. The doctor diagnosed Sangel with "Persistent tension headaches." Id. She prescribed a trial of Toradol and Amitriptyline.
Between June 22 and August 31, 2007, Sangel underwent mental health treatment at the Seasons Center for Community Mental Health. R. 538-42. On June 22, 2007, Sangel was diagnosed with generalized anxiety disorder, panic disorder with agoraphobia, but bipolar disorder was ruled out. R. 540. Prozac was prescribed. Id. On July 20, 2007, Sangel reported that her anxiety was well controlled and her mood was better. R. 539. On August 31, 2007, Sangel reportedly was "doing really well," continued to "do well with the Prozac," and had her dosage increased to better control her anxiety. R. 538. On October 26, 2007, Sangel reported that she felt "like she is doing really well with her energy and has a lot of projects that she has gotten started that she is looking forward to for the winter." R. 550.
On November 14, 2007, Suzanne Bakken, C.N.P., performed a consultative examination of Sangel. R. 543-49. Ms. Bakken noted as follows:
On initial questioning, the patient states that she has never had physical therapy. She then states that she did have physical therapy prior to having her first surgery. She reports it was no help. The patient states at the initiation of our visit that she feels as though [physical therapy] will never help her, and that she is unwilling to go through it, as she feels it will only increase her pain.
R. 543. Although initially on the new-patient questionnaire Sangel reported that she had never used illicit drugs or medication without a prescription, she reported on further questioning that she had smoked THC that summer. R. 545. Sangel further reported that "with adjustment of her [psychiatric] medication, she has been doing quite well, as far as her psychiatric issues go." R. 544. Ms. Bakken also noted that an MRI on January 31, 2007, revealed moderate foraminal stenosis on the right at L3-4 without evidence of nerve root impingement, and an MRI in February 2007 revealed no evidence of recurrent disc herniation. R. 547. Sangel last experienced a seizure in 2000. R. 546. Finally, Ms. Bakken told Sangel that she believed "at least part of [Sangel's] pain problem is fixable with physical therapy" and "that if she remained unmotivated and *772 nonfunctional, that the Chronic Pain Clinic and opiate use was [sic] not appropriate for her." R. 547. Sangel ultimately was prescribed Oxycodone and "was cautioned [about] drowsiness." R. 549.
Summary of ALJ's Decision
The ALJ found that Sangel has not engaged in substantial gainful activity since her alleged onset date of March 15, 2001. He found her to have the following severe impairments:
She is status post a discectomy at L4-L5 in 1999 and a microdiscectomy at L3-L4 on November 19, 2004, with MRI evidence of January 31, 2007, showing minimal changes suggestive of post-operative scarring at L4-L5 and along the posterior aspect of the thecal sac at L3. She experiences obesity, being 5 feet, 7 inches tall and weighing in excess of 300 pounds from 2000 to 2002; being between a high of 269 pounds in January 2005 to a low of 246 pounds in January 2006 and ending at 256 pounds in March 2006; and last weight 280 pounds when examined on November 14, 2007. The claimant testified she has had a weight problem her entire life and it does not case her physical problems. She has experienced symptoms of depression and anxiety with mixed personality traits, sometimes more pronounced than at other times over the time frame at issue in this decision, largely controlled with the use of Prozac and Xanax.
R. 28 (citations to exhibits omitted). However, the ALJ found that Sangel's impairments, singly or in combination, do not meet the Listing level of severity.
The ALJ found Sangel's testimony not to be fully credible, observing that she "has evidenced a tendency to assert various symptoms or medical problems have been present for long periods of time and quite debilitating although she did not seek treatment for said medical problems on more than an incidental or short-term basis." R. 30. He noted that some of Sangel's problems apparently were "resolved with treatment at the time or simply went away on their own," and he found that "[t]his tendency on the part of the claimant to exaggerate diminishes the credibility to be given her asserted symptomatology with resultant functional limitations as reported in record and at hearing." Id.
The ALJ found Sangel has the RFC "to perform light work involving only occasional postural activities and no climbing of ropes, scaffolds, or ladders." R. 29-30. In arriving at this RFC, the ALJ relied on the state agency consultants' conclusions "other than for limitations as to working in unclean air environments or around hazardous machinery," because the ALJ found Sangel's alleged limitations due to seizures and asthma "to be not medically documented or not severe." R. 30. He further stated:
The claimant is also found capable of only performing noncomplex, repetitive and routine work activities requiring no more than brief and superficial contacts with supervisors, coworkers, or the public as the result of her mental impairments during the time frame from March 15, 2001, forward. This mental residual functional capacity was less restrictive, at times, based on medical evidence and opinion in record as discussed below. Accordingly, the undersigned agrees with, and adopts, the conclusions of the state agency physicians regarding the claimant's mental residual functional capacity.
Id. The ALJ also found that "at all times the claimant would be found capable of performing the full range of work at the sedentary exertional level which would, in any case, preclude a finding of disability on a physical basis." R. 33.
The ALJ noted that Sangel performed her past relevant work as a production line *773 solderer at the sedentary exertional level, although such work is generally performed at the light exertional level. R. 35, 124, 132, 217, 219, 262. Therefore, on the basis of the RFC the ALJ assigned to Sangel, he found that she "is capable of performing her past relevant work as a production line solderer, both as she performed it in late 1996 and 1997 and as generally performed in the national economy." R. 35. The ALJ, therefore, found that Sangel was not under a disability from March 15, 2001, through December 12, 2007, the date of his decision. R. 35-36.
Disability Determinations and the Burden of Proof
The Social Security Act defines a disability as the inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or can be expected to last for a continuous period of not less than twelve months. 42 U.S.C. §§ 423(d)(1)(A), 1382c(a)(3)(A); 20 C.F.R. §§ 404.1505, 416.905. A claimant has a disability when the claimant is "not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists ... in significant numbers either in the region where such individual lives or in several regions of the country." 42 U.S.C. §§ 423(d)(2)(A), 1382c(a)(3)(B).
To determine whether a claimant has a disability within the meaning of the Social Security Act, the Commissioner follows a five-step sequential evaluation process outlined in the regulations. 20 C.F.R. §§ 404.1520, 416.920; see Kirby v. Astrue, 500 F.3d 705, 707 (8th Cir.2007). First, the Commissioner will consider a claimant's work activity. If the claimant is engaged in substantial gainful activity, then the claimant is not disabled. 20 C.F.R. §§ 404.1520(a)(4)(i), 416.920(a)(4)(i).
Second, if the claimant is not engaged in substantial gainful activity, the Commissioner looks to see "whether the claimant has a severe impairment that significantly limits the claimant's physical or mental ability to perform basic work activities." Dixon v. Barnhart, 353 F.3d 602, 605 (8th Cir.2003). "An impairment is not severe if it amounts only to a slight abnormality that would not significantly limit the claimant's physical or mental ability to do basic work activities." Kirby, 500 F.3d at 707; see 20 C.F.R. §§ 404.1520(c), 404.1521(a), 416.920(c), 416.921(a).
The ability to do basic work activities is defined as "the abilities and aptitudes necessary to do most jobs." 20 C.F.R. §§ 404.1521(b), 416.921(b). These abilities and aptitudes include (1) physical functions such as walking, standing, sitting, lifting, pushing, pulling, reaching, carrying, or handling; (2) capacities for seeing, hearing, and speaking; (3) understanding, carrying out, and remembering simple instructions; (4) use of judgment; (5) responding appropriately to supervision, co-workers, and usual work situations; and (6) dealing with changes in a routine work setting. Id. §§ 404.1521(b)(1)-(6), 416.921(b)(1)-(6); see Bowen v. Yuckert, 482 U.S. 137, 141, 107 S.Ct. 2287, 2291, 96 L.Ed.2d 119 (1987). "The sequential evaluation process may be terminated at step two only when the claimant's impairment or combination of impairments would have no more than a minimal impact on her ability to work." Page, 484 F.3d at 1043 (internal quotation marks omitted).
Third, if the claimant has a severe impairment, then the Commissioner will consider the medical severity of the impairment. If the impairment meets or equals one of the presumptively disabling impairments listed in the regulations, then the claimant is considered disabled, regardless of age, education, and work experience. *774 20 C.F.R. §§ 404.1520(a)(4)(iii), 404.1520(d), 416.920(a)(4)(iii), 416.920(d); see Kelley v. Callahan, 133 F.3d 583, 588 (8th Cir.1998).
Fourth, if the claimant's impairment is severe, but it does not meet or equal one of the presumptively disabling impairments, then the Commissioner will assess the claimant's RFC to determine the claimant's "ability to meet the physical, mental, sensory, and other requirements" of the claimant's past relevant work. 20 C.F.R. §§ 404.1520(a)(4)(iv), 404.1545(a)(4), 416.920(a)(4)(iv), 416.945(a)(4). "RFC is a medical question defined wholly in terms of the claimant's physical ability to perform exertional tasks or, in other words, what the claimant can still do despite his or her physical or mental limitations." Lewis v. Barnhart, 353 F.3d 642, 646 (8th Cir.2003) (internal quotation marks omitted); see 20 C.F.R. §§ 404.1545(a)(1), 416.945(a)(1). The claimant is responsible for providing evidence the Commissioner will use to make a finding as to the claimant's RFC, but the Commissioner is responsible for developing the claimant's "complete medical history, including arranging for a consultative examination(s) if necessary, and making every reasonable effort to help [the claimant] get medical reports from [the claimant's] own medical sources." 20 C.F.R. §§ 404.1545(a)(3), 416.945(a)(3). The Commissioner also will consider certain non-medical evidence and other evidence listed in the regulations. See id. If a claimant retains the RFC to perform past relevant work, then the claimant is not disabled. Id. §§ 404.1520(a)(4)(iv), 416.920(a)(4)(iv).
Fifth, if the claimant's RFC as determined in step four will not allow the claimant to perform past relevant work, then the burden shifts to the Commissioner to prove that there is other work that the claimant can do, given the claimant's RFC as determined at step four, age, education, and work experience. See Bladow v. Apfel, 205 F.3d 356, 358-59 n. 5 (8th Cir.2000). The Commissioner must prove not only that the claimant's RFC will allow the claimant to make an adjustment to other work, but also that the other work exists in significant numbers in the national economy. Eichelberger v. Barnhart, 390 F.3d 584, 591 (8th Cir.2004); 20 C.F.R. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v). "[I]f the claimant cannot perform the past work, the burden then shifts to the Commissioner to prove that there are other jobs in the national economy that the claimant can perform." Pearsall v. Massanari, 274 F.3d 1211, 1217 (8th Cir.2001). "If the ALJ determines the claimant cannot resume her prior occupation, the burden shifts to the Commissioner at step five to show the claimant is capable of performing other work." Pate-Fires v. Astrue, 564 F.3d 935, 942 (8th Cir.2009). If the claimant can make an adjustment to other work that exists in significant numbers in the national economy, then the Commissioner will find the claimant is not disabled. If the claimant cannot make an adjustment to other work, then the Commissioner will find that the claimant is disabled. 20 C.F.R. §§ 404.1520(a)(4)(v), 416.920(a)(4)(v). At step five, even though the burden of production shifts to the Commissioner, the burden of persuasion to prove disability remains on the claimant. Stormo v. Barnhart, 377 F.3d 801, 806 (8th Cir.2004).
The Substantial Evidence Standard
The court reviews an ALJ's decision to determine whether the ALJ applied the correct legal standards and whether the factual findings are supported by substantial evidence on the record as a whole. Page, 484 F.3d at 1042. This review is deferential; the court "must affirm the Commissioner's decision if it is supported by substantial evidence on the record as a *775 whole." Pelkey v. Barnhart, 433 F.3d 575, 578 (8th Cir.2006); see 42 U.S.C. § 405(g) ("The findings of the Commissioner of Social Security as to any fact, if supported by substantial evidence, shall be conclusive...."). Under this standard, substantial evidence is less than a preponderance but is enough that a reasonable mind would find it adequate to support the Commissioner's conclusion. Kluesner v. Astrue, 607 F.3d 533, 536 (8th Cir.2010); see Richardson v. Perales, 402 U.S. 389, 401, 91 S.Ct. 1420, 1427, 28 L.Ed.2d 842 (1971).
Moreover, substantial evidence "on the record as a whole" requires consideration of the record in its entirety, taking into account both "evidence that supports the Commissioner's decision as well as the evidence that detracts from it." Kluesner, 607 F.3d at 536 (quoting Finch v. Astrue, 547 F.3d 933, 935 (8th Cir.2008)). The court must "search the record for evidence contradicting the [Commissioner's] decision and give that evidence appropriate weight when determining whether the overall evidence in support is substantial." Baldwin v. Barnhart, 349 F.3d 549, 555 (8th Cir.2003) (citing Cline v. Sullivan, 939 F.2d 560, 564 (8th Cir.1991)).
In evaluating the evidence in an appeal of a denial of benefits, the court must apply a balancing test to assess any contradictory evidence. Sobania v. Sec'y of Health & Human Servs., 879 F.2d 441, 444 (8th Cir.1989) (citing Steadman v. S.E. C., 450 U.S. 91, 99, 101 S.Ct. 999, 1006, 67 L.Ed.2d 69 (1981)). The court, however, does not "reweigh the evidence presented to the ALJ," Baldwin, 349 F.3d at 555 (citing Bates v. Chater, 54 F.3d 529, 532 (8th Cir.1995)), or "review the factual record de novo." Roe v. Chater, 92 F.3d 672, 675 (8th Cir.1996) (citing Naber v. Shalala, 22 F.3d 186, 188 (8th Cir.1994)). Instead, if, after reviewing the evidence, the court finds it "possible to draw two inconsistent positions from the evidence and one of those positions represents the Commissioner's findings, [the court] must affirm the [Commissioner's] denial of benefits." Kluesner, 607 F.3d at 536 (quoting Finch, 547 F.3d at 935). This is true even in cases where the court "might have weighed the evidence differently." Culbertson v. Shalala, 30 F.3d 934, 939 (8th Cir.1994) (quoting Browning v. Sullivan, 958 F.2d 817, 822 (8th Cir.1992)); accord Krogmeier v. Barnhart, 294 F.3d 1019, 1022 (8th Cir.2002) (citing Woolf v. Shalala, 3 F.3d 1210, 1213 (8th Cir.1993)). The court may not reverse the Commissioner's decision "merely because substantial evidence would have supported an opposite decision." Goff v. Barnhart, 421 F.3d 785, 789 (8th Cir.2005) ("[A]n administrative decision is not subject to reversal simply because some evidence may support the opposite conclusion."); accord Page, 484 F.3d at 1042-43.
Discussion
A. The ALJ's Credibility Determination
The ALJ found that Sangel's subjective complaints were not fully credible to the extent they exceeded the limitations in the ALJ's RFC assessment. R. 30. Sangel contends that the ALJ "did not give full weight and credit to [her] pain complaints... as they deserved." Doc. No. 12 at 9. According to Sangel, the ALJ's credibility finding "is purely conjectural and unsupported by any evidence in the record from any health care provider, physical or mental, to the effect that [she] exaggerates or magnifies her symptoms or is malingerer." Id. at 10. The Commissioner maintains, however, that the ALJ properly relied on inconsistencies in the record to discredit Sangel's subjective complaints. Doc. 13 at 17-21.
*776 1. Legal Standard
"The credibility of a claimant's subjective testimony is primarily for the ALJ to decide, not the courts." Pearsall v. Massanari, 274 F.3d 1211, 1218 (8th Cir.2001). Accordingly, the court must "defer to the ALJ's determinations regarding the credibility of testimony, so long as they are supported by good reasons and substantial evidence." Guilliams v. Barnhart, 393 F.3d 798, 801 (8th Cir.2005). In this regard, an ALJ may discount a claimant's subjective complaints if there are inconsistencies in the record as a whole. Id. When evaluating a claimant's subjective complaints, the ALJ must consider 1) the claimant's daily activities; 2) the duration, frequency and intensity of the pain; 3) precipitating and aggravating factors; 4) dosage, effectiveness and side effects of medication; and 5) functional restrictions. Polaski v. Heckler, 739 F.2d 1320, 1322 (8th Cir.1984); see 20 C.F.R. §§ 404.1529(c)(3)(i)-(vii), 416.929(c)(3)(i)-(vii) (codifying Polaski factors). Other factors include the claimant's relevant work history and the absence of objective medical evidence to support the complaints. Wildman v. Astrue, 596 F.3d 959, 968 (8th Cir.2010). Thus, although an ALJ may not discount a claimant's subjective complaints solely because they are unsupported by objective medical evidence, Halverson v. Astrue, 600 F.3d 922, 931-32 (8th Cir.2010), such evidence is one factor that the ALJ may consider. Ford v. Astrue, 518 F.3d 979, 982 (8th Cir.2008); see Jones v. Astrue, 619 F.3d 963, 975 (8th Cir.2010) (noting that an ALJ is entitled to make a factual determination that a claimant's subjective pain complaints are not credible in light of objective medical evidence to the contrary). Further, an ALJ need not explicitly discuss each Polaski factor; it is sufficient if the ALJ acknowledges and considers those factors before discounting a claimant's subjective complaints. Heino v. Astrue, 578 F.3d 873, 881 (8th Cir.2009); see Dunahoo v. Apfel, 241 F.3d 1033, 1038 (8th Cir.2001) ("If the ALJ discredits a claimant's credibility and gives a good reason for doing so, we will defer to its judgment even if every factor is not discussed in depth.").
2. Analysis
In assessing Sangel's credibility, the ALJ first acknowledged the above factors. R. 30-31 (citing 20 C.F.R. § 404.1529(c) and Social Security Ruling 96-7p). The ALJ then pointed to inconsistencies in the record to discredit Sangel's subjective complaints, including her failure to seek treatment, her medical improvement with treatment, and the inconsistency between her allegations and the objective medical evidence. R. 30-35.
Substantial evidence supports the ALJ's finding in this case. The ALJ noted that, although Sangel's symptoms or medical problems allegedly had been present for long periods of time and were disabling, she did not seek treatment for those problems on more than an incidental or short-term basis. R. 30. The ALJ found that Sangel had only experienced low back pain for intermittent periods of time with even fewer reports of lower extremity pain. R. 31. The ALJ further found that, other than taking medications for the treatment of depression and anxiety between 2001 and 2007, Sangel did not seek further psychological treatment until June 2007, nor did she allege significant mental problems being present with the use of medication during the extended time frame between January 2002 and the early summer of 2007. R. 35.
Conservative treatment of pain through over-the-counter medication and limited use of prescription medication can be inconsistent with a claimant's allegations of disabling pain. Moore v. Astrue, 572 F.3d 520, 524-25 (8th Cir.2009); Clevenger v. Soc. Sec. Admin., 567 F.3d 971, *777 976 (8th Cir.2009). "A failure to follow a recommended course of treatment also weighs against a claimant's credibility." Guilliams, 393 F.3d at 802. Specifically, "[f]ailure to follow a prescribed course of remedial treatment without good reason is grounds for denying an application for benefits." Roth v. Shalala, 45 F.3d 279, 282 (8th Cir.1995); see 20 C.F.R. §§ 404.1530(b), 416.930(b). Good reasons justifying medical noncompliance may include a claimant's mental disorder, Pate-Fires v. Astrue, 564 F.3d 935, 945-47 (8th Cir.2009), or lack of sufficient financial resources. Brown v. Barnhart, 390 F.3d 535, 540 (8th Cir.2004). Further, a claimant's failure to seek regular medical treatment is inconsistent with complaints of disabling pain. Comstock v. Chater, 91 F.3d 1143, 1147 (8th Cir.1996). Accordingly, the ALJ articulated good reasons supported by substantial evidence to discount Sangel's credibility on the basis of her lack of regular medical treatment.
The ALJ further found that Sangel failed to follow recommended treatment. R. 32. In particular, the ALJ noted that Sangel "was adamantly against" following Dr. Glaser's recommendation to undergo a rehabilitation program. R. 32, 537. The record also indicates that Sangel refused to undergo recommended physical therapy that would help her condition. R. 33, 547. Accordingly, Sangel's failure to follow recommended treatment also weighs against her credibility. See Bradley v. Astrue, 528 F.3d 1113, 1115 (8th Cir.2008) (failure to follow recommended course of treatment weighs against claimant's credibility).
In addition, Sangel's medication controlled her anxiety and depression, and she continued to report doing well in 2007. R. 35, 538-42, 544, 550. Substantial evidence thus supports the ALJ's finding that the effective treatment of Sangel's depression and anxiety suggested that they were not disabling. See Clevenger, 567 F.3d at 976 (ALJ may reasonably discount claimant's subjective complaints of disabling pain when the pain is controllable by medication).
Finally, the ALJ noted inconsistencies in Sangel's testimony, including her testimony that she experienced dizziness and double vision as a side effect of her medication, when in fact Ms. Bakken had told her that the only possible side effect was drowsiness. R. 31, 549, 576, 591. As noted above, an ALJ may properly discount subjective complaints that are inconsistent with the record as a whole. See Teague v. Astrue, 638 F.3d 611, 615 (8th Cir.2011) ("Given that none of [the claimant's] doctors reported functional or work related limitations due to her headaches, there was a basis to question [the claimant's] credibility." (citing Eichelberger v. Barnhart, 390 F.3d 584, 590 (8th Cir. 2004))); 20 C.F.R. §§ 404.1529(c), 416.929(c). In sum, Sangel's failure to seek and to follow treatment, her medical improvement with treatment, and the inconsistency between her allegations and the objective medical evidence were good reasons supported by substantial evidence in the record for the ALJ to discount Sangel's credibility.
B. Plaintiff's Residual Functional Capacity
The ALJ found Sangel has the RFC "to perform light work involving only occasional postural activities and no climbing of ropes, scaffolds, or ladders." R. 29-30. The ALJ also found Sangel "capable of only performing noncomplex, repetitive and routine work activities requiring no more than brief and superficial contacts with supervisors, co-workers, or the public." R. 30. In determining Sangel's RFC, the ALJ adopted the "conclusions of the state agency physicians as to the claimant's physical residual functional capacity other than for limitations as to *778 working in unclean air environments or around hazardous machinery," because those limitations were "attributable to seizures and asthma which [the ALJ] found... to be not medically documented or not severe." R. 30. Sangel maintains that the ALJ should have formulated a more restrictive RFC, namely, the physical RFC assessment of a state agency consultant in January 2005, in which the consultant opined that Sangel retained the RFC to stand and/or walk for at least two hours in an eight-hour workday. Doc. No. 12 at 13; R. 297. Sangel contends that she "clearly would not have been able to perform any of her past relevant work with an inability to stand for no more than two hours." Doc. No. 12 at 13. Sangel further asserts that the ALJ erred in finding that she performed her past work at the sedentary exertional level. Id.
Sangel's arguments are without merit. The RFC is a function-by-function assessment of an individual's ability to do work-related activities based upon all of the relevant evidence. Casey v. Astrue, 503 F.3d 687, 696-97 (8th Cir.2007); see 20 C.F.R. §§ 404.1545(a)(1), 416.945(a)(1) (RFC is the most claimant can still do despite his or her limitations). Contrary to Sangel's assertion, the consultant completing the July 2005 physical RFC assessment did not find that Sangel was unable to stand for more than two hours. Rather, the consultant found that she could stand and/or walk for at least two hours in an eight-hour workday. In any event, according to Sangel, she stood and walked for ".10" of an hour and sat between 7 to 8 hours in an eight-hour workday as a production line solderer. R. 132. Sangel's assertion that she "would not have been able to perform any of her past relevant work with an inability to stand for no more than two hours" is thus unavailing.
Further, "[s]edentary work involves lifting no more than 10 pounds at a time and occasionally lifting or carrying articles like docket files, ledgers, and small tools." 20 C.F.R. §§ 404.1567(a), 416.967(a). "Although a sedentary job is defined as one which involves sitting, a certain amount of walking and standing is often necessary in carrying out job duties. Jobs are sedentary if walking and standing are required occasionally and other sedentary criteria are met." Id. On forms Sangel completed as part of her application for benefits, she reported that she frequently lifted less than 10 pounds while working as a production line solderer. R. 35, 124, 132, 217, 219, 262. Substantial evidence, therefore, supports the ALJ's finding that Sangel actually performed her past work as a production line solderer at the sedentary level.
C. Plaintiff's Ability to Perform Past Relevant Work
In determining Sangel's RFC, the ALJ adopted the state agency consultants' opinions except their opinions regarding Sangel's "limitations as to working in unclean air environments or around hazardous machinery," because the ALJ found these limitations based on seizures and asthma "to be not medically documented or not severe." R. 30. Sangel contends that the ALJ erred in finding that she has the RFC to perform her past relevant work as a production line solderer because the VE testified, in response to a hypothetical question by the ALJ, that environmental restrictions such as avoiding fumes and hazards would preclude such work.
"The regulations provide that the ALJ may elicit testimony from a vocational expert in evaluating a claimant's capacity to perform past relevant work." Wagner v. Astrue, 499 F.3d 842, 853 (8th Cir.2007) (citing 20 C.F.R. § 404.1560(b)(2)). "In fashioning an appropriate hypothetical question for a vocational *779 expert, the ALJ is required to include all the claimant's impairments supported by substantial evidence in the record as a whole." Finch v. Astrue, 547 F.3d 933, 937 (8th Cir.2008) (quoting Swope v. Barnhart, 436 F.3d 1023, 1025 (8th Cir.2006)) (internal quotation marks omitted). An ALJ may omit alleged impairments from a hypothetical question posed to a vocational expert when there is no medical evidence that these conditions impose any restrictions on the claimant's functional capabilities. Owen v. Astrue, 551 F.3d 792, 801-02 (8th Cir. 2008).
Substantial evidence supports the ALJ's finding that Sangel's seizure disorder and asthma were either not medically documented or not severe. Sangel last experienced a seizure in 2000, and medication since then had controlled her seizure disorder. R. 502-03, 526, 541, 546. She last experienced an asthma attack in June 2001 and had not sought any treatment since then. R. 479. In Johnson v. Apfel, 240 F.3d 1145, 1148 (8th Cir.2001), the court found that the ALJ properly disregarded the portion of the vocational expert's testimony that was based on the claimant's incredible assertions. The ALJ in this case thus properly excluded from his assessment of Sangel's RFC environmental limitations that were not supported by substantial evidence in the record. Accordingly, Plaintiff's argument in this regard is without merit.
D. Listing 12.04
Sangel finally maintains that she met or equaled the requirements for Listing 12.04. At step three, the claimant has the burden to show that her impairments meet or equal a listed impairment. See Johnson v. Barnhart, 390 F.3d 1067, 1070 (8th Cir.2004) (impairments must meet all specified listing criteria). Sangel provides no argument in this regard other than that her "work history, emergency care, and mental residual functional capacity assessments... demonstrate that she meets or exceeds the criteria under 12.04 B." Doc. No. 12 at 14. The court thus rejects Sangel's contention. See Vandenboom v. Barnhart, 421 F.3d 745, 750 (8th Cir.2005) (summarily rejecting conclusory assertion that ALJ did not consider whether appellant met certain listings, where no analysis of law or facts was provided). In any event, as discussed below, substantial evidence supports the ALJ's finding that Sangel's impairment did not meet or equal the criteria of Listing 12.04.
The Commissioner's Listing of Impairments describes, for each of the body's major systems, impairments the Commissioner considers "to be severe enough to prevent an individual from doing any gainful activity, regardless of his or her age, education, or work experience." 20 C.F.R. §§ 404.1525(a), 416.925(a). Listing 12.04 consists of "paragraph A criteria (a set of medical findings), and paragraph B criteria (a set of impairment-related functional limitations)," as well as some "additional functional criteria (paragraph C criteria)." 20 C.F.R. pt. 404, subpt. P, app. 1, § 12.00. The Commissioner describes the functions of the three types of criteria as follows:
The criteria in paragraph A substantiate medically the presence of a particular mental disorder....
The criteria in paragraphs B and C describe impairment-related functional limitations that are incompatible with the ability to do any gainful activity. The functional limitations in paragraphs B and C must be the result of the mental disorder described in the diagnostic description, that is manifested by the medical findings in paragraph A.
Id., subs. (A), Introduction.
Paragraph B of Listing 12.04 requires that the disorder result in at least two of the following criteria:
*780 1. Marked restriction of activities of daily living; or
2. Marked difficulties in maintaining social functioning; or
3. Marked difficulties in maintaining concentration, persistence, or pace; or
4. Repeated episodes of decompensation, each of extended duration.
Id. § 12.04(B).[2]
In this case, the ALJ adopted the May 11, 2002, findings of the state agency consultant that Sangel's mental impairment only caused (1) mild restriction in activities of daily living; (2) moderate difficulties in maintaining social functioning; (3) moderate difficulties in maintaining concentration, persistence, or pace; and (4) no episodes of decompensation of extended duration. R. 30, 493. As noted above, the ALJ found that, other than taking medications for depression and anxiety between 2001 and 2007, Sangel did not seek further treatment until June 2007, and she did not allege significant mental problems between January 2002 and early summer 2007. R. 35. Sangel began treatment on Prozac in June 2007, and her mental status improved thereafter, with Sangel reportedly "doing well." R. 35. Substantial evidence thus supports the ALJ's finding that Sangel's mental impairment caused at most moderate limitations in functioning.
Despite Sangel's assertion that her mental impairment meets or equals Listing 12.04, it is not the court's function on judicial review to reweigh the evidence or to review the factual record de novo. Baldwin, 349 F.3d at 555. Rather, the court must affirm the Commissioner's decision if it is supported by substantial evidence in the record even if the court would have weighed the evidence differently, or substantial evidence would support an opposite decision. See, e.g., Goff, 421 F.3d at 789. In light of substantial evidence to support the ALJ's finding that Sangel did not have an impairment or combination of impairments that meets or equals any of the impairments in the Listing of Impairments, including Listing 12.04, Sangel's argument to the contrary is unavailing.
Conclusion
For the reasons stated above, the court finds that the Commissioner's decision is supported by substantial evidence in the record as a whole and is based on proper legal standards. Accordingly, the Commissioner's decision is affirmed, and judgment will be entered in favor of the Commissioner and against Sangel.
IT IS SO ORDERED.
NOTES
[1] Sangel filed prior applications in 2001 and 2005, both of which were denied without proceeding to a hearing.
[2] Listing 12.04 allows only the paragraph C criteria to be satisfied, as an alternative to satisfying both A and B. Id. § 12.04 ("The required level of severity for these disorders is met when the requirements in both A and B are satisfied, or when the requirements in C are satisfied."). Because Sangel does not contend the ALJ should have considered her impairments under the paragraph C criteria of Listing 12.04, the court will omit discussion of those criteria here.
| {
"pile_set_name": "FreeLaw"
} |
225 F.2d 69
55-1 USTC P 9275
Adeline KIRSCHENMANN, Appellant,v.Harry C. WESTOVER, United States Collector of internalRevenue for the Sixth District of California, Appellee.Henry KIRSCHENMANN, Appellant,v.Harry C. WESTOVER, United States Collector of InternalRevenue for the Sixth District of California, Appellee.
No. 13736.
United States Court of Appeals, Ninth Circuit.
March 8, 1955.Rehearing Denied May 31, 1955.Certiorari Denied Oct. 10, 1955.See 76 S.Ct. 70.
1
Rainey & Blum, Beverly Hills, Cal., for appellant.
2
H. Brian Holland, Asst. Atty. Gen., Harry Marselli, Ellis N. Slack, Howard P. Locke, Sp. Assts. to Atty. Gen., Laughlin E. Waters, U.S. Atty., Edward R. McHale, Asst. U.S. Atty., Los Angeles, Cal., for appellee.
3
Before STEPHENS and FEE, Circuit Judges, and LING, District Judge.
4
LING, District Judge.
5
Taxpayers are husband and wife. In 1944, the taxable year here in question, and prior thereto, the husband was engaged in farming operations in Kern County, California. Part of the land used in this operation was a quarter section leased from one Margaret P. Osborne, under lease dated September 19, 1940. The lease was for five years, commencing November 1, 1941, at a total rental of $4550. Of this amount $700 was payable each year for the first two years and $1050 each remaining year. During the life of the lease, on August 25, 1943, taxpayers agreed with the lessor-owner to purchase the property for a down payment of $8000 and a like amount each year for three years thereafter.
6
On January 9, 1944, without valuable consideration, taxpayers conveyed their interest in the property to their minor daughter. Prior to this transaction they had discussed with their attorney the incident tax consequences. On February 7, 1944, Edward Kirschenmann, a brother of taxpayer, Henry Kirschenmann, was legally appointed guardian of the daughter's estate. Two weeks later the guardian leased the property back to taxpayers for a five year term, commencing July 1944. The lease was a share-crop agreement, under the terms of which in the Fall of 1944 taxpayers paid the guardian $19,412.54 as rental for that year.1 This represented a substantial part of the amount realized from farming the land. The child took no part in the farming operation and her parents exercised the same control over the property as before; community assets, credit and effort being used in the farming operation. The balance of $24,000 due under the purchase agreement was paid by the guardian with funds from his ward's estate.
7
Parenthetically it may be added, that in December 1943, Edward Kirschenmann conveyed a quarter section of land to his children and his brother Henry was appointed guardian of their estates. As here, a share-crop lease was given the parents. All parties to both transactions were represented by the same attorney.
8
Taxpayers deducted from their 1944 gross community income the amount of $19,412.54 as rental paid. The question for determination is whether this amount was paid as a condition to the continued use of the property for the purposes of their business.2 The District Court held against taxpayers.
9
It is contended that Skemp v. Commissioner, 7 Cir., 168 F.2d 598, and Brown v. Commissioner, 3 Cir., 180 F.2d 926, support taxpayers' position. We cannot agree. In both of these cases it was held that the rent paid was not unreasonable. Here no like finding was made, nor could such conclusion find support on the record. Taxpayers by the terms of their lease with Mrs. Osborne were obligated to pay only $1050 for the year in question; instead, by their own contrivance, they elected to pay $19,412.54. To say in this situation that such disparity was not the result of a studied attempt to gain a tax advantage would indicate a blindness to reality. It is true, taxpayers divested themselves of title to the property, yet they farmed the land as before, and in effect it was their earning power which formed the basis for the entire transaction, including payment of the purchase price. Tax consequences are determined not from the formal aspect of a transaction, but from the actual substance of a piece of business. What is found here lacks business meaning for tax purposes. This court's decision in Shaffer Terminals, Inc., v. Commissioner, 9 Cir., 194 F.2d 539, is controlling.
10
The instant case involved another issue which was resolved against taxpayers in the District Court. Originally, the Court's ruling on this disputed point was challenged here. However, it now appears that, while this appeal was pending, the parties stipulated that the judgment of the District Court on the question was correct. We have not therefore considered the matter.
11
Affirmed.
12
JAMES ALGER FEE, Circuit Judge (concurring).
13
The majority opinion is correct and sound. However, clarification may assist.
14
The statute provides that there should be allowed as deductions 'rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, of property to which the taxpayer has not taken or is not taking title or in which he has no equity.' Section 23(a)(1)(A), Internal Revenue Code. Unless taxpayers here had made a transfer of their entire equity, no deduction would be allowable under this section. The deed to their daughter did not convey the fee because they did not own the fee. After the transfer of some interest to their daughter, taxpayers, not their daughter or her guardian, were bound to pay the balance of the purchase price and were still the owners of an equity in the parcel until this was paid. If there had been a default, they would have been the defendants, since they were in possession and were the vendees. After the purchase price had been paid in full, title to the parcel was taken in taxpayers' names.
15
Taxpayers are not entitled to the deduction claimed here, since they have failed to show that the payments were made for the use of 'property to which the taxpayer has not taken or is not taking title or in which he has no equity.' Besides, the payments of the so-called 'rental' were not and could not have been made to the daughter or her guardian under the circumstances 'as a condition to the continued use or possession' of the property.
1
Following are excerpts from the testimony of Henry Kirschenmann:
'Q. Then this lease which you made, which you entered into as lessee from your brother Edward in 1944, was the only lease you have entered into, or entered into in this period on a share-crop basis, is that correct? A. That is right.
'The Court: Did you have any other similar lease on property where you were raising potatoes--
'The Witness: No.
'Q. (By Mr. McHale): Have you ever had any since?
'The Court: That is all the rest of them were cash leases?
'The Witness: Yes, Sir.
'The Court: Go ahead.
'Q. (By Mr. McHale): Have you ever had any since similar to this? A. No.
'Q. Could you give us an estimate of the number of acres you were farming in and about that period, (1942-3-4), Mr. Kirschenmann? A. Oh, I was farming between 700 and a thousand acres of potatoes through the year.'
2
Sec. 23. Deductions From Gross Income
'In computing net income there shall be allowed as deductions:
'(a) (as amended by Sec. 121(a) of the Revenue Act of 1942, c. 619, 56 Stat. 798) Expenses
'(1) Trade or Business Expenses.
'(A) In General. All the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including * * * rentals or other payments required to be made as a condition to the continued use or possession, for purposes of the trade or business, or property to which the taxpayer has not taken or is not taking title or in which he has no equity. * * *' 26 U.S.C. 1946 ed., 23.
| {
"pile_set_name": "FreeLaw"
} |
[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JULY 07, 2008
No. 07-12947 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 06-20464-CR-RWG-MGC
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
ROBERTO ALVAREZ,
a.k.a. Roberto Saavedra,
Defendant-Appellant.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(July 7, 2008)
Before TJOFLAT, BLACK and CARNES, Circuit Judges.
PER CURIAM:
Roberto Saavedra Alvarez appeals his conviction as to count one of the
indictment against him, conspiracy to possess with intent to distribute more than
five kilograms of cocaine in violation of 21 U.S.C. § 846. Alvarez contends that
the district court plainly erred by: (1) failing to sua sponte declare a mistrial on
count one after Jose Gonzalez, a government witness and confidential informant,
testified at trial that he knew Alvarez had a criminal record; (2) failing to sua
sponte enter a post-verdict judgment of acquittal on count one on the ground that
the jury’s guilty verdict rested on the harmfully prejudicial exchange between the
government and Gonzalez regarding Alvarez’s criminal record; and (3) failing to
sua sponte dismiss the indictment on the ground that the government was over-
involved in the particular reverse sting operation used in this case and thus violated
Alvarez’s Fifth Amendment due process rights.
Because Alvarez did not raise any of these arguments during his trial, we
review only for plain error. See United States v. Rodriguez, 398 F.3d 1291, 1298
(11th Cir. 2005). Under plain error review, “[a]n appellate court may not correct
an error the defendant failed to raise in the district court unless there is: (1) error,
(2) that is plain, and (3) that affects substantial rights. If all three conditions are
met, an appellate court may then exercise its discretion to notice a forfeited error,
but only if (4) the error seriously affects the fairness, integrity, or public reputation
of judicial proceedings.” Id. (quotation marks and citations omitted). An error is
2
“plain” if “it is obvious and clear under current law.” United States v. Eckhardt,
466 F.3d 938, 948 (11th Cir. 2006), cert. denied, 127 S. Ct. 1305 (2007).
Alvarez first contends that the district court plainly erred by failing to sua
sponte order a mistrial after Gonzalez testified that he knew Alvarez had a criminal
record. “[A] trial judge has discretion to grant a mistrial since [she] is in the best
position to evaluate the prejudicial effect of a statement or evidence on the jury.”
United States v. Newsome, 475 F.3d 1221, 1227 (11th Cir. 2007) (quotation marks
and citation omitted).
If the district court issues a curative instruction, “we will reverse only if the
evidence is so highly prejudicial as to be incurable by the trial court’s admonition.”
See United States v. Trujillo, 146 F.3d 838, 845 (11th Cir. 1998) (quotation marks
and citation omitted) (holding that the district court’s curative instruction cured any
potential prejudice caused by a witness’s testimony that the drug trafficking
defendant previously had been involved in the drug trade and incarcerated in
Cuba); see also United States v. Mejia, 82 F.3d 1032, 1038 n.7 (11th Cir. 1996)
(holding that witness’s testimony that he knew defendant from “past dealings” was
not grounds for a new trial where court quickly struck the response and instructed
the jury to disregard it). In making that determination, we presume that the jury
followed the district court’s curative instruction. United States v. Ramirez, 426
3
F.3d 1344, 1352 (11th Cir. 2005).
At trial, the government played for the jury without objection statements
made by Alvarez admitting his prior involvement in drug smuggling, which
lessened the likelihood of undue prejudice from Gonzalez’s statement that Alvarez
had a criminal record. In addition, following Gonzalez’s statement, the district
court sustained Alvarez’s objection and instructed the jury that it was to “disregard
both the question and the answer, any reference to criminal records that were
before the jury.” We presume that the jury followed this instruction, see Ramirez,
426 F.3d at 1352, and we conclude that it cured any potential prejudice caused by
the mention of Alvarez’s criminal record, see Trujillo, 146 F.3d at 845; Mejia, 82
F.3d at 1038 n.7. Accordingly, the district court did not err, much less plainly err,
by failing to sua sponte declare a mistrial. See also United States v. Perez, 30 F.3d
1407, 1411 (11th Cir. 1994) (“When a court gives a direct and explicit curative
instruction regarding improper testimony, it supports the court’s decision not to
grant a mistrial by decreasing the possibility of undue prejudice.”).
Alvarez next contends that the district court plainly erred by failing to sua
sponte enter a post-verdict judgment of acquittal on the count one conspiracy
charge. According to Alvarez, when the district court learned that the jury had
acquitted him on counts two, three, and four of the indictment, the court should
4
have concluded that the guilty verdict on count one rested on Gonzalez’s statement
that Alvarez had a criminal record. To support a conspiracy conviction, the
government must establish beyond a reasonable doubt: (1) the existence of an
agreement between the defendant and one or more persons; (2) the object of which
is to commit an unlawful act. United States v. Garcia, 405 F.3d 1260, 1269 (11th
Cir. 2005). It is unlawful to possess with intent to distribute a controlled
substance. 21 U.S.C. § 841(a)(1).
Alvarez’s contention is without merit. Alvarez’s counsel conceded at trial
that the evidence was sufficient to support a conviction on the conspiracy charge in
count one, stating that “the defendant would agree, there is sufficient evidence
taken in the light most favorable to the Government to establish that an agreement
was entered into and that that agreement was for the elicit purposes, which are
stated in the indictment.” He continued, “I don’t think there is any legal question.”
Moreover, the record does not support his argument that the jury’s acquittal on the
other three counts must have meant that the jury found him guilty on the
conspiracy charge simply because of Gonzalez’s brief statement that Alvarez had a
criminal record, especially in light of the court’s curative instruction. See Ramirez,
426 F.3d at 1352 (“A jury is presumed to follow the instructions given to it by the
district judge.”). The district court did not err by failing to sua sponte grant
5
Alvarez a judgment of acquittal on count one.
Finally, Alvarez contends that the district court plainly erred by failing to
sua sponte dismiss the indictment on the ground that the government’s sting
operation violated his right to due process. Alvarez argues that the government
was overinvolved in the sting operation that led to his arrest and conviction
because government agents: (1) created the entire scenario for a fictitious robbery
of drugs, (2) from “bad people” rather than innocent civilians, (3) that was initiated
by an informant who is a friend of the lead defendant, and (4) provided crucial
assistance to commit the crime, such as using the informant to transport the
suspects to meetings and providing a vehicle to the suspects. According to
Alvarez, once the district court heard all the evidence, the court should have
realized that the sting operation violated Alvarez’s due process rights and sua
sponte dismissed the indictment. The district court’s failure to do so, he argues,
was plain error.
“We have recognized that government infiltration of criminal activity is a
legitimate and permissible means of investigation and frequently necessitates the
government agent’s supplying something of value to the criminal.” United States
v. Puett, 735 F.2d 1331, 1335 (11th Cir. 1984). “Government involvement in
criminal activity constitutes a due process violation only where it violates
6
‘fundamental fairness, shocking to the universal cause of justice.’” United States
v. Gianni, 678 F.2d 956, 960 (11th Cir. 1982) (citations omitted). We have
repeatedly rejected “challenges to the ‘reverse sting’ method of police
investigation.” United States v. Sanchez, 138 F.3d 1410, 1413 (11th Cir. 1998).
The Supreme Court, however, has recognized the possibility that “the conduct of
law enforcement agents [may be] so outrageous that due process principles would
absolutely bar the government from invoking judicial processes to obtain a
conviction.” United States v. Russell, 411 U.S. 423, 431–32, 93 S. Ct. 1637, 1643
(1973). “One example of such outrageous conduct is when the government
instigates the criminal activity, provides the entire means for its execution, and
runs the entire operation with only meager assistance from the defendant.” Puett,
735 F.2d at 1335.
This Court has found the conduct of the government did not “approach that
demonstrable level of outrageousness the case law suggests would be necessary for
reversal of the[] defendants’ convictions” where: (1) federal agents contacted
individuals suspected of being involved in home invasions; (2) the defendant were
then informed by these individuals that large amounts of drugs could be stolen in a
home invasion; (3) the defendants voluntarily agreed to participate; (4) the
defendants were involved without any investigation from the government; (5) they
7
had contact with the government only after they had already agreed to participate;
and (5) the availability of the defendants, their weapons, and vehicles was not the
result of any governmental activity. See Sanchez, 138 F.3d at 1413–14.
The district court did not err by failing to sua sponte dismiss the indictment.
First, Alvarez was not initially contacted by a government agent to participate in
the conspiracy. Instead, Gonzalez testified that, while he was acting as a
confidential informant, he contacted codefendant Lamar to allegedly buy cocaine.
After Gonzalez proposed a cocaine robbery to Lamar, Lamar told Gonzalez that he
would contact other individuals who had experience in that area. Lamar then
contacted Alvarez. Second, Alvarez voluntarily chose to participate in the plan.
Gonzalez testified that Lamar told Alvarez about the planned robbery, and Lamar
immediately informed Gonzalez that Alvarez had agreed to participate. Third,
Alvarez had no contact with the government until he had already informed Lamar
that he wished to participate. Fourth, Alvarez recruited another individual into the
scheme. Finally, the government did not induce Alvarez into participating in the
scheme, but only offered a vehicle after Alvarez had already agreed to participate.
Accordingly, the evidence shows that the government did not instigate the
criminal activity as it related to Alvarez, provide the entire means for the
completion of the crime—particularly in light of the fact that Alvarez himself acted
8
as a recruiter—or run the operation with only “meager assistance” from Alvarez.
See Puett, 735 F.2d at 1335. Thus, these facts do not rise to the level of outrageous
conduct required to warrant a reversal of Alvarez’s conviction. See Sanchez, 138
F.3d at 1413–14.
AFFIRMED.
9
| {
"pile_set_name": "FreeLaw"
} |
883 F.2d 1026
12 U.S.P.Q.2d 1160
Unpublished DispositionNOTICE: Federal Circuit Local Rule 47.8(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.In re JACQUES BERNIER, INC.
No. 89-1185.
United States Court of Appeals, Federal Circuit.
July 11, 1989.
Before MARKEY, Chief Judge, and PAULINE NEWMAN and ARCHER, Circuit Judges.
PAULINE NEWMAN, Circuit Judge.
DECISION
1
Jacques Bernier, Inc. appeals the decision of the Trademark Trial and Appeal Board, refusing registration of LEATHER AND TWEED on the Principal Register as a trademark for cologne for men. We affirm.
OPINION
2
Registration of LEATHER AND TWEED for cologne for men was refused under Section 2(d) of the Trademark Act, 15 U.S.C. Sec. 1052(d), on the ground of likelihood of confusion in view of three registrations of the mark TWEED for perfumes and toiletries.
3
Bernier states that there is a difference in appearance and sound, as well as in meaning and in commercial impression, and that the Board placed too much significance on its belief that TWEED is a well known mark. The Commissioner argues, inter alia, that TWEED is a strong mark, and cites The Wella Corp. v. California Concept Corp., 558 F.2d 1019, 194 USPQ 419 (CCPA 1977) for the holding that when a composite mark (CALIFORNIA CONCEPT) incorporates an entire arbitrary mark of another (CONCEPT), for closely related goods used in hair treatment, the addition of a suggestive or descriptive term is generally insufficient to avoid likelihood of confusion as to source. "Although we are not free from doubt ... it is a fundamental principle that doubt must be resolved against the newcomer." Id. at 1023, 194 USPQ at 422. See also Coca-Cola Bottling Co. v. Joseph E. Seagram & Sons, Inc., 526 F.2d 556, 188 USPQ 105 (CCPA 1975) (source of BENGAL LANCER for mixers likely to be confused with source of BENGAL for gin, since goods are sold to same class of purchasers and used together); In re West Point-Pepperell, Inc., 468 F.2d 200, 201, 175 USPQ 558, 559 (CCPA 1972) (WEST POINT PEPPERELL and design for woven and non-woven fabrics not registrable in view of registered mark WEST POINT for woolen piece goods; "The issue under Sec. 2(d) is not whether people will confuse the marks but whether the marks will confuse people" ... as to their origin.)
4
We have reviewed the arguments on both sides, and conclude that the Board correctly refused registration.
| {
"pile_set_name": "FreeLaw"
} |
471 So.2d 147 (1985)
D.A., a Juvenile, Appellant,
v.
The STATE of Florida, Appellee.
No. 83-1646.
District Court of Appeal of Florida, Third District.
June 11, 1985.
*149 Bennett H. Brummer, Pub. Defender, and Robin H. Greene, Asst. Pub. Defender, for appellant.
Jim Smith, Atty. Gen., and Calianne P. Lantz, Asst. Atty. Gen., for appellee.
Before HUBBART, NESBITT and JORGENSON, JJ.
HUBBART, Judge.
The respondent juvenile D.A. appeals an adjudication of delinquency for the offense of loitering and prowling [§ 856.021, Fla. Stat. (1983)], entered below after a non-jury trial. He contends on appeal that the essential elements of the offense were not established below and that the court erred in denying his motion for judgment of acquittal at trial. We agree and reverse.
I
The facts of this case are as follows. On April 29, 1983, Officer David Bosworth of the Miami Police Department was on duty in a patrol car in the Overtown area of Miami. At 3:15 p.m., he received a call over his police radio to investigate a "disturbance" at 500 N.W. 5th Street. Upon arriving on the scene, Officer Bosworth discovered no disturbance but saw a white van parked in an alley in front of a vacant lot at this address. The houses bordering the alley were fully fenced so that there *150 was no way of entry from these houses into the alley. Standing in front of the van was the respondent D.A. and an adult male. As Officer Bosworth backed up his patrol car and looked down the alley, the respondent D.A. and the adult male ran. Officer Bosworth then drove down the alley and observed three other people running away from inside one of the fenced yards along the alley. Officer Bosworth then radioed a description of the respondent D.A. and the adult male companion. He returned to the van and discovered that its ignition had been "punched" so that a screwdriver could be used to start it instead of a key; thick blue tape had been placed over the name "Tropical Provision Company" on the truck's side door; and extra tape was found on the hood and on the ground. Officer Bosworth was informed over his police radio that this van had been stolen that morning from Tropical Provision Company at 845 N.W. 71 Street in Miami.
Officer Mary Reed of the Miami Police Department was also on patrol car duty at this time. She received over her police radio a description from Officer Bosworth of the two people who were seen fleeing from the above-described alley. She proceeded directly to the scene and observed the respondent D.A. coming from behind one of the houses on the corner of N.W. 5th Avenue and 4th Street, about a half block from the spot where Officer Bosworth had first seen the two persons in question in the alley. The respondent D.A. looked at Officer Reed and turned to walk away. At that point, Officer Reed asked the respondent to stop and he did so. Officer Bosworth then arrived on the scene and identified the respondent. Efforts to speak to the respondent proved essentially futile as the officers spoke only English and the respondent, who spoke only Spanish, indicated that he could not understand them. Officer Bosworth then arrested the defendant for grand theft of the van and for loitering and prowling.
The state charged the respondent D.A. with loitering and prowling through a delinquency petition filed before the circuit court. The delinquency petition reads in pertinent part as follows:
"This child, on or about April 29, 1983, in Dade County, Florida, did unlawfully loiter and prowl at a place located at or near 433 N.W. 4th Street, Dade County, Florida, at approximately 3:15 P.M., in a manner not usual for law abiding individuals under circumstances that warrant a justifiable concern for the safety of the persons or property in the vicinity, to wit: STANDING BY A STOLEN MOTOR VEHICLE, ENTERING THE YARD OF A RESIDENCE NOT HIS OWN, RUNNING FROM THE AREA BETWEEN HOUSES AND/OR BEING UNABLE TO DISPELL [SIC] OFFICERS ALARM FOR THE SAFETY OF PERSONS AND/OR PROPERTY IN THE AREA, in violation of 856.021 Florida Statutes."
The respondent entered a denial and was tried before the court without a jury. At the trial, the above facts were established through the only two witnesses who testified: Officer Bosworth and Officer Reed. The respondent, through counsel, moved for a judgment of acquittal at the close of all the evidence arguing in some detail that the state had failed to establish a prima facie case of loitering and prowling. The trial court denied the motion and adjudicated the respondent delinquent. This appeal follows.
II
The offense of loitering and prowling, as proscribed by Section 856.021, Florida Statutes (1983), has two distinct elements which the state must establish at trial: "(1) The defendant loitered or prowled in a place, at a time, or in a manner not usual for law-abiding individuals; (2) such loitering and prowling were under circumstances that warranted a justifiable and reasonable alarm or immediate concern for the safety of persons or property in the vicinity." State v. Ecker, 311 So.2d 104, 106 (Fla.), cert. denied, 423 U.S. 1019, 96 S.Ct. 455, 46 L.Ed.2d 391 (1975). "Proof of both elements is essential in order to establish *151 a violation of the statute," State v. Ecker, supra at 110, and each element must be proved beyond a reasonable doubt. See In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970).
A
As to the first element, it must be established that the defendant engaged in incipient criminal behavior which law-abiding people do not usually engage in due to the time, place, or manner of the conduct involved. The gist of this element is aberrant and suspicious criminal conduct which comes close to, but falls short of, the actual commission or attempted commission of a substantive crime. It does not, however, involve behavior which constitutes no threat of immediate, future criminal activity. See Model Penal Code § 250.6 comment at 388-91 (1980).
In this connection, the statute is forward-looking, rather than backward-looking in nature. Its purpose is to punish a certain type of incipient criminal behavior before it ripens into the commission or attempted commission of a substantive criminal act. As the Florida Supreme Court stated in State v. Ecker, supra, "[t]he whole purpose of the statute is to provide law enforcement with a suitable tool to prevent crime ...," Id. at 110, and as stated in the comment to Section 250.6 of the Model Penal Code upon which the statute is patterned, State v. Ecker, supra at 107, "[t]his formulation limits the offense to its essential law enforcement rationale of justifying intervention to prevent incipient crime... ." Model Penal Code § 250.6 comment at 391 (1980). Florida cases, in turn, sustaining loitering or prowling convictions have uniformly involved incipient crime situations which satisfy this element. For example, in Hardie v. State, 333 So.2d 13 (Fla. 1976), the convicted defendant was observed at 2:55 a.m. rummaging through two separate cars at a closed gas station, but before he made any move to steal or attempt to steal the cars. In Bell v. State, 311 So.2d 104, 110-11 (Fla.), cert. denied, 423 U.S. 1019, 96 S.Ct. 455, 46 L.Ed.2d 391 (1975), the convicted defendant was found hiding in the bushes at a private dwelling at 1:20 a.m., but before he made any move to break into or attempt to break into the dwelling. In In re A.R., 460 So.2d 1024 (Fla. 4th DCA 1984), the adjudicated juvenile was observed on two occasions standing on the sidewalk in a high-crime area watching traffic at 10:00-11:00 p.m. while his companion entered fenced car lots, peeked into car windows and tried car doors, but before the juvenile made an overt act to aid and abet his companion in the commission of any burglary.
By way of contrast, however, this first element of the crime of loitering and prowling, i.e., unusual behavior, is not directed at suspicious after-the-fact criminal behavior which solely indicates involvement in a prior, already completed substantive criminal act. For example, in Patmore v. State, 383 So.2d 309 (Fla.2d DCA 1980), where a loitering conviction was reversed, the defendant was observed running from the police at 9:00 p.m. and, in the process, discarding a bag of marijuana on the street in the immediate vicinity of a recent armed robbery. His activity, the court concluded, was sufficient to justify a temporary investigative stop for robbery and to effect an arrest for possession of marijuana all past and completed crimes but insufficient to justify a conviction for loitering and prowling. The defendant's activity in no way pointed to the commission of future criminal activity. This is not to suggest, however, that the commission of a prior or on-going substantive crime necessarily negates the first element of the crime. For example, the defendant in Hardie had clearly committed a car burglary; the defendant in Bell had clearly committed a trespass; and the juvenile's companion in A.R. had clearly committed a burglary of the car lot yet loitering and prowling convictions were upheld in each of these cases. It is only to point out that it is a sine qua non of the first element of this offense that the defendant's behavior must point to immediate future criminal activity and not *152 refer exclusively to prior criminal activity as in Patmore.
By way of further contrast, this element is also not directed at non-aberrant, harmless behavior which, by its very nature, poses no threat of immediate future criminal activity. For example, in In re O.W., 423 So.2d 1029 (Fla. 4th DCA 1982), where a loitering and prowling adjudication was reversed, the police observed the juvenile, a 13-year-old boy, running with two companions from some bushes across a vacant field during school hours on a school day. When stopped, the boys stated they were skipping school. The court found, in effect, that the first element of the offense had not been established because climbing trees, playing in bushes, and running through woods and fields were not unusual activities for a 13-year-old boy; plainly, the juvenile was skipping school and his activity in no way pointed toward immediate, future criminal conduct. In L.S. v. State, 449 So.2d 1305 (Fla.3d DCA 1984), this court, citing O.W., supra, reached a similar result where the juvenile, a 14-year-old boy, was observed crouching in the bushes near an expressway exit. A loitering and prowling adjudication was reversed on the basis that such playful activity was plainly not unusual for a 14-year-old boy and did not point to future criminal activity. Moreover, neither the fact that past drug transactions had taken place in the field through which O.W. ran, nor that past robberies and purse snatches had taken place at the expressway exit where L.S. was observed, changed the results in these cases because, if it had, children living in high crime areas would be precluded from playing and frolicking in many parts of their neighborhoods. Also in V.S. v. State, 446 So.2d 232 (Fla.3d DCA 1984), this court reversed a loitering and prowling adjudication involving a juvenile who was stopped on the street based solely on a police "hunch." Being out on the street, in itself, is plainly harmless behavior and, without more, poses no threat of immediate future criminal activity.
B
As to the second element, which is the heart of the offense, it must be established that the defendant engaged in conduct that warranted a justifiable or reasonable alarm or immediate concern for the safety of persons or property in the vicinity. The gist of this element is that the aberrant or incipient criminal behavior, stated above, must be alarming in nature; that is, it must threaten the physical safety of persons in the area or the safety of property in the area. It is not enough that the subject criminal behavior point towards the commission or attempted commission of any type of substantive crime; it must point toward the commission or attempted commission of a crime against a person or a crime against certain property in the vicinity. It must, in a word, amount to an imminent breach of the peace or an imminent threat to public safety. State v. Ecker, supra at 109, 110; Model Penal Code § 250.6 comment, supra.
For example, in Bell v. State, supra, which affirmed a loitering and prowling conviction, the defendant's actions in hiding in the bushes of a private dwelling at 1:20 a.m. obviously threatened the safety of persons and property in the said dwelling. And in Hardie v. State, supra, which affirmed a loitering and prowling conviction, the defendant's actions in rummaging through two cars at a closed gas station at 2:55 a.m. obviously constituted a threat to the safety of the cars in question. Also in In re A.R., supra, which affirmed a loitering and prowling adjudication, the juvenile's actions in watching traffic while his companion burglarized an adjacent closed car lot at 10:00-11:00 p.m. obviously constituted a threat to the safety of the cars on the lot. On the other hand, in B.A.A. v. State, 356 So.2d 304 (Fla. 1978), rev'g, 333 So.2d 552 (Fla.3d DCA 1976), where a loitering and prowling adjudication was reversed, the female juvenile's actions in approaching stopped cars in traffic and engaging the drivers in conversation created no threat whatever to the safety of persons or property in the area. The Court concluded *153 that if the juvenile was, as the district court found, engaged in solicitation for prostitution, she should have been so charged because this activity in no way created a reasonable alarm for the safety of persons or property in the area.
Although this second element is akin to the type of conduct which justifies a temporary detention of a person by the police based on conduct which threatens public safety and amounts to an imminent breach of the peace, as authorized by the United States Supreme Court in Terry v. Ohio, 392 U.S. 1, 88 S.Ct. 1868, 20 L.Ed.2d 889 (1968), see State v. Ecker, supra at 109, 110, it is plain that a much higher degree of proof is involved. It is not enough to establish, as in Terry, a founded or reasonable suspicion of the above-described conduct, for such a showing merely justifies a temporary detention under the Fourth Amendment and nothing else. It does not justify an arrest because that requires a probable cause showing under the Fourth Amendment; and it does not justify a conviction as that requires proof beyond a reasonable doubt. Compare Brinegar v. United States, 338 U.S. 160, 69 S.Ct. 1302, 93 L.Ed. 1879 (1949). It was thus held in Boal v. State, 368 So.2d 71 (Fla. 2d DCA 1979) that, although the circumstances justified a temporary detention of the defendant under Terry, the evidence was insufficient to convict the defendant of loitering and prowling as the requisite degree of proof beyond a reasonable doubt, as to the alarm or concern created, was lacking. In order to establish the second element, then, it must be shown beyond a reasonable doubt that the defendant's conduct warranted the above-described alarm or concern which obviously means a much greater degree of alarm or concern than would justify only a temporary detention or arrest. In sum, while this element is akin to Terry-type conduct when applied to future-type crimes against persons or property, it requires a much greater showing of alarm or concern. The statute in question does not and, indeed, constitutionally could not criminalize Terry-type conduct, which under the Fourth Amendment authorizes only temporary detentions, not arrests or convictions for crime.
In this connection, it has been held that Florida courts must be careful not to apply this statute, including this second element, as a "catchall." "The statute is not to be used as a `catch-all' provision [w]hereby citizens may be detained by police and charged by prosecutors when there is an insufficient basis to sustain a conviction on some other charge." B.A.A. v. State, supra at 306. Stated differently, the statute must not be applied so as to criminalize conduct which amounts to nothing more than a basis to temporarily detain or arrest a person for committing some other crime. If it is so applied, it plainly runs afoul of the Fourth Amendment and constitutes an unconstitutional application thereof which the courts must zealously avoid. The statute, although constitutional, plainly reaches the outer limits of constitutionality and must be applied by the courts with special care so as to avoid unconstitutional applications. State v. Ecker, supra; Model Penal Code § 250.6, supra.
It should also be noted that the showing necessary to justify an arrest for loitering and prowling, compare, e.g., White v. State, 458 So.2d 1150 (Fla. 1st DCA 1984); State v. Jones, 454 So.2d 774 (Fla. 3d DCA 1984); T.J. v. State, 452 So.2d 107 (Fla. 3d DCA 1984); State v. Coron, 411 So.2d 237 (Fla. 3d DCA 1982); A.L.B. v. State, 399 So.2d 483 (Fla. 3d DCA 1981); State v. Caballero, 396 So.2d 1210 (Fla. 3d DCA 1981); State v. Spurling, 385 So.2d 672 (Fla. 2d DCA), pet. for review denied, 392 So.2d 1379 (Fla. 1980), is not the same showing required to sustain a conviction for loitering or prowling. A probable cause showing is all that is necessary to justify a loitering or prowling arrest; proof beyond a reasonable doubt, on the other hand, is required to sustain a loitering and prowling conviction.
*154 Under Section 856.021(2), Florida Statutes (1983), circumstances which may be considered as tending to establish the second element, although none are conclusive, include: the defendant takes flight upon the appearance of a law enforcement officer, the defendant attempts to conceal himself or any object, or the defendant refuses to identify himself "[u]nder circumstances where the public safety is threatened." State v. Ecker, supra at 109. As a corollary, the contrary circumstances may be considered as tending to negate the second element: the defendant does not take flight upon the appearance of a law enforcement officer, the defendant makes no effort to conceal himself or any object, or the defendant properly identifies himself. It should be noted, however, that the failure of a defendant to explain his presence and conduct cannot constitutionally be considered as a circumstance tending to establish this second element. State v. Ecker, supra at 110.
Finally, it must also be shown, as part of the second element, that the police followed certain procedures prior to arresting the defendant; no one can be convicted under the statute if these arrest procedures are not followed. Unless flight by the defendant or other circumstances make it impractical, the law enforcement officer prior to arrest must afford the defendant an opportunity to dispel any justifiable alarm or immediate concern for the safety of persons or property in the vicinity by requesting him to identify himself and explain his presence and conduct. § 856.021(2), Fla. Stat. (1983). The defendant, however, is not required to explain his presence or conduct and his failure to do so cannot be used against him, State v. Ecker, supra at 110; on the other hand, the defendant's refusal to identify himself although not conclusive in establishing this second element of the crime may be used, as stated above, as one circumstance tending to establish said element. Watts v. State, 463 So.2d 205 (Fla. 1985).
III
Turning to the instant case, we have no trouble in concluding that neither of the two elements of loitering and prowling was established in this case sufficient to sustain a delinquency adjudication below. The trial court erred in denying a defense motion for judgment of acquittal at trial.
First, the evidence below fails to establish beyond a reasonable doubt that the respondent loitered and prowled in a place, at a time, or in a manner not usual for law-abiding people. This is so because the respondent's otherwise aberrant and suspicious criminal conduct pointed exclusively to a past, already completed crime of auto theft, and in no way pointed to immediate future criminal activity. The van, which the respondent and his adult companion were discovered in front of in the alley, had already been stolen earlier that day at an entirely different location. The respondent's activities on the day in question were related entirely to this already stolen van and in no way constituted a threat of immediate future criminal activity. In sum, the respondent here did not engage in incipient criminal behavior; he engaged exclusively in suspicious after-the-fact criminal behavior which solely indicated involvement in an already completed, past, substantive criminal act. The police did not act to prevent crime before it occurred; they acted to apprehend a suspect as to an already completed crime. The first element of loitering and prowling is therefore lacking in this case.
Second, the evidence below fails to establish beyond a reasonable doubt that the respondent loitered and prowled under circumstances that warranted a justifiable and reasonable alarm or immediate concern for the safety of persons or property in the area. As previously indicated, the defendant's activities on the day in question related entirely to an already completed, past criminal act of auto theft. The conduct in no way posed a threat of future criminal activity and, perforce, could not have warranted the requisite alarm or concern which *155 is a part of this element. The fact that the respondent ran upon seeing the police, although constituting some evidence of this element, does not in itself establish the subject element under the circumstances of this case.
True, the police, without doubt, had a reasonable suspicion to temporarily detain the respondent under Terry v. Ohio for auto theft; they may even have had probable cause to arrest him for auto theft. The state, however, may not take this evidence, which justifies only a temporary detention or at best an arrest under the Fourth Amendment, and convert it into sufficient evidence to convict and imprison for loitering and prowling without violating the respondent's due process and Fourth Amendment rights. Loitering and prowling is not a catchall crime whereby a person may be charged and convicted by prosecutors when there is an insufficient basis to sustain a conviction on some other charge. The respondent was never charged for the auto theft herein presumably because there was insufficient evidence to convict on this crime. The state may not now take the reasonable suspicion or probable cause to temporarily detain or arrest the respondent for auto theft and convert it into a catchall conviction for loitering and prowling.
One final point. We do not reach the claim that the arresting officer did not, prior to the arrest, give the respondent an opportunity to dispel any justifiable alarm or immediate concern for the safety of persons or property in the vicinity due to the language impasse between the arresting officers and the respondent. There was no alarm or concern to be dispelled, in our view, so that an opportunity to dispel same did not come into play in this case.
The final adjudication of delinquency under review is reversed and the cause is remanded to the trial court with directions to discharge the respondent.
Reversed and remanded.
| {
"pile_set_name": "FreeLaw"
} |
738 F.2d 35
35 Fair Empl.Prac.Cas. 97, 34 Empl. Prac.Dec. P 34,513Charles P. MAHONEY, Plaintiff, Appellee,v.Frank J. TRABUCCO, Commissioner, Massachusetts Department ofPublic Safety, et al., Defendants, Appellants.
No. 83-1862.
United States Court of Appeals,First Circuit.
Argued March 8, 1984.Decided July 2, 1984.
H. Reed Witherby, Asst. Atty. Gen., Boston, Mass., with whom Francis X. Bellotti, Atty. Gen., and Thomas A. Barnico, Asst. Atty. Gen., Boston, Mass., Government Bureau, were on brief, for defendants, appellants.
E. David Wanger, Elizabeth K. Boyer and Angoff, Goldman, Manning, Pyle, Wanger & Hiatt, P.C., Boston, Mass., on brief for State Police Ass'n of Mass., amicus curiae.
Wayne B. Hollingsworth, Boston, Mass., with whom Theresa A. Kelly and Hollingsworth & Associates, Boston, Mass., were on brief, for plaintiff, appellee.
Before COFFIN and BOWNES, Circuit Judges, and GIERBOLINI,* District Judge.
COFFIN, Circuit Judge.
1
Defendants-appellants, Frank J. Trabucco, Commissioner, Massachusetts Department of Public Safety, and the Massachusetts State Board of Retirement, appeal a judgment finding that the Commonwealth violated the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634, by mandatorily retiring plaintiff-appellee, Massachusetts State Police Sergeant Charles P. Mahoney, at age 50 pursuant to Mass.Gen.Laws ch. 32, Sec. 26(3)(a). 574 F.Supp. 955.
2
Massachusetts divides its state police force of somewhat more than 1,000 persons into a uniformed branch and non-uniformed branch. Members of the former receive a pension after twenty years service, which is more generous than that provided all other state employees. Mass.Gen.Laws Ann. ch. 32, Sec. 26(3). They are also entitled, by virtue of Mass.Gen.Laws ch. 32, Sec. 94, to a presumption that any heart-related disability is job-related for disability retirement purposes. But they are also required to retire at age 50. Mass.Gen.Laws Ann. ch. 32, Sec. 26(3)(a).1 It is this requirement that is challenged in the case at bar.
3
Plaintiff-appellee, a veteran sergeant of the uniformed branch of the state police with over 26 years of service, reached his 50th birthday on September 15, 1983. Upon being notified that he had to retire on that date, he brought suit against defendants charging that his forced retirement under Sec. 26(3)(a) would violate the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634.
4
Massachusetts claims that age 50 is a bona fide occupational qualification (BFOQ) for state police officers and that Mahoney's mandatory retirement was authorized under that section of the ADEA which provides:
5
"(f) It shall not be unlawful for an employer, employment agency, or labor organization--
6
(a) to take any action otherwise prohibited under subsections (a), (b), (c), or (e) of this section where age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business, or where the differentiation is based on reasonable factors other than age[.]" 29 U.S.C. Sec. 623(f)(1) (emphasis added).
7
The district court, after a trial, issued a thoughtful opinion, concluding that Mass.Gen.Laws ch. 32 Sec. 26(3)(a) is invalid as applied to plaintiff and that defendants must be enjoined from enforcing the statute against him "so long as he continues to work at his current assignment."
8
The court began by noting the generally accepted standard for evaluating the adequacy of a BFOQ defense as set forth in Usery v. Tamiami Tours, Inc., 531 F.2d 224, 235-36 (5th Cir.1976), and Orzel v. City of Wauwatosa Fire Dept., 697 F.2d 743, 753 (7th Cir.1983). Under that standard an employer must show that the age qualification is "reasonably related to the 'essential operation' of its business, and must demonstrate, either that there is a factual basis for believing that all or substantially all persons above the age limit would be unable to effectively perform the duties of the job, or that it is impossible or impracticable to determine job fitness on an individualized basis." Orzel, 697 F.2d at 753 (emphasis original) (footnote omitted).
9
Addressing the first part of this test, the court found the age requirement was reasonably related to the state police function of protection of persons, property, law and order, as indicated by Massachusetts Board of Retirement v. Murgia, 427 U.S. 307, 96 S.Ct. 2562, 49 L.Ed.2d 520 (1976) (holding that the Massachusetts state police mandatory retirement age did not violate the equal protection clause). Then, after considering the testimony of a number of witnesses, the court concluded that both the second and third prongs of the test had been met for members of the uniformed state police "generally". It held:
10
"Uncontradicted medical testimony indicates that all or substantially all 50 year-olds could not safely and effectively perform the duties of a State Police officer. In addition, uncontradicted medical evidence indicates that it is impracticable or impossible for the Commonwealth to make individual determinations of an officer's fitness to serve on the State Police after age 50."
11
The court then turned its attention to the meaning of "duties of the job", and, following the approach of the Eighth Circuit in E.E.O.C. v. City of St. Paul, 671 F.2d 1162 (8th Cir.1982), rather than that of the Seventh Circuit in E.E.O.C. v. City of Janesville, 630 F.2d 1254 (7th Cir.1980), decided that "the policies of the ADEA are best effected by evaluating the Commonwealth's BFOQ defense against the requirements of the job that Sergeant Mahoney has actually performed in the past and is likely to perform in the future", rather than the duties performed by uniformed state police officers generally.
12
Sergeant Mahoney, a 26 year veteran of the State Police, has spent the last 14 years at the Boston headquarters in an administrative capacity as liaison officer to a unit, headed and staffed by civilians, that collects and exchanges computerized criminal justice information with other law enforcement agencies, both within and outside Massachusetts. He also trains other officers in the use of the police telecommunications system. His work week is from 8:25 a.m. to 5:00 p.m., Monday through Friday. He occasionally volunteers for an overtime shift. He carries a gun, but wears civilian clothes. He is subject to reassignment and may be called to perform traditional police duties in the event of an emergency. During his service in this administrative post he has been called to special duty several times. He was assigned road duty for six weeks in 1972, he worked as a "radio man" at two prison disturbances in the early 1970's, and he performed communications duties during the visit of the "Tall Ships" in 1976, the "Blizzard of 1978", and the visit of Pope John Paul II in 1980. Although he weighs some 255 pounds, and has a mild arthritic condition, he has never failed a biennial physical examination.
13
Based on this record, medical testimony that plaintiff's age is no barrier to the performance of his administrative duties, the likelihood that plaintiff would not be assigned to other duty, and the "bare possibility that the plaintiff may be called upon to perform strenuous physical activity in an emergency", the court held that the Commonwealth had failed to satisfy the BFOQ defense.
14
We begin our own analysis by observing the implications of the district court's approach. On the one hand, the whole idea of a BFOQ is to carve out a limited occupational field where an employer may enforce a retirement age requirement, free from the duty of making individual judgments, provided that the Tamiami--Orzel factors are established. On the other hand, the court, although finding that the uniformed branch of the state police was such a field, felt obliged to analyze the particular present and likely future work assignment of the plaintiff to see if an age requirement was justified as applied to that assignment. This means that within any strenuous occupation where age is likely to be a BFOQ--pilot, firefighter, policeman, game warden--any administrative or supervising assignment would, if found by a court likely to endure, not be subject to the requirement. In a paramilitary organization where, as here, all members are subject to service in emergencies and to reassignment, this would mean either that superannuated poor-risk persons would be subjected to the most demanding tasks or that the force would be restricted in calling out and reassigning desk-bound personnel. Under the court's decision some members of the uniformed state police would not be available for general duties.
15
The district court was fully conscious of the problems posed by its fine-tuning approach. It noted that there is no correlation between rank and strenuous activity; officers in each rank may or may not be required to perform such activity. It recognized that "the possibility of inconsistent treatment of officers of the same rank may be expected to cause some difficulties", and that both officers approaching 50 and those in charge of duty assignments would have difficulty making assignment decisions. The court also acknowledged that the kind of particularistic case-by-case analysis it had undertaken "might interfere with the smooth operation of the state pension system." We would add that this approach may also tempt some to seek a "safe harbor" assignment, penalize the dutiful, discourage promotion, encourage litigation, and necessitate judicial determinations that turn on quality judgments, such as how sedentary is the assignment, and probability judgments, such as how long is the assignment likely to last and how likely is emergency duty.
16
Does the ADEA, as the district court concluded, mandate this approach? We think not. The BFOQ statutory exception applies "where age is a bona fide occupational qualification reasonably necessary to the normal operation of the particular business". 29 U.S.C. Sec. 623(f)(1). The word giving rise to the differing interpretation of the Seventh and Eighth Circuits is "occupational". In E.E.O.C. v. City of Janesville, 630 F.2d 1254, 1258 (7th Cir.1980), the court held that a chief of police, being within "the generic class of law enforcement personnel", was subject to the age retirement requirement; it deemed the term "particular business" to be the critical one, making irrelevant the fact that a particular occupation may be included within it. In E.E.O.C. v. City of St. Paul, 671 F.2d 1162, 1164-66 (8th Cir.1982), the court held that "occupations" within a "business" should be examined and that a fire chief, being completely able to fulfill his duties, was not subject to the age retirement requirement.2 It was concerned with the hazard of applying a BFOQ to any generic class as determined by a state; it noted, "state law could create a class of 'all state employees' and thereby allow the state to retire a clerk because he or she is too old to fight fires." 671 F.2d at 1166 (footnote omitted).
17
We take a position between these two decisions. Unlike the Seventh Circuit, we think we can ascribe a meaning to "occupational qualification" that is separate from "particular business".3 We view "occupation" as a word of some breadth. Webster's applicable definition is: "The principal business of one's life: a craft, trade, profession or other means of earning a living ...." Webster's Third New International Dictionary 1560 (1966). For example, an airline is a "particular business", but within that business there are specific occupations with their own separate training, career progression, and age limitations, such as captain and first officer (retirement at age 60) and flight engineer (retirement at age 70). See, e.g., Air Line Pilots Ass'n v. TWA, 713 F.2d 940 (2d Cir.1983) cert. granted, --- U.S. ----, 104 S.Ct. 1412, 79 L.Ed.2d 739 (U.S.1984); Criswell v. Western Airlines, Inc., 709 F.2d 544 (9th Cir.1983).
18
When, however, a person signs up in a paramilitary uniformed force, where one is subject to generally unrestricted reassignment and performance of the most strenuous duties in any emergency, and undergoes the military training required of all recruits, with the expectation of receiving special pension and disability benefits, we would be loath to equate particular "assignments", even if of long duration, to "occupations".
19
The Eighth Circuit case is susceptible of two interpretations. It dealt with the position of fire chief; arguably this position was sufficiently distinct to be considered an occupation separate from that of the rest of the department. But the court in St. Paul went on to say, "we cannot believe that the ADEA was intended to allow a city to retire a police dispatcher because that person is too old to serve on a SWAT team." 671 F.2d at 1166. If this nicety of distinction were to govern, we would have to say that an age limit geared to those performing at critical times the most strenuous function of a unit could not be applied to those performing somewhat less strenuous functions. If such were the law, state troopers engaged in tracking down and apprehending car thieves and drug runners could be subjected to an age 50 retirement requirement, but those who merely had to chase speeders, to attend truck weighing stations, and to apprehend drivers under the influence of alcohol or without proper licenses would not be so subjected. This, we think, would atomize the general concept of "occupation".
20
Although we can understand why courts have interpreted the statute differently, we think that our interpretation is faithful to the words--that "occupational qualification" means more of a recognized and discrete vocation rather than a desk assignment for an employee subject to all the obligations and benefits of a quasi-military organization. We also feel, as indeed the district court conceded, that a contrary interpretation, which permits a particularistic analysis of the actual duties performed to overcome an otherwise justified BFOQ for similarly classified employees, would raise immeasurable problems of morale, administration, litigation, and adjudication. The question remains whether our preferred interpretation runs contrary to the discernible intent of the Congress.
21
The answer to this question is not advanced very far by recourse to the obvious policy of ADEA, "to promote employment of older persons based on their ability rather than age; to prohibit arbitrary age discrimination in employment." 29 U.S.C. Sec. 621(b). A more germane inquiry focuses on the Congressional intent behind the BFOQ exception. The parties in their briefs have seized upon the 1977 Senate debate considering the ADEA amendments raising the generally protected age from 65 to 70.
22
Preliminarily we remark that, between the enactment of ADEA in 1967 and these debates in 1977, we know of only four cases applying the BFOQ. In all of these, the focus was on the class of employees to which the BFOQ applied; there was no suggestion that there might be exceptions within the class. Usery v. Tamiami Trail Tours, 531 F.2d 224 (5th Cir.1976) (upholding company's refusal to hire those over 40 as inner city bus drivers); Hodgson v. Greyhound Lines, Inc., 499 F.2d 859 (7th Cir.1974) (upholding company's policy of not accepting bus driver applications from persons over 35); Aaron v. Davis, 414 F.Supp. 453 (E.D.Ark.) (striking mandatory retirement at age 62 for assistant city fire chief and district chief), motion for reconsideration denied, 424 F.Supp. 1238 (E.D.Ark.1976); McIlvanie v. Pennsylvania State Police, 296 A.2d 630, 6 Pa.Comw. 505 (1972) (upholding the mandatory retirement of a state police officer at age 60 and rejecting notion that focus should be on the plaintiff's individual responsibilities as a troop commander, rather than on the responsibilities of the class as a whole). These cases of course do not imply that there cannot be fine tuning within a broad job classification; but they do show that the 1977 debate took place against the background of a broad brush application of the BFOQ defense by the courts.
23
Senator Williams, in commencing debate on the 1977 amendments, referred to his belief that there should not be a complete ban on mandatory retirement "where age has been established as a bona fide occupational qualification." 123 Cong.Rec. 34,296 (1977). In support of his position, the Senator continued:
24
"In his letter endorsing the basic purposes of my bill, President Carter expressed the same concern and asked that in enacting this legislation we clearly permit the establishment of a designated retirement age of less than 70 where age has been shown to be an important indicator of job performance. For some types of work, for example, law enforcement activity, there may be a factual basis for believing that substantially all employees above a specified age will be unable to continue performing their duties." Id. (emphasis supplied).
25
After a lengthy debate on amendments which would allow mandatory retirement as early as age 65 for tenured college and public school teachers and certain top business executives, Senator Griffin questioned an example Senator Javits had given for a BFOQ, that for airline pilots, opining that "[T]here could be many airline pilots at age 70 who would be able and fit to fly their planes." 123 Cong.Rec. 34,318 (1977). There followed this strange statement by Senator Javits:
26
"The Senator caught me a little too fast. I did not mean to state that generically--that just because a person is an airline pilot he can be retired at age 60. All I meant to say was that the law permits that distinction to be made if the employer has a valid reason other than age. In other words, if the employer has factual proof of diminished capacity or an agency with regulatory authority finds that on the basis of skill and competence, quite apart from age, a person is unable to perform his duties as an airline pilot, the law permits that retirement. But the action must still be based on a factor other than age."
27
Plaintiff naturally stresses this language in support of his position. Of course it does support his position, in fact it goes far beyond. Indeed it is inconsistent with any concept of a BFOQ; the Senator's statement would limit retirement of airline pilots to those based on reasons "other than age". That this was an aberration became clear when, shortly thereafter, the Senator emphasized that "we intend that employers may establish a mandatory retirement age that is lower than age 70 ... where the employer can demonstrate that there is an objective, factual basis for believing that virtually all employees above a certain age are unable to safely perform the duties of their jobs". He then read from the committee report an example of a justifiable BFOQ:
28
"For example, in certain types of particularly arduous law enforcement activity, there may be a factual basis for believing that substantially all employees above a specified age would be unable to continue to perform safely and efficiently the duties of their particular jobs ...." 123 Cong.Rec. 34,319.
29
Senator Griffin, not quite satisfied, asked:
30
"I do not understand what the standard is supposed to be. Would he say, for example, that if most policemen are physically unqualified after age 65 to continue to serve on the police force, then all policemen could be required to retire at 65, rather than 70?" Id.
Senator Javits replied:
31
"If it is reasonable, factually based, and can be justified as a bona fide occupational qualification for that type of employment." Id.
32
We conclude from these extracts that the Congressional intent revealed by this debate is consistent with a properly justified across-the-board BFOQ for a class of employees such as the uniformed branch of state troopers in the instant case.4
33
We draw further support from E.E.O.C. v. Wyoming, --- U.S. ----, 103 S.Ct. 1054, 75 L.Ed.2d 18 (1983). In that case the Court considered whether a challenge by a Wyoming game warden to the state's mandatory retirement age of 55 was barred by the doctrine of National League of Cities v. Usery, 426 U.S. 833, 96 S.Ct. 2465, 49 L.Ed.2d 245 (1976). The Court looked at the nature of the burden on or interference with state policy constituted by the ADEA. It first noted that under the ADEA the state could still "assess the fitness of its game wardens and dismiss those wardens whom it reasonably finds to be unfit." --- U.S. at ----, 103 S.Ct. at 1062. It continued with language stressed by the district court: "Put another way, the Act requires the State to achieve its goals in a more individualized and careful manner than would otherwise be the case, but it does not require the State to abandon those goals, or to abandon the public policy decisions underlying them." Id.
34
Coming to the point, the Court concluded its comments on the ADEA by writing, "Perhaps more important, appellees remain free under the ADEA to continue to do precisely what they are doing now, if they can demonstrate that age is a 'bona fide occupational qualification' for the job of game warden." Id. (emphasis original).5 Finally, and perhaps with most significance for this case, we note that the plaintiff in E.E.O.C. v. Wyoming was a game warden supervisor.
35
In passing, we take note of the fact that in 1974, when Congress extended ADEA coverage to state and local governments, it also established mandatory retirement ages for a number of federal public safety occupations. 5 U.S.C. Sec. 8335.6 We recognize that the Congress need not adhere to ADEA standards in setting mandatory retirement ages for federal personnel. Orzel v. City of Wauwatosa Fire Department, 697 F.2d 743, 749 (7th Cir.1983). Cf. Johnson (E.E.O.C.) v. Mayor and City Council of Baltimore, 731 F.2d 209 at 211-213 (4th Cir.1984) (court relied on Congress' establishment of mandatory retirement at age 55 for federal firefighters in upholding identical requirement for Baltimore firefighters). But we do think it pertinent to note that the federal legislation includes in its definitions of law enforcement officer and firefighter "an employee ... transferred to a supervisory or administrative position". 5 U.S.C. Secs. 8331(20) and (21).
36
Finally, we acknowledge the possibility that a state could endeavor to sweep under one classification of employees many distinct vocations and occupations for which a low mandatory retirement age would be quite unjustified. We think that our own approach, recognizing the need to focus not only on the "particular business" but also on genuine and well recognized occupations within such businesses, would prevent or remedy indiscriminate lumping together. Beyond that, of course, courts would not be powerless to remedy blatant or covert efforts to subvert the ADEA.
37
The judgment is reversed.
*
Of the District of Puerto Rico, sitting by designation
1
This statute provides:
"Any member in service classified in Group 3 who is an officer appointed under section nine A of chapter twenty-two and who has performed service in the division of state police in the department of public safety for not less than twenty years, shall be retired by the state board of retirement upon his attaining age fifty or upon the expiration of such twenty years, whichever last occurs."
Since another Massachusetts statute, Mass.Gen.Laws ch. 22 Sec. 9A, has for many years prohibited the recruitment into the uniformed branch of those who have "passed" their thirtieth birthday, the practical effect of this statute is to require all members of the uniformed branch to retire at age 50.
2
A similar approach was followed in E.E.O.C. v. City of Minneapolis, 537 F.Supp. 750, 756 (D.Minn.1982)
3
Another reading of "occupational qualification that would give it separate meaning is "having to do with work", as opposed to a physical, sexual, racial, social, or educational qualification
4
We have also been cited to the following language in the Report of the House of Representatives Committee on Education and Labor on the 1978 amendments:
"It is recognized that certain mental and physical capacities may decline with age, and in some jobs with unusually high demands age may be considered a factor in hiring and retaining workers. For example, jobs such as those in air traffic control and in law enforcement and firefighting have very strict physical requirements on which the public safety depends. The Committee, however, expects that age will be a relevant criteria for only a limited number of jobs[.]" H.R.Rep. No. 95-527, 95th Cong., 1st Sess. 12 (1977).
To the extent that this extract illumines our quest, we would say that it "tilts" toward our interpretation. "Jobs" seems to be used to describe very broad functional categories--traffic controllers, law enforcement and firefighting officials, all of which include administrative and other low pressure positions.
5
On remand, a jury upheld the 55 year mandatory retirement age as a BFOQ for Wyoming game wardens. E.E.O.C. v. Wyoming, No. C 80-0336 B (D.Wyo.1983), cited in E.E.O.C. v. Mayor and City Council of Baltimore, 731 F.2d 209 at 212 n. 7 (4th Cir.1984)
6
Those employees covered include agents of the FBI and the Secret Service, corrections officers, Immigration and Naturalization Service employees, U.S. Marshals, Bureau of Narcotics and Dangerous Drugs investigators, air traffic controllers, and federal firefighters
| {
"pile_set_name": "FreeLaw"
} |
Hamburg v New York Univ. Sch. of Medicine (2017 NY Slip Op 06635)
Hamburg v New York Univ. Sch. of Medicine
2017 NY Slip Op 06635
Decided on September 26, 2017
Appellate Division, First Department
Friedman, J.
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 September 26, 2017
SUPREME COURT, APPELLATE DIVISION
First Judicial Department
David Friedman,J.P.
John W. Sweeny, Jr.
Karla Moskowitz
Judith J. Gische
Barbara R. Kapnick, JJ.
153572/12 3622
[*1]Carole Hamburg, M.D., Plaintiff-Appellant-Respondent,
vNew York University School of Medicine, et al., Defendants-Respondents-Appellants.
Cross appeals from the order of the Supreme Court, New York County (Eileen A. Rakower, J.), entered June 16, 2016, which, to the extent appealed from as limited by the briefs, granted defendants' motion for summary judgment to the extent of dismissing plaintiff's claim for age discrimination in violation of the New York City Human Rights Law, and denied the motion with respect to plaintiff's claim for breach of contract.
Law Offices of Michael G. Berger, New York (Michael G. Berger of counsel), for appellant-respondent.
Zachary W. Carter, Corporation Counsel, New York (MacKenzie Fillow and Pamela Seider Dolgow of counsel), for respondents-appellants.
FRIEDMAN, J.P.
In this action for age discrimination in violation of the New York City Human Rights Law (NYCHRL) (Administrative Code of City of NY § 8-107[1][a]) and for breach of contract, plaintiff, a former member of the radiology department of defendant medical school and hospital, challenges defendant's decision not to renew her employment at the expiration of the term of her last appointment. Although Supreme Court assumed (as do we) that plaintiff carried her "de minimis" burden of establishing a prima facie case of age discrimination (see Bennett v Health Mgt. Sys., Inc., 92 AD3d 29, 38 [1st Dept 2011], lv denied 18 NY3d 811 [2012]), the court correctly determined that plaintiff, in response to defendant's evidence of legitimate, nondiscriminatory reasons for the challenged employment action, failed to present any evidence raising a triable issue as to whether bias against employees of her age played a role in that [*2]decision (see id., 92 AD3d at 40).
As more fully discussed below, defendant established that the non-specialized section of the radiology department in which plaintiff worked, which produced no research, was phased out as part of a restructuring of the department, at a time of financial constraint, to achieve greater focus on the specialized, research-producing sections of the department. Defendant further established that, as part of this restructuring, it retained three physicians from plaintiff's section, each of whom was of approximately the same age as plaintiff (60), and reassigned them to specialized departments. Plaintiff, however, was reasonably deemed to lack the specialized expertise and the proclivity for research that defendant deemed necessary to maintain its status as a top-tier academic radiology department. Not only did plaintiff fail to present any evidence casting doubt on this explanation, she failed to present any evidence, either direct or circumstantial, suggesting that bias against employees of her age was even a partial motive for the ending of her employment.
While we affirm the dismissal of the age discrimination claim, we modify to grant defendant summary judgment dismissing the claim for breach of contract, as well. As more fully discussed below, the faculty handbook setting forth the terms of plaintiff's employment, when construed as a whole, requires a year's notice of nonrenewal of employment only for faculty members (beyond their second year of service) holding tenure-eligible appointments. Since plaintiff admits that she was not eligible for tenure, her claim for breach of contract — based on defendant's having given her advance notice of eight months, rather than a full year, of the end of her employment — is legally insufficient as a matter of law.
Plaintiff Carole Hamburg, M.D., who was born in 1950, is a board-certified radiologist. In the summer of 2002, defendant New York University School of Medicine (NYU) hired plaintiff as an "Assistant Professor (Clinical) of Radiology" and as a member of the radiology department of NYU-affiliated hospitals [FN1]. As stated in NYU's letters offering the position to plaintiff, the appointment was for a one-year term that would be "renewable upon agreement of both parties," and was subject to the terms of the NYU faculty handbook and the hospital bylaws. Over the nine years following her initial appointment in 2002, NYU periodically renewed plaintiff's appointment. Each reappointment was for a defined period of one or two years.
It is undisputed that plaintiff's position at NYU was never eligible for academic tenure [FN2]. [*3]Stated otherwise, plaintiff's position at NYU was one that could never lead to tenure, no matter how many times she was reappointed. Plaintiff admits that she understood this at all relevant times.
Throughout her employment at NYU, plaintiff was assigned to the "General Diagnostic Radiology section" (hereinafter, general radiology) of NYU's radiology department. By her own account, plaintiff's primary responsibility in general radiology was "reading plain films" — X-rays without contrast — "[f]or any part of the body." As plaintiff stated at her deposition, "I was the designated plain film person." Notwithstanding her academic title, plaintiff did not conduct any research or publish any papers during her employment by NYU, nor did she teach or supervise medical students, residents or fellows. Her involvement in medical education at NYU was limited to informal "mentoring" of a handful of medical students and to interviewing medical school applicants.
In addition to general radiology, the NYU radiology department included several more specialized sections. Among the specialized sections of the department were sections respectively focusing on cardiac imaging, abdominal imaging, musculoskeletal imaging, thoracic (chest) imaging, neuroradiology, pediatric radiology, vascular interventional radiology, neuro-interventional radiology, and nuclear medicine. The specialized sections produced original research relevant to their respective practice areas, but general radiology — the section in which plaintiff worked — produced no research.
In November 2008, Dr. Michael Recht assumed the chair of NYU's radiology department. In discussions that began in 2009, Dr. Recht and his leadership team (which did not include plaintiff) identified as a departmental goal the maximization of the department's production of research, so as to maintain its standing as (in Dr. Recht's words) "one of the best academic radiology departments." The realization of this goal was complicated by the financial pressure under which the department was operating as the result of reductions in Medicare reimbursement rates for its clinical services. As Dr. Recht expressed it at his deposition: "Because we didn't have unlimited revenue, and in fact, our revenue for the exams that we were doing was shrinking, we needed to make very tough decisions to make sure we were set up correctly to thrive, survive and thrive [sic], in the future of radiology."
Given the goal of increasing the department's production of research under conditions of financial constraint, Dr. Recht and his team began to consider (in Dr. Recht's words) "[w]hether . . . [a] section of general radiology was something . . . that an academic radiology department should have or not have." These deliberations resulted in Dr. Recht's determination that the general radiology section, because it was not producing any research, "was not appropriate for our department," and should be eliminated over time. As Dr. Recht explained, "My goal for the department was not to be a good general radiology department . . . [but] to be a sub-specialized academic radiology department at the cutting edge of radiology clinical care, education and research." Accordingly, it was decided that certain physicians in general radiology would be absorbed into the department's specialized sections, while the appointments of other physicians in the section would not be renewed as their terms expired. Ultimately, the work performed in general radiology would be absorbed by the department's specialized sections.
At the time Dr. Recht decided to phase out general radiology, 10 physicians (including plaintiff) were working in the section. In consultation with the heads of the specialized sections, [*4]Dr. Recht determined that three general radiology physicians had the appropriate experience and skills to be reassigned to the specialized sections. It is undisputed that all three of these retained physicians — one of whom was assigned to thoracic imaging, the other two to abdominal imaging — were, like plaintiff, around 60 years of age in 2011. The appointments of six other physicians in general radiology — including plaintiff's — were not renewed as their respective terms ended. Of the six general radiology physicians whose appointments were not renewed as the section was phased out, one was in his late 30s or early 40s, two (including plaintiff) were around 60, one was in his late 60s, and the three others were 80 or older.[FN3]
Plaintiff's last appointment at NYU was for the 2010-2011 academic year. On May 3, 2011, Dr. Recht met with plaintiff in his office and informed her that NYU would not be renewing her contract, although, as a matter of courtesy, her employment would be extended until December 31, 2011. Dr. Recht testified that he told plaintiff at this meeting that her contract was not being renewed "because of the changes in the department . . . and that in order to be fair and give her as much time as possible, I was letting her know as early as I could, once the decision was made, so that she would have eight months to adjust to that and move forward."[FN4] Plaintiff, in her affidavit, states that Dr. Recht told her at the meeting that the reason for the nonrenewal was that "the Radiology Department was placing greater emphasis on research and had to maintain revenue." Subsequently, by letter dated October 14, 2011, Dr. Recht confirmed to plaintiff in writing that, "[a]s discussed in our meeting of May 3, 2011, due to operational changes in the Department of Radiology, your contract is not being renewed effective December 31, 2011."[FN5]
At the end of her employment by NYU, plaintiff was working three days a week (although her position was classified as full time) at Gouverneur Health Care Service, where, as previously noted, she principally interpreted "plain film" X-rays [FN6]. After plaintiff left NYU at the end of 2011, the work she had been doing at Gouverneur was absorbed by Dr. Jodi Cohen, a [*5]member of the musculoskeletal imaging section who had been at NYU since 2006. At his deposition, Dr. Recht estimated that Dr. Cohen, whose credentials included a fellowship in musculoskeletal radiology, was in her 40s.
In June 2012, plaintiff commenced this action against NYU, in which she asserts two causes of action, the first for age discrimination in violation of the NYCHRL and the second for breach of contract. After discovery was conducted, NYU moved for summary judgment dismissing the complaint. Supreme Court granted NYU summary judgment dismissing the cause of action for age discrimination, but denied the motion as to the breach of contract cause of action. Plaintiff and NYU each appeals from this order to the extent each is aggrieved thereby.
We turn first to the cause of action for age discrimination in violation of the NYCHRL. As this Court has held, a defense motion for summary judgment in an action brought under the NYCHRL must be analyzed under both the familiar framework of McDonnell Douglas Corp. v Green (411 US 792 [1973]) and under the newer "mixed motive" framework, which imposes a lesser burden on a plaintiff opposing such a motion. Summary judgment dismissing a claim under the NYCHRL should be granted only if "no jury could find defendant liable under any of the evidentiary routes — McDonnell Douglas, mixed motive, direct' evidence, or some combination thereof" (Bennett, 92 AD3d at 45).
The McDonnell Douglas framework and the mixed motive framework diverge only after the plaintiff has established a prima facie case of discrimination (as more fully described below) and the defense has responded to that prima facie case by presenting admissible evidence of "legitimate, independent, and nondiscriminatory reasons to support its employment decision" (Forrest v Jewish Guild for the Blind, 3 NY3d 295, 305 [2004] [internal quotation marks omitted]). At that point, under McDonnell Douglas, the burden shifts to the plaintiff to produce evidence tending to "prove that the legitimate reasons proffered by the defendant were merely a pretext for discrimination" (id.)[FN7]. By contrast, under the mixed motive analysis, the plaintiff may defeat the defendant's evidence of legitimate reasons for the challenged action by coming forward with evidence from which it could be found that "unlawful discrimination was one of the motivating factors, even if it was not the sole motivating factor, for [the] adverse employment decision" (Melman v Montefiore Med. Ctr., 98 AD3d 107, 127 [1st Dept 2012]). Combining the two approaches, where the plaintiff has made out a prima facie case of discrimination, he or she may defeat a defense summary judgment motion based on evidence of a legitimate, nondiscriminatory reason for the adverse action by coming forward either with evidence that "the [defendant's] stated reasons were false and that discrimination was the real reason" (Forrest, 3 NY3d at 305) or with evidence that "discrimination was one of the motivating factors for the defendant's conduct" (Williams v New York City Hous. Auth., 61 AD3d 62, 78 n 27 [2009], lv denied 13 NY3d 702 [2009]).
As previously noted, the first step in both the McDonnell Douglas analysis and the mixed motive analysis is to determine whether plaintiff has met her burden of establishing a prima facie case of discrimination. "To meet this burden, plaintiff must show that (1) she is a member of a protected class; (2) she was qualified to hold her position; (3) she was terminated from employment or suffered an adverse employment action; and (4) the discharge or other adverse [*6]action occurred under circumstances giving rise to an inference of discrimination" (Forrest, 3 NY3d at 305).
Here, it is undisputed that plaintiff has established the first three elements of a prima facie case of discrimination (membership in a protected class, possession of qualifications for the position, and having suffered an adverse employment action). Plaintiff argues that she has also satisfied the fourth element — a showing of circumstances giving rise to an inference of discrimination — in that, as she testified at her deposition, "the people [in general radiology] that were terminated in addition to me were all of a similar age and the person that sat at my desk after I left was in her late 30's [sic], early 40's [sic]."[FN8] While NYU does not concede that plaintiff has demonstrated circumstances giving rise to an inference of discrimination, it does not emphasize this point. Supreme Court, although it ultimately dismissed the claim under the NYCHRL, assumed that plaintiff had made out a prima facie case of discrimination, a standard that is, after all, "de minimis" (Bennett, 92 AD3d at 38). Accordingly, we, like Supreme Court, assume for purposes of plaintiff's appeal that she has met her burden of establishing a prima facie case of discrimination.
The next step in the analysis, under both McDonnell Douglas and the mixed motive framework, is to determine whether NYU has come forward with evidence of "legitimate, independent, and nondiscriminatory reasons to support its employment decision" (Forrest, 3 NY3d at 305 [internal quotation marks omitted]). NYU has set forth, through admissible evidence, a legitimate and nondiscriminatory reason for its decision not to renew her appointment. Dr. Recht, the chairman of NYU's radiology department, testified that he decided to phase out the general radiology section in which plaintiff worked as part of a strategic shift of the department's resources to the research-producing specialized radiology sections. Dr. Recht testified that this restructuring was motivated by his view that a top-tier academic radiology department should focus on the production of original medical research and, in the face of decreasing revenues, could not afford to support a non-specialized general radiology section, the members of which did not conduct research. Three general radiology physicians who had specialized skills — all of whom were, like plaintiff, around 60 years old at the time — were [*7]absorbed into the specialized sections. The appointments of those without such skills were not renewed.
Dr. Recht explained during his deposition that, as the chair of the radiology department, he was charged with determining how to use the limited revenue available to the department to maximize its potential and fulfill its mission of advancing medical science through the production of research. After numerous meetings with his leadership team, he concluded that the optimal use of the revenue from the department's clinical services was to employ radiologists with specialized skills who would produce research. At his deposition (as clarified in his subsequent affidavit correcting a transcription error), Dr. Recht summarized his reasoning as follows:
"[Plaintiff] . . . and the other general radiologists, since we were eliminating the general radiology section, we were able to use that revenue [from reading film] to hire people in the appropriate subspecialty sections that would allow us to increase . . . our subspecialization as well as our research output."
Stated otherwise, while plaintiff's performance as an interpreter of plain film was satisfactory, retaining her would have diverted the radiology department's resources from the specialized, research-oriented direction that its management had selected. As Dr. Recht put it at the conclusion of his deposition, "If I use that revenue [from reading film] in Bucket A, I have less revenue for Bucket B" — "Bucket A" being "general radiology" and "Bucket B" being "a subspecialty-trained radiologist who is doing academic work."
Upon NYU's submission of a legitimate, nondiscriminatory reason for its decision not to renew plaintiff's contract, the burden shifted back to plaintiff to come forward with evidence raising a triable issue as to whether, under McDonnell Douglas, NYU's explanation was a false pretext masking discriminatory intent (see Forrest, 3 NY3d at 305), or whether, under the mixed motive analysis, NYU's decision was motivated, at least in part, by discriminatory bias (see Williams, 61 AD3d at 78 n 27). Supreme Court correctly determined that plaintiff failed to carry this burden.[FN9]
Initially, we note that, as plaintiff essentially concedes, she has no direct evidence that the actions she challenges were taken with discriminatory intent, nor does she have any evidence of bias against older employees on the part of the leadership of the NYU radiology department. Plaintiff admits that she does not recall Dr. Recht or any member of his leadership team ever writing or saying anything that could be interpreted as revealing, either intentionally or [*8]inadvertently, the existence of such bias (cf. Ferrante, 90 NY2d at 626 [the employer was not entitled to summary judgment where the plaintiff alleged that his supervisor "disparaged and humiliated (him) by calling him the old man'"]; Krebaum v Capital One, N.A., 138 AD3d 528, 528 [1st Dept 2016] [same, where the plaintiff allegedly "endured repeated negative comments about his age from his manager"]). Indeed, plaintiff does not claim even to have heard second-hand reports or rumors of such comments. Accordingly, we turn to the circumstantial evidence on which plaintiff relies.
In arguing that the reasons given by NYU for the nonrenewal of her contract are pretextual — or, at a minimum, tainted by an admixture of bias against older employees — plaintiff relies heavily on the fact that, of the six general radiology physicians who were not reappointed as the section was phased out, five were 60 or older when advised that they would not be reappointed [FN10]. This overlooks, however, that all three physicians in the section who were retained and reassigned were, like plaintiff, about 60 years old at the time. Absent evidence that younger physicians of equal or lesser qualifications than plaintiff's received more favorable treatment than she did, the retention of three physicians of essentially the same age as plaintiff completely negates any possible inference that the nonrenewal of plaintiff's contract was based, in whole or in part, on bias against people of her age cohort.
In this regard, entirely beside the point is plaintiff's argument that her qualifications for transfer to a specialized section, and her ability to perform research, were comparable to, or better than, those of the three physicians who were retained. Since it is undisputed that there was no significant age difference between plaintiff and any of the three retained physicians, no inference of invidious discriminatory intent may be drawn from NYU's choice to retain those three rather than plaintiff [FN11]. In the absence of any significant age difference among the four physicians in question, NYU's assessment that each of the three retained physicians was better suited than plaintiff to joining one of the radiology department's specialized sections was a business judgment not subject to judicial second-guessing (see Forrest, 3 NY3d at 312 [in a discrimination case, it was not "material whether defendants' contemporaneous assessment of plaintiff's . . . skills was justified"]; Baldwin v Cablevision Sys. Corp., 65 AD3d 961, 966 [1st Dept 2009] [a court hearing a discrimination suit "should not sit as a super-personnel department that reexamines an entity's business decisions"] [internal quotation marks omitted], lv denied 14 NY3d 701 [2010]; Bailey v New York Westchester Sq. Med. Ctr., 38 AD3d 119, 124 [1st Dept 2007] [in a discrimination case, an attack on the employer's business judgment "does not give rise to the inference that the employee's discharge was due to age discrimination"] [internal quotation marks omitted]).
Plaintiff argues further that an inference of age discrimination against her may be drawn from the fact that four other general radiology physicians, whose contracts were not renewed in connection with the elimination of the section, were, like plaintiff herself, members of the protected class of older workers. However, as previously noted, each of these four physicians was significantly older than plaintiff (again, one was in his late 60s, the other three were 80 or older). In view of the retention of all of the general radiology physicians in plaintiff's age cohort, [*9]other than plaintiff herself, the nonrenewal of the contracts of the four significantly older physicians gives rise to no inference that the decision not to reappoint plaintiff was influenced by bias against employees of her age. Moreover, since plaintiff has presented no statistical data or analysis to show that the NYU radiology department declined to reappoint older physicians at a higher rate than younger physicians during the relevant period, the fact that plaintiff and four significantly older general radiology physicians were not reappointed (while three other physicians of plaintiff's own age were retained) provides no basis for a finding of a pattern of age discrimination (see Melman, 98 AD3d at 124-125).[FN12]
Also unavailing is plaintiff's argument that a discriminatory motive may be inferred from the fact that, after she left NYU, her functions at Gouverneur were assigned to a younger physician, Dr. Jodi Cohen, who, according to Dr. Recht's testimony, was in her 40s. To begin, Dr. Cohen was not hired to replace plaintiff; she had been working in the radiology department since 2006, and was a member of the musculoskeletal section, having completed a fellowship in that field. The thrust of plaintiff's argument appears to be that NYU, consistent with its stated goal of shifting the radiology department's resources to the specialized, research-producing sections, could just as well have reassigned plaintiff to the musculoskeletal section, rather than let her go and reassign her duties to Dr. Cohen, since plaintiff possessed sufficient credentials to participate in medical research (although she had never done so since joining NYU in 2002) and had practical experience in reading musculoskeletal images [FN13]. However, NYU was entitled, in the exercise of its academic judgment, to deem plaintiff's practical experience insufficient to warrant reassigning her to the musculoskeletal section, or any of the other specialized sections, and, after she left, to reassign her work to a member of one of the specialized sections. Plaintiff has not offered any competent evidence to controvert the good faith of this exercise of NYU's academic judgment.[FN14]
Given the NYU radiology department's phasing out of general radiology, the work that had previously flowed to that section had to be redistributed to the specialized sections. No inference of discriminatory intent, whether as sole or partial motive, arises from the fact that, in one instance (and that is all that plaintiff has shown), the work previously done by an older employee (plaintiff), whose employment ended due to the elimination of her section in a restructuring, was redirected to a younger employee (Dr. Cohen) in one of the remaining sections. Certainly, no such inference can be drawn against the employer where, as here, it reasonably deemed the younger employee to possess needed specialized expertise that the older employee lacked.[FN15]
Plaintiff also relies on announcements she received by email, in late 2010 and 2011, of the radiology department's hiring of a number of apparently younger physicians. Plaintiff overlooks, however, that each announcement states that the newly hired physician had completed a fellowship in a specialized area of radiology and, unlike plaintiff during her years with NYU, had developed defined areas of active research interest. Plaintiff does not dispute the accuracy of these statements. Thus, the hiring of these physicians was consistent with NYU's stated goal of shifting the department's focus to the research-producing specialized sections and, therefore, does not give rise to an inference of discriminatory intent.[FN16]
Plaintiff directs our attention to certain evidence in the record that, she argues, put in question NYU's explanation that the nonrenewal of her contract was motivated by a desire to shift the radiology department's focus to research. Thus, plaintiff points to her testimony that, before the May 2011 meeting at which she was told that she would not be reappointed, neither Dr. Recht nor any other departmental leader had ever asked her to involve herself in research or had even discussed research with her. Plaintiff states that she was qualified to participate in [*10]research and, had she been told that she was expected to produce research, she would have done so. Dr. Recht testified, however, that "we don't assign research to people" and that "most of our staff members develop their own research direction" and "come up with their own research projects," which they carry out "independently." NYU could reasonably conclude, based on plaintiff's nonparticipation in research since she was hired in 2002, that research (in Dr. Recht's words) "wasn't what she was interested in doing," and that keeping her on staff would not help to meet the department's goal of increasing the quantity and quality of the research it produced.[FN17]
Plaintiff's remaining arguments concerning her age discrimination claim are also unavailing. That her salary and bonuses were not reduced before her employment ended does not contradict Dr. Recht's testimony that the radiology department's revenue was under pressure, due to reduced Medicare reimbursement rates, at the time. As Supreme Court observed, it was reasonable for the department to maintain the same level of compensation for plaintiff while her employment continued even as it undertook a restructuring to address the financial strains under which it was operating. Nor is it relevant that, after plaintiff left, the department continued to perform the same kind of clinical work that she had been doing, since, as Dr. Recht testified, it better served the department's goals to have that work performed by more specialized and research-oriented radiologists, whose research would then be supported by the revenue from the clinical work. Finally, that plaintiff was given five more months of notice of the end of her employment than was the department's usual practice does not, standing alone, support an inference that the decision not to reappoint her was motivated, in whole or in part, by bias against employees of her age.
In sum, "[p]laintiff failed to raise triable issues of fact as to whether [NYU's] proffered reasons for [its] decisions were pretextual or incomplete, given the absence of any evidence from which a reasonable jury could infer that [her age] played a role in [NYU's] decision" not to reappoint her to its faculty in the context of a departmental restructuring (Uwoghiren v City of New York, 148 AD3d 457, 457 [1st Dept 2017]). Stated otherwise, on this record, no triable issue exists as to whether the employer, in taking the challenged action, "was motivated at least in part by age discrimination" (Spinello v Depository Trust & Clearing Corp., 147 AD3d 572, 572 [1st Dept 2017]). We recognize, of course, that, under the Local Civil Rights Restoration Act of 2005, the NYCHRL is to be "construed liberally" to accomplish its "uniquely broad and remedial purpose" (Administrative Code § 8-130[a]). This does not mean, however, that plaintiff may defeat NYU's evidentiary showing of legitimate and nondiscriminatory reasons for not reappointing her without "com[ing] forward with any evidence — either direct or circumstantial — from which it could rationally be inferred that age discrimination was a motivating factor, even in part, for [that decision]" (Melman, 98 AD3d at 128). Accordingly, we [*11]affirm the grant of summary judgment dismissing the age discrimination claim.
This brings us to the cause of action for breach of contract, as to which Supreme Court denied NYU's summary judgment motion. Plaintiff alleges that NYU breached her contract by providing her approximately eight months oral notice, and two months written notice, that her contract would not be renewed. Plaintiff asserts that her contract entitled her to 12 months prior written notice if her contract would not be renewed. In reply, NYU argues that plaintiff was not contractually entitled to any notice because her contract stated that her one year appointment would automatically terminate unless she received a notice of renewal, and further asserts that NYU's oral and written notice were delivered to plaintiff as a matter of professional courtesy. Plaintiff's employment agreement stated that her academic appointment as Assistant Professor (Clinical) of Radiology was governed by the NYU Faculty Handbook (the Handbook). Accordingly, the Handbook is the relevant contract. As to which sections of the Handbook apply to plaintiff's particular position, plaintiff's final reappointment letters specified that she would continue to hold the title of "Assistant Professor (Clinical) of Radiology," that she would be employed on a full-time basis, and that her appointment carried "[n]o tenure implications."
When analyzing an agreement, the "entire contract must be reviewed and particular words should be considered, not as if isolated from the context, but in the light of the obligation as a whole and the intention of the parties as manifested thereby" (Riverside S. Planning Corp. v CRP/Extell Riverside, L.P., 13 NY3d 398, 404 [2009] [internal quotation marks omitted]). Here, when the applicable contractual document — the Handbook — is viewed as a whole, we find that the provision requiring prior notice of intention not to reappoint a full-time faculty member (Title II, section XI, paragraph 2), on which plaintiff relies, unambiguously applies only to tenure-eligible faculty members.
The structure of the relevant portions of the Handbook is illustrated by the Handbook's table of contents, which is as follows, in relevant part (page numbers omitted):
"The Faculty"
"ACADEMIC FREEDOM AND TENURE"
"Title I:Statement in Regard to Academic
Freedom and Tenure"
"Title II: Appointment and Notification
of Appointment"
"Title III: Rules Regulating Proceedings to
Terminate for Cause the Service of
a Tenured Member . . . ."
"Title IV: General Disciplinary Regulations
Applicable to Both Tenured and
Non-Tenured Faculty Members"
"OTHER FACULTY POLICIES"
"Faculty Membership and Meetings"
"Faculty Titles"
In a note under the heading "The Faculty," the Handbook plainly indicates that, except where otherwise expressly provided (as in Title IV), the provisions under the heading "Academic Freedom and Tenure" apply only to tenured and tenure-eligible faculty. The note states in pertinent part:
"(This part of the Faculty Handbook, The Faculty, begins under the heading Academic Freedom and Tenure with Titles I-IV of the University's formal rules of tenure and related provisions. It's followed on page 41 by Other Faculty Policies, with policies, procedures and conventions in the form of Bylaws, rules adopted by the Senate, and policy summaries. . . . [emphasis added])."
Thus, unless otherwise expressly provided, the provisions under the heading "Academic Freedom and Tenure" — including Title II's provision for notice of non-reappointment, on which plaintiff relies — apply only to tenured or tenure-eligible faculty members [FN18]. This conclusion is confirmed by a closer reading of Title II itself.
Title II comprises sections X (entitled "General Appointment Procedures Affecting the Full-Time Tenure-Earning Ranks"), XI (entitled "Notification of Non-Tenured Faculty Members") and XII (entitled "Tenure Appointments"). Plaintiff concedes, as she must, that sections X and XII, by their terms and in their entirety, apply only to tenure-eligible faculty members. She argues, however, that part (but not all) of section XI applies to all non-tenured faculty members, whether or not they are tenure-eligible. To assess this argument, it is helpful to set forth section XI in pertinent part, with the language on which plaintiff relies italicized:
"XI. Notification of Non-Tenured Faculty Members"
"1. [Notification; prospects] During his or her probationary period, each full-time assistant professor, associate professor, and professor shall be notified annually by the departmental head or chairperson, or by the dean in schools without departmental organization, of his or her prospect of being recommended by the department on the evidence then available for an appointment resulting in tenure. Where it is unlikely that tenure will be achieved, such notification shall be in writing [footnote omitted].
"2. [Notification; no reappointment] Notice of intention not to reappoint a full-time assistant professor, associate professor, or professor shall be sent to the individual affected according to the following schedule:
a) Not later than March 1 of the first [*12]year of academic service, if the appointment is to be terminated on August 31.
b) Not later than December 15 of the second year of academic service, if the appointment is to be terminated on August 31.
c) In all other cases, not later than August 31, if the appointment is to be terminated on the following August 31, or not later than one year before the termination of the appointment."
Plaintiff does not dispute that paragraph 1 of section XI, by its terms, applies only to tenure-eligible faculty members [FN19]. She argues, however, that there is at least an ambiguity as to whether paragraph 2 of section XI, requiring advance notice of an intention not to reappoint, applies to faculty members ineligible for tenure, since paragraph 2 does not contain language expressly limiting its application to tenure-eligible faculty. Based on this reasoning, plaintiff contends that, because she was well beyond her second year of service when NYU determined not to reappoint her, she was entitled, under subparagraph c of paragraph 2 of section XI, to one year's notice that she would not be reappointed — or that whether she had such a right is at least a triable issue of fact. We are not persuaded by this argument.
As previously noted, plaintiff's proposed interpretation of the Handbook runs afoul of the Court of Appeals' admonition to avoid manufacturing artificial ambiguities by isolating a particular clause in a vacuum while ignoring the context and structure of the contract as a whole (see Riverside S. Planning Corp. v CRP/Extell Riverside, L.P., 13 NY3d at 404; see also Beal Sav. Bank v Sommer, 8 NY3d 318, 324 [2007] ["a contract should be read as whole, and every part will be interpreted with reference to the whole"] [internal quotation marks omitted]). A review of the structure and context of the Handbook as a whole makes it clear that paragraph 2 of section XI, like the preceding paragraph 1, applies only to probationary tenure-track employees. Title II, of which section XI is a part, is included in the portion of the Handbook entitled "Academic Freedom and Tenure," which, as noted, applies only to tenured and tenure-eligible faculty members except where otherwise expressly provided. The preceding and following titles, Title I and Title III, explicitly set forth procedures relevant only to tenured and tenure-eligible faculty. Further, as previously discussed, the sections of Title II that immediately precede and follow section XI (sections X and XII), apply, by their terms, only to tenure-eligible faculty (dealing, respectively, with tenure-eligible appointments generally and appointments resulting in tenure). Finally, as also previously discussed, section XI itself contains only two paragraphs, the first of which, paragraph 1 (requiring annual notification of the prospect of achieving tenure), on its face can apply only to tenure-eligible faculty. Accordingly, the structure and context of the [*13]Handbook makes it clear that the title of section XI ("Notification of Non-Tenured Faculty Members") refers to probationary tenure-track faculty, and, similarly, that the notice requirements of paragraph 2 of section XI apply only to probationary tenure-track faculty members (see Bijan Designor For Men v Fireman's Fund Ins. Co., 264 AD2d 48, 52 [1st Dept 2000] ["Words considered in isolation may have many and diverse meanings. In a written document the word obtains its meaning from the sentence, the sentence from the paragraph, and the latter from the whole document"], lv denied 96 NY2d 707 [2001]).
Further, plaintiff's proposed reading of paragraph 2 of section XI would create an impermissible conflict with another provision of the Handbook that expressly applies to her (see National Conversion Corp. v Cedar Bldg. Corp., 23 NY2d 621, 625 [1969] ["All parts of an agreement are to be reconciled, if possible, in order to avoid inconsistency"]). This is Bylaw 73 ("Non-Tenure Positions"), which appears in the section of the Handbook entitled "Other Faculty Policies," under the heading "Faculty Titles" (see the portion of the table of contents set forth above). Bylaw 73 provides in pertinent part:
"Instruction or research service shall be without tenure implications of any kind, regardless of rank or title, if rendered in a part-time capacity, or in a temporary position, or in a program having a subsidy of limited duration. Appointment to a non-tenure position shall be for a definite period of time, not exceeding one academic year unless otherwise specified, and shall automatically terminate at the close of that period unless there is an official notice of renewal. Non-tenure positions include the following . . ." (emphasis added).
After the word "following," Bylaw 73 sets forth a bullet-point list of non-tenured positions. The fourth bullet-point lists the following titles: "clinical professor, clinical associate professor, clinical assistant professor[.]" At the end of this line, a footnote is appended, which states: "In the School of Medicine, these designations denote part-time status. For full-time service appointments, the designations Professor (Research or Clinical)', Associate Professor (Research or Clinical)', and Assistant Professor (Research or Clinical)' are used" (emphasis added).
Since plaintiff does not dispute that her position in the School of Medicine — Assistant Professor (Clinical) of Radiology — was not eligible for tenure, her claim for breach of contract cannot be sustained unless section XI, paragraph 2's requirement of prior notification of intent not to reappoint, on which plaintiff relies, can somehow be harmonized with Bylaw 73's provision that non-tenure positions "shall be for a definite period of time . . . and shall automatically terminate at the close of that period unless there is official notice of renewal." Plaintiff's efforts to harmonize these provisions are unavailing as a matter of law.
To reconcile Bylaw 73 with the application to a non-tenure track faculty member (such as herself) of the notification provision of section XI, paragraph 2, plaintiff chiefly argues that the "automatic[] terminat[ion]" provision of Bylaw 73 applies only to part-time faculty. Since plaintiff's position was full-time, she reasons, Section XI, paragraph 2 (which states that it applies to "a full-time assistant professor, associate professor, or professor") applied to her. Contrary to this argument, however, Bylaw 73 expressly applies to all non-tenure track positions, whether full-time or part-time. The provision begins by stating that "[i]nstruction or research service shall be without tenure implications of any kind . . . if rendered in a part-time capacity, or in a temporary position, or in a program having a subsidy of limited duration" (emphasis added). The word "or" is a disjunctive article that generally indicates a choice between one of two alternatives (see generally Colbert v International Sec. Bur., 79 AD2d 448, 463 [2d Dept 1981], lv denied 53 NY2d 608 [1981]). Nothing in Bylaw 73 excludes full-time temporary positions — such as plaintiff's expressly temporary appointment — from the application of its automatic [*14]termination provision. Moreover, the above-quoted footnote including an appointment as an " Assistant Professor (Research or Clinical)'" as a non-tenure position expressly notes that this designation denotes a "full-time service appointment[]." Plaintiff's argument that the automatic termination provision of Bylaw 73 did not apply to her because her position was full-time is simply untenable.
Also unavailing is plaintiff's alternative argument that, even if Bylaw 73 does apply to her (as we find that it does), the notification requirement of section XI, paragraph 2 could also be applied to her without creating an inconsistency. Plaintiff contends that although Bylaw 73 states that her position "shall automatically terminate . . . unless there is an official notice of renewal," she is still entitled to notification of an intention not to renew the appoint under section XI, paragraph 2. This proposed interpretation is unavailing because it would lead to an illogical result (see Matter of Lipper Holdings v Trident Holdings, 1 AD3d 170 [1st Dept 2003]). Application to non-tenured faculty members of section XI, paragraph 2's requirement of advance notice of an intention not to reappoint would make no sense because, in the case of a faculty member having more than two years of service, NYU would have to give the faculty member notice of its intention not to reappoint simultaneously with the making of a one-year appointment. This would utterly negate Bylaw 73's provision that non-tenure appointments "shall automatically terminate at the close of th[e] period [for which the appointment was made] unless there is an official notice of renewal." Again, we are required to construe the parties' agreement — the Handbook — to avoid inconsistencies between different provisions (see National Conversion Corp., 23 NY2d at 625). Here, Bylaw 73 expressly applies to faculty in non-tenure track positions, whether full-time or part-time, and the natural reading of section XI, paragraph 2, is that it applies only to full-time faculty in tenure-eligible positions. Accordingly, the latter provision did not apply to plaintiff, and her breach of contract cause of action is without merit as a matter of law.
Accordingly, the order of the Supreme Court, New York County (Eileen A. Rakower, J.), entered June 16, 2016, which, to the extent appealed from as limited by the briefs, granted defendants' motion for summary judgment to the extent of dismissing plaintiff's claim for age discrimination in violation of the NYCHRL, and denied the motion with respect to plaintiff's claim for breach of contract, should be modified, on the law, to grant the motion with respect to the claim for breach of contract, and otherwise affirmed, without costs. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.All concur.
Order, Supreme Court, New York County (Eileen A. Rakower, J.), entered June 16, 2016, modified, on the law, to grant the motion with respect to the claim for breach of contract, and otherwise affirmed, without costs. The Clerk is directed to enter judgment in favor of defendants dismissing the complaint.
Opinion by Friedman, J. All concur.
Friedman, J.P., Sweeny, Moskowitz, Gische, Kapnick, JJ.
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.
ENTERED: SEPTEMBER 26, 2017
CLERK
Footnotes
Footnote 1:The academic and hospital appointments were components of the same position. Although plaintiff has also named "New York University Langone Medical Center" as a defendant, NYU explains that this is not the name of a separate legal entity that can be sued.
Footnote 2:The 2008 NYU faculty handbook describes tenure at the institution as follows: "After expiration of the stipulated probationary periods [for tenure-eligible positions], full-time associate professors and professors [sic] are considered to have permanent or continuous tenure, and their services are to be terminated only for adequate cause, except in the case of retirement, or under extraordinary circumstances because of financial exigencies, or because of the discontinuance of a considerable part of the University, such as a college, school, or division or a department in a college, school, or division." Regarding the purpose of tenure, the handbook states: "Academic tenure is a means to certain ends, specifically: (1) freedom of teaching and research; and (2) a sufficient degree of economic security to make the profession of teaching attractive to men and women of ability."
Footnote 3:It appears from the record that a tenth general radiology physician, the former head of the section, retired in January 2013, when he was in his late 70s. This physician's departure from NYU is not discussed by either party on this appeal, so we will not consider it in our analysis.
Footnote 4:According to an affidavit submitted by Dr. Recht, "It is the practice in the [NYU] School of Medicine to provide three months' notice of non-renewal of non-tenure eligible faculty where practicable."
Footnote 5:At his deposition, Dr. Recht, in explanation of the five-month gap between the May 3 meeting and the October 14 letter, testified that, at that time, "when we didn't renew people's contracts, we gave them the option of resigning rather than sending them a formal letter if they felt that would be better for their future opportunities."
Footnote 6:At the relevant time, NYU provided certain medical staffing at Gouverneur and at Bellevue Hospital pursuant to an affiliation agreement with the New York City Health and Hospitals Corporation.
Footnote 7:Of course, to withstand a summary judgment motion, a plaintiff is not required to prove pretext, but need only demonstrate the existence of a genuine and material disputed issue of fact as to whether the defendant's stated reasons for the adverse action were pretextual (see Ferrante v American Lung Assn., 90 NY2d 623, 630 [1997]).
Footnote 8:As previously noted, one general radiology physician whose contract was not renewed, apparently at some point before the end of 2010, was in his late 30s or early 40s. While plaintiff alleges that she understood that the departure from NYU of this physician (to whom we will refer as FL) was related to a disciplinary issue, she admitted that she had no personal knowledge of the matter, and she has not presented any admissible evidence concerning the reason for FL's departure. However, Dr. Recht's testimony about the reason for FL's departure was not entirely clear. Dr. Recht testified that, contrary to plaintiff's understanding, FL's departure "was not related to a disciplinary event." At one point, Dr. Recht characterized FL's departure as a "dismissal," but, at another point, he characterized the departure as "his [FL's] decision not to renew his contract," suggesting that the departure was voluntary. Since Dr. Recht, the only witness with personal knowledge of this matter who addressed it in the record, arguably contradicted himself concerning the reason for FL's departure, we regard FL's departure as a neutral factor in deciding this appeal.
Footnote 9:Contrary to plaintiff's contention, Supreme Court did not erroneously require her to prove her claim. Rather, the court appropriately required plaintiff to demonstrate the existence of an issue of fact that, if resolved in her favor, would prove her case, under either standard. Nor did the court inappropriately weigh the credibility of Dr. Recht's deposition testimony, which was the principal evidence on which NYU relied. Plaintiff cannot defeat a well-supported summary judgment motion, without identifying any evidence (either direct or circumstantial) from which it could rationally be inferred that bias played a role in the nonrenewal of her contract, merely by contending that she might persuade a jury not to believe Dr. Recht's testimony. If that were the case, no summary judgment motion could ever be granted in a discrimination case.
Footnote 10:Again, we regard the nonrenewal of the contract of the sixth physician, the aforementioned FL, the younger section member, as a neutral factor in deciding this appeal, as discussed in footnote 7 above.
Footnote 11:Plaintiff does not allege that NYU discriminated against her on any basis other than age.
Footnote 12:NYU directs our attention to record evidence that, during the period from December 31, 2010 through early 2015, of the nine radiology department physicians who were not reappointed, four were in their 40s, two were in their 60s (including plaintiff), and three were in their 80s. While the rates of reappointment for physicians of different ages during the period cannot be determined from this limited data set, the information certainly provides no support for plaintiff's theory that NYU discriminated in favor of younger physicians.
Footnote 13:We note that plaintiff completed a fellowship in nuclear medicine early in her career, apparently more than 30 years before NYU determined not to reappoint her. Plaintiff does not, however, suggest that she should have been reassigned to the radiology department's nuclear medicine section, or that her fellowship credential otherwise should have been considered by NYU in determining whether to renew her contract in 2011.
Footnote 14:Dr. Recht testified: "[T]oday if you want to be considered an expert, you need to do a fellowship." Dr. Recht also testified: "If you're asking me do I think [plaintiff] was qualified to be a member of a top-level academic musculoskeletal radiology section, I would answer no." Plaintiff's self-serving but unsupported assertion in her affidavit that her clinical experience had given her "more extensive training in musculoskeletal radiology than any fellowship could provide" does not create a jury issue. Also unavailing is plaintiff's reliance on her testimony that NYU did not honor her requests to be assigned to duties other than reading plain film, such as interpreting ultrasound images. Dr. Recht testified that it was plaintiff's lack of interest in research and lack of relevant specialized credentials, rather than the type of images she was reading, that led to the decision not to reappoint her.
Footnote 15:Plaintiff cites Ashker v International Bus. Machs. Corp. (168 AD2d 724 [3d Dept 1990]) for the proposition that, where an older employee's position has been eliminated, the redistribution of her work to a younger, preexisting employee can support a claim for age discrimination. In Ashker, however, the elimination of the plaintiff's position was not part of an overall restructuring of the enterprise, and the appeal was taken from a pre-discovery motion to dismiss (see id. at 726). Accordingly, Ashker is inapposite.
Footnote 16:Two of the announcements to which plaintiff draws attention concern the hiring of doctoral-level technology scientists, not physicians, and thus have no relevance at all to the analysis.
Footnote 17:Nor is NYU's explanation for not reappointing plaintiff undermined by its acquisition in 2011 of a Long Island outpatient imaging group. It appears that the group continued to function on Long Island after the acquisition, thereby increasing NYU's share of the market for radiology services in the metropolitan area. Thus, the acquisition of the group, even if it produced no research (as plaintiff asserts), would have served to increase the revenue available to support research at NYU. In this regard, we emphasize that plaintiff has produced no evidence that NYU, during the relevant period, hired additional radiologists not engaged in research simply to handle NYU's preexisting stream of clinical work.
Footnote 18:To reiterate, Title IV, dealing with discipline for violation of university rules, is expressly "Applicable to Both Tenured and Non-Tenured Faculty Members." That this includes faculty holding non-tenure track appointments is made plain by the first sentence of paragraph 1 of Title IV: "Quite apart from any question of tenure or the termination for cause of the service of a faculty member with tenure, all faculty members have an obligation to comply with the rules and regulations of the University and its schools, colleges, and departments" (emphasis added).
Footnote 19:Indeed, if section 1 were construed otherwise, it would make no sense, since its sole provision is a requirement that a faculty member to whom it applies be given annual notification of "his or her prospect of being recommended . . . for an appointment resulting in tenure."
| {
"pile_set_name": "FreeLaw"
} |
790 A.2d 523 (2002)
Anthony BELL, James L. Banks, and Thelmuris Forte, Appellants,
v.
UNITED STATES, Appellee.
Nos. 99-CM-1483, 99-CM-1531 and 99-CM-1594.
District of Columbia Court of Appeals.
Submitted October 4, 2001.
Decided January 17, 2002.
*525 Pleasant S. Broadnax, III, appointed by the court, was on the brief for appellant Bell. Robert O. Goff, also appointed by the court, entered an appearance for appellant Bell.
Vandy L. Jamison, Jr., Glenn Dale, MD, appointed by the court, was on the brief for appellant Banks.
James Wilson Richmond, Jr., was on the brief for appellant Forte.
Wilma A. Lewis, United States Attorney at the time the brief was filed, and John R. Fisher, Elizabeth Trosman, Steven J. Durham, and Steven B. Snyder, Assistant United States Attorneys, were on the brief for appellee.
Before TERRY and WASHINGTON, Associate Judges, and NEWMAN, Senior Judge.
TERRY, Associate Judge:
Anthony Bell, James Banks, and Thelmuris Forte appeal from convictions of first-degree fraud. Bell, Banks, and Forte, together with a fourth co-defendant, Roland Jones, were found guilty after a nine-day non-jury trial. All three appellants contend, first, that the trial court abused its discretion by admitting the prior inconsistent statement of a trial witness as substantive evidence. Second, each appellant maintains that the evidence was insufficient to sustain his conviction. Finally, Forte claims that the court erred in computing the amount of restitution that he was required to make as part of his sentence. We affirm all three convictions, but remand Forte's case for the purpose of modifying the amount of restitution he must pay.
I
A. The Fraudulent Scheme
Bell, Banks, and Forte, along with others, engaged in a scheme to use equipment and materials owned by the District of Columbia and workers employed by the District of Columbia to perform private water pipe repair work for their own profit. These "side jobs" took place at various locations in the District. Forte is a private plumber by trade; Bell and Banks were employees of the District of Columbia Water and Sewer Authority ("WASA").[1]
*526 WASA maintains the water mains under the District's streets and the service lines that carry water from the main lines to underground water meters, which are typically located at or just inside property lines. The pipes that run from the meters into buildings are the responsibility of the individual customers. WASA performs maintenance on the lines from the meters to the buildings only if the pipes are in such poor condition that a water meter cannot be connected to them.
In early 1996, Sylvia Robinson Green, the owner of an apartment building in Southeast Washington, contracted with Forte to have a water line connected from her building to the city water service. The agreed price was $4200, well below other bids Ms. Green had obtained from other contractors. As part of the deal, Green agreed to pay $2100 in advance. Forte, in turn, arranged to have the work done by Keith Thames, a plumber and supervisor for WASA. Thames agreed to do the work for a sum between $1400 and $1800 (at trial, his recollection of the exact amount was unclear).
Thames and other workers from WASA, including Banks and Bell, worked on the project during April 1996. The job was done during daytime hours, when the WASA employees should have been working for WASA. At the work site Bell and Banks operated a dump truck and a back-hoe with "city symbols" on them. In addition, Ms. Green, the property owner, saw Forte at the work site when she visited it.
The project was never completed because a piece was missing from the plumbing, and because Forte failed to procure some of the necessary permits for the job. When Ms. Green did not pay the full amount agreed upon, Forte went to Green's home accompanied by another man in a "government truck" and demanded the money, but she did not pay him. Thereafter a man named "Keith" telephoned and asked Ms. Green for the money, but she refused to pay him because her deal was with Forte. She told Keith that if he would have Forte bring her the required permits, she would pay him the remainder of what she owed. Forte never produced the permits, and Green never made the second payment. She ultimately hired another plumber to complete the project.
In the meantime, the Metropolitan Police Department began an investigation based on a report that WASA workers were taking bribes to perform private jobs on official time. Sergeant Philip Burton and another officer went at least twice to the work site at Ms. Green's apartment building, where they saw District of Columbia employees wearing uniforms and using equipment marked with District insignia and identification numbers. In particular, the officers saw Banks, Bell, Thames, and a man in a plaid shirt all working there. Later Burton ascertained that the car in which the man in the plaid shirt drove away was registered to Thelmuris Forte.
Sergeant Burton continued his investigation by setting up an undercover operation, which involved additional side jobs at two different locations in other parts of the city. Burton saw Bell working at both of those job sites, and Banks at one of them. According to Thames' plea statement, both Banks and Bell received payment from Thames for their work on the project for *527 Ms. Green, and for some of the other work as well.
B. The Admission of Thames' Prior Statement
The main issue on this appeal concerns the admission of a written statement made by Keith Thames in a related proceeding in federal court. On June 19, 1998, Thames pleaded guilty in the United States District Court for the District of Columbia to one count of conspiracy to commit bribery. In a five-page, single-spaced written statement signed on that date, Thames described in detail his involvement in the side job scheme and named Bell, Banks, and Forte, among others, as persons involved in that scheme.
As part of Thames' plea agreement in the United States District Court, counsel for the government, in consultation with Thames' attorney, drafted a "Factual Statement" which both Thames and his attorney signed before the plea hearing began. Immediately above Thames' signature appeared the following paragraph:
I have reviewed the foregoing Factual Statement and discussed it with my attorney. It accurately sets forth my and my co-defendants' conduct with regard to the matters charged in the pending indictment against us.
Then, in open court, Thames was placed under oath and stated, in a lengthy colloquy with the judge, that the information set forth in the Factual Statement was true and accurate. The prosecutor explained that he had originally drafted the statement, that both Thames and his counsel had "had an opportunity to go over it," and that they had suggested some changes which were incorporated into the statement. Thames' counsel confirmed that the document before the court was the final draft. At the conclusion of the plea proceeding, the judge offered Thames an opportunity to raise any other matters or to ask any questions, but he had no questions. At no time did Thames ever assert that the facts in the Factual Statement were incorrect or untrue. The judge then accepted Thames' plea.
In the case at bar, the government filed a motion in limine seeking a ruling before trial on the admissibility of the Thames statement. When none of the defendants opposed the motion, the court treated it as conceded. Later, at the beginning of the trial, Forte's counsel attempted to challenge the admission of the statement. The court refused to reopen the matter, but it did say that counsel could argue the relevance of the statement at the time it was offered into evidence. None of the other defendants made any objection at that time to the introduction of the statement.
At trial Thames was one of the government's principal witnesses, but in some respects his testimony was inconsistent with what he had said in his written statement in federal court. The government used that statement to impeach his testimony. At the end of Thames' direct testimony, the government moved the admission of both the statement and the transcript of the plea hearing in the United States District Court. Each appellant's counsel separately stated that he did not object to the admission of the statement and the transcript, and the court admitted both documents as substantive evidence.
None of the three appellants presented any evidence. Their co-defendant, Ronald Jones, called four witnesses, including himself, but their testimony did not incriminate or exculpate Bell, Banks, or Forte in any way.
At the conclusion of the trial, the court found each appellant guilty of first-degree fraud as an aider and abettor. In reaching its verdict, the court expressly relied on *528 Thames' written statement from the plea proceeding in federal court, and disregarded Thames' in-court testimony insofar as it was inconsistent with that written statement.
At the sentencing a few weeks later, the court ordered Forte to pay $2100 in restitution to the District of Columbia Treasury. After Forte noted an appeal from his conviction, the court filed an "amended judgment" and a separate order reducing the amount of restitution to $700.
II
All three appellants argue that the trial court committed plain error in admitting the factual statement and plea transcript as substantive evidence under D.C.Code § 14-102(b)(1) (2001). We hold that there was not only no plain error but no error at all, because Thames' statement meets the statutory criteria for admission under section 14-102(b)(1).
Section 14-102 provides, in relevant part:
(a) The credibility of a witness may be attacked by any party, including the party calling the witness.
(b) A statement is not hearsay if the declarant testifies at the trial or hearing and is subject to cross-examination concerning the statement and the statement is (1) inconsistent with the declarant's testimony, and was given under oath subject to the penalty of perjury at a trial, hearing, or other proceeding, or in a deposition .... Such prior statements are substantive evidence.
There is no dispute that Thames testified at trial and was subject to cross-examination concerning the statement; further, he made the statement at a hearing in which he was under oath and subject to the penalty for perjury. Appellants instead attempt to argue that the statement was not inconsistent with Thames' testimony at trial. Their arguments hinge on Thames' efforts to repudiate portions of his statement while testifying in this case.
To sustain their arguments, however, appellants mistakenly rely on cases interpreting the former version of D.C.Code § 14-102, which is no longer in effect.[2] The former statute required a party to give a witness an opportunity to explain a prior inconsistent statement. Repudiation of a prior statement by the witness resulted in its exclusion as hearsay. See, e.g., Fletcher v. United States, 524 A.2d 40, 43 (D.C.1987) (prior identification rendered inadmissible upon repudiation by witness).
The repudiation rule is inapplicable here because the language of the new statute and more recent case law omit any requirement that the witness be given an opportunity to explain his prior statement. See Sparks v. United States, 755 A.2d 394, 399 (D.C.2000). Since 1995, section 14-102 has required only (1) that the witness be confronted on the witness stand with the prior inconsistent statement, and (2) that *529 the opposing party be given an opportunity to cross-examine the witness concerning the statement. See Mercer v. United States, 724 A.2d 1176, 1196-1197 (D.C. 1999).
In the instant case, both of these requirements were met. Thames was on the stand when the factual statement from the plea hearing was offered into evidence; indeed, the government impeached his testimony with the statement in several instances when he attempted to back away from the facts detailed in the statement. Further, the government introduced the statement into evidence at the conclusion of Thames' direct testimony, and all of the defense attorneys had an opportunity to use it during cross-examination. We hold accordingly that the requirements of section 14-102 were met, and that Thames' prior statement was properly admitted as substantive evidence.[3]
III
In considering appellants' several arguments that the government failed to present sufficient evidence to establish their guilt, we must view the evidence "in the light most favorable to the government, recognizing the factfinder's role in weighing the evidence, determining the credibility of witnesses, and drawing justifiable inferences from the evidence." Ford v. United States, 498 A.2d 1135, 1137 (D.C. 1985) (citations omitted); see Mihas v. United States, 618 A.2d 197, 200 (D.C. 1992). The government is not required to negate every possible inference of innocence. See, e.g., Ford, 498 A.2d at 1137; In re T.J.W., 294 A.2d 174, 176 (D.C.1972). On the contrary, appellants must establish that the government presented "no evidence upon which a reasonable mind could infer guilt beyond a reasonable doubt." Head v. United States, 451 A.2d 615, 622 (D.C.1982). When the case is tried without a jury, as this one was, this court will not reverse a conviction for insufficient evidence unless the appellant demonstrates that the trial court's factual findings are "plainly wrong," or "without evidence to support [them]." D.C.Code § 17-305(a) (2001).
Bell, Banks, and Forte were convicted as aiders and abettors of first-degree fraud under D.C.Code § 22-3221(a) (2001).[4] That statute provides:
A person commits the offense of fraud in the first degree if that person engages in a scheme or systematic course of conduct with intent to defraud or to obtain property of another by means of a false or fraudulent pretense, representation, or promise and thereby obtains property of another or causes another to lose property.[5]
Aiding and abetting a criminal offense requires proof "(1) that the offense was committed by someone, (2) that the accused participated in the commission, and (3) *530 that he did so with guilty knowledge." West v. United States, 499 A.2d 860, 865 (D.C.1985) (citations omitted). Whether a defendant is guilty of aiding and abetting a crime depends on the totality of the evidence. See Green v. United States, 718 A.2d 1042, 1062 (D.C.1998), cert. denied, 526 U.S. 1011, 119 S.Ct. 1156, 143 L.Ed.2d 222 (1999).
In the instant case, the evidence showed that Forte offered Ms. Green, the apartment building owner, a contract price well below the market price quoted by other private plumbers to do the water pipe connection work. Thames' plea statement implicated Forte as a co-conspirator in the plan to perform that job at Ms. Green's building. Forte spent time at the work site when workers in WASA uniforms, using equipment marked with District of Columbia government insignia, were performing the job he had arranged. When the job was completed, Forte attempted to obtain the final payment from Ms. Green, accompanied by a person (to whom he referred as his "supervisor") in a truck bearing District government markings.
The evidence established, first of all, that Forte had guilty knowledge of Thames' fraudulent scheme. In his negotiations with Ms. Green, he substantially undercut the market price for the job, and his presence at the job site with uniformed employees of the District and marked District equipment permitted an inference that he knew that District employees were working on that job, rather than on their assigned duties as government employees. His guilty knowledge, his successful efforts to negotiate the job with Ms. Green, his recruitment of District government employees to do the work, his presence at the scene, his attempt to obtain the final payment from Ms. Green, and Thames' plea statement, all taken together, were sufficient to establish Forte's guilt as an aider and abettor of the fraud.
Bell and Banks were implicated in the scheme through Thames' plea statement. According to that statement, both Bell and Banks agreed to work at the Southeast Washington site in return for money to be paid by Forte. In addition, Bell worked at both of the other sites in return for money from Thames, and Banks worked at one of those sites in return for money from Thames. All of the work was done during hours when Bell and Banks should have been working for the District.[6] The evidence that Banks and Bell received money outside of their normal WASA employment for work done at the three job sites during official working hours, and that they actually participated in the work at the Southeast Washington job site, was sufficient to permit a reasonable inference that they acted with guilty knowledge. The trial court committed no error in finding beyond a reasonable doubt that Bell and Banks aided and abetted Thames' fraudulent scheme.
Appellants' real complaint appears to be that the trial court based its guilty verdicts almost entirely on Thames' sworn plea statement, which was admitted as substantive evidence under D.C.Code § 14-102(b)(1), while rejecting contrary testimony from Thames on the witness stand. But the court was entitled to do exactly that. There is nothing in either the statute or relevant case law that precludes a trier *531 of fact from basing a verdict, primarily or entirely, on a prior inconsistent statement made under oath and admitted under section 14-102(b)(1), and disregarding contrary live testimony from the very same person who made the statement. The court in this case could reasonably infer, as it did, that the five-page statement signed by Thames pursuant to his plea agreement was motivated by a desire to mitigate his punishment, whereas his testimony at trial may well have been motivated by a desire to help his friends get out of trouble. Hence the court could permissibly find, as it did, that the plea statement was more likely to be true than Thames' testimony in the courtroom. Because this finding was not plainly wrong, we must uphold it and the resulting guilty verdicts under D.C.Code § 17-305(a).
IV
The trial court initially ordered Forte to pay $2100 in restitution to the District of Columbia Treasury. Later, after Forte noted his appeal, the court modified its order and directed Forte to pay only $700 in restitution.
It is well established that a trial court loses jurisdiction to modify the sentence in a criminal case after a notice of appeal has been filed. See, e.g., Taylor v. United States, 603 A.2d 451, 453 n. 7 (D.C.), cert. denied, 506 U.S. 852, 113 S.Ct. 155, 121 L.Ed.2d 105 (1992); Franklin v. United States, 293 A.2d 278, 279 (D.C. 1972); King v. United States, 271 A.2d 556, 558-59 (D.C.1970); United States v. Mack, 151 U.S.App. D.C. 162, 169, 466 F.2d 333, 340, cert. denied, 409 U.S. 952, 93 S.Ct. 297, 34 L.Ed.2d 223 (1972). As a result, the only restitution order that is before this court is the initial order requiring the payment of $2100 to the District. However, if the trial court has indicated a willingness to modify a sentence, the proper course for us is to remand the case so that the trial court can amend that order. See Bell v. United States, 676 A.2d 37, 41 (D.C.1996). Thus we will interpret the second order purporting to reduce the amount of restitution as simply an indication that the trial court is willing to make such a modification. See Taylor, 603 A.2d at 453 n. 7; King, 271 A.2d at 558-559. Neither the government nor Forte contends that the $2100 figure should remain unchanged. We therefore remand the case with directions to enter a new order reducing the restitution amount from $2100 to $700.
V
The convictions of all three appellants are affirmed on the merits. Forte's case is remanded to enable the trial court to modify the restitution order.
It is so ordered.
NOTES
[1] In these appeals we assume, without deciding, that WASA is an agency of the District of Columbia government. Whether it is a District government agency for other purposes-specifically, whether a suit against WASA must be preceded by notice to the District under D.C.Code § 12-309 (2001)is an issue pending before this court en banc in another case, Dingwall v. District of Columbia Water & Sewer Authority, No. 99-CV-79, argued November 6, 2001. We express no view here on any of the issues presented in the Dingwall case.
[2] Section 14-102 was totally rewritten by an amendment which became effective on May 23, 1995. Before that date, section 14-102 was an entirely different statute, which read as follows:
When the court is satisfied that the party producing a witness has been taken by surprise by the testimony of the witness, it may allow the party to prove, for the purpose only of affecting the credibility of the witness, that the witness has made to the party or to his attorney statements substantially variant from his sworn testimony about material facts in the case. Before such proof is given, the circumstances of the supposed statement sufficient to designate the particular occasion must be mentioned to the witness, and he must be asked whether or not he made the statements and if so allowed to explain them.
D.C.Code § 14-102 (1989).
[3] As the government points out, the relevant language of D.C.Code § 14-102(b)(1) is identical to that of FED.R.EVID. 801(d)(1)(A). Applying that rule, federal courts have consistently upheld the admission, as substantive evidence, of prior inconsistent statements made under oath at plea proceedings. See, e.g., United States v. Knox, 124 F.3d 1360, 1363-1364 (10th Cir.1997); United States v. Matlock, 109 F.3d 1313, 1319 (8th Cir.), cert. denied, 522 U.S. 872, 118 S.Ct. 188, 139 L.Ed.2d 127 (1997).
[4] Formerly codified as D.C.Code § 22-3821(a) (1996).
[5] First-degree fraud can be either a felony or a misdemeanor, depending on whether "the value of the property obtained or lost" as a result of the fraud is $250 or more, or less than $250. D.C.Code § 22-3222(a) (2001), formerly D.C.Code § 22-3822(a) (1996). In the instant case, appellants were charged only with misdemeanor first-degree fraud.
[6] In addition to Thames' plea statement, undercover police officers saw the three men working at the Southeast Washington site and elsewhere. The trial court heavily discounted the police testimony about Bell's and Banks' presence at the job sites, assessing its probative value as less than "1 percent out of 100." Nevertheless, it corroborated the Thames plea statement in some measure.
| {
"pile_set_name": "FreeLaw"
} |
351 B.R. 274 (2006)
In re Hunter W. SMITH, Debtor.
The Cadle Company and D.A.N. Joint Venture, a Limited Partnership, Plaintiffs,
v.
Hunter W. Smith, Defendant.
Bankruptcy No. 99-32902 (ASD), Adversary No. 00-3049.
United States Bankruptcy Court, D. Connecticut.
September 27, 2006.
*275 Edward P. Jurkiewicz, Edward P. Jurkiewicz, LLC, Hartford, CT, for Plaintiffs.[1]
James C. Graham, Pepe & Hazard LLP, Hartford, CT, for Defendant.
MEMORANDUM OF DECISION SUPPLEMENTING ORAL BENCH RULING ON COMPLAINT TO DENY DISCHARGE
ALBERT S. DABROWSKI, Chief Judge.
I. BACKGROUND
Hunter W. Smith (hereafter, the "Debtor") commenced the instant bankruptcy case by the filing of a voluntary petition under Chapter 7 of the United States Bankruptcy Code, upon which relief was ordered. Thereafter Ronald I. Chorches (hereafter, the "Trustee") was appointed as trustee of the resulting bankruptcy estate. On March 1, 2000, The Cadle Company and D.A.N. Joint Venture, A Limited Partnership (hereafter, the "Plaintiffs") initiated this adversary proceeding through the filing of a multi-count complaint seeking to deny the Debtor his bankruptcy discharge pursuant to Bankruptcy Code Sections 727(a)(2)(A), (2)(B), (3), (4)(A), (4)(B) and (5) (hereafter, the "Original Complaint").[2]
On May 14, 2003, upon the Plaintiffs' *276 Consensual Motion to Amend Complaint[3] (hereafter, the "Consensual Motion"), Doc. I.D. No. 89, the Court accepted and docketed an Amended Complaint Objecting to Discharge (hereafter, the "Complaint"), Doc. I.D. No. 90, seeking to deny the Debtor his bankruptcy discharge on a more limited basis pursuant to Bankruptcy Code Sections 727(a)(2)(A) and (4)(A). The Complaint alleges that the Debtor, with intent to hinder, delay and/or defraud a creditor, transferred funds to a bank account maintained and held solely in the name of his spouse, Rita K. Smith, see Section 727(a)(2)(A), Complaint ¶ 4, and testified falsely at a Section 341 meeting of creditors, see Section 727(a)(4)(A), Complaint ¶ 5.
Trial on the Complaint was held before the Court commencing on August 23, and concluding on August 30, 2004, during which time the Court heard the testimony of nine witnesses, received into evidence voluminous documentary exhibits, including, inter alia, a 553-page transcript of the Plaintiffs' examination of the Debtor pursuant to Fed. R. Bankr.P. 2004, Exhibit N, and considered facts without substantial controversy determined pursuant to Fed. R.Civ.P. 56(d).[4] On August 30, 2004, following the closure of the evidentiary record, the parties elected to argue the matter in lieu of submitting written proposed findings of fact and conclusions of law, following which the Court overruled the Plaintiffs' objections to the entry of a discharge, ordered that a discharge enter forthwith,[5] and retained jurisdiction to enter supplemental written findings of fact and/or conclusions of law.
The Court's immediate oral bench ruling at the close of evidence and argument was (a) prompted and justified by the dearth of credible evidence establishing the requisite intent of the relevant statutes, and (b) intended to relieve the Debtor of the burden of further unwarranted trauma associated with any delay in ruling, in light of the fact that the Debtor, in addition to the trial, had endured, inter alia, what appears *277 to the Court to be (i) an overly broad Original Complaint,[6]see footnote 3, supra, (ii) dilatory and obstructive discovery tactics, see, e.g., Order dated October 26, 2000,[7] Doc. I.D. No 41, and (iii) three wearisome days of a contentious Rule 2004 Examination attended by an overly broad, and relentless, even mind-numbing interrogation, including ambiguous questions,[8] all designed to unfairly trap the most stalwart deponent into inconsistencies.[9]
II. DISCUSSION
A. Burden and Standard of Proof.
The relief of a bankruptcy discharge is not an absolute right, but rather, a privilege accorded only to debtors who conduct their financial affairs with honesty and openness. Despite this limitation on the discharge right, the law carries a "presumption" in favor of the debtor in discharge contests. This debtor-inclination derives from the observation that the denial *278 of a discharge "imposes an extreme penalty for wrongdoing". In re Chalasani, 92 F.3d 1300, 1310 (2d Cir.1996). Thus, Bankruptcy Code Section 727(a) "must be construed . . . `liberally in favor of the bankrupt'". Id (quoting In re Adlman, 541 F.2d 999, 1003 (2d Cir.1976)). Consistent with the foregoing, the party objecting to the granting of a discharge bears the ultimate burden of persuasion by a preponderance of the evidence at trial. Fed. R. Bank. P. 4005. Cf. Grogan v. Garner, 498 U.S. 279, 111 S.Ct. 654, 112 L.Ed.2d 755 (1991).
B. Applicable Substantive Law.
Through the Complaint the Plaintiff seeks to deny the Debtor his discharge pursuant to Bankruptcy Code Sections 727(a)(2)(A) and (a)(4)(A). Bankruptcy Code Section 727 provides in pertinent part as follows:
(a) The court shall grant the debtor a discharge, unless
* * * * * *
(2) the debtor, with intent to hinder, delay, or defraud a creditor or an officer of the estate charged with custody of property under this title, has transferred, removed, destroyed, mutilated, or concealed, or has permitted to be transferred, removed, destroyed, mutilated, or concealed
(A) property of the debtor, within one year before the filing of the petition . . .; [or]
* * * * * *
(4) the debtor knowingly and fraudulently, in or in connection with the case
(A) made a false oath or account;
11 U.S.C. § 727(a) (1999) (emphasis added).
Analysis of Section 727(a) (2) (A)
In order to prevail on an objection to discharge under Section 727(a)(2)(A), a plaintiff must prove that the subject act or undertaking:
(i) involved concealing, destroying, transferring, or removing the debtor's property, or permitting any of these acts to be done;
(ii) was performed with actual intent to hinder, delay or defraud a creditor; and
(iii) was done by the debtor within one year prior to the commencement of the case;
See, e.g., In re Maletta, 159 B.R. 108, 115-16 (Bankr.D.Conn.1993).
In the present proceeding the appropriate focus is squarely upon the Debtor's state of mind at the time of the undisputed transfers which are the subject of the Complaint;[10]i.e., did the Debtor intend to hinder, delay or defraud the Plaintiff or any other creditor. As noted by the Court during the oral bench ruling of August 30, 2004, Tr. at 227 -229, in view of Plaintiffs' failure to meet their burden of establishing the requisite "intent to hinder, delay or defraud" under Section 727(a)(2)(A), the Debtor was entitled to a discharge. Upon a thorough review of the evidentiary record the Court remains completely satisfied that at no time did the Debtor act with the level of scienter necessary for discharge disqualification under Code Section 727(a)(2). Notwithstanding additional supportive testimony,[11] the *279 Court finds the trial testimony of the Debtor and his spouse to be entirely credible and, standing alone, dispositive of this critical issue.
Analysis of Section 727(a)(4)(A)
In order to deny discharge under Section 727(a)(4)(A), the Plaintiffs must establish that:
(i) the debtor made a statement under oath;
(ii) such statement was false;
(iii) the debtor knew the statement was false;
(iv) the debtor made the statement with fraudulent intent; and
(v) the statement related materially to the bankruptcy case.
E.g., In re Aiello, 173 B.R. 254, 257 (Bankr.D.Conn.1994); see also In re Maletta, 159 B.R. 108, 112 (Bankr.D.Conn. 1993). Statements made in a petition and schedules are within the scope of § 727(a)(4), and statements made during Bankruptcy Rule 2004 examinations, or in connection with Section 341 testimony, are also covered. E.g., Maletta, 159 B.R. at 112; In re Kilson, 83 B.R. 198, 202 (Bankr. D.Conn.1988).
As with the Section 727(a)(2)(A) analysis above, to resolve the Plaintiff's claim under Section 727(a)(4)(A) the Court need look no further than the element of fraudulent intent. As noted by the Court during the oral bench ruling of August ac, 2004, Tr. At 227 -229, in view of Plaintiffs' failure to meet their burden of establishing the requisite "knowing and fraudulent" state of mind under Section 727(a)(4)(A), the Debtor was entitled to his discharge. Upon a thorough review of the evidentiary record the Court remains completely satisfied that at no time did the Debtor act with the level of scienter compelling discharge disqualification under Code Section 727(a)(4)(A). Notwithstanding additional supportive testimony,[12] the Court finds the trial testimony of the Debtor, standing alone, to be entirely credible and dispositive of this critical issue.
III. SUMMARY AND CONCLUSION
The Plaintiffs failed to meet their burden to establish that the Debtor acted with the requisite illicit intent of Section 727(a)(2)(A) or (a)(4)(A). The oral bench ruling of August 30, 2004, Tr. 222-231, supplemented by this Memorandum of Decision, and the August 30, 2004 argument of counsel for the Debtor, Tr. 198-221, which the Court finds fully supported by the evidentiary record, and adopts as its own[13], shall constitute this Court's Findings of Fact and Conclusions of Law pursuant to Fed. R. Bankr.P. 7052.
A separate Judgment in favor of the Debtor-Defendant shall enter simultaneously herewith. *280
Debtor's Paul Pizzo
Architects, P.C. Rita K Smith Deposit
pay stub date Net Pay Account Deposit Date Amount
07-02-98 $ 2,810.76 07-02-98 $ 2,810.76
07-16-98 $ 2,810.76 07-17-98 $ 2,810.76
07-30-98 $ 2,810.76 07-31-98 $ 2,810.76
08-13-98 $ 2,841.53 08-17-98 $ 2,841.53
09-10-98 $ 2,841.53 09-14-98 $ 3,041.53
10-08-98 $ 2,841.53 10-09-98 $ 2,841.53
10-23-98 $ 2,841.53 10-26-98 $ 2,841.53
11-06-98 $ 2,888.44 11-09-98 $ 3,155.23
11-20-98 $ 2,932.30 11-23-98 $ 2,932.30
12-03-98 $ 2,932.30 12-04-98 $ 2,932.30
12-17-98 $ 2,932.33 12-17-98 $ 2,932.30
02-04-99 $ 1,569.34 02-05-99 $ 1,569.34
02-19-99 $ 1,906.75 02-22-99 $ 1,906.75
02-26-99 $ 1,889.00 03-01-99 $ 1,889.00
04-08-99 $ 876.74 04-12-99 $ 876.74
04-21-99 $ 1,285.19 04-23-99 $ 1,285.19
04-22-99 $ 2,155.38 04-27-99 $ 2,155.38
05-07-99 $ 1,942.27 05-10-99 $ 1,942.27
---------- ----------
$43,108.41 $43,575.20
NOTES
[1] Appearances on behalf of the Plaintiffs by Edward C. Taiman, Jr., Esq., Sabia & Hartley, LLC, 190 Trumbull Street, Suite 202, Hartford, CT XXXXX-XXXX, and Paul M. Gaide, Esq., 713 Lovely Street, Avon, CT 06001, were withdrawn and terminated on July 2, 2003 and August 23, 2004, respectively. At trial, Attorney Gaide was called as a witness by the Plaintiffs and testified without objection by the Debtor-Defendant.
[2] The United States District Court for the District of Connecticut has subject matter jurisdiction over the instant adversary proceeding by virtue of 28 U.S.C. § 1334(b); and this Court derives its authority to hear and determine this matter on reference from the District Court pursuant to 28 U.S.C. §§ 157(a), (b)(1). This is a "core proceeding" pursuant to 28 U.S.C. § 157(b)(2)(J). Venue is appropriate in this District pursuant to 28 U.S.C. § 1409(a).
[3] The Consensual Motion noticed the Plaintiffs' election "not to pursue" relief under Sections 727(a)(2)(B), (3), (4)(B) and (5) as requested in the Original Complaint, thereby abandoning claims that the Debtor, inter alia, improperly transferred property of the estate after the petition date, concealed, destroyed or failed to keep information concerning the Debtor's financial condition, presented or used a false claim, and failed to explain satisfactorily a loss of assets, or deficiency of assets, respectively.
[4] On June 19, 2003, the Plaintiffs filed a Motion for Summary Judgment, Doc. I.D. No. 99, seeking the entry of judgment under Bankruptcy Code Section 727(a)(2)(A). On April 20, 2004, this Court denied that Motion. However, because both parties complied fully with Rule 56(a) of the Local Civil Rules of the United States District Court for the District of Connecticut (requiring detailed statements of material fact from each party to a summary judgment motion) this Court, on August 19, 2004, entered an Order Pursuant to Fed. R. Civ. P 56(d), made applicable to this proceeding by Bankruptcy Rule 7056, Doc. I.D. No. 134, stating facts which exist without substantial controversy.
[5] As of the date of this Memorandum of Decision no discharge order has entered. See Plaintiffs' Motion for Order Pursuant to Bankruptcy Rule 8005 (hereafter, the "Motion for Stay") (seeking to stay entry of the Discharge Order), Doc. I.D. No. 141, and Debtor/Defendant's Opposition to Motion for Stay . . . (hereafter, the "Opposition to Motion for Stay"), Doc. I.D. No. 151, scheduled for a hearing on October 6, 2004, but marked "off" on that date. In light of this Memorandum of Decision and the Judgment entering simultaneously herewith, a hearing shall be held on the Motion for Stay and Opposition to Motion for Stay on Wednesday, October 11, 2006 at 10:00 AM at the United States Bankruptcy Court, Connecticut Financial Center (18th Floor), 157 Church Street, New Haven, Connecticut.
[6] The Original Complaint averred a potpourri of allegations ultimately withdrawn by the Plaintiff, including the patently preposterous assertion that the Debtor should be denied his discharge for failure to list as an asset on Schedule B his "pet dog", Original Complaint, p: 10, ¶ 21, prompting the Debtor's counsel to remark:
It is a terrible thing to live for four or five years with the kind of debts that Mr. Smith had incurred, not knowing if you're ever going to get out from under. It's a particularly terrible thing if you're the kind of person as I think Mr. Smith has demonstrated he is. He isn't trying to skin anybody: he wasn't trying to gain anything: he wasn't trying to pull a fast one. He had, if anything, the misfortune of having a creditor named The Cadle Company who came after him for everything from the household account and the household and business accounts to the now infamous and, hopefully, never again to be seen in this Court or any other court around here that does bankruptcy, failure to list Buddy, the dog. . . .
Tr., August 30, 2004, p. 218.
[7] Granting the Debtor's application for an award pursuant to Fed. R. Bankr.P. 7037(a)(4), finding inter alia, that resistance of the Plaintiffs and their counsel to the discovery sought by the [Debtor] was not substantially justified, and awarding the Debtor reasonable costs of $14,396.00 in attorney's fees and and $578.65 in disbursments.
[8] See, e.g., Tr. August 30, 2004 at p. 155, line 16-page 158, line 2 (Discussion of Attorney Gaide's trial testimony admitting "he didn't paraphrase accurately", leading the Court to observe "It's mass confusion based upon what I call a shotgun approach where everything in the world is being laid on the table by Mr. Gaide in a rather aggressive way, and we end up with a convoluted record, some 553 pages long in the form of a 2004, which I find to be of little help because [Gaide's] reference back just clouds the issue; it doesn't clarify it").
[9] See, e.g., closing remarks of Debtor's counsel, (adopted by the Court, see Summary and Conclusion, infra.) ("[Cadle] put this man through three days and 500 pages of abusive examination. Your honor was very nice when he talked about it, but you know as well as I do that what went on in that room: Wrong. It was intended to intimidate, and it had that effect". Tr. August 30, 2004, Page 205, line 19-25. "Sometimes you only see what you want to see, and what Cadle has done from day one is seen only what it wants to see. * * * [Sentence intentionally omitted. See footnote 13, infra] * * *. While in the Courtroom, we invited Mr. Gaide to show us what the predicate for the statement that he tried to shove into [the Debtor's] mouth and [the Debtor], unfortunately, was a little bit too accommodating, so we asked, where's the predicate, where is that statement. * * * [Phrase intentionally omitted. See footnote 13, infra] * * * . . . and Mr. Gaide couldn't find it because it doesn't exist and it never did. You put somebody through that kind of examination, chances are some people are going to say things; there going to believe the person asking the questions knows all and if they say it, it must be true. You know what? It's not fair. I can do that. I'm not great at this, but I can do that to pretty much anybody, and I've seen it done, and it isn't pretty, and it isn't right, but it's no reason to take somebody's discharge away." Id., Page 211, line 16-page 212, line 15).
[10] These transfers consist of wage payments to the Debtor from Paul Pizzo Architects, P.C. and corresponding Debtor deposits to a Rita K. Smith Account throughout the one-year period preceding the petition date, to wit:
[11] In relation to both "counts" of the Complaint the Court (i) credits the supportive testimony of Attorney Neil Crane, Attorney Richard Coan, Mrs. Hunter W. Smith (no relation to the Debtor) and (ii) notes the testimony of Attorney Paul Gaide acknowledging the ambiguous nature of certain relevant questions asked by him during the Rule 2004 examination. See fn. 9, supra.
[12] See fn. 11, supra.
[13] The Court adopts as its own the closing argument of the Debtor/Defendant's attorney with the sole exception of the sentence, "Now, I have to read these things from time to time because I have the privilege of . . . being in state court from time to time, but that's what happened", found at page 208, lines 16-20, of the August 30, 2004 transcript, the sentence "And, when they didn't see what it wants to see, sometimes it just made it up", found at Id. page 211, lines 19-20, and the phrase "I knew it didn't exist; we all knew it didn't exist;" found at Id. page 212, lines 2-3.
| {
"pile_set_name": "FreeLaw"
} |
484 F.Supp. 1176 (1980)
EQUITABLE LIFE INSURANCE COMPANY OF IOWA, Plaintiff,
v.
MICHIGAN NATIONAL BANK, Carroll H. Vannatter, Bette L. Schoolmaster, and Judith H. Breshnahan, Defendants.
No. G78-372 CA1.
United States District Court, W. D. Michigan, S. D.
February 8, 1980.
Russell, Ward & Hodgkins, Robert G. Quinn, Jr., Grand Rapids, Mich., for defendants.
OPINION AND ORDER
DOUGLAS W. HILLMAN, District Judge.
Defendants Michigan National Bank (The Bank) and Carroll H. Vannatter (Vannatter), as co-executors of the estate of Mildred M. Brann, have moved for summary judgment, pursuant to Fed.R.Civ.P. 56, against defendants Bette L. Schoolmaster (Schoolmaster) and Judith H. Bresnahan (Bresnahan), rival claimants for the proceeds of an endowment policy owned by Mrs. Brann at the time of her death. This case originally was brought in May, 1977, as an interpleader action by plaintiff Equitable Life Insurance Co. of Iowa (Equitable), seller of the policy, pursuant to 28 U.S.C. § 1335 and Fed.R.Civ.P. 22(2). Equitable deposited with the Court $11,421.60, the amount payable under the policy, including interest. The parties subsequently agreed to invest $10,000 in U. S. Treasury bills until further order of the Court. On September 22, 1978, Judge Miles issued an order discharging plaintiff from further liability, enjoining any other suits pertaining to the policy, pursuant to 28 U.S.C. § 2361, and awarding attorney's fees and costs of *1177 $632.16 to plaintiff from the funds deposited. This motion for summary judgment was filed January 16, 1979, and a brief in opposition on December 10, 1979.
The endowment policy was sold to Mildred M. Brann on September 6, 1957, and required payment of monthly premiums over a twenty-year term to maturity. The contract stated:
"Equitable Life Insurance Company of Iowa AGREES TO PAY The Face Amount, SEVEN THOUSAND FIVE HUNDRED Dollars, at its Home Office in the City of Des Moines, Iowa, upon surrender of the policy, to The Insured MILDRED M. BRANN, on the Maturity Date, September 6, 1977, if the Insured is then living; or, upon surrender of the policy and upon receipt at its said office of due proof of the death of the Insured prior to the maturity date, will pay the face amount to The Beneficiary, THOMAS M. BRANN, husband of the Insured, if living, otherwise JUDITH A. HENRICKSON AND BETTE L. HENRICKSON, nieces of the Insured, or the survivor."
Mrs. Brann maintained the policy, and on or about July 7, 1977, plaintiff wrote to inform her of its impending maturity on September 6, 1977, and to suggest "various options" under which the proceeds due could be reinvested or paid out over time, rather than in one lump sum. Mrs. Brann never responded. Plaintiff subsequently was unable to contact Mrs. Brann or deliver a check for the amount of the policy. No instructions from the insured were received by Equitable concerning beneficiaries. Mr. Brann had died before the maturity date. In February, 1978, Plaintiff learned Mrs. Brann had died on November 25, 1977.
The Bank and Vannatter move for summary judgment on the ground there is no genuine issue of material fact and that they are entitled to the proceeds of the policy, as executors of the insured's estate, as a matter of law. They point to the language of the policy, quoted above, which they say entitles Mrs. Brann's estate to the money because she was living at the date of maturity. They argue that the provision for payment to the named beneficiaries was expressly contingent on the receipt by Equitable of due proof of the death of the insured prior to the maturity date, which did not occur here. Although the insured did not surrender the policy after maturity, as apparently required by its terms, it is said surrender is only for the protection of the insurer and cannot condition the existence of Mrs. Brann's right to payment.
The named beneficiaries oppose the motion for summary judgment on the ground an issue of material fact exists in this case, namely, who are entitled to the proceeds of the policy, the language of which they maintain is ambiguous. Specifically, they argue that Mrs. Brann failed to satisfy the terms of the contract by not surrendering the policy for payment, thereby leaving the policy in effect. They bolster this view by reference to the Optional Maturity Date Provision offered Mrs. Brann, under which she could have elected to postpone the maturity date and continue in effect the beneficiary designation. Although no affirmative election was made in this case, as required by Equitable, the policy beneficiaries maintain that the existing terms of the policy must remain in effect until the insured elects an option or, alternatively, surrenders the policy for payment, effectively electing not to extend the policy with the beneficiary designation intact. Because there was no surrender, the "maturity transaction" was not completed and the policy beneficiaries, not Mrs. Brann's estate, are entitled to the proceeds of the policy.
In support of their construction of the terms of the policy, The Bank and Vannatter cite Levy & Co. v. Van Hagen, 69 Ala. 17 (1881), in which the Alabama Supreme Court construed an endowment policy's terms to cut off the rights of named beneficiaries upon the insured's living to the maturity date of the policy. The rights of the beneficiary were found to be contingent on notice and proof of his death, and in any event ceased upon the insured's attaining the age of 45, the maturity date. In several respects, however, the facts distinguish that *1178 case from the one before the Court. In Levy & Co., the policy was owned and paid for by the beneficiary, not the insured, and it was she who contracted for its terms. Also, the insured was still alive at the time of the suit, so the Alabama court was not faced with differing outcomes depending on whether the contingency of death occurred before or after maturity. The Levy & Co. policy was more explicit in its terms. Finally, and most important, the Alabama Supreme Court isolated as the central issue the intention of the parties: "So this case comes at last to the inquiry, what is the proper interpretation of the policy? What did the parties intend, as shown by the language employed?" Id., at 21. It is noted that the resolution of that issue, involving a policy clearer in its terms than the one here, went to trial and was appealed to the highest court in the state where it was reversed and was not, demonstrably, susceptible of summary judgment.
The Policy beneficiaries raise significant questions concerning the operation of the terms of the policy. On its face, the document may only grant rights to them in the event of the insured's death before the maturity date, cutting them off once that point is reached, whether or not the insured subsequently dies. However, this termination of rights may possibly be contingent on the completion of the "maturity transaction," requiring surrender. It is not clear what effect, if any, the right to elect an option to postpone maturity has on the policy. The preliminary question of whether ambiguity does exist is a question of law to be decided by the court. It is not necessary to give a strained reading to the terms of the contract to find ambiguity on these points.
An insurance policy is a contract and must be interpreted according to its plain meaning. Courts should not read ambiguity, doubt, and equivocation into words of common meaning and understanding. Elston-Richards Storage Co. v. Indemnity Insur. Co., 194 F.Supp. 673 (W.D.Mich.1960). Nevertheless, where ambiguity exists, as here, a court must be free to interpret the pertinent language. "Worship of the literal should not overcome common sense or be used to bring about an absurdity if it can be avoided." Mondou v. Lincoln Mutual Casualty Co., 283 Mich. 353, 358, 278 N.W. 94, 96 (1938). As with any other contract, the intention of the contracting parties must govern.
Specifically, the Court poses the following questions:
1) Did Mildred Brann intend her named beneficiaries to receive the proceeds of the policy only if she died before the maturity date? Did she intend to cut them off if she was living at the date of maturity but subsequently died?
2) Do the terms of the policy make the rights of the beneficiaries contingent upon the insured's death prior to maturity?
3) When did the insured become entitled to the face value of the matured policy? Were her rights contingent upon surrender of the policy, or was that merely a condition of payment?
4) If there was no surrender of the policy after maturity, or alternatively, no election of options to defer payment, do the terms of the policy, including the beneficiary designation, continue in force?
These questions are not regarded as of equal weight. They are not necessarily listed in order of importance nor are they meant to be exclusive of other issues that may exist in the case. However, they do highlight genuine issues of material fact which remain to be decided.
A court may not grant a motion for summary judgment if there remain genuine questions as to state of mind, especially where relevant, as here, to the intent of the parties to an ambiguous contract. See Cram v. Sun Insur. Office, Ltd., 375 F.2d 670 (4th Cir. 1967); see also New England Mutual Life Insur. Co. v. Null, 554 F.2d 896 (8th Cir. 1977); 10 Wright & Miller, Fed. Practice and Procedure, § 2730.
On the basis of a careful consideration of the relevant facts in this case, and construing *1179 them in a light most favorable to the moving party, the Court holds the executors have failed to meet their burden of proof and that genuine issues of material fact exist which prevent granting the motion for summary judgment, as a matter of law.
IT IS SO ORDERED.
| {
"pile_set_name": "FreeLaw"
} |
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 05-1237
In Re: JERRY ALTON HURST,
Debtor.
- - - - - - - - - - - -
JERRY ALTON HURST,
Appellant,
versus
DORIS WILKINS, Individually and as Clerk of
the Court for Sussex County, Delaware,
Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. T. S. Ellis, III, District
Judge. (CA-04-1357; BK-03-15031-SSM; AP-04-1023-SSM)
Submitted: July 27, 2005 Decided: August 1, 2005
Before KING, GREGORY, and SHEDD, Circuit Judges.
Affirmed by unpublished per curiam opinion.
Jerry A. Hurst, Appellant Pro Se. Doris Wilkins, Appellee Pro Se.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
- 2 -
PER CURIAM:
Jerry Alton Hurst appeals from the district court’s order
affirming the bankruptcy court’s orders denying Hurst’s motion for
default judgment and denying his motion for reconsideration. Hurst
had sought in the bankruptcy court a ruling invalidating a debt
that resulted from a criminal judgment against him in a Delaware
County Court. We have reviewed the record and the lower courts’
opinions and orders and find no reversible error. Accordingly, we
affirm for the reasons stated by the district court. Hurst v.
Wilkins, Nos. CA-04-1357; BK-03-15031-SSM; AP-04-1023-SSM (E.D. Va.
Feb. 1, 2005). 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
- 3 -
| {
"pile_set_name": "FreeLaw"
} |
740 F.2d 398
117 L.R.R.M. (BNA) 2298, 101 Lab.Cas. P 11,184
NATIONAL LABOR RELATIONS BOARD, Petitioner,v.GREAT WESTERN COCA-COLA BOTTLING COMPANY, Respondent.
No. 83-4657.
United States Court of Appeals,Fifth Circuit.
Sept. 4, 1984.
Elliott Moore, Elaine Patrick, Deputy Associate Gen. Counsels, N.L.R.B., Washington, D.C., for petitioner.
Fulbright & Jaworski, T.J. Wray, L.G. Clinton, Jr., Susan J. Piller, Houston, Tex., for respondent.
Application For Enforcement of an Order of the National Labor Relations Board.
Before GEE, POLITZ, and RANDALL, Circuit Judges.
RANDALL, Circuit Judge:
1
The National Labor Relations Board seeks enforcement of its order finding Great Western Coca Cola Bottling Company guilty of various unfair labor practices and granting relief.1 For the reasons set forth below, we conclude that the order should be enforced as modified herein.
I. Factual and Procedural Background.2
2
Great Western Coca Cola Bottling Company (the "Company") operates several facilities in the Houston metropolitan area. In 1978, the Company entered into a collective bargaining agreement with Sales Drivers, Deliverymen, Warehousemen & Helpers, Local 949, a/w International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America (the "Union"), which designated the Union as the exclusive bargaining representative for a unit of some 550 production and maintenance employees at the Company's facilities. The agreement was to expire on November 30, 1979. Among its terms was a provision relating to the right of Union representatives to have access to the Company's premises.3
3
On September 27, 1979, a decertification petition was filed with the Board pursuant to 29 U.S.C. Sec. 159(c)(1)(A)(ii) (1982). On November 20, after a dispute between the Company and the Union regarding Union Business Agent Guadalupe Vasquez' efforts to gain access to the Company's premises, the Company sent Union Business Manager Ronald Teague a letter in which, in light of the decertification petition, the Company articulated its position and policy with regard to access to its premises by Union representatives. Thereafter, until early December, the parties essentially complied with the terms of the letter.
4
On December 11, 1979, at the request of a Company employee, Teague and Vasquez requested permission to visit one of the Company's facilities. The Company representatives with whom they spoke denied the request. They went to the facility nonetheless, whereupon Company supervisor Elbert Hill called the Harris County Sheriff's Department and had them arrested. Numerous employees, including Willie Jones, witnessed the confrontation and arrest. On December 13 and 14, the Company orally and in writing notified Teague that Union representatives would thereafter have access to Company facilities only in "instances of specific complaints or grievances signed by employees and presented in writing by the Union to the Company."
5
In mid-December, Company supervisor Hill summoned employee Willie Jones into his office and asked Jones whether he belonged to the Union. Although he was a member, Jones denied membership. Hill told Jones that he "did not have to lie," and that Hill knew that two of Jones' co-workers were Union members. Jones again denied membership and stated that he did not know that the other employees were Union members.
6
As a result of the foregoing, the Board issued an unfair labor practices complaint against the Company. The complaint alleged that the Company violated sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act ("NLRA"), 29 U.S.C. Sec. 158(a)(1) & (5) (1982),4 by unilaterally imposing restrictions on the Union representatives' access to Company facilities and by causing them to be arrested, and by interrogating an employee about his union affiliation and creating the impression that the Company was conducting surveillance of its employees' union activities.
7
The conduct alleged to be unfair labor practices was also at issue in a concurrent representation proceeding between the Company and the Union. On April 17, 1980, the Board conducted a decertification election pursuant to the decertification petition that had been filed. The Union lost the election and filed objections asserting, inter alia, that the Company's unfair labor practices had interfered with the election. The Board's Regional Director consolidated the unfair labor practice and representation proceedings for the purpose of holding a hearing.
8
A hearing was held before an Administrative Law Judge ("ALJ"). With regard to the unfair labor practice claim, the ALJ found that the Company had violated section 8(a)(1) of the NLRA on December 11, 1979, by denying Union representatives access to its facility and causing their arrest; that the Company had violated sections 8(a)(1) and 8(a)(5) of the NLRA on December 13 and 14 by unilaterally imposing new restrictions on the Union representatives' access to its premises; and that the Company violated section 8(a)(1) of the NLRA by interrogating Willie Jones about his union membership and by creating the impression that it was conducting surveillance of employees' union activities. The ALJ recommended that the Board order the Company to cease and desist from these unfair labor practices, and to rescind the unilateral changes that it had imposed. With regard to the representation proceeding, the ALJ found for the Union and recommended that the decertification election be set aside and that the representation proceeding be remanded to the Regional Director so that a new election could be held when he deemed appropriate. The Board's decision and order adopted the ALJ's findings and, with minor modifications not relevant here, adopted the ALJ's recommendations.
9
Subsequent to the Board's decision, the Union merged with another labor organization, Local 988.5 The Company filed with the Board motions for reconsideration and to reopen the record, alleging that the merger had been effected without permitting nonmember employees to vote in the merger election, thus precluding Local 988 from succeeding the Union as the bargaining representative of the Company's employees. The Board denied the motion for reconsideration and referred the motion to reopen the record to the Regional Director for disposition in the representation proceeding. The Regional Director denied the motion, finding that the merged organization could appear on the ballot in the second decertification election as the valid successor to the Union and that the second decertification election would be tantamount to affording all employees an opportunity to approve or disapprove the merger. The Company's appeal from these determinations as well as its renewed motion for reconsideration were denied by the Board.
10
II. The Enforcement Proceeding.
11
The parties are before us on the Board's petition seeking enforcement of its order against the Company. See 29 U.S.C. Sec. 160(e) (1982).6 The Company argues against enforcement, contending that its actions on December 11, 13 and 14 did not violate the NLRA because once the petition for decertification had been filed and the collective bargaining agreement expired on November 30, it was entitled unilaterally to institute changes in the erstwhile agreement. The Company also asserts that the conversation between employee Willie Jones and his supervisor was an isolated event and not unlawful. We will address these arguments in turn.
12
A. The Effect of Unilateral Change in the Terms of the Collective Bargaining Agreement.
13
The Company asserts that the Board applied an erroneous legal standard in concluding that the Company's conduct in refusing Union representatives access to the Company's plant on December 11 and in instituting unilateral changes in the collective bargaining agreement on December 13 and 14 constituted unfair labor practices.7 The Company argues that under Telautograph Corp., 199 N.L.R.B. 892 (1972), where a question concerning representation has been raised by the filing of a decertification petition, the employer is precluded from bargaining with the Union until the question concerning representation has been resolved by the Board. The Company contends that because the duty to refrain from making unilateral changes is an aspect of the duty to bargain, Telautograph frees the employer to make unilateral changes during the pendency of the question concerning representation.
14
As an initial matter we note that the Board prospectively overruled Telautograph in Dresser Industries, Inc., 264 N.L.R.B. 1088 (1982). However, because the instant case arose prior to Dresser, its disposition depends on Telautograph and its progeny. Of course, our analysis and that of the Board have future utility only to the extent that they are applied to cases, such as the present one, that arose before Dresser.
15
We are not persuaded by the Company's argument. While Telautograph did stand for the first proposition for which the Company cites it, we do not agree that it went so far as to permit the employer to impose unilateral changes on the collective bargaining agreement during the pendency of a question concerning representation. The issue in Telautograph was whether an employer is obligated to bargain with a union whose representative status is at issue. The Board answered that question in the negative, holding instead that in those circumstances, the imperative of employer neutrality compelled the conclusion that an employer was foreclosed from negotiating with the incumbent union. Telautograph did not undermine, however, the well settled premise that even after the parties' agreement has expired, practices that have developed under the agreement must remain unchanged unless the employer affords the employees' representative notice of any proposed change and a meaningful bargaining opportunity. See NLRB v. Katz, 369 U.S. 736, 743-45, 82 S.Ct. 1107, 1111-1112, 8 L.Ed.2d 230 (1962); Electric Machinery Co. v. NLRB, 653 F.2d 958, 962, 964 (5th Cir.1981). Because Telautograph precluded bargaining after a question concerning representation has been raised, we agree with the Board that where, as here, the expiration of the contract coincided with the filing of a decertification petition, the employer was dually bound not to bargain on the one hand, and to refrain from imposing unilateral changes on the other.
16
Our conclusion is supported, moreover, by the Board's decision in Turbodyne Corp., 226 N.L.R.B. 522 (1976), which was decided after Telautograph. There, the Board examined the employer's duty to remain neutral where a pending question concerning representation remained unresolved at the expiration of the parties' agreement. The Board held that while it would not have been improper for the parties to extend temporarily the terms of the expired agreement, "a violation of Section 8(a)(5) and (1) of the Act occurs when an employer unilaterally institutes certain basic changes in the collective bargaining agreement pending resolution of the QCR [question concerning representation]." 226 N.L.R.B. at 525. It is clear that access by the employees' representatives constitutes a mandatory bargaining subject, see, e.g., Campo Slacks, Inc., 250 N.L.R.B. 420, 429, enforced without opinion, 659 F.2d 1069 (3d Cir.1981); Boyer Bros. Inc., 217 N.L.R.B. 342, 344 (1975), and a unilateral change in the manner and degree of access afforded the employees' representative constitutes a "basic change" in the agreement. Thus, we think that Turbodyne mandates the Board's determination here that an employer commits an unfair labor practice by unilaterally imposing new restrictions on such access upon expiration of the contract and while a question concerning representation is pending.
17
We are aware that the Board approved unilateral changes in certain situations subsequent to Telautograph. However, we agree with the Board's conclusion here that those cases, relied upon by the Company, are inapposite to the instant circumstances. In Ellex Transportation, Inc., 217 N.L.R.B. 750 (1975), the unilateral change implemented by the employer and approved by the Board was the granting of wage and pension benefits that could otherwise not have been extended subsequent to the contract's expiration because they were explicitly tied to the contract. Id. at 757. Similarly, in Vernon Manufacturing Co., 214 N.L.R.B. 285 (1974), the approved change was an increase in wages and benefits that was justified by the employer's need to confer such benefits to stay in business. Id. at 293. In the instant case, because an incumbent union remains the employees' bargaining representative unless and until the union is decertified, the Board distinguished "unilateral changes affecting the union's dealings with the employees whom it continues to represent from those relating to wages and benefits ...." The Board noted that even under Vernon and Ellex, an employer "is not licensed to interfere with the union's representative functions which continue during the pendency of the decertification petition." We agree with the Board that Vernon and Ellex are distinguishable on this basis, and do not support the Company's argument that its actions on December 11, 13, and 14 were proper or lawful.8
18
B. The Company's Interrogation of Willie Jones.
19
The Company also contends that the Board erred in finding that Willie Jones' conversation with his supervisor, Elbert Hill, constituted coercive interrogation and created the impression that the Company was conducting surveillance over its employees' union activities and affiliation, thus violating section 8(a)(1) of the NLRA. The Company asserts that because the conversation was brief, isolated, and followed by a week Hill's assurances that Jones' union interests would not affect his job, the Board erred as a matter of law in concluding that section 8(a)(1) was violated.
20
Coercive interrogation of employees regarding union association or affiliation is prohibited by the NLRA. See, e.g., NLRB v. Laredo Coca Cola Bottling Co., 613 F.2d 1338, 1342 (5th Cir.), cert. denied, 449 U.S. 889, 101 S.Ct. 246, 66 L.Ed.2d 115 (1980). Section 8(a)(1) is violated when all of the circumstances surrounding an interrogation reasonably permit the inference that the interrogation had the tendency to coerce employees. See, e.g., NLRB v. Pope Maintenance Corp., 573 F.2d 898, 904 (5th Cir.1978); NLRB v. Birdsall Construction Corp., 487 F.2d 288, 291 (5th Cir.1973). It is not necessary that the employee or employees are in fact coerced. Pope Maintenance, supra, at 904. Because the question whether coercive interrogation has occurred is one of fact, its primary determination rests with the Board, and we accord "great deference" to that body's findings. NLRB v. Henriksen, Inc., 481 F.2d 1156, 1161 (5th Cir.1973); see Laredo Coca Cola, supra, 613 F.2d at 1341. Thus, if there is substantial evidence in the record taken as a whole for the Board's finding of a violation, we will not disturb that finding. Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951); Laredo Coca Cola, supra, 613 F.2d at 1341.
21
In the instant case, we think that the record as a whole amply supports the Board's finding that the Hill-Jones conversation constituted a violation of section 8(a)(1). Hill summoned Jones to his office and questioned Jones concerning his union sentiments. Jones was alone; Hill was the Company representative responsible for the arrest of Vasquez and Teague several days before when they attempted to exercise the right of access that had been collectively bargained for. Jones had witnessed the arrest of Vasquez and Teague. The Board could also have properly inferred that because Jones denied his union membership upon Hill's inquiry, Jones indeed felt coerced. We think it is clear that in these circumstances, the Board's finding that section 8(a)(1) was violated is correct. See, e.g., TRW-United Greenfield Division v. NLRB, 637 F.2d 410, 416-17 (5th Cir.1981); NLRB v. Aero Corp., 581 F.2d 511, 514 (5th Cir.1978); Florida Steel Corp. v. NLRB, 529 F.2d 1225, 1229 (5th Cir.1976). Moreover, upon Jones' denial of membership, Hill disclosed that he knew that Jones and two of Jones' co-workers were union members. This disclosure exacerbated the coercive effect of the interrogation and, as the Board found, constituted an independent violation of section 8(a)(1). See, e.g., Hendrix Manufacturing Co. v. NLRB, 321 F.2d 100, 105 n. 7 (5th Cir.1963) ("[W]hen an employer ... takes steps leading his employees to think [surveillance] is going on, they are under the threat of economic coercion, retaliation, etc.").
22
The Board's finding that the encounter between Hill and Jones was isolated does not render the interrogation lawful. As we have discussed, we look to the total circumstances surrounding an interrogation to assess its effect. NLRB v. Birdsall Construction, supra. Here, the interrogation followed the confrontation involving Vasquez and Teague and their subsequent arrest, and there was an implication that employee surveillance was being conducted. In these circumstances, we decline to disturb the Board's finding of coercive interrogation in violation of section 8(a)(1). Nor are we persuaded that Hill's prior statement to Jones that Hill was unconcerned about Jones' union affiliation had the ameliorative effect attributed to it by the Company. Jones' denial of union membership amply indicates that he did not credit Hill's reassurances and cuts against a finding that the reassurances mitigated the impact of the subsequent interrogation.
23
C. The Effect of the Union's Merger with Local 988.
24
The Company maintains that the Union's merger with Local 988 subsequent to the Board order now sought to be enforced was effected by improper procedures. On the basis of these asserted improprieties the Company contends first that the Board erred by directing in the representation proceeding that a second decertification election be held with Local 988 appearing on the ballot as the Union's successor. The Company also asserts that some aspects of the Board's order in the unfair labor practice proceeding have become moot as a result of the merger.
25
We do not have jurisdiction to consider the Company's first contention because the NLRA provides only for judicial review of "final orders" of the Board in unfair labor practice cases. Though consolidated for hearing with an unfair labor practice proceeding, the Board's decision in the representation proceeding does not constitute a "final order."9 See AFL v. NLRB, 308 U.S. 401, 60 S.Ct. 300, 84 L.Ed. 347 (1940); R. Gorman, Basic Text on Labor Law Sec. 10 (1976). In Hendrix Manufacturing Co. v. NLRB, supra, at 106, we held:
26
[E]ver since American Federation of Labor v. NLRB, 1940, 308 U.S. 401, 60 S.Ct. 300, 84 L.Ed. 347; NLRB v. International Brotherhood of Electrical Workers, 1940, 308 U.S. 413, 60 S.Ct. 306, 84 L.Ed. 354, it has been clear that Courts of Appeals do not have the power to review representation proceedings. And jurisdiction does not come into being because the representation order arises out of a consolidated hearing as to which the Court of Appeals has jurisdiction to review the order concerning unfair labor practices.
27
See also TRW-United Greenfield Division, supra, at 415 n. 2; Custom Recovery, Division of Keystone Resources, Inc. v. NLRB, 597 F.2d 1041, 1046 (5th Cir.1979).
28
The Company also contends that the merger of the Union with Local 988 effectively renders the Board's order moot because it is directed at the Company's conduct relative to Local 949, and Local 949 no longer exists.
29
When the Board finds that unfair labor practices have been committed, it is entitled to have its order enforced by the courts to prevent a recurrence of that unlawful conduct in the future. In this manner, the Board and the courts vindicate the statutory right of employees to freely choose a bargaining representative, see NLRB v. Raytheon Co., 398 U.S. 25, 90 S.Ct. 1547, 26 L.Ed.2d 21 (1970), and the public interest in preventing unfair labor practices. See National Licorice Co. v. NLRB, 309 U.S. 350, 364, 60 S.Ct. 569, 577, 84 L.Ed. 799 (1940). Doubt as to the existence of Local 949 and the validity of a successor's affiliation election should not be permitted to excuse the Company's previous unlawful conduct. See NLRB v. Union Carbide Caribe, Inc., 423 F.2d 231, 235-36 (1st Cir.1970) (doubt as to identity or existence of union affords no basis for denying enforcement of Board's order to bargain).
30
In NLRB v. Raytheon Co., supra, the Supreme Court held that a subsequent election lost by the union did not moot the union's action to enforce a Board order requiring the employer to cease and desist from unlawful campaign tactics and to post an appropriate notice. Following Raytheon, the Fifth Circuit has held that an election result could not moot an enforcement proceeding against an employer who had committed unfair labor practices. NLRB v. Mangurian's, Inc., 566 F.2d 463 (5th Cir.1978). See also Chef's Pantry, Inc. v. NLRB, 654 F.2d 458 (6th Cir.1981). "Despite intervening compliance, or ... union victory, future misconduct may occur, and enforcement is an essential predicate for a future contempt order." NLRB v. Mangurian's Inc., supra, at 468. Likewise, termination of Local 949's status as the authorized bargaining representative and doubt as to Local 988's status as successor cannot be permitted to pretermit enforcement of an order aimed at preventing future misconduct. Cf. NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962).
31
We conclude that enforcement of the Board's order would best effectuate the statutory purpose of protecting the right of the Company's employees to freely choose a bargaining representative. Allegations of impossibility of compliance have not prevented courts from enforcing Board orders against employers who have discontinued their business operations. See, e.g., Southpart Co. v. NLRB, 315 U.S. 100, 104-07, 62 S.Ct. 452, 454-456, 86 L.Ed. 718 (1942); NLRB v. West Coast Casket Co., 469 F.2d 871, 873 (9th Cir.1972); NLRB v. Kostilnik, 405 F.2d 733, 735 (3d Cir.1969). Thus, the public interest in prohibiting and discouraging the commission of unfair labor practices is no less critical in cases where union representation has ceased or changed, despite the Company's allegations that it has been ordered to "perform an impossible act."
32
Accordingly, pursuant to section 10(e) of the NLRA, enforcement of that part of the Board's order arising from the Company's unfair labor practices is enforced as hereby modified.10
33
Paragraph 1(a) of the recommended order of the ALJ, adopted (with modifications) by the Board, is hereby modified by the insertion of the following language after the date November 30, 1979 and before the period: "(said Local 949 or its successor, including Local 988, Teamsters, should it be deemed the successor to Local 949 as a result of the pending representation proceeding, shall be referred to herein as the "Union")".
34
The Notice to Employees is modified by striking the fifth, sixth, seventh, eighth and ninth paragraphs and substituting the following paragraphs:
35
WE WILL NOT deny access to our premises to agents of your certified collective bargaining representative, including agents of Local 988, Teamsters, should it be deemed the successor to the rights of Local 949 as a result of the pending representation proceeding, who seek admittance for the purpose of representing you so long as we are legally obligated to give effect to applicable collectively bargained provisions permitting access to our premises by the representative's officials.
36
WE WILL NOT cause the arrest of any official of your certified collective bargaining representative who is on our premises pursuant to a collectively bargained access provision for the purpose of providing you with representation so long as the officials make arrangements with us to enter our property as provided by the applicable collectively bargained provision.
37
WE WILL NOT unilaterally alter the terms under which officials of your certified representative may enter our premises to represent you from those which existed under any collective bargaining agreement without first providing the certified representative with an opportunity to bargain concerning such a change, and, if the certified representative chooses to bargain, we will maintain the existing provision in effect until an agreement is reached upon a change or until an impasse is reached in our bargaining over any proposed change.
38
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you if you choose to exercise the rights you have under the National Labor Relations Act, or refuse to bargain with your certified representative as required by the Act.
39
WE WILL rescind the restrictions which we placed on the access by officials of your certified representative to our premises on December 13 and 14, 1979.
40
As modified, the Board's order will be enforced. See NLRB v. Express Publishing Co., 312 U.S. 426, 439, 61 S.Ct. 693, 701, 85 L.Ed. 930 (1941); NLRB v. Calumet Steel Division of Borg-Warner Corp., 121 F.2d 366, 371 (7th Cir.1941).
41
ENFORCED AS MODIFIED.
1
265 N.L.R.B. 766 (1982)
2
Because the ALJ's findings exhaustively recount the facts, see 265 N.L.R.B. 766, we recite them only briefly
3
The agreement provided:
The Company agrees that the Union representatives may have access to the plant at reasonable times upon reasonable notice to the Company, for the purpose of investigating grievances or conducting other business pertaining to the employees covered by this Agreement. The Union representative must first report to the representative designated by the Company, and shall not in any manner interfere with the job duties of any employee, or production, or operations of the Company.
4
Section 8(a)(1) provides:
It shall be an unfair labor practice for an employer--
(1) to interfere with, restrain, or coerce employees in the exercise of rights guaranteed in section 157 of this title ....
Section 8(a)(5) provides:
It shall be an unfair labor practice for an employer--
(5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) of this title.
5
Teamsters Freight, Tank Line & Automobile Industry Employees Local Union No. 988
6
Section 160(e) provides, in pertinent part:
The Board shall have power to petition any court of appeals of the United States ... within any circuit ... wherein the unfair labor practice in question occurred ... for the enforcement of such order .... Upon the filing of such petition, the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction of the proceeding and of the question determined therein, and shall have power to grant such temporary relief or restraining order as it deems just and proper, and to make and enter a decree enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the Board.
* * *
The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive.
* * *
(Emphasis added.)
7
The Company also argues that its denial of access did not substantially deviate from the terms of the collective bargaining agreement and that it did not effect a "material, substantial, and significant" change in the existing practices. See Peerless Food Products, Inc., 236 N.L.R.B. 161 (1978). The Board determined otherwise, and our review of the record establishes that this determination was supported by substantial evidence; thus, we decline to disturb it. See 29 U.S.C. Sec. 160(e), supra note 4
8
The Company also asserts that the Union had notice of the Company's intent to institute changes in access and failed to demand bargaining, thus waiving its rights. We find this argument meritless. The record supports the Board's finding that the Company's letter of November 20, see supra part I, merely elaborated on and "fleshed out" the terms of the collective bargaining agreement with regard to the access provision, and did not alter the terms of the agreement. The November 20 letter did not effect a change in the access provision nor did it provide warning of such a pending change. Similarly, Teague's conversation with a Company representative on November 12 constituted an attempt to vitalize and define the terms of the agreement's access clause, not notice of the Company's subsequent unilateral alteration thereof. Thus, we agree with the Board's finding that the Union did not waive its right to object to the Company's conduct. See, e.g., American Distributing Co. v. NLRB, 715 F.2d 446, 450 (9th Cir.1983) ("To assert successfully a waiver-by-inaction defense, an employer must show that the union had clear notice of the employer's intent to institute the change sufficiently in advance of actual implementation so as to allow a reasonable opportunity to bargain about the change"); cert. denied, --- U.S. ----, 104 S.Ct. 2170, 80 L.Ed.2d 553 (1984); see also NLRB v. Crystal Springs Shirt Corp., 637 F.2d 399, 402 (5th Cir.1981)
9
The Company cites Local Union No. 4-14, Oil, Chemical & Atomic Workers International Union, AFL-CIO v. NLRB, 721 F.2d 150, (5th Cir.1983), as supporting our jurisdiction over the representation issue. In Local Union No. 4-14, we reviewed the Board's conduct and supervision of an election only after the employer had committed an unfair labor practice in treating as void the collective bargaining agreement in existence prior to the disputed affiliation election. In contrast, the Company in this case committed the unfair labor practices precipitating the present action before the merger of Locals 549 and 588. The policy and practice of the NLRA suggests that dilatory litigation by the employer facing a representation election should not be permitted to frustrate the employee's preferences for representation. In Local Union No. 4-14, the election over, a court could review whether the Board reasonably exercised its discretion. With an election ordered by the Board, an assertion of our jurisdiction in this matter would be improper at this time
10
That part of the Board's order arising from the representation proceeding is exempted from our enforcement because of our lack of jurisdiction. See infra text at note 9
| {
"pile_set_name": "FreeLaw"
} |
970 F.2d 1316
118 A.L.R.Fed. 717, 15 Employee Benefits Cas. 1988
Richard SHOFER, Plaintiff-Appellant,v.HACK COMPANY, Stuart Hack, Defendants-Appellees.
No. 91-1024.
United States Court of Appeals,Fourth Circuit.
Argued Oct. 2, 1991.Decided June 24, 1992.
1
Anthony Peter Palaigos, Blum, Yumkas, Mailman, Gutman & Denick, P.A., Baltimore, Md., argued (Thomas A. Bowden, of counsel), for plaintiff-appellant.
2
Janet Marie Truhe, Semmes, Bowen & Semmes, Baltimore, Md., argued (Lee B. Zaben, of counsel), for defendants-appellees.
3
Before ERVIN, Chief Judge, TILLEY, District Judge for the Middle District of North Carolina, sitting by designation, and HERLONG, District Judge for the District of South Carolina, sitting by designation.
OPINION
HERLONG, District Judge:
4
Richard Shofer ("Shofer") appeals the district court's granting summary judgment in favor of The Stuart Hack Company and Stuart Hack (collectively "Hack"). Shofer sought damages from Hack for allegedly failing to give proper advice about the tax consequences of borrowing from his pension plan. The district court held that Shofer's claims were barred by the applicable statute of limitations. We affirm.
I.
5
Shofer owns and operates Catalina Enterprises, Inc. which transacts business as Crown Motors, a used car dealership. Catalina Enterprises, Inc. has a pension plan ("Plan") established for its employees which is a tax qualified pension plan subject to the terms of the Employee Retirement Income Security Act ("ERISA"), 29 U.S.C. § 1001 et seq.
6
In the early or mid seventies, Hack was hired to administer the Plan.1 His functions included preparing and filing certain annual federal returns and preparing statements to be sent to participants of the Plan. Hack also rendered advice as to tax matters involving the Plan.
7
At some time prior to August 9, 1984, Shofer asked Hack whether he could borrow money from the Plan or use the Plan's assets as collateral for a loan. By a letter dated August 9, 1984, Hack advised Shofer that he could borrow up to one hundred percent (100%) of his voluntary account in the Plan. The letter made no mention of any tax consequences.
8
From this time in 1984 until sometime in 1986, Shofer borrowed Three Hundred Seventy-Five Thousand Dollars ($375,000) from the Plan. This money borrowed from the Plan was taxable as income to Shofer. Because he borrowed the money from the Plan, Shofer incurred considerably higher taxes and tax penalties.
9
Shofer learned of the tax consequences and his tax problems in approximately November of 1986.
II.
10
Litigation between Shofer and Hack began on April 11, 1988, when Shofer filed a complaint in the Circuit Court of Maryland for Baltimore City. After a series of motions and amendments, Shofer alleged claims for negligence, breach of contract, common law breach of fiduciary duty, and five claims to enforce his rights to competent advice under the Plan through ERISA. On October 12, 1990, the state court complaint was dismissed. The first three claims were dismissed because they were preempted by ERISA under 29 U.S.C. § 1144(a).2 The remaining five claims were dismissed because they were within the exclusive jurisdiction of the federal court under 29 U.S.C. § 1132(e)(1).
11
Shofer then filed this action in the United States District Court for the District of Maryland on October 19, 1990. The claims asserted were substantially the same as the claims in the state court complaint. In response, Hack filed a motion for summary judgment based on the expiration of the statute of limitations. The district court granted Hack's motion for summary judgment, finding that Shofer's claims were barred by the ERISA statute of limitations, 29 U.S.C. § 1113(a)(2), and that equitable tolling was not applicable in this case. 753 F.Supp. 587.
III.
12
The district court applied the limitations period in 29 U.S.C. § 1113(a)(2) to all of Shofer's claims. Since this statute of limitation applies only to claims for a breach of a fiduciary's duty, the court must infer that the district court determined that Hack was a fiduciary. Though there is evidence to support that determination, the court finds it unnecessary to decide whether Hack was a fiduciary. The result of the case is the same whether Hack was a fiduciary or not.
13
For any claim that alleges a breach of a fiduciary duty, ERISA provides a three-year statute of limitations. 29 U.S.C. § 1113(a)(2). The ERISA statute of limitations begins to run when a plaintiff has knowledge of the alleged breach of a responsibility, duty, or obligation by a fiduciary. Id. Shofer had this knowledge, and the limitation period began to run in November of 1986.
14
Shofer does not contend that the complaint filed on October 19, 1990, was within the three-year period. He asserts that his timely filing of an action essentially stating the same claims in Maryland state court should equitably toll the running of the statute of limitations under federal tolling principles.
15
Shofer relies on three cases: Burnett v. New York Cent. R.R. Co., 380 U.S. 424, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965); Berry v. Pacific Sportfishing, Inc., 372 F.2d 213 (9th Cir.), cert. denied, 389 U.S. 821, 88 S.Ct. 42, 19 L.Ed.2d 72 (1967); and Farrell v. Automobile Club of Michigan, 870 F.2d 1129 (6th Cir.1989).
16
Burnett involved an action under the Federal Employers' Liability Act ("FELA") brought in Ohio state court within the limitation period. The action was dismissed for improper venue. The plaintiff then filed the identical action in federal court, but this filing was after the statute of limitations had expired. The Supreme Court held that "when a plaintiff begins a timely FELA action in a state court having jurisdiction, and serves the defendant with process and the plaintiff's case is dismissed for improper venue, the FELA limitation is tolled during the pendency of the state suit." Burnett, 380 U.S. at 434-35, 85 S.Ct. at 1058.
17
Berry involved a death at sea. An action was filed originally in California state court. No assertion was made that the state court lacked jurisdiction. The defendants filed an action in federal court seeking limitation of liability. The plaintiff then asserted a claim in the federal action contending that the state court action should have been brought in federal court under the exclusive federal jurisdiction of the Death on the High Seas Act. The district court dismissed this claim on the grounds that it was barred by the statute of limitations. The Ninth Circuit Court of Appeals found that, notwithstanding the exclusive jurisdiction in the Death on the High Seas Act, the California state court had jurisdiction until a lack of jurisdiction was asserted, and the state court determined that the Death on the High Seas Act applied, thereby depriving the state court of jurisdiction. See Berry, 372 F.2d at 215.
18
Farrell is the only case relied upon by Shofer dealing with tolling of limitation periods under ERISA. In Farrell, a complaint was filed in Michigan state court. Over two years later, the defendants moved for summary judgment on the grounds that one of the state law claims was preempted by ERISA. Before the state court ruled on the motion, the plaintiff filed an almost identical complaint in federal court. The district court dismissed the ERISA claim as time-barred. The Sixth Circuit Court of Appeals determined that the state court had concurrent jurisdiction over the ERISA claim. That court held that since the plaintiff had filed in a court having jurisdiction, the filing of the state action tolled the ERISA statute of limitations. Farrell, 870 F.2d at 1134.
19
An important common factor in these cases is that the state trial courts were found to have had jurisdiction over the federal claims when they were filed originally in state court. This factor is not present in this case. The ERISA fiduciary duty claims presented in this case were within the exclusive jurisdiction of the federal courts. 29 U.S.C. § 1132(e)(1). The district court correctly found that the state court was "plainly without jurisdiction" of these ERISA claims.
20
The commencement of an action in a clearly inappropriate forum, a court that clearly lacks jurisdiction, will not toll the statute of limitations. Silverberg v. Thomson McKinnon Sec., Inc., 787 F.2d 1079, 1082 (6th Cir.1986); see also Fox v. Eaton Corp., 615 F.2d 716, 719 (6th Cir.1980) (finding that, generally, filing in a court that clearly lacks jurisdiction will not toll the limitations period, but holding the lack of jurisdiction was not "clear" in that case), cert. denied 450 U.S. 935, 101 S.Ct. 1401, 67 L.Ed.2d 371 (1981). Because the state court clearly lacked jurisdiction over the ERISA fiduciary duty claims, Burnett, Berry and Farrell do not apply,3 and equitable tolling under federal tolling principles is not appropriate in this case.
IV.
21
ERISA does not expressly provide a limitation period for bringing a private action other than for claims of a breach of fiduciary duty. Therefore, for any claim that does not assert that Hack breached a fiduciary duty, the court must look to state law and apply an analogous limitation provision. Dameron v. Sinai Hosp. of Baltimore, Inc., 815 F.2d 975, 981 (4th Cir.1987). Because the claims that do not allege a breach of a fiduciary duty are analogous to claims for either negligence or breach of contract, the court will apply the three-year statute of limitations for ordinary civil actions under Maryland law. Maryland Cts. & Jud.Proc.Code Ann. § 5-101 (1989). The statute of limitation begins to run on the date that the claims accrued, which was in November of 1986, when Shofer learned of the alleged wrongful advice. Since this action was filed on October 19, 1990, Shofer failed to file within the three-year limitation period. He asks the court to apply equitable tolling to avoid this failure.
22
In applying the state statute of limitations, the court must also apply state principles of tolling to that limitation period. See Board of Regents v. Tomanio, 446 U.S. 478, 485-88, 100 S.Ct. 1790, 1795-97, 64 L.Ed.2d 440 (1980); Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 464, 95 S.Ct. 1716, 1722, 44 L.Ed.2d 295 (1975). The rule in Maryland concerning equitable tolling of statutes of limitations "can be fairly termed one of strict construction." Walko Corp. v. Burger Chef Systems, Inc., 281 Md. 207, 210, 378 A.2d 1100, 1101 (1977). The court in Walko stated that "where the Legislature has not made an exception in express words in the Statute of Limitations, the Court cannot allow any implied and equitable exception to be engrafted upon the statute merely on the ground that such exception would be within the spirit or reason of the statute." Id. at 211, 378 A.2d at 1102 (quoting McMahan v. Dorchester Fertilizer Co., 184 Md. 155, 160, 40 A.2d 313, 316 (1944)).
23
Shofer principally relies upon Bertonazzi v. Hillman, 241 Md. 361, 216 A.2d 723 (1966), to argue that equitable tolling applies under Maryland law in this case. In Bertonazzi, the Maryland Court of Appeals held that the filing of an action against the personal representative of a deceased tortfeasor in Baltimore County tolled the relevant limitations period for the subsequent suit in Baltimore City. The Walko court, however, limited Bertonazzi to its facts, stating that the court in Bertonazzi "carved out a narrow exception to the traditional rule against engrafting implied exceptions upon the statute of limitations in certain situations where the sole reason for the dismissal of the prior action was improper venue." Walko, at 214, 378 A.2d at 1103; Sasso v. Koehler, 445 F.Supp. 762, 766 (D.Md.1978) (applying Maryland law); accord Shepard v. Nabb, 84 Md.App. 687, 697, 581 A.2d 839, 844 (1990), cert. denied, 322 Md. 240, 587 A.2d 247 (1991); Bennett v. Baskin & Sears, 77 Md.App. 56, 77, 549 A.2d 393, 402-03 (1988); Burket v. Aldridge, 241 Md. 423, 429, 216 A.2d 910, 912-13 (1966). This case does not fall within the narrow exception from Bertonazzi. Therefore, under Maryland law, the court cannot apply equitable tolling in this case.
V.
24
Shofer did not bring this action within the three-year limitations period allowed by federal and Maryland law. Also, the facts of this case do not support the application of equitable tolling under either federal or Maryland tolling principles. Accordingly, the district court's granting of summary judgment in favor of Hack is
25
AFFIRMED.
1
Shofer contends that Hack was hired in 1971. Hack asserts that he was hired in 1975. This discrepancy is not material
2
The dismissal of the negligence and the breach of contract claims was vacated, and the case was remanded to the Circuit Court for Baltimore City in Shofer v. Stuart Hack Co., 324 Md. 92, 595 A.2d 1078 (1991), cert. denied, --- U.S. ----, 112 S.Ct. 1174, 117 L.Ed.2d 419 (1992)
3
This court does not express an opinion whether the law of the Ninth Circuit from Berry or the Sixth Circuit from Farrell would be adopted if the facts of those cases were presented to this court
| {
"pile_set_name": "FreeLaw"
} |
111 Ill. App.3d 268 (1982)
443 N.E.2d 1085
PETER D. WAGNER, Plaintiff-Appellant,
v.
JAMES A. ZBONCAK, Defendant-Appellee.
No. 82-221.
Illinois Appellate Court Second District.
Opinion filed December 14, 1982.
Walter M. Ketchum and Patrick S. Moore, both of Chicago, for appellant.
Victor J. Piekarski, James S. Jendryk, and Glen E. Amundsen, all of Querrey, Harrow, Gulanick & Kennedy, Ltd., of Chicago, for appellee.
Reversed and remanded.
JUSTICE NASH delivered the opinion of the court:
Plaintiff, Peter D. Wagner, appeals from a judgment of the circuit court, entered upon a jury verdict, finding for defendant, James A. Zboncak, in this negligence action arising out of an automobile accident. He contends that the trial court erred in refusing to declare a mistrial; in giving and refusing to give certain jury instruction; in admitting evidence, and, that the verdict was contrary to the manifest weight of the evidence. We reverse and remand.
*269 At about 8 p.m. on August 28, 1979, plaintiff was driving his Jeep east on Odgen Avenue in Lisle approaching Yackley Road. Defendant was driving his van west on Odgen intending to turn left onto southbound Yackley. After defendant reached the intersection he waited for three or four vehicles to pass and then proceeded to turn left. While crossing the eastbound lanes of Odgen, he observed plaintiff's Jeep coming towards him through the green light, about one second from impact. He accelerated, but could not clear Odgen in time and the right front of plaintiff's Jeep impacted the right rear of the van. The Jeep rolled onto its side and came to rest on plaintiff's left foot and ankle, injuring him. Defendant subsequently pled guilty to a citation for failure to yield the right of way.
Prior to trial the court granted plaintiff's motion in limine which, inter alia, prohibited defendant from introducing any evidence of consumption of alcohol by plaintiff prior to the accident as there was no evidence of his intoxication. In trial plaintiff called defendant as his first witness and inquired what defendant had said to the investigation officer at the scene. When asked the same question previously at a deposition, defendant had responded he did not recall. Before the jury, however, he responded that the scene smelled like a brewery; that there were beer bottles all over the place, thrown in an adjacent lot; and, that there were no skid marks from plaintiff's Jeep. At the close of defendant's testimony, out of the jury's presence, plaintiff moved for a mistrial on the grounds defendant's response was in violation of the order in limine. The trial court denied the motion.
Expert opinion testimony was offered by defendant that the failure of plaintiff to use a seat belt and the absence of the removable canvas door on the driver's side of plaintiff's vehicle had contributed to causing plaintiff's ejection from it and his injury. Plaintiff's motion to strike the evidence relating to the absence of the canvas door was denied by the trial court.
In view of the ruling of the court admitting the opinion testimony, plaintiff offered an instruction, applicable both to the seat belt and to the lack of a door, limiting consideration of that evidence to damages only and not as to liability. Defendant's counsel advised the court the jury could properly also consider the evidence as to proximate cause, and plaintiff's instruction was refused. Plaintiff also objected to defendant's tendered instruction as to speed on the grounds there was no credible evidence plaintiff was speeding. The instruction was given.
While deliberating, the jury requested clarification of the issue of proximate cause and its relation to contributory negligence and were *270 referred by the court to the instructions relating to proximate cause. The jury thereafter returned a general verdict for defendant upon which judgment was entered. This appeal followed.
1 Plaintiff initially contends the trial court erred in denying his motion for a mistrial when the defendant testified the accident scene smelled like a brewery and implied that occupants in the Jeep had attempted to conceal beer bottles in an adjacent vacant lot. He argues this was a direct, intentional violation of the order in limine and prejudicial. Defendant argues this issue has been waived by lack of objection at the time of the answer, but plaintiff did timely move for a mistrial out of the presence of the jury after completion of defendant's testimony.
Evidence of drinking is so prejudicial that more than mere drinking must be shown; actual intoxication with impairment of physical or mental capabilities is required. (Bohnen v. Wingereid (1979), 80 Ill. App.3d 232, 237, 398 N.E.2d 1204, 1208; Kitten v. Stodden (1966), 76 Ill. App.2d 177, 181-82, 221 N.E.2d 511, 513, appeal denied (1967), 35 Ill.2d 631.) Insinuations or innuendos of intoxication based upon evidence of drinking are impermissible and irrelevant when there is no evidence of intoxication. (Benuska v. Dahl (1980), 87 Ill. App.3d 911, 914, 410 N.E.2d 249, 252; McWethy v. Lee (1971), 1 Ill. App.3d 80, 272 N.E.2d 663, appeal denied (1972), 49 Ill.2d 575.) However, such irrelevant evidence is grounds for reversal only if it results in prejudicing the jury's verdict. Gilberto v. Nordtvedt (1971), 1 Ill. App.3d 677, 679, 274 N.E.2d 139, 140.
Defendant notes there was just a single reference to plaintiff's consumption of alcohol; however, it does not follow that the reference is thus without prejudice. The improper reference occurred on the examination of the first witness in trial, when the jury was highly attentive, and it could readily have colored its perception of the following testimony. Further, under the order in limine, plaintiff was unable to rebut the allegation without himself violating the order.
In Benuska v. Dahl (1980), 87 Ill. App.3d 911, 914, 410 N.E.2d 249, 252, this court found that irrelevant evidence that one defendant had thrown a can of beer out of a car after an accident was sufficiently prejudicial as to require reversal. We held that a mistrial should have been granted not only because the suggestion of drinking without proof was highly prejudicial, but because defendant was also denied a fair opportunity to rebut the allegation under the order in limine, as in the present case. In Coleman v. Williams (1976), 42 Ill. App.3d 612, 617, 356 N.E.2d 394, 398, no evidence was introduced that plaintiff was intoxicated, but evidence was produced that plaintiff *271 had spent some time in taverns on the day of the accident. In closing argument, defense counsel made the single reference that the jury consider where the plaintiff had been that day. We concluded this indirect reference to drinking raised the possible conclusion plaintiff was intoxicated and was reversible error. See Mizowek v. De Franco (1976), 64 Ill.2d 303, 356 N.E.2d 32; cf. Gilberto v. Nordtvedt (1971), 1 Ill. App.3d 677, 679-80, 274 N.E.2d 139, 140-41.
It is apparent plaintiff was denied a fair trial in these circumstances and a mistrial should have been granted on that basis. It was also a clear violation of the trial court's in limine order, and as plaintiff was prejudiced, reversal is required. Reidelberger v. Highland Body Shop, Inc. (1979), 79 Ill. App.3d 1138, 1144, 399 N.E.2d 247, 251, aff'd (1981), 83 Ill.2d 545, 416 N.E.2d 268.
2 Plaintiff next contends that the trial court erred in refusing to submit his tendered instruction No. 6 which read as follows:
"If you decide that the failure of the plaintiff in operating his vehicle without the door in place or without wearing a seat belt aggravated the injuries he sustained, then you are to consider those facts together with all of the other facts in evidence as to the nature and extent of the injuries sustained by the plaintiff.
You are not to consider those facts in determining the question of negligence or contributory negligence."
We agree. The failure of the trial court to instruct the jury that evidence of the nonuse of seat belts is limited and may be considered only as to damages was also reversible error.
It has been settled by a long line of Illinois cases beginning with this court's decision in Mount v. McClellan (1968), 91 Ill. App.2d 1, 234 N.E.2d 329, and further analyzed in Kassela v. Stonitsch (1978), 57 Ill. App.3d 817, 373 N.E.2d 608, and Dudanas v. Plate (1976), 44 Ill. App.3d 901, 358 N.E.2d 1171, appeal denied (1977), 65 Ill.2d 581, that evidence of the use or nonuse of seat belts is not relevant to the issue of defendant's liability or plaintiff's contributory negligence, but is relevant only as it may affect the extent of plaintiff's injuries. Even then, the seat belt defense is proper only when it has been established by competent evidence that there is a direct, causal connection between plaintiff's failure to use a seat belt and his injuries. See also Kassela v. Stonitsch (1978), 57 Ill. App.3d 817, 821-22, 373 N.E.2d 608, 612; Dudanas v. Plate (1976), 44 Ill. App.3d 901, 904, 358 N.E.2d 1171, 1174-75, appeal denied (1977), 65 Ill.2d 581; Eichorn v. Olson (1975), 32 Ill. App.3d 587, 592-93, 335 N.E.2d 774, 778.
The issues of defendant's liability and plaintiff's injuries are questions *272 which must be considered separately. To consider them as one question with a single answer determined, in part, by whether or not plaintiff wore a seat belt is error. Failure to wear seat belts cannot, as a matter of law, constitute contributory negligence. (See Old Second National Bank v. Baumann (1980), 86 Ill. App.3d 547, 408 N.E.2d 224, appeal denied (1980), 79 Ill.2d 632.) If competent evidence has established that plaintiff failed to wear an available seat belt and that a causal connection existed between nonuse and plaintiff's injuries, then an instruction limiting the use of that evidence must be submitted to the jury. (Dudanas v. Plate (1976), 44 Ill. App.3d 901, 908-09, 358 N.E.2d 1171, 1178, appeal denied (1977), 65 Ill.2d 581.) It makes no logical difference whether plaintiff or defendant seeks the instruction as evidence admitted in trial is available for all purposes to every party. Morris v. Central West Casualty Co. (1932), 351 Ill. 40, 47, 183 N.E. 595, 598; Dudanas v. Plate (1976), 44 Ill. App.3d 901, 909, 358 N.E.2d 1171, 1178, appeal denied (1977), 65 Ill.2d 581.
In the case at bar the jury was left to speculate as to the application of this evidence and could well have been confused in reaching its verdict. The trial judge, relying upon representations of defendant's counsel, also erroneously understood that absence of seat belts could be considered as to contributory negligence. In these circumstances the failure to give plaintiff's tendered instruction as it related to seat belts requires reversal. People v. Lyden (1981), 97 Ill. App.3d 540, 542; County of Cook v. Patka (1980), 85 Ill. App.3d 5, 15, 405 N.E.2d 1376, 1382.
In view of our determination of these issues we will address plaintiff's further contentions only to the extent necessary to avoid error on retrial.
3 Plaintiff argues that the trial court erred in refusing his motion to strike the evidence relating to the absence of a door on the plaintiff's vehicle. As offered in this case, defendant apparently seeks to extend the seat belt doctrine, as a factor in mitigation of damages, to the condition of the vehicle in which plaintiff was riding. Defendant's counsel offers no authority for such extension and in oral argument acknowledged he knew of none. Nor are we aware of any basis upon which that evidence could properly be considered as to the issues of liability or damages in this case.
4 Plaintiff next contends the trial court erred in giving defendant's instruction No. 16 relating to speeding and patterned on section 11-601(a) of the Illinois Vehicle Code (Ill. Rev. Stat. 1979, ch. 95 1/2, par. 11-601(a)), arguing there was no credible evidence he was speeding. *273 Credibility was to be determined by the jury, and as both defendant and another witness testified plaintiff's speed was excessive, the instruction was properly given.
We conclude the errors in trial require that the judgment of the circuit court be reversed and the cause remanded for a new trial.
Reversed and remanded.
REINHARD and VAN DEUSEN, JJ., concur.
| {
"pile_set_name": "FreeLaw"
} |
962 A.2d 529 (2008)
197 N.J. 258
BRUNSON
v.
AFFINITY FEDERAL CREDIT UNION.
C-439 September Term 2008, 63, 271
Supreme Court of New Jersey.
December 4, 2008.
Petition for certification. Granted.
| {
"pile_set_name": "FreeLaw"
} |
COURT OF APPEALS FOR THE
FIRST DISTRICT OF TEXAS AT HOUSTON
ORDER
Appellate case name: Raul Adam Trevino v. State of Texas
Appellate case numbers: 01-13-00246-CR
01-13-00247-CR
01-13-00248-CR
01-13-00249-CR
Trial court case numbers: 683652
9416330
9425377
9425398
Trial court: 209th District Court of Harris County
Date motions filed: August 12, 2013 and September 3, 2013
Party filing motion: Appellant
The 2nd motion for extension of time to file for rehearing filed by appellant on August 12,
2013, is dismissed as moot.
It is ordered that the motion for rehearing is denied.
Judge’s signature:/s/ Harvey Brown
Acting for the Court
Panel consists of: Justices Jennings, Sharp, and Brown
Date: September 17, 2013
| {
"pile_set_name": "FreeLaw"
} |
STATE OF WEST VIRGINIA
FILED
SUPREME COURT OF APPEALS June 27, 2014
RORY L. PERRY II, CLERK
SUPREME COURT OF APPEALS
ALLEN L. MCCLURE, OF WEST VIRGINIA
Claimant Below, Petitioner
vs.) No. 13-0392 (BOR Appeal No. 2047900)
(Claim No. 2009075515)
BLUESTONE COAL COMPANY,
Employer Below, Respondent
MEMORANDUM DECISION
Petitioner Allen L. McClure, by Reginald D. Henry, his attorney, appeals the decision of
the West Virginia Workers’ Compensation Board of Review. Bluestone Coal Company, by Lisa
A. Warner Hunter, its attorney, filed a timely response.
This appeal arises from the Board of Review’s Final Order dated March 21, 2013, in
which the Board affirmed a November 7, 2012, Order of the Workers’ Compensation Office of
Judges. In its Order, the Office of Judges affirmed the claims administrator’s May 19, 2011,
decision which denied a request to add lumbar sprain as a compensable component of the claim.
In its Order, the Office of Judges also reversed the claims administrator’s June 8, 2011, decision
which granted Mr. McClure a 4% permanent partial disability award. The Court has carefully
reviewed the records, written arguments, and appendices contained in the briefs, and the case is
mature for consideration.
This Court has considered the parties’ briefs and the record on appeal. The facts and legal
arguments are adequately presented, and the decisional process would not be significantly aided
by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision is appropriate under Rule 21 of the Rules of Appellate
Procedure.
Mr. McClure, a coal miner, was injured on January 14, 2009, when the man trip he was
operating struck a coal rib. Treatment notes from Welch Community Hospital indicate Mr.
McClure injured his neck, back, and left wrist. His claim was thereafter held compensable for
neck sprain/strain, thoracic sprain/strain, and contusion of the wrist.
1
Yogesh Chand, M.D., performed an independent medical evaluation of Mr. McClure on
March 3, 2011, in which he assessed 4% impairment for the left wrist. He opined that he was
unable to rate the neck and thoracic spine at that time due to pain. A second independent medical
evaluation was performed by Bruce Guberman, M.D., on August 2, 2011. Dr. Guberman
diagnosed acute and chronic cervical and thoracic spine sprains/strains and chronic post-
traumatic strain of the left wrist with persistent range of motion abnormalities. Dr. Guberman
noted that Mr. McClure reported that he injured his lumbar spine on January 14, 2009, as well.
For the lower back, Dr. Guberman diagnosed acute and chronic lumbosacral strain. He noted that
there were range of motion restrictions in the cervical, thoracic, and lumbar spines as well as in
the left wrist. Mr. McClure was determined to be at maximum medical improvement and in no
further need of treatment. Dr. Guberman assessed 6% cervical spine impairment, 5% thoracic
spine impairment, and 7% impairment for the left wrist for a combined total of 17% impairment.
A third and final independent medical evaluation was conducted by Prasadarao
Mukkamala, M.D., on April 30, 2012. At that time, Mr. McClure complained of pain in his neck
with radiation into both arms and pain in his mid-back. Dr. Mukkamala noted previous injuries
to the neck and lower back. He diagnosed cervical sprain, thoracic sprain, and contusion of the
left wrist. Dr. Mukkamala opined that Mr. McClure did not injure his lower back at the time of
his compensable injury. When asked about his injuries, Mr. McClure indicated he injured his
cervical and thoracic spines. He was found to be at maximum medical improvement and capable
of returning to work. Dr. Mukkamala assessed 5% impairment for the cervical spine, 0% for the
thoracic spine, and 4% for the left wrist. Additionally, he opined that Dr. Guberman’s cervical
impairment calculations were incorrect because he failed to make an adjustment for West
Virginia Code of State Rules § 85-20 (2006).
The claims administrator denied a request to add lumbar sprain as a compensable
component of the claim on May 19, 2011. On June 8, 2011, it granted Mr. McClure a 4%
permanent partial disability award for the left wrist. The Office of Judges affirmed the claims
administrator’s May 19, 2011, decision. It reversed the June 8, 2011, decision and awarded Mr.
McClure a 9% permanent partial disability award representing 4% for the left wrist and 5% for
the thoracic spine.
The Office of Judges found that a preponderance of the evidence shows that Mr. McClure
did not sustain a lumbar sprain as the result of his work-related injury. Dr. Chand found a long
history of lower back problems dating back to a workers’ compensation claim twenty-five years
prior. The lower back was not mentioned in the records on the date of the accident from Welch
Community Hospital. Also, Drs. Mukkamala and Chand both opined that Mr. McClure did not
injure his lower back as a result of his January 14, 2009, accident.
The Office of Judges held that Mr. McClure sustained 4% permanent impairment to his
left wrist as a result of his work-related injury. The opinions of Drs. Chand and Mukkamala were
found to be persuasive because their range of motion evaluations were substantially in
agreement. Dr. Guberman’s left wrist range of motion testing was found to represent a
significant variance in comparison and his report was therefore found to be less persuasive.
2
The Office of Judges determined that Mr. McClure sustained 5% permanent impairment
to his thoracic spine. It found that the reports of Drs. Mukkamala and Guberman were the most
relevant to the issue because Dr. Chand was unable to measure thoracic range of motion due to
pain. Dr. Mukkamala found 0% impairment and therefore declined to use Table 75 of the
American Medical Association’s Guides to the Evaluation of Permanent Impairment, (4th
Edition, 1993). Dr. Guberman found 2% impairment and thus utilized Table 75 to arrive at an
impairment rating of 5%. The Office of Judges determined that the decision of whether or not to
use Table 75 represented a reasonable difference of professional opinion and the two reports
therefore deserve equal evidentiary weight. Per West Virginia Code § 23-4-1g(a) (2003), the
issue was resolved in the manner most consistent with the claimant’s position and Dr.
Guberman’s report was therefore found to be persuasive. His recommendation of 5% impairment
was found to correlate with West Virginia Code of State Rules § 85-20-Table D (2006).
For the cervical spine, the Office of Judges determined that Dr. Mukkamala’s findings
were the most persuasive. It found that there was disagreement between Dr. Mukkamala and Dr.
Guberman regarding the point at which adjustment for prior permanent partial disability awards
is to be made. Dr. Mukkamala made the adjustment after arriving at a final impairment rating
and Dr. Guberman made the adjustment from his range of motion recommendation prior to the
application of West Virginia Code of State Rules § 85-20-Table E (2006). The Office of Judges
held that Dr. Mukkamala’s adjustment was more compatible with the regulations set forth in
West Virginia Code of State Rules §§ 85-20-64.4 (2006) and 85-20-64.1 (2006). Dr. Mukkamala
assessed 5% permanent partial disability and Mr. McClure was therefore found to have been
fully compensated by his prior 8% cervical permanent partial disability awards.
The Board of Review adopted the findings of fact and conclusions of law of the Office of
Judges and affirmed its Order in its March 21, 2013, decision. This Court agrees with the
reasoning and conclusions of the Board of Review.
For the foregoing reasons, we find that the decision of the Board of Review is not in clear
violation of any constitutional or statutory provision, nor is it clearly the result of erroneous
conclusions of law, nor is it based upon a material misstatement or mischaracterization of the
evidentiary record. Therefore, the decision of the Board of Review is affirmed.
Affirmed.
ISSUED: June 27, 2014
CONCURRED IN BY:
Chief Justice Robin J. Davis
Justice Brent D. Benjamin
Justice Menis E. Ketchum
Justice Allen H. Loughry II
DISSENTING:
Justice Margaret L. Workman
3
| {
"pile_set_name": "FreeLaw"
} |
185 B.R. 247 (1995)
In re Bill N. COLBERT, Debtor.
Bill N. COLBERT, Plaintiff,
v.
Rachel Nadine Crick COLBERT, Defendant.
Bankruptcy No. 94-08072-AT3-7, Adv. No. 394-0446A.
United States Bankruptcy Court, M.D. Tennessee.
August 11, 1995.
*248 Andrew D. Dunn, Nashville, TN, for debtor/plaintiff.
John J. Hollins, Jr., Nashville, TN, Margaret L. Behm, Nashville, TN, for defendant.
MEMORANDUM
ALETA ARTHUR TRAUGER, Bankruptcy Judge.
This matter was tried on June 8, 1995, at which time the court held that certain obligations imposed upon the debtor in his divorce decree were nondischargeable pursuant to 11 U.S.C. §§ 523(a)(5) and (a)(15). The court reserved for further briefing the question of whether defendant was entitled to an award of attorney fees incurred by her in this proceeding pursuant to T.C.A. § 36-5-103(c). The court now holds that it does not have the authority to award fees to the prevailing defendant in this action. The following constitute findings of fact and conclusions of law. Fed.R.Bankr.P. 7052.
Defendant bases her claim to fees upon T.C.A. § 36-5-103(c), which provides in pertinent part:
The plaintiff spouse may recover from the defendant spouse . . . reasonable attorney fees incurred in enforcing any decree for alimony and/or child support . . . both upon the original divorce hearing and at any subsequent hearing, which fees may be fixed and allowed by the court, before whom such action or proceeding is pending, in the discretion of such court.
Defendant argues that she is entitled to her fees incurred in defending this dischargeability action because the fees were incurred in "enforcing a decree for alimony" in a "subsequent hearing," as contemplated by the statute.
The Bankruptcy Code does not specifically authorize fee awards to prevailing creditors in § 523 actions. The general rule is that, absent a federal statute or enforceable contract providing for fees, each party must bear his or her own attorney fees. Alyeska Pipeline Service v. Wilderness Society, 421 U.S. 240, 257, 95 S.Ct. 1612, 1621, 44 L.Ed.2d 141 (1975). The only authorization for fees in dischargeability actions appears in § 523(d), which permits fees to prevailing debtors in § 523(a)(2) actions on consumer debts, where the creditor's position was not substantially justified. Under the well-established principle of statutory interpretation expressio unius est exclusio alterius,[1] the inclusion of § 523(d) indicates a congressional intent that each party bear his or her own litigation costs in all other dischargeability actions. See Matter of Myers, 61 B.R. 891, 896 (Bankr.N.D.Ga.1986).
Defendant argues that In re Martin, 761 F.2d 1163 (6th Cir.1985), authorizes payment of her fees in this case. In Martin, a § 523(a)(2) case, the Sixth Circuit held that a contractual right to attorney fees in a promissory note provided a basis for awarding fees, despite the lack of specific Code authority therefor. The court reasoned that the attorney fees were part of the underlying debt, the whole of which was excepted from discharge under § 523(a)(2)(B). Id. at 1168. The court further noted, however, that "[p]revailing creditors still have no statutory right to attorney's fees, and if they have a contractual right, it must be assumed that they gave value for that right at the time credit was advanced." Id.
*249 This court finds that Martin is inapplicable in the instant case. The basis for awarding fees in that case was a contractual right, which the Supreme Court specifically recognized as an exception to the general rule. See Alyeska Pipeline, 421 U.S. at 257, 95 S.Ct. at 1621. In this case, there is no contractual right to fees, only a state statutory right. Defendant asserts that the state statute is comparable to a contractual right under Martin, but this ignores the elements of bargaining and giving value to which the Martin court gave special weight. The court therefore declines to extend the Martin holding to include state fee award statutes.
Defendant also relies on In re Scannell, 60 B.R. 562 (Bankr.W.D.Wis.1986), to overcome the lack of Code authority for fees. The Scannell court analogized § 523 actions to federal diversity cases, in which the rule is that "so long as no federal law expressly prohibits fees, a state law creating a right to attorney fees, which reflects a substantial state policy, should be followed." Id. at 567 (citing Sioux County v. National Surety Co., 276 U.S. 238, 241-44, 48 S.Ct. 239, 239-41, 72 L.Ed. 547 (1928)). The court found that a state statute permitting attorney fees in "actions affecting the family" reflected an established state policy and there was no federal prohibition on fees, so an award of fees was appropriate. Id.
This court declines to follow the Scannell court's reasoning. Unlike federal diversity cases, where state law controls the substantive aspects of the decision, a dischargeability action is a unique creation of federal bankruptcy law. In re Barbre, 91 B.R. 846, 848 (Bankr.S.D.Ill.1988). The Supreme Court has specifically recognized this distinction, contrasting the general federal rule of no fees in the absence of contractual or federal statutory authority with the "very different situation" presented by diversity cases. Alyeska Pipeline, 421 U.S. at 259 n. 31, 95 S.Ct. at 1623 n. 31 (citing, inter alia, Sioux County, supra). Scannell is therefore unpersuasive to this court.
The court likewise declines to follow In re Teter, 14 B.R. 434 (Bankr.N.D.Tex.1981), relied upon by defendant. Teter involved a marital dissolution agreement executed by the parties and a state statute providing for fees in "suits founded on oral or written contracts." Id. at 437. The Colbert divorce was contested. Therefore, there was no settlement agreement and no state statute which might grant fees based on the contractual nature of such an agreement. Further, the Teter court based its decision primarily on cases holding that attorney fees awarded by the state court in a divorce proceeding are nondischargeable support. The court extrapolated from those cases a general policy that, when the underlying liability is created by state law, "state law should control" on the issue of attorney fees as well. Id. The court did not cite any other authority, nor did it even attempt to deal with the lack of Code authorization for such fees. This court, therefore, finds Teter unpersuasive.
Aside from the lack of Code authority, a bankruptcy court is simply not the proper court to make an award of attorney fees in this type of case. As defendant acknowledges, Tennessee law has long treated an award of attorney fees related to a divorce action as alimony. See Raskind v. Raskind, 45 Tenn.App. 583, 325 S.W.2d 617, 625 (1959); Humphreys v. Humphreys, 39 Tenn. App. 99, 281 S.W.2d 270, 282 (1954); see also In re Paulson, 27 B.R. 330, 333 (Bankr. W.D.Tenn.1983) (fees awarded by state court for post-divorce, pre-bankruptcy enforcement action were in the nature of support). The right to fees is not absolute, but "is conditioned upon [the spouse's] lack of resources to prosecute or defend a suit in good faith." Fox v. Fox, 657 S.W.2d 747, 749 (Tenn.1983).
Because the award of fees is thus "uniquely related to state court support determinations," the decision as to whether such an award is appropriate and, if so, the amount of the award, should be left to the state court. Barbre, 91 B.R. at 849. While the bankruptcy court determines whether an obligation imposed initially by the state court is dischargeable, the bankruptcy court is simply not authorized to award support in the first instance. See id.; In re Shearer, 124 B.R. 862, 864 (Bankr.N.D.Fla.1990); Matter of Myers, 61 B.R. 891 (Bankr.N.D.Ga.1986); In re Lathouwers, 54 B.R. 205 (Bankr. D.Colo.1985); see also In re Calhoun, 715 F.2d 1103, 1107 (6th Cir.1983) ("[t]he federal bankruptcy courts are obviously not empowered to create an obligation to support where it did not previously exist").
*250 Defendant argues that this reasoning is inapplicable in the Sixth Circuit because Calhoun authorizes the bankruptcy court to "determine support" by inquiring into the "present needs" of the nondebtor spouse and the reasonableness of the award amount.[2] Further, defendant asserts, after the 1994 amendments to § 523, bankruptcy courts in all circuits are authorized to award support based on the new § 523(a)(15), which permits the bankruptcy court to determine the debtor's ability to pay and balance the benefit to the debtor against the detriment to the nondebtor spouse.[3]
While these authorities do permit some inquiry into the parties' current financial circumstances, they do not authorize an increase in the underlying support award itself. Calhoun specifically recognizes that "[d]ivorce, alimony, support and maintenance are issues within the exclusive domain of the state courts." 715 F.2d at 1107. The inquiries contemplated by Calhoun and § 523(a)(15) are simply to determine what portion of the award already made in state court is nondischargeable, not to award additional support or create new, nondischargeable debt. If defendant needs additional support due to the financial burdens of this litigation, she may seek modification of her divorce decree in the state court. See In re Beattie, 150 B.R. 699, 704 (Bankr.S.D.Ill. 1993); Barbre, 91 B.R. at 849; Myers, 61 B.R. at 896; Fortner v. Fortner, 631 So.2d 327 (Fla.Ct.App.1994).
For all of the above reasons, the court concludes that it is not authorized to award attorney fees to the defendant in this case. Any award of attorney fees must come from the state court.[4]
NOTES
[1] "The expression of one thing is to the exclusion of the other." See In re Michigan-Wisconsin Transportation Co., 161 B.R. 628, 635 (Bankr. W.D.Mich.1993). This principle has been specifically recognized by the Supreme Court. See, e.g., Tennessee Valley Authority v. Hill, 437 U.S. 153, 188, 98 S.Ct. 2279, 2298, 57 L.Ed.2d 117 (1978); National Railroad Passenger Corp. v. National Association of Railroad Passengers, 414 U.S. 453, 458, 94 S.Ct. 690, 693, 38 L.Ed.2d 646 (1974).
[2] Calhoun employed a four part test to determine whether obligations to assume marital debts which were not specifically denominated as alimony or support in the divorce decree or settlement agreement were actually support for purposes of § 523(a)(5): The court must determine:
1) whether the state court or the parties to a settlement agreement intended to create a support obligation;
2) whether the debt assumption has the actual effect of providing necessary support;
3) whether the amount of support is "not so excessive that it is manifestly unreasonable under traditional concepts of support; and
4) if the amount is unreasonable, what portion should be nondischargeable.
715 F.2d at 1109-10. The Sixth Circuit has subsequently stated that the second element, the so-called "present needs" test, "has been applied more broadly than intended," and emphasized that "Calhoun was not intended to intrude into the states' traditional authority over domestic relations. . . ." In re Fitzgerald, 9 F.3d 517, 520-21 (6th Cir.1993).
[3] Section 523(a)(15) excludes from discharge any debt not covered by 523(a)(5) which was incurred in a divorce or separation, unless
(A) the debtor does not have the ability to pay such debt from income or property of the debtor not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor . . .; or
(B) discharging such debt would result in a benefit to the debtor that outweighs the detrimental consequences to a spouse, former spouse, or child of the debtor.
[4] The state court has concurrent jurisdiction with the bankruptcy court to determine questions of nondischargeability under § 523(a)(5). In re Hohenberg, 143 B.R. 480, 483 (Bankr.W.D.Tenn. 1992). Thus, if the state court decides to award attorney fees to defendant under T.C.A. § 36-5-103(c), it may also rule on the dischargeability of those fees and save the parties a potential return to this court for that determination.
| {
"pile_set_name": "FreeLaw"
} |
151 P.3d 428 (2006)
James D. BLOOD, Appellant,
v.
KENNETH A. MURRAY INSURANCE, INC., and Progressive Insurance Companies, Appellees.
Kenneth A. Murray Insurance, Inc., Cross-Appellant,
v.
James D. Blood, Cross-Appellee.
Nos. S-11733, S-11763.
Supreme Court of Alaska.
December 22, 2006.
*429 Robert John, Law Office of Robert John, and Ward Merdes, Merdes & Merdes, P.C., Fairbanks, for Appellant and Cross-Appellee Blood.
Michael C. Kramer, Cook Schuhmann & Groseclose, Inc., Fairbanks, for Appellee and Cross-Appellant Kenneth A. Murray Insurance, Inc.
Aisha Tinker Bray, Guess & Rudd, P.C., Fairbanks, for Appellee Progressive Insurance Companies.
Susan Orlansky, Feldman Orlansky & Sanders, Anchorage, Richard A. Hodyl, Jr., Meckler Bulger & Tilson LLP, Chicago, for Amicus Curiae Property Casualty Insurers Association of America.
Before: BRYNER, Chief Justice, MATTHEWS, EASTAUGH, and FABE, Justices.
OPINION
MATTHEWS, Justice.
I. INTRODUCTION
This appeal follows a jury trial to determine whether James Blood's automobile insurance coverage remained in effect, despite his failure to pay premiums, because the insurer sent notice of termination to the wrong address. The jury returned a verdict in favor of the insurer after concluding (1) that the insurer had not met its obligation to notify Blood but (2) that the failure did not cause Blood's lack of coverage. The parties ask us to review whether the insurer's efforts to notify were examined under the proper legal standard and whether it was error to include causation as an element of Blood's claim. We conclude that the jury was instructed on the wrong legal standard, but that the insurer satisfied its notice obligations as a matter of law. We therefore affirm the judgment without considering the causation issue.
II. FACTS AND PROCEEDINGS
This case is here for the second time. The following statement of facts is taken largely from our prior opinion, Blood v. Kenneth Murray Insurance, Inc. (Blood I).[1]
James Blood purchased an automobile liability insurance policy from Kenneth A. Murray Insurance, Inc. (KMI), on March 28, 1996. Progressive Insurance Company issued the policy. The policy term was six months. "Blood did not pay the renewal premium on his policy, and Progressive sent three termination-of-coverage notices to him at the address in Progressive's files. Blood no longer lived at that address, and the letters were returned undelivered. Although Progressive mailed the notices, they were returned to KMI."[2] The policy expired by its terms on September 28, 1996. On November 4, 1996, Blood appeared in person at KMI's office and renewed the lapsed policy for another six-month term. Blood prepaid the premium for this new term. On March 13, 1997, and April 20, 1997, Progressive sent *430 Blood notices that his coverage would expire on May 5, 1997, and that in order to renew his coverage he would have to submit renewal premiums by that date. On May 5, 1997, Progressive sent Blood a notice that his coverage was terminated effective May 16, 1997. These notices were sent to Blood at the address in Progressive's files, which was Blood's old address. These notices were returned to KMI marked "undeliverable."
On August 2, 1997, Blood "was injured in an automobile accident while riding in a car driven by an uninsured driver."[3] He filed a claim against Progressive and demanded arbitration under the uninsured motorist coverage of his then-lapsed insurance policy. Progressive denied the claim on the ground that Blood's coverage under the policy ended before the accident because he did not pay the renewal premium.[4] Progressive denied the arbitration request on the theory that "arbitration only applied to liability and damages issues, not coverage disputes."[5]
Blood then filed suit against Progressive and KMI seeking a declaration of coverage and an award of damages. Blood argued that he was covered by the insurance policy at the time of the accident because "KMI was negligent in failing to use reasonable efforts to obtain his `last known address,' and that therefore Progressive's attempts to cancel his policy for non-payment under AS 21.36.220[[6]] [or AS 21.36.240,[7]] and AS 21.36.260[[8]] were ineffective."[9] Although the complaint sought damages, Blood's counsel ultimately took the position that he wanted only a declaration of coverage so that he could proceed to arbitration on his damages claims.[10] Blood moved for summary judgment on the coverage issue, arguing (1) that KMI had a duty to exercise reasonable care and diligence when notifying him, as the insured, of termination of coverage[11] and (2) that KMI breached its duty as a matter of law because it had three pieces of returned mail in its files when it mailed Blood's termination notice to the same address. Without ruling on the validity of Blood's duty theory, the superior court denied his summary judgment motion on the ground that factual issues remained as to whether such a duty was breached.
Next, Progressive and KMI argued that Blood waived his right to arbitration on his damages claims because he filed a lawsuit seeking damages and indicated an intention to litigate damages up until the day of trial.[12] The superior court agreed and held that Blood had to prove his damages in court.[13] "Blood's counsel responded that he was `not prepared to present a damages case,'" and so the court dismissed the case, noting that Blood could not prevail if he could not prove damages.[14]
*431 Blood appealed, and in Blood I we concluded that Blood did not waive his right to arbitrate, but we affirmed the superior court's denial of Blood's summary judgment motion on the coverage issue because material issues of fact remained in dispute.[15] We therefore remanded the case "for further proceedings, including trial on the coverage issue."[16]
In the resulting coverage trial, the superior court ruled on the duty question as follows. First, the court found that KMI satisfied its statutory duty, meaning that notices of nonrenewal and cancellation were mailed to Blood to his last known address as required by AS 21.36.260. Second, the court concluded that KMI also owed a separate, non-statutory, duty to "exercise reasonable care, skill, and diligence to inform the insured of termination of coverage." Whether KMI satisfied this second duty was a question for the jury, which was instructed that "[u]nder Alaska law, an insurance agent may terminate an insurance policy only by mailing notice to the last known address of the insured. It is also required by Alaska law that the insurance agent exercise reasonable care, skill and diligence to inform the insured of termination of coverage." "In order to prevail in this lawsuit, Mr. Blood must show not only that [KMI] breached a duty owed to him, but also that the breach was a `legal cause' of harm to him."
The jury returned a special verdict, finding that KMI failed "to exercise reasonable care, skill, and diligence to inform [Blood] of termination of coverage," but that the failure was not a legal cause of harm to Blood. The superior court entered judgment in favor of KMI and Progressive.
Blood appeals and argues that causation should not have factored into whether KMI's breach of its non-statutory duty to provide notice of terminated coverage resulted in his continued coverage under the policy. Instead, he claims that KMI's breach, alone, establishes continued coverage. Blood also argues that KMI did not meet its separate obligations under AS 21.36.260. KMI's cross-appeal contends that an insurer does not owe a non-statutory duty of due diligence to inform an insured of terminated coverage, and so the jury was improperly instructed on that point.
III. DISCUSSION
We conclude that the superior court erred by imposing a non-statutory duty of care and due diligence to inform the insured of terminated coverage and therefore do not reach Blood's argument that the court erred by including causation as an element in his claim for breach of such a duty. Because we also conclude that the superior court properly found KMI to have satisfied its statutory notice obligations, we affirm the judgment in favor of KMI and Progressive.[17]
A. KMI Met Its Statutory Notice Obligations.
Alaska Statute 21.36.220 requires an insurer to notify an insured before terminating *432 coverage or failing to renew a policy.[18] According to AS 21.36.260, notice under .220 or .240 is ineffective unless the insurer "(1) mail[s] the notice by first class mail to the last known address of the insured; and (2) obtain[s] a certificate of mailing from the U.S. Postal Service." The superior court found KMI to have substantially complied with section .260 as a matter of law. We affirm this decision because the evidence is such that no other decision is reasonably possible.[19]
Blood does not dispute that Progressive mailed several notices to his former address. Progressive mailed each notice via first class mail. The first two notices indicated that Blood's policy would lapse if payment was not received before May 5, 1997. The third, mailed May 5, stated that his coverage was terminated effective May 16. Although Progressive sent these notices to an address at which Blood no longer resided, Blood admits that it was the only address he ever provided to KMI or Progressive. On these facts, the requirement that notice of cancellation or nonrenewal be mailed to Blood's last known address has plainly been satisfied.
Alaska Statute 21.36.260(2) also requires an insurer to obtain a certificate of mailing, and KMI appears not to have complied with this subsection. KMI offered no proof at the coverage trial of having obtained a certificate of mailing. Blood contends that the missing certificate renders KMI's termination of his insurance ineffective. But, again, Blood does not dispute that Progressive mailed notice to him at his old address. The returned letters were introduced as evidence in the first trial and are in the record before us. A certificate of mailing from the U.S. Postal Service serves only as proof of mailing. When, as here, returned mail directly establishes that an insurer has mailed notice, the purpose of AS 21.36.260(2)establishing proof of mailingis accomplished. In this circumstance compliance with the certificate of mailing requirement may be excused.[20] To hold otherwise would be to put form over substance.
For these reasons, we affirm the superior court's conclusion that KMI substantially complied with the notice requirements under AS 21.36.260.
B. The Superior Court Erred by Holding KMI to a Separate Duty of Care.
The superior court's conclusion that an insurer must satisfy a duty to "exercise reasonable care" that is separate from AS 21.36.260 resulted from an inference the court drew from our first opinion. Noting Blood's legal theory, we said that "Blood relies on Jefferson v. Alaska 100 Insurance., Inc.[[21]] in arguing that an insurance agent has a `duty to exercise reasonable care, skill, and diligence . . . to inform the insured of termination of coverage.'"[22] On remand, the superior court concluded that we agreed with Blood's theory. But because in Blood I the superior court had denied Blood's summary judgment motion due to disputed material facts, the validity of his legal theory was not an issue before us. Instead of ruling on it, we said that "[e]ven if Blood is correct that KMI and Progressive owed him such a *433 duty, there remains the question whether the defendants exercised due diligence."[23]
According to Blood, the superior court's mistaken belief that Blood I imposes an extra duty of care is harmless because the duty can be found elsewhere in our case law. He renews his argument from Blood I that Jefferson imposes a "duty to exercise reasonable care, skill, and diligence . . . to inform the insured of termination of coverage."[24] But this reading of Jefferson conflates the two duties discussed in that case. We noted in Jefferson that an insurer's "duty to use reasonable diligence to procure insurance is coupled with an equally important duty to inform the insured of cancellation."[25] The two duties are distinct. And while the duty to procure insurance requires "reasonable diligence," Jefferson does not state or imply that the duty to inform the insured of cancellation requires more than compliance with AS 21.36.260.[26]
Blood relies on Rosenberg v. Smidt,[27] as an alternative source for the extra duty of care. In that case, we considered the phrase "last known address" as it is used in AS 34.20.070(c),[28] which requires a deed of trust trustee to mail notices of default to the last known addresses of certain interested parties before a nonjudicial foreclosure sale of real estate. In Rosenberg the owners of real estate scheduled for a foreclosure sale did not receive notice mailed to their former address.[29] They sued and argued that subsection .070(c) required an affirmative effort on the part of the trustee to determine their correct address.[30] We agreed, holding that under AS 34.20.070(c) "the last known address is that address most likely to give the affected party notice. The trustee is obligated to exercise due diligence to determine that address. Failure to impose such a requirement," we reasoned, "would not balance adequately the competing interests involved."[31]
Blood argues that Rosenberg's definition of "last known address" applies to that phrase as it is used in AS 21.36.260.[32] Under this theory, KMI was bound to both follow the specific terms of section .260, and satisfy an extra duty to use reasonable care and due diligence to determine Blood's correct address. But we reject the argument because real estate deed of trust foreclosures are not comparable to the termination or nonrenewal of liability insurance policies.
As we noted in Rosenberg, the law generally regards real estate forfeitures to be abhorrent "and will seize upon slight circumstances to relieve a party therefrom."[33] No similar doctrine attends the cancellation or nonrenewal of policies of insurance, especially for nonpayment of premiums. Relatedly, the equity of the owner of real property that is subject to a deed of trust is often substantial. By contrast, the insured under a liability insurance policy typically has received what he has paid for, and stands to lose no equity interest. Moreover, the owner of real estate, as in Rosenberg, may not actually be in default and thus may have no notice that a foreclosure will occur. But the insured is typically aware that his insurance will terminate when premiums are not paid, even without notice from the insurer. In addition, a long period of time often passes between the execution of a deed of trust, or the establishment of subordinate interests to property subject to a deed of trust, and a deed of trust foreclosure. Thus it is to be anticipated that the addresses of owners and other parties in interest will have changed and addresses on file may not be accurate. This is much less *434 likely to be the case with respect to liability insurance where policies are typically issued on an annual or semi-annual basis. Further, compared to cancellation or nonrenewal of liability insurance policies, a nonjudicial foreclosure of real estate under a deed of trust is a relatively rare event. Requiring insurers to track down the new addresses of its insured would impose a significant burden on a routine transaction, whereas real estate foreclosures are much less routine. For these reason we decline to extend the holding of Rosenberg to notices required under AS 21.36.260.
Our conclusion on this point renders Blood's causation arguments moot. Because we hold that KMI owed no separate duty of care, we need not consider whether it was appropriate for the superior court to instruct the jury that coverage could only be found if a breach of that duty caused Blood's loss of coverage.
IV. CONCLUSION
The coverage trial in this case proceeded under an erroneous legal theory because the superior court held KMI to a non-statutory duty that does not exist. Yet because the jury returned a verdict in favor of KMI and we conclude that KMI met its notice obligations under AS 21.36.260, we AFFIRM the judgment below.
NOTES
[1] 68 P.3d 1251 (Alaska 2003).
[2] Id. at 1253.
[3] Id.
[4] Id.
[5] Id.
[6] AS 21.36.220 prevents an insurer from cancelling insurance without first giving notice to the insured. It provides in relevant part:
(a) An insurer may not exercise its right to cancel a personal insurance policy unless, for a named insured who is
(1) less than 70 years of age, a written notice of cancellation is mailed to the named insured as required by AS 21.36.260 at least 30 days before the effective date of cancellation; however, if cancellation is for nonpayment of premium, the notice shall be mailed to the named insured as required by AS 21.36.260 at least 20 days before the effective date of cancellation. . . .
[7] AS 21.36.240 requires an insurer to notify the insured when insurance will not be renewed. It provides in relevant part: "An insurer may not fail to renew a policy unless a written notice of nonrenewal is mailed to the named insured as required by AS 21.36.260 at least 20 days for a personal insurance policy . . . before the expiration date of the policy. . . ."
[8] AS 21.36.260 reads as follows: "If a notice is required from an insurer under this chapter, the insurer shall (1) mail the notice by first class mail to the last known address of the insured; and (2) obtain a certificate of mailing from the U.S. Postal Service."
[9] Blood I, 68 P.3d at 1253.
[10] Id.
[11] Id. at 1258.
[12] Id. at 1253.
[13] Id. at 1254.
[14] Id.
[15] Id. at 1257.
[16] Id. at 1258.
[17] In this appeal Blood also attacks some of the superior court's evidentiary rulings in the coverage trial. Our conclusion that the superior court erred by imposing a non-statutory duty in this case renders the coverage trial superfluous because it was conducted exclusively to determine whether KMI breached the non-statutory duty. We therefore reach no conclusion on Blood's evidentiary claims.
Blood also argues that "AS 28.20.440(d) requires that Progressive and KMI have obtained James Blood's current address" upon renewal of his policy. But since he did not raise this point in the superior court on remand, as by requesting a jury instruction or moving for a directed verdict, it has been waived. Willoya v. State, Dep't of Corrections, 53 P.3d 1115, 1120 (Alaska 2002). Citing Sea Lion Corp. v. Air Logistics of Alaska, 787 P.2d 109, 115 (Alaska 1990), Blood also argues that the point should be reviewed because it is "closely related to . . . the address and notice issues actually litigated and presents an issue of law not dependent on any new or controverted facts." But the issue is not merely one of law; instead, it requires resolution by a jury. As we observed in Blood I, "assuming a jury could find that KMI was negligent for failing to ask for Blood's new address, we cannot hold that a jury could only reach this result." 68 P.3d at 1258. Thus Blood's Sea Lion Corp. argument lacks merit.
[18] AS 21.36.220(a). There is some dispute between the parties as to whether KMI terminated Blood's insurance policy or simply failed to renew the policy. Yet the distinction makes no difference here because AS 21.36.260 applies whenever "notice is required from an insurer under [AS 21.36]" and therefore sets the same requirements regardless of whether notice is due under AS 21.36.220 for terminated insurance or AS 21.36.240 for non-renewed insurance.
[19] See Bennett v. Hedglin, 995 P.2d 668, 672 (Alaska 2000) (noting that courts may decide facts as a matter of law "when `the evidence is such that there can be no reasonable difference of opinion.'") (quoting Ruhlig v. American Cmty. Mut. Ins. Co., 696 N.E.2d 877, 880 (Ind.App. 1998)).
[20] See Travelers Indem. Co. v. Guess, 243 Ga. 559, 255 S.E.2d 55, 56 (1979) (concluding that written notice of cancelled insurance mailed to and actually received by the insured is effective even if the insurance company fails to obtain a post office receipt as the governing statute requires because "where it is admitted such notice was received, the purpose of the statute has been accomplished").
[21] 717 P.2d 360, 364 (Alaska 1986).
[22] Blood I, 68 P.3d at 1258 (alteration in original).
[23] Id. (emphasis added).
[24] Blood I, 68 P.3d at 1258 (quoting Jefferson, 717 P.2d at 364).
[25] Jefferson, 717 P.2d at 364 (emphasis added).
[26] Id.
[27] 727 P.2d 778 (Alaska 1986).
[28] Id. at 780.
[29] Id. at 779.
[30] Id. at 780.
[31] Id. at 783.
[32] See AS 21.36.260 ("The insurer shall . . . mail the notice . . . to the last known address of the insured.").
[33] 727 P.2d at 783.
| {
"pile_set_name": "FreeLaw"
} |
(2008)
UNITED STATES of America,
v.
Jason ZAWADZKI, Defendant.
Criminal Action No. 00-10077-WGY.
United States District Court, D. Massachusetts.
December 23, 2008.
ORDER
YOUNG, District Judge.
In November 2000, the defendant Jason Zawadzki ("Zawadzki") pled guilty to a three-count indictment charging him with possession and transfer of unregistered destructive devices and possession of a firearm by a felon. This Court sentenced him in November 2001 to thirteen years of incarceration and three years of supervised release. When calculating Zawadzki's offense level, the Court added a three level enhancement pursuant to section 4A1.1(a) of the United States Sentencing Guidelines[1] based on a prior Massachusetts conviction for breaking and entering in the nighttime with intent to commit a felony, a charge to which Zawadzki had pled guilty in 1998. The Massachusetts Appeals Court later vacated that conviction, concluding on August 10, 2005 that the Commonwealth's factual rendition at the plea hearing was insufficient. See Commonwealth v. Zawadzki, No. 04-1356, 64 Mass.App.Ct. 1104, 2005 WL 1903305, at *1 (Mass.App.Ct. Aug. 10, 2005). That vacatur is the basis for the instant request.
Prior to this petition, Zawadzki, in October 2004, filed in this Court a motion to vacate his November 2001 sentence pursuant to 28 U.S.C. § 2255, relying on Blakely v. Washington, 542 U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004). The Court denied the motion, observing that Blakely was not retroactive. [See 04-cv-12114-WGY, 11/04/2004 ruling]. The First Circuit Court of Appeals affirmed.
On July 24, 2006, Zawadzki filed in this Court a second petition pursuant to 28 U.S.C. § 2255, claiming that his sentence improperly had been enhanced based on the prior state conviction that later was overturned. Zawadzki had not, however, sought an order from the First Circuit pursuant to 28 U.S.C. § 2255(h) authorizing this Court to consider his second or successive habeas corpus petition, and this Court denied it. [See 06-cv11273-WGY, 08/14/2006].
Zawadzki filed the instant motion to correct his sentence pursuant to 18 U.S.C. § 3582 on October 27, 2008. [Doc. No. 111]. On October 31, 2008, the Court converted it to a petition pursuant to 28 U.S.C. § 2255 [Doc. No. 112], and later denied Zawadzki's request to reconsider. [Doc. No. 114].
The Court now agrees with the United States that the petition must be dismissed for lack of subject matter jurisdiction. First, Zawadzki has failed, as in 2006, to seek prior approval from the First Circuit. See 28 U.S.C. § 2255(h). Second, had he sought approval, it would have been denied. In Johnson v. United States, 544 U.S. 295, 298, 125 S.Ct. 1571, 161 L.Ed.2d 542 (2005), the Supreme Court held that when a prisoner collaterally attacks a federal sentence on the ground that a state conviction used to enhance the sentence since has been vacated, the one-year statute of limitations begins to run when the petitioner receives notice of the vacatur, so long as he acted with due diligence in attacking the conviction. In this case, more than three years have passed since Zawadzki's state conviction was vacated and almost seven years since his sentence was imposed by this Court. Furthermore, Johnson does not apply because the Johnson defendant, unlike Zawadzki, was sentenced as a career offender. For these reasons, Zawadzki's motion [Doc. No. 112] is DENIED.
SO ORDERED.
NOTES
[1] U.S. Sentencing Guidelines Manual § 4A1.1(a) (2000), provides: "Add 3 points for each prior sentence of imprisonment exceeding one year and one month."
| {
"pile_set_name": "FreeLaw"
} |
389 F.Supp. 107 (1975)
Richard M. NIXON, Plaintiff,
v.
Arthur F. SAMPSON et al., Defendants,
Henry S. Ruth, Special Prosecutor, Intervenor,
Jack Anderson, Intervenor.
The REPORTERS COMMITTEE FOR FREEDOM OF the PRESS et al., Plaintiffs,
v.
Arthur F. SAMPSON et al., Defendants,
Richard M. Nixon, Intervenor.
Lillian HELLMAN et al., Plaintiffs,
v.
Arthur F. SAMPSON et al., Defendants,
Sen. Sam J. Ervin, Jr., et al., Amici Curiae;
Congresswoman Elizabeth Holtzman, Amicus Curiae.
Civ. A. Nos. 74-1518, 74-1533, and 74-1551.
United States District Court, District of Columbia.
January 31, 1975.
*108 *109 *110 *111 *112 *113 Herbert J. Miller, Jr., R. Stan Mortenson, Raymond G. Larroca, William H. *114 Jeffress, Jr., Miller, Cassidy, Larroca & Lewin, Washington, D. C., for Richard M. Nixon.
Peter M. Kreindler, Counsel to the Sp. Prosecutor, Richard Davis; Kenneth S. Geller, Asst. Sp. Prosecutors, Watergate Sp. Prosecution Force, Washington, D. C., for the Special Prosecutor.
William A. Dobrovir, Andra N. Oakes, Washington, D. C., for Jack Anderson.
Carla A. Hills, Asst. Atty. Gen., Irving Jaffe, Deputy Asst. Atty. Gen., Irwin Goldbloom, Acting Deputy Asst. Atty. Gen., Jeffrey Axelrad, Dept. of Justice, Earl J. Silbert, U. S. Atty., Washington, D. C., for Arthur F. Sampson, et al.
Robert E. Herzstein, Mark J. Spooner, Andrew S. Krulwich, Jonathan D. Schiller, Leonard Simon, Arnold & Porter, Washington, D. C., for The Reporters Committee for Freedom of the Press et al.; David Bonderman, Lawrence C. Maisel, Thomas B. Wilner, Ivor C. Armistead, III, Washington, D. C., Peter T. Grossi, Jr., New Haven, Conn., of counsel.
Leon Friedman, Hofstra University School of Law, Hempstead, N. Y., John H. F. Shattuck, Melvin L. Wulf, American Civil Liberties Union, Telford Taylor, Columbia University Law School, New York City, for Lillian Hellman et al.
Thaddeus Holt, Breed, Abbott & Morgan, and William Sudow, Counsel, Subcommittee on Printing of the House Administration Committee, Washington, D. C., for amici curiae Senator Sam J. Ervin, Jr., et al.
Larry P. Ellsworth, Alan B. Morrison, Washington, D. C., for amicus curiae Congresswoman Elizabeth Holtzman.
MEMORANDUM OPINION
CHARLES R. RICHEY, District Judge.
I. INTRODUCTION
These consolidated cases present a unique controversy, the heart of which concerns the ownership of and the right to assert or waive privilege with respect to the "Presidential materials and tape-recorded conversations"[1] of the Nixon Administration.
The suits comprise the following actions: a suit by former President Richard M. Nixon (C.A. No. 74-1518) for injunctive relief and a writ of mandamus against Arthur F. Sampson, the Administrator of General Services; Philip W. Buchen, counsel to President Gerald R. Ford; and H. Stuart Knight, Director of the Secret Service, as well as the Special Prosecutor, an intervenor-defendant, who has counterclaimed against Mr. Nixon for declaratory relief; a suit by The Reporters Committee for Freedom of the Press, et al. (C.A. No. 74-1533) for declaratory and injunctive relief against Messrs. Sampson, Buchen, and Knight; a suit by Lillian Hellman, et al. (C.A. No. 74-1551) for declaratory and injunctive relief against Mr. Richard M. Nixon and Messrs. Sampson, Buchen, and Knight; and a suit by Mr. Jack Anderson, an intervenor-plaintiff in C.A. No. 74-1518, for declaratory and injunctive relief against Mr. Nixon, by cross-claim, and against Messrs. Sampson, Buchen, and Knight for declaratory and injunctive relief.
These actions are before the Court on the following motions:[2] plaintiff Nixon's motion for a preliminary injunction; *115 plaintiff Nixon's motions to dismiss the Hellman, et al., and Anderson suits for lack of standing; the government defendant's motion to dismiss all the actions, except that by the Special Prosecutor, on the ground that they are moot; and on motions for summary judgment or partial summary judgment by plaintiffs Anderson, The Reporters Committee for Freedom of the Press, et al., Lillian Hellman, et al., and the Special Prosecutor, on his counterclaim for declaratory relief, and as the intervenor-defendant in C.A. 74-1518.
II. BACKGROUND[3]
On August 9, 1974, President Richard M. Nixon resigned from Office and was succeeded by Gerald R. Ford.[4] Shortly thereafter, on August 15, 1974, members of the Office of the Special Prosecutor[5] informed Philip W. Buchen,[6] counsel to President Ford, and J. Fred Buzhardt, counsel to former President Nixon, that the Special Prosecutor had a continuing interest in the Presidential materials and tape-recorded conversations of the Nixon Administration which are housed in the White House, the Executive Office Building, and elsewhere, that "might be relevant to investigations and prosecutions within the jurisdiction of the Special Prosecutor."[7] Assurances were given to the Special Prosecutor that the files of former President Nixon and his staff members would not be removed from the White House or the Executive Office Building without the Special Prosecutor's approval.[8] On August 22, 1974, Mr. Buchen requested an opinion from Attorney General William Saxbe on the issues of the ownership of the Presidential materials and tape-recorded conversations of the Nixon Administration and the responsibilities of the Ford Administration with respect to subpoenas or other court orders requiring the production of these materials and/or tape-recorded conversations.[9] On August 29, 1974, Mr. Buchen received a preliminary opinion from Deputy Attorney General Laurence Silberman *116 that the Presidential materials and tape-recorded conversations were to be regarded as belonging to the former President, but that the government had a right to use the materials for ongoing governmental purposes and would also have to respond to subpoenas or court orders relating to the materials and tape-recorded conversations.[10] Thereafter, Mr. Buchen met with Mr. William Casselman, counsel to President Ford, and Mr. Benton L. Becker, a private attorney, concerning the disposition of the Presidential materials of the Nixon Administration.[11] On or about August 30, 1974, Mr. Buchen contacted Mr. Herbert J. Miller, attorney for former President Nixon, and raised the subject of the disposition of the materials.[12] Further discussions were held on September 3 and September 5, 1974, between Mr. Buchen, Mr. Miller and Mr. Becker.[13] At the September 5 meeting, Mr. Miller presented a draft depository agreement for consideration.[14] After some changes, it was finalized and signed by the former President on September 6, 1974.[15] On the same day, a written opinion of Attorney General Saxbe was released.[16] At or about 6:15 or 6:30 p. m. on September 7, 1974, Mr. Arthur F. Sampson, Administrator of the General Services Administration, met with Messrs. Casselman and Becker, who presented him with the depository agreement signed by former President Nixon.[17] At approximately 7:10 p.m., Mr. Sampson signed the agreement,[18] (hereinafter, the "Nixon-Sampson Agreement").
On September 10, 1974, Jack Anderson, a well-known newspaper columnist, filed an application with the General Services Administration, pursuant to the Freedom of Information Act,[19] seeking access to the materials encompassed by the Nixon-Sampson Agreement. On October 2, 1974, Lillian Hellman and other members of the Committee for Public Justice filed a similar application, but restricted it to the tape recordings of conversations in the White House and Executive Office Building. Both applications were denied on the grounds that:
. . . (1) this agency does not presently have the requested materials in its possession; (2) deposited papers and other historical materials are not "records" within the purview of the Freedom of Information Act and, therefore, are not subject to its provisions; and (3) assuming, for the sake of argument, that the deposited papers and other historical materials are subject to the provisions of the Act, they are exempt from disclosure under the third exception to the mandatory public disclosure; i.e. ". . . matters that are . . . specifically exempted from disclosure by statute . . ." 5 U.S.C. 552(b)(3)). The pertinent statute is the Presidential Libraries Act of 1955, which provides that the Administrator of the General Services may accept for deposit on behalf of the United States papers and/or other historical materials which may be subject to restrictions upon access that have been accepted by the Administrator (44 U.S. 2107-2108).[20]*117 Thereafter, the applicants exhausted their administrative remedies.[21]
On October 17, 1974, former President Nixon brought suit against Arthur F. Sampson, Philip W. Buchen, and H. Stuart Knight,[22] seeking a temporary restraining order and a preliminary injunction to compel compliance with the Nixon-Sampson Agreement and preventing unauthorized access to the materials and tape-recorded conversation. On October 21, 1974, Jack Anderson, whose application for access to the materials had been denied on the basis, inter alia, of the Nixon-Sampson Agreement, moved to intervene, seeking temporary and preliminary injunctive relief to prevent its implementation. On the same day, the Special Prosecutor also moved to intervene in order to protect the interests of his office in the materials and tape-recorded conversations. Also on October 21, The Reporters Committee for Freedom of the Press, et al., filed suit against the government seeking relief similar to that sought by plaintiff-intervenor Anderson in C.A. 74-1518, as well as consolidation with the Nixon suit. After granting the Reporters' motion to consolidate, the Court held a hearing. On October 21, the Court, in order to preserve the status quo, issued a temporary restraining order which essentially prohibited the implementation of the Nixon-Sampson Agreement and set forth the access procedures to the materials until a full hearing on the motions for a preliminary injunction could be held.
On October 24, 1974, Lillian Hellman, and other members of the Committee for Public Justice, whose application for access had been denied, brought suit against the government and former President Nixon for declaratory and injunctive relief, seeking access to specified tape recordings.[23] The Hellman plaintiffs also moved to consolidate their action with the other suits.
During this time period, several members of Congress who had introduced and supported legislation concerning the Nixon-Sampson Agreement moved for leave to appear as amici curiae,[24] and the Court granted their motions.
On October 25, former President Nixon moved to amend the temporary restraining order, claiming that there was an immediate need for the original materials and tape-recorded conversations to enable him to testify in the Watergate criminal trial. The Court scheduled a hearing on the matter for October 30. In the interim, Mr. Nixon moved to consolidate the hearing on the preliminary injunction with the trial, to intervene in the Reporters' suit, and to amend his application for a preliminary injunction, in order to request immediate transfer to his possession of all the materials and tape-recorded conversations. The Reporters Committee for Freedom of the Press, et al., also moved to extend the temporary restraining order. *118 After the hearing, during which Mr. Nixon's counsel withdrew his motion to modify the temporary restraining order because the former President was too ill to testify, the Court, on October 31, granted the Special Prosecutor's and Anderson's motions to intervene in the Nixon suit, granted Nixon's motion to intervene in the Reporters' suit, consolidated the Hellman suit with the Nixon and Reporters Committee suits, extended the temporary restraining order, and denied the motion to consolidate the trial with the hearing on the motions for preliminary injunctions, which was set for November 15, 1974.
On November 4, the Anderson, Hellman and Reporters plaintiffs (hereinafter, the "FOIA plaintiffs"), moved to take depositions and to inspect the areas where the materials were being kept. In order to provide the parties with the opportunity to make an adequate record at the subsequent hearing, the Court allowed limited depositions and also ordered the government to provide the Court and the parties with a descriptive categorization of the materials. On the same day, Mr. Nixon again moved to amend the temporary restraining order, which motion in essence sought a clarification of the access procedures.
On November 11, the Special Prosecutor and the government filed a joint motion to amend the temporary restraining order to allow implementation of an agreement dated November 9, 1974,[25] between President Ford and the Special Prosecutor which provided, inter alia, that the President had determined that in the interest of justice the Special Prosecutor would have immediate access to the Presidential materials and tape-recorded conversations of the Nixon Administration for purposes of investigation and prosecution of persons involved in the "Watergate" matter. Shortly thereafter, on November 13, former President Nixon filed a new motion for a temporary restraining order requesting that the Ford-Ruth Agreement be enjoined.[26]
After two days of hearings on all motions extant, on November 15 and 18, the Court requested that the parties file proposed findings of fact and conclusions of law by November 29, 1974. At the request of the parties, this was extended to December 6. A few days later, on December 9, the Congress passed a bill relating to the materials covered by the Nixon-Sampson Agreement.[27] The Court promptly ordered that the parties brief the impact of this legislation. Those briefs were filed on December 16, 1974. On December 19, 1974, President Gerald R. Ford signed into law the Presidential Recordings and Materials Preservation Act.[28] In response thereto, considering the posture of the cases to have been altered by the new legislation, the parties filed the following motions: the government defendants moved to dismiss all actions, except the Special Prosecutor's counterclaim, on the ground that they have become moot; the Special Prosecutor filed a motion for summary judgment; and plaintiffs Anderson, Reporters Committee for Freedom of the Press, et al., and Lillian Hellman, et al., have filed motions for summary judgment or, in the alternative, for partial summary judgment.
III. THE CLAIMS OF THE PARTIES
Former President Nixon, who claims ownership to the Presidential materials and tape recordings generated or retained during his tenure in office, seeks a writ of mandamus or an injunction in the nature of specific performance to compel the defendants, officers of the United States, to comply with the terms and conditions of the Nixon-Sampson *119 Agreement, including but not limited to immediately transferring the materials to California, except (a) such materials and tapes as were subject to subpoena or other legal process at the time the action was filed and, (b) such of the materials and tapes which the Special Prosecutor may designate which are needed for ongoing criminal investigations and prosecutions, provided that such excepted materials and tapes, or portions thereof, shall be transferred in accordance with the agreement at such time as such subpoenas or court orders are quashed, vacated or satisfied, and the Special Prosecutor no longer has such interest in them. Further, he requests that the defendants be enjoined from interfering with the performance of the agreement and that they be enjoined from having access to the materials and tapes without his authorization. The gravamen of the former President's claim is that he has a constitutional right and duty to protect and assert the privilege of confidentiality which allegedly attaches to the Presidential materials and tapes, and that ownership and control of the materials and tapes is an essential incident of this right and duty. It is also his contention that compliance by the defendants with demands for production of the materials and tapes will necessitate a search of the materials and tapes which, without his authorization, will be in derrogation of rights and privileges afforded the former President by the Constitution. Thus, he maintains that the November 9th Agreement between President Ford and the Special Prosecutor is unlawful as it abridges his rights and duty to protect the privilege of confidentiality as well as other of his constitutional rights, particularly the right to be free from unreasonable searches and seizures. And, lastly, the former President claims that the defendants, having entered into the Nixon-Sampson Agreement, owe him a duty to comply with the terms and conditions of the agreement, which he asserts is valid, binding and non-discretionary. It is on the basis of all of the above that he seeks equitable relief, stating that he has no adequate remedy at law and that he will suffer irreparable injury without preliminary and permanent relief.
It is the contention of the Special Prosecutor, an intervenor-defendant in the Nixon suit, and in which contention the government concurs, that the government of the United States and the Special Prosecutor, by virtue of its authorization and responsibilities, have an "overriding interest" in the Presidential materials and tapes of the Nixon Administration which supervenes any personal or contractual rights that the former President may or may not have. The Special Prosecutor also claims that this interest was recognized by the government prior to the Nixon-Sampson Agreement and that the government, by entering into the agreement, did not intend to negate this "overriding interest", nor does the agreement itself. Furthermore, the Special Prosecutor maintains that the former President does not have the constitutional right to assert a claim of privilege against his successor in office who, it is claimed, has determined by the November 9, 1974 Agreement, that the interests of justice require that the Special Prosecutor have access to the materials and tapes.
While concurring with the Special Prosecutor in his contentions, the government does not contest the validity of the agreement, nor the right of ownership asserted by the former President in the materials and tapes. Nevertheless, it is the position of the defendants that the relief requested by the former President is barred by the doctrine of sovereign immunity, in that specific performance will not lie against the government for failure to comply with a contract. They also argue that since the Nixon-Sampson Agreement is silent as to when and how the agreement is to be effectuated, it is discretionary and not ministerial and, therefore, a writ of mandamus may not issue. Finally, the defendants contend that any search of the materials or tapes will not violate Mr. Nixon's fourth amendment rights.
*120 The contentions of Jack Anderson, The Reporters Committee for Freedom of the Press, et al., and Lillian Hellman, et al., the "FOIA plaintiffs", are essentially identical. Having been denied access to the Presidential materials and tapes on the basis of the Nixon-Sampson Agreement, they seek an injunction restraining the effectuation of the agreement and a declaration that the Presidential materials and tapes belong to the United States, and not to the former President. They claim that the Presidential materials and tapes are government records, that since the former President was a private citizen at the time he entered into the Nixon-Sampson Agreement, he could not impose restrictions on access to the materials, and that it was beyond the statutory authority of the Administrator to allow any such restrictions to be imposed. In support of this proposition, they argue that any historical practice of claims of ownership by prior Presidents was terminated by the Presidential Libraries Act, 44 U. S.C. ง 2101 et seq., and that a former President does not have the right to claim Presidential privilege. Furthermore, they maintain that Arthur F. Sampson, the Administrator of General Services, failed to comply with statutory requirements when he signed the agreement and, therefore, it is null and void. Specifically, they allege that Mr. Sampson failed to perform his statutory duty to negotiate an agreement,[29] and also failed to confer with the National Records Council prior to signing the agreement, which they contend is also statutorily required. Furthermore, they argue that the Nixon-Sampson Agreement is invalid because it allegedly confers title to the materials and tapes upon the former President, in contravention of the exclusive power of Congress to dispose of property under Article 4 of the Constitution. They also contend that these materials and records, etc., are an emolument within the meaning of and in violation of Article II of the Constitution. In addition, they allege that the agreement is merely temporary and that there is no assurance that the former President will permanently donate the materials or even some of the materials to the United States; therefore, if an injunction does not issue, the possibility of their attaining their right of access to the materials will be forever lost. Lastly, they maintain that access to the materials and tape-recorded conversations cannot be barred by a claim of privilege by the former President; it is their position that the privilege belongs to the government and may only be asserted by the incumbent President.
IV. JURISDICTION
The jurisdiction of the Court in Civil Action No. 74-1518 is founded upon Title 28 U.S.C. งง 1331, 1332, 1361 and in Civil Action Nos. 74-1533 and 74-1551 upon Title 5 U.S.C. งง 552, 702-704 and Title 28 U.S.C. งง 1331, 1361.
V. STANDING
Former President Nixon and the United States have, by motion[30] and in all their papers[31] and oral argument, vigorously contested the standing to sue of intervenor-plaintiff Anderson, The Reporters Committee for Freedom of the Press, et al., and Lillian Hellman, et al. The argument is basically threefold. First, it is claimed that these parties have only a speculative interest in the materials and have not sustained an "injury in fact". Second, it is argued that the Freedom of Information Act does not provide a basis for challenging the validity of the Nixon-Sampson Agreement. Encompassed within this contention are the assertions that: the *121 materials are not agency "records"; the White House is not an "agency"; the materials are "exempted" from disclosure under the FOIA; and the Congress does not have the constitutional power to require disclosure of Presidential materials and tape-recorded conversations.[32]
In support of these contentions, former President Nixon and the United States have placed great reliance upon the Tenth Circuit opinion in Nichols v. United States, 460 F.2d 671 (10th Cir. 1972), aff'g 325 F.Supp. 130 (D.Kan. 1971), for the proposition that since those persons who here seek access to the materials and tape-recorded conversations were not parties to the Nixon-Sampson Agreement nor have a claim of ownership in the materials and tape-recorded conversations, they therefore do not have standing to contest the validity or terms of the agreement.
In Nichols, a pathologist had been denied access to certain materials relating to the assassination of President John F. Kennedy. He claimed in federal court that the donation agreement between the Kennedy estate and the government was a nullity since the government had possession of the materials prior to the donation and, therefore, they were government property. The trial court held that a donor need not "own" the materials to deposit them pursuant to 44 U.S.C. งง 2107, 2108(c), and to place restrictions on their access, as long as the materials "fall within the description of those things which may be deposited." 325 F.Supp. at 136. The Tenth Circuit upheld the ruling of the trial court and added that since Nichols was not a party to the agreement, he did not have standing to contest its validity or terms. 460 F.2d at 674-675.
The arguments of former President Nixon and the government, however, do not really address the question of standing but, rather, go to the merits of the FOIA plaintiffs' claims. And, the opinions in Nichols, supra, are likewise infirm and should not be followed. It must be recognized that the judicial doctrine of standing is simply a correlative of the Article III requirement of the Constitution that there be a "case or controversy". See Flast v. Cohen, 392 U.S. 83, 101, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1953). The essence of this requirement is that a federal court will not serve as a "forum in which to air . . . generalized grievances about the conduct of government." Id. at 106, 88 S.Ct. at 1956. Thus, it is necessary that there be an impact on the party which is not common to all members of the public. Laird v. Tatum, 408 U.S. 1, 13, 92 S.Ct. 2318, 33 L.Ed.2d 154 (1972). The courts, therefore, have established certain criteria which must be met in order for there to be "a personal stake in the outcome of the controversy as to assure that concrete adverseness . . . upon which the court so largely depends for the illumination of difficult constitutional questions." Baker v. Carr, 369 U.S. 186, 204, 82 S.Ct. 691, 703, 7 L.Ed.2d 663 (1969). Congress, however, has determined that these criteria need not be demonstrated in certain cases. These actions, under the Freedom of Information Act, present such a case.
The primary purpose of the Freedom of Information Act,[33] passed in 1966, is to increase public access to government records, Soucie v. David, 145 U.S.App.D.C. 144, 448 F.2d 1067, 1076 (1971), by providing a right of access to "any person" without "consideration of the interests of the party seeking relief." Id. at 1077. The FOIA, therefore, clearly effectuates important first amendment interests. See Tennessean Newspapers, Inc. v. Federal Housing Administration, 464 F.2d 657, 660 (6th Cir. 1972). Upon a denial of access, the applicant may bring a suit in the United States District Court and there obtain a de novo determination of the matter.[34]*122 5 U.S.C. ง 552(a)(3). Thus, when access is denied, a controversy exists and injury must be presumed. To then require that the person meet the criteria for standing would be in contravention of the Act. Moreover, the "burden is on the agency to sustain its action." 5 U. S.C. ง 552(a)(3). Thus, it is impermissible to require the person who has been denied access to prove his case at the outset, as the government and the former President seek to require the FOIA plaintiffs to do.
Simply stated, when a party, such as the parties in the instant matter, has made an application under the FOIA and that application has been denied, (s)he has standing to sue in the federal courts. And, questions as to whether that which is sought is a "record" within the meaning of the FOIA; whether a claimed exemption is valid, and other such questions go to the merits of the action, for which the plaintiff is entitled to a de novo determination. Thus, the opinions in Nichols, supra, to the extent that they held that the plaintiff therein, an FOIA applicant, did not have standing, appear to be in error.
Notably, in Nichols, the trial court rejected the plaintiff's claim that the material requested belonged to the government, or was a government "record" within the FOIA, and granted the government's motion for summary judgment. 325 F.Supp. at 137, 138. The Tenth Circuit upheld the district court, but added, as dictum, that it believed that the plaintiff had no standing. 460 F.2d at 674-675. It is apparent to this Court, however, that an FOIA plaintiff, such as Nichols, has standing, even though (s)he may not prevail on the merits.
For similar reasons, the contention that the FOIA plaintiffs do not have standing to contest the validity of the Nixon-Sampson Agreement is also untenable. It is well settled that the exceptions of the Freedom of Information Act are to be read narrowly and that disclosure is the rule, not the exception. And, Section 552(a)(3) of the Act places the burden on the government to sustain its action. Thus, the courts have been loathe to accept mere assertions that a record is covered by an exception. The former President and the government, however, point to the Nichols case, supra, and the recent Supreme Court decision in Environmental Protection Agency v. Mink, 410 U.S. 73, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973), for the proposition that the parties herein, who have been denied access to records because of the Nixon-Sampson Agreement, may not challenge the validity of the agreement.
The Mink case does not stand for such a proposition. The Supreme Court in Mink delineated the parameters of judicial review of a denial of access under the national defense and foreign policy exemption, 5 U.S.C. ง 552(b)(1). The court held that once a record had in fact been classified, the district court, after the government has shown that the President has determined to keep a record secret, should not inquire into the "soundness of executive classifications. . . ." 410 U.S. at 84, 93 S.Ct. 827. The Mink decision, however, cannot be read to hold that the soundness of the assertions under all of the exemptions should not be scrutinized. And, notably, this Circuit has opined that the Mink decision does not preclude in inquiry into whether a document has in fact been classified. See Schaffer v. Kissinger, 505 F.2d 389 (D.C.Cir., 1974).
The government in these cases has denied access to the materials under the *123 third exemption of the Freedom of Information Act, 5 U.S.C. ง 552(b)(3), which provides that this section does not apply to matters that are "specifically exempted from disclosure by statute." The statute that is asserted is the Presidential Libraries Act, 44 U.S.C. ง 2101 et seq. The government claims that the parties do not have standing to challenge the Nixon-Sampson Agreement, as there is a statute which specifically exempts from access the materials encompassed by the agreement. It is the government's contention, in which the former President concurs, that this is dispositive of the matter. This, however, is not the law.
The exemptions under the Freedom of Information Act are to be narrowly construed. This general construction of the FOIA has been made particularly applicable to the third exemption. Robertson v. Butterfield, 498 F.2d 1031 (D.C.Cir. 1974). A court must not only examine and interpret the statute relied upon as specifically exempting disclosure. See Schechter v. Weinberger, 506 F.2d 1275 (D.C.Cir. 1974). It must also resolve any dispute as to whether the exemption has been properly invoked. See Stretch v. Weinberger, 3 Cir., 495 F.2d 639 (1974).
Thus, it is the conclusion of this Court that the Nixon-Sampson Agreement, having been invoked to bar access to the FOIA plaintiffs, can be scrutinized by this Court. For, if the FOIA plaintiffs are correct in their allegations that these are government "records" within the meaning of the FOIA and do not belong to the former President, and that the Nixon-Sampson Agreement is invalid, it would do great violence to the letter and spirit of the FOIA to hold that the government, by merely asserting the third exemption, could preclude a determination of these issues and thus access which would otherwise be appropriate. And, to the extent that Nichols, supra, is contrary, it is rejected.[35]
VI. JUSTICIABILITY
A threshold issue in these consolidated cases is whether they remain justiciable. Subsequent to the commencement of these proceedings, Congress passed and President Ford signed into law the Presidential Recordings and Materials Preservation Act.[36] The Act, which is unique both as to its nature and because it is specifically directed at these pending proceedings, has raised a dispute as to whether, on the basis of the allegations extant and the possible relief that may be afforded, there still exists a "live dispute between the parties" which requires resolution. Golden v. Zwickler, 394 U.S. 103, 109, 89 S.Ct. 956, 22 L.Ed.2d 113 (1969). In this regard, the Court must ascertain whether the effect of the Act is to moot any or all of the questions presented,[37] and whether the non-mooted questions, if any, are present in an actual controversy requiring immediate resolution and for which the Court can fashion an appropriate *124 remedy.[38] In conjunction with the latter inquiry, the Court must also determine whether the legislation makes an adjudication of any or all of the questions premature.[39]
It is clear to the Court that the Presidential Recordings and Materials Preservation Act nullifies the Nixon-Sampson Agreement of September 7, 1974.[40] The Nixon-Sampson Agreement provided essentially that the Presidential materials and tape recordings of the Nixon Administration would be "deposited temporarily" in an existing government facility.[41] Access to the Presidential materials was to be by a two-key system, one held by the government and the other held by Mr. Nixon, as "custodian of the materials", the latter key being "essential for access."[42] Access to both the Presidential materials and tape recordings was to be limited to Mr. Nixon or any person whom he designated.[43] As to the Presidential materials, Mr. Nixon could, after three years, "withdraw from deposit without formality any or all of the materials . . . for any purpose or use . . .."[44] And, as to the tape recordings, they were to be donated to the United States as of September 1, 1979, under specific instructions, but would be destroyed at the time of Mr. Nixon's death or on September 1, 1984, whichever event occurred first.[45] The agreement further provided that upon any subpoena or court order which demanded that the government produce either the Presidential materials or tape recordings, the government would notify Mr. Nixon who, as "owner and custodian" with the "sole right and power of access thereto," could then raise "any privileges or defenses" he might have.[46] Mr. Nixon was to then allow the government to inspect the materials in order that "national security or any other privilege" could be interposed.[47]
Upon a careful examination of the terms and conditions of the Nixon-Sampson Agreement, it is apparent that its salient aspects are: that Mr. Nixon would be the custodian of the Presidential materials and tapes, of the latter until 1979, and of the former until such time as he donated such materials as he designated; that Mr. Nixon would have the sole right of access to both the Presidential materials and tape recordings; and that Mr. Nixon would have the sole right to use the information contained in the Presidential materials and tape recordings. Thus, it is unquestionable that the Presidential Recordings and Materials Preservation Act, which provides in Title I, Sections 101(a), (b) and 102(a)[48] that the Administrator of *125 General Services shall, "Notwithstanding any other law or agreement or understanding . . . retain . . . complete possession and control . . ." of the tape recordings and Presidential materials of the Nixon Administration, and that they shall not be destroyed except as provided by law, abrogates the Nixon-Sampson Agreement.[49]
Although the Presidential Recordings and Materials Preservation Act moots the question of the validity of the Nixon-Sampson Agreement, the Act does not resolve the questions of ownership of the Presidential materials and tape recordings, nor whether the former President may assert any privilege in regard thereto. First, with respect to the question of ownership, the Act requires that the Administrator of General Services take custody and control, but makes no statement as to who has title to the Presidential materials and tape recordings. It is apparent that Congress deliberately chose not to resolve this question. The section of the House Committee Report on private ownership unequivocally states that: "The legislation takes no position on the ownership of these materials prior to enactment of this title. The committee believes that at this time the resolution of the question of prior ownership is a matter most appropriately left for the judiciary to decide."[50] The avoidance by Congress of the question of ownership is also evidenced by title I, section 105(a) of the Act.[51] That section, while under the *126 category of "Judicial Review", provides for the possibility that "just compensation" may be necessary. However, this would have to be predicated upon a determination by a court that there existed personal property rights in the Presidential materials and tape recordings.[52] Otherwise, in the opinion of Congress, "If the materials are already public property, the bill is simply an exercise of the congressional power under Article IV of the Constitution to dispose of the property of the United States . . .", and no compensation would be required.[53]
Second, with respect to the question of whether former President Nixon may rightfully assert any privilege as to the Presidential materials and tape recordings, the Act is also noncommital. None of the sections of the Act which provide for access to Presidential materials and tape recordings include any determination of this question. Subsection 102(b) of title I, which provides for access in "any judicial proceeding" or pursuant to "court subpoena or other legal process," recognizes that the Presidential materials and tape recordings may be subject to the "rights, defenses or privileges" which either the federal government or "any person" may assert. Clearly, the "either-or" language of this subsection demonstrates that Congress did not resolve this question. Further, subsection 104(a) of title I, which requires the Administrator to establish regulations for public access, similarly takes no position on this question, for section 104(a)(5) provides that the Administrator must consider "the need to protect any party's opportunity to assert any legally or constitutionally based rights or privileges which would prevent or otherwise limit access to such recordings and materials." (Emphasis added.) Those sections providing for access for both Mr. Nixon and the federal government likewise do not provide any indication whether or not Mr. Nixon has the right to assert any privilege to the Presidential materials and tape recordings.[54]
*127 Thus, it is the opinion of this Court that while the Presidential Recordings and Materials Preservation Act nullifies the Nixon-Sampson Agreement, the Act does not resolve the basic questions of ownership and privilege. It is therefore necessary that the Court determine whether these questions are present in an "actual controversy" which requires resolution.
In order to ascertain whether there exists an actual controversy, it is necessary to examine the nature of the proceedings. See United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 3101, 41 L.Ed.2d 1039 (1974). The FOIA plaintiffs, whose applications for access to the Presidential materials and tape recordings were administratively denied, have brought suit under the Freedom of Information Act and the Administrative Procedure Act, seeking an injunction to restrain the enforcement of the Nixon-Sampson Agreement and a declaration that the Agreement is invalid and that the Presidential materials and tape recordings are government records and not the personal property of former President Nixon. Clearly, even if there never had been an agreement, this Court would have to determine the questions of ownership and privilege since Mr. Nixon, who is a defendant and intervenor in these actions, claims without reliance upon the Nixon-Sampson Agreement, that the Presidential materials and tape recordings are his personal property and not government records, a position shared by the government, and that they are protected by his assertion of his alleged right of "Presidential privilege". The Nixon-Sampson Agreement, therefore, is merely an additional ground asserted by both Mr. Nixon, a party in all these proceedings, and the government, for preventing access by the FOIA plaintiffs. Thus, the fact that the legislation nullifies the Nixon-Sampson Agreement does not resolve what is otherwise a live controversy.
The question thus presented is whether this Court should at this time decide the dispute as to ownership and privilege. The government defendants and Mr. Nixon argue that any adjudication would be premature. They argue that since Mr. Nixon has filed a new suit attacking the validity of the Presidential Recordings and Materials Preservation Act, this Court should delay decision on all issues. There are, however, compelling reasons for rejecting this argument.
There are essentially three contentions asserted by Mr. Nixon and the government as to why the FOIA plaintiffs cannot have access to the Presidential materials and tape recordings: ownership, privilege, and the Nixon-Sampson Agreement. The third ground has been eliminated by statute and, since Mr. Nixon has not contested this in this suit, the Court must presume that the Act is valid. Thus, a resolution of the first and second grounds would end these disputes. However, it is apparent that if Mr. Nixon were to be successful in his new suit, the third ground may be reasserted. While this is possible, there is no reason for both the pending and the new suit not to go forward at the same time. See Weinstein v. Williams โ McWilliams Industries, Inc., 313 F.Supp. *128 876 (D.Del.1970).[55] Clearly, if Mr. Nixon is unsuccessful in the new suit, then a ruling in these pending proceedings would substantially advance the resolution of these disputes. If he is successful, then the Court can re-address the issues concerning the Nixon-Sampson Agreement, which have already been briefed and argued.[56]
Furthermore, the issues of ownership and privilege are basic questions extant in the controversy between Mr. Nixon, the government defendants and the Special Prosecutor.
As discussed below, those disputes require resolution at this time.[57] Therefore, it is obviously judicious to resolve these issues in all the pending cases.
The defendants argue, however, by way of a motion to dismiss, that since the Presidential Recordings and Materials Preservation Act provides for "public access" pursuant to regulations to be promulgated by the Administrator of General Services,[58] an adjudication of these questions may be unnecessary or at least premature. This contention is unacceptable for several reasons. First, Title I, Section 104(d) of the Act provides that: "The provisions of this title shall not in any way affect the rights, limitations or exemptions applicable under the Freedom of Information Act, 5 U.S.C. ง 552 et seq. (sic)" Further, in explaining this provision of the Act, the House Committee Report states that: "It is the intent of the committee that this section not apply to litigation now pending in which access to the material relating to the Nixon Presidency under the Freedom of Information Act and title to the materials is in issue. But, rather, it is intended to apply to actions filed subsequent to enactment of this title."[59] Thus, it is impossible for this Court to conclude that an adjudication of the FOIA actions is unnecessary or premature. Secondly, as previously stated, these regulations do not resolve the basic questions of ownership and privilege and they are drawn in such a *129 way that these same questions will probably arise.[60] This Court will not require the FOIA plaintiffs to abandon their present actions on the mere possibility that they may be able to obtain access under the new regulations. It is a general principle that where wrongful conduct has occurred, the mere possibility that it will not re-occur, especially when it is only the statement of the defendant that it will not, is not sufficient to moot the claim for relief. See United States v. Concentrated Phosphate Export Ass'n, 393 U.S. 199, 89 S.Ct. 361, 21 L.Ed.2d 344 (1968). This principle is particularly applicable in the instant proceedings, where the FOIA plaintiffs, having been denied access, seek a statutory injunction to "enjoin the agency from withholding agency records and to order the production of agency records improperly withheld".[61] The mere allegation by the defendants that access may be possible under the regulations yet to be promulgated is not enough, particularly when the criteria upon which the regulations are to be drawn negates the assertion that the wrongful conduct will not re-occur.[62] Third, it must be recognized that while the FOIA plaintiffs have sought access to the materials, they also seek a declaratory judgment. It is, therefore, within the discretion of this Court, considering the public interest and the purpose of the statute, to decide whether a declaration should issue at this time. See Public Affairs Ass'n v. Rickover, 369 U.S. 111, 82 S.Ct. 580, 7 L.Ed.2d 604 (1962). It is the opinion of this Court that, given the express intention of Congress that the Presidential Recordings and Materials Preservation Act, insofar as it provides for a new avenue of access, shall not interfere with these pending cases, it is appropriate to consider the claims of the FOIA plaintiffs and, if they prevail, issue a declaratory judgment.
A similar examination of Nixon v. Sampson et al., reveals that while the Presidential Recordings and Materials Preservation Act has an obvious impact upon the justiciability of those claims for relief which rely upon the Nixon-Sampson Agreement, there does remain a dispute that is presently cognizable. Mr. Nixon, as plaintiff in C.A. 74-1518, seeks not only a writ of mandamus, under 28 U.S.C. ง 1361, to compel defendant Arthur F. Sampson to comply with the provisions of the Presidential Libraries Act, 44 U.S.C. ง 2108(c), and thereby effectuate the Nixon-Sampson Agreement, but also seeks an injunction in the nature of specific performance to compel the defendants to comply with the terms and conditions of the agreement so as to protect his alleged constitutional rights, particularly his alleged right of "Presidential privilege". Since this Court has determined that the Presidential Recordings and Materials Preservation Act nullifies the Nixon-Sampson Agreement, there can be no justiciable controversy which would permit a decision on the issue of whether, under the Presidential Libraries Act, defendant Sampson owes a specific statutory duty to Mr. Nixon to effectuate the Nixon-Sampson Agreement which would not necessitate the exercise of official discretion. Such a determination would, of course, have required this Court to ascertain the validity of the agreement for it is axiomatic that a writ of mandamus will not issue to compel a government official to do an illegal act.[63] Plaintiff Nixon's request for injunctive relief, however, remains partially justiciable.
To the extent that Mr. Nixon seeks injunctive relief to compel the defendants, in their official capacity, to comply with the Nixon-Sampson Agreement, the action is barred by sovereign immunity. See Larson v. Domestic and Foreign Commerce Corp., 337 U.S. 682, *130 69 S.Ct. 1457, 93 L.Ed. 1628 (1949). And to the extent that Mr. Nixon seeks injunctive relief to prevent certain of the defendants from interfering with the agreement, the action is, for the same reasons as those applicable to the action for a writ of mandamus, not justiciable. To the extent, however, that Mr. Nixon seeks injunctive relief to prevent the defendants from infringing upon his alleged constitutional rights, the action is maintainable and this Court has jurisdiction to make that determination. See Bell v. Hood, 327 U.S. 678, 682, 66 S.Ct. 773, 90 L.Ed. 939 (1946). But, the conduct sought to be enjoined must be beyond that which is sanctioned by the Presidential Recordings and Materials Preservation Act. For, otherwise, the claim would not be that the defendants were acting unlawfully, but that the Act is unconstitutional. Notably, Mr. Nixon has not amended his pleadings in this proceeding to include such a challenge; rather, he has filed a new suit for declaratory and injunctive relief.[64] While it would appear that the Courts should therefore grant the defendants' motion to dismiss the complaint, the Court will not do so since it is apparent that if Mr. Nixon is successful in that suit, his present claims for relief would be cognizable. See Weinstein v. Williams-McWilliams Industries, Inc., supra. The Court will instead stay the proceedings with respect to those claims which are based upon the Nixon-Sampson Agreement pending a decision in the new suit.[65] However, the Court will decide the issue of infringement with respect to the FOIA plaintiffs' requests under the FOIA, and with respect to the November 9th Agreement, which remain justiciable.
The controversy concerning the alleged infringement of Mr. Nixon's rights exists apart from both the Nixon-Sampson Agreement and the Presidential Recordings and Materials Preservation Act. Mr. Nixon seeks to enjoin the defendants, particularly Mr. Philip W. Buchen, counsel to President Ford, from permitting the Special Prosecutor to have access to the materials. He claims that this is not only a violation of his alleged "right and duty to protect the constitutionally-based privilege of confidentiality" of the Presidential materials and tape recordings, but also his fourth amendment rights to be free from unreasonable searches and seizures and privacy.
Furthermore, President Ford, on November 9, 1974, entered into an agreement with the Office of the Special Prosecutor whereby the Special Prosecutor would be permitted to have access for the purpose of accommodating the needs of the Special Prosecutor with respect to "ongoing criminal investigations and prosecutions within the Special Prosecutor's jurisdiction." Appendix B, Intro. ถ. And, the Special Prosecutor, who is an intervenor-defendant in C.A. 74-1518, has counterclaimed for a declaration of the validity and enforceability of the November 9th Agreement, as well as having moved for summary judgment in C.A. 74-1518. This controversy does not depend upon the enforceability of the Nixon-Sampson Agreement,[66] but rather upon the basic questions of ownership and privilege raised by the FOIA plaintiffs' cases. Moreover, as previously noted, Mr. Nixon does not rely upon *131 the Nixon-Sampson Agreement to establish his claim of ownership or his right to assert a privilege, which are necessary if he is to prevail in this controversy. Thus, these questions are squarely before the Court.
Moreover, the Presidential Recordings and Materials Preservation Act does not resolve this controversy. Although Section 102(b) of the Act provides that: "Any request by the Office of Watergate Special Prosecution Force, whether by Court subpoena or other lawful process, for access to such recordings or materials shall at all times have priority over any other request for such recordings or materials," this section can only be construed to afford the Special Prosecutor "priority" of access, not the right of access. Nor can section 102(d) which provides for access for "lawful government use" be construed as a limitation or expansion of these rights. Thus, the questions of ownership and privilege under the Nixon suit and the Special Prosecutor's counterclaim are justiciable. Furthermore, they require immediate resolution.
Having determined that the questions of ownership and privilege are raised in a live controversy, the Court will resolve these questions. Prior to reaching the merits, however, it is necessary to determine whether the motions for summary judgment and partial summary judgment meet the requirements of Rule 56 of the Federal Rules of Civil Procedure.
VII. RULE 56
Having determined that the questions relating to the Nixon-Sampson Agreement are not at this time justiciable, it is left to determine whether there are genuine issues of material fact with respect to the claims relating to ownership, privilege and the fourth amendment. Rule 56, Federal Rules of Civil Procedure. As to the issues of privilege and the fourth amendment, the moving parties are clearly entitled to a judgment as a matter of law. With respect to the question of ownership, however, Mr. Nixon contends that there are genuine issues of material fact which cannot be resolved on a motion for summary judgment.
The former President claims that the evidence is not conclusive as to the practices of other former Presidents. However, the practices of former Presidents are not adjudicative facts.[67] Neither are they material to a resolution of the legal issues involved in this case.
Nevertheless, the parties have submitted voluminous briefs and appendices in which the practices of many, if not all, of the past Presidents are set forth. What Mr. Nixon really contests, then, are the assumptions drawn by the other parties based upon the information therein. The Court, however, will not rely upon any of these disputed "assumptions", and will make its determination of the issues on motions for summary judgment and partial summary judgment based solely upon facts which are not in dispute.
There is no dispute as to the nature of the "Presidential materials and tape-recorded conversations." Mr. Nixon has admitted that these materials and tape-recorded conversations were generated or retained by himself and others on his behalf during his tenure in office, and that they contain documents, papers, tapes and other materials, all of which relate to the official business of the government of the United States, and many of which relate directly to the conduct of the Office of the President. Thus, the question presented is purely a question of law. The FOIA plaintiffs seek a declaration that these materials and tapes belong to the government and may not be barred from public access under the FOIA. Mr. Nixon and the government contest this claim, arguing that since Mr. Nixon owns the "Presidential materials and tape recordings", they cannot be considered "records" within the meaning of the FOIA. In this position the government concurs, *132 and adds that the materials cannot be obtained under the FOIA because the White House is not an "agency" within the meaning of the FOIA and, therefore, these materials are not "records" within the meaning of the Act.
Before turning to the merits, it is necessary to set forth with more particularity the nature of the "Presidential materials and tape-recorded conversations", which are estimated to comprise 42 million items. Based upon the pleadings,[68] the hearings,[69] and the submission by the government,[70] the Court finds that the "Presidential materials and tape recordings" are comprised of the following categories:
1) Materials and tape-recorded conversations of the Office of the President, generated or retained by the former President or by others on his behalf, relating to the performance of the constitutional powers and duties of the Office of the President. These communications include all the White House Central Files and all the White House Special Files, as well as many materials and tape-recorded conversations which were never in these files. These communications include memoranda, documents, and papers of the former President, the White House Staff and aides, and they include classified papers and documents relating to the national defense, and other ongoing interests of the government.[71]
2) Materials of the Executive agencies and departments relating to the business of government. These materials include documents, papers and communications of the Executive agencies and departments, as well as documents, papers, and communications sent from and between the various *133 Executive agencies and departments.[72]
3) Materials and Communications in and out of the White House files relating solely to the private lives and activities of the former President, his family, and all other persons taking part or described in said materials and communications.[73]
Because none of the above facts are disputed by any of the parties, and because the above facts are the only facts necessary to a thorough consideration of the legal issues relevant herein, this Court holds that a summary judgment under Rule 56, Fed.Rules of Civ.Proc. is appropriate under the circumstances. With this issue, and all procedural issues, now decided, the Court turns to the merits of this case and the first substantive question, that of "ownership".
VIII. OWNERSHIP
POINT ONE: THE CLAIM OF OWNERSHIP OF FORMER PRESIDENT NIXON TO THE "PRESIDENTIAL MATERIALS AND TAPE-RECORDED CONVERSATIONS" OF THE NIXON ADMINISTRATION IS CONTRARY TO THE GENERAL PRINCIPLE OF LAW THAT THAT WHICH IS GENERATED OR KEPT IN THE ADMINISTRATION AND PERFORMANCE OF THE POWERS AND DUTIES OF A PUBLIC OFFICE BELONG TO THE GOVERNMENT.
It is a general principle of law that that which is generated, created, produced or kept by a public official in the administration and performance of the powers and duties of a public office belongs to the government and may not be considered the private property of the official. United States v. First Trust Co. of St. Paul, 251 F.2d 686, 688 (8th Cir. 1958), aff'g First Trust Co. of St. Paul v. Minnesota Historical Soc., 146 F.Supp. 652 (D.Minn.1956), wherein the Court of Appeals set forth the well-settled principle that:
"[R]ecords of a government officer executed in the discharge of his official duties . . . are public documents and ownership is in the United States." *134 251 F.2d at 688.[74]Cf. White v. United States, 164 U.S. 100, 103, 17 S.Ct. 38, 41 L.Ed. 365 (1896); Wilson v. United States, 221 U.S. 361, 380, 31 S.Ct. 538, 55 L.Ed. 771 (1912). See also United States v. Chadwick, 76 F.Supp. 919 (N. D.Ala.1948):
"[t]he notes, memoranda, statements and other material made and taken by [a public official] in the course of said employment, were and are, the property of the Government."
76 F.Supp. at 923. In Chadwick, the district court in fact ordered the return of the "notes, memoranda, statements and other material" which were taken by the public officer when he left office.
This principle has also been followed by the states. In Coleman v. Commonwealth, 25 Grattan (66 Va.) 865 (1874), the Virginia Supreme Court of Appeals held that:
"whenever a written record of the transactions of a public officer in his office, is a convenient and appropriate mode of discharging the duties of his office, it is not only his right but his duty to keep that memorial, whether expressly required so to do or not; and when kept it becomes a public document โ a public record belonging to the office and not the officer; it is the property of the state and not of the citizen; and is no sense a private memorandum."
25 Grattan (66 Va.) at 881 (emphasis added). See also Robison v. Fishback, 175 Ind. 132, 93 N.E. 666 (1911); People v. Peck, 138 N.Y. 386, 34 N.E. 347 (1893). In Peck, the court held that information given to a public official and related to the administration of that office gave rise to an implied duty to preserve the information for the office and then the public. 138 N.Y. at 395, 34 N. E. at 355. Moreover, the court in Peck opined that the fact that the official was not required to keep the information was not determinative. Id., See also, Sandy White, supra, 164 U.S. at 103, 17 S.Ct. 38.
This principle has also found expression in cases involving the question of whether a document or other material generated by a public official is outside the scope of his duties and therefore susceptible to copyright. The most well-recognized case in this area is that of Public Affairs Associates, Inc. v. Rickover, 109 U.S.App.D.C. 128, 284 F. 2d 262 (1960), rev'd and rem'd 369 U.S. 111, 82 S.Ct. 580, 7 L.Ed.2d 604 (1962), on remand, 268 F.Supp. 444 (D.D.C. 1967). The case concerned an action by a publisher for a declaratory judgment as to its right to publish certain uncopyrighted speeches given by Vice Admiral Hyman G. Rickover, who had refused to allow the speeches to be published, claiming that he owned the speeches and that they were protected by a secured copyright. 284 F.2d at 264-265. The publisher argued that the speeches "resulted from [Rickover's] official responsibilities" and, therefore, were the property of the government. Thus, a copyright would be contrary to 17 U.S.C. ง 8, which provides, "No copyright shall subsist in * * * any publication of the United States Government." 284 F.2d at 267-268 (footnote omitted). The Supreme Court, reversing and remanding *135 due to insufficiency of the record, set forth the test for determining whether the speeches belonged to the government. 369 U.S. at 113-114, 82 S.Ct. 580. The determination was to be made by ascertaining whether the speeches were prepared "in relation to the Vice Admiral's official duties," after careful examination of the "nature and scope" of the duties of the office. Id. at 113, 82 S. Ct. at 582.[75] On remand, the district court, finding that the use of government duplicating machinery, government paper, and the services of a government secretary not determinative, held that the speeches were not "written and delivered as a part of Admiral Rickover's official duties" and, therefore, were susceptible to copyright. 268 F.Supp. at 456.
In the instant matter, former President Nixon contends that this principle is inapplicable to "Presidential materials and tapes" of the Nixon administration, although he admits that these materials and tape-recorded conversations relate to the conduct of the Office of the President. He argues that the nature of the Office of the President permits an assertion of private ownership, and therefore enables him to prevent access to these materials and tapes by any person without his authorization. In support of this contention, he points to the fact that the President is a "constitutionally-elected" officer, and therefore he cannot be held to the principle that that which is generated or kept in the administration and performance of a public office belongs to the government.
POINT TWO: FORMER PRESIDENT NIXON'S ASSERTION OF OWNERSHIP OF THE DOCUMENTS, PAPERS, TAPES AND OTHER MATERIALS GENERATED OR RETAINED BY HIMSELF OR OTHERS ON HIS BEHALF IN THE PERFORMANCE OF HIS DUTIES AS THE PRESIDENT OF THE UNITED STATES IS CONTRARY TO THE NATURE OF THE OFFICE OF THE PRESIDENT AND THE CONSTITUTION.
In order to sustain the assertion that former President Nixon personally owns the documents, papers, tapes and other materials generated or retained by himself or others in the performance of his duties as the President of the United States, it must be found that an individual President is distinguishable from other public servants.[76] Such a conclusion, however, is untenable as it is refuted by the Constitution and the very concept of the Office of the President.
Art. II, Sec. I, cl. 1 of the Constitution provides that: "The exclusive Power shall be vested in a President of the United States of America. He shall hold his Office during the Term of four Years, and, together with the Vice President, chosen for the same Term, be elected, as follows . . . ." And, Sec. I, cl. 5 further provides that:
"In Case of the Removal of the President from Office, or of his Death, Resignation, or Inability to discharge the Powers and Duties of the said Office, the same shall devolve on the Vice President, and the Congress may by Law provide for the Case of Removal, Death, Resignation or Inability, both of the President or Vice President, declaring what Officer shall then act as President, and such Officer shall act accordingly, until the Disability be removed, or a President shall be elected."
*136 These sections of Article II compel only one conclusion: the powers and duties of the executive inure to the Office and not to any individual office-holder; for the President, although elected to the highest office in the Nation, is but a transient holder of the public trust. Even though a President while in office may exercise specific and enumerated powers, Youngstown Sheet & Tube Co. et al., v. Sawyer, 343 U.S. 579, 72 S.Ct. 863, 96 L.Ed. 1153 (1952), he is nevertheless a servant of the people. The President is elected by the people (Art. II, Sec 1, cl. 1), to execute the laws made by the people (Art. II, Sec. 1, cl. 7), and may be removed by the people (Art. II, Sec. IV); and, as recently articulated by the United States Court of Appeals for the District of Columbia:
"Though the President is elected by a nationwide ballot, and is often said to represent all the people, he does not embody the nation's sovereignty. He is not above the law's commands . . .. Sovereignty remains at all times with the people . . .."[77]
Former President Nixon's claim of ownership is therefore repugnant to the very nature of the Office of the President.
It is important to remember that the original Articles of Confederation did not include a chief executive, and that there was a great reluctancy in formulating the Constitution to include such an Office because of the fear that it would lead to a monarchial rather than a republican form of government. The framers of the Constitution, however, were successful in establishing such an Office by convincing the people that a President was necessary for the proper administration of the government and that he would be in the nature of a chief magistrate and not a monarch.[78] James Madison argued in The Federalist No. 69 that:
"The President of the United States would be an Officer elected by the people for four years, the King of Great Britain is a perpetual and hereditary prince. . . . What answer shall we give to those who would persuade us that things so unlike resemble each other? The same that ought to be given to those who tell us that a government, the whole power of which would be in the hands of the elective and periodical servants of the people, is an aristocracy, a monarchy, and a despotism."[79]
Thus, as the Supreme Court has cautioned, "it would be altogether unsafe to reason from any supposed resemblance between [the President and a monarch] where the rights and powers of the executive are brought into question." Fleming v. Page, 50 U.S. (9 How.) 603, 618, 13 L.Ed. 276 (1850). Rather, the President is a "creature of the Law." See United States v. Lee, 106 U.S. 196, 220, 1 S.Ct. 240, 27 L.Ed. 171 (1882). And, in order to preserve the freedom of the people, the President is bound by the law. See Youngstown Sheet & Tube Co., supra 343 U.S. at 655, 72 S.Ct. 863. Therefore, to uphold former President Nixon's claim of ownership would be to place him above the law as well as recognize that he may assert a right to the products of the office, which would be to compare him to a monarch. This the Court cannot do.
Further, not only must former President Nixon's claim of ownership be rejected as contrary to the nature of the office, but also because it is expressly negated by the Constitution itself. Art. II, Sec. I, cl. 6, generally known as the Emoluments Clause, provides that: "The President shall, at stated Times, receive for his Services, a Compensation, *137 which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them." Since the materials in question are directly related to the performance of the Office of the President and are of incalculable value, it would be contradictory to and a violation of, the Emoluments clause for a President to be given or to be permitted to assert a personal right to such materials.
Moreover, it was the intent of the framers of the Constitution to prevent the Office of the President from being a position of both power and profit. While they recognized that they could not divest the office of power, they sought to prevent the corruption of the office by removing profit. They feared that if the office offered both power and profit, the persons who sought the office would "not be the wise and moderate, the lovers of peace and good order, the men fittest for trust." 1 Farrand, The Records of the Federal Convention of 1787, at 82 (as recorded by Madison) (rev. ed. 1937).[80]
Mr. Nixon, however, argues that this Court must sustain his claim of ownership in order to preserve the "constitutional independence" of the Office of the President.
POINT THREE: THE INHERENT CONTINUITY OF THE OFFICE OF THE PRESIDENT NEGATES A CLAIM BY FORMER PRESIDENT NIXON THAT THE INDEPENDENCE OF THE OFFICE REQUIRES THAT HIS ASSERTION OF OWNERSHIP BE SUSTAINED.
Former President Nixon contends that in order to preserve the independence of the Office of the President, the Court must uphold his claim of ownership to the documents, papers, tapes and other materials generated or retained by himself and others on his behalf in the performance of his duties as President of the United States. While this assertion is actually an outgrowth of his argument that he has a personal "Presidential privilege" which attaches to the documents, papers, tapes and other materials which contain confidential communications between himself and his aides, his broad assertion of ownership to approximately 42 million items of materials must be rejected because it would undermine the continuity of the Office of the President.
As previously set forth, Art. II, Sec. I, cl. 1 of the Constitution provides that there be regular changes in the individuals who hold the Office of the President, and Sec. I, cl. 5, which provides for the procedure of who shall hold the Office upon the death, resignation, or other inability of the incumbent, recognizes that there may be unforeseen and irregular changes in the individual who holds the Office of the President.[81] These changes may be from year to year, or even from day to day. And, since the *138 successor is charged with exercising the executive power, it is essential that he have for this purpose the documents, papers, tapes and other materials generated and retained by his predecessor in the exercise of the Article II powers and duties of the Presidency. To sanction the contrary result would undermine the notion of continuity of the Office of the President, and the government as a whole.[82]
The President of the United States is charged with significant powers and duties in the formulation and effectuation of the nation's foreign and domestic policies.[83] He is also charged by the Oath of Office with executing the Office of the President and preserving, protecting and defending the Constitution of the United States, U.S.Const. Art. II, Sec. I, cl. 7, and by Sec. II, cl. 3, with the duty to "take care that the laws be faithfully executed." In order to carry out these responsibilities, the Office of the President must seek and obtain information and advice from the "offices", "counsels", and "departments" of the Executive Branch.
Although the Office of the President consisted originally of only a few aides, it has continuously grown over the years;[84] today there are over five thousand persons who work within the Office of the Executive.[85] Moreover, in order to formulate, effectuate, and discharge the powers and duties of the Office of the President, numerous executive departments and agencies have been created,[86] all of which report to the Office of the President, and which are utilized in the formation and effectuation of the Nation's foreign and domestic *139 policy. To allow any one President to remove the documents, papers, tapes and other materials which contain information vital to the ongoing affairs of the nation would be totally disruptive to the Office of the Presidency and would impair the ability of his successor in office to properly carry out the duties and powers of the office:
"To recognize the constitutional independence of the Presidency is not to establish a sound premise for the conclusion that presidential records are the private property of the incumbent, whether in or out of office. On the contrary, it would seem that if any proposition collides with constitutional principles it is that the President should be exempted from the legal obligation that rests upon other officials in government to protect and refrain from appropriating to personal use records produced or received into custody by virtue of the exercise of a public office. To assume otherwise would be to vest in the highest office of the land, or in his heirs or descendants, the right to sell, to destroy, to disclose, to refuse to disclose, or otherwise to dispose of documents of the highest official nature involving information that, if improperly, prematurely, or irresponsibly revealed, could not only wreck private lives, but also endanger the security of the nation."
H. G. Jones, The Records of a Nation, 161-62 (1969).
Mr. Nixon, however, contends that his personal ownership of the "Presidential materials and tapes" has been sanctioned by precedent.
POINT FOUR: THERE IS NO PRECEDENT WHICH COMPELS A FINDING THAT THE "PRESIDENTIAL MATERIALS AND TAPES" ARE THE PERSONAL PROPERTY OF FORMER PRESIDENT NIXON.
There is no precedent which compels a finding that the "Presidential materials and tapes" of the Nixon administration are the personal property of former President Nixon. There are, in fact, only two cases in our jurisprudence which have involved documents, papers and other materials generated and/or retained in the conduct of the Office of the President.
In the most recent case, In Re Roosevelt's Will, 190 Misc. 341, 73 N.Y.S.2d 821 (1947), the executors of the estate of President Franklin D. Roosevelt sought a determination by surrogate's court that the instrument purporting to be a "gift inter vivos" of all his private and official papers to the government was valid. Thus, the question before the court was limited to whether the instrument contained the essential elements of a valid inter vivos gift. Id. at 821. The court, finding that it did, went no further. The question of whether President Roosevelt personally owned the documents and papers was not raised nor considered. The court, however, noted that during his lifetime, President Roosevelt had continuously placed official documents and papers in a depository and had stated that, "`the ownership and title of all the papers, books, et cetera, should be in the Federal Government itself'." Id. at 823. The court also noted that whereas upon the death of President Roosevelt, the "White House Central Files" were removed to the library, the "Map Room Papers", "relating to the prosecution of the war," were "still in Washington, D.C., under the custody of the President of the United States." Id. at 825.
In Re Roosevelt's Will, therefore, provides no express precedent that the "Presidential materials and tapes" belong to former President Nixon. While it may be construed to assume such ownership, the example of the "Map Room Papers" evinces the repugnance of personal ownership to the continuity of the Office of the President. Had the heirs of former President Roosevelt been less cooperative, a possibility beyond the imagination of this Court, the case may well have been of a different nature.
The second and earlier case, Folsom v. Marsh, 9 Fed.Cas. p. 342 (No. 4, 901) *140 (C.C.D.Mass.1841) concerned a dispute between two private parties in an action for infringement of copyright. Folsom and Company, publishers of a multi-volume work entitled, "The Writings of George Washington", by Jarod Sparks, brought suit in equity to enjoin Marsh and Company, publishers of a two-volume work entitled "The Life of Washington in the Form of an Autobiography," written by Rev. Charles W. Upham, from continuing to publish the two-volume work, claiming that the defendant had copied verbatim a portion of the multi-volume treatise. Id. at 343. The defendants claimed that there could be no infringement since the material extracted was the papers of George Washington himself and, therefore, public in nature and not susceptible to copyright. Id. at 344. Circuit Justice Story, recognizing the copyright, held that there had been infringement and that an injunction should issue. Id. at 349.
While on first impression the holding in Folsom would lend support to former President Nixon's claim of ownership, Justice Story's opinion was carefully interwoven with indications of its limited stare decisis value, as well as an inference that a contrary conclusion may well have been reached had the equities not dictated the result.
First, Justice Story noted that President Washington had "deemed them his own private property," and that Mr. Sparks together with Mr. Chief Justice Marshall had procured the papers from his nephew, the late Mr. Justice Washington. 9 Fed.Cas. at 345. Thus, he was sensitive to the fact that publication by the defendants "must be injurious to the rights of property of the representatives and assignees of President Washington." Id. at 345. Secondly, he noted that the pirated work only included a fraction of the papers of the multi-volume treatise, and that copies of these papers were generally available. Id. at 347. However, Justice Story emphasized that the copyright law had encouraged publication of the papers of such presidents as "Jefferson and Madison, and other distinguished statesmen of our own country." Id. Thus, he was fearful that not to recognize the copyright would have an inhibiting effect on such publications. Third, he noted that the multi-volume treatise was a work of considerable labor, and that the equities were, therefore, against the pirate, despite the limited degree of the infringement. Id. Thus, it is understandable that Justice Story prefaced his opinion with the following caveat:
"This is one of those intricate and embarrassing questions, arising in the administration of civil justice, in which it is not, from the peculiar nature of the controversy, easy to arrive at any satisfactory conclusion, or to lay down any principles applicable to all cases."
9 Fed.Cas. at 344. It therefore is apparent that decision in Folsom v. Marsh was not intended to be, and cannot be, considered an establishment of the right of personal ownership of a President in the documents, papers and materials generated or retained in the conduct of the Office of the President. Rather, Justice Story was careful to comment that had the government sought an interest in the matter, the result may have been different:
"In respect to official letters, addressed to the government, or any of its departments, by public officers, so far as the right of the government extends, from principles of public policy, to withhold them from publication, or to give them publicity, there may be a just ground of distinction. It may be doubtful, whether any public officer is at liberty to publish them, at least, in the same age, when secrecy may be required by the public exigencies, without the sanction of the government. On the other hand, from the nature of the public service, or the character of the documents, embracing historical, military, or diplomatic information, it may be right, and even the duty, of the government, to give them publicity, *141 even against the will of the writers.
. . . . . .
But assuming the right of the government to publish such official letters and papers, under its own sanction, and for public purposes, I am not prepared to admit, that any private persons have a right to publish the same letters and papers, without the sanction of the government, for their own private profit and advantage."
9 Fed.Cas. at 347 (emphasis added).[87]
Former President Nixon, however, contends that the historical practice of past Presidents does sanction his private right of ownership.
POINT FIVE: THE HISTORICAL PRACTICE OF PAST PRESIDENTS DOES NOT EVINCE A CLEAR AND CONSTANT RECOGNITION OF OWNERSHIP OF THE MATERIALS GENERATED AND RETAINED IN THE CONDUCT OF THE OFFICE OF THE PRESIDENT.
Former President Nixon contends that his personal ownership of the "Presidential materials and tapes" is supported by the practice of past Presidents. In response, the statement of Judge Pine in Youngstown Sheet & Tube Co. v. Sawyer, 103 F.Supp. 569, 575 (D.D.C.1952), is particularly applicable and this Court adopts it: "Apparently, according to his theory, several repetitive, unchallenged, illegal acts sanctify those committed thereafter. I disagree."
An examination of the practices of past Presidents reveals that while some Presidents claimed that the materials in the White House were their personal property and, therefore, took them when they left office, this was not the opinion or the practice of all previous Presidents. For example, President Thomas Jefferson:
"deposit[ed] in the various departmental offices โ State, Treasury, War, Justice, and Post Office โ every document having any relation to the conduct of public business or being in any sense official in nature."[88]
More recently, Presidents Franklin D. Roosevelt and Harry S. Truman publicly stated that these materials were the property of the government.[89] But even if there existed an expectation and practice by past Presidents to the contrary, it would not necessarily dictate the constitutional standard. The Court must examine the purpose and function of such practice, for to merely rely on historical precedent would be "blind formalism". Williams v. Florida, 399 U.S. 78, 103, 90 S.Ct. 1893, 26 L.Ed.2d 446 (1970).[90]
A review of the literature concerning Presidential practice with regard to the disposition of Presidential papers and materials reveals that there were compelling reasons for Presidents to take their materials with them when they left office. H. R. Jones, in his learned work, The Records of a Nation: Their Management, Preservation and Use,[91] indicates that the most important factor which prompted Presidents to take Presidential papers and materials with them when they left office was the lack of assurance that they would not be indiscriminately thrown open to public *142 scrutiny.[92] As another scholar has stated Presidents feared that the end of the President's term would be a "signal for disclosure."[93] This is understandable since there was no provision or facility to house and protect these papers and materials. In fact, the National Archives did not even come into existence until 1934.[94] Even after its creation, there was no provision whereby these papers and materials could be deposited and access controlled. Thus, when President Franklin D. Roosevelt decided to deposit the Presidential papers and materials of his administrations with the government, the problem, as stated by Jones, was that "nowhere in past experience would there be found a logical pattern or practical solution to the complex problem of what disposition to make of the papers of an outgoing President."[95] Thus, in 1943, the archivists had to make up their own rules for access.[96]
Therefore, considering the problem that there was no place to deposit Presidential papers and materials, and the fear of disclosure, it is understandable that Presidents such as William H. Taft stated: "I do not think that I ought to burden the White House with these things and, therefore, want them sent to me." Index to the William Howard Taft Papers V. (1972).
This situation was altered, however, with the passage of the Federal Records Act in 1950, which was amended in 1955 to become the Presidential Libraries Act.[97] Under this Act, Presidential papers and materials could be deposited and access controlled.[98] Subsequently, every President has deposited the Presidential papers and materials under the Act.[99]
The practices of past Presidents must be viewed in light of these reasons for post-term retention of Presidential papers and materials. When so viewed, the practice may be considered not one of asserting a right of ownership, but of retention in trust for the public. See, First Trust Co. of St. Louis v. Minnesota Historical Society, 146 F.Supp. 652, aff'd, 251 F.2d 686 (8th Cir. 1958). And, even if a rule existed that a President, at the expiration of his term in office, could remove the Presidential papers and materials to hold them in trust and to protect their confidentiality, the passage of the Presidential Libraries Act eliminated the reason for such a rule, and it should not now be resurrected:
"It is revolting to have no better reason for a rule of law than that it was laid down so [long ago]. It is even more revolting if the grounds upon which it was laid down have vanished long since, and the rule simply persists from blind imitation of the past." (Emphasis added.)
Holmes, The Path of the Law, 10 Harv. L.Rev. 457, 469 (1897).
A further reason for rejecting any such rule is that the scope of the office of the President has greatly expanded in this century, and has taken on many of the functions formerly assigned to the executive departments.[100] Thus, the papers and materials generated and retained in this office have become even more indispensible to the ongoing operations of the government.[101] That they *143 should be removed and controlled by a former President further undermines the vitality of the rule.
Former President Nixon, however, argues that his right of ownership has been recognized by Congress and, therefore, must be accepted.
POINT SIX: CONGRESS HAS NOT SANCTIONED THE PERSONAL OWNERSHIP OF "PRESIDENTIAL MATERIALS AND TAPES" GENERATED AND RETAINED IN THE CONDUCT OF THE OFFICE OF THE PRESIDENT.
An analysis of the relevant statutes and the legislative history reveal that Congress has never sanctioned the personal ownership of "Presidential Materials and tapes" generated and retained in the conduct of the Office of the President.
Former President Nixon argues that the Presidential Libraries Act of 1955, 44 U.S.C. งง 2101, 2107, 2108, sanctioned the personal ownership of each President of the documents, papers, tapes and other materials generated and retained in the conduct of the Office of the President. Principally, he relies on section 2107 which provides in pertinent part that:
"When the Administrator of General Services considers it to be in the public interest he may accept for deposit โ
"(1) the papers and other historical materials of a President or former President of the United States, or other official or former official of the Government, and other papers relating to and contemporary with a President or former President of the United States, subject to restrictions agreeable to the Administrator as to their use . . .." (Emphasis added).
and which amended section 507(e) of the Federal Records Act of 1950, which provided in pertinent part that:
"(e) The Administrator may accept for deposit โ
"(1) the personal papers and other personal historical documentary materials of the present President of the United States, his successors, heads of executive departments, and such other officials of the Government as the President may designate, offered for deposit under restrictions respecting their use specified in writing by the prospective depositors . . .." (Emphasis added.)
Former President Nixon contends that since the word "personal" in section 507(e)(1) was not included in section 2107, Congress recognized the right of ownership of the President to all the documents, papers, tapes and other materials generated and retained in the conduct of the office of the President. The legislative history of the Act and the other sections of the 1955 Act require that this interpretation be rejected.
Preliminarily, it must be recognized that the impetus for the passage of the 1950 Federal Records Act was the desire to secure for the Nation the historical record contained in Presidential documents, papers and materials. Records of a Nation at 145-154. Congress sought to prevent the destruction of these valuable memorials of history which had so often been destroyed.[102] As Representative McCormack stated when presiding over the hearings concerning the 1955 amendments: "the matter should not be left to happenstance."[103] Thus, Congress established a statutory scheme to provide facilities for these materials.
Considering this general purpose, the omission of the word "personal" cannot be interpreted as recognizing a right of private ownership. In fact, the legislative history reveals that the word "personal" was omitted to expand the scope of materials relating to the life of a President that could be accepted and preserved, such as pre-Presidential materials and materials "outside the scope *144 of the personal collection of the President." 1955 Hearings at 24.
The language of the statute itself rejects the former President's interpretation. It is axiomatic that a statute cannot be read in piecemeal. A reading of the other subsections of section 507 of the 1950 Act demonstrate not only that Congress distinguished between "personal" and "official" materials of the President, but also that section 2107 is still limited to "personal" materials.
Section 507(a)(1) of the 1950 Act provided in pertinent part that:
"Sec. 507. (a) The Administrator, whenever it appears to him to be in the public interest, is hereby authorized โ
"(1) to accept for deposit with the National Archives of the United States the records of any Federal agency or of the Congress of the United States that are determined by the Archivist to have sufficient historical or other value to warrant their continued preservation by the United States Government . . .." (Emphasis added).
This section was not changed by the 1955 amendments, but was left intact in section 2103 of title 44. It provides for the deposit of "records" of "any Federal agency". These records are the "official" records of the government, defined in 44 U.S.C. ง 3301 which defines government records as:
"all books, papers, maps, photographs, or other documentary materials, regardless of physical form or characteristics, made or received by an agency of the United States government under Federal law or in connection with the transaction of public business and preserved or appropriate for preservation by that agency or its legitimate successor as evidence of the organization, functions, policies, decisions, procedures, operations, or other activities of the Government or because of the informational value of data in them." (Emphasis added)
Further, "Federal agency" includes the Office of the President, by the definition set forth in 40 U.S.C. ง 472, which provides in pertinent part that:
"(a) The term `executive agency' means any executive department or independent establishment in the executive branch of the Government . . .."
"(b) The term `Federal agency means any executive agency' or any establishment in the legislative or judicial branch of the Government . . ."
Although this section does not expressly include the Office of the President, this is the clear interpretation. The Solicitor General has, in discussing section 507 (a) (1) [sections 2103, 2104 as amended], opined that:
"The Presidency seems to have been regarded by Congress as a Federal agency, the official records of which would be subject to deposit pursuant to sections [2103 and 2104 of 44 U.S. C.]. Section 3(b) of the Federal Property and Administrative Services Act of 1949 . . . defines `Federal agency' as including inter alia, `any executive agency' and section 3(a) defines `executive agency' as `any executive department or independent establishment in the executive branch of the Government * * *' Other parts of that act appear to be applicable to the White House, among other agencies. See, e.g., sections 109, 201-206, 301-309."
Memorandum of Office of the Asst. Solicitor General (now Office of Legal Counsel) at 2 (July 24, 1951).
Thus, section 2107, when construed with section 2103, reveals not only that Congress distinguished between "official" and "personal" Presidential documents, papers and materials, but also that section 2107 must still be interpreted as only including "personal" documents, papers and materials. Therefore, *145 the contention of the former President must be rejected.[104]
This Court, however, recognizes that without reference to 44 U.S.C. ง 3301 (definition of government records), the distinction between official and personal Presidential documents, papers and materials would be vague. Even without referring to section 3301, however, the general principle that documents, papers and materials generated and retained in the conduct of a public office which this Court has held to apply to the Office of the President, would cause the same result: that former President Nixon's contention be rejected.[105]
The Court, having tested former President Nixon's claim of ownership against the common-law, the Constitution, the history and practice of former Presidents, precedent, and the Acts of Congress, concludes that the "Presidential materials and tape-recorded conversations" which were generated, created, produced or kept in the administration and performance of the powers and duties of the Office of the President belong to the government, and are not personal property of the former President.
POINT SEVEN: TO THE EXTENT THAT THE PRESIDENTIAL MATERIALS AND TAPE-RECORDED CONVERSATIONS CONTAIN "RECORDS" WITHIN THE MEANING OF THE FOIA, THE FOIA PLAINTIFFS HAVE A RIGHT OF ACCESS TO THOSE RECORDS.
The government and former President Nixon contend that even if Mr. Nixon does not own the "Presidential materials and tape-recorded conversations" generated and retained in the conduct of the Office of the President, they nevertheless are not "records" within the meaning of the Freedom of Information Act.
The Freedom of Information Act, 5 U.S.C. ง 552, provides in pertinent part that:
"(a) (3) . . . each agency, on request for identifiable records . . . shall make the records promptly available to any person. . . ."
The FOIA applies to the records of executive departments of the government. See e.g. Rose v. Department of Air Force, 495 F.2d 261 (2d Cir. 1974) (Defense); Stern v. Richardson, 367 F. Supp. 1316 (D.D.C.1973) (Justice); Tax Analysts & Advocates v. Internal Revenue Service, 362 F.Supp. 1298 (D. D.C.1973) (Treasury); National Parks & Conservation Ass'n v. Morton, 498 F. 2d 765 (D.C.Cir. 1974) (Interior). Moreover, these records would be available to "any person" even if they are sent to the Office of the President for his *146 consideration. See Environmental Protection Agency v. Mink, 410 U.S. 73, 93 S.Ct. 827, 35 L.Ed.2d 119 (1973). Thus, these records of the executive departments even though now in the Office of the President must still be considered as records under the FOIA and, therefore, accessible to applicants under the Act. Notably, although this Court has held that the Presidential materials and tape-recorded conversations are not the private property of former President Nixon, this fact would be an additional ground for rejecting his claim. For it is inconceivable that these "records" which would have been accessible when Mr. Nixon was in office, would be inaccessible when Mr. Nixon left office.
It is the opinion of the Court that the essence of the government's and former President Nixon's claim is that the Office of the President is not an "agency" under the FOIA, and therefore the "Presidential materials and tape-recorded conversations" pertaining thereto are not "records" within the Act. This broad contention must be considered in light of the fact that the Office of the President is really two entities: the White House Office and the Executive Office of the President. See Soucie v. David, 145 U.S.App.D.C. 144, 448 F.2d 1067, 1074 (1971). The former includes the President and his immediate aides, and the latter includes congressionally-created executive "agencies" which assist the President in the formulation of policy and programs. Id. at 1074-1079. The executive agencies have been held to be within the meaning of the term "agency" of the FOIA, and "records" of such agencies may be accessible under the FOIA even though they have been sent to and are in the possession of the White House Office. Id. 1075-1076. Thus, the "records" of the executive "agencies" like the executive departments, even though now in the White House Office, must be considered "records" under the FOIA and accessible to applicants under the Act.
The remaining question then is whether the Office of the President (the White House Office) is an "agency" under the FOIA, making its "records" accessible under the Act. The language of the definition of the term "agency" does not distinguish between the White House Office and the Executive Office of the President. In fact, the definition of the term "agency" "specifically excludes Congress and the courts of the United States, but does not specifically exclude the President." Soucie v. David, supra, 145 U.S.App.D.C. 144, 448 F.2d at 1073 n. 17. Further,
"the leading students of the APA, whose analyses are often cited by the Supreme Court, and who on some matters are in conflict with each other, seem to be in agreement that the term `agency' in the APA includes the President โ a conclusion fortified by the care taken to make express exclusion of `Congress' and `the courts.'"
Amalgamated Meat Cutters & Butchers Work v. Connaly, 337 F.Supp. 737, 761 (D.D.C.1971) (three-judge court) (citing R. Berger, Administrative Arbitrariness โ A Synthesis, 78 Yale L.J. 965, 997 (1969); K. Davis, Administrative Arbitrariness โ A Postscript, 114 U. of Pa.L. Rev. 823, 832 (1966); L. Jaffee, The Right to Judicial Review, 71 Harv.L. Rev. 401, 769, 778, 781 (1958)).
This, however, is not conclusive. This question cannot be answered without consideration of the doctrine of the separation of powers. Congressional intrusions into the powers and duties of the Office of the President have been few, and they should not be assumed. It is the opinion of this Court that when Congress excluded the "executive" from the definition of "agency" within the FOIA, it did not go so far as to place the "records" of the President and his immediate aides, known as the White House Office, within the purview of the Act. This conclusion is supported by the recent amendments to the FOIA.[106]*147 5 U.S.C. ง 552(a)(3) has been amended to include subsection (e), which provides:
"(e) For purposes of this section, the term `agency' as defined in section 551(1) of this title includes any executive department, military department, Government corporation, Government controlled corporation, or other establishment in the executive branch of the Government (including the Executive Office of the President), or any independent regulatory agency." (emphasis added)
In explaining the expanded definition of the term "agency", the Conference Report[107] states that:
With respect to the meaning of the term `Executive Office of the President' the conferees intend the result reached in Soucie v. David, 145 U.S. App.D.C. 144, 448 F.2d 1067 (1971). The term is not to be interpreted as including the President's immediate personal staff or units in the Executive Office whose sole function is to advise and assist the President.
Thus, Congress has excluded those White House materials and tape-recorded conversations between the President and his aides from the purview of the Act by the new amendments. It is the opinion of this Court that in view of these new amendments and Congress's intention, and considering the doctrine of separation of powers, the present definition of the term "agency" should not include the White House Office but should only be extended to the Executive Office of the President, as previously differentiated. This, however, does not mean that "records" of the executive agencies and departments which were kept in the White House Office are immune from access under the FOIA, See Environmental Protection Agency v. Mink, supra; Soucie v. David, supra. Therefore, the FOIA plaintiffs are entitled to a declaration as to such, as well as a declaration that they are "records" within the meaning of the FOIA.[108]
This, however, does not dispose of the matter, as former President Nixon contends that even if the "Presidential materials and tapes" do contain such "records", access may not be given to any FOIA applicant since it would violate his alleged constitutional right of "Presidential privilege". The FOIA plaintiffs seek a declaration to the contrary. Further, the question of privilege is also raised with respect to the November 9th Agreement between President Ford and the Special Prosecutor, as well as with respect to the government defendants responding to subpoenas and other Court orders. These, in turn, raise questions under the fourth amendment.
IX. PRIVILEGE
A FORMER PRESIDENT MAY NOT ASSERT OR WAIVE THE PRIVILEGE WHICH ATTACHES TO THE CONFIDENTIAL COMMUNICATIONS RELATING TO THE CONDUCT OF THE OFFICE OF THE PRESIDENT CONTAINED IN PRESIDENTIAL MATERIALS AND TAPE RECORDINGS AS THE PRIVILEGE BELONGS TO THE GOVERNMENT AND MAY ONLY BE ASSERTED OR WAIVED BY THE INCUMBENT PRESIDENT.
Former President Nixon contends that he must have personal and exclusive control of access to and disclosure of Presidential materials and tape recordings which contain confidential communications relating to the conduct of the Office of the President in order to protect and preserve what he denominates as his constitutional right of *148 "Presidential privilege." He argues that this privilege has been recognized by the Supreme Court in the recent case of United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974). Based upon this premise, he claims that the defendants, officers of the United States government, may not have access to or disclose the Presidential materials and tape recordings, either to respond to a subpoena or other court order, or pursuant to the November 9th Agreement between President Ford and the Special Prosecutor, or in response to requests by private parties under the Freedom of Information Act.
It is extremely important to articulate the precise parameters of the question presented to the Court. Former President Nixon claims a personal "Presidential privilege" to confidential communications which took place in the Office of the President during his tenure, and which relate to the conduct of the office. He argues that this "Presidential privilege" is distinguishable from "executive privilege", the latter being applicable to state and national security secrets, the former apparently encompassing all communications to and from the former President concerning the conduct of the Office of the President. This presents a difficult definitional problem. On the one hand, the former President defines "Presidential privilege" by the fact of a confidential communication to or from the President, and "executive privilege", on the other hand, by the substance of the information contained therein. Thus, he asserts that even though he has left office, it is he who has the right to assert or waive the "Presidential privilege", but it is the government who has the right to assert or waive the "executive privilege". This dichotomy, however, is unacceptable for numerous reasons.
A. The Function of the Privilege
Executive privilege is founded upon the public interest in the effective performance of the constitutional powers and duties assigned to the Executive Branch. See Carl Zeiss Stiftung v. E. B. Carl Zeiss, Jena, 40 F.R.D. 318, 325 (D.C.1966) ("executive privilege" is essential to the quality of its functioning). And, based upon the function of executive privilege, it is well-settled that the privilege belongs to the government. United States v. Reynolds, 345 U.S. 1, 8, 73 S.Ct. 528, 97 L.Ed. 727 (1953).
Mr. Nixon, however, relying on the recent Supreme Court case of United States v. Nixon, 418 U.S. 683, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974), contends that unlike executive privilege, the privilege which protects confidential communications of the President relating to the conduct of the Office of the President is a "Presidential privilege" which inures to the President during whose term in office the communications occurred. United States v. Nixon, supra, however, does not lend support to Mr. Nixon's reasoning. Rather, the Supreme Court's analysis of the function of the privilege which protects confidential communications relating to the conduct of the Office of the President overwhelmingly supports the contrary conclusion.
In United States v. Nixon, supra, the Supreme Court, holding that an assertion of privilege based "only on the generalized interest in confidentiality" could not "prevail over the fundamental demands of due process of law in the fair administration of criminal justice," 418 U.S. at 713, 94 S.Ct. at 3110, recognized that the protection of the confidentiality of presidential communications is constitutionally based, 418 U.S. at 711, 94 S.Ct. at 3109. Significantly, the Court, while noting that the privilege has "all the values to which we accord deference for the privacy of all citizens," determined that the privilege should be recognized because it is in the "public interest" that the "Chief Executive", in the performance of Article II powers, must be free, with his assistants, "to explore alternatives in the process of shaping policies and making decisions and to do so in a way many would be unwilling to express *149 except privately." 418 U.S. at 708, 94 S. Ct. at 3107. The privilege accepted by the Supreme Court is not personal, but rather, "the privilege can be said to derive from the supremacy of each branch within its own assigned area of constitutional duties." 418 U.S. at 705, 94 S.Ct. at 3106. The Court opined that the privilege only exists insofar as it "relates to the effective discharge of a President's powers." 418 U.S. at 711, 94 S.Ct. at 3109.
The Supreme Court's analysis of the function of the privilege therefore compels only one conclusion, that it inures to the Office of the President, not to any particular office-holder. Thus, the privilege which protects the President's confidential communications must be considered but "one species of executive privilege." Senate Select Committee on Pres. Camp. Act. v. Nixon, 498 F.2d 725, 729 (D.C.Cir., 1974). For, like that which protects military and state secrets, it is also founded upon the public interest in the effective performance of the constitutional powers and duties assigned to the Executive Branch and, therefore, also belongs to the government.[109] This is so even if a limited view of the privilege is taken, for it is apparent that the crux of the Supreme Court's decision in United States v. Nixon, supra, is that while the privilege protects conversations that have occurred, its true function is to assure that future presidents and their assistants will not be inhibited in expressing their "candid, objective, and even blunt or harsh opinions." 418 U.S. at 706, 712, 94 S.Ct. at 3107, 3109, n. 20.
B. The Exercise of the Privilege
The assertion or waiver of the privilege is an exercise of the executive power, and since this power is vested in the incumbent President, U.S.Const., Art. II, Sec. I, cl. 1, it follows that the former President may not assert or waive the privilege.[110] Nevertheless, Mr. Nixon contends that since these confidential communications occurred during his tenure in office, he has the right to assert or waive the privilege. The reasons for the above-stated principle, however, require that Mr. Nixon's contention be rejected.
This principle, that the assertion or waiver of the privilege is an exercise of executive power, has been expressed in the "head of the department" concept. In the area of military and state secrets, it is well-settled that "[the privilege] is not to be lightly invoked. There must be a formal claim of privilege, lodged by the head of the department which has control over the matter, after actual personal consideration by that officer." United States v. Reynolds, 345 U.S. at 7, 73 S.Ct. at 532 (emphasis added). The reason that the "head of the department" must raise the privilege is apparent.
Only a government official, and particularly the "head of the department", has sufficient knowledge to determine, after "actual personal consideration of the matter," whether the disclosure of certain information would affect, adversely or not, the ongoing interests of the government. For, only (s)he knows what those ongoing interests are. This will depend upon a myriad of information, both current and past, to which only the head of the Department will have access, and which will be necessary to make a decision involving "considerations of policy . . . of extreme magnitude". Ware v. Hylton, 3 Dall (3 U.S. 199, 260 (1796). Clearly, *150 a private individual does not have this capacity. For example, in the case of In re Grove, 180 F. 62 (3rd Cir. 1910), a private individual, Grove, had been held in contempt for refusing to produce copies of plans and specifications for the construction of certain torpedo boat destroyers for the United States, for which his company had submitted a bid. The Third Circuit Court of Appeals held that Grove's refusal was proper and not contemptuous since only the Secretary of the Navy, who had informed the Court that, after consideration of the matter, disclosure "[would not cause] the discovery of military or other secrets detrimental to the public interest," was in a position to make such a determination. 180 F. at 67.[111] It was upon consideration of the matter as revealed in Grove that the Supreme Court in Reynolds held that "the privilege belongs to the Government and must be asserted by it; it can neither be claimed nor waived by a private party." 345 U.S. at 7, 73 S.Ct. at 532 (citing In re Grove).
The rule announced in Reynolds, supra, is also applicable to confidential communications of a President pertaining to the conduct of the Office of the President. This privilege is identical[112] to the privilege which protects all executive department "documents reflecting advisory opinions, recommendations and deliberations comprising part of a process by which governmental decisions and policies are formulated." Carl Zeiss, supra, 40 F.R.D. at 324. See also, Black v. Sheraton Corp. of America, et al., 371 F.Supp. 97, 100 (D.D.C.1974); United States v. Article of Drug, etc., 43 F.R.D. 181, 190 (D.Del.1967); Rosee v. Board of Trade of City of Chicago, 36 F.R.D. 684, 689 (N.D.Ill.1965); United States v. Procter & Gamble Co., 25 F.R.D. 485, 489 (D.N.J.1960); Kaiser Aluminum & Chemical Corp. v. United States, 157 F.Supp. 939, 944, 141 Ct.Cl. 38 (1958); Gardner v. Anderson, 9 Fed.Cas. p. 1158, No. 5220 (C.C.D.Md. 1876). In these cases, while the fact of the communication is privileged, as with all privileges,[113] the substance of the communication has not been separated from the fact thereof; "While it is agreed that the privilege extends to all military and diplomatic secrets, its recognition is not confined to data qualifying as such." Carl Zeiss, supra, 40 F. R.D. at 324. Therefore, the courts in such cases have uniformly adopted the "head of the department" principle, requiring the head of the department to assess the impact of disclosure, not only on the free flow of information, but the impact of the substance of the disclosure upon ongoing governmental interests. See, e. g., Carl Zeiss, supra, 324 n. 15 (citing numerous cases where the courts have noted the impact of the substance *151 of the communication as well as the fact of the communication). Thus, since the fact of the communication can similarly not be separated from the substance thereof with respect to the communications of the President pertaining to the conduct of the Office of the President,[114] the head of the department rule of Reynolds must be applied.[115]
That the rule in Reynolds, supra, must be applied with respect to confidential communications of the President relating to the conduct of the Office of the President is even more compelling than with respect to the executive departments, since the former relate to decisions and policies at the highest level of the government. Thus, the disclosure of even the most innocuous statement about a foreign power, for example, may have the gravest repercussions. See United States v. Nixon, supra, 418 U.S. at 714-716, 94 S.Ct. at 3111.
Thus, the assertion or waiver of the privilege which protects confidential communications relating to the conduct of the Office of the President, even though they are those of a former President, must be exercised by the incumbent President. It may not be asserted or waived by a private party, even a former President; it is apparent that Mr. Nixon, although a former President, is no longer privy to the myriad of information concerning ongoing governmental interests which would be essential to the exercise of the privilege. Therefore, he lacks the capacity to assert or waive the privilege.[116] Thus, the preservation or disclosure of confidential communications pertaining to the conduct of the Office of the President must devolve upon the incumbent President.
This conclusion would also obtain even if the substance of the communication were not considered. For, the privilege of confidentiality of presidential communications is not only based upon the public interest, but also, it is to be exercised in the public interest.[117] "If a President concludes that compliance with a subpoena would be injurious to the public interest he may . . . invoke a claim of privilege." United States v. Nixon, 418 U.S. at 713, 94 S.Ct. at 3110. Thus, even where the disclosure of the substance of the communication would not be detrimental to ongoing governmental interests, an assessment must be made of whether the public interest in disclosure outweighs the affect upon the free flow of information within the Office of the President. And, only the incumbent President is in a position to assess the public interest, and balance these interests. Clearly, even in such *152 instances, "[the privilege] is not to be lightly invoked." Reynolds, supra, 345 U.S. at 7, 73 S.Ct. at 532.
Moreover, it is the incumbent President, not the former President, who bears the legal and political responsibility for either asserting or waiving the privilege. It is the incumbent President who is held legally responsible for his conduct, U.S.Const. Art. II, Sec. IV, and it is the incumbent President who is held politically responsible; he, not the former President, must stand for reelection, U.S.Const., Art. II, Sec. I, cl. 1. And, even though there are statutes which would prohibit the former President from disclosing certain information,[118] these statutes are not all-inclusive.
The court concludes that the privilege which protects confidential communications relating to the conduct of the Office of the President belongs to the government, and must be asserted or waived by the incumbent President, and not by the former President or any other private citizen.
C. The Scope of Protection of the Privilege
Former President Nixon contends that if he is unable to control the assertion or waiver of the privilege, he will lose the protection that the privilege would afford him if he were still in office.
Preliminarily, as this Court has earlier set forth, the privilege does not exist for the protection of the officeholder, but rather for the office and, therefore, the public. Yet, the effect of the privilege is to shield public officials to a limited extent. They are protected from public disclosure of "errors or bad judgment," Kaiser Aluminum, supra, 157 F. Supp. at 946, except where the privilege must yield to other interests. See United States v. Nixon, supra. However, this protection is limited:
"It is true, of course, that the Executive cannot, any more than the other branches of government, invoke a general confidentiality privilege to shield its officials and employees from investigations by the proper governmental institutions into possible criminal wrongdoing."
Senate Select Comm. on Pres. Cam. Act. v. Nixon, supra, D.C.Cir., 498 F.2d at 731 (footnote omitted).
See also, Nixon v. Sirica, supra, 159 U. S.App.D.C. 58, 487 F.2d at 713.
It is against this background that former President Nixon strongly asserts that if the court rules that only an incumbent President may assert or waive the privilege which protects the confidential communication of the President, including those of a former President, relating to the conduct of the Office of the President, it would subject each President to the intolerable possibility that his successor would lay bare, either out of spite or for political gain, those confidential communications of his predecessor which reveal "errors or bad judgment." But such an assertion is untenable as the privilege is part of the Constitution, United States v. Nixon, supra, which each President has a constitutional duty to "preserve, protect and defend." U.S.Const., Art. II, Sec. I, cl. 7. This duty carries with it the responsibility that each President not disclose the confidential communications of his predecessor except upon the same consideration that he is required to give to his own confidential communications with his assistants, i. e., when it is in the "public interest". United States v. Nixon, supra, 418 U.S. at 713, 94 S.Ct. at 3110 (Section D). And, it matters not that a former President has no remedy at law or equity to prohibit disclosures by his successors, or to recover damages therefrom for his successors, having taken the "oath of office" may, upon a violation of the duty to protect such communications, be held responsible. U.S.Const., Art. II, Sec. I, cl. 1; Sec. IV.
Former President Nixon, however, claims that a "Presidential privilege" is essential to a former President; otherwise, *153 he could be compelled to reveal confidential communications once he had left office.[119] This Court has rejected any notion of a personal "Presidential privilege". However, this does not mean that a President, once he has left office, can be compelled to reveal confidential communications which relate to the conduct of the Office of the President. For, a President, in this sense, is analogous to an attorney.
When an attorney is subpoenaed or summoned to testify about confidential communications protected by the attorney-client privilege, he may not do so without the informed consent of his client. For, the attorney-client privilege is personal to the client, and can only be waived by the client. See Magida v. Continental Can Co., 12 F.R.D. 74, 78 (S.D.N.Y.1951). Similarly, the former President, when called upon to testify about confidential communications concerning the conduct of the Office of the President, could not do so without the informed consent of the client โ in this case, the public. However, unlike the attorney-client privilege, the public expresses its consent through its designated representative,[120] the incumbent President. Thus, it would appear that when the former President is subpoenaed or summoned to testify concerning confidential communications relating to the conduct of the Office of the President, the incumbent President would have to intercede in order to assert or waive the privilege. This conclusion has found expression in not wholly dissimilar cases. See e. g., Heine v. Raus, 399 F.2d 785 (4th Cir. 1968). However, a final and conclusive determination of this question is not essential for a resolution of the questions herein.
The Court concludes, as a matter of law, that the privilege which attaches to confidential communications relating to the conduct of the Office of the President contained in Presidential materials and tape recordings belongs to the government and may only be asserted or waived by the incumbent President, and not by former President Nixon.
X. FOURTH AMENDMENT
POINT ONE: MR. NIXON'S FOURTH AMENDMENT RIGHTS HAVE NOT BEEN VIOLATED BECAUSE THE NOVEMBER 9TH AGREEMENT IS NOT A GENERAL WARRANT: NOR DOES IT SUBJECT HIM TO AN UNREASONABLE SEARCH AND SEIZURE. HOWEVER, UNDER THE CIRCUMSTANCES, MR. NIXON'S RIGHT OF PRIVACY MUST BE AFFORDED PROTECTION.
This Court, having held that only the incumbent President can assert or waive the privilege which attaches to the confidential communications relating to the conduct of the Office of the President contained in the Presidential materials and taped conversations of the Nixon Administration, cannot enjoin the actions of the defendants or the November 9th Agreement on the basis of a claim of infringement of "Presidential privilege". Mr. Nixon, however, also seeks to enjoin the defendants, who are now acting pursuant to the November 9th Agreement, from infringing upon his alleged fourth amendment rights. In a three-fold allegation, he claims that the November 9th Agreement is a "general warrant", that the defendants' access to the Presidential materials and tape recordings is a violation of his right to be free from unreasonable searches and seizures, *154 and that the defendants will also violate his constitutional right of privacy. The Court will deal with each of these arguments in turn, as they are in large part dependent upon each other.
A. "General Warrant"
Mr. Nixon contends that the November 9th Agreement is a "general warrant" which is abhorrent to the Constitution, specifically the fourth amendment which was adopted to safeguard against such pernicious practices. See Weeks v. United States, 232 U.S. 383, 390, 34 S.Ct. 341, 58 L.Ed. 652 (1914). The November 9th Agreement, set forth in its entirety in Appendix B, however, bears no resemblance to a "general warrant". It does not give the Special Prosecutor the general authority to invade the home and privacy of a citizen and seize his private papers in support of charges against him. Id. It is evident from the first paragraph of the agreement that it is a waiver by the incumbent President of the privilege to prevent disclosure of confidential communications between the President, albeit the former President, and his assistants relating to the conduct of the Office of the President:
"WHEREAS, Gerald R. Ford, President of the United States, has determined and informed his counsel that the due administration of justice and the public interest require that the Special Prosecutor have prompt and effective use of those Presidential materials of the Nixon Administration now located in the White House complex that are relevant and important to ongoing criminal investigations and prosecutions within the Special Prosecutor's jurisdiction . . ."[121]
The agreement does not give the Special Prosecutor the power to indiscriminately search the Presidential materials and tape-recorded conversations. Rather, it specifically limits both the scope and procedures for access. The Special Prosecutor not only must specify "those materials that he has reason to believe are relevant to specified criminal investigations and prosecutions" but also must explain "why access to such materials is important to a full and fair resolution of these investigations and prosecutions."[122]
More importantly, the agreement does not sanction an unlawful intrusion into the privacy of a citizen. Although the agreement does not define the "Presidential materials" referred to in the first paragraph, the United States government and the Special Prosecutor have stated on the record that it only encompasses Presidential materials and tape recordings relating to the conduct of the office of the President. They argue that such access is lawful and is based upon the government's right to access to materials and tape-recorded conversations in which they have an "overriding interest". This theory is extracted from dicta in the case of Folsom v. Marsh, 9 Fed.Cas. 342, 347 (D.Mass.1841) and a recent opinion of the Attorney General.[123] Although this Court has rejected this theory, the access is nevertheless lawful, since this Court has held that these "Presidential material and tapes" do in fact belong to the government, giving it an unfettered right of access.
Thus, there being no grounds for concluding that the November 9th Agreement is a "general warrant", its effectuation can not be enjoined on that basis.
B. Search and Seizure
Mr. Nixon's second contention is that any search by the defendants pursuant to the November 9th Agreement *155 would nevertheless violate his fourth amendment right to be free from unlawful searches and seizures. This claim must be considered in light of the following: first, the defendants and the Special Prosecutor have averred that the November 9th Agreement only pertains to Presidential materials and tape-recorded conversations relating to the conduct of the Office of the President; second, this Court has held that these are the property of the United States Government; and, third, they are in the possession of the Executive Branch of the government.
There is no cognizable fourth amendment claim by a private citizen with respect to a search by the government of government property in the government's possession, even though the private citizen generated or retained the property as a public official.[124] This is true even though the fourth amendment applies to private materials, Boyd v. United States, 116 U.S. 616, 6 S.Ct. 524, 29 L.Ed. 746 (1886), and private conversations, United States v. United States Dist. Ct., E. D. of Mich., S. D., 407 U.S. 297, 313, 92 S.Ct. 2125, 32 L.Ed.2d 752 (1972), and not to government-owned materials and tape-recorded conversations. Cf. Davis v. United States, 328 U.S. 582, 589-591, 66 S.Ct. 1256, 1259, 90 L.Ed. 1453 (1945). And, even where the individual is still in public office, it is well-settled that, "in the case of public records and official documents, made or kept in the administration of public office, the fact of actual possession or of lawful custody would not justify the officer in resisting inspection, even though the record was made by himself and would supply the evidence of his alleged criminal dereliction." Wilson v. United States, 221 U.S. 361, 380, 31 S.Ct. 538, 55 L.Ed. 771 (1912). See also Taylor v. United States, 111 U.S.App.D.C. 324, 296 F.2d 446 (1961). This principle has even greater force when the official has left office and no longer is in custody of the materials, for "the settled doctrine is that objection to evidence obtained in violation of the prohibition of [the fourth amendment] may be raised only by one who claims ownership in or right to possession of . . . the property seized . . . ." Gibson v. United States, 80 U.S.App.D.C. 81, 149 F.2d 381, 384 (1945).[125]
It is the conclusion of this Court that there can be no violation of Mr. Nixon's fourth amendment right to be free from unlawful searches and seizures with respect to the Presidential materials and tape-recorded conversations relating to *156 the conduct of the Office of the President, which are owned by and are in the possession of the United States Government.
C. Right of Privacy
Having rejected Mr. Nixon's general warrant and search and seizure allegations, the Court will now address the merits of his allegation of infringement of his right of privacy.
The essential purpose of the fourth amendment is to shield the citizen from unwarranted intrusions into his privacy. Cardwell v. Lewis, 417 U.S. 583, 94 S.Ct. 2464, 2469, 41 L.Ed.2d 325 (1974) (and cases cited therein). "This protection reaches all alike, whether accused of a crime or not, and the duty of giving to it force and effect is obligatory upon all entrusted under our Federal system with the enforcement of the laws." Weeks v. United States, 232 U.S. 383, 392, 34 S.Ct. 341, 344, 58 L.Ed. 652 (1914). Thus, even though Mr. Nixon is not the object of the criminal process, he has a right to have the privacy of both his private papers and conversations protected. But, such protection is not afforded unless it can be found that he has a reasonable expectation that they will remain free from governmental intrusion. See Mancusi v. DeForte, 392 U.S. 364, 88 S.Ct. 2120, 20 L.Ed.2d 1154 (1968); Katz v. United States, 389 U.S. 347, 88 S.Ct. 507, 19 L.Ed.2d 576 (1967).[126]
The fact that personal property is in the possession of the government does not in and of itself eliminate an expectation of privacy. See United States v. Blok, 88 U.S.App.D.C. 326, 188 F.2d 1019, 1021 (1951). Here, former President Nixon left office under unique circumstances, making it difficult for him to remove with him his personal materials and tape-recorded conversations. The evidence indicates that at the time of his departure, they were being prepared for transfer to his home in California. Certainly, the fact of his unusual departure from office did not diminish his nor the government's expectation that these materials would remain free from intrusion. Thus, his right of privacy deserves protection.
However, the need to protect Mr. Nixon's right of privacy with respect to personal materials and tape-recorded conversations springs not from an intended governmental intrusion, but from the circumstances and the very nature of the tapes. The Special Prosecutor and the government defendants have emphatically stated that they have no interest in Mr. Nixon's personal materials and tape-recorded conversations. They admit, however, that in locating certain government-owned materials and tape-recorded conversations, specified by the Special Prosecutor pursuant to the November 9th Agreement, there may be inadvertent examination of the private materials and tape-recorded conversations. This is due to the fact, recognized by all the parties, that official and personal materials and conversations are intermingled. This is supported by the evidence adduced at the hearings which revealed that in the haste to compile and prepare the materials for transfer, no system for separating personal from official materials was employed.[127] And, although some of the boxes in which the material was placed are marked, there is no assurance as to the nature of all of the materials in a particular box or file.[128] With respect to the tape-recorded conversations, it is obvious and uncontested *157 that they are interspersed with official and personal matters.
The Court, therefore, finds that Mr. Nixon does have a cognizable right of privacy claim to the personal materials and tape-recorded conversations which right is threatened not by an intended governmental intrusion, but by the possibility of inadvertent examination in the course of the defendants' lawful examination of Presidential materials and tape-recorded conversations relating to the conduct of the Office of the President. Having so found, the Court turns to the question of the nature of the remedy to be applied under the circumstances.
POINT TWO: MR. NIXON'S RIGHT TO PRIVACY DOES NOT ENTITLE HIM TO AN INJUNCTION, BUT THE COURT HAS THE POWER TO PROTECT HIS RIGHTS AND THOSE OF THE GOVERNMENT BY FASHIONING A REMEDY.
This Court has the power to issue an injunction to prevent an injury to a constitutionally-protected right, in this case, the right of privacy. See, Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946)[129]see also Bivens v. Six Unknown Named Agents of the Fed. Bur. Narc., 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971) (especially Harlan, Jr., concurring, 398-412). Such a remedy, however, is in this instance clearly inappropriate. The Special Prosecutor and the government defendants have, as previously noted, evinced no interest in Mr. Nixon's personal materials and tape-recorded conversations. This Court will not enjoin them from doing an act which they do not themselves wish to do. Nevertheless, the Special Prosecutor and the government, having candidly conceded that as a result of intermingling the possibility of unintended infraction exists, have recommended that the Court fashion a remedy suited to the circumstances. It is clear that this Court has the power, and indeed the duty, to fashion such a remedy. See Marbury v. Madison, 5 U.S. (1 Cranch) 137, 163, 2 L.Ed. 60 (1803):
"the government of the United States has been emphatically termed a government of laws, and not of men. It will certainly cease to deserve this high appellation, if the laws furnish no remedy for the violation of a vested legal right."
See also, Bivens, supra; J. I. Case Co. v. Borak, 377 U.S. 426, 84 S.Ct. 1555, 12 L.Ed.2d 423 (1964); Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957); Bell v. Hood, supra; Dellinger, Of Rights and Remedies: The Constitution as a Sword, 85 Harv.L.Rev. 1532, 1540-43 (1971-72).
In light of the circumstances, the problem facing the Court is formulating a procedure which will both effecuate the interests and protect the rights of the parties. This is not a novel problem, even with respect to these very same tape-recorded conversations. See Nixon v. Sirica, supra, 159 U.S.App.D.C. 58, 487 F.2d at 718-721.
Although the overall controversy concerns approximately 42 million materials, including documents, papers, tapes, etc., the Special Prosecutor, the government, and Mr. Nixon agree that their dispute involves a significantly smaller number of items. These include approximately 138 boxes of papers and 900 tape-recorded conversations. Further, the Special Prosecutor, pursuant to the November 9th Agreement, seeks only a relatively small portion of these materials to be used for investigations, for ongoing grand injuries, and for prosecutions. And, in an effort to aid the Court, the Special Prosecutor has suggested *158 several alternative procedures for resolving the question of access.[130]
Initially, it must be recognized that Mr. Nixon, not the government or Special Prosecutor, must make the preliminary determination of what is private. For if the government or Special Prosecutor were to examine the materials and tape-recorded conversations for this purpose, they would be doing that which any procedure must be designed to prevent โ the intrusion into Mr. Nixon's privacy. Allowing Mr. Nixon to make this initial determination, however, must not result in the frustration of the interests of the government in immediate and unfettered access to materials and tape-recorded conversations relating to the conduct of the Office of the President. Therefore, the Court, based upon the recommendations of the Special Prosecutor, will require the following procedure:[131]
1. Documents: In effectuating the terms and conditions of the November 9th Agreement, the government defendants, or their agents, prior to any governmental examination of the materials, shall permit Mr. Nixon or his counsel, (a) to segregate from any box or file, any document which is deemed personal, as defined by this Court, (b) to mark those portions of any document which are deemed private, as defined by this Court, without destroying or impairing the integrity of that portion or any other portion of the document;
2. Tapes: In effectuating the terms and conditions of the November 9th Agreement, the government defendants, or their agents, prior to any governmental examination of the tape-recorded conversations, shall permit Mr. Nixon or his counsel to listen to those tape-recorded conversations and, if any such tape-recorded conversation contains matters which are deemed private, as defined by this Court, then Mr. Nixon or his counsel shall so designate.
This procedure is to be effectuated as follows:
(a) The defendants shall specify one individual official of the government having expertise in the use of tape recording mechanisms (hereinafter, "operator"), who at all times shall operate the mechanisms chosen by the operator for use in this procedure; and
(b) The operator shall employ two tape recorders, one (hereinafter, "recorder A") of which shall include the following features: (1) a single-listening device, commonly known as headphones, and (2) a digital "counter"; the other (hereinafter, "recorder B") shall include the capacity to duplicate the recording from recorder A; and
(c) When Mr. Nixon, or his counsel, are in the process of listening to the tapes, he shall utilize the single-listener device; and
(d) The operator shall play the tape on recorder A and duplicate the tape onto recorder B, and when Mr. Nixon or his counsel deem any conversation or portion thereof as private, as defined by this Court, the operator shall stop recorder B at the commencement of that conversation or portion thereof so as not to record that conversation or portion thereof on the tape on recorder B, and shall commence the tape on recorder B at the termination of the conversation or portion thereof designated as private, *159 and the operator shall also, utilizing the "counter", mark in a log the digital number of the commencement and termination of the conversation or portion thereof designated as private.
Thus, there will be produced one duplicate for use without any private conversations or portions thereof. And, if the original tape or tapes are to be used, the private conversations or portions thereof can be avoided by reference to the log and the digital numbers therein.
The Court is of the belief that the above procedure will be accomplished with the full cooperation of the parties and with all deliberate speed.
It is recognized by all parties that disputes will arise with respect to the validity of the claim that a particular material or tape-recorded conversation, or portion thereof, is private. When such a dispute arises, upon notice of counsel, the Court shall examine the material or tape-recorded conversation, or portion thereof, in camera. This shall be followed by a hearing in chambers under the procedure set forth below.
The burden of proof as to whether a particular paper or tape-recorded conversation, or portion thereof, is personal shall be borne by Mr. Nixon. The primary reason for placing the burden of proof on Mr. Nixon is that he alone will have "access to knowledge about the fact in question." James, Civil Procedure, 257 (1965) (citing Maguire, Evidence, Common Sense and Common Law 179 (1947)). The government and the Special Prosecutor are at an obvious disadvantage since they will not have examined the materials or tape-recorded conversations, and, therefore, will not be able to say with sufficient accuracy why a particular paper or tape-recorded conversation, or portion thereof, is or is not private or official. Thus, the burden must fall to the party having the superior knowledge of the facts in question.
Placing the burden on Mr. Nixon also comports with the traditional reason for allocating the burden of proof. The government and the Special Prosecutor do not seek access to these private materials and tape-recorded conversations. Rather, it is Mr. Nixon as plaintiff who seeks to protect his privacy therein. Thus, the burden of proof must be placed upon Mr. Nixon, who relies upon the essential fact that a particular paper or tape-recorded conversation or portion thereof is private to establish his claim for relief. See 9 Wigmore, Evidence ง 2486 (3d ed. 1940).
Furthermore, the Court will not require that the government or Special Prosecutor demonstrate a particular need for a particular paper or tape-recorded conversation prior to the in camera inspection. Although this is contrary to the procedure set forth in Nixon v. Sirica, supra, 159 U.S.App.D.C. 58, 487 F.2d at 716-718, and approved in United States v. Nixon, 418 U.S. at 712-716, 94 S.Ct. at 3110-3111, there are obvious reasons for not adopting that requirement in the instant matter. There the taped conversations were cloaked in a "presumptive privilege", since their production was opposed on the basis of executive privilege. 487 F.2d at 716; 418 U.S. at 708, 94 S.Ct. at 3108. The presumption was based upon a deference to a determination of a co-equal branch of the government and upon the great public interest in nondisclosure. 487 F. 2d at 717; 418 U.S. at 706-707, 94 S.Ct. at 3107, 3111. These considerations are not extant where the sole reason for opposing mere inadvertent examination is the personal right of privacy.
Thus, the Court will require that when a dispute arises, Mr. Nixon shall submit to the Court, the government, and the Special Prosecutor, a specific statement designating with particularity those materials or tape-recorded conversations, or portions thereof, which he believes should not be examined. This shall be accompanied by a detailed statement of the reasons why the particular materials or tape-recorded conversations are to be considered private. Such statement shall be drawn in such a manner so as not to compromise the substance of the materials or conversations *160 for which protection is sought. Whereupon the government and the Special Prosecutor shall file with the Court and Mr. Nixon a response thereto, with that degree of specificity as is possible using available materials.[132] Those materials and/or tape-recorded conversations shall be submitted to the Court for an in camera inspection, to be followed by a hearing in chambers.
Following the in camera inspection and the hearing in chambers, the Court will either (a) uphold or deny the claim, or (b) uphold or deny the claim in part, and thereupon designate that which is private. These findings shall be considered final for purposes of appeal.
XI. CONCLUSION
In accordance with this Opinion, and the findings of fact and conclusions of law contained herein, the Court will issue an Order of even date herewith rendering judgment which grants or denies total or partial relief to the parties based upon their claims.
APPENDIX A
September 6, 1974
Honorable Arthur F. Sampson
Administrator
General Services Administration
Washington, D.C.
Dear Mr. Sampson:
In keeping with the tradition established by other former Presidents, it is my desire to donate to the United States, at a future date, a substantial portion of my Presidential materials which are of historical value to our Country. In donating these Presidential materials to the United States, it will be my desire that they be made available, with appropriate restrictions for research and study.
In the interim, so that my materials may be preserved, I offer to transfer to the Administrator of General Services (the "Administrator"), for deposit, pursuant to 44 U.S.C. Section 2101, et seq., all of my Presidential historical materials as defined in 44 U.S.C. Section 2101 (hereinafter "Materials"), which are located within the metropolitan area of the District of Columbia subject to the following:
1. The Administrator agrees to accept solely for the purpose of deposit the transfer of the Materials, and in so accepting the Materials agrees to abide by each of the terms and conditions contained herein.
2. In the event of my death prior to the expiration of the three-year time period established in paragraph 7A hereof, the terms and conditions contained herein shall be binding upon and inure to the benefit of the executor of my estate for the duration of said period.
3. I retain all legal and equitable title to the Materials, including all literary property rights.
4. The Materials shall, upon acceptance of this offer by the Administrator, be deposited temporarily in an existing facility belonging to the United States, located within the State of California near my present residence. The Materials shall remain deposited in the temporary California facility until such time as there may be established, with my approval, a permanent Presidential archival depository as provided for in 44 U.S.C. Section 2108.
5. The Administrator shall provide in such temporary depository and in any permanent Presidential archival depository reasonable office space for my personal use in accordance with 44 U.S.C. Section 2108(f). The Materials in their entirety shall be deposited within such office space in the manner described in paragraph 6 hereof.
*161 6. Within both the temporary and any permanent Presidential archival depository, all of the Materials shall be placed within secure storage areas to which access can be gained only by use of two keys. One key, essential for access, shall be given to me alone as custodian of the Materials. The other key may be duplicated and entrusted by you to the Archivist of the United States or to members of his staff.
7. Access to the Materials within the secure areas, with the exception of recordings of conversations in the White House and the Executive Office Building which are governed by paragraphs 8 and 9 hereof, shall be as follows:
A. For a period of three years from the date of this instrument, I agree not to withdraw from deposit any originals of the Materials, except as provided in subparagraph B below and paragraph 10 herein. During said three-year period, I may make reproductions of any of the originals of the Materials and withdraw from deposit such reproductions for any use I may deem appropriate. Except as provided in subparagraph B below, access to the Materials shall be limited to myself, and to such persons as I may authorize from time to time in writing, the scope of such access to be set forth by me in each said written authorization. Any request for access to the Materials made to the Administrator, the Archivist of the United States or any member of their staffs shall be referred to me. After three years I shall have the right to withdraw from deposit without formality any or all of the Materials to which this paragraph applies and to retain such withdrawn Materials for any purpose or use I may deem appropriate, including but not limited to reproduction, examination, publication or display by myself or by anyone else I may approve.
B. In the event that production of the Materials or any portion thereof is demanded by a subpoena or other order directed to any official or employee of the United States, the recipient of the subpoena or order shall immediately notify me so that I may respond thereto, as the owner and custodian of the Materials, with sole right and power of access thereto and, if appropriate, assert any privilege or defense I may have. Prior to any such production, I shall inform the United States so it may inspect the subpoenaed materials and determine whether to object to its production on grounds of national security or any other privilege.
8. The tape recordings of conversations in the White House and Executive Office Building which will be deposited pursuant to this instrument shall remain on deposit until September 1, 1979. I intend to and do hereby donate to the United States, such gift to be effective September 1, 1979, all of the tape recordings of conversations in the White House and Executive Office Building conditioned however on my continuing right or access as specified in paragraph 9 hereof and on the further condition that such tapes shall be destroyed at the time of my death or on September 1, 1984, whichever event shall first occur. Subsequent to September 1, 1979 the Administrator shall destroy such tapes as I may direct. I impose this restriction as other Presidents have before me to guard against the possibility of the tapes being used to injure, embarrass, or harass any person and properly to safeguard the interests of the United States.
*162 9. Access to recordings of conversations in the White House and Executive Office Building within the secure areas shall be restricted as follows:
A. I agree not to withdraw from deposit any originals of the Materials, except as provided in subparagraph B and paragraph 10 below, and no reproductions shall be made unless there is mutual agreement. Access to the tapes shall be limited to myself, and to such persons as I may authorize from time to time in writing, the scope of such access to be set forth by me in each said written authorization. No person may listen to such tapes without my written prior approval. I reserve to myself such literary use of the Information on the tapes.
B. In the event that production of the Materials or any portion thereof is demanded by a subpoena or other order directed to any official or employee of the United States, the recipient of the subpoena or order shall immediately notify me so that I may respond thereto, as the owner and custodian of the Materials, with sole right and power of access thereto and, if appropriate, assert any privilege or defense I may have. Prior to any such production, I shall inform the United States so it may inspect the subpoenaed materials and determine whether to object to its production on grounds of national security or any other privilege.
10. The Administrator shall arrange and be responsible for the reasonable protection of the Materials from loss, destruction or access by unauthorized persons, and may upon receipt of any appropriate written authorization from the Counsel to the President provide for a temporary redeposit of certain of the Materials to a location other than the existing facility described in paragraph 4 herein, provided however that no dimunition of the Administrator's responsibility to protect and secure the Materials from loss, destruction, unauthorized copying or access by unauthorized persons is affected by said temporary re-deposit.
11. From time to time as I deem appropriate, I intend to donate to the United States certain portions of the Materials deposited with the Administrator pursuant to this agreement, such donations to be accompanied by appropri restrictions as authorized by 44 U.S.C. Section 2107. However, prior to such donation, it will be necessary to review the Materials to determine which of them should be subject to restriction, and the nature of the restrictions to be imposed. This review will require a meticulous, thorough, time-consuming analysis. If necessary to fulfill this task, I will request that you designate certain members of the Archivist's staff to assist in this review under my direction.
If you determine that the terms and conditions set forth above are acceptable for the purpose of governing the establishment and maintenance of a depository of the Materials pursuant to 44 U.S. C. Section 2101 and for accepting the irrevocable gift of recordings of conversations after the specified five year period for purposes as contained in paragraph 8 herein, please indicate your acceptance by signing the enclosed copy of this letter and returning it to me. Upon your acceptance we both shall be bound by the terms of this agreement.
Sincerely,
/s/ Richard Nixon
Accepted by: Arthur F. Sampson
Administrator General
Services Administration
/s/ Arthur F. Sampson
9/7/74
*163 APPENDIX B
NOVEMBER 9, 1974 AGREEMENT
WHEREAS, Gerald R. Ford, President of the United States has determined and informed his Counsel that the due administration of justice and the public interest require that the Special Prosecutor have prompt and effective use of those Presidential materials of the Nixon Administration now located in the White House complex that are relevant and important to ongoing criminal investigations and prosecutions within the Special Prosecutor's jurisdiction; and
WHEREAS, this Agreement, if implemented, would accommodate the needs of the Special Prosecutor with respect to such materials;
NOW, THEREFORE, the undersigned have agreed as follows:
1. Upon letters from the Special Prosecutor to Counsel to the President specifying those materials that he has reason to believe are relevant to specified criminal investigations or prosecutions within the Special Prosecutor's jurisdiction and explaining why access to such materials is important to a full and fair resolution of those investigations and prosecutions, the Special Prosecutor or his designees shall be afforded access to the materials under the following procedures:
a. Documents
1. Where files are organized by subject matter, only those files may be examined which, because of their titles, may contain documents relevant to these specified investigations and prosecutions.
2. Where files are organized chronologically, only that portion of the file covering the time period relevant to the request may be examined.
3. Where no chronological or subject label is on a file, the file may be examined to determine whether the file contains relevant materials.
4. In order to assist in these searches, the Special Prosecutor may request the assistance of members of the archival staff assigned to the White House in making a list of file titles or other index.
b. Tape Recordings: Only the tape recordings of conversations specified by letters according to the above procedures may be listened to.
2. The Special Prosecutor shall be allowed to make copies of only those tapes of conversations and documents that he determines are relevant to criminal investigations or prosecutions within his jurisdiction. Prior to the Special Prosecutor receiving such copies, Counsel to the President may review the copies to determine whether they may not be disclosed for reasons of national security. The originals of any tapes and documents, copies of which are provided to the Special Prosecutor, shall be retained and, if necessary for a criminal proceeding, will be given to the Special Prosecutor for such proceeding in exchange for the copies.
3. Richard M. Nixon or his attorney or designated agent shall be given notice of, and may be present during, searches pursuant to this Agreement. Also, Mr. Nixon or his attorney or designated agent, shall be afforded access to and/or copies of those tapes of conversation and documents for which the Special Prosecutor is allowed copies. The Counsel to the President also may designate individuals to be present during these searches.
4. No Presidential materials shall be removed to locations in Washington, D. C. other than the White House complex without the approval of the Special Prosecutor and no portions of such materials shall be removed to locations outside of the District of Columbia without an indication from the Special Prosecutor that he has no further need for such portions, except upon court order.
5. The parties to this Agreement shall move jointly to modify, if necessary, the temporary restraining order as now outstanding in Civil Action number 74-1518 and in consolidated cases in the *164 United States District Court for the District of Columbia to permit implementation of this Agreement.
/s/ Philip W. Buchen Nov. 8, 1974
Philip W. Buchen
Counsel to the President
/s/ Arthur F. Sampson 11/9/74
Arthur F. Sampson
Administrator of General Services
/s/ H. Stuart Knight 11/9/74
H. Stuart Knight
Director, United States Secret
Service
/s/ Henry S. Ruth, Jr. Nov. 8, 1974
Henry S. Ruth, Jr.
Special Prosecutor
Watergate Special Prosecution
Force
NOTES
[1] The nature of the "Presidential materials and tape-recorded conversations" will be discussed infra. However, prior to that discussion, the term should be considered as including all of the materials, including documents, papers, etc., and tape-recorded conversations of the Nixon Administration which have been boxed or set aside by personnel of the General Services Administration and the archivists assigned to the White House.
[2] These consolidated cases were before the Court on motions for preliminary injunction by plaintiffs Nixon, Anderson, and The Reporters Committee for Freedom of the Press, et al., the joint motion of the Special Prosecutor and the government defendants for modification of the temporary restraining order, and plaintiff Nixon's motions to dismiss the Anderson and Hellman complaints for lack of standing. Subsequent to the hearings on these motions, the Congress passed and President Ford signed the Presidential Recordings and Materials Preservation Act, see footnote 36, infra, which changed the posture of this litigation, see Section V, infra. The parties therefore filed appropriate motions for a resolution of the questions extant. The Court will, therefore, of even date herewith, deny the motions for a preliminary injunction of plaintiffs Anderson and The Reporters Committee for Freedom of the Press, et al. However, the motions by plaintiff Nixon to dismiss are still viable and require resolution. Further, the joint motion of the Special Prosecutor for modification of the temporary restraining order will be considered, as requested by the Special Prosecutor, as being merged into his motion for summary judgment.
[3] The facts contained in this section are not all-inclusive, but form the essential background of this litigation. They are not in dispute. Further facts will be included in the later appropriate sections.
[4] President Richard M. Nixon resigned from office shortly after a unanimous recommendation by the House Committee on the Judiciary that he be impeached. Impeachment of Richard M. Nixon, President of the United States, H.R.Rep.No.93-1305, 93d Cong., 2d Sess. (1974). Gerald R. Ford became the 38th President on August 9, 1974.
[5] On May 25, 1973, the Attorney General of the United States established the Office of the Special Prosecutor. Department of Justice Order No. 517-73, 38 Fed.Reg. 14,688, adding 28 C.F.R. งง 0.37, 0.38 and appendix to subpart G-1 (June 4, 1973). The Special Prosecutor, Mr. Leon Jaworski, was the original named intervenor. Since he resigned the office and was replaced by Mr. Henry S. Ruth, Jr., Mr. Ruth has been substituted as the named intervenor pursuant to Rule 25(d)(1) of the Federal Rules of Civil Procedure.
[6] Mr. Buchen is a named defendant in all the consolidated actions.
[7] Affidavit of Peter M. Kreindler, counsel to the Special Prosecutor, at ถ 3 (hereinafter, "Kreindler affidavit"); Deposition of Philip W. Buchen, November 11, 1974, pp. I-4, 5, II-10, 6 (hereinafter, "Buchen deposition").
[8] Kreindler affidavit at ถ 3. Buchen deposition at II-73.
[9] Buchen deposition at I-7. See footnote 87, infra.
[10] Id. at I-11, 12.
[11] Deposition of Benton L. Becker at 12 (hereinafter, "Becker deposition").
[12] Buchen deposition at I-14, 15, 16.
[13] Becker deposition at 28-29; Buchen deposition, Exhibit 4.
[14] Buchen deposition, Exhibits 4 & 5; Becker deposition at 35; Buchen deposition at II-46.
[15] Deposition of Arthur F. Sampson at 13, 85 (hereinafter, "Sampson deposition"); Becker deposition at 51, 103.
[16] Sampson deposition at 20, 22-23.
[17] Kreindler affidavit at ถ 5.
[18] The Nixon-Sampson agreement is set forth in Appendix A.
[19] 5 U.S.C. ง 552 (1970).
[20] Letter of Mr. Richard Q. Vawter, Director of Information, GSA, to Mr. Jack Anderson, dated October 3, 1974, at ถ 3.
[21] Plaintiff Anderson filed an administrative appeal on October 8, 1974. While no action has been taken, counsel for the government defendants have stipulated that Anderson's request, as well as those of Lillian Hellman, et al., and The Reporters Committee for Freedom of the Press, et al., would be denied on the same grounds set forth in the accompanying text of this footnote, and that their administrative remedies should be deemed exhausted. Transcript of the Hearing of November 18, 1974, pp. 405-407.
[22] The suit names the defendants in their official capacity as officers of the United States government, as well as individually. Therefore, the suit must be considered, insofar as it concerns the action of the defendants in their official capacity, as one against the United States. See Dugan v. Rank, 372 U.S. 609, 620, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963).
[23] Plaintiffs Hellman, et al., made application for access to the 147 tape-recorded conversations subpoenaed by the House Committee on the Judiciary during the hearings on the question of the impeachment of the President. See footnote 21, supra.
[24] Congresswoman Elizabeth Holtzman filed a motion to appear as amicus curiae which was granted on November 11, 1974. On November 11, five other members petitioned to appear as amici curiae; specifically, Sam J. Ervin, Jr., John Brademas, Jacob Javits, Gaylord Nelson, and Wayne Hays. This motion was also granted on November 11, 1974.
[25] Hereinafter, the "November 9th Agreement". The full text of the agreement is set forth in Appendix B.
[26] This motion was subsequently withdrawn.
[27] 120 Cong.Rec. H. 11442, S. 20806 (daily ed., Dec. 9, 1974).
[28] See footnote 36, infra.
[29] See 44 U.S.C. ง 2108(c).
[30] Plaintiff Nixon has moved to dismiss Plaintiff Anderson's crossclaim in C.A. 74-1518 and, as a named defendant in C.A. 74-1551, moved to dismiss the complaint of Lillian Hellman, et al.
[31] The government defendants have contested the standing of the FOIA plaintiffs in ther opposition to the motions for a preliminary injunction.
[32] See footnote 20, supra.
[33] 5 U.S.C. ง 552 (1970).
[34] The FOIA plaintiffs have not only sought a de novo determination of the matter, but have also requested a declaratory judgment pursuant to 28 U.S.C. งง 2201, 2202, that the "Presidential materials and tape-recorded conversations" do not belong to former President Nixon but, rather, to the United States and are "records" within the meaning of the FOIA, and that the Nixon-Sampson Agreement is invalid. Such a remedy is clearly available in connection with a FOIA suit, even though some of the applications did not request all of the materials and tape-recorded conversations. See Renegotiation Board v. Bannercraft Clothing Co., 415 U.S. 1, 94 S.Ct. 1028, 39 L.Ed.2d 123 (1974).
[35] The Tenth Circuit's statement was not only dictum, but was based upon a finding that the material did not belong to the government. In the instant matter, the FOIA plaintiffs claim that these are government records, and there has been no contrary finding. Furthermore, it is obvious that FOIA applicants do not personally own the records that they seek. This cannot preclude access, or else all applications would be denied. The true question here, as a Nichols, is whether restrictions can be placed on "records" beyond those contained in the exemptions to the FOIA, 5 U.S.C. ง 552(b)(1-9). In Nichols, it was found that the materials were not even records. Therefore, the court in Nichols did not even have to reach this question.
[36] Pub.Law 93-526, "An Act to protect and preserve tape recordings of conversations involving former President Richard M. Nixon and made during his tenure as President, and for other purposes," to be cited as the "Presidential Recordings and Materials Act." The Act, formerly S. 4016, was passed by the Congress on December 9, 1974, see Cong. Rec. 93rd Cong., 2d Sess., S. 20806, H. 11442 (daily ed., Dec. 9, 1974), and was signed by President Ford on December 19, 1974.
[37] See Golden v. Zwickler, supra, 394 U.S. at 108-109, 89 S.Ct. 956.
[38] Id. See also Powell v. McCormack, 395 U.S. 486, 517, 89 S.Ct. 1944, 23 L.Ed.2d 491 (1969).
[39] See Abbott Laboratories v. Gardner, 387 U.S. 136, 148-149, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967).
[40] The clear intent of Congress can be ascertained by the succinct statement in the House Committee Report that "This legislation would nullify the Nixon-Sampson Agreement of September 7, 1974, and would provide that the Federal Government retain custody of the Nixon tapes and Presidential materials." Report of the Committee on House Administration No. 93-1507, 93rd Cong., 2d Sess. at 4 (Description of the Bill) (November 27, 1974) (Hereinafter, "House Committee Report").
[41] See Appendix A, Intro. ถ 12, ถ No. 4.
[42] See Appendix A, ถ 6.
[43] See Appendix A, ถ 7(A) and ถ 9(A).
[44] See Appendix A, ถ 7(A). Prior to expiration of the three-year period Mr. Nixon could only remove reproductions of the Presidential materials, although still for "any use". Id.
[45] See Appendix A, ถ 8. Prior to their destruction, no reproductions could be made of the tapes and no person could listen to the tapes without Mr. Nixon's prior approval. He further reserved to himself "literary use of the information on the tapes." Id. at ถ 9(A).
[46] See Appendix A, ถ 6(B) and ถ 9(B).
[47] Id.
[48] Title I, Sections 101(a), (b) and 102(a) provide that:
"Sec. 101.(a) Notwithstanding any other law or any agreement or understanding made pursuant to section 2107 of title 44, United States Code, any Federal employee in possession shall deliver, and the Administrator of General Services (hereinafter in this title referred to as the `Administrator') shall receive, obtain or retain complete possession and control of all original tape recordings of conversations which were recorded or caused to be recorded by any officer or employee of the Federal Government and which โ
(1) involve former President Richard M. Nixon or other individuals who, at the time of the conversation, were employed by the Federal Government;
(2) were recorded in the White House or in the office of the President in the Executive Office Buildings located in Washington, District of Columbia; Camp David, Maryland; Key Biscayne, Florida; or San Clemente, California; and
(3) were recorded during the period beginning January 20, 1969, and ending August 9, 1974.
(b)(1) Notwithstanding any other law or any agreement or understanding made pursuant to section 2107 of title 44, United States Code, the Administrator shall receive, retain, or make reasonable efforts to obtain, complete possession and control of all papers, documents, memorandums, transcripts, and other objects and materials which constitute the Presidential historical materials of Richard M. Nixon, covering the period beginning January 20, 1969, and ending August 9, 1974.
(2) For purposes of this subsection, the term `historical materials' has the meaning given it by section 2101 of title 44, United States Code.
Availability of Certain Presidential Materials
Sec. 102.(a) None of the tape recordings or other materials referred to in section 101 shall be destroyed, except as hereafter may be provided by law."
[49] There are two further reasons which make it clear that the Act nullifies the agreement. First, the Act provides for the possession and control of the Presidential materials and tape recordings, "[not]withstanding any other law or any agreement or understanding made pursuant to Section 2107 of Title 44, United States Code." Thus, it need not even be inferred that the Nixon-Sampson Agreement is abrogated by the Act. This is particularly true as Congress utilized the word "notwithstanding", which it often uses to negate a prior act or law.
Secondly, the Act covers the same subject matter as the agreement and, with respect to the Presidential materials, is identical. Both the Act and the Agreement refer to 44 U.S.C. ง 2101 for the definition of Presidential materials. And, like the Agreement, the Act differentiates between Presidential materials and tape recordings. See Appendix A, second introductory paragraph. Section 101(b)(2) of the Act provides that, "For purposes of this subsection, the term `historical materials' has the meaning given it by section 2101 of title 44, United States Code."
[50] House Committee Report, at 7.
[51] "Sec. 105(a). The United States District Court for the District of Columbia shall have the exclusive jurisdiction to hear challenges to the legal or constitutional validity of this title or of any regulation issued under the authority granted by this title, and any action or proceeding involving the question of title, ownership, custody, possession, or control of any tape recording or material referred to in section 101 or involving payment of any just compensation which may be due in connection therewith. Any such challenge shall be treated by the court as a matter requiring immediate consideration and resolution, and such challenge shall have priority on the docket of such court over other cases." (Emphasis added.)
[52] Section 103 provided that "if any court of the United States determines that any provision of title I of this legislation deprives an individual of his property without just compensation, then compensation shall be made to such individual from the Treasury of the United States." House Committee Report at 11 (Analysis of Section 103) Section 103 of S. 4016, which provided for compensation, was incorporated in Section 105 of the final version of the Public Law 93-526. And, as stated by Congressman John Brademas, a sponsor of the Act:
"The amendment also deletes the express language in the House-passed bill which provides that the bill takes no position on ownership of the material prior to enactment.
The legislation still takes no position on ownership. However, the Senate felt that this language was unnecessary because the legislative history in the Senate and House is clear on this point."
120 Cong.Rec., 93rd Cong., 2d Sess. at H. 11444 (daily ed., Dec. 9, 1974).
[53] House Committee Report, at 7. It is also notable that in analyzing section 103(a) of title I of the Act, the committee stated that:
"Section 103 also provides that the provisions of title I of this legislation shall not be construed as making any determination with respect to any private property right of title to the recordings or materials, if any such right existed before the date of enactment of title I of this legislation. The committee does not intend this legislation to make any decision, determination, or other rule with respect to the existence or extent of any such private property rights. It is the opinion of the committee that the question of private property rights with respect to the recordings or materials should be left for determination by an appropriate court." Id. at 11.
See footnote 52, supra.
[54] Subsection 102:
"(c) Richard M. Nixon, or any person whom he may designate in writing shall at all times have access to the tape recordings and other materials referred to in section 101 for any purpose which is consistent with the provisions of this title, subsequent and subject to the regulations which the Administrator shall issue pursuant to section 103."
Subsection 103:
"The Administrator shall issue at the earliest possible date such regulations as may be necessary to assure the protection of the tape recordings and other materials referred to in section 101 from loss or destruction, and to prevent access to such recordings and materials by unauthorized persons. Custody of such recordings and materials shall be maintained in Washington, District of Columbia, or its metropolitan area, except as may otherwise be necessary to carry out the provisions of this title."
Although it might be argued that since section 103 only prevents "unauthorized access", thereby allowing the government access, pursuant to subsection 102(d), despite any privilege that may attach to the materials, this Court does not read this section in that manner. However, such a determination is not necessary in these cases.
[55] There, the district court states that:
"If it is unclear whether the pending suit involves identical issues and the Court is unable to say that one suit is superior to the other in comparative utility, then the Court might properly allow both suits to go forward and defer action in the declaratory judgment action to see if the coercive suit will settle the controversy between the parties. If all the issues are not settled, the remaining issues could be dealt with by declaratory relief. For a full discussion of this subject, see 6A Moore Federal Practice ถ 57.08 [6]."
313 F.Supp. at 879 (footnote omitted).
[56] Judicial time and economy should not be abused by tactical fencing.
[57] The question of ownership is particularly significant with respect to Mr. Nixon's fourth amendment claims. See Section X(c), infra.
[58] Title I, Section 104(a) provides that:
"The Administrator shall, within ninety days after the date of enactment of this title, submit to each House of the Congress a report proposing and explaining regulations that would provide public access to the tape recordings and other materials referred to in section 101. Such regulations shall take into account the following factors:
(1) the need to provide the public with the full truth, at the earliest reasonable date, of the abuses of governmental power popularly identified under the generic term "Watergate";
(2) the need to make such recordings and materials available for use in judicial proceedings;
(3) the need to prevent general access, except in accordance with appropriate procedures established for use in judicial proceedings, to information relating to the Nation's security;
(4) the need to protect every individual's right to a fair and impartial trial;
(5) the need to protect any party's opportunity to assert any legally or constitutionally based right or privilege which would prevent or otherwise limit access to such recordings and materials;
(6) the need to provide public access to those materials which have general historical significance, and which are not likely to be related to the need described in paragraph (1); and
(7) the need to give to Richard M. Nixon, or his heirs, for his sole custody and use, tape recordings and other materials which are not likely to be related to the need described in paragraph (1) and are not otherwise of general historical significance."
[59] House Committee Report, at 7.
[60] See footnote 58, supra.
[61] 5 U.S.C. ง 552(a)(3).
[62] See footnote 58, supra.
[63] This is the standard issue raised upon a request for a writ of mandamus. See, e. g. Feliciano v. Laird, 426 F.2d 424 (2d Cir. 1970).
[64] C.A.No. 74-1582.
[65] The Court will issue an order of even date of this opinion.
[66] Mr. Nixon argues, however, that the Nixon-Sampson Agreement, if enforceable, would serve as a bar to access by the Special Prosecutor. Thus he contends that, like the FOIA cases, this controversy should not be resolved until the new action in which he contests the Presidential Recordings and Materials Preservation Act is resolved. This is not persuasive, however, since the question here is not whether the Nixon-Sampson Agreement is valid, but whether it was within the discretion of the Administrator to delay the enforcement of the agreement in the interests of the Special Prosecutor. The Court finds that it was, as the time of enforcement of the agreement was discretionary.
[67] See Schick v. Reed, 419 U.S. 256, 95 S.Ct. 379, 42 L.Ed.2d 430 (1974).
[68] See e. g., Answer of intervenor-defendant Richard M. Nixon, C.A. 74-1533; Plaintiff Nixon's Motion for Preliminary Injunction and Amended Motion for Preliminary Injunction of October 29, 1974 in C.A. No. 74-1518.
It is admitted by all parties that the materials and tape-recorded conversations also contained purely private matters. The FOIA plaintiffs have stated on the record that they do not seek access to these materials or conversations.
[69] At the hearings on the motions for preliminary injunctions evidence was introduced by way of testimony and depositions as to the nature of the "Presidential materials and tapes", (hereinafter, TR. or by reference to a particular deposition, see footnotes 7-15, supra.).
[70] In order to ascertain with more specificity the nature of the 42 million items in question, the Court ordered the government to submit indices and descriptions of the materials and tapes, in accordance with established procedures in such cases. See, Vaughn v. Rosen, 157 U.S.App.D.C. 340, 484 F.2d 820 (1973). This submission was filed on November 14, 1974 (hereinafter, "Government Submission".)
[71] Examples of materials and tape-recorded conversations falling into this first category are: 888 original tape recordings and approximately 60-75 copies of conversations in the White House Oval Office and in the Executive Office Building (Government's Submission, document entitled "Materials Held in Safe Zone 128 and Room 429 EOB"); "memoranda to the President for his information, review, and decision including proposed Presidential decisions and instructions" (Government Submission, document entitled "Categories of Nixon Administration Materials Held by National Security Council"); "memoranda of conversations between the former President and foreign Heads of Government/State and other foreign dignitaries including, but not limited to, Foreign Ministers and other Cabinet Officers, Ambassadors, and Special Emissaries" (id.); "records of appointments and meetings with U. S. Cabinet officers and other officials pertaining to national security matters" (id.); "defense-related papers associated with deployment of forces, budget, research and development, and organization/command structure" (id.); "telegrams originating in the White House dispatched to foreign governments, U. S. ambassadors and force commanders relating to foreign policy and national security decisions" (id.); "sensitive incoming cable traffic associated with negotiations, plans, evaluations and the impact of decisions taken on national security" (id.); and records embodying "thousands of communications between the former president and his aides and [relating] to topics covering the enormous range of responsibilities which fall within the function of the Presidency" (plaintiff Nixon's Amended Motion for Preliminary Injunction, No. 74-1515, p. 4., filed on October 29, 1974).
[72] Examples of materials falling into this second category are: logs, diaries, and calendars of members of the Executive Branch which illustrate the organization, functions, procedures, operations, and other activities of the Executive Branch (Anderson Ex. 2 at 736, 778; Ex. 4 at 515, 521, 560); the files of the Chairman and of the members of the Council of Economic Advisors (Government's Submission, document entitled "Description of Presidential Materials of the Nixon Administration Sent to the National Archives Building by the Office of Presidential Papers"); various documents relating to task force studies on such matters as rural development, the mentally handicapped, prisoner rehabilitation, air pollution, science policy, low income housing, urban renewal, higher education, business taxation, oceanography, and economic growth (Governments' Submission, memorandum dated March 7, 1973, from William F. Matthews, White House Chief of Files); memoranda to Dr. Henry Kissinger from the State Department (Government's Submission, memorandum dated January 12, 1972, from William F. Matthews; Nesbitt Testimony at 76-77); virtually all of the files of at least the three agencies with responsibility for vast areas of government policy and actionโthe Domestic Council, the Council of Economic Advisors, the Council of International Economic Policy (Nesbitt Dep. Tr. at 15, 20-21; Government's Submission, document entitled "Description of Presidential Materials of the Nixon Administration Sent to the National Archives Building by the Office of Presidential Papers").
[73] Examples of materials and communications falling into this third category are: personal gifts to the former First Family (Government's Submission, document entitled "Description of Presidential Materials of the Nixon Administration Sent to the National Archives Building by the Office of Presidential Papers"); birthday cards, anniversary cards, wedding invitations, Christmas cards, Easter cards, Thanksgiving cards, Valentines, mail from children and adults, get-well cards and letters of sympathy and encouragement with regard to Watergate, and documents labelled as Mrs. Nixon's "Social Files" (Government's Submission, Memoranda For the Record from William T. Matthews, dated July 23, 1970 through November 14, 1973).
[74] The United States argued in its brief to the Eighth Circuit Court of Appeals that:
"The right of a government (state or Federal) to written records of its employees produced in the performance of their official duties has been uniformly recognized by the decided cases. The doctrine adopted by the decisions is one that is, in large part, so self-evident that there has been relatively little litigation in this area . . . This rule is not merely an extension of normal principles governing a master-servant relationship. The peculiar status of public employment and the need for records bearing on the carrying out of governmentally directed and financed tasks . . . intensifies the need for applicability where governmental employees and governmental records are involved . . . In fact, we have been unable to find any case, nor has one been cited, in which the records of a public employee produced in the discharge of his public duties have been held to be private property." Brief for the United States at 37-39 (footnotes omitted).
[75] See Scherr v. Universal Match Corp., 417 F.2d 497 (2d Cir. 1969); aff'g 297 F.Supp. 107 (S.D.N.Y., 1967); note, Piracy in High Places โ Government Publications and Copyright Law, 24 Geo.Wash.L.Rev. 423 (1956).
[76] The principle that that which is done for the public by a public official belongs to the government in essence expresses the notion that that which is done on behalf of the sovereign belongs to the sovereign, which in our system of government is the public. Thus, the assertion of former President Nixon may well be said to be a claim that while in office he was in fact the sovereign, or at least the embodiment thereof.
[77] Nixon v. Sirica, 159 U.S.App.D.C. 58, 487 F.2d 700, 711 (1973) (footnotes omitted) (emphasis added).
[78] See The Federalist (Ford ed. 1898) Nos. 69, 70 (hereinafter, The Federalist).
[79] The Federalist, No. 69 at 465.
[80] Former President Nixon argues, however, that this is not an emolument because his right of ownership does not come into existence until he leaves office and, therefore, there could be no emolument as the Emoluments Clause by its terms applies only to a President's term of office. Even if this were true, then his claim of ownership would be a direct violation of Art. IV, Sec. III, cl. 2 of the Constitution, which provides that only the Congress can dispose of property belonging to the United States. For if his claim of ownership does not come into existence until he leaves office, then it can only be concluded that while he is in office the documents, papers, tapes and other materials were government property.
[81] Clearly, the various sections of Article II make it irrefutable that no individual President has a "right" to hold the Office in perpetuity; furthermore, the 22nd amendment limits each individual to two terms in Office. Even if this were not the law, the fact that a President may not be reelected would mandate such a conclusion.
This proposition is supported by the rejection of any analogy between the Office of the President and a monarchy. See footnotes and accompanying text. In this century alone there have been several changes in the individual presidents other than by election. Calvin Coolidge became the 30th President upon the death of Warren G. Harding on August 2, 1923. Harry S. Truman became the 33rd President upon the death of Franklin D. Roosevelt on April 12, 1945. Lyndon B. Johnson became the 36th President upon the death of John F. Kennedy on November 22, 1963. And, Richard M. Nixon (plaintiff, defendant and intervenor in these consolidated cases), who resigned from office on August 9, 1974, has been succeeded by Gerald R. Ford, now the 38th President of the United States. Congressional Directory 93rd Cong., 2d Sess. 412 (1974).
[82] See H. L. A. Hart, The Concept of Law (Oxford U.Press 1972). The notion of continuity is a primary premise of our legal system and it is this notion which differentiates the constitutional system from the monarchial system of government.
[83] Art. II, Sec. II of the Constitution provides that the Chief Executive shall be the Commander in Chief and shall conduct the war powers of the Nation; shall have the power to make treaties, with the advice and consent of Congress, and to conduct the nation's foreign affairs; and shall have the power and duty to formulate and recommend to Congress domestic policies and programs.
[84] See E. Hargrove, Power of the Modern Presidency, 80-81 (1974).
[85] By several Congressional Reorganization Acts, the Office of the Executive has continually expanded. In 1939, various agencies were incorporated within the Office of the Executive (5 U.S.C. ง 133 et seq.); and today there are 14 "offices" with staffs in the Executive Office of the President which deal with matters formerly handled by the Departments of Defense, State, and Health, Education and Welfare. United States Government Manual for 1973/74 at 78 (1973). See also Lester G. Seligman, "Presidential Leadership: the Inner Circle and Institutionalization in the Presidency", (Wildavsky ed. 1969). These include, for example, the Office of Management and Budget, the Domestic Council, the Council on Environmental Quality, the Office of Telecommunications Policy, the Council on International Economic Policy, and the Council of Economic Policy Advisors.
[86] Although the immediate Executive Office of the President has expanded only in recent years, the numerous executive "departments", all of which have reported and continued to report to the Office of the President, have a long history. These include: Department of State, established in 1789, the Department of the Treasury, established in 1789; the Department of Justice, established in 1870; the Post Office Department, established in 1872 (as part of the Executive); the Department of the Interior, established in 1849; the Department of Agriculture, established in 1889 (as part of the Executive); the Department of Commerce, established in 1913; the Department of Labor, established in 1913; the Department of Health, Education and Welfare, established in 1953; the Department of Housing and Urban Development, established in 1965; and the Department of Transportation, established in 1966. See R. Morris, Encyclopedia of American History (1973); Gov't Manual at 474-641.
[87] It was based upon this language that Attorney General Saxbe stated in his opinion that while the former President had an apparent right of ownership, it was subject to the "interests" of the government. Opinion of the Attorney General of the United States, September 6, 1974 (unpublished).
[88] Statement of Julian P. Boyd, Editor, "The Papers of Thomas Jefferson," (Princeton Univ.Lib.), Brief of The Reporters Committee for Freedom of the Press, et al., in Support of Motion for Preliminary Injunction, Exhibit A.
[89] Records of a Nation, at 157, 162 n. 25; Christian Science Monitor, January 29, 1947.
[90] In Williams, the Supreme Court held that the 12-man jury, although historically adhered to, was not necessary to "effect the purposes of the jury system." 399 U.S. at 102, 90 S.Ct. at 1907.
[91] Hereinafter, Records of a Nation.
[92] Records of a Nation at 159-160, 162.
[93] David D. Lloyd, "The Harry S. Truman Library," American Archivist, XVIII (April 1955), 101-102.
[94] National Archives Act of 1934, PL. 73-432, 48 Stat. 1122.
[95] Records of a Nation at 147.
[96] Id. at 153.
[97] P.L. 84-373; 69 Stat. 695, codified at 44 U.S.C. ง 2101 et seq., amending P.L. 81-754; 64 Stat. 583 (ง 507 of the Federal Records Act) [hereinafter, the "Presidential Libraries Act"].
[98] See 44 U.S.C. งง 2107, 2108, formerly ง 507 (a) & (e) of the 1950 Act.
[99] See Government Brief in Opposition to Motions for a Preliminary Injunction, Appendix.
[100] See footnote 86, supra.
[101] See Section VII, "Point Three", supra.
[102] See 1955 Hearings at 6-7 (Statement of Rep. McCormack).
[103] Id.
[104] This is further compelled by the fact that only officials of the government can, under the Act, deposit "official" records. See S.Rep.No.2140, 81st Cong., 2d Sess. at 16-17, quoted in 1950 U.S.Code Cong.Serv. at p. 3564. See also 44 U.S.C. งง 3101, 3106.
[105] Former President Nixon's argument that Congress recognized the right of personal ownership of "Presidential materials and tapes" by permitting former Presidents to take a tax deduction for them when they were donated to the government is likewise erroneous. Congress eliminated this deduction in the Tax Reform Act of 1969, P.L. 91-172, 83 Stat. 685 (December 30, 1969). And, although Congress took no express position in the language of the statute on the question of ownership, some members of Congress openly rejected any notion of private ownership. For example, Senator John J. Williams of Delaware stated during the debate that:
"One of the things that bothers me about getting special tax benefits through the gift of official papers is that the parties doing this are making a profit from the `charitable' giving of what are really official papers which, in my opinion, properly belong to the Government and not to them as individuals. I am sure that in many cases many of the papers are just plain junk, but to the extent that they do have value, they were developed by Government officials on Government time with the aid of Government staff personnel, were typed by Government secretaries on Government paper, and were even stored in Government files."
115 Cong.Rec.S. 20461 (daily ed. July 23, 1969).
[106] P.L. 93-502, 120 Cong.Rec. ___; U.S.Code Cong. and Admin.News, (December 15, 1974) at p. 1798.
[107] Conf.Rep. No. 93-1200, 12 U.S.Code Cong. and Admin.News, (December 15, 1974) at p. 6285.
[108] Since the FOIA plaintiffs have also sought access, the government will be afforded the opportunity to raise any "exception" applicable, 5 U.S.C. ง 552(b)(1-9), or executive privilege. See Soucie v. David, supra, 145 U.S.App.D.C. 144, 448 F.2d at 1079. This litigation, however, has not reached that stage.
[109] It is the general rule that to determine to whom a privilege belongs, the Court must ascertain whom the privilege benefits. Cf. Turner v. Black, 19 Ill.2d 296, 166 N.E.2d 588, 595, (1960).
Thus, since the executive privilege exists for the benefit of the people, it is perhaps technically proper to state that the privilege belongs to the people. However, since the government is equatable with the people, U. S.Const., Preamble, it is not misleading to state that the privilege belongs to the government.
[110] This was long ago articulated by President John Quincy Adams, who stated: "the right of withholding information pertains to the office and not to the man." Records of a Nation at 162.
[111] Notably, the Department of the Navy originally had broadly asserted a privilege in the trial court but that court postponed the matter "to learn further from the Navy Department what its position in the matter really was", after which the Secretary of the Navy gave the court a different reply, "qualifying in a very material respect the answer [the Department] had previously given to the court's request for copies of the papers." 180 F. at 70.
[112] It is arguable that the Supreme Court in United States v. Nixon, supra, did not bifurcate the privilege which protects confidential communications to the Chief Executive and that which is afforded to the executive departments and agencies, since the court cited in support of the privilege such cases as Carl Zeiss, supra, which involved only executive departments and not the Office of the President. This conclusion is further supported when it is considered that the executive departments and agencies are merely extensions of the Office of the Chief Executive, which aid in the performance of Article II powers, U.S.Const., Art. II, Sec. 2. And, therefore, the Supreme Court's decision in United States v. Nixon may be considered nothing more than a determination that the heretofore common law privilege which has protected confidential communications in the Executive Branch is constitutionally based. 418 U.S. at 704-710, 94 S.Ct. at 3106-3109.
[113] The fact of the communication and the substance thereof may not be so easily separated. See Branzburg v. Hayes, 408 U.S. 665, 92 S.Ct. 2646, 33 L.Ed.2d 626 (1972).
[114] Although the Supreme Court in United States v. Nixon stated that case did not involve "the President's interest in preserving state secrets," 418 U.S. at 712, 94 S.Ct. at 3109, n. 19, the Court did not divorce the substance of the communication from the fact of the communication. The Court in fact found that since the President could not give any reason for withholding the information contained in the conversation, the general claim of confidentiality was insufficient to overcome the specific needs of another significant public interest, that of the "fair administration of criminal justice." 418 U.S. at 711-712, 94 S.Ct. at 3109-3110.
[115] This rule has in fact been applied to confidential White House communications. Center for Corporate Responsibility v. Shultz, 368 F.Supp. 863 (D.D.C.1973). There, the district court had ordered the production of a tape recorded conversation between President Richard M. Nixon, White House counsel John W. Dean, III, and Chief of Staff H. R. Haldeman, concerning political influence of the Internal Revenue Service relating to the denial of an application for tax exemption of the Center for Corporate Responsibility. Subsequent to the court's order, White House counsel, noting his general authority in such matters, filed a claim of executive privilege. The court, finding the rule in Reynolds applicable, held that since only the President was in a position to assert the privilege, the claim was improperly asserted. 368 F.Supp. at 872-873.
[116] This is even more apparent with respect to the heirs of the former President who have never held the office.
[117] "[The] application of Executive privilege depends on a weighing of the public interest protected by the privilege against the public interests that would be served by disclosure in a particular case." Nixon v. Sirica, supra, 159 U.S.App.D.C. 58, 487 F.2d at 716.
[118] See e. g., title 18 U.S.C. ง 793(d)-(e).
[119] In support of this contention, he points to the fact that Harry S. Truman, after he had left office, when summoned to testify before Congress, refused on the ground that he could not do so as it would result in his revealing confidential communications relating to the conduct of the office of the President and, the communications were, therefore, privileged. Brief of Richard M. Nixon in Support of Motion for Preliminary Injunction at 26.
[120] Cf. In re Investigation of World Arrangements with Relation to . . . Petroleum, 13 F.R.D. 280, 285-286 (D.D.C. 1952).
[121] The striking similarity of this language with that of the Supreme Court, in United States v. Nixon, 418 U.S. at 712, 94 S.Ct. at 3110, is quite evident. And, it must also be pointed out that President Ford, although waiving the general privilege as to confidentiality, did not waive the privilege as to national security matters. See Appendix B, ถ 2.
[122] Appendix B, ถ 1 and 1(a) & (b).
[123] See footnote 88, supra.
[124] The fourth amendment protects an individual from unlawful government seizures of private property in the individual's possession; it does not protect seizures of private property lawfully in the possession of the government. See Burdeau v. McDowell, 256 U.S. 465, 476, 41 S.Ct. 574, 65 L.Ed. 1048 (1921). Thus, it is difficult to comprehend how there could be any unlawful search and seizure of government property in government possession. The applicable constitutional provision would appear to be the fifth amendment, which protects an individual from compulsory production of evidence to be used against him. See United States v. Davis, supra, 328 U.S. at 587, 66 S.Ct. 1256. There is no indication, however, that the Special Prosecutor intends to use the Presidential materials and tape-recorded conversations in a criminal proceeding against the former President. And, the Court takes judicial notice of the fact that President Ford has granted, and Mr. Nixon has accepted, a full and unconditional pardon. Such a pardon dispels any possibility that a fifth amendment claim could be cognizable. Brown v. Walker, 161 U.S. 591, 598-599, 16 S.Ct. 644, 40 L.Ed. 819 (1896). However, since Mr. Nixon has not contested the November 9th Agreement on fifth amendment grounds, it is unnecessary for the Court to embark upon consideration of such issues.
[125] Although the Supreme Court has held that property rights and the right to possession are not controlling fourth amendment considerations, Warden v. Hayden, 387 U.S. 294, 302-306, 87 S.Ct. 1642, 18 L.Ed.2d 782 (1967), they become significant in the instant matter which is analogous to the situation where one citizen seeks to prevent the search of another citizen's property. See Gibson, supra, 149 F.2d at 384. In such situations, there is no cognizable fourth amendment claim. Id.
[126] Although it is arguable that the Presidential Recordings and Materials Preservation Act, supra, may have taken by eminent domain these private materials and tape-recorded conversations, this is still in dispute and is the subject matter of Mr. Nixon's newly-filed suit. See footnote 64, supra. Thus, the Court will not reject Mr. Nixon's privacy claim on that basis. Further, a strong argument may be made that the Act in fact protects his right of privacy. See section 104(a).
[127] Testimony of Mr. Jack Nesbitt, TR-82-83, 86-94, 104-105; See also, Deposition of Mr. Nesbitt at 10-11, 27, 38-40, 65, 38-42.
[128] Id.
[129] The Court, articulating the rule, stated ". . . it is established practice for this Court to sustain the jurisdiction of federal courts to issue injunctions to protect rights safeguarded by the Constitution . . .". 327 U.S. at 684, 66 S.Ct. at 777 (footnote omitted).
[130] Response of the Special Prosecutor to Mr. Nixon's Report to the Court, January 2, 1975.
[131] This procedure is delineated in terms of the effectuation of the November 9th Agreement. However, the same procedure is intended to apply with equal force to requests for Presidential materials or tape-recorded conversations when such requests are made pursuant to a subpoena or court order, or by way of application under the Freedom of Information Act. As discussed in Section VIII, supra, requests under the FOIA are proper when the materials or conversations being sought were generated by executive departments or by the Executive Office of the President; requests are not within the scope of the FOIA when the materials or conversations being sought were generated by the White House Office.
[132] These include materials such as White House diaries, logs, indices, etc., that the Special Prosecutor has said are available for this use.
| {
"pile_set_name": "FreeLaw"
} |
224 F.2d 778
Alfred B. CENEDELLA, Defendant, Appellant,v.UNITED STATES of America, Appellee.
No. 4964.
United States Court of Appeals First Circuit.
Argued June 8, 1955.
Decided August 5, 1955.
Rehearing Denied August 31, 1955.
Alfred B. Cenedella, Milford, Mass., pro se, with whom Richard Maguire, Boston, Mass., Thomas J. Carens, Wellesley Hills, Mass., and Maguire, Roche, Garrity & Maloney, Boston, Mass., were on the brief.
James P. Lynch, Jr., Asst. U. S. Atty., Canton, Mass., with whom Anthony Julian, U. S. Atty., and Arthur I. Weinberg, Asst. U. S. Atty., Boston, Mass., were on the brief, for appellee.
Before MAGRUDER, Chief Judge, and WOODBURY and HARTIGAN, Circuit Judges.
WOODBURY, Circuit Judge.
1
A jury in the court below found the appellant guilty on all four counts of an indictment charging evasion of income taxes in violation of § 145(b) of the Internal Revenue Code, Title 26 U.S.C. § 145(b), for the four calendar years from 1947 to 1950, inclusive, and the court sentenced him to concurrent terms of imprisonment on each count and on each count to pay a separate fine of $500.
2
The appellant admitted at the trial that he had understated his income in the joint returns he filed for himself and his wife for each of the years covered by the indictment. His contention was, and is, that his omission of items of income was not willful but inadvertent, or at the most, the result of his or his secretary's carelessness. However, the number of income items concededly omitted each year, and their gross amounts, clearly warranted the jury in rejecting the appellant's contention and instead concluding that the items were willfully omitted by the appellant in an attempt to evade or defeat his income tax obligations for each of the four years involved. Further elaboration is unnecessary for the appellant only half-heartedly contends that the District Court erred in denying his motions under Criminal Rule 29(a), 18 U.S.C.A., for the entry of a judgment of acquittal on each count of the indictment.
3
We turn, therefore, at once to the consideration of those matters which the appellant contends entitle him to a new trial.
4
The appellant was admitted to the Massachusetts Bar in 1910 and he has lived and practiced his profession in his native town of Milford ever since. Throughout his professional life he has been active in civic affairs. He served on the local school committee for over twenty years; he was Town Solicitor of Milford for five years and Town Solicitor for the adjoining town of Mendon for twenty-five years. In addition to holding local office, he served on the Massachusetts Industrial Accident Board from 1930 to 1935 when he resigned to become First Assistant to the District Attorney for Worcester County. He held that office for twelve years and in 1946 he was elected District Attorney. In 1950 he was re-elected for another four-year term at the end of which he retired.
5
The Government does not contend that the appellant understated his salary as District Attorney during the four years covered by the indictment. Its contention is, and the appellant concedes, that during those years he understated the income he derived from the private practice of the law which he carried on part time during his service as District Attorney. While many omissions of items of income from this source were agreed upon in a series of stipulations entered into by opposing counsel, other omissions alleged by the Government were not, and it undertook to prove these disputed items by documentary evidence and the testimony of witnesses. Two of these disputed items must be considered in some detail. One involves the administration of the estate of Coccavelli and the other a transaction with one Swartz.
6
The appellant in 1920 was appointed guardian of Vincenzo Coccavelli, an insane person, and he continued to serve in that capacity until 1946 when Coccavelli died intestate leaving an estate of about $35,000 and four heirs residing in Italy. The heirs appointed the appellant their attorney in fact and in October, 1946, the appellant's son, then a law student, was appointed administrator of the Coccavelli estate. The appellant acted as counsel for his son as administrator and as such he apparently handled most if not all transactions involving the estate.
7
The Government introduced evidence at the trial to show that in 1947 the appellant obtained stock and cash from the Coccavelli estate to the value of over $9,000 which he did not report as income in his return for that or any other year. It showed specifically that in July, 1947 the administrator transferred stock of the estate in the Home National Bank of Milford worth $2,300 to the appellant, and that in the same year, at one time or another and in one way or another, over $7,000 in cash found its way from the estate to the appellant's personal checking account and was subsequently used by him as though it were his own, except for $318.29 which he transmitted by personal check to the heirs in Italy in February, 1948, noting on his check stub "In full Coccavelli Est."
8
The appellant objected to the introduction of the above evidence on the ground that it was both irrelevant and prejudicial. He said that the evidence was irrelevant because its only tendency was to show that he had embezzled funds from the Coccavelli estate, and in Commissioner of Internal Revenue v. Wilcox, 1946, 327 U.S. 404, 66 S.Ct. 546, 90 L.Ed. 752, it was held that embezzled money does not constitute taxable income to the embezzler. And he said that the evidence was so highly prejudicial as to prevent the possibility of his having a fair trial not only on the first count of the indictment covering the year 1947, but also on the three remaining counts covering the three succeeding years as well. Nevertheless, the court below overruled the appellant's objection and admitted the evidence on the Government's theory that from it the jury could infer that the appellant had taken the stock and money from the Coccavelli estate in payment for his services as counsel for the administrator and as attorney in fact for the heirs.
9
When the appellant took the stand in his own defense he admitted that he had received assets of the Coccavelli estate as shown by the Government. He contended, however, that the Home National Bank of Milford stock was not worth $2,300 at the time it was transferred to him, as the Government contended, but was worth only $1,610, and that he took it in payment of his fee for services of $1,500 and to reimburse him for his expenses of $110. He said that of the cash, $2,000 was his son's fee as administrator which was paid directly to him in partial repayment of loans made over past years to his son, and the remainder, amounting to nearly $6,000, got into his personal checking account by mistake and that he spent it inadvertently.
10
Furthermore, the appellant introduced in evidence the first and final account of his son as administrator of the Coccavelli estate which was filed in the Probate Court for Worcester County on November 24, 1954, and was allowed on the day it was filed at the request of the appellant as attorney in fact for the heirs. This account shows a payment to the appellant on July 17, 1947, of $1,610, consisting of Home National Bank stock, for fees and expenses; a payment of an administrator's fee of $2,000 to the appellant's son on October 22, of that year; and a distribution on February 16, 1948, of $5,725.26 to the appellant for the Coccavelli heirs. The appellant admitted, however, that he did not actually remit the latter sum to the heirs until December 1954, after the account was allowed, and about eleven months after he was indicted.
11
The District Court recognized that the Wilcox doctrine did not cover all of the evidence with respect to the Coccavelli estate because of the appellant's claim that part of the money he received from the estate was in payment of fees and expenses. But, at the appellant's earnest request, the court did not charge on the Wilcox rule at all. Instead, the court without objection by the appellant charged the jury that it was not to consider the $5,000 odd taken from the Coccavelli estate as unreported income for the year 1947 if it should find that the appellant did not realize that he had that money in that year, for "then obviously he could not be expected to have reported it," and the jury was not to concern itself with honest mistakes. The jury was also told that on the other hand, if it should find that the appellant had consciously retained some or all of the above sum, in addition to the bank stock, for his professional services as counsel for his son, the administrator, and as attorney in fact for the heirs, then it could find "that what he so took for that purpose was taxable income" which should have been reported in his income tax return for 1947.
12
The appellant at the trial clearly abandoned his contention based on the Wilcox case and he has not attempted to revive it in his brief. His present contention is that the evidence pertaining to the estate of Coccavelli should have been excluded for the reason that its admission constituted a collateral attack on the decree of the Probate Court for Worcester County allowing the administrator's final account.
13
We do not brush this contention aside as an afterthought for it was briefly mentioned in passing at the trial. Nor can we treat the contention as applicable only to the first count covering the year 1947 and sustain the judgment without considering it, for although the prison sentences on each count were concurrent the fines on each count were separate, and furthermore, the appellant contends that the prejudice resulting from the admission of this evidence deprived him of a fair trial on all counts. We find the contention, however, to be wholly without merit.
14
Since the appellant's son was the administrator of the Coccavelli estate, and the appellant himself was not only counsel for his son as administrator but also attorney in fact for the heirs, and as such requested allowance of his son's final account as administrator, it would seem that the appellant, by relying on the judicial allowance of the account as the ground for excluding the evidence of his dealings with the estate's assets, was attempting to lift himself by his own bootstraps. See Wolfsen v. Smyth, decided by the United States Court of Appeals for the Ninth Circuit, May 25, 1955, 223 F.2d 111. However, the decree of the Probate Court as to the amount of the appellant's fee, although perhaps binding on the heirs, is not binding on the Government under the doctrine of res judicata for the Government was neither a party, nor the privy of a party, in the accounting proceeding. Moreover, while the decree may adjudicate the amount of the appellant's fee so far as the heirs are concerned, it does not adjudicate, or purport to adjudicate, the appellant's prior dealings with assets of the estate. See Gallagher v. Smith, decided by the United States Court of Appeals for the Third Circuit, June 3, 1955, 223 F.2d 218. That is to say, it does not adjudicate, or attempt to adjudicate, that the appellant did not, some seven years before, take a larger fee than that subsequently allowed and then later abandon his claim to the larger amount and remit the balance to the heirs. In short, the 1954 decree of the Probate Court, while for some purposes fixing the appellant's fee at $1,500 and his expenses at $110, does not determine the question whether or not in 1947 the appellant claimed as of right and took a larger fee which on second thought he later reduced to the amount he finally claimed and was allowed. See United States v. Lewis, 1951, 340 U.S. 590, 71 S.Ct. 522, 95 L.Ed. 560.
15
We turn now to the Swartz matter.
16
The Government introduced evidence to show that the appellant had been co-executor under the will of one Catherine Green; that he had assisted his fellow townsman, landlord and neighbor, Swartz, in negotiating for the purchase of a business block in Milford belonging to that estate, whereby Swartz had been able to purchase the property at a saving of approximately $9,000 or $10,000; and that upon consummation of the sale in October, 1949, Swartz gave the appellant $4,750 in cash which the appellant noted in his diary as a "gift" and never reported as income. It was the Government's contention that from this evidence the jury could properly find that the money received from Swartz was not a "gift" but a payment for valuable services rendered, and so conclude that the appellant ought to have reported the $4,750 as income in the year received.
17
The appellant admitted that he had done what he could to help Swartz purchase the property from the Green estate and that Swartz had given him $4,750 in cash at the time the transaction was closed. But he contended that the money was a "gift", as he had noted in his diary, and not a payment for services rendered. The issue of fact presented by the foregoing evidence was submitted to the jury under instructions which were not objected to.
18
We come now to the gist of the appellant's complaint.
19
The Government summoned Swartz as a witness, and he was present in the courthouse with the other government witnesses for three days during the trial, but he was not called to the stand by either the Government or the appellant. The court in its charge mentioned that Swartz had not appeared in court and told the jury that no inference was to be drawn for or against either party because of his absence. It is conceded that Swartz, if called, would have testified that he never gave the appellant $4,750, or any other sum, and both the Government and the appellant knew that he would so testify.
20
The appellant does not contend that the Government concealed Swartz where he could not be found. Nor does the appellant contend that he was prevented by the Government from finding out what Swartz' testimony would be. His contention is that it was the duty of Government's counsel to put Swartz on the stand and present his testimony to the jury for its consideration, and that the failure of counsel for the Government to do so was highly prejudicial to his cause. The contention is refuted by its statement.
21
The Government is privileged not to call witnesses in whom it has no confidence and there is little reason to have confidence in Swartz. Nor is it any part of the Government's duty to present evidence for the defense. Moreover, had it put Swartz on the stand, it would have been open to the accusation of prejudicing the jury by impeaching the appellant's credibility, for he had testified categorically that Swartz gave him $4,750, or possibly, as the court below noted, indicating a consciousness on the part of Swartz that he and the appellant had engaged in a shady transaction. At any rate the appellant knew where Swartz was and knew what Swartz would say if he were called to the witness stand. He could have called Swartz had he wanted to, by process if necessary, and his failure to do so cannot be charged against the Government.
22
Only one more matter requires specific consideration.
23
The jury took the case and retired to consider its verdict about 10 o'clock in the morning. At nine o'clock that evening the court called the jury back into the courtroom and in the presence of the appellant and counsel on both sides asked the foreman if there was any prospect of the jury reaching an agreement within the next five or ten minutes. The foreman replied that he did not think agreement could be reached within quite so short a time, and the court then urged the jurors to reach an agreement if they conscientiously could using language approved by the Supreme Judicial Court of Massachusetts in Commonwealth v. Tuey, 8 Cush. 1.
The following colloquy then ensued:
24
"The Court: * * * Now, Mr. Foreman, if there is anything in my charge that you would like to have repeated, if there is any subject on which you would like further illumination from the charge or if there is any evidence you would like to hear, I will hand you a pad and you may address any questions to me that you wish, being not just the decision of one of you as to the questions but you should confer briefly among yourselves so that you agree as to what it is that I am being asked.
25
"The Foreman: Right here, your Honor?
26
"The Court: Yes, you may. If you prefer to go upstairs and do it, you may do that.
27
"The Foreman: I don't think that will be necessary, your Honor.
28
"[Conference between jurors]
29
"The Foreman: I feel, your Honor, that we are reasonably close to a decision, a verdict.
30
"The Court: That is fine. That was why I brought you down, to find out whether you were or were not. We will await you, and naturally you may take as long as you feel you should. If you do change your mind and want any questions answered, why, we will be here.
31
"The Foreman: Thank you."
32
The jury then retired at 9:03 to return at 9:20 with a verdict of "guilty" on all four counts of the indictment.
33
The appellant registered no objection to these proceedings at the time. Indeed, through his counsel at least, he appears to have fully acquiesced in all that was done. Now, however, he contends that the court brought improper pressure to bear on the jury and in effect coerced it into bringing a verdict of guilty. He says that in effect the court asked the jury how it stood numerically with respect to a verdict, which the Supreme Court condemned in Burton v. United States, 1905, 196 U.S. 283, 307, 308, 25 S.Ct. 243, 49 L.Ed. 482, and held to be prejudicial error calling for reversal in Brasfield v. United States, 1926, 272 U.S. 448, 450, 47 S.Ct. 135, 71 L.Ed. 345, and also that the court required the jury to reach its verdict in open court, where it was subject to the imponderable but nevertheless pervasive influence of the bailiffs and other court attaches, instead of in the privacy of its jury room.
34
Again the statement of the contention demonstrates its lack of merit. The trial court did not poll the jury in advance of verdict as in the cases last cited. Instead it merely inquired as to the prospects of agreement to find out if further instructions would be helpful — certainly a reasonable inquiry, for if the jury were on the verge of agreement further instructions would not have been necessary. Nor did the court require the jury to reach its verdict in the courtroom. All that the jury decided in the courtroom was that it did not desire any further instructions, and, having decided that, it retired to its room to consider the case further, returning several minutes later with a verdict. We see no error in the way the court handled the jury.
35
The appellant further contends that the court below fell into several other serious errors affecting his substantial rights which we should notice under Criminal Rule 52(b) even though they were not brought to the attention of the court at the trial. We have examined these assertions of error and found them all without merit. We shall not mention them in detail. It will suffice to say that the record discloses a trial fought hard but cleanly by counsel on both sides and conducted from the bench with scrupulous regard for the appellant's rights.
36
The judgment of the District Court is affirmed.
| {
"pile_set_name": "FreeLaw"
} |
511 F.2d 526
5 Envtl. L. Rep. 20,224
SIERRA CLUB et al., Plaintiffs-Appellants,v.Donald P. HODEL, as Administrator of the Bonneville PowerAdministration, Defendant-Appellee.
No. 74--3366.
United States Court of Appeals,Ninth Circuit.
Feb. 25, 1975.
William D. Rives (argued), of Davis, Wright, Todd, Riese & Jones, Seattle, Wash., for plaintiffs-appellants.
Larry A. Boggs, Dept. of Justice (argued), Washington, D.C., for defendant-appellee.
ORDER
Before ELY, TRASK and WALLACE, Circuit Judges.
1
The motion for injunction pending appeal is denied except as follows: No additional new clearing work shall be done on the power line corridor so that the timber, shrubs, etc. on the remaining approximately nine miles of planned corridor will not be cut or affected until the regular panel hearing this case orders otherwise.
ELY, Circuit Judge (dissenting):
2
The National Environmental Policy Act, 42 U.S.C. § 4321 et seq., became effective on January 1, 1970. Almost one year thereafter, i.e., on December 7, 1970, the Power Sales Contract that the appellant challenges was executed. This execution occurred despite the fact that no environmental impact statements, as required by 42 U.S.C. § 4332, were prepared and therefore subject to consideration before the execution of the contract. The contract involved massive projects which will, if completed and utilized, undeniably have a severe impact upon the environment of a large geographical area.
3
During the oral argument conducted in connection with the appellants' application for an injunction suspending work on the project pending the disposition of their appeal, the appellee's attorney conceded that there had been a 'technical' violation of the law in the execution of the contract without the existence and benefit of the required environmental impact statement. In the light of this concession and in consideration of Lathan v. Brinegar, 506 F.2d 677 (9th Cir. 1974) (en banc), and National Forest Preservation Group v. Butz, 485 F.2d 408, 412 (9th Cir. 1973), I conclude that there is a fair likelihood that the appellants will be successful in their appeal to this court.
4
I would therefore grant the appellants' motion in its entirety, halting all further work on the project pending the disposition of the appeal on the merits. Such action, I think, would involve less risk to the appellee.
| {
"pile_set_name": "FreeLaw"
} |
941 A.2d 842 (2008)
STATE
v.
George C. GONCALVES.
No. 2006-37-C.A.
Supreme Court of Rhode Island.
February 21, 2008.
*844 Lauren S. Zurier, Esq., Providence, for Plaintiff.
Marie Roebuck, Esq., Providence, for Defendant.
Present: WILLIAMS, C.J., GOLDBERG, FLAHERTY, SUTTELL, and ROBINSON, JJ.
OPINION
Chief Justice WILLIAMS, for the Court.
The defendant, George C. Goncalves (defendant), appeals from an adjudication of a probation violation and the partial denial of his motion to dismiss pursuant to Rule 35(a) of the Superior Court Rules of Criminal Procedure. This case came before the Supreme Court for oral argument on January 24, 2008, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not summarily be decided. After hearing the arguments of counsel and examining the memoranda filed by the parties, we are of the opinion that this appeal may be decided at this time, without further briefing or argument. For the reasons set forth herein, we affirm the judgment of the Superior Court.
I
Facts and Travel
The hearing justice in this case found that defendant violated the conditions of his probation in two separate underlying cases, both of which involved convictions for possession of narcotics. The hearing justice based his decision on the testimony of two police officers and a detective from the Pawtucket Police Department. One of the officers testified that while on patrol in Pawtucket on April 29, 2005, he spotted a car traveling on Hurley Avenue. He followed the car and looked up the license plate, and discovered that the plate had been reported stolen.
The officers testified that, during defendant's arrest at the scene for suspected drug possession and a subsequent search at the police station, they found and seized a total of eighteen small bags of a white substance and eighteen small bags of a "greenish-brownish substance." A Pawtucket police detective testified at the violation hearing that he performed tests on the seized substances, which revealed that the white substance was cocaine and the brown leafy substance was marijuana. On appeal, defendant does not challenge the aforementioned account of the stop and arrest on April 29, 2005.[1]
At the beginning of the two-day violation hearing, defendant addressed the court, requesting permission to "fire" his attorney. The defendant explained that he and his attorney were "not connecting with each other right now." The defendant was unwilling to disclose any further details to the court. The defendant's attorney informed the court that he believed the conversations concerning their disagreement were privileged. The defendant's attorney, however, was not willing to characterize the situation as unworkable, saying, "I don't think, in my professional opinion, that a conflict exists."
After some consideration, the hearing justice concluded that defendant primarily was unhappy with the plea offers he had *845 received from the state, which were outside the defense attorney's control. Additionally, he noted that defendant's request to change attorneys already had been rejected by a different hearing justice a week and a half earlier. Finally, he noted that the state was ready with witnesses and defendant's attorney was "ready, willing, and able to take the case on." Taking all of these factors into account, the hearing justice denied defendant's request to change counsel and proceeded with the hearing.
The defendant complained that he was not prepared to start, but he added that, if he was forced to continue, he would represent himself with his attorney as standby counsel. The hearing justice again stated that the matter was going to proceed, even if defendant intended to represent himself. The hearing justice proceeded over defendant's objections. Ultimately, defendant's attorney cross-examined each of the witnesses.
At the close of the hearing, the hearing justice was reasonably satisfied that defendant had violated the terms of his probation, and ordered defendant to serve three years of a three-year suspended sentence in case P2/02-3895D (the 2002 case) and continued defendant's four-year suspended sentence in case P2/03-3674A (the 2003 case). The defendant filed a timely appeal to this Court on July 29, 2005.
In a complicating twist, this Court granted defendant's post-appeal motion to remand and hold in abeyance so he could bring a motion in Superior Court in accordance with Rule 35 to have the underlying sentence in the 2002 case corrected. The record was remanded and defendant's motion was heard before a Superior Court magistrate on October 13, 2006. At that hearing, the magistrate found that the maximum penalty for the 2002 conviction was two years, not the three years imposed. Therefore, the magistrate issued an order correcting the sentence in the 2002 case to two years suspended, with two years probation.
Next, defendant brought a second Rule 35(a) motion to correct the order to serve three years on the 2002 conviction issued by the probation-violation hearing justice. At that hearing, defendant argued that the order to serve three years was illegal because the underlying sentence was corrected to only two years. In addition, he argued that the corrected two-year suspended sentence already was completed when the order was issued, so the hearing justice lacked jurisdiction from the start. He went a step further, however, arguing that the hearing justice could not modify his order to require defendant to serve any of the 2003 sentence, because the hearing justice already had continued the original suspension and no longer had jurisdiction to modify that disposition.
The hearing justice did not decide the issue immediately, but instead put the hearing in recess for more than a week for consideration. On November 20, 2006, he ruled from the bench in favor of the state. Accordingly, he corrected his original decision and ordered defendant to serve three years of the four-year suspended sentence from the 2003 case, with the stated intention that defendant serve three years at the Adult Correctional Institutions (ACI), as intended in the original order.
On November 21, 2006, defendant filed a second appeal and the record was returned to this Court. We will consider the issues raised in both appeals.
II
Analysis
The defendant makes two arguments on appeal. First, he argues that the hearing justice abused his discretion and violated *846 defendant's state and federal constitutional right to counsel of his choice when he refused to grant a motion for a continuance. Second, he argues that the hearing justice misinterpreted Rule 35 when he corrected the original order and ordered defendant to serve three years on the 2003 case.
A
Motion for a Continuance
The defendant argues on appeal that the hearing justice abused his discretion by refusing to grant his motion to continue so he could engage new defense counsel. Rather than grant this motion, the hearing justice required defendant to proceed with the lawyer he already had retained.
On appeal, "[w]e will not disturb a hearing or trial justice's decision on a motion to continue absent an abuse of discretion." State v. Caprio, 819 A.2d 1265, 1269 (R.I.2003) (citing State v. Burke, 811 A.2d 1158, 1163 (R.I.2002); State v. Dias, 118 R.I. 499, 503, 374 A.2d 1028, 1029-30 (1977)). Furthermore, "a violation hearing is summary in nature and the full panoply of rights afforded to a defendant at a criminal trial are not available at a violation hearing * * * includ[ingl the right to a continuance in order to secure counsel of his or her own choice." State v. Davis, 726 A.2d 13, 14 (R.I.1998) (mem.).
Though our standard of review is limited, a defendant at a violation hearing is not stripped entirely of the right to counsel of his or her own choice. Caprio, 819 A.2d at 1269-70. "A sustainable exercise of discretion in this context requires the trial justice to balance carefully the presumption in favor of the defendant's right to trial counsel of choice and the public's interest in the prompt, effective, and efficient administration of justice." Id. (quoting Burke, 811 A.2d at 1163). In making that determination, a hearing justice must look to the "specific circumstances of each case." Id. at 1270 (citing as an example the specific factors from State v. Moran, 699 A.2d 20, 26 (R.I.1997)).
Looking to the specific circumstances of this case, we cannot conclude that the hearing justice abused his discretion. First, defendant's request for a continuance to secure different counsel had been considered and rejected by a different justice eleven days before the violation hearing commenced. The hearing justice in this case noted on the record that defendant had not taken any steps to engage new counsel during the intervening eleven-day period. See Moran, 699 A.2d at 26 (listing as one factor "whether the defendant in fact has other competent and prepared trial counsel ready to pinch-hit"). Second, the hearing justice noted on the record that defendant primarily was unhappy with "the proposed disposition" of his case, even though his lawyer had plea bargained effectively with the state. See id. (listing as one factor "whether the request appears to be legitimate"). The defense lawyer secured an offer of eighteen months incarceration to serve on both violations. Third, defendant's attorney was present and ready to proceed, and he did in fact cross-examine the state's witnesses. Finally, this was the sixth hearing on the matter, and the state had come prepared with its witnesses. See id. (listing as one factor "the inconvenience to the parties, witnesses, jurors, counsel, and the court"). The hearing justice was justifiably concerned that defendant would cause further delay late in the process. See Caprio, 819 A.2d at 1270 ("[T]here must be `exceptional circumstances' to justify a delay for an eleventh-hour discharge of counsel." (quoting Moran, 699 A.2d at 26)).
*847 The hearing justice looked explicitly to the factors above and applied the appropriate test, balancing defendant's rights against the public's right to a fair and efficient justice system. See, Caprio, 819 A.2d at 1269-70. "On balance," the hearing justice determined that the best course of action was to deny the request for a continuance and proceed with the hearing. In so doing, the hearing justice acted well within his discretion, and we will not disturb his determination on appeal. For the foregoing reasons, we affirm the hearing justice's denial of defendant's motion for a continuance.
B
Rule 35(a) Sentence Correction
The defendant next argues that the hearing justice did not have jurisdiction under Rule 35(a) to modify his original order continuing defendant's 2003 sentence. Generally, our review of a motion justice's ruling on a motion to correct pursuant to Rule 35 is limited. State v. Burke, 876 A.2d 1109, 1112 (R.I.2005) (citing State v. Morris, 863 A.2d 1284, 1286 (R.I.2004)). However, the issue in this case requires us to interpret Rule 35(a) to determine the extent of the authority granted by the rule. "When interpreting statutes and court rules, we apply a de novo standard of review." State v. Brown, 898 A.2d 69, 76 (R.I.2006) (citing Jacksonbay Builders, Inc. v. Azarmi, 869 A.2d 580, 583 (R.I.2005)).
This appeal raises an issue of first impression before this Court concerning a practice that is commonly known as sentence re-bundling. Re-bundling occurs "[w]hen one or more components of a defendant's sentence are held to be illegal" and the hearing justice thereafter corrects the entire sentencing package in order to "effectuate the original sentencing intent." United States v. Martenson, 178 F.3d 457, 462 (7th, Cir.1999) (quoting United States v. Shue, 825 F.2d 1111, 1114 (7th Cir. 1987)). In the case at bar, the hearing justice's order was illegal as it related to the 2002 conviction, but he later "re-bundled" the sentencing package, relying on Rule 35 to achieve the same resultthree years to serve.
Even though re-bundling is an issue of first impression in Rhode Island, we are not without guidance; our neighbor state, Connecticut, has dealt squarely with this issue, as have many federal circuit courts of appeal. See State v. Raucci, 21 Conn. App. 557, 575 A.2d 234, 235-36 (1990) (citing cases from the First, Second, Third, Fourth, Fifth, Sixth, Seventh, Ninth, and Eleventh Circuit Courts of Appeal dealing with the issue of sentence bundling); (State v. Tabone, 68 Conn. L.J. 154 (August 15, 2006) (as corrected at 68 Conn. L.J. xxii (October 10, 2006)) (remanding "for resentencing in accordance with" Raucci)).[2]Cf. Wilson v. State, 170 P.3d 975, 979 (Nev.2007) (rejecting sentence bundling theory based on the uniqueness of federal sentencing law). Of all the federal courts that have discussed sentence re-bundling, all but the Ninth Circuit Court of Appeals hold the position that "the original sentencing court is viewed as having imposed individual sentences merely as component parts or building blocks of a larger total punishment * * *." Raucci, 575 A.2d at 236.
The logical implication of this view in the resentencing context is clear: "When the conviction on one or more of the component counts is vacated, common *848 sense dictates that the judge should be free * * * to reconstruct the sentencing architecture * * * within applicable constitutional and statutory limits * * * to ensure that the punishment still fits both crime and criminal." United States v. Pimienta-Redondo, 874 F.2d 9, 14 (1st Cir. 1989) (en banc). We adopt the majority approach in the Rule 35 context in Rhode Island. Accordingly, a hearing justice who corrects an illegal sentence pursuant to Rule 35(a) may correct the entire initial sentencing package to preserve the originally intended sentencing scheme, so long as the corrected sentence does not exceed the sentence originally imposed. See, e.g., Martenson, 178 F.3d at 462; Raucci, 575 A.2d at 237 ("recognizing the power of the court to fashion the new sentence so as to conform to its original sentencing intent").
Applying this newly adopted rule to the case at bar, it is clear that the hearing justice modified his order appropriately. First, the hearing justice made it clear that he was acting in accordance with his original plan:
"[T]he plan was to sentence this defendant to three years at the ACI as a violator of his probations. * * * Obviously, now we know that the first case was erroneous. It should not have been before me. Had that been the case, there's not a shred of doubt in my mind that what I would have done was given him the three years on the second case. And, I think based upon the authority that has been cited to me today, that's exactly what should happen."
The hearing justice was explicitly attempting to preserve the intent of his original sentencing scheme. Additionally, the hearing justice's new order did not exceed the total time ordered to serve under the original order. The hearing justice in this case, therefore, anticipated and followed the rule announced in this opinion. Accordingly, we affirm the hearing justice's ruling and order.
Conclusion
For the reasons stated herein, we affirm the judgment of the Superior Court. The record shall be remanded to the Superior Court
NOTES
[1] According to defendant's brief, he has since pled nob contendere to charges stemming from the April 29, 2005 stop and arrest. Accordingly, defendant is precluded from challenging those charges on appeal as the basis for this violation. See State v. Seamans, 935 A.2d 618, 622 (R.I.2007).
[2] The final corrected version will appear at State v. Tabone, 279 Conn. 527, 544, 902 A.2d 1058 (2006).
| {
"pile_set_name": "FreeLaw"
} |
Matter of Attorneys In Violation of Judiciary Law § 468-a (Serbinowski) (2018 NY Slip Op 05726)
Matter of Attorneys In Violation of Judiciary Law § 468-a (Serbinowski)
2018 NY Slip Op 05726
Decided on August 9, 2018
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: August 9, 2018
[*1]In the Matter of ATTORNEYS IN VIOLATION OF JUDICIARY LAW § 468-a. COMMITTEE ON PROFESSIONAL STANDARDS, Now Known as ATTORNEY GRIEVANCE COMMITTEE FOR THE THIRD JUDICIAL DEPARTMENT, Petitioner; PAUL ALAN SERBINOWSKI, Respondent. (Attorney Registration No. 4174413)
Calendar Date: July 2, 2018
Before: Garry, P.J., Egan Jr., Lynch, Clark and Pritzker, JJ.
Monica A. Duffy, Attorney Grievance Committee for the Third Judicial Department, Albany, for petitioner.
Emery, Celli, Brinckerhoff & Abady LLP, New York City (Hal R. Lieberman of counsel), for respondent.
Per CuriamMEMORANDUM AND ORDER
Per Curiam.
Respondent was admitted to practice by this Court in 2003
and lists a business address in Austin, Texas with the Office of
Court Administration. By January 2014 order, this Court suspended respondent from the practice of law in New York for conduct prejudicial to the administration of justice arising from
his noncompliance with the attorney registration requirements of Judiciary Law § 468-a and Rules of the Chief Administrator of the Courts (22 NYCRR) § 118.1 (113 AD3d 1020, 1051 [2014]; see Judiciary Law § 468-a [5]; Rules of Professional Conduct [22 NYCRR 1200.0] rule 8.4 [d]). Respondent now moves for his reinstatement in New York (see Rules for Attorney Disciplinary Matters [22 NYCRR] § 1240.16 [a]). In its June 2018 correspondence in response, petitioner advises that it defers to the Court's discretion on respondent's application.
A reinstatement applicant must apply by form affidavit as prescribed in Rules for Attorney Disciplinary Matters (22 NYCRR) part 1240 and provide certain required documentation in support of his or her application (see Rules for Attorney Disciplinary Matters [22 NYCRR] § 1240.16 [b]; part 1240, appendix C). Here, in light of the length of his suspension, respondent properly submits the form affidavit contained in appendix C to the Rules for Attorney Disciplinary Matters (22 NYCRR) part 1240 (see Rules for Attorney Disciplinary Matters [22 NYCRR] § 1240.16 [b]; see e.g. Matter of Attorneys in Violation of Judiciary Law § 468-a [Higashi], 159 AD3d 1260, 1261 [2018]; Matter of Attorneys in Violation of Judiciary Law § 468-a [Timourian], 153 AD3d 1513, 1514 [2017]), and such affidavit is duly sworn to (compare Matter of Attorneys in Violation of Judiciary Law § 468-a [Hughes-Hardaway], 152 AD3d 951, 952 [2017]). Office of Court Administration records demonstrate that respondent has cured the delinquency that resulted in his suspension and that he is current with his biennial registration requirements (see Judiciary Law § 468-a; Rules of the Chief Admin of Cts [22 NYCRR] § 118.1). Further, respondent provides proof that he successfully completed the Multistate Professional Responsibility Examination in November 2017, as is required for attorneys seeking reinstatement following suspensions of six months or more (see Rules for Attorney Disciplinary Matters [22 NYCRR] § 1240.16 [b]; compare Matter of Attorneys in Violation of Judiciary Law § 468-a [Castle], 161 AD3d 1443, 1444 [2018]).
Respondent's application also establishes, by clear and convincing evidence, that he possesses the requisite character and fitness to return to the practice of law in New York (see Matter of Attorneys in Violation of Judiciary Law § 468-a [Squires], 153 AD3d 1511, 1513 [2017]; Rules for Attorney Disciplinary Matters [22 NYCRR] § 1240.16 [b]). Respondent attests to having no other disciplinary history during the time of his suspension (see Rules for Attorney Disciplinary Matters [22 NYCRR] part 1240, appendix C, ¶ 14), and that he is not the subject of any governmental investigation (see Rules for Attorney Disciplinary Matters [22 NYCRR] part 1240, appendix C, ¶ 31). Respondent also attaches certificates of good standing for the foreign jurisdictions where he is admitted and provides proof that he satisfied the Continuing Legal Education requirements of those jurisdictions during the years of his suspension in this state (see Rules for Attorney Disciplinary Matters [22 NYCRR] part 1240, appendix C, ¶¶ 13, 35; see also Rules of App Div, All Depts [22 NYCRR] §§ 1500.5 [a] [1]; 1500.22 [n] [1]). Also relevant here, respondent attests to having taken steps to remedy any financial concerns presented in his application (see Rules for Attorney Disciplinary Matters [22 NYCRR] part 1240, appendix C, ¶¶ 24-25).
Finally, we conclude that respondent's reinstatement will be in the public interest (see Rules for Attorney Disciplinary Matters [22 NYCRR] § 1240.16 [a]; compare Matter of Sullivan, 153 AD3d 1484, 1484 [2017]). Respondent's application does not present any concern of possible detriment to the public that would result from his reinstatement, as he has no disciplinary record outside of this suspension and the misconduct that led to his suspension had no effect on any client. Further, respondent attests to having practiced law for several years in the intellectual property discipline, and his specialized knowledge and expertise in this field will provide a tangible benefit to the public (see Matter of Attorneys in Violation of Judiciary Law § 468-a [Ettelson], 161 AD3d 1478, 1480 [2018]). Based on the foregoing, we grant respondent's application for reinstatement.
Garry, P.J., Egan Jr., Lynch, Clark and Pritzker, JJ., concur.
ORDERED that the motion for reinstatement is granted; and it is further
ORDERED that respondent is reinstated as an attorney and counselor-at-law in the State of New York, effective immediately.
| {
"pile_set_name": "FreeLaw"
} |
946 A.2d 686 (2008)
COM.
v.
PRATT.[18]
No. 450 EAL (2007).
Supreme Court of Pennsylvania.
April 1, 2008.
Disposition of petition for allowance of appeal. Denied.
NOTES
[18] Justice TODD did not participate in the consideration or decision in this matter.
| {
"pile_set_name": "FreeLaw"
} |
IN THE SUPREME COURT OF THE STATE OF DELAWARE
JAMES ST. LOUIS, §
§
Defendant Below, § No. 160, 2019
Appellant, §
§ Court Below—Superior Court
v. § of the State of Delaware
§
STATE OF DELAWARE, § Cr. ID No. 0009015005 (S)
§
Plaintiff Below, §
Appellee. §
Submitted: June 13, 2019
Decided: June 18, 2019
ORDER
Following the denial of his motion to proceed in forma pauperis on May 28,
2019, the appellant was directed to pay the Court’s filing fee by June 12, 2019, or
else his appeal would be dismissed without further notice. The appellant has not
paid the filing fee. The dismissal of this appeal is therefore deemed to be unopposed.
NOW, THEREFORE, IT IS ORDERED, under Supreme Court Rules 3(b)(2)
and 29(b), that this petition is DISMISSED.
BY THE COURT:
/s/ Karen L. Valihura
Justice
| {
"pile_set_name": "FreeLaw"
} |
PDs0297s15
| {
"pile_set_name": "FreeLaw"
} |
226 S.W.3d 825 (2006)
Robert WHITE, Appellant,
v.
ARKANSAS CAPITAL CORPORATION/DIAMOND STATE VENTURES, The City of Fort Smith, Arkansas, Jefferson County Minority Business Owners Association, Richard A. Weiss, Individually and in His Official Capacity as Director of the Arkansas Department of Finance and Administration, Jimmie Lou Fisher, In Her Official Capacity as Arkansas State Treasurer, The Economic Development of Arkansas Fund Commission, and Raymond Heern, Richard L. Mays, Hayes C. McClerkin, Merle F. Peterson, James C. Pledger, Emon Mahoney, Individually and in their Official Capacities as Members of the Economic Development of Arkansas Fund Commission, Appellee.
No. 05-337.
Supreme Court of Arkansas.
February 2, 2006.
*826 Oscar Stilley, Fort Smith, for appellant.
Mike Beebe, Att'y Gen., by: Patricia Van Ausdall Bell, Ass't Att'y Gen., Little Rock, for appellees Gus Wingfield, The Economic Development Fund Commission, Raymon Heern, Richard Mays, Hayes McClerkin, Merle Peterson, James Pledger, and Emon Mahoney.
Rose Law Firm, a Professional Association, by: Stephen N. Joiner, Little Rock, for appellee Arkansas Capital Corporation and Diamond State Ventures.
Jessica C. McGhee and William E. Keadle, Little Rock, for appellee Richard A. Weiss, individually and in his official capacity as Director of the Arkansas Department of Finance and Administration.
ANNABELLE CLINTON IMBER, Justice.
Laura Cullen, on behalf of herself and all other taxpayers similarly situated, filed a lawsuit in Pulaski County Chancery Court[1] to challenge certain appropriation bills adopted by the General Assembly of *827 1997.[2] The first amended complaint was filed August 26, 1999, and named the following defendants: Arkansas State Capital Corporation/Diamond State Ventures; Jefferson County Minority Business Owners Association; Economic Development of Arkansas Fund Commission; City of Fort Smith; Richard Weiss, individually and in his official capacity as Director of the Arkansas Department of Finance and Administration (DF & A); Jimmie Lou Fisher as Treasurer of the State of Arkansas; Raymond Heern, Richard L. Mays, Hays C. McClerkin, Merle F. Peterson, James C. Pledger, and Emon Mahony, individually and in their official capacities as members of the Economic Development of Arkansas Fund Commission (hereinafter referred to as Appellees), and Bill J. Blankenship, Robert J. Jones, John Kincannon, Albert E. Qualls, Bobby G. Wood, and Sally Kibler, individually and in their official capacities as members of the Commission on Institutional and Community Development, and the Commission on Institutional and Community Development.[3] The complaint alleged in relevant part:
The Economic Development of Arkansas Fund Commission, established pursuant to Ark.Code Ann. § 26-59-122 and Ark.Code Ann. § 19-6-472, is a flagrant attempt to bypass the constitutional requirement that no money be drawn from the treasury except by specific appropriation, as required by Arkansas Constitution Article 5, Section 29, and the constitutional requirement that all appropriations save the general appropriation bill be made by separate bill, each embracing but one subject, as required by Arkansas Constitution Article 5, Section 30.
The Arkansas General Assembly unlawfully delegated its constitutional authority to appropriate money by the enactment of Ark.Code Ann. § 26-59-122, Ark.Code Ann. § 19-6-472, and Act 413 of 1997, which appropriated $15,000,000 to the DF & A disbursing officer to be payable from the Economic Development of Arkansas Fund, for economic development and enhancement in the State of Arkansas.
Pursuant to the claimed authority of Act 413 of 1997, the DF & A, by and through its director Richard Weiss, paid over to Arkansas Capital Corporation/Diamond State Ventures the sum of $300,000 out of the State Treasury, as a grant of taxpayers' dollars. Within the grant application by Arkansas Capital Corporation, the principals thereof declared that all of the corporation assets would be paid over to the Arkansas Treasury in the event of dissolution. By appropriating public monies to Arkansas Capital Corporation, a private, for profit corporation, and by making the State of Arkansas financially interested in that corporation, the General Assembly violated Article 12, Section 7 of the Arkansas Constitution.
Act 413 of 1997 is illegal because it is in essence a grant of state money to Richard Weiss and the members of the Economic Development of Arkansas Fund Commission with disbursement to unidentified persons or entities left to their discretion.
Article 16, Section 3 of the Arkansas Constitution provides penalties for the *828 use of public monies for any purpose not authorized by law.
The payment of money to Arkansas Capital Corporation, made pursuant to an unconstitutional delegation of the Arkansas General Assembly's constitutional authority to appropriate money, constitutes an illegal exaction from the named Plaintiff and all other Arkansas taxpayers. The court should therefore order said monies returned to the State Treasury.
Jefferson County Minority Business Owners Association applied for and received the sum of $250,000 from the Economic Development of Arkansas Fund.
The disbursement of funds to Jefferson County Minority Business Owners Association constitutes a flagrant attempt to bypass the constitutional requirement that no money be drawn from the treasury except by specific appropriation, as required by Arkansas Constitution Article 5, Section 29, and the constitutional requirement that all appropriations save the general appropriation bill be made by separate bill, each embracing but one subject, as required by Arkansas Constitution Article 5, Section 30.
The payment of money to Jefferson County Minority Business Owners Association, made pursuant to an unconstitutional delegation of Arkansas General Assembly's constitutional authority to appropriate money, constitutes an illegal exaction from the named Plaintiff and all other Arkansas taxpayers. The court should therefore order said monies returned to the State Treasury.
The Economic Development of Arkansas Fund Commission and DF & A Director Richard Weiss, together with the State Treasurer, have under the auspices of Act 413 of 1997, and pursuant to warrant number 0272383, paid out to the City of Fort Smith the sum of $500,000, for certain infrastructure improvements within said city.
No specific appropriation of these funds was made by the Arkansas General Assembly; rather, the General Assembly, as previously stated herein, sought to impermissibly delegate the powers of specific appropriation to certain individuals and groups of individuals.
In addition to the lack of specific appropriation, such a grant to a specific city would also constitute a special and local act and appropriation, in violation of Amendment 14 to the Arkansas Constitution. The payment of said funds therefore constitutes an illegal exaction from the named Plaintiff and all other Arkansas taxpayers.
The Economic Development of Arkansas Fund Commission, DF & A Director Richard Weiss, and Jimmie Lou Fisher, Treasurer, under the auspices of Act 672 of 1997 have also paid out undetermined sums of money to the City of Fort Smith, believed to amount to millions of dollars, for the construction of a Civic/Convention Center in said city. On information and belief, additional millions will be spent and paid out unless Plaintiff obtains an injunction against same.
The payment of said money for a Civic/Convention Center in the City of Fort Smith was made without any specific appropriation, and appropriation for any such purpose, if made, would constitute local and special legislation prohibited by Amendment 14 to the Arkansas Constitution.
In sum, Appellant challenges the constitutionality of Acts 413 and 672 of 1997, and argues all appropriations made thereunder constitute illegal exactions.
*829 After the first amended complaint was filed in 1999 and Appellees responded separately, there was little or no action in the case until December 13, 2002, when the circuit court notified the parties that the case would be dismissed for want of prosecution unless application was made to continue the case. Upon the request of Appellant's counsel, the court agreed to continue the case by order dated January 27, 2003. Still, no action was taken in the case, and on March 17, 2004, the circuit court again notified the parties that the case would be dismissed for want of prosecution. Appellant's counsel again requested that the case be continued. The court entered an order on March 29, 2004, setting the matter for trial on May 20, 2004. Motions for summary judgment were then promptly filed by all of the parties. The circuit court determined that no material issues of fact remained in the lawsuit and entered an order dismissing the lawsuit on December 3, 2004.
In the order, the circuit court noted that no request for injunctive relief had been presented to the court since the lawsuit was originally filed in 1999. The court determined that Appellees Arkansas Capital Corporation, Jefferson County Minority Business Owners Association and Fort Smith all acted in good faith and followed the law, which is presumed to be valid, in making applications for grants from the Economic Development of Arkansas Fund Commission. The court further noted that the grants were considered and awarded in 1998 and 1999, and that the funds contained in the grants had already been spent and were no longer maintained by the recipients. Thus, the court concluded that the claims against the recipients were moot and dismissed the claims with prejudice. The court also found, on the basis of an affidavit filed by Appellee Arkansas Capital Corporation, that the State had no interest in that corporation.
Moreover, based on Appellant's failure to develop his argument that the appropriation to Appellee Fort Smith constituted local legislation in violation of Amendment 14 to the Arkansas Constitution, the circuit court determined that this claim had been withdrawn. The court further concluded that claims against Richard Weiss, in his official capacity, and the Economic Development of Arkansas Fund Commission and its members were moot because the money had already been disbursed.[4] Furthermore, effective January 1, 2002, the commission was abolished pursuant to Act 1681 of 2001. Finally, the court dismissed the claims against Appellee Richard Weiss in his individual capacity, determining that there was no evidence he acted in any way other than in his official capacity. Appellant filed a timely notice of appeal. As he is challenging the validity of statutes enacted by the Arkansas General Assembly, our jurisdiction is appropriate pursuant to Ark. Sup.Ct. R. 1-2(b)(6) (2005).
On appeal, Appellant raises six points of error: (1) the circuit court erred in finding that good faith or a rebutted presumption of validity constitutes a valid basis for summary judgment in an illegal-exaction case; (2) the circuit court erred in finding that an affidavit that is legally insufficient to establish all or part of a claim for summary judgment must be rebutted, or else summary judgment will be entered; (3) the circuit court erred in denying his motion for summary judgment against Appellees Arkansas Capital Corporation/Diamond State Ventures for violation of Article 12, Section 7 of the Arkansas *830 Constitution; (4) the circuit court erred in failing to enter an order of summary judgment declaring Act 413 of 1997 illegal and commanding Appellees to repay funds to the state treasury, commensurate with the amounts received pursuant to Act 413 of 1997; (5) the circuit court erred in failing to enter an order of summary judgment commanding Appellee Fort Smith to repay $9.5 million to the state treasury, for violation of the single-subject rule and for other violations of constitutional provisions; and (6) the circuit court erred in dismissing the claim against Appellee Richard Weiss, for having used public funds for a purpose not authorized by law. We need only address the first point because, even if the appropriations were deemed to be unconstitutional, no remedy exists at this time and thus Appellant's claims are moot.
Article 16, Section 13 of the Arkansas Constitution grants the citizens of Arkansas standing to pursue an illegal-exaction claim. An illegal exaction is defined as any exaction that either is not authorized by law or is contrary to law. Munson v. Abbott, 269 Ark. 441, 602 S.W.2d 649 (1980). Two types of illegal-exaction cases can arise under Article 16, Section 13: "public funds" cases, where the plaintiff contends that public funds generated from tax dollars are being misapplied or illegally spent, and "illegal-tax" cases, where the plaintiff asserts that the tax itself is illegal. McGhee v. Ark. State Bd. of Collection Agencies, 360 Ark. 363, 201 S.W.3d 375 (2005). In the instant case, Appellant argues that because the acts were unconstitutional, the appropriations were misappropriations of public funds. According to the first amended complaint filed on August 26, 1999, he sought injunctive relief and restitution from the parties receiving the appropriations. The circuit court, however, determined that his claims were moot for lack of remedy. A case is moot when any judgment rendered would have no practical, legal effect upon a then-existing legal controversy. Ark. Gas Consumers, Inc. v. Ark. Pub. Serv. Comm'n, 354 Ark. 37, 118 S.W.3d 109 (2003).
For his first point of error, Appellant argues the circuit court erred in considering the good faith of Appellees because illegal-exaction claims are not subject to defenses of good faith. In support of this proposition, he cites Munson v. Abbott, 269 Ark. 441, 602 S.W.2d 649 (1980). The appellees in Munson had challenged payments made to Lee Munson, Prosecuting Attorney for the Sixth Judicial District. While we did not require repayment of the bulk of the expenses, we did sustain the trial court's finding that certain out-of-district expenses required justification as office expenses and were not properly documented. Despite the prosecutor's claim of good faith, this court upheld the trial court's judgment ordering repayment. Id. at 450, 602 S.W.2d at 655. It is true that, generally speaking, we have allowed the remedy of reimbursement despite a claim of good faith. See, e.g., Massongill v. County of Scott, 337 Ark. 281, 991 S.W.2d 105 (1999); Looper v. Thrash, 334 Ark. 212, 972 S.W.2d 250 (1998); Hartwick v. Thorne, 300 Ark. 502, 780 S.W.2d 531 (1989); Munson v. Abbott, supra; but see Martindale v. Honey, 261 Ark. 708, 551 S.W.2d 202 (1977); Starnes v. Sadler, 237 Ark. 325, 372 S.W.2d 585 (1963). In each of these "public funds" cases, however, the funds were misappropriated because of an improper interpretation or application of an otherwise constitutional law. In the instant case, Appellant is not challenging the public officials' interpretation of the law; rather, he is challenging the constitutionality of the law itself.
*831 The question of whether a defendant can escape liability for good-faith actions pursuant to a statute later declared to be unconstitutional has not been conclusively answered in Arkansas. Appellees cite the case of White v. Williams, 192 Ark. 41, 89 S.W.2d 927 (1936), as support for the proposition that liability should not be imposed. In that case, the Pulaski County Sheriff received money pursuant to a statute for reimbursement of prisoner meals without requiring formal documentation of the expenses. The statute was later declared unconstitutional, but our court refused to require the sheriff to repay the money, stating:
A compliance with said act by appellee and his reliance thereon are circumstances tending to show his good faith in the transactions, and when we consider the state comptroller directed compliance with said act, treating it as valid, it certainly negatives any deliberate intent on appellee's part to ignore other statutory directives.
Id. at 43, 89 S.W.2d at 928. We have explicitly adopted a similar rule in the criminal context, holding that a good-faith exception extends to police who act in objectively reasonable reliance on a statute, even though the statute is later held unconstitutional. See, e.g., Feland v. State, 355 Ark. 573, 142 S.W.3d 631 (2004).
Other jurisdictions have adopted the rule that penalties should not be imposed on private parties for acts done in accordance with a law valid at the time the acts were performed but later held unconstitutional. See, e.g., Shreve v. Western Coach Corp., 112 Ariz. 215, 540 P.2d 687 (1975); Downs v. Jacobs, 272 A.2d 706 (Del.Super.Ct.1970). In Shreve, the Arizona Supreme Court stated:
At common law, a declaration of unconstitutionality had complete retroactive effect. Thus it was said that an unconstitutional law `confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed.' (citations omitted). This Blackstonian view, based on the theory that judges discover, rather than make the law, has been considerably eroded with time, and is not the law in Arizona.
Id. at 216-17, 540 P.2d at 688-89. The court then quoted an earlier decision where it stated:
[I]t would be the height of injustice for the state to penalize, either by criminal process or civil action, one of its citizens for obeying a law which on its face was adopted in a constitutional manner, but which was, after such obedience by the citizen, held to be unconstitutional.
Id. (citing Texas Co. v. State, 31 Ariz. 485, 254 P. 1060 (1927)). Finally, the Arizona court noted:
The reasons for adhering to the view that citizens are entitled to rely upon an enactment of the legislature until repealed or declared unconstitutional are as cogent today as in 1927 when the Texas Co. case was decided. However desirable the total nullity doctrine of Norton may be from the standpoint of symmetrical jurisprudence it does not conform to reality. For a statute, until legislatively or judicially excised, is an operative fact which cannot be ignored. The court presumes every legislative act constitutional and indulges in every intendment in favor of its validity. No penalties should be visited upon the citizenry for doing likewise.
Id. (citing Austin v. Campbell, 91 Ariz. 195, 370 P.2d 769 (1962))(internal citations omitted).
The logic of the Arizona appellate court is compelling. We presume *832 statutes to be constitutional, and should not punish state officials or citizens of Arkansas for doing likewise. As in White, Appellees in this case acted in good faith, relying on legislative acts presumed to be valid. Restitution is therefore not a proper remedy in this case. While injunctive relief to prohibit further disbursement of funds might have been available to Appellant in the event the appropriation statutes were held unconstitutional, such relief is no longer available in this case. Mackey v. McDonald, 255 Ark. 978, 504 S.W.2d 726 (1974). In the five-year span between the filing of the lawsuit and the resulting order by the circuit court, the Economic Development of Arkansas Fund Commission was abolished in 2002, and all monies appropriated through the Commission were spent. Thus, as neither injunctive relief nor restitution are proper remedies at this time, the claims by Appellant are moot and the circuit court did not err in so ruling.
Affirmed.
NOTES
[1] By virtue of Amendment 80 to the Arkansas Constitution, which became effective on July 1, 2001, our state courts are no longer chancery and circuit courts. These courts have merged and now carry the designation of "circuit court." Perkins v. Cedar Mountain Sewer Imp. Dist. No. 43 of Garland County, 360 Ark. 50, 199 S.W.3d 667 (2004).
[2] Robert White became an additional party plaintiff in November 2000, and the circuit court granted Laura Cullen's request to be relieved and discharged of her duties as plaintiff in the case on February 26, 2002.
[3] On June 8, 2004, the circuit court granted Appellant's motion to dismiss the action against the Commission on Institutional and Community Development and the members of that commission.
[4] The order also notes Appellant admitted in open court that the claims against Treasurer Gus Wingfield and the members of the Economic Development of Arkansas Fund Commission, in their individual and official capacities, were moot.
| {
"pile_set_name": "FreeLaw"
} |
183 U.S. 589 (1802)
CHICAGO, ROCK ISLAND AND PACIFIC RAILWAY CO.
v.
EATON.
No. 57.
Supreme Court of United States.
Argued October 25, 1901.
Decided January 9, 1802.
ERROR TO THE SUPREME COURT OF THE STATE OF NEBRASKA.
Mr. W.F. Evans for plaintiff in error. Mr. M.A. Low was on his brief.
Mr. Thomas C. Munger for defendant in error. Mr. John M. Stewart and Mr. A.E. Harvey were on his brief.
MR. JUSTICE McKENNA delivered the opinion of the court.
This action was brought in the district court of Thayer County, Nebraska, by the defendant in error as the administrator of the estate of John R. Mathews, deceased, against the plaintiff in error, for damages, under a statute of the State, for the death of Mathews, caused by the derailment of the train of plaintiff in error upon which Mathews was a passenger.
The record presents the same questions which were presented and passed on in the case of the plaintiff in error herein against Zernecke, Administratrix, No. 58 of this term, just decided. As in the latter case the ground of action in the case at bar was negligence in the railroad company and its servants. The answer of the company denied negligence, and alleged that the derailment was caused by some person or persons unknown to the company, and not in its employment or under its control, who willfully, maliciously and feloniously removed and displaced from the track certain spikes, nuts, angle-bars, fishplates, bolts and rails, and otherwise tore up and destroyed the track. *590 The company also alleged care in the maintenance of its track and the management of its train.
The petition alleged that the plaintiff in error "was a corporation, duly incorporated under the laws of the State of Nebraska," and the admission of the answer was that defendant in error, "at all times mentioned in said petition, was a corporation organized and existing under and by virtue of the laws of the States of Illinois and Iowa, and a domestic corporation of the State of Nebraska."
The case was tried before a jury. The evidence of defendant in error (petitioner) was that at the time Mathews was killed he was being transported as a passenger over the railway of plaintiff in error, and that the train upon which he was riding was thrown from the track, resulting in his death and the death of ten other persons. The plaintiff in error then offered witnesses and depositions to sustain the allegations of its answer. The testimony, upon the objection of defendant in error, was rejected, and at the close of the evidence, on motion of defendant in error, the court instructed the jury as follows:
"The jury is instructed that if you find from the evidence that John R. Mathews was a passenger, being carried on the train of the defendant railway company that was derailed and wrecked near Lincoln, Nebraska, on August 9, 1894, thereby causing the death of said Mathews, and that plaintiff is the administrator of the estate of said Mathews, then you should find for the plaintiff if you find a pecuniary loss from such death has resulted to the next of kin, in this case the father."
The jury returned a verdict for defendant in error for $1500, upon which judgment was entered. The judgment was affirmed by the Supreme Court of the State, upon the decision in Chicago, Rock Island & Pacific Railway Company v. Zernecke, Administratrix, 59 Neb. 689, and this writ of error was then allowed.
The facts, contentions and questions being the same as those presented in the Zernecke case, supra, for the reasons stated in the opinion in that case the judgment is
Affirmed.
| {
"pile_set_name": "FreeLaw"
} |
538 F.2d 722
UNITED STATES of America, Plaintiff-Appellee,v.John Wiley PRICE, Defendant-Appellant.
No. 76-2165
Summary Calendar.*
United States Court of Appeals,Fifth Circuit.
Sept. 13, 1976.
James A. Johnston, Dallas, Tex., for defendant-appellant.
Michael P. Carnes, U. S. Atty., Fort Worth, Tex., Judith A. Shepherd, Asst. U. S. Atty., Dallas, Tex., for plaintiff-appellee.
Appeal from the United States District Court for the Northern District of Texas.
Before DYER, CLARK and HILL, Circuit Judges.
PER CURIAM:
1
This is an appeal from the denial by the district court of John Wiley Price's motion to withdraw his plea of guilty under Fed.R.Crim.P. 32(d). Price was convicted on a plea of guilty to making a materially false statement to a federally insured bank for the purpose of influencing the bank to approve a home improvement loan in violation of 18 U.S.C. § 1014. On appeal Price contends that his plea proceeding was held in violation of Rule 11 of the Fed.R.Crim.P. Price argues that the district court could not have been satisfied that there was a factual basis for his plea. See Rule 11(f). We agree.
2
On January 23, 1976, Price was arraigned and advised of his rights pursuant to Rule 11 of the Fed.R.Crim.P. At this hearing he was represented by retained counsel and entered a plea of guilty. After being directed by the court to establish a factual basis for the plea, the Assistant United States Attorney read the following prepared statement into the record:
3
Your Honor, the facts to support the plea in United States v. John Wiley Price, Criminal Number 3-76-4, are that on May the 1st of 1974, John Wiley Price, defendant, made a false statement to the Guaranty Bank in Dallas, Texas, a bank the deposits of which were then and there insured by the Federal Deposit Insurance Corporation in that he presented a contract with a Roger S. Mullins to a loan officer of said bank for improvements to be done on a house owned by Price. Price presented this contract for the purpose of influencing the loan officer's decision to act favorably on Price's application for a home improvement loan. Price then knew that the contract was false and never entered into by Price with Roger S. Mullins to make home improvements on his house. Based on this false contract, the loan officer granted Price a loan for $1,850 which Price never repaid. The loan was ultimately written off as a total loss by the bank.
4
The court inquired of Price as to the accuracy of the statement. Price replied that the statement was not true. He then proceeded to inform the court that he believed at the time and still believed that the contract entered into with Mullins was in fact signed by Mullins. He explained to the court that such misrepresentations as may have been made by him were known to be such by the bank officer who approved the loan. In addition, he explained that all of the proceeds of the loan went to settle his indebtedness to the bank making the loan. On the basis of Price's rejection of the factual statement, the court refused to accept his plea and recessed the proceeding until February 13, 1976.
5
On February 13, the court resumed the proceedings and once again interrogated Price concerning the factual basis for the plea. Price made almost exactly the same statement as he made on January 23. Following this interrogation the court again refused to accept the guilty plea because it did "not think that a factual basis, as required by law, ha(d) been established to support (the) plea of guilty . . . ." The court entered a plea of not guilty and set a trial date.
6
On March 15, 1976, the case was called for trial. The court was informed once again that Price wished to plead guilty. The Assistant United States Attorney read the exact statement into the record as was read on January 23, 1976. Following that statement the court asked Price if that statement accurately and correctly represented the facts involved in the instant case. Price replied "Yes, sir." The court then asked Price's counsel the same question to which he replied "Yes, sir, Your Honor, with some interpretation, they are." The only other inquiry of Price's counsel was as to whether the plea was consistent with his advice to his client, to which counsel answered, yes. Without further questioning to determine the reason why that day's response was inconsistent with the two previous clear rejections of the same factual statement, the court then accepted Price's plea of guilty.
7
Given this record, we cannot find that the court was properly "satisfied" that there was a factual basis for the plea. Twice before Price had rejected these facts. His pro forma acceptance, in light of these previous rejections and his counsel's cryptic equivocation, is insufficient to fulfill the Rule 11 requirement that the court be satisfied as to the factual basis for the plea. The rule instructs that absent such satisfaction, the court shall not enter a judgment on the plea. The plea, therefore, was taken in violation of Rule 11 and Price is entitled to withdraw it and plead again in a new proceeding. McCarthy v. United States, 394 U.S. 459, 89 S.Ct. 1166, 22 L.Ed.2d 418 (1969).
8
In rejecting Price's motion to set aside his plea the district court concluded that even if Price's version of the facts were true he would still be guilty of the alleged offense. This, of course, completely fails to explain why the court rejected Price's plea based on this statement of the facts at the February 15 hearing. In addition, 18 U.S.C. § 1014 includes a specific element of intent to influence the action of the bank which would not be present if Price's version of the facts were taken as true. Price stated that the construction contract was not forged and that the bank officer knew of all other misrepresentations, i. e., that two-thirds of the construction had already been completed and that the proceeds of the loan were to be used to pay off Price's indebtedness to that bank and not for the purpose of improving his home. The clear implication is that if the bank was aware of these misrepresentations, it could not have been influenced by them and was acting out of greed to secure the payment of its own debts. Therefore, there did not exist a factual basis for Price's plea of guilty.
9
The order of the district court refusing to allow Price to withdraw his plea and to plead anew is reversed and the cause is remanded with directions to allow the plea to be withdrawn and to afford defendant the right to replead.
10
REVERSED AND REMANDED.
*
Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Co. of New York et al., 5 Cir., 1970, 431 F.2d 409, Part I
| {
"pile_set_name": "FreeLaw"
} |
In the
United States Court of Appeals
For the Seventh Circuit
Nos. 07-2350, 07-2762 & 08-1606
C HERYL JANKY,
Plaintiff-Appellee/
Cross-Appellant,
v.
L AKE C OUNTY C ONVENTION AND
V ISITORS B UREAU,
Defendant-Appellant/
Cross-Appellee.
Appeals from the United States District Court
for the Northern District of Indiana, Hammond Division.
1
No. 05 C 217—Andrew P. Rodovich, Magistrate Judge.
A RGUED O CTOBER 28, 2008—D ECIDED A UGUST 3, 2009
Before B AUER, R IPPLE, and E VANS, Circuit Judges.
E VANS, Circuit Judge. This over-litigated case, involving
a song by a doo-wop group, comes to us with 18 district
1
Most of the heavy lifting in this case was done by Magistrate
Judge Paul R. Cherry. Judge Cherry recused himself after the
case was tried to a jury, and Magistrate Judge Andrew P.
Rodovich picked it up at that point.
2 Nos. 07-2350, 07-2762 & 08-1606
court orders and memorandum opinions spread over a
combined 239 pages. The district court’s 46-page docket
contains a staggering 371 entries. And the briefs of the
parties on appeal are a bit unfocused to say the least. But
although it’s a tough job, someone has to do it, so with
shoulder to the wheel, we forge on.
Lake County, Indiana, is the home of Gary, a gritty
industrial town southeast of Chicago. But there’s much
more to Lake County than Gary—including miles of
pristine beachfront along the Indiana Dunes National
Lakeshore—and the Lake County Convention and
Visitors Bureau (the Bureau) wants you to know that.
To get the word out, the Bureau commissioned a tune
singing the county’s praises, the distribution of which
led to this lawsuit for copyright infringement. Cheryl
Janky says she composed the song and never gave the
Bureau permission to use it. The Bureau maintains that
Janky was only a co-author and that it had the authority
to use the song by licensing it from the other song-
writer, Henry Farag. The district court entered partial
summary judgment in favor of Janky—deciding that she
was the sole author—and a jury awarded her $100,000
in damages. The Bureau now appeals, contending that
summary judgment was improper given the evidence of
co-authorship. In the alternative, the Bureau submits
that the district court erred when it denied a motion
for remittitur or new trial in light of Janky’s failure to
mitigate damages. Janky cross-appeals from an order
concerning the imposition of sanctions against her
counsel under Rule 11.
Nos. 07-2350, 07-2762 & 08-1606 3
Before we get to the underlying facts, we need to assess
our jurisdiction. See Mostly Memories, Inc. v. For Your Ease
Only, Inc., 526 F.3d 1097 (7th Cir. 2008) (“A court of appeals
has an obligation to examine its jurisdiction sua sponte,
even if the parties fail to raise a jurisdictional issue.”)
(quoting Wingerter v. Chester Quarry Co., 185 F.3d 657, 660
(7th Cir. 1998)). The Bureau has made this task more
complicated than usual because its brief is defective. At
oral argument the Bureau clarified that it seeks, first and
foremost, review of the summary judgment decision.
However, that is not at all apparent from the Bureau’s
brief, which neither references the lower court’s sum-
mary judgment opinion within the jurisdictional state-
ment nor includes that opinion within its short
appendix, all in violation of the applicable rules. See Fed. R.
App. P. 28(a)(4), 30(a); 7th Cir. R. 28(a)(2), 30(a). Janky’s
brief isn’t any better. Although we take these rules seri-
ously, we are nonetheless willing to forgive the violation
in this case because we do in fact have jurisdiction. To
be sure, the Bureau was not permitted to appeal as of
right following the grant of partial summary judgment.
See Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737, 744
(1976) (“[P]artial summary judgment[s] limited to the
issue of [a] petitioner’s liability . . . are by their terms
interlocutory, see Fed. Rule Civ. Proc. 56(c), and where
assessment of damages . . . remains to be resolved have
never been considered to be ‘final’ within the meaning
of 28 U.S.C. § 1291.”). So we do not fault the Bureau for
waiting to appeal until the denial of its motion for new
trial or remittitur. And though the Bureau did a poor job
of explaining exactly what it seeks, we are satisfied that
4 Nos. 07-2350, 07-2762 & 08-1606
the denial of the motion for new trial or remittitur impli-
cates all prior orders, including the decision on sum-
mary judgment. With that sorted out, then, we can turn
to the facts.
Janky and Farag were members of “Stormy Weather,” an
Indiana-based doo-wop group.2 Farag heard through the
grape vine that the Bureau was looking for a song to
represent Lake County, and he suggested that the band
might want to give it a shot. Janky took the initiative.
After Farag made the announcement, she got to work
writing the music and lyrics for a tune she called “Wonders
2
Doo-wop is characterized by vocal harmonies. It became
popular in the 1950s and 1960s with the arrival of groups like
The Five Satins (“In the Still of the Night”), The Platters (“My
Prayer”), The Skyliners (“Since I Don’t Have You”), The
Turbans (“When You Dance”), The Penguins (“Earth Angel”),
The Crystals (“Da Doo Ron Ron”), Frankie Lymon and the
Teenagers (“Why Do Fools Fall in Love?”), and the incompara-
ble Drifters (“There Goes My Baby,” “This Magic Moment,”
“Save the Last Dance for Me,” “Under the Boardwalk,” and “Up
on the Roof”). According to Stormy Weather’s Web site, the
group is “the chief proponent of the nation’s revitalized a
cappella doo-wop sound.” Stormy Weather has produced 14
albums, including “Street Carols” (a “holiday classic,” says its
Web site) and “Doo-Wop & Lollipops.” The group has also
performed with the likes of Smokey Robinson, Franki Valli,
and Dion Francis DiMucci (who, as Dion, made it big with hits
like “Runaround Sue” and “The Wanderer”). The group
reports that it has traveled around the world keeping “the a
cappella sounds of the street corner alive, well, and kickin’.”
www.stormy-weather.com (last visited Nov. 26, 2008).
Nos. 07-2350, 07-2762 & 08-1606 5
of Indiana” (a.k.a. “Indiana”). When it was complete,
Janky obtained a copyright for the song (in May 1999),
listing herself as the sole author. Janky then showed the
song to Farag. Although Farag thought it had potential,
he recommended revising the lyrics to better suit the
Bureau’s vision. Pursuant to a conversation with the
Bureau’s chief executive officer, Farag suggested that
the song needed to focus more on Lake County in particu-
lar, as opposed to Indiana in general, and include refer-
ences to the area as “Chicago’s neighboring south
shore” and to its ethnic diversity. Janky testified that
Farag’s recommendations, which she adopted, accounted
for 10 percent of the lyrical content. With the song re-
vamped, Janky filed a new copyright registration form
in December 1999, this time listing Farag as a co-author
who provided “additional lyrics” and styling the effort a
“joint work.” Similarly, she filed a document with the
American Society of Composers, Authors and Publishers
(ASCAP) stating that Farag held a 10 percent “ownership
share.” She now says that was all a mistake.
According to Janky, Farag was not a co-author and
she did not intend to give him credit as such. Rather,
she testified that she placed Farag’s name on the registra-
tion form “as an indication of [her] gratitude . . . and to
demonstrate that [she] appreciated every little bit of
support.” She said she now realizes that the proper way
to acknowledge a “de minimis” contribution is by
making a notation on the album cover.
Farag sees it differently. He says the lyrical changes
were “significant,” and revisions were also made to the
melody.
6 Nos. 07-2350, 07-2762 & 08-1606
This difference of opinion did not manifest itself im-
mediately, however. For the time being, there was music
to be made. Janky, Farag, and the rest of Stormy Weather
recorded a demo of the song at Thunderclap Studios in
Hammond, Indiana. They followed that up with a
music video and presented their work to the Bureau for
review. The Bureau was satisfied—it would be a great
marketing tool. And Stormy Weather was a generous
partner. Rather than seeking to extract a profit from
the venture, Stormy Weather agreed to allow the Bureau
to use the video and song in return for the costs of pro-
duction. Beyond that, the group decided the publicity
generated from the Bureau’s use of the material would
be payment enough. Farag issued a nonexclusive license
to the Bureau to that effect.
The Bureau’s first use of the song came on December 1,
1999. The Bureau opened a new visitor’s center that day,
and it commemorated the occasion not only by playing
the music video, but also with a live performance.
When Stormy Weather completed production of the
album on which the song ultimately appeared—“Doo-It
Doo-Wop,” published by Street Gold Records—in June
of 2000, the Bureau purchased 1,500 copies to resell at the
visitor’s center.3 Beginning around the same time, the
Bureau treated callers placed on hold to the sounds of
Stormy Weather, and it frequently played the song at
3
When it released the album, Stormy Weather renamed the
tune “Lake County, Indiana.” There is no dispute, however,
that this was the same song registered in December 1999.
Nos. 07-2350, 07-2762 & 08-1606 7
the visitor’s center and used it in promotional ads. So
passed the next three years.
On July 15, 2003, Janky filed yet another copyright
registration form, ostensibly to correct the “mistake” she
had made in the previous form. Janky omitted Farag’s
name, listing herself as the sole author of the music, lyrics,
and “arrangement performance.” And at some point in
time she notified the Bureau that she was the exclusive
owner. However, the Bureau did not stop using the
tune until she filed this lawsuit against it in October 2003.
Janky alleged in her complaint (just like in her latest
registration form) that she was the sole author of the
song and had a valid copyright in the tune to the ex-
clusion of Farag. As a result, so the theory went, Farag’s
license to the Bureau was without effect and the latter’s
use of the song illegal. Although Janky originally filed
her complaint in the Eastern District of Michigan and
named Farag and Street Gold as additional defendants,
the case was transferred to the Northern District of
Indiana early, and the matter was stayed against Farag
and Street Gold pursuant to bankruptcy proceedings.
The parties thereafter consented to have a magistrate
judge handle the case. After conducting discovery, cross-
motions for summary judgment were filed. In March of
2006, the magistrate judge issued his summary judg-
ment decision in favor of Janky. A jury trial, on damages,
was conducted a year later, in March of 2007.
The main issue—both in the district court and here on
appeal—is whether Janky holds the copyright to the
song by herself or whether she shares it with Farag as a co-
8 Nos. 07-2350, 07-2762 & 08-1606
author. In general, individuals are co-authors of a work
only where they (1) intend to create a joint work; and
(2) contribute independently copyrightable material.
Erickson v. Trinity Theatre, Inc., 13 F.3d 1061, 1071 (7th Cir.
1994). Applying this standard, the magistrate judge
found in favor of Janky on both scores. First, he found
that a jury would have no choice but to conclude that
Farag and Janky didn’t intend to be co-authors at the
time of creation. Second, he found that Farag’s contribu-
tions were nothing more than “minimal revisions” of
a song Janky already composed.
We disagree with that analysis, which we review de novo.
Trask-Morton v. Motel 6 Operating L.P., 534 F.3d 672, 677
(7th Cir. 2008). But before we get too much further,
a bit more on the background law.
A plaintiff alleging copyright infringement must estab-
lish two elements: “(1) ownership of a valid copyright,
and (2) copying of constituent elements of the work that
are original.” Feist Publ’ns, Inc. V. Rural Tel. Serv. Co., 499
U.S. 340, 361 (1991). Janky’s satisfaction of the second
element is in little dispute. An individual “copies” an-
other’s work for purposes of copyright law if he plays
it publicly or distributes copies without the copyright
owner’s authorization. Twentieth Century Music Corp. v.
Aiken, 422 U.S. 151, 157 (1975); see also ProCD, Inc. v.
Zeidenberg, 86 F.3d 1447, 1454 (7th Cir. 1996) (“Copyright
law forbids duplication, public performance, and so on,
unless the person wishing to copy or perform the work
gets permission[.]”). The Bureau concedes that it played
and distributed the song that Janky claims as her sole
Nos. 07-2350, 07-2762 & 08-1606 9
creation. And no one questions that the song enjoys
copyright protection. The question is, was Janky the only
author? If not—if Farag was a co-author—then Janky
does not own the copyright exclusively, and the Bureau
had a right to use the song with Farag’s permission.
On, then, to the legal framework of joint authorship.
Under 17 U.S.C. § 201(a), “[t]he authors of a joint work are
co-owners of copyright in the work.” In other words, “the
joint authors hold undivided interests in [the] work,
despite any differences in each author’s contribution.”
Erickson, 13 F.3d at 1068. The benefits of co-authorship
are therefore significant: each author may use or
license the joint work. Id.
But when does a song qualify as a “joint work”? Section
101 of the Copyright Act defines a joint work as “a work
prepared by two or more authors with the intention
that their contributions be merged into inseparable or
interdependent parts of a unitary whole.” 17 U.S.C. § 101.
In Erickson, we determined that this language requires
(1) intent to create a joint work; and (2) contribution of
independently copyrightable material.4 Erickson, 13 F.3d
4
Later, in Gaiman v. McFarlane, 360 F.3d 644, 658-59 (7th Cir.
2004), we identified an exception to the requirement of inde-
pendent copyrightability. However, that exception obtains
only when none of the constituent parts could pass the test
of copyrightability due to “the nature of the particular creative
process,” e.g., the creation of a comic book by a writer, a
penciler, an inker, and a colorist. Id. at 659. The exception is not
(continued...)
10 Nos. 07-2350, 07-2762 & 08-1606
at 1068, 1071. With respect to the first element, we ex-
plained that the intent prong does not have to do with
the collaborators’ intent to recognize each other as co-
authors for purposes of copyright law; the focus is on the
parties’ intent to work together in the creation of a single
product, not on the legal consequences of that collabora-
tion. See id. At 1068-69. We also noted that “ ‘billing’ or
‘credit’ may be evidence of intent to create a joint work.”
Id. at 1072 (internal quotation marks omitted). As to the
second element, we rejected Professor Nimmer’s “de
minimis” test, which posits that a joint work exists when-
ever there is “more than a de minimis contribution by
each author.” Id. at 1070. The standard we embraced
requires more than that: a contribution that is independ-
ently copyrightable. Measured against this standard,
we held that the putative joint author of a play was not
a joint author where his contributions were limited to
“[i]deas, refinements, and suggestions.” Id. at 1072.
“[S]tanding alone,” we said, these contributions were
“not the subject of copyright.” Id.
As in Erickson, the first question for us is whether
Farag and Janky intended to create a joint work. Janky
certainly denies that now, but that is irrelevant. The issue
is whether Janky and Farag “intended to be joint authors
at the time the work was created.” Id. at 1070. We think
they did, so much so that Farag was entitled to sum-
4
(...continued)
applicable in this case because Janky’s work was copyrightable
before Farag got on board.
Nos. 07-2350, 07-2762 & 08-1606 11
mary judgment on this point. Unlike Erickson, where an
individual made minor suggestions but the final decision
belonged “entirely” to the principal playwright, id. at
1072, the song here was the product of Janky and Farag.
Farag wielded considerable control over what the song
finally looked like; one could even say he demanded the
changes. More important, however, is the evidence of
intent supplied by Janky herself. We observed in
Erickson that crediting another person as a co-author is
strong evidence of intent to create a joint work. See id. at
1072; see also Childress v. Taylor, 945 F.2d 500, 508 (2d Cir.
1991) (“Though ‘billing’ or ‘credit’ is not decisive in all
cases and joint authorship can exist without any
explicit discussion of this topic by the parties, consider-
ation of the topic helpfully serves to focus the fact-
finder’s attention on how the parties implicitly regarded
their undertaking.”) (footnote omitted). In this case, we
have such an acknowledgment—Janky named Farag a co-
author and deemed the song a “joint work.” Janky’s post
hoc rationalization—that she only intended to express
her gratitude—is simply at odds with the significant
contributions made by Farag and Janky’s identification
of Farag as a co-author in the copyright registration
form. Just as litigants “cannot create sham issues of fact
with affidavits that contradict their prior depositions,”
Lorillard Tobacco Co. v. A & E Oil, Inc., 503 F.3d 588, 592 (7th
Cir. 2007) (internal quotation marks omitted), Janky’s
affidavit cutting the other way is entitled to little weight.
A reasonable jury could only conclude that Janky and
Farag intended to create a joint work.
As to the second element—independent copyright-
ability—we think the situation here differs considerably
12 Nos. 07-2350, 07-2762 & 08-1606
from Erickson. Farag’s contributions went beyond general
“[i]deas, refinements, and suggestions.” They were con-
crete expressions and thus pass the test of copyrightability
where mere ideas fail. Gaiman, 360 F.3d at 658. In addi-
tion, while Farag’s changes may have accounted for only
10 percent of the lyrics, they were significant. They were
important not only to the final sound, but also to its
commercial viability. Before Farag became involved, the
song celebrated the charm of Indiana as a state; Farag
shifted the focus to Lake County. Without Farag’s input,
it is unlikely that the Bureau would have embraced the
song the way it did. And though we think any reason-
able jury would agree with us on this point, that doesn’t
actually matter. Under our precedent, “copyrightability
is always an issue of law.” Gaiman, 360 F.3d at 648
(citing Publications Int’l, Ltd. v. Meredith Corp., 88 F.3d
473, 478 (7th Cir. 1996)).
Despite this conclusion, however, we admit that this is
a close case. Farag contributed ideas and gave expression
to those ideas, but had he done much less, his work
would not garner the protection of copyright. We have
observed in the past that published creations are almost
always collaborative efforts to some degree—peers
make suggestions, editors tweak words, and so forth. See
id. at 658. Were we to deem every person who had a
hand in the process a co-author, “copyright would ex-
plode.” Id. On the other hand, the very purpose of copy-
right law is to promote the progress of the arts and sci-
ences, U.S. CONST. art. I, § 8, cl. 8; Wildlife Express Corp. v.
Carol Wright Sales, Inc., 18 F.3d 502, 507 (7th Cir. 1994), a
purpose that is defeated if important contributions are
Nos. 07-2350, 07-2762 & 08-1606 13
denied copyright protection. Placing a contribution in
one hopper or the other is not always an easy task, and
the judge here made a commendable effort. In the end,
though, this doo-wop ditty is a joint work.5
That leaves only one loose end—Janky’s cross-appeal.6
After the district court handed down its summary judg-
ment decision, it levied $2,500 in sanctions against
Janky’s attorney, Gregory Reed, under Rule 11 of the
Federal Rules of Civil Procedure. The court found that
Reed filed a motion for injunctive relief without any
legal or factual support. (Reed wanted the Bureau to
stop selling the song, but it hadn’t done so for several
years.) When the jury returned a verdict for Janky in
the amount of $100,000, the parties jointly sought to
reduce the judgment by the amount owed in Rule 11
sanctions. It is only logical, however, that Reed was the
driving force behind this request—the cost to the
Bureau would be the same either way, but paying the
5
Janky may still have a cause of action against Farag for an
accounting of profits, see Gaiman, 360 F.3d at 652; Erickson,
13 F.3d at 1068, but that possibility has no bearing on the
appeal before us.
6
The Bureau also appealed from the district court’s ruling on
another motion for sanctions (Court of Appeals Case No. 08-
1606). However, the Bureau never mentioned that issue in
its principal or reply brief—not so much as an argument
header! Perhaps the Bureau was overwhelmed by the sheer
amount of paper filed in this case. Whatever the reason, this
issue is waived for lack of development. See Kochert v.
Adagen Med. Int’l, Inc., 491 F.3d 674, 679 (7th Cir. 2007).
14 Nos. 07-2350, 07-2762 & 08-1606
Rule 11 sanctions out of Janky’s judgment would save
Reed $2,500. In other words, Reed sought to use funds
from his client’s victory to pay for a penalty he had in-
curred all by himself. The district court was not im-
pressed; not only would this proposal shift the burden to
an innocent party (Janky), it would violate the terms of
Rule 11(c)(5)(A), which provides that monetary sanctions
shall not be imposed against a represented party for
frivolous legal contentions. Reed apparently does not
dispute the propriety of sanctions in the first instance,
but he insists that the court abused its discretion in deny-
ing his request for a setoff.7 We highly doubt that. But
we need not decide the issue because it is mooted by
our conclusion that the Bureau is entitled to summary
judgment—there is now no verdict from which sanc-
tions can be deducted.
For these reasons, the judgment is R EVERSED and the
case R EMANDED so that summary judgment can be
entered in favor of the Bureau, and for such further
proceedings that may be necessary.
7
That’s certainly how Reed framed the issue on the notice of
appeal and jurisdictional statement. However, to the extent
Reed thinks sanctions were inappropriate to begin with, we
have considered that issue and find no error.
Nos. 07-2350, 07-2762 & 08-1606 15
R IPPLE, Circuit Judge, dissenting. I agree with the major-
ity that the district court improperly granted Ms. Janky
summary judgment on the issue of copyright owner-
ship. However, I cannot agree with the majority’s conclu-
sion that the Bureau is entitled to summary judgment
under our precedent in Erickson v. Trinity Theatre, Inc., 13
F.3d 1061 (7th Cir. 1994). I therefore must respectfully
dissent.
In reviewing the district court’s grant of summary
judgment, “we consider only those matters that were
before the district court when it entered the judgment.”
Hildebrandt v. Ill. Dep’t of Natural Res., 347 F.3d 1014, 1024
(7th Cir. 2003) (citation and quotation marks omitted). To
establish that Ms. Janky and Farag intended to create a
joint work under Erickson, the Bureau needed to show
(1) that Farag and Ms. Janky “intended to be joint authors
at the time the work was created” and (2) that Farag’s
contributions to the song were independently
copyrightable. See Erickson, 13 F.3d at 1071. When the
district court considered Ms. Janky’s motion for sum-
mary judgment on copyright ownership, there was
little evidence regarding Farag’s intent to become a joint
author. In its motion opposing summary judgment, the
Bureau presented a certificate of registration for a joint
copyright as evidence of Farag’s intent. See R.71, Ex. 2.
However, Farag stated in his counterclaim that his
name was forged on the copyright application, which
cast doubt on the Bureau’s claim that Farag intended to
create a joint authorship. See R.64, Ex. B-1.
Farag stated in his declaration that he was an “owner
and/or co-owner” of the song, R.29, Ex. 6 at ¶ 6, and Ms.
16 Nos. 07-2350, 07-2762 & 08-1606
Janky’s declaration acknowledged that Farag revised
her original work “by 10%,” R.29, Ex. 1 at ¶ 5. Neverthe-
less, there was no evidence before the district court estab-
lishing that Farag intended to create a joint work, as
required under Erickson, 13 F.3d at 1071. Moreover,
Farag’s notice of affirmative defenses stated that Ms. Janky
did not own the copyrights at issue, R.64, Ex. B-2 at ¶ 8,
a view that undermines the Bureau’s claim that Farag
intended to create a joint authorship with Ms. Janky.
In finding that Farag intended to be a joint author, the
majority emphasizes the fact that “Farag wielded con-
siderable control over what the song finally looked
like” and that Ms. Janky credited him in the copyright
application. Ante, at 11. The factors of decisionmaking
and billing were discussed briefly in Erickson and at
greater length in a subsequent Second Circuit opinion. See
Thomson v. Larson, 147 F.3d 195, 202-03 (2d Cir. 1998) (citing
Erickson, 13 F.3d at 1071-72). However, even if we take
these factors into account in our analysis, the record at
summary judgment does not show that Farag possessed
the requisite intent to create a joint work. See Erickson,
13 F.3d at 1071. Consequently, the first requirement for
joint authorship has not been met.
I also believe that the Bureau has failed to establish
that Farag’s “contributions to the [work] were independ-
ently copyrightable.” See Erickson, 13 F.3d at 1071. As the
majority observes, we know that Farag’s contributions to
the lyrics were his suggestion to Ms. Janky that the song
focus on Lake County specifically, and the specific sug-
gestion that the song include a reference to “Chicago’s
Nos. 07-2350, 07-2762 & 08-1606 17
neighboring south shore” 1 and to its ethnic diversity.
These contributions do not rise above mere “[i]deas,
refinements, and suggestions.” Id. at 1072.
I do not think that the record before us allows us to
affirm summary judgment for Ms. Janky or to grant
summary judgment to the Bureau on the issue of copy-
right ownership. I would remand this case to the
district court for further proceedings on the merits.
1
Short phrases are generally not entitled to copyright protec-
tion. 37 C.F.R. § 202.1 (2004); see also Alberto-Culver Co. v. Andrea
Dumon, Inc., 466 F.2d 705, 711 (7th Cir. 1972). Consequently,
Farag’s addition of the phrase “Chicago’s neighboring
south shore” is not sufficient to establish that his contribu-
tion was independently copyrightable.
8-3-09
| {
"pile_set_name": "FreeLaw"
} |
(2008)
GPX INTERNATIONAL TIRE CORPORATION and Hebei Starbright Tire Co., Ltd., Plaintiffs,
v.
UNITED STATES, Defendant, and
Bridgestone Americas Holding, Inc., Bridgestone Firestone North American Tire, LLC, Titan Tire Corporation, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC, Defendant-Intervenors.
Slip Op. 08-146. Court Nos. 08-00285, 08-00286, 08-00287.
United States Court of International Trade.
December 30, 2008.
OPINION
RESTANI, Chief Judge.
Restani, Chief Judge: Plaintiffs GPX International Tire Corporation ("GPX") and Hebei Starbright Tire Co., Ltd. ("Starbright") (collectively, "plaintiffs") move for reconsideration or a rehearing of the court's decision in GPX International Tire Corp. v. United States, 587 F.Supp.2d 1278 (CIT 2008), denying plaintiffs' motion for a temporary restraining order and preliminary injunction. GPX, a domestic importer of certain off-the-road ("OTR") tires, and Starbright, a foreign producer and exporter of certain OTR tires, alleged that collection of full antidumping duty ("AD") and countervailing duty ("CVD") deposits would cause irreparable harm and sought to post some security until further litigation or an administrative review altered the situation. In denying plaintiffs' motion, the court found that plaintiffs had not demonstrated a likelihood of success on the merits in achieving a negative injury determination or a smaller AD and CVD rate so as to prevent the alleged irreparable harm.[1]
Plaintiffs now seek reconsideration pursuant to USCIT R. 59,[2] alleging that because the court specifically found that GPX would suffer irreparable harm and found a likelihood of success on the merits for at least some individual issues in the CVD and AD determinations, injunctive relief was warranted. Alternatively, plaintiffs seek a rehearing to submit evidence concerning the effect of the Department of Commerce's ("Commerce") alleged error on the AD margin. Defendants Commerce and the International Trade Commission ("ITC") and defendant-intervenors Bridgestone Americas Holding, Inc., Bridgestone Firestone North American Tire, LLC, Titan Tire Corporation, and United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL-CIO-CLC (collectively, "defendant-intervenors") contend that plaintiffs have not demonstrated a manifest error of law or fact to justify reconsideration and that regardless, the new margins calculated by plaintiffs would not provide meaningful relief as they still will not prevent plaintiffs' alleged irreparable harm. For the reasons discussed below, the court denies plaintiffs' motion.
STANDARD OF REVIEW
A rehearing will be granted "only in limited circumstances," such as for "1) an error or irregularity, 2) a serious evidentiary flaw, 3) the discovery of new evidence which even a diligent party could not have discovered in time, or 4) an accident, unpredictable surprise or unavoidable mistake which impaired a party's ability to adequately present its case." Target Stores v. United States, 471 F.Supp.2d 1344, 1347 (CIT 2007) (citing Kerr-McGee Chem. Corp. v. United States, 14 CIT 582, 583 (1990)). The grant or denial of a motion for reconsideration is within the discretion of the court, id., and will not be granted "merely to give a losing party another chance to re-litigate the case or present arguments it previously raised," Totes-Isotoner Corp. v. United States, 580 F.Supp.2d 1371, 1374 (CIT 2008) (internal quotations and citation omitted).
DISCUSSION
This dispute arose from Commerce's calculations of an AD rate of 29.93% and a CVD rate of 14% for Starbright in its final determinations concerning OTR tires from the People's Republic of China ("PRC"). See Certain New Pneumatic Off-the-Road Tires from the People's Republic of China: Notice of Amended Final Affirmative Determination of Sales at Less Than Fair Value and Antidumping Duty Order, 73 Fed.Reg. 51,624, 51,625 (Dep't Commerce Sept. 4, 2008); Certain New Pneumatic Off-the-Road Tires from the People's Republic of China: Final Affirmative Countervailing Duty Determination and Final Negative Determination of Critical Circumstances, 73 Fed.Reg. 40,480, 40,483 (Dep't Commerce July 15, 2008). Plaintiff's sought a temporary restraining order and a preliminary injunction, alleging that imposition of the approximate 44% cash deposit requirement would cause irreparable harm to GPX.
For purposes of the preliminary injunction motion, the court assumed that, as alleged by plaintiffs, "GPX established irreparable harm attributable to any deposit rate above the 10-15% range." GPX Int'l Tire Corp., at 1291-92. Contrary to plaintiffs' assertions here, the court did not find that plaintiffs had demonstrated a likelihood of success on the merits of Commerce's AD and CVD determinations.
With respect to the merits of the AD determination, the court was "greatly concerned," given Commerce's imposition of CVD duties based on market-oriented changes in the PRC, that Commerce did not even consider market-oriented-enterprise ("MOE") treatment for Starbright. Id. at 1288-89. Plaintiffs, however, did not provide an estimate of what the margins likely would have been if Commerce had granted Starbright MOE treatment and the court could not determine whether the AD cash deposit rate likely would be reduced to a level sufficient to prevent plaintiffs' claimed irreparable harm. Id. at 1289-90.
In addressing the merits of the CVD determination, the court acknowledged that application of CVD duties in this case raised "grave questions" both in terms of statutory interpretation and fairness concerning the ability of Commerce, under 19 U.S.C. §§ 1671, 1677(5), to apply non-market economy ("NME") procedures to PRC merchandise in the AD context while at the same time applying CVD measures to the same goods. See id. at 1290. The court found, however, that even "[a]ssuming that plaintiffs have established that there is sufficient likelihood that the duty deposit rate should be approximately 30% rather than 44%, based on a reduction for eliminated CVD, ... plaintiffs cannot prevail." Id. at 1291-92 (emphasis added). Because "there has been no showing of a likelihood of success on the merits on the ITC's affirmative injury determination or Commerce's AD determination" sufficient to reduce the likely combined duty rate to close to the 10-15% level, no meaningful relief could be provided. Id.
Plaintiffs now argue that providing an estimate of what the margins likely would have been if Commerce had granted Starbright MOE treatment places them in an "impossible `Catch 22' situation," because they were unable to show the effect of the AD margin due to Commerce's refusal to undertake the calculation. (Pls.' Mot. for Amendment of J. or Reh'g ("Pls.' Br.") 3.) Plaintiffs ask the court to take judicial notice that "AD rates calculated using market economy antidumping rules are typically much lower than AD rates calculated from Commerce's NME methodology" and direct the court to a recent report by the U.S. Government Accountability Office ("GAO"). (Id. at 3-4.) Additionally, plaintiffs allege that demonstrating the actual effect on the AD margin conflicts with Queen's Flowers de Colombia v. United States, 947 F.Supp. 503 (CIT 1996), where the court did not require the plaintiffs to calculate what the AD rate would have been had Commerce properly utilized the submitted company databases and questionnaire responses. (Id. at 4-5.)
While plaintiffs may be faced with a heavy burden, it is not an impossible one. Without such a calculation the court is unable to determine if use of an MOE methodology would have significantly affected plaintiffs' AD rate. Additionally, even if the court were to allow admission of the GAO study at this late date, the study does not indicate the extent to which plaintiffs' AD rate would be reduced if an MOE treatment were used. Without such knowledge, the court cannot determine if plaintiffs' likely AD rate would be reduced to a level sufficient to prevent the alleged irreparable harm. Further, Queen's Flowers is inapplicable here, as the court in Queen's Flowers was not asked to estimate the maximum amount of cash deposits importers could post before suffering alleged irreparable harm.
In the alternative, and likely demonstrating that the calculations are not beyond them, plaintiffs submit a declaration from their litigation consultant, Ms. Valerie Owenby, containing projections of the AD rates that they allege would have been applied if Commerce had used an MOE methodology for GPX. (Pls.' Br., Attach. 1.) Defendants argue that the court should reject this analysis because plaintiffs did not present this to the court in their motion for a preliminary injunction and it is also hearsay, rather than testimony subject to cross-examination. (Def.'s Resp. to Pls.' Mot. for Amendment of J. or Reh'g 6-7.) Plaintiffs attempt to avoid this evidentiary problem by offering to make Ms. Owenby available for direct and cross-examination at an evidentiary hearing. (Pls.' Br. 7.)
While "[t]he purpose of a rehearing is not to relitigate a case," Kerr-McGee, 14 CIT at 583, even if the court were to consider the merits of this declaration and accept plaintiffs' calculation as true, plaintiffs still would be unable to demonstrate a likelihood of success on the merits sufficient to prevent the claimed irreparable harm. Plaintiffs appear to misunderstand that the court's concern with Commerce's application of NME procedures to PRC imports in the AD context was predicated on the fact that Commerce had also applied CVD measures to PRC goods. The court questioned whether the two were mutually exclusive, and envisioned two possible scenarios. If plaintiffs were likely to succeed on their MOE argument in the AD context, then plaintiffs would likely be subject to the full CVD duties. Alternatively, if plaintiffs were likely to prevail in the CVD context, then plaintiffs would likely be subject to the full NME AD duties.
Plaintiffs cannot have it both ways. If the court were to assume that plaintiffs' new calculation of the AD margin using MOE procedures is correct and apply an AD rate of 15.8%, there would be no reason to eliminate the CVD margin. Thus, plaintiffs's new margin using the AD rate of 15.8% and the prior CVD rate of 14% would result in a 29.8% cash deposit rate. As plaintiffs have asserted consistently that they will be irreparably harmed by any cash deposit rate over 10-15%, and also that they cannot provide the normal type of security for the remainder, the court remains unable to provide any meaningful injunctive relief here.
CONCLUSION
Plaintiffs have failed to identify any legal error in the court's opinion and have not demonstrated how any preliminary injunction which the court might order would provide any meaningful relief. The court will not impose extraordinary injunctive relief, which necessarily adversely impacts other parties, for no purpose. Accordingly, the balance of factors does not favor plaintiffs, and plaintiffs' motion for amendment of judgement or rehearing is denied.
NOTES
[1] Familiarity with the court's November 12, 2008 opinion is presumed.
[2] USCIT Rule 59(a)(2) provides that a "rehearing may be granted.. for any of the reasons for which rehearings have heretofore been granted in suits in equity in the courts of the United States."
| {
"pile_set_name": "FreeLaw"
} |
171 S.W.3d 763 (2005)
STATE of Missouri, Plaintiff/Respondent,
v.
Brian CURTIS, Defendant/Appellant.
No. ED 84723.
Missouri Court of Appeals, Eastern District, Division Five.
September 13, 2005.
*764 Brian Curtis, Clayton, pro se.
Shawn Mackelprang, Lacey Searfoss (co-counsel), Jefferson City, for respondent.
GLENN A. NORTON, Chief Judge.
Brian Curtis (Defendant) appeals from his convictions, after a guilty plea, for five counts of violating an order of protection and one count of stalking. Because his notice of appeal is untimely, we dismiss his appeal.
In two separate criminal cause numbers, Defendant was charged with two counts of violation of an order of protection, cause number 03CR-1306, and one count of stalking and three additional counts of violation of an order of protection, cause number 03CR-1610. All of the charges are class A misdemeanors. On September 23, 2003, Defendant pleaded guilty to all six misdemeanor counts. On September 25, 2003, the trial court sentenced Defendant on all six counts. In cause number 03CR-1306, the court sentenced Defendant to one year in the Department of Justice Services and a consecutive sentence of six months in the Department of Justice Services. In cause number 03CR-1610, the court sentenced Defendant to one year in the Department of Justice Services for each count, but suspended execution of the sentence and placed Defendant on probation. On December 8, 2003, Defendant's probation was suspended and ultimately revoked on June 2, 2004.
On December 3, 2003, Defendant filed a motion to vacate, set aside, or correct his judgment pursuant to Rule 29.15. Defendant sought to have his convictions in the above two cases set aside. This proceeding was given a third cause number, 03CC-5215. On December 31, 2003, the trial court denied this motion, concluding that Rule 29.15 provides only a remedy for those convicted of felonies after a trial. In addition, Rule 24.035, which provides a remedy for those who plead guilty, only applies to felonies and persons delivered to the Missouri Department of Corrections.
After Defendant's probation was revoked, he filed a notice of appeal on June 3, 2004, in which he referenced the cause numbers 03CR-1306 and 03CR-1610. This Court issued an order stating that Defendant had not identified the judgment from which he was appealing. The order stated that he "has filed copies of numerous documents with this Court including copies of sentences entered in accordance with pleas of guilty in cause nos. 03CR-1306 and 03CR-1610 on September 25, 2003, a copy of a judgment entered on a probation revocation hearing in 03CR-1610 on June 2, 2004, and a copy of a PCR judgment entered on December 31, 2003 in 03CC-5215." We ordered Defendant to identify the judgment from which he was appealing, and, because it appeared any *765 appeal was untimely, to show cause why his appeal should not be dismissed. Despite numerous filings since that date, Defendant has never clearly identified which judgment he is appealing. He did, however, file a document asking this Court to dismiss all the charges against him and allow his appeal from final judgment and sentencing in cause numbers 03CR-1306 and 03CR-1610. He then made allegations of ineffective assistance of counsel and referenced the judgment in 03CC-5215. The State has also filed a motion to dismiss Defendant's appeal, contending Defendant is entitled to no relief under the post-conviction rules. Again, despite multiple filings by Defendant, he did not respond to the State's motion.
Regardless of whether Defendant is appealing from his criminal convictions or the civil judgment denying his Rule 29.15 motion, Defendant's notice of appeal was untimely. As to his criminal convictions, Rule 30.01(d) provides that a notice of appeal in a criminal case is due no later than ten days after the judgment becomes final. A judgment is "final" in a criminal case when the sentence is entered. State v. Williams, 871 S.W.2d 450, 452 (Mo. banc 1994). Here, in both cases, the trial court sentenced Defendant on September 25, 2003. Therefore, his notice of appeal from his criminal convictions was due ten days later, on Monday, October 6, 2003. Rule 30.10(d); Rule 20.01(a). Defendant filed his notice of appeal on June 3, 2004, well outside the time limits of Rule 30.01(d).
Moreover, even if his appeal was timely, Defendant does not appear to raise any issues for appellate review. Defendant pleaded guilty and in such a case, the only issues cognizable on direct appeal are the subject matter jurisdiction of the trial court and the sufficiency of the charging instrument. State v. Klaus, 91 S.W.3d 706 (Mo.App. E.D.2002). None of Defendant's complaints, as evidenced by his filings with the trial court and this Court, pertain to either of these issues. Therefore, even if his appeal had been timely, this Court would have had to dismiss the appeal for lack of jurisdiction on that basis. If he is attempting to appeal from the probation revocation entered on June 2, 2004, it is also not appealable. State v. Engle, 125 S.W.3d 344, 345 (Mo.App. E.D.2004).
To the extent Defendant's appeal pertains to the judgment denying his Rule 29.15 motion, it also appears untimely. The judgment in that case was entered on December 31, 2003. Motions filed under Rule 29.15 are governed by the rules of civil procedure. Rule 29.15(a). Under the civil rules, a notice of appeal must be filed no later than ten days after the judgment becomes final. Rule 81.04(a). In a civil case, a judgment becomes final thirty days after its entry unless an authorized after-trial motion is timely filed. Rule 81.05(a)(1); Ort v. DaimlerChrysler Corp., 138 S.W.3d 777, 779 (Mo.App. E.D.2004). There is nothing in the record filed by Defendant to indicate that an after-trial motion was filed. Therefore, the motion court's judgment became final on January 30, 2004 and Defendant's notice of appeal was due February 9, 2004. Defendant's notice of appeal, filed June 3, 2004, is untimely as to the PCR case. Moreover, even if Defendant's appeal were timely, the motion court's conclusions that neither Rule 29.15 nor Rule 24.035 provides a remedy for Defendant, who was convicted of misdemeanors, are not clearly erroneous. Rule 29.15(a); Rule 24.035(a).
The State's motion to dismiss is granted. The appeal is dismissed.
KATHIANNE KNAUP CRANE, J., and BOOKER T. SHAW, J., concur.
| {
"pile_set_name": "FreeLaw"
} |
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 04-6116
RICARDO EVANS,
Petitioner - Appellant,
versus
DIRECTOR, DEPARTMENT OF CORRECTIONS,
Respondent - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Leonie M. Brinkema, District
Judge. (CA-03-152-AM)
Submitted: March 25, 2004 Decided: April 1, 2004
Before TRAXLER, KING, and DUNCAN, Circuit Judges.
Dismissed by unpublished per curiam opinion.
Ricardo Evans, Appellant Pro Se. Amy L. Marshall, OFFICE OF THE
ATTORNEY GENERAL OF VIRGINIA, Richmond, Virginia, for Appellee.
Unpublished opinions are not binding precedent in this circuit.
See Local Rule 36(c).
PER CURIAM:
Ricardo Evans seeks to appeal the district court’s order
denying relief on his petition filed under 28 U.S.C. § 2254 (2000).
The order is not appealable unless a circuit justice or judge
issues a certificate of appealability. 28 U.S.C. § 2253(c)(1)
(2000). A certificate of appealability will not issue absent “a
substantial showing of the denial of a constitutional right.” 28
U.S.C. § 2253(c)(2) (2000). A prisoner satisfies this standard by
demonstrating that reasonable jurists would find that his
constitutional claims are debatable and that any dispositive
procedural rulings by the district court are also debatable or
wrong. See Miller-El v. Cockrell, 537 U.S. 322, 336 (2003);
Slack v. McDaniel, 529 U.S. 473, 484 (2000); Rose v. Lee, 252 F.3d
676, 683 (4th Cir. 2001). We have independently reviewed the
record and conclude that Evans has not made the requisite showing.
Accordingly, we deny Evans’s motion for a certificate of
appealability and dismiss the appeal. We also deny Evans’s motions
for judgment, to vacate the district court’s order and judgment,
for an evidentiary hearing, for appointment of appellate counsel,
and for a transcript at government expense. 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
- 2 -
| {
"pile_set_name": "FreeLaw"
} |
823 F.2d 543
Worlds (Jerry)v.Sigel (Morton H.)
NO. 86-1804
United States Court of Appeals,First Circuit.
JUN 03, 1987
1
Appeal From: D.Mass.
2
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
United States Court of Appeals
FOR THE EIGHTH CIRCUIT
________________
Nos. 01-2171/01-2919
________________
Edward J. Kaffenberger; *
Cora S. Kaffenberger, *
*
Appellees, * Appeal from the United States
* District Court for the
v. * Western District of Arkansas.
*
United States of America, *
*
Appellant. *
________________
Submitted: January 14, 2002
Filed: January 3, 2003
________________
Before WOLLMAN,1 Chief Judge, HANSEN, Circuit Judge, and OBERDORFER,2
District Judge.
________________
HANSEN, Circuit Judge.
1
The Honorable Roger L. Wollman stepped down as Chief Judge of the United
States Court of Appeals for the Eighth Circuit at the close of business on January 31,
2002. He has been succeeded by the author of this opinion.
2
The Honorable Louis F. Oberdorfer, United States District Judge for the
District of Columbia, sitting by designation.
The United States appeals from the district court's judgment awarding Edward
and Cora Kaffenberger refunds of overpaid income taxes based on a jury verdict that
found that Edward and Cora Kaffenberger made a timely informal claim for a refund.
The United States also appeals the district court's order requiring the United States
to pay the Kaffenbergers' costs and attorneys' fees. We affirm in part and reverse in
part the district court's judgment regarding the tax refunds and reverse its award of
costs and fees.
I.
There is no dispute that the Kaffenbergers overpaid their tax liability for the
years involved. The dispute revolves around whether they timely requested that the
IRS give back the overpayment. Edward Kaffenberger was a partner in a partnership
with his son. During the late 1980s and early 1990s, Edward was unable to obtain
complete financial information about the partnership from his son. As a result,
Edward and Cora failed to timely file their personal income tax return, Form 1040,
for the years ending December 31, 1988, through December 31, 1993. For each of
these years, the Kaffenbergers filed extension requests, which gave them an
additional six months to file their returns, and made estimated payments by the tax
return's due date in an attempt to cover each year's tax liability, except for the tax year
1990 as discussed below.
The Kaffenbergers filed their 1988 Form 1040 (which was due on October 15,
1990,after the applicable extensions) on February 11, 1991 reflecting a refund due of
$26,794. The Form 1040 indicated that the refund should be applied to the following
year's (1989) tax liability. The Kaffenbergers had already made an estimated payment
of $35,000 against their 1989 tax liability. The Kaffenbergers received a notice from
the IRS dated April 15, 1991, stating that they were due a refund of income taxes in
the amount of $26,770. The notice of refund from the IRS led the Kaffenbergers to
believe that the IRS had not applied the 1988 refund to the 1989 liability. The
2
Kaffenbergers filed a Form 4868, Application for Automatic Extension of Time to
File U.S. Individual Income Tax Return (hereinafter "Automatic Extension Request")
for their 1990 tax return on the same day they received the notice, April 15, 1991, a
date open under the statute of limitations, and included the amount of $26,700 on the
line of Form 4868 for "other payments and credits" to cover their estimated 1990
liability. Edward Kaffenberger testified that he did not make an estimated payment
for 1990, as he had done for prior years, because he thought that the refund, as
reflected in the notice from the IRS, would cover the estimated 1990 liability. At the
time the Form 4868 Automatic Extension Request was filed for 1990, the
Kaffenbergers had not yet completed their Form 1040 tax return for 1989.
In 1993, the IRS contacted the Kaffenbergers to discuss the tax returns that
they had failed to file. An IRS agent began an audit and undertook to prepare the
Kaffenbergers' 1989 Form 1040 on November 30, 1993. The Kaffenbergers retained
a Certified Public Accountant (CPA) to prepare their Form 1040s for 1990 through
1992 and submitted those returns to the IRS agent in December 1993. The Form
1040 returns for tax years 1990 through 1992 were filed on March 14, 1994. The
1990 return showed that the Kaffenbergers owed $36,329 to the IRS, as no estimated
payments had been made for 1990, and the 1989 return had not yet been completed.
The taxpayers received refunds for the 1991 and 1992 returns, which are not in
dispute. The IRS agent did not finish and file the 1989 return until July 29, 1994.
When the 1989 return was originally prepared by the IRS agent and signed by the
Kaffenbergers, it reflected the estimated payment for 1989 of $35,000 and the
overpayment from 1988 of $26,770, which totaled $61,770, as payments to be applied
against the 1989 liability, resulting in an overpayment in 1989 of $38,309.
(Appellant's App. at 35-36.) The IRS agent told the Kaffenbergers that the $38,309
could be applied to the taxes still due on the 1990 return, leaving liability only for
penalties and interest. The Kaffenbergers gave the IRS agent a check for $12,161 to
cover the penalties and interest on July 24, 1994.
3
The IRS agent called the Kaffenbergers back later the same day and informed
them that the $38,309 refund from 1989 could not be used to offset the 1990 tax
liability because the statute of limitations for claiming the refund from 1989 had
expired. The IRS deemed the 1989 return, filed July 29, 1994, to be the refund claim.
The IRS sent formal notice of the denial of the refund claim on April 28, 1995. (Id.
at 29-30.) The taxpayers filed Form 1040X for 1989 on September 26, 1995,
claiming an additional $3,286 refund based on errors made by the IRS agent in
preparing the original return related to depreciation and SEP contributions. (Id. at 37-
38.) That claim was also denied as beyond the statute of limitations in a notice dated
October 24, 1995. (Id. at 31-32.) The IRS applied overpayments from the years 1994
through 1996 totaling $17,256 toward the Kaffenbergers' 1990 liability. Even after
application of the overpayments, the IRS claimed that the Kaffenbergers owed over
$64,000, stemming from the 1990 tax liability and related penalties and interest. The
Kaffenbergers filed Form 1040X for each of the tax years 1994, 1995, and 1996, in
November and December 1997, seeking refund of the overpayments applied to the
1990 liability. The IRS did not respond to those forms.
On October 17, 1997, the Kaffenbergers and the IRS signed two Form 907
Agreements to Extend Time to Bring Suit (hereinafter "Form 907 Agreement") until
December 31, 1998; one covered the tax period ending December 31, 1989, and one
covered the tax period ending December 31, 1990. The taxpayers filed suit on
December 31, 1998, seeking refunds from 1989 (based on the original Form 1040
return and the amended Form 1040X return), refunds from 1994 through 1996 for the
overpayments that were applied to the 1990 liability, and an order that the 1990 taxes
were paid in full. The district court denied the government's motion to dismiss for
lack of jurisdiction, based on the allegation that the suit was untimely filed, or for
summary judgment, based on the allegation that the administrative refund claims were
untimely. The district court found that the government had waived its sovereign
immunity when it entered the Form 907 Agreements and found that a fact issue
existed regarding whether the Kaffenbergers made an informal claim for refund.
4
The case proceeded to trial on the issue of whether the Kaffenbergers made a
timely request for refund of the 1989 overpayment. The jury returned a special
verdict, finding that the Kaffenbergers established "by a preponderance of the
evidence that they filed an informal claim for their refund of their 1989 tax
overpayment before October 15, 1993." (Appellant's App. at 14.) On March 9, 2001,
the district court entered judgment for the Kaffenbergers, ordering a refund of
$17,778 and ordering the abatement of the IRS's claim for income taxes related to
1990 in its entirety. On June 5, 1991, the district court granted the Kaffenbergers'
motion for costs and attorneys' fees, but limited the fee rate to $125 per hour instead
of the requested $175 per hour.
The government now appeals the district court's judgment, arguing that the
district court erred in denying its motion for judgment as a matter of law on the
informal claim issue, and that the district court lacked jurisdiction to order a refund
related to the original 1989 return as well as the overpayments from 1994 through
1996 that were applied to the 1990 liability, and lacked jurisdiction to order the
abatement of the 1990 tax liability. The government also appeals the district court's
order granting costs and attorneys' fees to the Kaffenbergers.
II.
The government's appeal involves two statutes of limitations: one governing
the time in which a taxpayer may administratively claim a refund from the IRS, and
one governing the time in which a taxpayer may bring suit against the United States
for recovery of a refund withheld by the IRS. We begin by addressing the statute of
limitations for bringing suit, as the outcome of that issue determines the district
court's jurisdiction over the bulk of this case.
5
A. Statute of Limitations for Bringing Suit Against the United States
Sovereign immunity protects the United States from being sued unless
Congress has expressly waived the government's immunity. United States v. Shaw,
309 U.S. 495, 500-01 (1940); United States v. Kearns, 177 F.3d 706, 709 (8th Cir.
1999). A district court lacks jurisdiction to hear a case against the United States
unless its sovereign immunity has been waived, and the court's jurisdiction is limited
by the scope of the waiver. Kearns, 177 F.3d at 709. "[A] waiver of the government's
sovereign immunity will be strictly construed, in terms of its scope, in favor of the
sovereign." Lane v. Pena, 518 U.S. 187, 192 (1996). Once consent has been
expressly provided and its scope defined, however, the waiver of immunity is
liberally construed within the parameters of the consent. Shaw, 309 U.S. at 501.
Congress has expressly waived sovereign immunity for suits against the United
States by taxpayers seeking to recover tax refunds. Congress limited that waiver by
requiring a taxpayer to file an administrative claim with the Secretary of Treasury
before bringing a lawsuit. See 26 U.S.C. § 7422(a) (1994), I.R.C. § 7422(a).
Congress further limited the waiver of sovereign immunity by requiring the taxpayer
to bring suit within "2 years from the date of mailing by certified mail or registered
mail by the Secretary to the taxpayer of a notice of the disallowance of the part of the
claim to which the suit or proceeding relates." I.R.C. § 6532(a)(1). Although "[n]o
officer by his action can confer jurisdiction[,]" Shaw, 309 U.S. at 501, Congress
expressly allows the Secretary to extend the time for filing suit for a refund, and
correspondingly to extend the waiver of immunity, as provided in a written agreement
with the taxpayer. I.R.C. § 6532(a)(2). Form 907, Agreement to Extend Time to
Bring Suit, is generally used to satisfy the extension provision of § 6532(a)(2).
The United States argues that the district court lacked jurisdiction over the
refund claim based on the original 1989 Form 1040 because the suit against the
6
United States, as it related to that refund claim, was not filed within the requisite two
years of the disallowance notice, dated April 28, 1995, and the IRS did not enter a
Form 907 Agreement related to the original 1989 claim.3 The parties agree that the
Kaffenbergers did not file this suit within the requisite two-year period. Thus, the
suit was timely only if the IRS agreed to extend the time for bringing suit as provided
in I.R.C. § 6532(a)(2).
The IRS entered into two Form 907 Agreements with the Kaffenbergers, which
extended the waiver of sovereign immunity to the agreed upon date of December 31,
1998, the date this suit was filed. Both forms were signed on October 14, 1997, by
the Kaffenbergers' representative, and on October 17, 1997, by an IRS agent.
(Appellant's App. at 8; Dist. Ct. Docket Entry 25, Exh. 5.) Both referenced October
24, 1995, as the date that the notice of disallowance of the claim was mailed. They
differed only in that the first Form 907 Agreement covered the tax period ending
December 31, 1989, and the second Form 907 Agreement covered the tax period
ending December 31, 1990. The district court's jurisdiction hinges on whether either
of these Form 907 Agreements extended the time for bringing suit related to the
original 1989 return.
The government argues that the first Form 907 Agreement did not apply to the
original 1989 refund claim for two reasons: (1) because the Form 907 Agreement
referred only to the claim for which the notice of disallowance was sent on October
24, 1995, which was the 1989 Form 1040X amended return as opposed to the original
Form 1040 return, and (2) because, even if the Form 907 Agreement applied to the
original 1989 refund claim, it was ineffective to extend the statutory period because
3
This issue involves only the refund claim related to the original 1989 Form
1040 return. The government agrees that the Kaffenbergers' suit is timely for the
1989 Form 1040X amended return and the subsequent refund claims.
7
the parties entered into the Form 907 Agreement after the limitations period had run
for the original 1989 claim.
We reject the first argument because the government conceded prior to trial in
its motion to dismiss or for summary judgment that the Form 907 Agreement did in
fact apply to both the original and amended 1989 refund claims. (See Appellant's Br.
at 38 n.4; United States' Br. Responding to Aug. 31, 2000 Order, Dist. Ct. Docket
Entry 34, at 1-2, 3.) The scope of a waiver of the government's sovereign immunity
must be strictly construed in favor of the government. Lane, 518 U.S. at 192. So
construing Congress's waiver of sovereign immunity, the Kaffenbergers' suit must
have been brought within the time frame agreed to by the IRS and the Kaffenbergers.
Having strictly construed the scope of the waiver, however, we must liberally
construe the waiver within those parameters. Shaw, 309 U.S. at 501. In its
submissions to the district court, the government agreed that the Form 907 extended
the time for bringing suit on the original 1989 refund claim, even though the Form
907 referred to the date that the 1989 1040X was disallowed. We cannot allow the
IRS to renege on that agreement if we are to liberally construe the waiver within the
parameters provided by Congress. Further, holding the government to its concession
does not allow it to confer jurisdiction upon the court, as the government suggests.
See Krein v. Norris, 250 F.3d 1184, 1187 (8th Cir. 2001) (noting that court must
determine jurisdiction, even if parties concede the issue); Overhauser v. United
States, 45 F.3d 1085, 1088 (7th Cir. 1995) ("[G]overnment officers have no general
power to waive statutes of limitations in tax cases."). Rather, it holds the IRS to the
agreement that it made, an agreement that Congress authorized it to enter pursuant to
I.R.C. § 6532(a)(2). See United States v. Aetna Cas. & Surety Co., 338 U.S. 366, 383
(1949) ("The exemption of the sovereign from suit involves hardship enough, where
consent has been withheld. We are not to add to its rigor by refinement of
construction, where consent has been announced.") (internal quotations omitted).
8
The government argues alternatively that it lost the authority to extend the two-
year statute of limitations once the limitations period expired, so that even if the Form
907 Agreement included the original 1989 claim, it was incapable of extending the
period for bringing suit related to that claim. The government relies on a revenue
ruling and the general proposition that an officer lacks the power to waive the United
States' sovereign immunity. We respectfully disagree with the government and the
revenue ruling upon which it relies.
The power to waive the United States' sovereign immunity rests solely with
Congress. As such, it is our duty to determine the scope of the waiver created by
Congress in light of Congress's intent. See United States v. Brockamp, 519 U.S. 347,
352 (1997). Congress provided a mechanism that allows the IRS and the taxpayer to
extend the period for bringing suit to recover a refund beyond the normal two-year
statutory period. I.R.C. § 6532(a)(2) ("The 2-year period prescribed in paragraph (1)
shall be extended for such period as may be agreed upon in writing between the
taxpayer and the Secretary."). The government argues that the agreement must be
entered before the two-year statutory period lapses, and any later agreement is invalid
to confer jurisdiction upon the district court. The parties have not cited, nor have we
located in our own research, any cases that have addressed whether an extension
agreement pursuant to § 6532(a)(2) is effective if entered after the two-year period
for bringing suit has ended. Although the government's position is facially appealing,
other related statutory provisions lead us to a different conclusion.
Congress enacted § 6532(a)(2) as part of the Tax Reform Act of 1954 on
August 16, 1954, see ch. 736, 68A Stat. 816, the same time that it enacted § 6501, see
ch. 736, 68A Stat. 803. Section 6501 includes a statute of limitations period within
which the IRS must assess a tax, barring the IRS from assessing taxes beyond three
years from the date that a return is filed. See I.R.C. § 6501(a). Similar to § 6532, that
section contains a provision allowing the taxpayer and the IRS to agree to extend the
assessment period beyond the three-year statute of limitations, but contrary to § 6532,
9
§ 6501 expressly requires the agreement to be made "before the expiration of the time
prescribed in this section for the assessment of any tax imposed by this title." §
6501(c)(4). Congress did not include similar limiting language in § 6532(a)(2).
Comparing the two statutes, enacted together as part of the Tax Reform Act of 1954
and codified within a few pages of each other in the Statutes at Large, we are
compelled to conclude that Congress did not intend to prevent taxpayers and the IRS
from agreeing, after the two-year statute of limitations has passed, to extend the time
in which a taxpayer may bring suit for a refund. See Dep't of Housing and Urban
Dev. v. Rucker, 122 S. Ct. 1230, 1234 (2002) (comparing two sections of the Anti-
Drug Abuse Act of 1988 and holding that "[t]he forfeiture provision shows that
Congress knew exactly how to provide an 'innocent owner' defense. It did not provide
one in § 1437d(l)(6)."); Duncan v. Walker, 533 U.S. 167, 173 (2001) ("It is well
settled that '"[w]here Congress includes particular language in one section of a statute
but omits it in another section of the same Act, it is generally presumed that Congress
acts intentionally and purposely in the disparate inclusion or exclusion.'"" (quoting
Bates v. United States, 522 U.S. 23, 29-30 (1997), in turn quoting Russello v. United
States, 464 U.S. 16, 23 (1983))) (alteration in original); Hohn v. United States, 524
U.S. 236, 249-50 (1998) (applying Russello rule); Sharp v. United States, 14 F.3d
583, 589 (Fed. Cir. 1993) (applying Russello rule to Internal Revenue Code § 163,
and holding that where Congress provided express limitations in § 172 but not in §
163, Congress did not intend the limitations to apply to § 163).
The IRS issued a revenue ruling in 1971 which found that a district director
lacked authority to enter an agreement to extend the two-year statute of limitations
for bringing suit after the period had expired. See Rev. Rul. 71-57, 1971-1 C.B. 405.
The IRS relied on its interpretation of "extended" to "mean[] the continuation of an
existing period of time with no intervening lapse." Id. We respectfully disagree with
the IRS's revenue ruling. In § 6501, the statute limiting the IRS's time frame for
assessing taxes to three years from the date the return is filed, Congress allows the
IRS and taxpayer to further "extend [the assessment period] by subsequent
10
agreements in writing made before the expiration of the period previously agreed
upon." I.R.C. § 6501(c)(4). If Congress had intended "extend" to carry the definition
given it by the IRS, there would have been no need for Congress to include the phrase
"before the expiration of the period previously agreed upon" in the provision allowing
the IRS and taxpayer to enter subsequent extensions under § 6501. We decline to
adopt the IRS's definition of "extension" where to do so renders the above quoted
portion of § 6501"insignificant, if not wholly superfluous." Duncan, 121 S. Ct. at
2125. We hold that the IRS acted within its statutory authority in entering into the
Form 907 Agreement to extend the time to bring suit on the original 1989 refund
claim, even though the statutory time period for bringing suit had lapsed prior to the
date of the Form 907 Agreement. Consequently, the district court properly exercised
jurisdiction over the original 1989 refund claim.
B. Informal Refund Claim
Having concluded that the district court had jurisdiction over this case, we turn
to the issue of whether the Kaffenbergers timely filed refund claims related to 1989
at the administrative level. The government argues that the Kaffenbergers are not
entitled to any refunds related to 1989 because they failed to bring their
administrative refund claims within three years and six months of the date on which
the taxes were paid, as required by the Internal Revenue Code. See I.R.C. §
6511(b)(2)(A) (limiting the amount of recovery on a refund claim to the amount of
tax paid within three years, plus applicable extensions, prior to the refund claim).
The Kaffenbergers concede that the 1989 Form 1040 return filed on July 24, 1994,
and the 1989 Form 1040X amended return filed on September 26, 1995, were
untimely, as they sought a refund of taxes paid on April 15, 1990. The Kaffenbergers
argued to the jury, apparently successfully, that they had made an informal claim for
refund when they designated that $26,700 of a prior credit be applied to their 1990
tax liability on the Form 4868 Automatic Extension Request, filed on April 15, 1991,
well within three years and six months of April 15, 1990. On appeal, the government
11
argues that there is no evidence to support the jury's finding that the Kaffenbergers
made an informal claim for refund.
The government argued in its motion for judgment as a matter of law that the
facts did not support a finding of an informal claim, but did not renew the argument
in its posttrial motions. We therefore review this issue for plain error to prevent a
miscarriage of justice. See Cross v. Cleaver, 142 F.3d 1059, 1070 (8th Cir. 1998).
Plain error in a civil suit is an error that is "obvious, or . . . otherwise seriously
affect[s] the fairness, integrity, or public reputation of judicial proceedings."
Champagne v. United States, 40 F.3d 946, 947 (8th Cir. 1994) (internal quotations
omitted) (first alteration in original). An obvious error is an error that is "clear under
current law." United States v. Caldwell, 97 F.3d 1063, 1069 (8th Cir. 1996).
Ultimately, we must determine whether the district court plainly erred in accepting
the jury's determination that the facts and circumstances of the case satisfied the
requirements of the informal claim doctrine.
Treasury regulations specify what is required of a taxpayer to file a valid claim
for refund or credit of taxes previously paid. See 26 C.F.R. § 301.6402-2(b)(1); §
301.6402-3(a). Although the regulation states that a claim that fails to comply with
the requirements will not be considered as a claim for refund, § 301.6402-2(b)(1), the
Supreme Court has endorsed informal claims filed within the statutory period that
have technical deficiencies, as long as a valid refund claim is subsequently made after
the period has run. See United States v. Kales, 314 U.S. 186, 194 (1941) (holding
that a letter of protest sent by the taxpayer to the collector and Commissioner was a
valid informal claim for refund). In essence, an informal claim that puts the IRS on
notice that a claim is being made tolls the statute of limitations until the deficiencies
are corrected in a subsequent refund claim. See United States v. Comm'l Nat'l Bank
of Peoria, 874 F.2d 1165, 1170-76 (7th Cir.1989) (finding an informal claim where
the tax issues surrounding the refund claim were involved in litigation and the
taxpayers' attorney wrote a letter to the IRS within the statutory time frame stating his
12
disagreements with the IRS's calculations). Generally, "an informal claim is
sufficient if it is filed within the statutory period, puts the IRS on notice that the
taxpayer believes erroneous tax has been assessed, and describes the tax and year
with sufficient particularity to allow the IRS to undertake an investigation." PALA,
Inc. Employees Profit Sharing Plan and Trust Agreement v. United States, 234 F.3d
873, 877 (5th Cir. 2000). The sufficiency of an informal claim depends on the
individual facts of each case, "with a view towards determining whether under those
facts the Commissioner knew, or should have known, that a claim was being made."
Id. (internal quotations omitted). Failure to specify the year does not necessarily
defeat the informal claim if other facts suffice to put the IRS on notice of the specific
refund sought. See id. at 878 ("The fact that PALA's letter does not specifically
mention the year 1991 is irrelevant . . . ."); Am. Radiator & Stand. Sanitary Corp. v.
United States, 318 F.2d 915, 921 (Ct. Cl. 1963) ("[P]laintiff was not required, for this
informal claim for refunds all of one type, to match particular amounts to particular
years, or to point out that this claim related only to 1942, 1943, and 1945 (not to
1944, 1946 or 1947)." (quoting Kales, 314 U.S. at 194) (internal footnotes omitted)).
"An informal claim which is partially informative may be treated as valid even though
'too general' or suffering from a 'lack of specificity'--at least where those defects have
been remedied by a formal claim filed after the lapse of the statutory period but before
the rejection of the informal request. " Id.
At a bare minimum, the Kaffenbergers' informal claim had to contain a written
component within the statute of limitations, and must have been followed by a formal
claim that remedied any defects in the informal claim. The Form 4868 Automatic
Extension Request, which reflected "other payments and credits" of $26,700 and
which was filed on April 15, 1991, satisfies the written component. Further, Form
4868 contained the Kaffenbergers' signatures and declarations under penalties of
perjury that the information was correct. Cf. Tobin v. Tomlinson, 310 F.2d 648, 651
(5th Cir. 1962) (holding that letter did not constitute informal claim because it was
not verified to be under penalty of perjury), cert. denied, 375 U.S. 929 (1963). There
13
is no dispute that the 1989 Form 1040, which was filed on July 29, 1994, and
requested a refund of $38,309, and the 1989 Form 1040X, which was filed on
September 26, 1995, and requested a refund of an additional $3,286, made formal
claims for refund, albeit untimely ones. These forms satisfy the minimum
requirements for an informal refund claim. Whether the remaining facts and
circumstances satisfy the informal claim doctrine is highly fact intensive. See
Comm'l Nat'l Bank, 874 F.2d at 1170. "No hard and fast rules can be applied because
it is a combination of facts and circumstances which must ultimately determine
whether or not an informal claim constituting notice to the Commissioner has been
made. Necessarily each case must be decided on its own peculiar set of facts . . . ."
Newton v. United States, 163 F. Supp. 614, 619 (Ct. Cl. 1958) (rejecting
Commissioner's application of "guiding principles" distilled from prior cases). In
making this factual inquiry, it is important to note that the written component within
the statutory period–Form 4868 in this case–need not contain all of the information
necessary to put the IRS on notice that a refund was being sought. The written
component "should not be given a crabbed or literal reading, ignoring all the
surrounding circumstances which give it body and content. The focus is on the claim
as a whole, not merely the written component." Estate of Hale v. United States, 876
F.2d 1258, 1262 (6th Cir. 1989) (internal quotations omitted).
Shortly after filing Form 1040 for the 1988 tax period, directing that a $26,794
overpayment be applied to 1989, the Kaffenbergers received a notice dated April 15,
1991, that they were entitled to a refund of $26,770. Evidence introduced at trial
revealed that that type of notice normally is not sent when a refund is to be applied
to the following year's tax liability. The Kaffenbergers filed Form 4868 the same day,
notifying the IRS that they wanted $26,700 of "other payments or credits" to be
applied to their 1990 liability. The IRS also had Form 4868 for 1989 on file, with
which the Kaffenbergers had paid $35,000 for estimated payments toward their 1989
tax liability. Thus, at the time the IRS received Form 4868 for 1990 in April 1991,
the IRS knew that the Kaffenbergers were entitled to a refund of $26,770, that the
14
Kaffenbergers had requested that the refund from 1988 be applied to their 1989
liability, that the Kaffenbergers had paid $35,000 in estimated payments toward their
1989 liability, that the IRS had recently sent the Kaffenbergers a notice of refund for
the same $26,770 the Kaffenbergers had asked to be applied to their 1989 liability,
and that the Kaffenbergers had requested $26,700 from "other payments and credits"
be applied to their 1990 liability.
The government argues that the Kaffenbergers' failure to include the $26,700
amount on the line for "1989 overpayments allowed as a credit" on the Form 4868
contradicts the Kaffenbergers' assertion that they were claiming a refund from 1989.
The jury apparently did not buy that argument, however. We believe that the jury's
implicit finding that there is no inconsistency is supported by the evidence,
particularly in light of the fact that as of April 15, 1991, the Kaffenbergers had not
filed their 1989 Form 1040, so that the exact amount of the overpayment for 1989 was
unknown at that time.
In these unique factual circumstances, we cannot say that any error by the
district court in entering judgment based on the jury's special verdict was obvious.
See Gustin v. United States Internal Rev. Serv., 876 F.2d 485, 488 (5th Cir. 1989)
("[T]here are no hard and fast rules for evaluating the sufficiency of an informal
claim, and each case must be decided on its own particular set of facts . . . ."). We
believe these facts were sufficient to put the IRS on notice, as of April 1991, that the
Kaffenbergers were claiming a refund of $26,700 and that the information held by the
IRS described the refund sought with sufficient particularity to allow the IRS to
investigate the claim. These facts are not so different from other factual scenarios in
which courts have found an informal claim that we could say that the jury's verdict
was plainly erroneous. See, e.g., Penn Mut. Indemn. Co. v. Comm'r, 277 F.2d 16, 18-
19 (3d Cir. 1960) (holding that a letter attached to a return protesting the
constitutionality of the tax and refusing to pay the tax shown due on the return was
an informal claim); Cumberland Portland Cement Co. v. United States, 104 F. Supp.
15
1010, 1013-14 (Ct. Cl. 1952) (finding an informal claim where Commissioner
notified taxpayer of overassessment and informed taxpayer of need to file Form 843
to protect itself against the running of the statute of limitations, where taxpayer sent
letter asking that "a prompt settlement be made in this matter of overassessment" with
its signed "Waiver of Restrictions on Assessment and Collection of Deficiency in Tax
and Acceptance of Overassessment," but did not timely file Form 843, as instructed
by the Commissioner); Night Hawk Leasing Co. v. United States, 18 F. Supp. 938,
941 (1937) (finding that notation on the back of a check stating "This check is
accepted as paid under protest pending final decision of the higher courts" was a valid
informal claim). Because we affirm the jury's determination that the Kaffenbergers
made a sufficient informal claim for refund within the statute of limitations, they are
entitled to a refund of $26,700 from 1989.
C. Abatement of 1990 Tax Liability & Refund of 1994 Through 1996
Overpayments Applied to 1990 Liability
The district court ordered the government to abate the 1990 tax assessment, to
refund $17,778, which the court characterized as a refund of overpayments from
1994, 1995, and 1996 together with interest through January 31, 2001, and to pay
postjudgment interest at a rate of 4.83% to the Kaffenbergers. (See Appellant's Add.
at 7.) The government argues that the district court lacked jurisdiction to order a
refund of the 1994 through 1996 overpayments and to order the abatement of the
1990 liability. For reasons discussed below, we agree with the government. The
government does not explain the effect of the district court's lack of jurisdiction,
however. Given the complexity of this case, both factually and legally, we begin our
analysis by summarizing the facts of the case in light of our holding thus far.
The Kaffenbergers claimed a total overpayment of their 1989 tax liability of
$41,595 ($38,309 claimed on their 1989 Form 1040, filed on July 28, 1994, and
$3,286 claimed on their 1989 Form 1040X, filed on September 26, 1995) and made
16
a timely informal claim for refund of $26,700 of that overpayment. The
Kaffenbergers concede that their recovery is limited to the $26,700 claimed pursuant
to their informal claim, (Appellees' Br. at 18 n.6 & 31-32), and the district court's
judgment reflected the limited amount. The IRS assessed the Kaffenbergers' tax
liability for 1990 at $36,329 before imposition of interest and penalties and before
application of any payments or credits. The Kaffenbergers paid an additional $12,161
against their 1990 tax liability on July 28, 1994, as part of the audit, which the IRS
applied against the 1990 liability. The IRS also applied $17,256 worth of
overpayments from 1994 through 1996 against the 1990 liability.
Following the jury's verdict, the district court asked the parties to submit
calculations for a proposed judgment. The district court noted in its order that the
parties submitted widely divergent calculations and that the Kaffenbergers'
"calculations best reflect[ed] the jury's special verdict." (Appellant's Add. at 7; Mar.
9, 2001, Order.) The Kaffenbergers submitted a detailed calculation, which netted
the $26,700 refund from 1989 against the 1990 liability as of April 15, 1991, and
reflected the July 1994 payment of $12,161 as well as the 1994 through 1996
overpayments of $17,256 applied by the IRS to the remaining 1990 liability. The
calculation also accounted for penalties and interest. The Kaffenbergers' calculation
showed that they had overpaid their tax liability by $17,778, including interest
through January 31, 2001. (See Appellees' App. at 121-26.) The government's
proposed judgment, on the other hand, limited recovery to a refund of $3,286, which
is the amount that the Kaffenbergers claimed on the amended Form 1040X for 1989,
plus interest from April 15, 1990, leaving the 1990 tax liability as assessed by the IRS
still owing. In reaching this determination, the government argued that the district
court lacked jurisdiction over the $38,309 refund claimed on the original 1989 Form
1040 filed on July 24, 1994, because the Kaffenbergers did not file suit within two
years of receiving the IRS's notice of disallowance related to that refund claim, an
argument the district court, and now we, rejected. (United States' Br. Regarding
Computation of Judgment, Dist. Ct. Docket Entry 52.)
17
At this point, we think it important to delineate what about the judgment the
government does not appeal. The government does not appeal the fact that the
district court netted the 1989 refund against the 1990 tax liability and took into
consideration the subsequent payments that the IRS applied against the 1990
liability.4 Nor does the government appeal the accuracy of the Kaffenbergers'
calculations, which resulted in the conclusion that they had overpaid their tax
liability, including penalties and interest, by $17,778, when the $26,700 refund was
taken into consideration. Rather, the government argues only that the district court
lacked jurisdiction to order that the 1990 tax liability be abated in full and that the
district court lacked jurisdiction to order a refund of the 1994 through 1996
overpayments that were applied against the 1990 liability. Thus, our review is limited
to those issues.
4
Only if the district court's decision to net payments was somehow outside its
jurisdiction would we be required to review the issue of netting. See Krein, 250 F.3d
at 1187(noting that court must determine jurisdiction, even if parties concede the
issue). Although the Tax Code leaves the decision to net payments to the IRS's
discretion, see I.R.C. § 6402(a), the district court is not deprived of jurisdiction over
the issue. See N. States Power Co. v. United States, 73 F.3d 764, 768 (8th Cir.)
(noting that the IRS's failure to net payments under § 6402(a) may be reviewable for
an abuse of discretion in the proper case), cert. denied, 519 U.S. 862 (1996); Horton
Homes, Inc. v. United States, 936 F.2d 548, 550 (11th Cir. 1991) (holding that district
court had subject matter jurisdiction over claim that IRS erroneously failed to abate
interest, but that IRS's refusal to do so was not judicially reviewable because the Tax
Code left the decision to the IRS's discretion). See also I.R.C. § 6402(f) (limiting
courts' jurisdiction to review decisions under subsections (c), (d), or (e), without
mentioning courts' jurisdiction concerning subsection (a)). Thus, we will not review
the propriety of the district court's judgment netting the 1989 overpayment against the
1990 liability because the government did not raise the issue.
18
1. Abatement of the 1990 Liability
The government argues that the district court lacked jurisdiction to order the
abatement of the Kaffenbergers' 1990 tax assessment. We agree. Full payment of a
tax assessment is a prerequisite to suit in federal district court; taxpayers may bring
prepayment suits only in United States Tax Court. Without full payment of the
assessment, the district court lacks subject matter jurisdiction over the suit as it relates
to the 1990 liability. See 28 U.S.C. § 1346(a)(1); Flora v. United States, 362 U.S.
145, 146, 158-63 (1960). The Kaffenbergers did not pay the 1990 assessment in full
prior to bringing this suit in district court. Their argument that the 1989 overpayment
satisfied the 1990 liability is irrelevant to their obligation to pay the full amount of
the 1990 assessment before filing suit related to that liability in district court. See
Hutchison v. United States, 677 F.2d 1322, 1326 (9th Cir. 1982) ("[Taxpayer's] mere
claim that the 1973 liability was satisfied by a then-disputed credit from 1971 does
not establish full satisfaction of the 1973 liability."). What this means is that the
district court lacked authority to adjudicate the accuracy of the 1990 assessment.
Without authority to determine the accuracy of the 1990 liability, the district court
lacked authority to declare it abated.
2. 1994-1996 Overpayments Applied to 1990 Liability
The government also argues that the district court lacked the authority to order
a refund of the 1994 through 1996 overpayments that were applied by the IRS to the
unpaid 1990 tax liability. The government's argument is twofold: (1) the
Kaffenbergers' failure to file an administrative claim related to 1990 precludes the
district court from exercising jurisdiction related to subsequent credits applied to the
1990 tax liability; and (2) the Kaffenbergers' failure to pay the full assessment for the
1990 tax liability precludes them from bringing suit in district court for a refund of
subsequent credits applied to the 1990 liability. We agree with the IRS's second
position and therefore need not address the first.
19
Once the IRS applied the overpayments from 1994 through 1996 to the 1990
tax assessment, as the IRS had the discretion to do, see I.R.C. § 6402(a), those funds
became credits against the 1990 tax liability. See I.R.C. § 7422(d) ("The credit of an
overpayment of any tax [i.e., 1994-1996] in satisfaction of any tax liability [i.e., 1990]
shall, for the purpose of any suit for refund of such tax liability [i.e., 1990] so
satisfied, be deemed to be a payment in respect of such tax liability [i.e., 1990] at the
time such credit is allowed"); Donahue v. United States, 33 Fed. Cl. 500, 605 (Ct. Cl.
1995) (holding that application of an overpayment from 1988 to a tax liability for
1985 was deemed a payment against the 1985 liability on the date the IRS applied the
1988 overpayment to the 1985 liability for purposes of § 6511(a)); Republic
Petroleum Corp. v. United States, 613 F.2d 518, 525 n.19 (5th Cir. 1980)
("[T]axpayer's 1960 and 1962 credits are treated like any cash payment made by
taxpayer to satisfy his deficiency for 1959, and he can recover a refund of them to the
extent he overpaid his 1959 tax." (emphasis added)). The Kaffenbergers' claim
related to the 1994 through 1996 overpayments is based solely on their assertion that
there is no 1990 liability against which to apply the overpayments. In other words,
what they are seeking is an adjudication of their 1990 tax liability. As we have just
held, the Kaffenbergers' failure to pay the full 1990 assessment prior to bringing this
suit deprived the district court of jurisdiction over claims related to the 1990
assessment. Because the overpayments became credits against the 1990 tax liability
when the IRS so applied them, we hold that the district court lacked jurisdiction to
order a refund of the overpayments from 1994 through 1996 that were credited
against the 1990 liability.
Having so held, we disagree with the district court's characterization of the
$17,778 as a refund of the 1994 through 1996 overpayments. Upon closer
examination, we believe that that amount reflects an order to refund the $26,700
overpayment from 1989. As made clear by the detailed calculations submitted by the
Kaffenbergers, the $17,778 figure is the result of refunding the 1989 overpayment
after taking into consideration the 1990 liability as assessed by the IRS and the
20
payments applied to that liability by the IRS. The district court's inability to
adjudicate the Kaffenbergers' 1990 liability and to declare the parties' rights related
to that liability does not render the court incapable of recognizing the payments
already applied by the IRS against the Kaffenbergers' 1990 liability. As noted, the
government does not appeal the calculation netting the $26,700 overpayment from
1989 against the 1990 liability or the accuracy of the $17,778 amount. Faced with
the parties' disparate calculations for judgment, we believe that the district court's
ultimate conclusion was correct that the Kaffenbergers were entitled to a refund of
$17,778 to carry into effect the jury's special verdict.
To be clear, we do not pass on any other disputes that the IRS and the
Kaffenbergers might have regarding the 1990 liability. Rather, we affirm the district
court's judgment to the extent that it ordered the refund of the $26,700 overpayment
from 1989 and calculated that this amount, when considered with the other payments
applied to the 1990 liability by the IRS, resulted in an overpayment by the
Kaffenbergers of $17,778.
D. Attorney's Fees
The district court ordered the government to pay the Kaffenbergers' costs and
attorney's fees, although the fee rate was reduced from the rate requested by the
Kaffenbergers. The Internal Revenue Code authorizes an award of reasonable
litigation costs to the prevailing party in a suit by or against the United States in
connection with a tax refund. I.R.C. § 7430(a). A taxpayer is not considered a
"prevailing party," and is not entitled to litigation costs, if the government's position
was substantially justified. § 7430(c)(4)(B). "The position of the United States is
substantially justified if it has a reasonable basis in both law and fact, a determination
made on a case by case basis. The taxpayer bears the burden of proving that the
government's litigation position was not substantially justified." United States v.
Bisbee, 245 F.3d 1001, 1007 (8th Cir. 2001) (internal citations omitted). We will
21
reverse the district court's grant of costs and fees under I.R.C. § 7430 only if the
district court abused its discretion. Id.
The district court found the government's position not substantially justified
for the same reasons it had previously denied the government's motion for summary
judgment and because the jury ultimately found in favor of the Kaffenbergers.
(Appellant's Add. at 9-10.) Although a jury's verdict is relevant to whether the
government's position is substantially justified, it is not determinative, especially
where the jury's finding is based on the preponderance of the evidence, as in this case.
See Wilfong v. United States, 991 F.2d 359, 367 (7th Cir. 1993) (reversing an award
of fees where the district court's only valid explanation of its award was the jury's
verdict). Similarly, fact disputes that preclude summary judgment do not establish
that the moving party's position is not substantially justified.
The Kaffenbergers assert that the IRS acted in bad faith by not accepting their
factual claim that they made a valid informal refund claim, and that the IRS tried to
keep them from going to trial. The IRS was not required to acquiesce in the
taxpayers' claim that they made a valid informal claim. Our judicial system allows
all litigants, including the IRS, to litigate their differences through trial if the parties
cannot settle them. That does not make the IRS's position not substantially justified.
The Kaffenbergers' equitable arguments do not address whether the IRS's position
was substantially justified, which the Kaffenbergers must prove if they are to be
awarded litigation costs.
Reviewing the record, we believe that the IRS's position was substantially
justified and the district court abused its discretion in awarding litigation costs to the
Kaffenbergers. Given the state in which the issue of the informal claim reached us
on appeal, we reviewed the issue for plain error. The fact intensive nature of the
informal claim doctrine led us to conclude that the jury's findings are supported under
that standard of review. Factually, we believe that this was a close case and may
22
border on the outer reaches of the informal claim doctrine. It was by no means clear
that the Kaffenbergers made an informal claim sufficient to toll the statute of
limitations until their formal claim was filed. See Comm'l Nat'l Bank, 874 F.2d at
1170 (characterizing the adequacy or sufficiency of an informal refund claim as
primarily a question of fact). As such, we must conclude that the IRS's position that
the Kaffenbergers had not made an informal claim for a refund was substantially
justified. We reverse the district court's award of costs and fees to the Kaffenbergers.
III. CONCLUSION
We reverse the district court's judgment to the extent it ordered the abatement
of the 1990 tax liability, as well as its order awarding fees and costs to the
Kaffenbergers. We affirm the district court's judgment to the extent it implicitly
ordered the government to refund $26,700 to the Kaffenbergers, which, after netting
that refund against the 1990 liability and subsequent payments and credits, resulted
in an overpayment by the Kaffenbergers to the IRS of $17,778, including interest and
penalties through January 31, 2001. We also affirm the district court's judgment
ordering postjudgment interest on the Kaffenbergers' refund. Although the 1990
liability is not abated by order of court, we do make clear that the $17,778 refund is
the result of applying the 1989 informally claimed refund against the 1990 liability
of $36,329 as assessed by the IRS and as detailed in the Kaffenbergers' calculations
submitted to the district court for calculation of the judgment.
A true copy.
Attest:
CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.
23
| {
"pile_set_name": "FreeLaw"
} |
UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
LUCY BENNETT; RONALD BENNETT,
Plaintiffs-Appellants,
v.
THE KROGER COMPANY, a foreign
corporation, No. 97-1938
Defendant-Appellee,
and
MARK JONES,
Defendant.
Appeal from the United States District Court
for the Southern District of West Virginia, at Beckley.
David A. Faber, District Judge.
(CA-96-96-5)
Submitted: April 21, 1998
Decided: June 15, 1998
Before WIDENER and WILLIAMS, Circuit Judges, and
PHILLIPS, Senior Circuit Judge.
_________________________________________________________________
Affirmed by unpublished per curiam opinion.
_________________________________________________________________
COUNSEL
Harold F. Salsbery, Madonna C. Estep, SALSBERY & DRUCK-
MAN, Charleston, West Virginia, for Appellants. Joseph M. Price,
Michael A. Kawash, ROBINSON & MCELWEE, L.L.P., Charleston,
West Virginia, for Appellee.
_________________________________________________________________
Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).
_________________________________________________________________
OPINION
PER CURIAM:
Lucy and Ronald Bennett appeal the district court's grant of sum-
mary judgment for The Kroger Company (Kroger) in this diversity
action, 28 U.S.C. § 1332 (1994). The Bennetts filed suit against
Kroger, alleging that Kroger was liable under W. Va. Code § 23-4-
2(c)(2) (1994), for injuries Lucy Bennett suffered in a fall while was
working in the deli section at the Kroger store in Beaver, West Vir-
ginia. The district court granted summary judgment to Kroger, and we
affirm.
The injury in question took place in 1994, when Lucy Bennett
slipped on a wet part of the floor and broke her hip. She required a
total hip replacement and incurred $40,000 in medical expenses. Ben-
nett was unable to work for nearly twenty-six months; one leg is now
one-half inch shorter than the other, necessitating that she wear a spe-
cial shoe.
According to Bennett's deposition, the water on the floor came
from a machine called the bread proofer in the deli. She had noticed
that water built up on the floor at that spot for as long as she had
worked at the deli, which was most of her fifteen years employment.
She also stated that other employees had fallen in the area. Bennett
admitted that she was aware of the Kroger store safety rules requiring
that any liquids on the floor be cleaned up immediately, and had
signed an acknowledgment to that effect. Bennett received worker's
compensation for her injury.
2
Under West Virginia law, employers are generally immune from
liability in actions under common law or statute for employee injuries
covered by the state worker's compensation act. W. Va. Code § 23-2-
6 (Supp. 1997). In Mandolidis v. Elkins Indus., Inc., 246 S.E.2d 907
(W. Va. 1978), the state high court held that the general immunity
from damage suits arising from work-related injuries is abrogated if
the employer has acted with deliberate intention to injure an
employee. Such a proceeding is now known as a Mandolidis action,
and the court's holding has been codified in W. Va. Code § 23-4-
2(c)(2). See Arthur v. E.I. DuPont de Nemours & Co., 58 F.3d 121,
123 (4th Cir. 1995).
The statute provides two distinct methods of establishing the
employer's deliberate intention. Under § 23-4-2(c)(2)(i), the
employee must prove that the employer acted with a conscious inten-
tion to produce specific injury to the employer. Under § 23-4-
2(c)(2)(ii), a plaintiff must prove five elements: (A) a specific unsafe
working condition existed in the workplace, creating a high degree of
risk and strong probability of serious injury; (B) the employer realized
and understood the existence of the unsafe condition as well as the
high risk of injury; (C) the unsafe working condition was a violation
of a state or federal safety statute, rule or regulation or a commonly
accepted and well-known safety standard within the business, which
was specifically applicable to the particular work and working condi-
tion involved, "as contrasted with a statute, rule, regulation or stan-
dard generally requiring safe workplaces, equipment or working
conditions"; (D) the employer intentionally exposed the employee to
the unsafe condition; and (E) the employee suffered serious injury or
death as a result.
In this case, the Bennetts conceded below that they could not sup-
port their claim under § 23-4-2(c)(2)(i). In granting summary judg-
ment as to § 23-4-2(c)(2)(ii), the district court concluded that the
Bennetts could not establish subsection (C) of the claim. The only
issue before us on appeal is whether summary judgment on this
ground was appropriate.
We review a grant of summary judgment de novo. United States
v. Kanasco, Ltd., 123 F.3d 209, 210 (4th Cir. 1997). The moving
party must demonstrate that there exists no genuine issue of material
3
fact for trial. See Celotex v. Catrett, 477 U.S. 317, 322-23 (1986). We
consider the facts in the light most favorable to the non-movant. See
Anderson v. Liberty Lobby, 477 U.S. 242, 255 (1986).
The Bennetts's expert, Harold Parker, cited two federal regulations
to support his contention that the water on the floor of the Kroger deli
was a violation of a specific federal or state safety provision. In addi-
tion, the Bennetts assert that Parker's affidavit and deposition create
an issue of fact as to whether the water on the floor violated a well-
known, commonly accepted safety practice within the grocery busi-
ness.
The regulations cited by Parker are just the sort of general provi-
sions that are specifically excluded from subsection (C). Section
1910.22, 29 C.F.R. (1997), provides general requirements for
walking-working surfaces, and applies to all permanent places of
employment. It provides in pertinent part, "[t]he floor of every work-
room shall be maintained in a clean and, so far as possible, a dry con-
dition. Where wet processes are used, drainage shall be maintained,
and false floors, platforms, mats or other dry standing places should
be provided where practicable." Section 1910.141(a)(3)(ii), 29 C.F.R.
(1997), dealing with sanitation, is another general provision for all
permanent places of employment. "The floor of every workroom shall
be maintained, so far as practicable, in a dry condition. Where wet
processes are used, drainage shall be maintained and false floors, plat-
forms, mats, or other dry standing places shall be provided, where
practicable, or appropriate waterproof footgear shall be provided."
The Bennetts argue that slip and fall hazards occur in every industry,
and it would be impracticable to detail specifically each industry or
business in the Code of Federal Regulations. But the West Virginia
statute specifically provides that a general safety provision is insuffi-
cient to satisfy subsection (C). See Greene v. Carolina Freight
Carriers, 663 F. Supp. 112, 115 (S.D.W. Va. 1987) (holding that a
general regulation requiring safe equipment is not specific enough
under subsection (C)).
The Bennetts also suggests that the affidavit and deposition of their
expert, Parker, provide evidence that wet spots on the floor violate a
commonly accepted safety standard within the grocery business.
Under Mayles v. Shoney's, Inc., 405 S.E.2d 15 (W. Va. 1990), testi-
4
mony by an expert as to what violates the industry standard can sat-
isfy subsection (C). In Mayles, a restaurant worker was burned with
hot grease he was attempting to carry in an open container down a
slippery, grassy slope to the disposal bins. The relevant safety regula-
tions were general and did not pertain specifically to the restaurant
business. But the court held that the testimony of an expert in the res-
taurant business as to the commonly accepted, well-known safety
standard within the business for disposing of hot grease was adequate
to satisfy subsection (C). Id. at 22.
As the district court held below, however, the Bennetts's expert did
not set forth specific, well-known standards within the grocery busi-
ness or personal experiences from the business as to how the problem
of water on the floor is handled, as did the expert in Mayles in relation
to grease disposal. Parker's testimony dealt with wet floors as a gen-
eral problem in business and industry.
The statute in question expressly requires that the unsafe working
condition in question violate a "safety statute, rule, or regulation, . . .
or . . . a commonly accepted and well-known safety standard within
the . . . business . . . specifically applicable to the particular work and
working condition involved, as contrasted with [one] generally requir-
ing safe workplaces, equipment, or working conditions. . . ." W. Va.
Code § 23-4-2(c)(2)(ii)(C) (emphasis added). As the district court
held, a specific safety provision or standard is not present in this case.
Section 23-4-2(c)(2) is not intended to give every injured employee
a remedy; the worker's compensation system satisfies that purpose.
Rather, the statute works to deny immunity to employers whose con-
duct is so outrageous that it falls outside the accepted standards of
conduct, imposed either externally or from within the business.
Greene, 663 F. Supp. at 115. The statute allows no flexibility. Id. The
facts in this case do not come within this strict standard. Therefore,
the Bennetts have no proof to establish subsection (C), and summary
judgment was appropriate.
We affirm the judgment below. 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
| {
"pile_set_name": "FreeLaw"
} |
911 F.2d 731
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.Gregory CARNILL, Petitioner-Appellant,v.UNITED STATES of America Respondent-Appellee.
No. 89-1089.
United States Court of Appeals, Sixth Circuit.
Aug. 22, 1990.
Before KENNEDY and BOGGS, Circuit Judges, and TIMBERS,* Senior Circuit Judge.
PER CURIAM.
1
In December 1985, Gregory Carnill was convicted of 88 counts of mail fraud. As a practicing chiropractor at the Hamilton Clinic in Highland Park, Michigan, he had been engaged in a scheme to defraud Blue Cross/Blue Shield of Michigan by submitting false insurance claims. In December 1988, he filed a motion to vacate his conviction pursuant to 28 U.S.C. Sec. 2255 and a motion to disqualify United States District Judge Anna Diggs Taylor. Judge Taylor denied both motions.1 Finding that Carnill's conviction is constitutionally valid and that no basis existed for Judge Taylor's disqualification, we affirm.
2
* A
3
The allegations in Carnill's motion to vacate are largely connected to those presented in his direct appeal to the Sixth Circuit. On September 22, 1987, a panel of this court affirmed Carnill's conviction (and those of his co-defendants), finding no reversible error. United States v. Dean, et al., Nos. 86-1150/1220/1221/1222/1224 (6th Cir. September 27, 1987) (unpublished per curiam). See also United States v. Azad, 809 F.2d 291 (6th Cir.1986) (reciting the details of the fraud scheme), cert. denied, 481 U.S. 1004 (1987). The five defendants each argued that: 1) the district court abused its discretion by excluding the testimony of a medical expert; 2) this exclusion violated their constitutional right to present a complete defense; 3) the court erred by denying their motion to dismiss the indictment, to strike surplusage from the indictment, and to receive a bill of particulars; 4) the court erred by not finding that there was prosecutorial misconduct at the grand jury proceedings; 5) the court erred by failing to disclose the record of the grand jury proceedings; 6) the prosecutor's closing argument contained prejudicial remarks that denied them a fair trial; and 7) the court erred by not holding an evidentiary hearing to determine the exact amount of money taken in the scheme. Carnill also raised the individual claim that he was prejudiced by a 59-day delay in the middle of the trial. The panel found that all of these arguments lacked merit.
4
In appealing the denial of his Sec. 2255 motion, Carnill claims that 1) he was denied due process based on Judge Taylor's conflict of interest; 2) the government failed to prove a key element of the crime; 3) the conviction is invalid because contrary to the antitrust laws; 4) the district court violated Fed.R.Crim.P. 32(c)(3)(D) by not making factual findings as to disputed information in the presentence investigation report; 5) the court allowed the jury to make determinations about what procedures (for which Blue Cross was billed) were medically necessary; 6) he was denied effective assistance of counsel; and 7) the sentence is excessive. He also repeats the following claims made in his direct appeal: that he was prejudiced by the delay during the trial, during which a juror underwent treatment in a hospital of which Judge Taylor was a trustee; that there was prosecutorial misconduct; and that he was denied his right to present witnesses. Judge Taylor dismissed the Sec. 2255 motion for failure to state a claim on which relief may be granted.
B
5
Most of Carnill's allegations are vague and conclusory. In United States v. Frady, 456 U.S. 152, 167-68 (1982), the Supreme Court held that a successful Sec. 2255 motion must show 1) cause for failure to raise the claims at trial, and 2) actual prejudice resulting from errors at trial. The movant must demonstrate that the trial errors "worked to his actual and substantial disadvantage, infecting his entire trial with error of constitutional dimensions." Id. at 170 (emphasis in original). Carnill is not able to make this showing.
6
The assertions raised in Carnill's direct appeal that are repeated here--prejudice resulting from the trial delay, prosecutorial misconduct, and a denial of his right to present witnesses--were already rejected by a panel of this court. Carnill gives no reasonable explanation of why he believes we erred by denying relief previously. In any case, review of a determination on the merits by this court is not available through a habeas petition.
7
The assertions that Carnill was denied due process because of Judge Taylor's alleged conflict of interest and that Carnill was denied effective assistance of counsel are based on Carnill's claim for disqualification. These two claims are meritless for the reasons stated in part II of this opinion. To the extent that Carnill's ineffectiveness of counsel claim is not dependent on the success of his disqualification claim, it is meritless because Carnill cannot affimatively prove the prejudice necessary to make out a sixth amendment violation. We do not find it reasonably probable that, but for the alleged errors made by trial counsel, the outcome would have been different; therefore, Carnill cannot show actual ineffectiveness. Strickland v. Washington, 466 U.S. 668, 693-94 (1984).
8
Carnill's claim that his sentence is illegal is unsupported. The district court imposed a sentence authorized by statute. Therefore, Sec. 2255 relief cannot be granted on this basis. See Baker v. United States 781 F.2d 85, 92 (6th Cir.), cert. denied, 107 S.Ct. 667 (1986) (denying claim that a sentence imposed after defendant pleaded guilty was excessive).
9
Most of the remaining assertions--that the government failed to prove its case, that an application of the antitrust laws renders the conviction invalid, and that the court allowed the jury to decide what was medically necessary--are patently meritless. None can meet the "cause and actual prejudice" standard laid down in Frady.
10
Carnill's last claim is his assertion that the court violated Fed.R.Crim.P. 32(c)(3)(D) by not making a finding that the dollar value of the fraud reflected in the presentence investigation report was accurate or, in the alternative, determining that such a finding would not be necessary for sentencing. Carnill cites United States v. Smedes, No. 86-1702 (6th Cir. September 11, 1987) (unpublished per curiam), for the proposition that the district judge must make either a docket margin notation or a notation in the margin of the presentence report in order to satisfy Rule 32(c)(3)(D).
11
Carnill's argument was dismissed earlier on direct appeal:
12
Finally, the defendants challenged the accuracy of figures contained in the pre-sentence report and requested that an evidentiary hearing be held to determine the amount of money involved in the scheme to defraud. However, the court did not rely upon the information contained in the pre-sentence report but instead relied on evidence produced at trial. Accordingly, there was no need for a separate evidentiary hearing.
13
United States v. Dean, slip op. at 4. A review of the transcript of Carnill's sentencing hearing reveals that Judge Taylor specifically indicated that she was not relying on the disputed facts in the presentence report. The court and defense counsel engaged in this colloquy:
14
THE COURT: The Court just told you its determination. The Court considers that the sum involved--to the extent that this is relevant to the sentence, the sum involved is the amount of each of the checks which is alleged to have been mailed as a result of mail fraud.
15
[DEFENSE COUNSEL]: No matter--
16
THE COURT: I don't know what that totals. But the Court is not considering amounts of money altogether as determinative of the sentence.
17
This finding is sufficient to meet the requirement of Rule 32(c)(3)(D)(i). More significantly, the court clarified that it found the disputed information only marginally relevant and therefore was not taking it into account in sentencing, thereby meeting the requirement of Rule 32(c)(3)(D)(ii).
II
18
The gravamen of Carnill's recusal motion is that Judge Taylor was at all relevant times a trustee of several Detroit-area hospitals that would have reason to be hostile to him. He argues that her affiliations with these medical institutions required her to recuse herself under 28 U.S.C. Secs. 144 and 455.
19
Disqualification of district judges may be required either under 28 U.S.C. Sec. 144, which instructs a party to file "a timely and sufficient affidavit that the judge before whom the matter is pending has a personal bias or prejudice either against him or in favor of any adverse party," or under 28 U.S.C. Sec. 455. Sec. 455(a) requires a judge to "disqualify himself in any proceeding in which his impartiality might reasonably be questioned." Sec. 455(b) states:
20
He shall also disqualify himself in the following circumstances:
21
(1) Where he has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding;
22
* * *
23
* * *
24
(4) He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding;
25
* * *
26
* * *
27
Carnill claims that these statutes required the district judge's recusal. He has submitted Judge Taylor's financial disclosure reports, which indicate that the judge has been or is a trustee of Detroit Receiving Hospital, Sinai Hospital, Metropolitan Hospital, and the Health Alliance Plan. Carnill claims that these medical institutions were in direct competition with his medical group for health care business in the Highland Park community.
28
Carnill contends that Liljeberg v. Health Services Acquisition Corp., 486 U.S. 847 (1988), governs this appeal. He cites Liljeberg for the proposition that a judge who is a trustee of an adversary institution must recuse herself under Sec. 455.
29
Carnill also contends that Judge Taylor had direct or constructive knowledge of the circumstances that disqualified her under the statute, such that a reasonable observer would have questioned her impartiality. His contention is based on two purported facts.2 First, the hospitals of which Judge Taylor is a trustee allegedly receive a large portion of their income from Blue Cross/Blue Shield of Michigan, the primary victim of Carnill's bilking scheme. Second, the hospitals with which Judge Taylor is affiliated employ members of the American Medical Association (AMA). In Wilk v. American Medical Association, 671 F.Supp. 1465 (N.D.Ill.1987), aff'd 895 F.2d 352 (7th Cir.), cert. denied sub nom. Wilk v. Joint Committee on Accreditation of Hospitals, 110 S.Ct. 2621 (1990), the district court held that the AMA violated the antitrust laws by engaging in a conspiracy to boycott chiropractors. Carnill asserts that Wilk established the presumption that all AMA members have a bias against chiropractors like himself, and this bias extends to hospital trustees like Judge Taylor. Carnill claims that he could not receive an impartial hearing from a judge operating under such an obvious conflict of interest.
30
We find that Judge Taylor's trustee relationship with certain hospitals could not have had any impact on her ability to remain impartial. There is no indication in the record that she did not fulfill her judicial responsibilities.
31
Hamilton Clinic is not a competitor of the hospitals. The evidence at trial showed that the Hamilton Clinic was operated solely for the purpose of defrauding Blue Cross, not for providing legitimate patient services.
32
Liljeberg is not controlling. In Liljeberg, the judge was the trustee of a university with a direct interest in the litigation over which the judge was presiding. In Carnill's case, none of the hospitals had an interest in the criminal prosecution sufficient to raise an issue as to Judge Taylor's impartiality.
33
As Carnill has not demonstrated that Judge Taylor harbored any "personal bias or prejudice" or held "any other interest that could be substantially affected by the outcome of the proceedings," the district court properly denied the motion for disqualification under Secs. 144 and 455.
34
For the foregoing reasons, the order of the district court denying Carnill's motions is AFFIRMED.
*
The Honorable William H. Timbers, United States Court of Appeals for the Second Circuit, sitting by designation
1
Judge Taylor presided over Carnill's fraud trial
2
Carnill also claims that the appearance of a conflict of interest arose when a juror was treated during the trial at Sinai Hospital. As Carnill cannot show that the juror even knew of Judge Taylor's affiliation with the hospital, let alone that the juror's participation in the trial worked to Carnill's actual disadvantage, this claim is without merit
| {
"pile_set_name": "FreeLaw"
} |
854 F.2d 147
Lawrence MOON, Plaintiff-Appellant,v.Larry PHILLIPS, et al., Defendants-Appellees.
No. 87-1514.
United States Court of Appeals,Seventh Circuit.
Argued Nov. 30, 1987.Decided March 17, 1988.Rehearing and Rehearing In Banc DeniedMay 4, 1988.
Robert C. Angermeier, Angermeier & Rogers, Milwaukee, Wis., for plaintiff-appellant.
Mel S. Johnson, Asst. U.S. Atty., Patricia A. Gorence, U.S. Atty., Milwaukee, Wis., for defendants-appellees.
Before CUMMINGS, WOOD, Jr., and MANION, Circuit Judges.
HARLINGTON WOOD, Jr., Circuit Judge.
1
This appeal involves a complaint that a former federal employee filed against his supervisors. The district court dismissed the complaint because it failed to state a claim upon which relief could be granted. We affirm.
I. FACTUAL BACKGROUND
2
In November, 1985, plaintiff Lawrence Moon, a former employee of the Internal Revenue Service (IRS) in Milwaukee, Wisconsin, filed a complaint against five of his former IRS supervisors, claiming that they had harassed him and caused him to resign. Moon charged that the defendants violated his first amendment right to freedom of speech, and his fifth amendment right to equal protection of his property interest in his federal employment. Additional counts alleged the intentional infliction of emotional distress, defamation of plaintiff's professional reputation, malfeasance in office by the supervisors in not curtailing the improper actions against him, and a final charge that his supervisors failed to fairly evaluate plaintiff's work performance. Plaintiff alleges that his supervisors' actions caused him to resign his IRS position. Plaintiff seeks actual damages in the amount of $850,000, punitive damages in the amount of $900,000, and attorney's fees and costs.
3
The difficulty between plaintiff and his supervisors allegedly resulted from Moon's refusal to prepare a false report concerning an incident in which an unnamed citizen who had lawfully entered the Federal Building in Milwaukee, Wisconsin was harassed and threatened. Moon claims that the alleged harassment occurred when IRS agents attempted to photograph the citizen. Plaintiff alleges that if he had prepared the report of that incident as requested by his supervisors, it would have subjected him to criminal prosecution for submitting a false statement, in violation of 18 U.S.C. Sec. 1001 (1982). As a result of his refusal to report the incident in the manner his supervisors requested, Moon alleges that he was denied a promotion, his work was more closely monitored, and every minor deficiency noted. Plaintiff alleges that he was isolated from working with his colleagues, and that the supervisor prepared a false or misleading annual performance evaluation showing that Moon was deficient in certain areas of his work. Consequently, plaintiff resigned.
4
On September 10, 1986, the district judge, selecting one of the government's theories for dismissal, allowed the defendants' motion to dismiss for failure to state a cause of action, finding that the constitutional allegations had no legal basis. That finding then left Moon's other allegations without federal jurisdictional foundations. Moon's remedy, the district court suggested, was to pursue his grievances in the administrative forum that Congress provided for federal employees to contest adverse personnel actions. Relying on Bush v. Lucas, 462 U.S. 367, 103 S.Ct. 2404, 76 L.Ed.2d 648 (1983) and Gremillion v. Chivatero, 749 F.2d 276 (5th Cir.1985), the district court held that a judicial remedy was foreclosed.
5
Thereafter, on September 10, 1986, plaintiff filed a short pro forma motion for reconsideration, to which was attached an amended complaint. While that motion was under consideration, Moon filed a notice of appeal. This court remanded the appeal to allow the district court the opportunity to consider Moon's motion for reconsideration. Moon had filed the motion for reconsideration more than ten days after the judgment of dismissal had been entered and the motion was therefore untimely. The district court nevertheless treated it as a timely motion under Fed.R.Civ.P. 60. Plaintiff's motion was devoid of explanation, and lacked any citation of authority. The district court considered the motion no more than an unsupported request for reconsideration to which an amended complaint was attached. The amended complaint was merely a restatement and elaboration of Moon's original allegations. The district court therefore denied the motion for reconsideration. This second appeal followed.
II. ANALYSIS
6
The jurisdiction of the federal court is not clearly set forth in the original complaint, except that the first two counts charge constitutional violations, and one of the appended counts is allegedly based on a particular statute of the state of Wisconsin. The amended complaint adds 42 U.S.C. Sec. 1985 as support for some of the claims, but the amended complaint was only an attachment to Moon's untimely motion and is not the one directly involved in this appeal.
7
The district court considered its jurisdiction in light of Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971), first cited by Moon in his opposition to the defendants' motion to dismiss. The district court took note that under Bivens the Constitution may support a private cause of action for damages against federal officials, but also noted one of the limitations subsequently set forth in Carlson v. Green, 446 U.S. 14, 100 S.Ct. 1468, 64 L.Ed.2d 15 (1980). That limitation, which may defeat a Bivens action, occurs when the "defendants show that Congress has provided an alternative remedy which it explicitly declared to be a substitute for recovery directly under the Constitution and viewed as equally effective." Id. at 18-19, 100 S.Ct. at 1471-72 (emphasis in original).
8
The district court then followed the development of those legal principles in later cases and applied them to the facts of this case. In Bush v. Lucas, 462 U.S. 367, 103 S.Ct. 2404, 76 L.Ed.2d 648 (1983), Bush was an engineer employed by the National Aeronautics and Space Administration who publicly criticized the space flight center. Bush claimed that he was demoted as a result of that criticism. In addition to pursuing an administrative remedy, Bush filed a state court action under the first amendment against the director of the center seeking damages for his retaliatory demotion. That suit was removed to the federal district court. The district court granted summary judgment for the defendant director. The court of appeals affirmed on the basis that Bush had no constitutional cause of action for damages in view of available administrative remedies. The Supreme Court then granted certiorari. Writing for a unanimous Court, Justice Stevens began the analysis with certain assumptions. First, the Court assumed that Bush's first amendment rights had been violated, and that the administrative remedy would not be as effective as a civil suit in fully compensating Bush for the harm he had allegedly suffered. The Court also noted that Congress had neither provided for nor prohibited the judicial remedy Bush sought to pursue. The Court, however, declined to provide a judicial remedy to supplement the elaborate administrative remedial system, leaving the development of any new remedy to Congress.
9
In Gremillion v. Chivatero, 749 F.2d 276 (5th Cir.1985), a case very similar to this one, the court held that a former employee of the IRS had no cause of action against his supervisor for alleged violations of the first and fifth amendment rights caused by his wrongful discharge. Apparently, Gremillion had criticized his supervisors within the office by questioning their authority and the correctness of their actions. He also claimed that his allegedly unlawful discharge from his job amounted to a taking of his property without just compensation in violation of the fifth amendment. Following Bush and its deference to the existing regulatory scheme, the court found that Gremillion's only recourse was his statutory administrative remedies.
10
Other cases have understandably followed the Bush lead in holding that, subject to narrow exceptions, a federal employee cannot file a suit for damages against his supervisor for an unconstitutional adverse personnel action when Congress has provided an adequate administrative remedy. See, e.g., Palermo v. Rorex, 806 F.2d 1266 (5th Cir.), cert. denied --- U.S. ----, 108 S.Ct. 77, 98 L.Ed.2d 40 (1987); Franks v. Nimmo, 796 F.2d 1230 (10th Cir.1986); Ellis v. United States Postal Service, 784 F.2d 835 (7th Cir.1986); Mason v. Pierce, 774 F.2d 825 (7th Cir.1985); Gleason v. Malcom, 718 F.2d 1044 (11th Cir.1983).
11
Moon argues that Bush and Gremillion are distinguishable because those cases only involved criticism of a supervisor's work performance. According to Moon, however, the underlying cause here is his refusal to commit a crime on behalf of his supervisor by preparing what he perceived to be a false report. To support Moon's characterization that he had been asked to perform a criminal act, he relies primarily on the following statement of one of the supervisors, which he set forth in his amended complaint:
12
I don't care to count the times within the past six months or so, I thought you were being contrary or uncooperative. The arrest-escort [incident] in May was a prime example. I asked you to write the memo describing the event and you, in effect, refused, citing some nebulous reference to an arrest. Even after reciting the law of arrest to you, you demurred.
13
Moon correctly asks this court to presume the truth of the allegations in his complaint, along with reasonable inferences flowing from those allegations, viewing them in the light most favorable to Moon. Ellsworth v. City of Racine, 774 F.2d 182, 184 (7th Cir.1985), cert. denied, 475 U.S. 1047, 106 S.Ct. 1265, 89 L.Ed.2d 574 (1986); Doe ex rel. Doe v. St. Joseph's Hospital, 788 F.2d 411, 414 (7th Cir.1986). Nevertheless, we fail to find any factual support or confirmation in that statement for Moon's characterization that his supervisors endeavored to persuade him to commit a criminal act in their behalf and then retaliated when he would not. At most, it evidences disagreements between an employee and his supervisor in the course of their employment.1
14
Moon, relying upon Carlson and Bivens, seeks to bypass Bush on the basis that Congress has not explicitly declared the available administrative remedy to be a substitute for a judicial remedy. Bivens was not a case between a federal employee and his supervisor, but involved a citizen suing federal employees. Therefore, unlike the present case, the Bivens plaintiff had no available administrative remedy. The Carlson Court did suggest that to foreclose a Bivens action, Congress must explicitly close the judicial door. Bush, however, lessens the impact of the Carlson language, although Bush does permit some leeway for an employee's possible cause of action against a supervisor in very limited circumstances. For example, "certain actions by supervisors against federal employees, such as wiretapping, warrantless searches, or uncompensated takings, would not be defined as 'personnel actions' within the statutory scheme." Bush, 462 U.S. at 385 n. 28, 103 S.Ct. at 2415 n. 28. Even viewed in the light most favorable to Moon, the conduct of Moon's supervisors in directing him to file a false or misleading report does not fall within the general nature of the criminal and outrageous conduct exceptions set out in Bush to justify a judicial, rather than an administrative, remedy.
15
Moon also cites Bishop v. Tice, 622 F.2d 349 (8th Cir.1980); Sonntag v. Dooley, 650 F.2d 904 (7th Cir.1981); Egger v. Phillips, 710 F.2d 292 (7th Cir.), cert. denied, 464 U.S. 918, 104 S.Ct. 284, 78 L.Ed.2d 262 (1983); and Williams v. IRS, 745 F.2d 702 (D.C.Cir.1984). We shall examine those cases briefly.
16
In Bishop, a pre-Bush case, a former federal employee sued other employees, charging that the defendants, in violation of his constitutional right to due process, had coerced him into resigning from his position by threatening to bring false criminal charges against him. The Eighth Circuit, anticipating Bush to some extent, held that a Bivens-type action generally would not be permitted when an adequate administrative remedy is available. Nevertheless, the court permitted Bishop to maintain his action because of his particular circumstances. Bishop had alleged that the defendants had interfered with and blocked his access to the civil service remedy, thereby denying him due process. Moon does not make a similar claim, and only argues that the administrative remedy providing for reinstatement and back pay is not as satisfactory to him as would be the monetary damages in excess of a million dollars he seeks through the judicial process.
17
In Sonntag, another pre-Bush decision,2 this court implied a Bivens remedy for a former civil service employee, noting among other things that there was no explicit alternative administrative remedy equally as effective as the implied judicial remedy. The Bush Court, however, declined to create a judicial remedy even in the absence of congressional approval or disapproval of an exclusive remedy, since Congress is better suited to fashion any new remedy. The Court in Bush also recognized that administrative remedies may not be considered as effective and may not compensate the former employee as fully as a judicial remedy could. 462 U.S. at 372-73, 103 S.Ct. at 2408-09. Those factors alone, however, do not permit a court to devise new remedies for federal employees.
18
Egger, another decision from this circuit, considered a Bivens-type suit brought by a former FBI agent. Egger charged that his former supervisors violated his constitutional rights by transferring and subsequently discharging Egger in retaliation for his efforts to expose alleged corruption among FBI personnel. This court permitted his private damage action. The Egger decision, like Sonntag, did not have the benefit of the second and final Supreme Court Bush decision. At the time of Egger, the Fifth Circuit, on remand, had maintained its original position that the plaintiff had not stated a cause of action. The Egger court considered that second decision of the Fifth Circuit to be of "questionable viability, at best," noting that the Supreme Court had granted certiorari for the second time. 710 F.2d at 298 n. 5. As it turned out, however, the Fifth Circuit decision had more validity than this court gave it credit. Nevertheless, Egger is factually distinguishable from the present case because FBI agents are exempt from civil service protection, see 28 U.S.C. Sec. 536 (1982), and thus Egger, unlike Moon, had no alternative administrative remedy.
19
In Williams, the plaintiff, an attorney employed by the IRS, sought judicial relief for his five-day suspension by the IRS which the agent alleged was in violation of his constitutional procedural rights. The court permitted his suit against the agency. The Williams court found that Williams, unlike the plaintiff in Bush, had no access to an administrative adjudication or judicial review because he was an excepted employee. Williams sought no damages, only declaratory and injunctive relief. Williams does not aid Moon's cause since Moon, a covered employee, has available the administrative remedies that Williams did not.
20
Moon's applicable administrative remedy is through the Merit Systems Protection Board, to which Congress granted broad jurisdiction to resolve all contested federal personnel matters. See 5 U.S.C. Secs. 1205, 1208, 5596 (1982). Moon cited cases in which a court of appeals allowed the plaintiff to maintain a Bivens action because the alleged constitutional deprivation was not an adverse personnel action that could be redressed through the Board. Schowengerdt v. General Dynamics Corp., 823 F.2d 1328 (9th Cir.1987); McIntosh v. Weinberger, 810 F.2d 1411 (8th Cir.1987). The scope of the Board's authority, however, does include forced resignations. Covington v. Department of Health & Human Services, 750 F.2d 937 (Fed.Cir.1984); Scharf v. Department of the Air Force, 710 F.2d 1572 (Fed.Cir.1983). As the Gremillion court found, the Board's broad jurisdiction includes an IRS employee, similar to Moon, who can avail himself of his administrative remedy. The administrative decision is judicially reviewable in the United States Court of Appeals in the circuit where the employee resides or is employed. 5 U.S.C. Sec. 7703(a)(1) (1982).3
21
Viewing the particular facts of this case in the context of this brief review of case law, we find no reason for this court to attempt to fashion for Moon a judicial damage remedy. He must be left to his administrative remedies as others in this circuit have been before him. See Ellis v. United States Postal Service, 784 F.2d 835 (7th Cir.1986); Cameron v. IRS, 773 F.2d 126 (7th Cir.1985). Moon would fare no better in other circuits. See Palermo v. Rorex, 806 F.2d 1266 (5th Cir.), cert. denied, --- U.S. ----, 108 S.Ct. 77, 98 L.Ed.2d 40 (1987); Franks v. Nimmo, 796 F.2d 1230 (10th Cir.1986); Gleason v. Malcom, 718 F.2d 1044 (11th Cir.1983).
22
The various constitutional violations of the first and fifth amendments that Moon alleged, supplemented by state and common law charges, do not allow him to bypass the administrative remedies Congress has provided for government employees. Gleason, 718 F.2d at 1048.
23
Nor did the trial court abuse its discretion in denying plaintiff's pro forma motion for reconsideration, timely or untimely, because plaintiff's attached amended complaint did not cure the defects that caused the dismissal of his original complaint. The amended complaint remained a complaint challenging a federal personnel grievance, which must originally be resolved at the administrative level. The district court did not abuse its discretion in these circumstances. Simons v. Gorsuch, 715 F.2d 1248, 1253 (7th Cir.1983).
24
As the district court held, Moon failed to state a claim upon which relief could be granted. We therefore need not consider whether Moon's complaint adequately alleged a constitutional deprivation, or whether the defendants would be shielded by the defense of qualified immunity.
25
AFFIRMED.
1
Apparently the so-called "victim" of the federal employees' alleged unlawful conduct took no offense at whatever occurred
2
In Sonntag, however, this court noted Bush v. Lucas, 598 F.2d 958 (5th Cir.1979). At that time, the judgment had been vacated by the Supreme Court and remanded for reconsideration in light of the Court's intervening decision in Carlson v. Green, 446 U.S. 14, 100 S.Ct. 1468, 64 L.Ed.2d 15 (1980). A week after the Sonntag decision, the Fifth Circuit rendered its decision, thereafter affirmed by the Supreme Court. 647 F.2d 573 (5th Cir.1981), aff'd, 462 U.S. 367, 103 S.Ct. 2404, 76 L.Ed.2d 648 (1983)
3
5 U.S.C. Sec. 7703(a)(1) provides:
Any employee or applicant for employment adversely affected or aggrieved by a final order or decision of the Merit Systems Protection Board may obtain judicial review of the order or decision.
Other sections detail the review procedure.
| {
"pile_set_name": "FreeLaw"
} |
CESAR SANCHEZ
v.
UNITED STATES
No. 08-5195
Supreme Court of United States.
October 6, 2008.
The petition for a writ of certiorari is denied.
| {
"pile_set_name": "FreeLaw"
} |
536 P.2d 1112 (1975)
96 Idaho 762
Mary M. COMPTON, Plaintiff-Appellant,
v.
Larry SIMS, Personal Representative of the Estate of Dennis Merle Markham, Deceased, et al., Defendant-Respondents.
No. 11683.
Supreme Court of Idaho.
June 13, 1975.
Thomas A. Mitchell, Coeur d'Alene, for plaintiff-appellant.
Paul D. McCabe, Coeur d'Alene, Brian B. Kennedy of Turner, Stoeve, Gagliardi & Kennedy, Spokane, Wash., for defendant-respondents.
PER CURIAM:
This is an appeal from a summary judgment in favor of defendant-respondent State Farm Mutual Insurance Company. The sole issue presented is whether the deceased son of plaintiff-appellant Mary M. Compton, a resident of Arlington, Texas, was "a relative of the named insured who is a resident of the same household" as set forth in the insurance policy.
Appellant was an insured under an automobile insurance policy issued by respondent State Farm Mutual. The policy provided for uninsured motorist coverage to a relative of the insured who was a resident of the same household. Gordon Persky, a 27 year old son of appellant Compton, was killed when the car in which he was a passenger was struck by an automobile driven by an uninsured motorist in Idaho. Appellant Compton seeks recovery for the death of her son under the provisions of the uninsured motorist clause contained in her policy with State Farm Mutual.
The trial court granted summary judgment in favor of the insurance carrier on the basis that Gordon Persky was not a resident of the same household as the insured. We agree and affirm.
The facts, which are clear and undisputed, indicate that while Persky may have had a legal domicile at the home of his mother, he nevertheless was not a resident of the same household within the purview of the language of the insurance policy. At the time of his death, Persky was 27 years old, had completed college and had served three and one-half years in the armed services at various stations throughout the world. When he died, he was stationed at Spokane, Washington. He owned his own automobile, which was insured with a company other than State *1113 Farm, which policy was in effect at the time of his death.
Under the facts before the trial court at the time of summary judgment, it was correctly concluded that Persky was not a resident of the same household as the insureds under the State Farm Mutual insurance policy. Schehen v. North-West Insurance Company, 484 P.2d 836 (Or. 1971).
Affirmed. Costs to respondents.
| {
"pile_set_name": "FreeLaw"
} |
State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: May 19, 2016 106678
________________________________
THE PEOPLE OF THE STATE OF
NEW YORK,
Respondent,
v MEMORANDUM AND ORDER
STEVEN R. SHANNON,
Appellant.
________________________________
Calendar Date: April 19, 2016
Before: Peters, P.J., Garry, Rose, Clark and Aarons, JJ.
__________
Hinman, Howard & Kattell, LLP, East Greenbush (Linda B.
Johnson of counsel), for appellant.
Weeden A. Wetmore, District Attorney, Elmira (Sophie J.
Marmor of counsel), for respondent.
__________
Aarons, J.
Appeal from a judgment of the County Court of Chemung
County (Hayden, J.), rendered January 13, 2014, convicting
defendant upon his plea of guilty of the crime of identity theft
in the second degree.
In satisfaction of a four-count indictment, defendant
pleaded guilty to identity theft in the second degree stemming
from his fraudulent use of department store credit accounts to
purchase multiple gift cards. He was sentenced as a second
felony offender in accordance with the terms of the plea
agreement to a prison term of 1½ to 3 years and ordered to pay
restitution in the amount of $2,310. Defendant now appeals.
-2- 106678
Defendant's challenge to the restitution imposed is not
preserved for our review as there was no objection to the amount
of restitution or a request for a restitution hearing at the time
of sentencing (see People v Williams, 123 AD3d 1374, 1375 [2014],
lv denied 25 NY3d 954 [2015]; People v Sparbanie, 110 AD3d 1119,
1120 [2013], lv denied 22 NY3d 1203 [2014]). Moreover, there is
sufficient evidence in the record to support County Court's
imposition of the restitution amount requested (see Penal Law §
60.27 [2]; People v Sparbanie, 110 AD3d at 1120; People v Heier,
73 AD3d 1392, 1393 [2010], lv denied 15 NY3d 805 [2010]). To the
extent that defendant contends that he was deprived of the
effective assistance of counsel due to counsel's failure to
request a restitution hearing, we find it to be without merit
(see People v Faranda, 86 AD3d 862, 863 [2011], lv denied 17 NY3d
903 [2011]).
Peters, P.J., Garry, Rose and Clark, JJ., concur.
ORDERED that the judgment is affirmed.
ENTER:
Robert D. Mayberger
Clerk of the Court
| {
"pile_set_name": "FreeLaw"
} |
361 S.W.2d 221 (1962)
Nell C. CUTLER, Appellant,
v.
GULF STATES UTILITIES COMPANY, Appellee.
No. 6397.
Court of Civil Appeals of Texas, Beaumont.
October 4, 1962.
Rehearing Denied October 31, 1962.
Barnes & Barnes, Beaumont, for appellant.
Orgain, Bell & Tucker, Beaumont, for appellee.
HIGHTOWER, Chief Justice.
This is a wrongful death action brought under the authority of Article 16, sec. 26, of the Constitution of the State of Texas, Vernon's Ann.St. providing for recovery of exemplary damages by the surviving widow and heirs where death is the result of the *222 gross negligence on the part of the party charged. The action was brought by Nell C. Cutler, as guardian of her minor daughter, and as surviving wife of James O. Cutler, against Gulf States Utilities Company as a result of the accidental death of her husband while he was employed by said company. Trial, before a jury, resulted in a judgment based upon an instructed verdict in favor of the defendant, from which judgment plaintiff has appealed.
On the day of the accident, September 2, 1954, J. W. Kirkland and G. H. Oglesbee, as vice-principals of appellee, dispatched James O. Cutler, the deceased, two subforemen, J. L. Childress and J. B. Morrison, together with four other employees, to replace a broken insulator on a high voltage power line in the near vicinity of one of appellee's power plants in Jefferson County. (The exact juxtaposition of the workmen to each other and the measurements between and/of various objects connected with the job hereinafter referred to are not entirely specific when the testimony of the several witnesses are compared as a whole; therefore, positions and measurements referred to herein are the averages of such testimony). Upon reaching the location of the broken insulator Childress, Morrison and Cutler proceeded up a ladder to a steel structure located about 25 feet from the ground. The power line in question, carrying 138,000 volts of electricity, running east and west at about the same height from the ground as the steel structure, ran parallel to said structure 5 or 6 feet to the north. This power line was attached to the east and west sides of the broken insulator in such manner that the current flowing through the line from the west could not proceed through the insulator to the line connected to the same from the east without the aid of a "jumper". This "jumper" consisted of a 47-strand copper wire 6 or 8 feet in length, one end of which was attached to the power line east of the insulator with the other end being attached to the power line on the western side thereof. Each end of this "jumper" was attached to the power line by means of a clamp known as a "hot-clamp". On the same power line approximately 10 feet to the west of the broken insulator was a "wave trap". The flow of electricity through this "wave trap" was likewise circumvented by means of a "jumper" attached on either side of it by "hot-clamps". As a part of the procedure in removing the broken insulator, the workmen first attached and insulated block and tackle to the power line in such manner as to take up slack in the same, thereby removing strain from either side of the insulator. As the work progressed, one end of the "jumper" circumventing the "wave trap" in the power line suddenly, and without warning, came loose from the "hot-clamp" in which it was attached with the result that a great electrical flash, or arc, was created. The testimony reflects that this flash was of such dimensions as to have encompassed Cutler, who was working 8 to 10 feet from the "wave trap". Simultaneously with the electrical flash, Cutler, who had only moments before, detached a safety belt he was wearing, fell to his death from the steel structure to the ground. It was stipulated in the record that his death was the result of his fall. The substance of the acts and omissions constituting gross negligence pleaded by appellant against appellee, to which we give consideration may be grouped as follows:
(1) In failing to cut off the electric current of the power line before proceeding with the repairs; (2) in failing to provide a reasonably safe place to work; (3) in making use of the "jumper" and "hotclamp" in question when each was defective and inadequate; (4) in failing to provide adequate safety rules and regulations for the performance of such dangerous work; (5) in permitting the use of the "jumper" and "hot-clamp" in question which were loose; (6) in failing to make reasonable inspection of them prior to proceeding with the work; (7) in failing to provide a competent supervisor to inspect the work; (8) in failing to provide proper tools with which to do the work; (9) in failing to warn *223 Cutler of the dangers of the high voltage line.
We do not consider it necessary to state each of appellant's first 13 points of error complaining of the trial court's action. It suffices to say that, in substance, they are to the effect that the specific acts and omissions charged against appellee, either separately or considered as a whole, were supported by probative evidence which established that the same constituted gross negligence on the part of appellee, and that the trial court erred in ruling to the contrary.
The Supreme Court of Texas in Bennett v. Howard, 141 Tex. 101, 170 S.W. 2d 709 (1943), declared that the definition of "gross negligence" given in Missouri Pacific Railway Co. v. Shuford, 72 Tex. 165, 10 S.W. 408 (1888), was the proper definition and that any definition to the contrary was thereby overruled. On page 411, of 10 S.W., of the Shuford case, gross negligence is defined as follows:
"Gross negligence, to be the ground for exemplary damages, should be that entire want of care which would raise the belief that the act or omission complained of was the result of conscious indifference to the right or welfare of the person or persons to be affected by it."
The courts of Texas have stressed the word "conscious" as did the Supreme Court in the Bennett case. Later cases have cited with approval this same definition. Langston v. Tex-O-Kan Flour Mills Co., 211 S. W.2d 1020 (Tex.Civ.App.1948); Wooley v. Southwestern Portland Cement Co., 272 F. 2d 906 (Fifth Cir.1959); Nichols v. Texas Electric Service Co., 206 S.W.2d 860 (Tex. Civ.App.1947, n. r. e.); J. S. Abercrombie Co. v. Scott, 267 S.W.2d 206 (Tex.Civ.App. 1954, n. r. e.); Union Transports, Inc. v. Braun, 318 S.W.2d 927 (Tex.Civ.App.1958). Mere indifference is not enough to constitute gross negligence. There must be conscious indifference. Helms v. Universal Atlas Cement Co., 202 F.2d 421 (5th Cir., 1953) cert. denied; 346 U.S. 858, 74 S.Ct. 74, 98 L.Ed. 372; Rio Grande Valley Telephone Co. v. Hocut, 93 S.W.2d 167 (Tex. Civ.App.1936); Texas Pacific Coal & Oil Co. v. Robertson, 125 Tex. 4, 79 S.W.2d 830 (1935).
Circumstances compelled the appellant to rely almost entirely upon testimony of appellee's employees, the names and positions of which are first set out hereinabove. The only other witness for appellant was one Paul D. Fontenot who had departed appellee's employment prior to date of trial, but who was a member of the work crew on the day of the accident. The record is replete with testimony of these witnesses and there is no evidence or testimony to the contrary that all of the lead men in the work crew, including Cutler, were well versed and experienced in the type of work they were performing; that all knew that the power line in question was charged with 138,000 volts of electricity. It was quite customary in the business to do repair work upon these high voltage lines while they were "hot" or charged with electricity. The lead men, including Cutler, had all performed similar work under the same circumstances. The "jumper" and "hot clamps" were the type customarily used in the business and they were not shown to be inadequate or defective prior to the accident. The evidence established that a reasonable inspection of these instruments just prior to the accident failed to disclose that they were loose or improperly secured together to the power line. It was also established that had the "hot clamps" and "jumper" been improperly fastened to the power line that the current of electricity would not have been flowing through said line as it had been doing immediately prior to the time the "jumper" in question came loose. The only evidence as to why the "jumper" did come loose was to the effect that the block and tackle assembly hereinabove mentioned, which was being used to take the slack up on either side of the broken insulator, caused a strain upon the power *224 line, shaking it and thereby causing the "jumper" to come loose. There was no allegation or proof that this manner of taking up the slack was negligence. The two foremen supervising the job were only a few feet away from Cutler at the time of the accident. They were in good position to assist and supervise Cutler in the work being performed and they were proved to be competent men of long experience in the work in which they were engaged. The tools and equipment with which the work was being performed were all shown to be of the proper and customary type used in the performance of the work in question. It would take several more pages to even state the substance of the wealth of testimony in the record which refutes the allegations of gross negligence contained in appellant's petition and it would serve no useful purpose. The record is simply devoid of any proof to sustain any allegations of gross negligence; therefore, appellant's first 13 points of error are overruled. Bennett v. Howard, supra.
By reason of our foregoing conclusion concerning appellant's first thirteen points of error, we pretermit a discussion of her fourteenth point. Said point complains of the action of the trial court in striking from her first amended original petition the eighth paragraph thereof which alleged the pain and suffering of the deceased as a basis for determination of exemplary damages.
By her last point of error (fifteen) appellant complains of the action of the trial court in overruling her motion that appellee be caused to produce the jumper and clamp giving rise to the arc-flash explosion, together with photographs taken by appellee of the place where the deceased was working at the time of his fall.
The accident occurred September 2, 1954. The motion was not filed until March, 1960. In answer to the "motion to produce" appellee filed its sworn reply to the effect that the jumper and clamp had long been disposed of and had not been in its possession for many years; that the photographs were privileged, having been made by appellee's agents in connection with an investigation of the circumstances surrounding the accident. The court's order denying appellant's motion was upon the same grounds alleged by appellee.
For a thing or document to be subject to discovery it must be in the custody, control or possession of a party to the suit. 3 McDonald, p. 840. In deciding whether or not to order discovery or production, the trial court has a wide discretion and his action will not be reversed unless an abuse of such discretion is shown. 15-A Tex.Jur. (REV.), p. 301. Appellant having failed to raise the issue of abuse of discretion here in regard to any of the things sought to be produced, her last point of error is overruled.
A determination of appellee's counter-points invoking the doctrine of assumed risk, contributory negligence and unavoidable accident is not deemed necessary.
Judgment affirmed.
| {
"pile_set_name": "FreeLaw"
} |
355 So.2d 335 (1978)
Bettye M. BELL and Willie James Bell
v.
The TRAVELERS INDEMNITY COMPANY OF AMERICA et al.
SC 2506.
Supreme Court of Alabama.
January 27, 1978.
*336 Alfred W. Goldthwaite, Montgomery, for appellants.
James T. Upchurch, III, Montgomery, for appellee, The Travelers Indem. Co. of America.
SHORES, Justice.
The Bells, who are husband and wife, filed an action against Travelers and E. C. Dothard, Director of Public Safety for the State of Alabama, seeking a declaration that the action of Travelers in removing Willie Bell, the husband, as a driver under a liability policy covering an automobile belonging to the wife, was void. The trial court upheld the exclusion of the husband and the Bells appealed.
Prior to February, 1975, the Bells were covered by liability insurance with Travelers under a policy made available by Travelers to members of the Alabama Education Association (AEA). Mrs. Bell was a member of AEA, being a public school teacher in Montgomery County.
When this policy came up for renewal, Travelers advised Mrs. Bell that it would not renew the policy unless she first agreed to the removal of her husband as a driver under the policy due to his driving record. The husband had been convicted twice of speeding and once for reckless driving in the two years next preceding the renewal date of the Travelers' policy.
The wife agreed to the husband's being removed as a driver under the policy covering her automobile.
Thereafter, while driving the automobile owned by his wife, Mr. Bell was involved in an automobile accident which resulted in injuries to the occupants of the automobile with which he collided.
On appeal, the Bells contend that the exclusion from coverage of the husband is void as against public policy because insurance companies:
". . . can not avoid their responsibilities by writing a policy for a wife and excluding the husband, a licensed driver, when they know, or have reason to know, that during the term of the policy the husband will very probably sooner or later, at one time or another, operate that vehicle. . . ."
The Bells argue that Travelers should not be permitted to exclude a spouse from a policy covering the other automobile so long as the spouse sought to be excluded holds a valid driver's license. Such exclusion, they say, violates public policy in that it creates marital discord. They also argue that the exclusion violates the Constitution of the State of Alabama.
We are not persuaded by either argument. The exclusion is clear and unambiguous and was agreed to by Mrs. Bell. This insurance company, like others, has a right, absent statutory provisions to the contrary, to impose whatever conditions it wishes on its obligations, so long as such conditions do not offend public policy. Northam v. Metropolitan Life Insurance Co., 231 Ala. 105, 163 So. 635 (1935); 29 Am.Jur.Insurance § 264. We find nothing violative of the Constitution or to the public policy of this state in the provision excluding the insured's spouse from coverage in *337 the policy before us. The judgment appealed from is, therefore, affirmed.
AFFIRMED.
TORBERT, C. J., and MADDOX, JONES and BEATTY, JJ., concur.
| {
"pile_set_name": "FreeLaw"
} |
794 So.2d 958 (2001)
Evelyn M. TATUM, Plaintiff-Appellee,
v.
ST. PATRICK'S PSYCHIATRIC HOSPITAL, Defendant-Appellant.
No. 34,957-WCA.
Court of Appeal of Louisiana, Second Circuit.
August 22, 2001.
*959 Collins C. Rossi, Richard C. Ely, Jr., Counsel for Appellant.
Street & Street, by D. Randolph Street, Counsel for Appellee.
Before WILLIAMS, GASKINS and CARAWAY, JJ.
GASKINS, Judge.
St. Patrick's Psychiatric Hospital appeals from a judgment of the Office of *960 Workers' Compensation (OWC) awarding claimant Evelyn M. Tatum $9,000 in attorney fees due to the hospital's failure to pay a compensation judgment within 30 days after payment was due. Ms. Tatum answers the appeal seeking an increase in attorney fees for defending this appeal. For the following reasons, we amend and affirm the judgment below.
FACTS
On December 23, 1996, Ms. Tatuma mental health technician and phlebotomist at St. Patrick's Psychiatric Hospitalwas physically attacked by a patient. The attack caused substantial bodily injury to Ms. Tatum, and she brought a workers' compensation claim against the hospital seeking payment for medical expenses. After a hearing, the OWC judge found in Ms. Tatum's favor and ordered the hospital to pay for medical treatment and mileage. This court affirmed the decision of the OWC on appeal. Tatum v. St. Patrick's Psychiatric Hospital, 32,616 (La. App.2d Cir.12/30/99), 748 So.2d 1276, writ denied, XXXX-XXXX (La.3/24/00), 758 So.2d 157.
On March 27, 2000, Ms. Tatum's attorney wrote a letter to the hospital's attorney stating that the judgment in Ms. Tatum's favor was final and asking that the hospital's adjuster contact Ms. Tatum's doctors and authorize the recommended treatment. He also requested immediate payment of the mileage award. On April 5, 2000, Ms. Tatum's attorney wrote the hospital's attorney again, proposing a settlement but asking that the hospital act swiftly because Ms. Tatum would be seeking statutory penalties if the judgment were not timely satisfied. The hospital's attorney responded with a request that Ms. Tatum provide certain information. On May 1, 2000, Ms. Tatum's attorney replied with a letter indicating that the information had already been provided and that the appropriate persons already had "all the information one could possibly need" and again asking that the adjuster contact the healthcare providers to authorize treatment. On June 8, 2000, the case manager for Ms. Tatum's claim wrote Ms. Tatum's attorney and noted that it had made appointments with three of her doctors and had an appointment pending with a fourth doctor.
On June 12, 2000, Ms. Tatum filed with the OWC a motion seeking penalties against the hospital for its failure to pay the judgment. The motion alleged that the hospital "still has not paid the judgment, nor authorized any of the medical treatment awarded therein, as of the date of this Motion." The motion sought statutory penalties and attorney fees. On June 15, 2000, Ms. Tatum's attorney wrote the hospital's attorney a fourth letter asking specifically for approval of treatment recommended by Ms. Tatum's orthopedic surgeon.
The hospital responded to Ms. Tatum's motion for penalties with various procedural objections and substantively asserted that the hospital "has not been contacted by any of the five physicians listed in this Court's Order to approve treatment nor has the [hospital] denied [c]laimant authorization to see any of those five physicians." The hospital further asserted that its medical case manager learned that the claimant had not seen any of the five doctors in question since before the trial.
The matter came before the OWC for hearing on July 17, 2000. Ms. Tatum said that the hospital had not yet reimbursed her for mileage she incurred while visiting her treating physicians; the pertinent exhibit shows that she traveled a total of 3,404 miles visiting various doctors. She also said that she had not yet received the medical treatment that was previously ordered *961 by the OWC. However, there was no testimony from Ms. Tatum's attorney concerning the amount of time spent pursuing her effort for approval of treatment by the hospital. The worker's compensation judge (WCJ) decided that the hospital had not timely paid the judgment and assessed a penalty of $3,000 against the hospital and cast the hospital with $9,000 for Ms. Tatum's attorney fees. The WCJ subsequently signed a judgment to that effect, and the hospital brought a suspensive appeal. Ms. Tatum answered the appeal, seeking an additional award of attorney fees of $1,000 for work performed on appeal.
DISCUSSION
The hospital has not argued on appeal that the OWC erred in finding that it failed timely to satisfy the judgment. Instead, the hospital's only assignment of error concerns the amount of the attorney fee award. The hospital urges that the $9,000 award is excessive and unreasonable.
La. R.S. 23:1201(G) provides, in pertinent part:
If any award payable under the terms of a final, nonappealable judgment is not paid within thirty days after it becomes due, there shall be added to such award an amount equal to twenty-four percent thereof or one hundred dollars per day together with reasonable attorney fees, for each calendar day after thirty days it remains unpaid, whichever is greater, which shall be paid at the same time as, and in addition to, such award, unless such nonpayment results from conditions over which the employer had no control. [Emphasis added]
A WCJ has great discretion in the award of attorney fees and penalties, and a decision concerning the award of attorney fees will not be disturbed absent an abuse of discretion. Ward v. Phoenix Operating Company, 31,656 (La.App.2d Cir.2/24/99), 729 So.2d 109. The award of attorney fees is a type of penalty in workers' compensation matters. However, the penalty for the behavior is the imposition of the attorney fee, rather than the amount of the attorney fee. The amount of the fee must be assessed in accordance with law, i.e., the fee must be reasonable. Ward, supra; Langley v. Petro Star Corp. of La., XXXX-XXXX (La.6/29/01), 2001 WL 754813. The degree of bad faith exhibited by the employer is not an appropriate factor in determining the amount of attorney fees to be awarded under La. R.S. 23:1201(G). Langley, supra. The factors to be considered in the imposition of the attorney fee in workers' compensation cases include the degree of skill and ability exercised by the attorney, the amount of the claim, the amount recovered for the claimant, and the amount of time the attorney devoted to the case. Ward, supra; Langley, supra. There is no requirement that the trial court hear evidence concerning the time spent or the hourly rates charged to make an award of attorney fees since the record will reflect much of the services rendered. Bagwell v. Bagwell, 29,756 (La.App.2d Cir.8/20/97), 698 So.2d 746.
Although this court has not addressed the propriety of an award of attorney fees under section G of the statute (which applies to postjudgment awards), we have addressed similar awards under section F (which addresses prejudgment awards). In Harvey v. B E & K Construction, 33, 475 (La.App.2d Cir.10/4/00), 770 So.2d 819 (on rehearing), this court affirmed under section F a $6,000 award of attorney fees for the claimant's attorney who recovered $24,690 in supplemental earnings benefits for the claimant and "who had to prepare and file a petition, prepare for and attend mediation, answer unnecessary discovery, *962 prepare for trial and try the case." In Ward, supra, this court reduced a $4,000 award to $2,500:
The record reflects that there was no motion practice undertaken, little discovery and no depositions taken. There was a brief trial in which Ward's counsel put on no witnesses and entered only two exhibits.
Under La. R.S. 23:1201(G), we consider only the attorney's effort in seeking to enforce the final judgment, not efforts leading up to that judgment as those costs are covered by section F of the statute. Nevertheless, we consider the amount of the judgment relevant for the determination. In this case the record reflects that counsel sought to enforce a judgment that would allow Ms. Tatum to undergo at least two surgical procedures and be treated by several physicians. Although the value of this treatment is not set forth in the record, we do not assume that it is de minimis. Additionally, the plaintiff was seeking payment for 3,404 miles traveled for medical treatment. The record further reflects that counsel wrote four letters to the hospital's attorney in the effort to have the hospital approve the treatment as ordered by the OWC. The attorney's motion culminated in a brief hearing where 11 exhibits were introduced.
Although the record suggests that Ms. Tatum's attorney performed more work than did the attorney in Ward, supra, we believe that the WCJ was clearly wrong in awarding $9,000 in attorney fees. The record does not reflect extensive labor by Ms. Tatum's attorney in conjunction with the enforcement of the judgment once it became final, the proper inquiry under La. R.S. 23:1201(G). We accordingly amend the award to $3,500, the most the WCJ could have awarded for the work performed postjudgment by the plaintiff's counsel.
CONCLUSION
The judgment of the trial court is amended to reduce the claimant's attorney fees from $9,000 to $3,500. In all other respects, the judgment is affirmed. Costs are assessed equally to both parties.
AMENDED AND, AS AMENDED, AFFIRMED.
CARAWAY, J., concurs.
| {
"pile_set_name": "FreeLaw"
} |
354 F.2d 358
Raymond J. HANIFANv.The UNITED STATES.
No. 92-63.
United States Court of Claims.
December 17, 1965.
John I. Heise, Jr., Washington, D. C., attorney of record, for plaintiff. Leonard J. Meiselman, New York City, of counsel.
Edwin J. Reis, Washington, D. C., with whom was Asst. Atty. Gen. John W. Douglas, for defendant.
Before COWEN, Chief Judge, and LARAMORE, DURFEE, DAVIS and COLLINS, Judges.
PER CURIAM.*
1
Plaintiff, a veterans' preference eligible, was removed on charges in 1959 from his position as a special agent in the Internal Revenue Service. The Civil Service Commission, after a hearing under Section 14 of the Veterans' Preference Act, 58 Stat. 387, 390, as amended, 5 U.S.C. § 863, sustained the removal.
2
The case is before the court on cross-motions for summary judgment.1 Plaintiff's principal contention in this court is that he was deprived of a procedural right, at the Civil Service Commission hearing, by the refusal of the Internal Revenue Service to produce certain of its employees to testify.
3
The facts pertinent to this issue are as follows: By letter of November 28, 1958, signed by James A. O'Hara, District Director, plaintiff was charged in four detailed specifications by the Internal Revenue Service with inefficiency, and given notice of proposed removal from the Service. After exchanges of correspondence which included a categorical denial by plaintiff of the charge, the Service found that the charge was supported by substantial evidence, was sustained, and warranted his removal which was effected on January 9, 1959.
4
Plaintiff filed a timely appeal to the Civil Service Commission on the ground that the charges which were made against him were without merit and on the ground that the notice of charges was not substantially sufficient and in detail so as to comply with the intent and purpose of the Veterans' Preference Act. In an affidavit, dated January 14, 1959, plaintiff requested the Commission to obtain from the Internal Revenue Service, in connection with the appeal, numerous and voluminous records which he specified. He also alleged that the charges against him were motivated by political prejudice and requested that a hearing be granted, to take place in New York City, "at which time appellant [plaintiff] and counsel will be present, together with such witnesses as appellant will request in his final affidavit." Thereafter, the District Director of the Internal Revenue Service, Albany, New York District (in which plaintiff had been employed), transmitted to the Commission the requested material, but with certain deletions and omissions, and an extensive affidavit, dated October 6, 1960, commenting on various details of the removal action.
5
By affidavit dated November 15, 1960, plaintiff protested to the Commission that certain of the requested material had not been received, requested that additional material be obtained from the Service, and requested that the Service produce at the hearing as witnesses the Albany District Director, James O'Hara, who had signed the notice of proposed removal of plaintiff, and the Chief of the Intelligence Division, John Mullen, plaintiff's former supervisor, against whom plaintiff had at one time instituted a grievance proceeding.
6
In response to plaintiff's affidavit dated November 15, 1960, Mr. O'Hara submitted additional information by letter dated December 29, 1960. It can properly be assumed that Mr. O'Hara was cognizant of the request in plaintiff's affidavit of November 15, 1960, that he (Mr. O'Hara) and Mr. Mullen be produced by the Service at the hearing as witnesses.
7
On January 12, 1961, the Commission set the date of February 14, 1961, for the hearing and advised plaintiff in pertinent part as follows:
8
* * * * * *
9
You may be represented in person or by a representative of your own choosing at the hearing. In addition, you have the right to present witnesses and to make any statements which you desire to have placed in the record, which you have not already made. The agency from whose adverse decision you are appealing is being invited to participate. Both the witnesses whom you present and those who may be presented by the agency may be cross-examined by the opposite side. As the Commission does not have the power of subpoena, you will be required to make your own arrangements for the appearance of your witnesses. * * *
10
Shortly after the hearing convened on February 14, 1961, plaintiff's counsel inquired if the witnesses requested by the appellant (plaintiff) would be supplied by the Service. Whereupon, the Service representative advised that the Service did not intend to present either Mr. O'Hara or Mr. Mullen. During the course of the hearing, plaintiff's counsel protested the failure of the Service to produce Mr. O'Hara and Mr. Mullen as witnesses "to test their credibility and accuracy." Included in plaintiff's testimony were statements concerning hostility between plaintiff and Mr. Mullen, his former supervisor. After plaintiff and witnesses produced by the Service testified, the hearing was continued until August 16, 1961.
11
Following the hearing of February 14, 1961, Mr. O'Hara and Mr. Mullen both reviewed the transcript of the hearing and submitted to the Commission detailed rebuttal statements in affidavit form. There is no question but that both Mr. O'Hara and Mr. Mullen were cognizant of plaintiff's desire, as expressed in the transcript, that they appear as witnesses.
12
On June 27, 1961, plaintiff submitted to the Commission an affidavit protesting the affidavits "from persons whose presence had been requested by your deponent but whom the Agency [Internal Revenue Service] refused to present." Plaintiff's affidavit continued: "In effect, these persons, and in particular, John T. Mullen, are hiding behind written affidavits while refusing to appear and be cross-examined as to veracity, accuracy and credibility." Plaintiff then requested production of "other papers not as yet submitted, although previously requested," and that "the Commission obtain the personal appearance of John T. Mullen, James A. O'Hara and Francis D. Sullivan."
13
In a letter of July 11, 1961, the Commission advised plaintiff that the hearings would reconvene on August 8, 1961, and repeated the statements made to plaintiff prior to the first hearing regarding the appearance of witnesses. Upon resumption of the hearings, plaintiff's counsel inquired if the Service intended to produce "the witnesses whose affidavits were submitted" and was informed by the Service representative that the Service did not.
14
On September 19, 1961, the Commission's regional office issued its opinion and decision sustaining the removal action. In the course of the opinion, reliance was placed upon the affidavits of Mr. O'Hara and Mr. Mullen as a basis for the decision.2
15
On October 30, 1961, plaintiff appealed to the Commission's Board of Appeals and Review and requested on several grounds that the Board reverse the decision of the regional office and reinstate him. In the appeal, plaintiff stated:
16
* * * * * *
17
On several occasions the Agency was requested to produce Director O'Hara and Mr. Mullen. This request was arrogantly disregarded. Nevertheless, affidavits were submitted by them, which affidavits could not be cross-examined and which were erroneous, false and self-serving in nature. Afraid to appear in person, they fearlessly submitted documents which they must know, of necessity, to be wrong. The appellant on the other hand testified fully under oath and completely controverted the allegations of Mr. O'Hara and Mr. Mullen. The appellant was available for cross-examination. He was not cross-examined.
18
* * * * * *
19
By letter of March 2, 1962, the Board of Appeals and Review advised plaintiff's counsel that it had affirmed the decision of the regional office. In the course of the letter, the following appears:
20
* * * * * *
21
You also stated that you requested the agency to produce Director O'Hara and Mr. Mullen, and that this request was arrogantly disregarded. You admit, however, that affidavits were submitted by these individuals. This was entirely a matter for the agency concerned as to whether it desired to produce certain witnesses since the Commission does not have the power of subpoena.
22
* * * * * *
23
There are two Commission regulations which bear on the issue of the refusal of the Service to produce the witnesses to testify. A Commission regulation (5 C.F.R. § 22.603) provides:
24
Opportunity will be afforded for the introduction of evidence (including testimony and statements by the employee and his designated representative and witnesses and by representatives of the agency and its witnesses) and for the cross-examination of witnesses.
25
Another regulation (5 C.F.R. § 22.607) provides:
26
The Commission is not authorized to subpoena witnesses. The employee and his designated representative, and the employing agency, must make their own arrangements for the appearance of witnesses.
27
In Williams v. Zuckert, 371 U.S. 531, 83 S.Ct. 403, 9 L.Ed.2d 486 and 372 U.S. 765, 83 S.Ct. 1102, 10 L.Ed.2d 136 (1963), the Supreme Court considered the foregoing regulations in connection with a somewhat similar case in which the petitioner who had been dismissed from the Air Force alleged that he had been denied the right of cross-examination of witnesses whom the Air Force failed to produce at the Commission hearing. The Court remanded the case to the District Court with instructions to hold a hearing and determine "whether the petitioner, desiring the presence of witnesses at his hearing, either discharged his initial burden under the applicable regulations by making timely and sufficient attempt to obtain their presence or, under the circumstances and without fault of his own, was justified in failing to make such attempt, and, if so, whether proper and timely demand was made upon the Air Force so that it was required to produce such witnesses for cross-examination."
28
In Begendorf v. United States, 169 Ct.Cl. 293, 340 F.2d 362 (January 1965), counsel for plaintiff therein sent a telegram to the Treasury Department the night before the Civil Service Commission hearing on the dismissal asking for some 10 agents to appear. In determining whether the plaintiff's procedural rights were violated (under the same regulations applicable to the instant case) by the refusal of the Treasury Department to produce the agents at the hearing, this court noted that the plaintiff therein did not show (or offer to show) that he had attempted privately to arrange for the appearance of the witnesses or that he had some proper excuse for not doing so. The court expressed agreement with the decision of the Second Circuit in McTiernan v. Gronouski, 337 F.2d 31 (1964) that, in the absence of such a showing (or offer to show) or of some proper excuse, no procedural rights to which a plaintiff is entitled are violated when a Department fails to respond to his request for the production of witnesses at a hearing. In rejecting the contention of plaintiff in Begendorf, supra, that his procedural rights had been violated, the court pointed out that he had not made nor offered to make the required showing; that, so far as the record showed in the case, none of the men whom the Treasury Department failed to produce was an accuser, an informant, a witness, or an affiant against plaintiff; and that, in any event, at least two of the three grounds given by plaintiff's counsel for calling the agents were invalid on their face and the Department would not have been required to produce the agents for such purposes. See, also, De Nigris v. United States, Ct.Cl., No. 18-63, decided Feb. 19, 1965; Brown v. Macy, 340 F.2d 115 (C.A.5, 1965); Studemeyer v. Macy, 120 U.S.App.D.C. 259, 345 F.2d 748 (C.A.D.C.1965), cert. denied 382 U.S. 834, 86 S.Ct. 78, 15 L.Ed.2d 77.
29
We come then to an appraisal of the facts in the instant case in light of the above-decided cases. It is clear that plaintiff did not attempt to arrange privately for attendance of the witnesses at the hearing. Was he, in the words of the Supreme Court, "justified in failing to make such an attempt?" Was there, in the words of this court, "some proper excuse" for plaintiff's failure? There are peculiar factual elements in this case which in the aggregate compel the conclusion that plaintiff was justified in failing to attempt to arrange privately for the attendance of the witnesses and that he had proper excuse for this failure.
30
The affidavit of Mr. Mullen, plaintiff's former supervisor, concerning plaintiff was (irrespective of its validity) damaging to plaintiff's interest. Mr. Mullen was at all pertinent times cognizant of plaintiff's repeatedly expressed and unhonored request of the Service that he (Mr. Mullen) appear at the hearing for cross-examination. Plaintiff had in effect asked him (through the Service) to appear. Could plaintiff, under these circumstances, reasonably expect that Mr. Mullen would accept plaintiff's personal invitation to appear and subject himself to cross-examination when the Service which could have produced him at any time declined to ask him to appear pursuant to plaintiff's repeated requests?
31
James O'Hara, the District Director of the Albany, New York District in which plaintiff had been employed, had, on behalf of the Service, signed the charge against plaintiff and processed plaintiff's affidavit of November 15, 1960, in which plaintiff had requested that he (Mr. O'Hara) and Mr. Mullen be produced by the Service at the hearing as witnesses. Since Mr. O'Hara as District Director did not, on behalf of the Service, produce himself for the hearing in response to the request in the affidavit, plaintiff would be entitled to conclude that Mr. O'Hara as an individual would be equally unresponsive to a personal invitation from plaintiff to appear. Mr. O'Hara was at all pertinent times cognizant of plaintiff's repeatedly expressed request for his appearance and knew that officially at least the Service would not comply. The conclusion is inescapable that plaintiff could not reasonably have expected that Mr. O'Hara would accept his personal invitation to appear if such invitation were tendered.
32
Mr. Mullen and Mr. O'Hara were at all times plaintiff's principal adversaries in the removal proceedings. After the first hearing, both had submitted extensive affidavits in rebuttal to plaintiff's testimony and reliance was placed upon these affidavits by the Commission's regional office in sustaining the removal action. Plaintiff would have been justified in both instances in concluding that a personal invitation by him to either Mr. Mullen or Mr. O'Hara to appear would be simply an exercise in futility. It is clear also that plaintiff's requests made over the course of several months to the Service for the appearance of Mr. Mullen and Mr. O'Hara were timely.
33
Defendant's assertion that plaintiff failed to exhaust his administrative remedy by not raising the issue of the alleged procedural error before the Civil Service Commission is without merit. As previously set forth herein, plaintiff vigorously complained to the Commission's Board of Appeals and Review of the failure of the Service to produce Mr. Mullen and Mr. O'Hara at the hearing. There is no showing made here that this complaint should have been in any specific form or that plaintiff had an obligation to direct the attention of the Board to the specific language of its own regulations.
34
Defendant contends that, if the court finds a procedural error was committed, plaintiff must still show that he was injured by the error; and, in reliance on United States v. Carlo Bianchi & Co., Inc., 373 U.S. 709, 83 S.Ct. 1409, 10 L.Ed.2d 652 (1963) and similar cases, suggests that the court should stay proceedings in order to allow the Commission to conduct a rehearing and accord plaintiff his procedural rights. Defendant has filed with the court an affidavit of the Service stating that it will in such event produce Mr. Mullen and Mr. O'Hara for a rehearing, and an affidavit of the General Counsel of the Commission that it will in such event grant a rehearing.
35
The heart of plaintiff's case is his position that Mr. Mullen and Mr. O'Hara, who were his principal adversaries, were motivated by political prejudice; in other words, that they were out to "get" him. One of the best ways in which plaintiff could prove his thesis would be to cross-examine them. It is implicit, moreover, in both Zuckert and Begendorf, supra, that if under the cited regulations of the Commission, a plaintiff is improperly denied the opportunity for the cross-examination of witnesses, such denial is a denial of a procedural right which is fatal to the proceedings. The rule has been firmly established in pay cases "that unlawful administrative action depriving a claimant of a procedural right voids the action and leaves the plaintiff entitled to his money otherwise due, until (at the least) proper procedural steps are completed * * *." Garrott v. United States, 169 Ct.Cl. 186, 340 F.2d 615 (January 1965). See also Washington v. United States, 137 Ct.Cl. 344, 147 F.Supp. 284, petition for cert. dismissed, 355 U.S. 801, 78 S.Ct. 6, 2 L.Ed.2d 19 (1957); Watson v. United States, 142 Ct.Cl. 749, 162 F.Supp. 755 (1958); Shadrick v. United States, 151 Ct.Cl. 408 (1960).
36
Defendant says that that rule is applicable only to a procedural defect or irregularity in the proceedings before the employing agency prior to removal, and is inapplicable to such a defect in the appellate proceedings before the Civil Service Commission (after the employee has been separated by his agency). This court has not hitherto made any such distinction (see Stringer v. United States, 117 Ct.Cl. 30, 50-51, 52, 90 F.Supp. 375, 379-381 (1950); Chisholm v. United States, 149 Ct.Cl. 8 (1960); Shadrick v. United States, 151 Ct.Cl. 408 (1960),3 but defendant argues that the distinction is nevertheless required by the statutes (the Veterans' Preference Act, 5 U.S.C. § 863, and the Lloyd LaFollette Act, 5 U.S.C. § 652) which indicate — in the Government's eyes — that Civil Service Commission review comes after the employee's removal and forms no part of the removal process. We do not so read the legislation. For employees entitled to Commission review, Commission action is an integral step in the removal process and the employee is not lawfully discharged until he has had (or has waived or forfeited) his rights to review. The references in the legislation to discharge or removal by the employing agency are convenient shorthand citations to the preliminary separation which the agency can effect. These references do not mean that the agency's action is fully effective to separate the employee for all purposes; as is often the case in judicial proceedings, an appeal or application for review by the Commission suspends the final operative effect of the initial decision. It follows that an employee who has been deprived of a procedural right by the Commission must be regarded as not yet lawfully removed and thus entitled to his pay otherwise due. No more than in the case of a procedural violation by the employing agency (e. g., Elchibegoff v. United States, 106 Ct.Cl. 541, petition for cert. dismissed, 329 U.S. 694, 67 S.Ct. 629, 91 L.Ed. 607 (1946); Wittner v. United States, 110 Ct.Cl. 231, 76 F.Supp. 110 (1948)) is there a requirement that the employee show that he would not have been discharged had he been accorded his procedural rights by the Commission. Cf. Greene v. United States, 376 U.S. 149, 162, 84 S.Ct. 149, 11 L.Ed.2d 576 (1964); Silver v. New York Stock Exchange 373 U.S. 341, 365, 83 S.Ct. 1246, 10 L.Ed.2d 389, fn. 18 (1963).4
37
It is therefore concluded that plaintiff is entitled to recover, and that defendant's motion for summary judgment is denied, and plaintiff's cross-motion granted, with the amount of recovery to be determined under Rule 47(c).5
Notes:
*
This opinion incorporates, with minor changes and some supplementary discussion, the opinion prepared, at the direction of the court under Rule 54(b), by Trial Commissioner Richard Arens
1
Defendant moves for summary judgment, or, in the alternate, for a stay in proceedings herein "pending completion of review of plaintiff's removal by the Civil Service Commission, under what the court may determine to be proper procedure before that body." Plaintiff moves for summary judgment, or, in the alternate, for an order denying defendant's motion for summary judgment on the ground that material issues of fact do exist "relative to plaintiff's allegations of arbitrary and capricious action when plaintiff refused to tamper with cases pending before the Internal Revenue Service."
2
The ultimate findings and recommendation read as follows:
It is the finding of this office that the Department complied with all of the procedural requirements of the Law and Regulations. It is also the finding of this office that the action taken by the Department in the appellant's case, based on the sustained charge and four sustained specifications, is considered to be taken for such cause as will promote the efficiency of the Service. Accordingly, the Department's action in separating the appellant is sustained.
3
The decisions of this court on which defendants relies are inapposite. In Schmidt v. United States, 145 Ct.Cl. 632 (1959), the Commission committed a substantive error, not a procedural one, in appraising the employee's claim that he had been reassigned for political reasons; the court ordered a trial (before our trial commissioner) to determine whether his allegation was correct, just as it often has done in comparable personnel cases. In Hofflund v. United States, 154 Ct.Cl. 66, 71 (1961), the agency had responded to a district court decision in the plaintiff's favor and the court held that he could not recover in this court because, if he were dissatisfied, he should have sought further relief from the district court or from the Civil Service Commission. In Taylor v. United States, 131 Ct.Cl. 387, 391 (1955), and Hart v. United States, 148 Ct.Cl. 10, 16, 17, 284 F.2d 682, 687 (1960), and similar cases, the court held that an improper suspension during the 30-day notice period was a separate and distinct matter which did not invalidate the removal proceedings
4
Since reinstatement cases in the district courts seek restoration to duty, not merely damages for an illegal discharge, it is possible that the rule for those cases may be different
5
In view of the above ruling, it is unnecessary to consider other allegations of plaintiff, i. e., that the charges were not sufficiently specific, that plaintiff was denied the right to a personal hearing by the Service, that plaintiff was refused the right to cross-examine a certain witness at the hearing, and that the Service failed to produce certain documents requested by plaintiff
| {
"pile_set_name": "FreeLaw"
} |
Filed 6/5/15 In re Rafael S. CA5
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIFTH APPELLATE DISTRICT
In re RAFAEL S., a Person Coming Under the
Juvenile Court Law.
THE PEOPLE, F070333
Plaintiff and Respondent, (Super. Ct. No. JJD065389)
v.
OPINION
RAFAEL S.,
Defendant and Appellant.
THE COURT*
APPEAL from a judgment of the Superior Court of Tulare County. Michael B.
Sheltzer, Judge.
Kristen Owen, under appointment by the Court of Appeal, for Defendant and
Appellant.
Kamala D. Harris, Attorney General, Gerald A. Engler, Chief Assistant Attorney
General, Michael P. Farrell, Assistant Attorney General, Catherine Chatman and Michael
Dolida, Deputy Attorneys General, for Plaintiff and Respondent.
-ooOoo-
* Before Kane, Acting P.J., Franson, J. and Smith, J.
This case comes to us pursuant to People v. Wende (1979) 25 Cal.3d 436 and In re
Kevin S. (2003) 113 Cal.App.4th 97, 99, which extended Wende review to a minor’s first
appeal in a delinquency case. Having reviewed the record as required by those opinions
and solicited supplemental briefing from the parties, we modify the award of credit for
time served, but otherwise affirm.
FACTS AND PROCEDURAL HISTORY
On December 8, 2011, Rafael S. was adjudged a ward of the court pursuant to
Welfare and Institutions Code section 6021, based on his commission of felony receiving
stolen property (Pen. Code, § 496, subd. (a)) and misdemeanor receiving a stolen motor
vehicle (id., § 496d, subd. (a)), battery upon an officer or emergency personnel (id.,
§ 243, subd. (b)), and resisting or obstructing a peace officer (id., § 148, subd. (a)(1)). He
was committed to the Tulare County Youth Facility (YF) and placed on probation.2
On April 10, 2012, Rafael was readjudged a ward of the court, based on his
commission of misdemeanor battery. (Pen. Code, § 242.) He was committed to YF and
placed on probation.
On May 9, 2013, Rafael was readjudged a ward of the court, based on his
commission of robbery with the personal use of a weapon (Pen. Code, §§ 211, 12022,
subd. (b)). He was committed to the Tulare County Youth Correctional Center Unit
(YCCU) and ordered to comply with various terms and conditions of probation.
1 Further statutory references are to the Welfare and Institutions Code unless
otherwise stated.
2 A probation officer’s report states this was Rafael’s original juvenile court
appearance, but also states he appeared on June 11, 2011, for a dispositional hearing on a
charge of first degree burglary, whereupon he was readjudged a ward of the court, placed
on probation, and committed to YF. However, the same report does not show a burglary
charge (or any charge on or about June 2011) as part of Rafael’s prior record. The
discrepancy is irrelevant to this appeal.
2.
On February 6, 2014, the Tulare County District Attorney filed a notice of
violation of probation pursuant to section 777, alleging Rafael failed to obey all laws in
that he drove a motor vehicle without the owner’s permission, left the scene of an
accident without complying with the requirements of Vehicle Code section 20002,
subdivision (a), and damaged and destroyed a fence belonging to the vehicle’s owner;
admitted using alcohol; left home without his mother’s permission; and removed his
electronic monitor in violation of the Aftercare portion of his YCCU commitment. That
same date, the probation officer filed a notice pursuant to section 777, alleging Rafael
failed to abide by the terms and conditions of the Aftercare program, failed to attend
school, removed his GPS monitor, and absconded from his residence.
On February 11, 2014, Rafael admitted the violations of probation with an
agreement he would be committed to the long-term program at YCCU. The court found
Rafael knowingly, intelligently, and voluntarily waived his rights, and that there was a
factual basis for his admission. Pursuant to the parties’ stipulation, the court then
proceeded to disposition. The court determined the maximum aggregate time on
previously sustained petitions was seven years 10 months, less 884 days credit for time
served. It continued Rafael as a ward of the court, and placed him in the custody and
under the supervision of the probation officer for out-of-home placement. The court
ordered that all prior terms and conditions remain in effect, and committed Rafael to the
long-term program for 240 to 365 days. Rafael subsequently was ordered to pay
restitution.
On September 8, 2014, the court held a compliance review hearing. Rafael
requested an early release date from YCCU, and the court ordered him released that same
day on electronic monitoring for 30 days.
On September 22, 2014, the probation department filed a notice of violation of
probation pursuant to section 777, alleging Rafael removed his GPS monitor and
absconded from his residence on September 12, 2014; used alcohol on September 12
3.
and 14, 2014; and tested “presumptive positive” for marijuana and cocaine use on
September 15, 2014. On September 23, 2014, a detention hearing was held. Rafael
expressed a desire to admit the violation, but requested that the court dismiss his
probation unsatisfactorily or, in the alternative, commit him to the long-term program.
Rafael read a letter to the court. The court agreed to take Rafael’s admission, but
reserved disposition until it heard from the district attorney, probation officer, and
defense counsel. The court found Rafael knowingly, intelligently, and voluntarily waived
his rights, and that there was a factual basis for the plea.
On October 7, 2014, a disposition hearing was held. Through counsel, Rafael
requested that he be released again on formal probation or, in the alternative given a
“short-set review” to allow him to possibly be released early to begin attending college in
January, for which he had already registered. The probation officer recommended that
Rafael be readjudged a ward of the court and recommitted to YCCU. The People
requested Rafael be placed in a custodial program. Rafael personally made a statement to
the court and asked to be released on a suspended sentence, placed in Visalia Youth
Services, and ordered to perform some community service hours.
The court set the maximum term of confinement at seven years 10 months, less
1,123 days of credit for time served. It continued Rafael as a ward of the court. It found
(1) Rafael’s welfare required that physical custody be removed from his parent or
guardian, (2) Rafael had been on probation in custody of his parent or guardian and had
failed to reform, and (3) reasonable efforts had been made to prevent or eliminate the
need for removal. It committed Rafael to 240 to 365 days in the long-term program.
However, it set the matter for a 90-day review, with the possibility Rafael could be
released at that time. It also set the matter for October 6, 2015, for a probation
termination review.
Rafael filed a timely notice of appeal.
4.
APPELLATE COURT REVIEW
Rafael’s appointed appellate counsel has filed an opening brief that summarizes
the pertinent facts, raises no issues, and requests this court to review the record
independently. (People v. Wende, supra, 25 Cal.3d 436; In re Kevin S., supra, 113
Cal.App.4th 97.) The opening brief also includes the declaration of appellate counsel,
stating that Rafael could file his own brief with this court. By letter dated January 27,
2015, we invited Rafael to submit additional briefing. To date, he has not done so.
However, we identified a reasonably arguable issue concerning whether Rafael’s custody
credits were properly calculated. We notified the parties accordingly and directed them
to brief the issue. (Gov. Code, § 68081.)
DISCUSSION
As shown by the statements of facts and procedural history, ante, Rafael has been
in and out of custody on numerous occasions dating back to 2011. At the most recent
disposition hearing (Oct. 7, 2014), Rafael was awarded 1,123 days of predisposition
credit. Although not required to do so before raising the issue on appeal (In re Antwon R.
(2001) 87 Cal.App.4th 348, 350-352), his appellate counsel wrote the juvenile court,
claiming the custody credits were miscalculated and asking the court to award 1,124 days
of credit. Insofar as we know, the court never ruled on the request, and Rafael did not
raise the issue in his opening brief.3 We requested supplemental briefing, however,
because it appeared to us, from the probation officer’s report setting out Rafael’s days in
custody and calculating the credit to be awarded, that Rafael was awarded two days of
credit on several occasions when, in reality, he only spent one day in custody. The
Attorney General agreed and contended Rafael should only have been awarded 1,118
days of credit. We agree with the Attorney General’s calculation.
3 It seems likely Rafael has been released from custody. However, neither party has
claimed the issue is moot as a result.
5.
“If the minor is removed from the physical custody of his or her parent … as the
result of an order of wardship made pursuant to Section 602, the order shall specify that
the minor may not be held in physical confinement for a period in excess of the
maximum term of imprisonment which could be imposed upon an adult convicted of the
offense .…” (§ 726, subd. (d)(1).) Physical confinement includes placement in juvenile
hall (In re J.M. (2009) 170 Cal.App.4th 1253, 1256) and boot camp (see In re Jose Z.
(2004) 116 Cal.App.4th 953, 956-957). Generally speaking, Penal Code section 2900.5,
subdivision (a) entitles an adult offender to credit against his or her term of imprisonment
for “all days” he or she spent in custody prior to sentencing. Although the statute deals
with adults, not juveniles, the California Supreme Court has determined juveniles are
entitled to credit for all days of actual precommitment confinement against the maximum
period of confinement time, in order to comply with section 726’s mandate. (In re Eric J.
(1979) 25 Cal.3d 522, 536; see In re Randy J. (1994) 22 Cal.App.4th 1497, 1503.) When
a juvenile court elects to aggregate a minor’s period of physical confinement on multiple
wardship petitions, the court must also aggregate the predisposition custody credits
attributable to those petitions. (In re A.M. (2014) 225 Cal.App.4th 1075, 1085-1086; see
§ 726, subd. (d)(3).)
The accrual of custody credits under Penal Code section 2900.5 begins when the
individual is processed into a custodial situation, such as a juvenile detention facility
described in subdivision (a) of the statute, and not merely when the individual is taken
into the custody of police. (People v. Ravaux (2006) 142 Cal.App.4th 914, 919-920;
accord, People v. Macklem (2007) 149 Cal.App.4th 674, 702.)4 Because the statute
speaks in terms of “days” and not “hours,” any partial day is treated as a whole day.
Accordingly, a sentencing court is required to award presentence credit for the day of
4 Nothing in the record on appeal suggests the dates of any of Rafael’s arrests and
processing into the juvenile detention facility were different.
6.
sentencing, where the defendant has remained in custody between conviction and
sentencing. (People v. Smith (1989) 211 Cal.App.3d 523, 526.) It appears this rule is
also applicable to juvenile proceedings (see In re Antwon R., supra, 87 Cal.App.4th at
p. 352); hence, a minor must be awarded credit for the day of disposition if he or she is in
custody on that day.
In Rafael’s case, the probation officer’s report shows several occasions on which
Rafael transitioned between the Tulare County Juvenile Detention Facility (JDF) and YF
or Aftercare. The probation officer calculated the date of “release” from one facility or
Aftercare and the date of “booking” into the other facility or Aftercare as two separate
days, despite the fact Rafael merely transitioned between custodial programs within the
county’s physical and legal jurisdiction. It appears the juvenile court followed this
calculation in awarding credits. In our view, only one day should have been credited
against Rafael’s maximum period of confinement in those instances, because he was
never actually released or, for example, given over into the physical custody of the state
or some other noncounty entity.
Rafael argues that because the term “day” is statutorily defined as “the period of
time between any midnight and the midnight following” rather than as 24 hours (Gov.
Code, § 6806), the law normally views a fraction of a day as a full day (In re Jackson
(1986) 182 Cal.App.3d 439, 442-443), and any partial day is treated as a full day (id. at
p. 442; People v. Smith, supra, 211 Cal.App.3d at p. 526), he was entitled to both days of
credit on each such occasion. We disagree. Penal Code section 2900.5, subdivision (a)
states, in pertinent part, that “when the defendant has been in custody, … all days of
custody of the defendant, … shall be credited upon his or her term of imprisonment .…”
(Italics added.) In the present case, Rafael received two days of credit for one day spent
in custody on the occasions at issue. He received the benefits to which he was entitled
under the legal authorities he cites when he was awarded credit for the dates he was
7.
initially out of custody but was then booked into custody, and for the dates he spent part
of the day in custody and was then released from custody altogether.
Calculated correctly, Rafael’s dates of actual physical confinement (as shown by
the probation officer’s report and not disputed by either party), and the number of days
for which he was entitled to credit, are as follows:
DATE BOOKED DATE RELEASED DAYS IN CUSTODY
4/4/11 4/5/11 2
4/19/11 4/27/11 9
5/23/11 5/27/11 5
6/18/11 7/14/11 27
8/23/11 2/1/13 529
4/8/13 9/12/14 523
9/15/14 10/7/14 23
Adding the number of days together shows Rafael was in actual physical custody
for a total of 1,118 days. He is entitled to predisposition credit in that amount.
DISPOSITION
The October 7, 2014, disposition order and “CUSTODIAL AND OUT OF
HOME PLACEMENT DISPOSITION ATTACHMENT” are modified to reflect that
Rafael’s maximum period of confinement is 7 years 10 months less 1,118 days credit for
time served. As so modified, the judgment is affirmed. The juvenile court is ordered to
cause to be prepared and filed an amended disposition order and attachment and, if
Rafael is still in the physical custody of a county juvenile facility, to transmit a certified
copy of same to the appropriate authority.
8.
| {
"pile_set_name": "FreeLaw"
} |
Opinions of the United
2009 Decisions States Court of Appeals
for the Third Circuit
2-11-2009
USA v. John George
Precedential or Non-Precedential: Non-Precedential
Docket No. 08-1515
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2009
Recommended Citation
"USA v. John George" (2009). 2009 Decisions. Paper 1882.
http://digitalcommons.law.villanova.edu/thirdcircuit_2009/1882
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2009 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact [email protected].
NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 08-1515
_____________
UNITED STATES OF AMERICA
v.
JOHN PATRICK GEORGE,
a/k/a JOHN PATRICK HOLGUIN,
a/k/a JOHN GEORGE PATRICK,
a/k/a JOHN PATRICK HOQUIN,
a/k/a DEAN GEORGE,
Appellant
_______________
On Appeal from the United States District Court
for the Western District of Pennsylvania
(D.C. No. 06-cr-00161)
District Judge: Honorable Donetta W. Ambrose
_______________
Submitted Under Third Circuit LAR 34.1(a)
February 6, 2009
Before: McKEE, JORDAN, and LOURIE*, Circuit Judges.
(Filed: February 11, 2009)
_______________
OPINION OF THE COURT
_______________
_______________
*Honorable Alan D. Lourie, Circuit Judge of the United States Court of Appeals
for the Federal Circuit sitting by designation.
LOURIE, Circuit Judge.
John Patrick George appeals from the decision of the United States District Court
for the Western District of Pennsylvania denying George’s motions to suppress certain
evidence. United States v. George, Criminal No. 06-161, 2007 U.S. Dist. LEXIS 33068
(W.D. Pa. May 4, 2007) (“George I”); United States v. George, Criminal No. 06-161
(W.D. Pa. July 20, 2007) (“George II”). Because George has failed to show that the
District Court erred in its evidentiary decisions, we affirm.
I. BACKGROUND
George was stopped by Officer Hughes of the Mount Lebanon, Pennsylvania
Police Department on December 24, 2004. Hughes had previously been informed of a
report that a business was to be burglarized over the Christmas weekend and had been
given specific information about the prospective burglar’s truck, including its color,
make, model, and license number. Hughes was also told that the suspected burglar did
not have a valid Pennsylvania driver’s license.
Hughes observed the truck described in the report and followed it. After the truck
made several turns, Hughes stopped the truck and told the driver and passenger that they
had been stopped for failing to properly use a turn signal. Hughes asked George for
identification, and he produced a Florida driver’s license, a Pennsylvania registration
card, and a Pennsylvania insurance card. George and his passenger were detained for
about thirty minutes while Hughes and other officers who had arrived at the scene
checked George’s identity. After telling George he was free to leave, Hughes asked to
look into the truck, and George consented. The officers found and seized binoculars, ski
masks, a notebook with businesses and social clubs noted, sledge hammers, chisels, metal
cutting blades, gloves, and ropes. George was then permitted to leave.
On January 28, 2005, pursuant to 18 Pa. C.S.A. § 5761, Magistrate Judge John
Zottola authorized the installation and use of a mobile tracking device to track George’s
truck. With the mobile tracking device, on April 25, 2005, George was tracked to a
grocery store and arrested for burglary and other offenses. After George’s arrest, state
troopers went to George’s house and searched it upon obtaining his wife’s consent. The
troopers found and seized a receipt for a storage unit and applied for a warrant to search
the storage unit. Pursuant to the search warrant, the storage facility was searched on
April 26, 2005, and two weapons were seized, although neither weapon was mentioned in
the search warrant. George was indicted by a grand jury for possession of a firearm after
having been convicted of a crime punishable by a term of imprisonment in excess of one
year.
George moved to suppress certain evidence, challenging, inter alia, the propriety
of a traffic stop and the search of his vehicle on December 24, 2004, the propriety of the
order dated January 28, 2005, which had authorized the use of a mobile tracking device,
and the search of the storage facility on April 28, 2005. The Court found the traffic stop
for a technical violation of the motor vehicle code (i.e., failing to use a turn signal) to be
legitimate, even if the stop was a pretext for an investigation of some other crime, citing
Whren v. United States, 517 U.S. 806 (1996), and United States v. Burks, 2007 WL
128005 (W.D. Pa. Jan. 11, 2007). George I, 2007 U.S. Dist. Lexis 33068, at *3. The
Court thus denied the motion with respect to the traffic stop. The Court also denied the
motion with respect to the warrantless search of George’s truck because it found credible
Hughes’ testimony that George had consented to the search, especially given a video of
the incident showing George opening both the vehicle door and the door to the cab of the
truck for the officers’ inspection. Id. The Court denied the motion with respect to the
seizure of items from the vehicle, as the items were clearly tools commonly used for theft,
and Hughes had had George’s consent and there was probable cause to believe the items
were instruments of crime. Id.
The Court denied the motion with respect to the installation of the mobile tracking
device, stating that “[t]he statute authorizing the installation and use of a Mobile Tracking
Device is not constitutionally infirm. No search occurred and [George] had no legitimate
expectations of privacy with respect to the tracking device while driving his vehicle on
public roadways.” George II, Criminal No. 06-161, slip op. at 2.
The Court finally denied the motion with respect to the search of the storage
facility, reasoning that “the search warrant[ was] entered into evidence and
demonstrate[d] clearly the existence of probable cause.” George I, 2007 U.S. Dist. Lexis
33068, at *4. According to the Court, “[t]he circumstances which occurred on December
24, 2004, along with the observations of April 23, 2005 and April 25, 2005 provided a
substantial basis for the issuance of the warrant[].” Id. The Court later clarified its
statement, saying that it had “never ruled that [George] lacked standing to contest the
search of storage unit,” but instead had “ruled that there was a substantial basis for the
magistrate’s determination of probable cause for the issuance of the search warrant.”
George II, Criminal No. 06-161, slip op. at 1.
George was convicted and sentenced, and he timely appealed the final judgment.
We have jurisdiction pursuant to 28 U.S.C. § 1291.
II. DISCUSSION
“We review the district court’s denial of [a] motion to suppress for clear error as to
underlying facts, but exercise plenary review as to its legality in light of the court’s
properly found facts.” United States v. Givan, 320 F.3d 452, 458 (3d Cir. 2003) (internal
quotation marks omitted). We review the issuance of a search warrant to see whether the
magistrate had a “substantial basis” for concluding that probable cause was present.
United States v. Conley, 4 F.3d 1200, 1205 (3d Cir. 1993).
On appeal, George argues that the District Court erred in denying his suppression
motions, and that the judgment and sentence should therefore be vacated. George asserts
that the traffic stop was unlawful because it was pretextual and was effected only to allow
a greater intrusion. George also argues that his subsequent half-hour detention was
unreasonable because it was longer than necessary to issue a warning while he was not
free to leave, and that the search of his truck was nonconsensual, either because he did
not consent or because the traffic stop was coercive. Thus, according to George, the
seizure of items should have been suppressed as the fruit of an unlawful search. George
also argues that the state troopers lacked any cause or basis in their application for the
mobile tracking device, as they relied on a confidential informant without providing any
information on the informant’s reliability, and they lacked probable cause to obtain a
warrant to search George’s storage unit, as there was no evidence that the items listed
might be found in the storage unit. According to George, the seizure of the two handguns
should therefore also be suppressed as fruit of the unlawful search.
The government responds that the traffic stop was not unlawful because the
District Court found that George turned without signaling, a determination that is entitled
to substantial deference, and even a pretextual stop is legitimate if it is based on a
violation of a traffic code. The stop was not unreasonably long, according to the
government, because the stop required extra time as circumstances unfolded, each
requiring further investigation. The government also argues that the officers searched
George’s car pursuant to his consent, and the District Court’s credibility finding to that
effect was not clearly erroneous, as the evidence showed George nodding his head in
consent and opening the doors to his truck. The application for the mobile tracking
device was sufficient, according to the government, because it relied not only on the tip
from the confidential informant, but also on the seized evidence from the traffic stop and
the fact that the circumstances corroborated the informant’s tip. Finally, the government
argues that the officers had probable cause to obtain a search warrant, as the magistrate
need only have reasonably inferred that George would store the fruits of his burglaries in
the storage unit, providing a nexus between the items listed and the storage unit.
We agree with the government that the District Court permissibly denied George’s
motions to suppress. First, the traffic stop was not unlawful. A traffic stop is reasonable
as long as “an officer possessed specific, articulable facts that an individual was violating
a traffic law at the time of the stop.” United States v. Delfin-Colina, 464 F.3d 392, 398
(3d Cir. 2006). Thus, “any technical violation of a traffic code legitimizes a stop, even if
the stop is merely pretext for an investigation of some other crime.” United States v.
Mosley, 454 F.3d 249, 252 (3d Cir. 2006) (citing Whren, 517 U.S. 806). Here, the
District Court believed, after hearing evidence from both sides, that George had failed to
use his turn signal. The district court’s credibility determination was not clearly
erroneous, as George, when asked whether he had signaled for all of his turns,
equivocally stated: “I thought I did. I could have swore I did.” See Givan, 320 F.3d at
458 (reviewing factual determinations for clear error). Thus, George’s failure to use his
turn signal, even if a pretext rather than the actual motivation for the stop, rendered the
traffic stop lawful.
Second, we agree with the government that the stop was not unreasonably long.
Most of the stop was spent waiting for an officer to go to the station to check whether
George was the same person as another John George whose Pennsylvania driver’s license
had been suspended. The stop ended when, after about thirty minutes, the officer
returned with a picture of the other John George, and George was given his license and
told he was free to leave. See id. (recognizing that traffic stop ends and consensual
encounter begins once motorist’s documents are returned to him and he is told that he is
free to leave). The similarity of the two names (both John George, with different middle
initials) gave the officers reasonable suspicion that George may have been driving with a
suspended license, justifying his detention until his identity was verified. The verification
did not take unreasonably long, as the officers did not have an on-board computer system
that would allow them to access photographs or descriptive information with which to
verify George’s identity and thus had to leave the site to obtain verification. Third, the
search of George’s car was also justified, as the District Court was not clearly erroneous
in finding that George voluntarily consented to the search, relying on the video of the
incident that showed George voluntarily opening the doors of his truck to allow the
search.
Finally, we agree with the government that the two warrants, for installing a
mobile tracking device and for searching the storage unit, were supported by probable
cause. In applying to install the mobile tracking device, the trooper set forth the content
of the informer’s tip and explained how that information had been corroborated by the
events of December 24, 2004, including the traffic stop itself, statements made by George
during the traffic stop, and seizure of the tools. (App. 86-89.) The affidavit also set forth
George’s criminal record, along with that of his passenger. (App. 89-92.) Thus, the
affidavit did not rely solely on a tip from a confidential informant but contained
corroborating evidence.
George argues that, in the application for a warrant to search his storage unit, there
was no evidence that the items listed might be found in the storage unit. However, the
magistrate issuing the warrant had a “minimum substantial basis” to conclude that the
items might be found in the storage unit. Conley, 4 F.3d at 1205. In his affidavit, the
trooper explained that the search of George’s home netted a receipt showing that George
was actively renting the storage unit. (App. 123.) The trooper also described the earlier
traffic stop and George’s criminal record (App. 114-16), leading to a reasonable inference
that George might have the listed stolen goods and tools that might be used for burglary.
Given that the trooper had not found the items in George’s home, the magistrate had a
minimum substantial basis to conclude that they might be found in the storage unit he was
actively renting. See United States v. Whitner, 219 F.3d 289, 296-97 (3d Cir. 2000) (“The
issuing judge or magistrate . . . is entitled to draw reasonable inferences about where
evidence is likely to be kept, based on the nature of the evidence and the type of offense,”
including “normal inferences about where a criminal might hide stolen property.”). We
therefore agree with the government that the search warrant was supported by probable
cause.
III. CONCLUSION
For the foregoing reasons, we will affirm the District Court’s denial of George’s
motions to suppress evidence.
| {
"pile_set_name": "FreeLaw"
} |
Case: 14-10589 Document: 00512828600 Page: 1 Date Filed: 11/06/2014
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 14-10589
Fifth Circuit
FILED
Summary Calendar November 6, 2014
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff - Appellee
v.
ARCHIE DALE GOODMAN,
Defendant - Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 6:12-CR-14-2
Before JOLLY, BARKSDALE, and OWEN, Circuit Judges:
PER CURIAM: *
Archie Dale Goodman challenges his sentence of, inter alia, 17 months’
imprisonment, imposed following the revocation of his supervised release.
Because Goodman did not object to the following claimed errors, review is only
for plain error. E.g., United States v. Broussard, 669 F.3d 537, 546 (5th Cir.
2012). Under that standard, Goodman must show a forfeited plain (clear or
obvious) error that affected his substantial rights. Puckett v. United States,
* 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: 14-10589 Document: 00512828600 Page: 2 Date Filed: 11/06/2014
No. 14-10589
556 U.S. 129, 135 (2009). If he does so, we have the discretion to correct the
error, but should do so only if it seriously affects the fairness, integrity, or
public reputation of the proceedings. Id.
Goodman claims: the district court erred in failing to provide an
adequate explanation for imposing the sentence, which was above the range
recommended in the non-binding Sentencing Guidelines policy statements;
and this claimed error affected his substantial rights because the sentence was
based on a miscalculation in his criminal-history score for his underlying
possession-of-stolen-mail conviction. For the following reasons, there was no
reversible plain error.
Implicit consideration of the 18 U.S.C. § 3553(a) factors is sufficient in a
revocation proceeding. E.g., United States v. Gonzalez, 250 F.3d 923, 930 (5th
Cir. 2001). Moreover, the district court stated that Goodman’s sentence
addresses the issues of adequate deterrence and protection of the public, two
of the § 3553(a) factors that are permissible considerations in a revocation
proceeding. 18 U.S.C. § 3553(a)(2)(B),(C). Goodman cannot show that a more
thorough explanation would have resulted in a lesser sentence or that the
district court would impose a lesser sentence on remand. United States v.
Whitelaw, 580 F.3d 256, 264-65 (5th Cir. 2009). Additionally, regarding
Goodman’s challenge to his revocation sentence based on a miscalculated
criminal-history score for his sentence for stolen mail, “a defendant may not
use the appeal of a revocation of supervised release to challenge an underlying
conviction or original sentence”. United States v. Willis, 563 F.3d 168, 170 (5th
Cir. 2009).
AFFIRMED.
2
| {
"pile_set_name": "FreeLaw"
} |
891 A.2d 150 (2005)
BENIHANA OF TOKYO, INC., individually and on behalf of Benihana, Inc., Plaintiff,
v.
BENIHANA, INC., John E. Abdo, Norman Becker, Darwin Dornbush, Max Pine, Yoshihiro Sano, Joel Schwartz, Robert B. Sturges, Takanori Yoshimoto, and BFC Financial Corporation, Defendants.
Civil Action No. 550-N.
Court of Chancery of Delaware, New Castle County.
Submitted: August 3, 2005.
Decided: December 8, 2005.
*154 C. Barr Flinn, Esquire, Richard H. Morse, Esquire, Danielle Gibbs, Esquire, Kevin M. Baird, Esquire, Glenn C. Mandalas, Esquire, Young Conaway Stargatt & Taylor, LLP, Wilmington, Delaware, Attorneys for Plaintiff Benihana of Tokyo, Inc.
Gregory V. Varallo, Esquire, Lisa M. Zwally, Esquire, Richards Layton & Finger, P.A., Wilmington, Delaware; C. Thomas Tew, Esquire, Dennis Nowak, Esquire, Jeffrey Tew, Esquire, Tew Cardenas, LLP, Miami, Florida, Attorneys for Defendants Benihana, Inc., Norman Becker, Darwin Dornbush, Max Pine, Yoshihiro Sano, Joel Schwartz, Robert B. Sturges and Takanori Yoshimoto.
John G. Harris, Esquire, Reed Smith LLP, Wilmington, Delaware; Alan K. Cotler, Esquire, Reed Smith LLP, Philadelphia, Pennsylvania; Alan H. Fein, Esquire, Stearns Weaver Miller Weissler Alhadeff & Sitterson, P.A., Miami, Florida, Attorneys for Defendants BFC Financial Corporation and John E. Abdo.
OPINION
PARSONS, Vice Chancellor.
Plaintiff, Benihana of Tokyo, Inc. ("BOT"), seeks rescission of an agreement between Defendants Benihana Inc. ("Benihana" or the "Company") and BFC Financial Corporation ("BFC") to issue $20 million of Benihana preferred stock to BFC *155 (the "BFC Transaction" or "Transaction"). BOT's complaint asserts that: (1) the BFC Transaction violated 8 Del. C. § 151 and Benihana's Certificate of Incorporation by granting BFC shares with preemptive rights and is therefore void as ultra vires; (2) eight of Benihana's nine directors, namely, John E. Abdo, Norman Becker, Darwin Dornbush, Max Pine, Yoshihiro Sano, Joel Schwartz, Robert B. Sturges and Takanori Yoshimoto (collectively, "Director Defendants") breached their fiduciary duties of loyalty and care in approving the BFC Transaction; (3) the BFC Transaction had an improper primary purpose to dilute BOT's interest in Benihana and entrench certain Director Defendants; (4) the BFC Transaction should receive entire fairness review and fails such review; and (5) BFC aided and abetted the Director Defendants in their actions. Additionally, BOT seeks damages for costs it incurred in a proxy contest that allegedly would have been unnecessary if the BFC Transaction had not occurred. If the Court does not rescind the BFC Transaction, BOT seeks compensatory damages.
BOT filed its Complaint on July 2, 2004, along with motions for expedited proceedings and a preliminary injunction. The Court granted in part the request for expedited proceedings. Trial was held from November 9 through 15, 2004.[1] This Opinion reflects the Court's post-trial findings of fact and conclusions of law.
For the reasons stated below the Court finds as follows: (1) the Board had authority under Benihana's Certificate of Incorporation and the applicable provisions of the DGCL to issue the preferred stock with preemptive rights that is the subject of the BFC Transaction; (2) a majority of the informed, disinterested and independent directors approved the transaction; (3) the directors did not have an improper purpose of entrenchment; (4) the directors did not breach their fiduciary duties of loyalty and care; and (5) the BFC Transaction was a valid exercise of the Board members business judgment. Accordingly, the Court will deny BOT's claims for relief and enter judgment in favor of Defendants.
I. FACTS[2]
A. The Parties
Rocky Aoki founded BOT in 1963 as a New York corporation. BOT owns and operates Benihana restaurants outside the continental United States and owns intellectual property interests in the Benihana name and trademarks. Rocky Aoki also founded nominal Defendant Benihana. Benihana was incorporated on December 6, 1994 as a Delaware corporation with its principal place of business in Florida; it operates and franchises Benihana restaurants within the continental United States. BOT has been a controlling stockholder of Benihana since its incorporation.[3]
*156 Initially, Rocky Aoki owned 100% of BOT and thereby indirectly controlled Benihana. In 1998, after he pled guilty to insider trading charges unrelated to Benihana, Rocky Aoki put his 100% ownership interest of BOT into the Benihana Protective Trust (the "Trust") to avoid regulatory problems regarding Benihana's liquor licenses stemming from his status as a convicted felon. Defendant Dornbush, a trusted friend and the family attorney, advised Rocky Aoki in that matter. The trustees of the Trust are Rocky Aoki's three children, Kana Aoki Nootenboom ("Kana Aoki"), Kyle Aoki and Kevin Aoki, and, until recently, Defendant Dornbush. The directors of BOT are Kana Aoki, Defendant Dornbush, and until recently, Kevin Aoki and Defendant Yoshimoto. Kevin Aoki also serves as a vice president of marketing and a director of Benihana.[4]
Benihana has two classes of common stock outstanding, common stock ("Common Stock") and Class A common stock. Benihana has 3,018,979 shares of Common Stock issued and outstanding. Each share of Common Stock entitles its holder to one vote. Additionally, Benihana has 6,134,225 shares of Class A common stock issued and outstanding, with each share having 1/10 vote. The holders of Class A common stock have the right to elect 25% of the Benihana Board of Directors, rounded up to the nearest whole director.[5] The holders of the Common Stock elect the remaining directors.[6]
BOT owns 50.9%, or 1,535,668 shares, of Benihana's Common Stock and 2%, or 116,754 shares, of Benihana's Class A common stock. Before the BFC Transaction, BOT also had 50.9% of the Common Stock voting power. The Transaction caused a decrease in BOT's voting power in two steps: first to 42.5% and then to 36.5%.
Since June 2003, Benihana has had a nine member board of directors (the "Benihana Board" or "Board"). Defendants Abdo, Becker, Dornbush, Pine, Sano, Schwartz, Sturges and Yoshimoto are all directors of Benihana. The Benihana Board is classified; the holders of Class A common stock elect three directors, and the holders of Common Stock elect six directors. Each year the stockholders elect one third of the directors for three year terms, including one director elected by Class A common stockholders.
Defendant BFC is a publicly traded Florida corporation with its principal place *157 of business in Florida. BFC is a holding company for various investments, including a 55% controlling ownership interest in Levitt Corporation, which in turn has a 37% ownership interest in Bluegreen Corporation. BFC invests in companies they like and can understand and that have managements that BFC admires as having a high degree of integrity and character.[7] BFC does not get involved in the management of the companies they invest in or frequently change boards of directors or management.[8] Abdo's job at BFC is to identify opportunities for investments in companies that are run by people BFC would admire.[9]
At all times material to this case, Abdo was a director and the vice chairman of BFC and owned approximately 30% of its stock. He and BFC Chairman, Alan Levan, together control BFC.[10] Abdo also serves as president of Levitt Corporation and vice chairman of the boards of directors of both Levitt and Bluegreen.
Abdo has long had an interest in Benihana.[11] He was appointed to the Board in 1991 as an independent director.[12] On the day he was nominated to the Board he purchased 10,000 shares of Benihana stock.[13] He subsequently purchased more Benihana stock.[14] After it was announced that Rocky Aoki would resign from the board due to an insider trading conviction Abdo told Dornbush that if Rocky sold any of his stock he would have an interest in purchasing it.[15] That is the only situation Abdo recalled where he initiated a conversation in which he expressed an interest in purchasing stock from Rocky Aoki or BOT.[16]
Defendant Dornbush is a director and corporate secretary of Benihana and, in effect, acts as its general counsel. He served as counsel to Benihana in the BFC Transaction. Together with Abdo, Dornbush also serves as a director on Levitt's board.
Defendant Schwartz is a director of Benihana as well as its president and chief executive officer. Thus, Schwartz receives a significant portion of his income from his salary, bonuses and options in Benihana. In addition, Schwartz is a partner in the Dorsan Group, a financial consulting firm whose other partners include Defendants Dornbush and Sano.
Defendant Yoshimoto works for Benihana as Executive Vice President of Restaurant Operations. His position is subordinate to Dornbush and Schwartz.
Both Yoshimoto and Schwartz have multi-year employment contracts that guarantee their annual salaries and require the Company to pay all salary remaining under the contract within 20 days of any termination without cause.[17] Yoshimoto's *158 contract expires in 2006, Schwartz's in 2009.[18]
In addition to being a director of Benihana, Defendant Becker is a director of Bluegreen Corporation along with Abdo.
B. Concern Regarding Future Control of BOT
In early 2003, Rocky Aoki became displeased with the actions of his trusted advisors and members of his family to whom he had ceded control of BOT (and indirect control of Benihana).[19] Around this time period, Rocky Aoki first retained counsel other than Dornbush to advise him with regard to the Trust. Rocky even suggested that Dornbush and Yoshimoto resign as directors of Benihana. In or around August 2003, Rocky Aoki also prepared a codicil to his will that provided for distribution of all of BOT's stock to his new wife, Keiko Aoki, 25% passing to her in fee simple and 75% passing to her in the form of a life estate with the remainder to his children. Thus, upon Rocky Aoki's death, complete control of BOT and indirect control of Benihana would pass to Keiko Aoki and not to his children. This development created varying degrees of concern among not only Kevin and Kana Aoki, two of Rocky Aoki's children who served as trustees of the Trust, but also some members of the Benihana Board.[20]
According to Schwartz, Benihana frequently received comments from investors and Wall Street about changing from two classes of common stock to one, because it would improve the liquidity of Benihana.[21] Due to the two tiered structure of Benihana's stock Schwartz always asked Dornbush "whether [he] thought the trust would be interested in selling any of their BOT shares."[22] Dornbush always responded to these inquiries by saying that BOT would not sell their shares during Rocky's lifetime.[23]
The Certificate of Incorporation provides that if the number of shares of Common Stock falls below a specified threshold (12 1/2%) of the total number of shares of Class A and Common Stock, then the Class A stock not only votes separately for 25% of the directors, but also votes with the Common Stock for the remaining 75% of the directors. In all cases, however, the Class A stock would have only a 1/10 vote.
In late August 2003, Dornbush and Schwartz examined different means by which they could trigger the provision of the certificate which would cause the Common Stock and Class A stock to vote together for the directors previously elected by the Common Stock alone.[24] In one scenario, Schwartz determined that Benihana would have to issue 16.5 million Class A shares to meet the threshold in the Certificate. Such a stock issuance *159 would have reduced BOT's percentage of the vote to approximately 29%. Schwartz asked Dornbush whether that scenario was feasible. Dornbush responded that it would not be and suggested that there would not be a legitimate business purpose for issuing that number of shares.[25]
1. The proposal of an option to purchase BOT's interest in Benihana
On September 10, 2003, shortly after learning of the change to his father's will, Kevin Aoki had dinner with Abdo and discussed the growing tension among the Aoki family. Kevin told Abdo that the amount of control their father's new wife exerted over their father disturbed the Aoki children.[26] The parties dispute whether Abdo, on the prompting of Dornbush, approached Kevin Aoki at the September 2003 dinner about purchasing BOT's stock in Benihana.
In the second half of 2003 and into 2004, the Aoki children who served as trustees experienced many pressures and concerns as a result of their father's changed behavior after his remarriage. For example, after Rocky Aoki married Keiko, he decided that he no longer wanted to pay the premiums on his life insurance policies that benefited his children.[27] Further, against their father's wishes, Kevin and Kana Aoki, who served as trustees of an insurance trust that owned Rocky Aoki's life insurance policies, refused to cancel the policies. Since that time Kevin and Kana Aoki have used the cash surrender value of the policies to pay the premiums that Rocky Aoki refuses to pay.[28] Though the Aoki children tried to discuss this matter with their father, their relationship had deteriorated to the point where Rocky Aoki, through counsel, informed them that he would not meet with them outside of Keiko's presence.[29]
By early 2004, the Aoki children, upon the recommendation of Dornbush, had retained separate counsel to represent them. In that context, the Aoki children met with Dornbush in late January and mid March 2004 (the "Option Meetings"). The Aoki children sought a solution to protect themselves against their father's threats and pressures.[30] Additionally, they wanted to protect Benihana, as well as Kevin and Kyle's jobs at Benihana, from Keiko's control and find a way to pay the insurance premiums.[31] At the March 2004 meeting, Dornbush suggested issuing an option to purchase BOT's interest in Benihana. This effectively would have shielded Benihana, and Kyle and Kevin's jobs, from Keiko's control and provided cash to BOT so the children could pay Rocky's life insurance premiums. The Aoki children, however, felt uncomfortable selling BOT's interest in Benihana during their father's lifetime, so they suggested that the option would be exercisable only upon Rocky's deathbed. The Aoki children also wanted to "[k]eep [the] door open for dad," i.e., provide a mechanism through which they could cancel the option if they reconciled with their father.[32] Dornbush expressed *160 skepticism about finding a buyer willing to accept a transaction with such a cancellation feature. In fact, Dornbush "identified [Abdo] as the only person [he knew] who would entertain buying" such an option.[33] Abdo knew of the pressure Rocky Aoki had placed on Kevin Aoki, and Dornbush felt that Abdo "was truly supportive" of Kevin.[34]
After the meeting Dornbush had with Kyle, Kevin and Kana Aoki, Dornbush and Kevin met with Abdo for lunch in March 2004. Kevin Aoki denies that he "asked [Abdo] if he would be interested in buying cancelable options for the purchase of BOT shares in Benihana,"[35] at the March 2004 lunch meeting.
I do not find this testimony credible because both Kevin's sister, Kana Aoki, and Dornbush testified that approaching Abdo with regard to purchasing a cancelable option was exactly the course of action the Aoki children agreed upon at the Option Meetings.[36] Therefore, I find that Kevin Aoki approached Abdo at the March 2004 lunch meeting about purchasing an option for the BOT shares.
In addition, I find that there is no credible evidence that Abdo approached Kevin Aoki at the September 2003 dinner meeting about purchasing BOT's interest in Benihana. The only evidence in support of that allegation is the testimony of Kevin Aoki. Having concluded that Kevin's recollection of who approached whom about purchasing the option at the March 2004 lunch meeting is faulty, I likewise consider unreliable his testimony regarding what transpired at the September 2003 dinner meeting. Further, I find Abdo's testimony with regard to these two meetings credible and convincing. Abdo is vice chairman of BFC's board of directors, president of Levitt Corporation and vice chairman of the boards of directors of both Levitt and Bluegreen. As discussed below, he had no need, financial or otherwise, to keep his director position at Benihana. Though he may have found an opportunity to acquire BOT's Benihana Common Stock attractive, the cancellation feature of the option offered by the Aoki children made the proposed investment much less enticing. Thus, I accept Abdo's testimony regarding what transpired at the September 2003 dinner meeting and the March 2004 lunch meeting.
C. The State of Benihana's Businesses
In 2003, Benihana realized that it needed to renovate many of its restaurant facilities because they were aging and quickly becoming outmoded in the face of new competition in the marketplace.[37] Benihana hired WD Partners to evaluate, plan and design the necessary renovations to help the Company maintain its competitive position within the market. WD Partners determined that Benihana needed to construct new teppan and sushi restaurants[38] as well as renovate its older restaurants. They projected that these construction and renovation efforts (the "Construction and *161 Renovation Plan") would last at least five years.
Implementation of the Construction and Renovation Plan would require capital. In 2003, Benihana had an existing line of credit with Wachovia.[39] Mark Burris, Benihana's CFO, approached Wachovia to determine their ability to finance Benihana's Construction and Renovation Plan. On October 17, 2003, Burris wrote a file memo with a copy to Schwartz that analyzed Wachovia's proposal for providing debt financing to Benihana. Burris concluded that, "the need for additional financing is clear if we are to continue capex [capital expenditures] at our projected rate."[40] At trial, Burris explained that he felt uncomfortable relying solely upon the Wachovia proposal to satisfy Benihana's financing needs because it contained a provision limiting the amount Benihana could borrow to 1.5 times earnings before interest, taxes, depreciation, and amortization ("EBITDA"). This restriction on the financing plan, which spanned five years, threatened to limit substantially Benihana's ability to borrow funds.
To illustrate, though Wachovia offered a line of credit of $60 million, Benihana could borrow that amount only if its EBITDA equaled or exceeded $40 million. In 2003, however, Benihana's EBITDA was far below that amount. Moreover, if Benihana's earnings declined in the near term,[41] the covenant could limit further its ability to borrow funds from Wachovia. Consequently, Benihana's EBITDA represented an equally important figure to the $60 million cap in considering the proposed Wachovia financing. In fact, in his memo to the file Burris stated that, "it seems unlikely that we will use the entire $60 million availability under any circumstances unless there is improvement to profitability."[42]
1. Financing alternatives explored
Given the less than satisfactory financing option offered by Wachovia,[43] Benihana retained the investment banking firm Morgan Joseph & Co., Inc. ("Morgan Joseph") to determine what other financing options the Company might use to carry out its five year Construction and Renovation Plan.[44] As a part of its due diligence, Morgan Joseph met with Benihana's management, including Schwartz, Kevin Aoki and Burris, to gain a better understanding of their views regarding the need for renovation of the teppan style restaurants, acquisition potential, and expansion of the Ra sushi bars.[45]
After meeting with management, Morgan Joseph studied Benihana's financial projections and conducted sensitivity analyses. Morgan Joseph determined that because Benihana
*162 had not in recent years made its projections.... [Morgan Joseph had become] very concerned about embarking on an extensive refurbishment plan, needing to do more acquisitions, if you could find appropriate acquisitions, and having a very close call in terms of capital availability depending on operating cash flow.[46]
Morgan Joseph wanted to ensure that Benihana did not embark on its five year Construction and Renovation Plan, which everyone including Kevin Aoki agreed was necessary to remain competitive, only to run out of capital before its completion and end up as a bankruptcy candidate.[47]
2. January 9 meeting of the Executive Committee
On January 9, 2004, Morgan Joseph met with the Executive Committee, comprised of Abdo, Schwartz and Dornbush,[48] to discuss financing vehicles available to Benihana to fund the Construction and Renovation Plan. Morgan Joseph expressed its concern regarding the "closeness of the company's capital needs to its availability" and the vulnerability of their projected growth forecasts, which depended on the success of the renovation plan.[49] The Executive Committee and Morgan Joseph discussed their respective goals and concerns, as well as various financing alternatives available to the Company. These alternatives included bank debt, high yield notes, convertible debt or preferred stock, traditional equity financing and sale/leaseback options.[50]
The parties all agree that Benihana was conservatively leveraged during the relevant time period.[51]
3. January 29 meeting of the Benihana Board
Following the January 9, 2004 meeting, Morgan Joseph decided to recommend convertible preferred stock as an appropriate financing vehicle for Benihana and created a board book that analyzed the recommended stock issuance and set forth the anticipated terms for it. Morgan Joseph presented the board book to the Benihana Board at a January 29, 2004 meeting. Once again, they reviewed the financing alternatives of bank debt, high yield notes, convertible debt or preferred stock, traditional equity financing and sale/leaseback options, and the Board discussed them.[52] Morgan Joseph recommended that Benihana obtain equity financing first to gain flexibility, then use the equity financing as leverage to negotiate better terms on their existing line of credit with Wachovia.[53] According to Joseph, "the oldest rule in our business is you raise equity when you can, not when you need it. And Benihana's stock had been doing okay. The markets were okay. We thought we could do an equity placement."[54] Morgan Joseph recommended a convertible preferred stock specifically because it felt "that adding the additional long-term capital match[ed] the company's long term needs [for capital expenditures,] .... provide[d] the flexibility for the company to grow *163 internally and pursue the other opportunities [i.e., acquisitions] .... [a]nd reduce[d][the] company's dependence on bank debt."[55] The Benihana directors were told to take the board books home to study and deliberate.
4. February 17 meeting of the Benihana Board
On February 17, 2004, the Benihana Board met again to discuss the terms of the recommended convertible preferred stock issuance. Morgan Joseph discussed the feasibility of obtaining certain terms the Company wanted. For example, during the meeting, Morgan Joseph noted the following areas in which they anticipated having to make concessions: (1) that it "was going to have quite a battle to keep the investor from putting performance criteria on the company as a condition of executing the second takedown;" (2) that it would most likely have to pay a coupon, or dividend, of "probably six percent, plus or minus a half;" (3) that the conversion premium would probably be "20%, plus or minus 2½%;" (4) that Benihana would have a difficult time getting a perpetual maturity for the issuance, and that the notes typically have a maturity range of 5 to 10 years; and (5) that Benihana will likely have to "give up two board seats."[56] Thus, the Board understood that, while Morgan Joseph would endeavor to negotiate the best deal for Benihana, several of the terms they had discussed were more akin to a "wish list."[57]
At the conclusion of the February 17 meeting, the Benihana Board decided to pursue convertible preferred stock as an additional means of financing. Abdo attended both the January 29 and February 17 meetings. At the February 17 meeting Morgan Joseph proposed that the convertible preferred stock should have immediate voting rights as though they had been converted.[58] Joseph explained their reasoning as follows: "Someone is not going to come in, put in money, be illiquid, have a larger holder and not have their voting rights from Day 1."[59]
The convertible preferred stock discussed at the February 17 meeting differed in certain respects from the three classes of preferred stock (Series A, A-1 and A-2) Benihana previously had authorized. None of those classes carries with it the right to a directorship, voting rights or preemptive rights.[60]
5. Actual versus projected net debt figures
The board books used in the January 29 and February 17 meetings contained a "base case" scenario that calculated capital shortfalls if Benihana relied solely upon the proposed Wachovia line of credit. Morgan Joseph based its figures for this "base case" scenario on calculations of net debt by Burris that included several renovation projects that did not occur during Benihana's fiscal year 2004 because of zoning and other temporary delays.[61] Benihana did not cancel these projects, but rather deferred them to a later point in time. It also did not consider the attendant delay *164 to cause a fundamental change in the Company's need for capital.[62]
By the February 17 Board meeting Benihana's management knew of the change in net debt figures, but failed to mention it to Morgan Joseph. Morgan Joseph later discovered the discrepancy when it conducted additional due diligence in connection with preparing the private placement memorandum.[63] This discovery, however, did not alter Morgan Joseph's opinion that Benihana should not rely solely on the Wachovia line of credit to finance the Construction and Renovation Plan. Fred Joseph testified that:
I wasn't obsessed by the slight shortfall [created by the projected, not actual, net debt figures]. I was very concerned about the fact [that] there just wasn't enough room in the Wachovia proposal and, you know, a terrorist attack, two-percent decline in sales growth and the company would have been in real trouble on its cap[e]x requirements.[64]
Additionally, Morgan Joseph preferred a flexible strategy because it believed that Benihana needed flexibility to take advantage of attractive acquisition opportunities that might present themselves.[65] In fact, Benihana ended up not only with lower actual net debt figures for fiscal year 2004, but also lower EBITDA figures. The lower net debt figures would have made more funds available to Benihana to borrow under the Wachovia offer. The lower EBITDA figures, however, would have limited the amount of those funds. Thus, changes in these figures offset each other to a certain extent.[66]
Morgan Joseph corrected the net debt figures in the board books it created going forward.
D. Abdo Approaches Morgan Joseph on Behalf of BFC
Shortly after the February 17 Board meeting Abdo talked to his partner Alan Levan about having BFC attempt to purchase the preferred stock Benihana planned to issue to finance the Construction and Renovation Plan.[67] Levan responded that he thought it was a good deal and trusted Abdo's instincts regarding the investment.[68]
Two or three days after the February 17 meeting, Abdo contacted Joseph and told him BFC had an interest in purchasing the Benihana convertible preferred stock being offered to finance the Construction and Renovation Plan.[69] Joseph then contacted Benihana which welcomed Abdo's involvement in the Transaction.[70]
In early April 2004, Morgan Joseph sent its private placement memorandum to BFC and negotiations began.[71] Although Abdo did not indicate whether BFC generally accepted the term sheet contained in the private placement memorandum, the parties agreed not to shop the issuance to anyone else for a short period to foster more productive negotiations with BFC.[72]
Morgan Joseph negotiated on behalf of Benihana. Abdo negotiated on behalf of *165 BFC. Morgan Joseph had no prior business relations with Abdo or BFC. In fact, Morgan Joseph directly competed with Ryan Beck, an investment bank that BFC controlled.[73]
1. Negotiation of the convertible preferred stock issuance
Negotiations between BFC (Abdo) and Benihana (Morgan Joseph) continued through the end of April 2004. The ultimate terms of the BFC Transaction are reflected in a stock purchase agreement (the "Stock Purchase Agreement" or "SPA"). Those terms include the issuance of 800,000 shares of convertible preferred stock for $20 million in two separate tranches of $10 million apiece.[74] The second tranche would issue within one to three years after the first.[75]
BFC negotiated to obtain the following terms: (1) the right to require Benihana to draw down the second tranche of convertible preferred stock; (2) BFC's right to one director seat on the Benihana Board and an additional seat if Benihana missed its dividend for two consecutive quarters;[76] (3) BFC's preemptive right to purchase a proportional amount of any new voting securities issued by Benihana;[77] (4) BFC's right to require Benihana to re-deem the full $20 million of convertible preferred stock at any time after 10 years;[78] (5) anti-dilution and liquidation provisions;[79] (6) BFC's right to a standby fee;[80] and (7) BFC's right to immediately vote on all matters, including elections of directors, with the voting power associated with the amount of Common Stock into which their preferred stock was convertible, even if such stock has not yet been converted.
For its part, Morgan Joseph negotiated several terms that they considered beneficial to Benihana. Those terms included: (1) no performance criteria could be placed on Benihana as a condition of executing the second tranche; (2) a coupon rate, or dividend, of five percent;[81] and (3) a conversion price of 115% of the original volume based on a 10 day average before the announcement of the Transaction.[82]
*166 Morgan Joseph believed that Benihana got what they wanted through the negotiations. Joseph testified that he
ended up quite satisfied that we had a transaction that, in what [he] considered material aspects, the amount, the two takedowns, the dividend and conversion premium. This sort of hierarchy of importance and you can get hung up on all these points, but you got to remember what's most important. On the important points we ended up where we wanted to be.[83]
Schwartz sent the negotiated term sheet to the Board on April 30, 2004, but did not indicate that BFC was the other party to the negotiations.[84] Schwartz, however, informally told Becker, Sturges, Sano, and possibly Pine of BFC's role as the counterparty before the May 6, 2004 Board meeting.[85]
E. The May 6 Benihana Board Meeting
On May 6, 2004, the Benihana Board met again to consider the convertible preferred stock issuance. At this meeting, the entire Board formally was informed of BFC's negotiations with Benihana. Abdo made a presentation on behalf of BFC and explained its business philosophy. He then excused himself from the remainder of the meeting. Morgan Joseph circulated an updated board book that contained the negotiated terms and corrected net debt figures. They reviewed the new terms with the Board and pointed out the changes in the net debt figures.[86] In addition, the Board specifically discussed changes that had been made with regard to the conversion price and preemptive rights.[87]
The Benihana Board, however, never received the private placement memorandum that Morgan Joseph prepared after the February 17 Board meeting and gave to BFC in April 2004. Therefore, the Board members were only familiar with the proposed terms discussed at the January 29 and February 17 Board meetings and the negotiated terms presented to them at the May 6 meeting. Morgan Joseph told the Board that no significant changes to the terms had been made.[88] Additionally, though Pine had inquired about Abdo's involvement in the negotiations, the Benihana Board was not informed that Abdo himself negotiated the terms on behalf of BFC.[89] The Board did know, however, of Abdo's position as a principal of BFC and the ultimate decision making role he presumably had over BFC's investments.[90]
At the conclusion of the May 6 meeting, the Board voted to approve the BFC Transaction subject to receipt of a fairness opinion. Dornbush and Kevin Aoki attended the meeting and participated in the discussions but abstained from voting. All six remaining directors voted in favor of the Transaction.
*167 F. Closing of the BFC Transaction
On May 20, 2004, the Benihana Board met again to consider the BFC Transaction, which now was supported by a favorable fairness opinion from Morgan Joseph. The Board then approved the transaction. On June 8, 2004, Schwartz executed the Stock Purchase Agreement on behalf of Benihana, and Abdo executed it on behalf of BFC.
1. BOT's concern over the dilutive effect of the BFC Transaction
After the May 6 Board meeting, Kevin Aoki approached Schwartz, Abdo and Dornbush to inquire if either his father or BOT could finance the second tranche of the BFC Transaction in order to avoid dilution of BOT's interest in Benihana.[91] The proposals Kevin Aoki made, however, were not realistic. Despite Rocky Aoki's long history with the Company and desire to exert control over it, he had "never brought financing to the table."[92] Consequently, management did not view Rocky as a viable funding source.[93] The other scenarios Kevin presented as to how BOT could raise the necessary capital to participate in the second tranche demonstrated his lack of financial expertise and sophistication, and were likely to result in adverse tax consequences.[94] Furthermore, BFC had no motivation to give up the second tranche for which it had just negotiated.
In mid-May 2004, after learning of the BFC Transaction, Rocky Aoki discussed his displeasure regarding it with Kevin. The trustees of the Trust objected to the dilutive effect of the Transaction as well.[95] Because of concern for Kevin and Kyle Aoki's work environment, however, the trustees delegated the task of complaining about the BFC Transaction to Ken Podziba, a family friend.[96] Thereafter, representatives of the Trust and Rocky Aoki communicated their objections regarding the BFC Transaction to the Benihana Board and recommended alternative financing offers for Benihana's consideration.[97]
2. Alternative financing offers
On May 28, 2004, Benihana received an offer from Yamano Holdings (the "Yamano Offer").[98] Schwartz asked Becker, Pine and Sturges to form an independent ad hoc committee to review the offer.[99] Schwartz also sent the Yamano Offer to Morgan Joseph for evaluation.[100] Benihana reviewed both transactions quickly because it did not want to risk losing the BFC Transaction, which the Board had already announced.[101] Though the Yamano Offer terms appeared to differ from the BFC Transaction only in that the preferred would convert into Class A common stock rather than Common Stock, Yamano stated that it would need to conduct due *168 diligence and then possibly negotiate the terms further.[102] The ad hoc committee concluded that the Yamano Offer was inferior because it was "very much underdeveloped" and an important term, the conversion price, was "on its face inferior."[103] Additionally, Morgan Joseph informed Benihana that it considered the Yamano Offer inferior to the BFC Transaction and not worth pursuing.[104]
On June 3, 2004, Benihana received an offer from Cornell Capital Partners (the "Cornell Offer").[105] Schwartz submitted this proposal to Morgan Joseph for review. Morgan Joseph concluded that the short term Cornell Offer was inappropriate to finance Benihana's five year Construction and Renovation Plan.[106]
Finally, on June 4, 2004, Benihana received a letter from Trinity Capital.[107] Once again, Benihana sent this letter to Morgan Joseph for review. Morgan Joseph concluded that Trinity Capital's letter did not even constitute an offer of financing; rather, it was "another investment bank saying `We'd like to be your investment bank.'" Additionally, Morgan Joseph opined that the suggested financing terms were "just flat out ridiculous."[108]
On June 11, 2004, the Benihana Board met to consider these three alternative proposals. The Board also discussed BOT's concerns regarding the dilutive effect of the BFC Transaction.[109] The Board determined not to pursue any of the alternative proposals and voted to ratify the BFC Transaction.[110]
3. Filing of the Certificate of Designations
Benihana's Certificate of Incorporation gives the Benihana Board the power to issue "blank check" preferred stock.[111] Accordingly, and as required by § 4(l) of the Stock Purchase Agreement, Benihana filed a Certificate of Designations, Preferences and Rights of Series B Convertible Preferred Stock of Benihana ("Certificate of Designations") with the Delaware Secretary of State on June 29, 2004.[112] This action immediately reduced BOT's voting interest from 50.9% to 42.5%, and then further reduced it to 36.5% in or around August 2005, when BFC took down the second tranche. Likewise, BFC acquired *169 a 16.5% voting interest in Benihana when the Certificate of Designations was filed, which increased to 28.3% upon issuance of the second tranche.
4. Procedural History
The Complaint was filed July 2, 2004 along with motions for expedited proceedings and a preliminary injunction.[113] Defendants moved to dismiss on July 28, 2004. They filed further motions to dismiss on October 15 and 18. At trial on November 14, 2004, I partially denied Defendants motion to dismiss. In February 2005, I issued a memorandum opinion denying Defendants motion to dismiss as to BFC under Chancery Court Rules 12(b)(2) for lack of personal jurisdiction and 12(b)(5) for insufficient service of process, and as to all remaining Defendants under Rule 19 for failure to join an indispensable party.[114] Regarding Defendants' motion to dismiss the derivative claims, I found that the Complaint met all pleading requirements under Rule 23.1, but deferred decision regarding whether claims IV and V are derivative in nature pending further development of the case.[115]
G. Subsequent review of the BFC Transaction
On October 27, 2004, Benihana's Audit Committee, consisting of Becker, Pine and Sturges, met to review the BFC Transaction again. The Audit Committee analyzed the BFC Transaction to rectify a deficiency in Benihana's process under NASDAQ's standards.[116] As permitted by the applicable rules, Dornbush and Kevin Aoki participated in the discussion, although they were not members of the Committee. At the October 27 meeting, counsel to Benihana reviewed all of the allegations raised by BOT in the Amended Complaint in this action. The Audit Committee then deliberated and decided to ratify the BFC Transaction.
Later on October 27, 2004, the full Benihana Board met. After counsel to Benihana again reviewed the allegations raised in the Amended Complaint, the Board voted to ratify the BFC Transaction.
II. ANALYSIS
BOT challenges the BFC Transaction on several grounds. First, BOT contends that the transaction is void because it violated 8 Del. C. § 151 and the applicable provisions of Benihana's Certificate of Incorporation.
BOT also claims that the BFC Transaction is invalid because the Board adopted it for an improper primary purpose of diluting BOT's interest in Benihana and entrenching certain Director Defendants and that the Director Defendants breached their fiduciary duties of loyalty and care in approving the Transaction.
The issues raised by BOT's legal argument under 8 Del. C. § 151 are distinct from the entrenchment and breach of fiduciary duty claims. Therefore, the Court begins its analysis with the § 151 claim.
A. The Validity of the BFC Transaction Under 8 Del. C. § 151(a)
Benihana's Certificate of Incorporation states that: "No stockholder shall *170 have any preemptive right to subscribe to or purchase any issue of stock or other securities of the Corporation or any treasury stock or other security."[117] In connection with the sale of preferred stock to BFC, Benihana granted BFC preemptive rights to purchase Benihana stock.[118] In particular, the Stock Purchase Agreement provides that Benihana shall not issue, sell or transfer any of its equity securities unless the Company provides BFC at least 30 days prior written notice specifying the price and other material terms of the issuance. During a defined period thereafter, BFC has the right to purchase at the same price up to the number of offered shares necessary for BFC to maintain the percentage ownership in the Company it had immediately before such issuance based on its purchase of preferred shares.[119]
BOT argues the BFC Transaction is invalid based on 8 Del. C. § 151(a) and the absence of any authorization in Benihana's Certificate of Incorporation for the Board to issue stock with preemptive rights. In response, Benihana argues that the Court should interpret the language in its Certificate of Incorporation as not prohibiting Benihana from granting preemptive rights by contract because the language of 8 Del. C. § 102(b)(3), which Benihana contends the language quoted above from its Certificate of Incorporation mirrors, has been interpreted to "not necessarily prohibit contractual preemptive right[s]."[120]
Thus, this Court must address whether the Benihana Board had the authority to grant preemptive rights to BFC in connection with its purchase of preferred stock consistent with the Delaware General Corporation Law ("DGCL") and its charter. In particular, the Court must consider the interplay of certain provisions of the DGCL with Benihana's Certificate of Incorporation and the Board's action in issuing the preferred stock.
Section 151 of the DGCL allows corporations to issue one or more classes of stock or one or more series of stock within a class, including stock with redemption rights, conversion features and other special rights.[121] The powers, preferences, rights and other characteristics of such shares, however, "shall be stated and expressed in the Certificate of Incorporation or of any amendment thereto, or in the resolution or resolutions providing for the issue of such stock adopted by the board of directors pursuant to authority expressly vested in it by the provisions of its certificate of incorporation."[122] In addition, 8 Del. C. § 151(g) provides:
When any corporation desires to issue any shares of stock of any class or of any series of any class of which the powers, designations, preferences and relative, participating, optional or other rights, if any, or the qualifications, limitations or restrictions thereof, if any, shall not have been set forth in the *171 certificate of incorporation or in any amendment thereto but shall be provided for in a resolution or resolutions adopted by the board of directors pursuant to authority expressly vested in it by the certificate of incorporation or any amendment thereto, a certificate of designations setting forth a copy of such resolution or resolutions and the number of shares of stock of such class or series as to which the resolution or resolutions apply shall be executed, acknowledged, filed, recorded and shall become effective, in accordance with § 103 of this title.[123]
Therefore, the Court also must consider the terms of Benihana's charter.
The relevant section of Benihana's Certificate of Incorporation is Article 4(b). This Article vests the Board with authority to "issue from time to time the Preferred stock of any series and to state in the resolution or resolutions providing for the issuance of shares of any series the voting powers, if any, designations, preferences and relative, participating, optional or other special rights"i.e., a blank check authorization.[124] The BFC Transaction gives BFC the preemptive right to purchase additional equity securities of Benihana if the Company issues or transfers any of its equity securities and to do so at the same price and terms being offered to others.[125]
"Corporate charters and by-laws are contracts among the shareholders of a corporation and the general rules of contract interpretation are held to apply."[126] Accordingly, certificates of incorporation are "interpreted using standard rules of contract interpretation which require a court to determine from the language of the contract the intent of the parties.... If no ambiguity is present, the court must give effect to the clear language of the Certificate."[127]
Benihana disputes BOT's contention that the BFC Transaction is invalid. Benihana contends that the language in its Certificate of Incorporation regarding preemptive rights should not be interpreted as prohibiting Benihana from granting preemptive rights by contract when issuing preferred stock. They base this argument on the ambiguity they claim surrounds the intended purpose of the language in 8 Del. C. § 102(b)(3) and the parallel language in the Certificate of Incorporation. In that regard, Benihana relies on the 1967 and 1969 amendments to § 102. Before the 1967 amendments, § 102(b)(3) provided that a certificate of incorporation may contain provisions "limiting or denying to the stockholders the preemptive rights to subscribe to any or all additional issues of stock of the corporation."[128] As a result, a common law rule developed that shareholders possess *172 preemptive rights unless the certificate of incorporation provides otherwise. In 1967, the Delaware Legislature reversed this presumption. Section 102(b)(3) was amended to provide in pertinent part: "No stockholder shall have any preemptive right to subscribe to an additional issue of stock or to any security convertible into such stock unless, and except to the extent that, such right is expressly granted to him in the certificate of incorporation."[129]
Thereafter, companies began including boilerplate language in their charters to clarify that no shareholder possessed preemptive rights under common law.[130] Consistent with that practice Benihana's Certificate of Incorporation states that "[n]o stockholder shall have any preemptive right to subscribe to or purchase any issue of stock or other securities of the Corporation, or any treasury stock or other treasury securities."[131] I conclude that this type of boilerplate language concerning preemptive rights applies only to common law preemptive rights and not to contractually granted preemptive rights.[132] Such a conclusion is reinforced by the fundamental principle that parties should have the freedom to contract and that their contracts should not easily be invalidated.[133]
The blank check provision in Benihana's Certificate of Incorporation suggests that the certificate was never intended to limit Benihana's ability to issue preemptive rights by contract to purchasers of preferred stock. Therefore, I do not read Article 4 of the charter as doing anything more than confirming that the common law presumption does not apply and that the Certificate of Incorporation itself does not grant any preemptive rights. The broad authorization to the Board to issue preferred stock and the Board's approval of the BFC Transaction and subsequent filing of an appropriate Certificate of Designations presents a different situation. Hence, I conclude that the Board did have the authority to issue the preferred stock with preemptive rights that is the subject of the BFC Transaction under Benihana's Certificate of Incorporation and the applicable provisions of the DGCL.[134]
*173 B. The Applicable Standard of Review for the BFC Transaction
Before addressing the alleged breaches of fiduciary duties, the Court must determine whether it should judge the BFC Transaction under an entire fairness standard or the business judgment rule. There is no dispute that the BFC Transaction is an interested transaction; at a minimum, Abdo, a director of Benihana, had an interest in it as a director of BFC. Benihana argues, however, that the BFC Transaction qualifies for one of the "safe harbor" provisions of 8 Del. C. § 144(a) because a majority of informed and disinterested directors of the Board voted in favor of the Transaction. Defendants have the burden to demonstrate that one of the safe harbors of § 144 applies.[135] If this Court determines that Defendants have not satisfied § 144, entire fairness review applies.[136] If the Court determines that Defendants have satisfied § 144, then the transaction is protected against being invalidated solely because it is an interested one and the burden shifts to BOT to demonstrate that the transaction was unfair.[137] Further, if the requirements of § 144(a)(1) have been met, Abdo's "interest" in the Transaction would not vitiate the presumptions of the business judgment rule.[138]
1. The Applicability of Section 144(a)(1)
Under 8 Del. C. § 144(a)(1):
No contract or transaction between ... a corporation and any other corporation, partnership, association, or other organization in which 1 or more of its directors or officers, are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the board or committee which authorizes the contract or transaction, or solely because any such director's or officer's votes are counted for such purpose, if:
(1) The material facts as to the director's or officer's relationship or interest and as to the contract or transaction are disclosed or are known to the board of directors or the committee, and the board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum.
As discussed below, six of the nine Benihana directors, Pine, Sturges, Sano, Becker, Schwartz and Yoshimoto, voted to ratify the BFC Transaction (the "Voting Directors"). Abdo excused himself from the meeting during both the discussion and *174 vote on the Transaction, while Dornbush and Kevin Aoki abstained from the vote only. BOT contends that § 144(a)(1) does not apply here, because the Voting Directors were neither informed of the material facts regarding Abdo's interest in the BFC Transaction nor disinterested.
To determine whether the prerequisites of § 144(a)(1) are met, the Court must examine the interestedness of each of the Voting Directors, as well as the information available to them. Even if the requirements of § 144(a)(1) were not met, Defendants still could avoid having the interested BFC Transaction rendered void or voidable by proving that it was "fair as to the corporation" under § 144(a)(3). Defendants, however, seek to invoke not only the benefits of the safe harbor of § 144(a)(1), but also the presumptions of the business judgment rule.
In general, the business judgment rule is a "presumption that in making a business decision the directors of a corporation acted on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the company."[139] In Brehm v. Eisner, the Delaware Supreme Court identified several circumstances in which the business judgment rule would not apply.
Thus, directors' decisions will be respected by courts unless the directors are interested or lack independence relative to the decision, do not act in good faith, act in a manner that cannot be attributed to a rational business purpose or reach their decision by a grossly negligent process that includes the failure to consider all material facts reasonably available.[140]
With that in mind, this Court ultimately must determine the applicability of both § 144(a)(1), which speaks in terms of "disinterested directors," and the business judgment rule, which depends on the disinterestness and independence of the directors.
To avoid unnecessary duplication in reviewing the circumstances of the individual directors, the analysis that follows addresses the allegations of interest and lack of independence as to each Voting Director. Regarding independence, the party alleging domination and control of a company's board of directors bears the burden of proving such control by showing a lack of independence on the part of the directors.[141] In assessing director independence, the court must apply a subjective "actual person" standard, instead of an objective "reasonable director" standard.[142] An independent director is one whose decision "is based on the corporate merits of the subject before the board rather than extraneous considerations or influence,"[143] while a director who is not independent is "dominated or otherwise *175 controlled by an individual or entity interested in the transaction."[144] Control over individual directors is established by facts demonstrating that "through personal or other relationships the directors are beholden to the controlling person"[145] or so under "their influence that their discretion would be sterilized."[146]
BOT advances several grounds for its argument that the directors were interested in or lacked independence with respect to the BFC transaction. I address those grounds below.
2. Were the Voting Directors disinterested and independent?
a. Pine, Sano and Sturges
Plaintiff argues that Pine, Sano and Sturges were interested because the BFC Transaction removed a threat to their incumbency.[147] Defendants respond by arguing that even after the BFC Transaction BOT had sufficient voting power to remove directors. In particular, a successful proxy fight by BOT caused Sano to lose his Board seat in the 2004 election. Further, Defendants contend that neither Pine nor Sturges "needs" or "depends on" his Benihana directorship.[148]
Entrenchment, self-dealing, or financial interest can indicate that a director is interested or lacks independence.[149] There is no evidence that Pine, Sano or Sturges has any financial interest in the BFC Transaction, only BOT's allegations of an entrenchment motive. BOT, however, must prove that the directors believed they were vulnerable to being removed from office, and that they took entrenchment action.[150] "In most circumstances Delaware law routinely rejects the notion that a director's interest in maintaining his office, by itself, is a debilitating factor."[151] Further, the fact that directors receive fees for their services does not establish an entrenchment motive on their part.[152]
Plaintiff has failed to prove that Pine, Sano or Sturges depends financially on his Benihana directorship. Pine is a lifelong restaurant executive and the former CEO of Restaurant Associates, Inc. Sturges is a lawyer, entrepreneur and gaming industry executive. Apart from a conclusory allegation about threats to their incumbency, BOT offered no evidence of specific facts relating to the financial or other benefits these individuals received for being Benihana Directors. Thus, I find that BOT has failed to show that Pine, Sano or Sturges were either interested in the BFC *176 Transaction or lacked independence from anyone else who was.
b. Schwartz and Yoshimoto
BOT argues that Schwartz and Yoshimoto, as directors and officers of Benihana, were interested in the BFC transaction because it removed a threat to their incumbency. As discussed later in connection with Plaintiff's contention that the directors acted for an improper entrenchment purpose, I find that BOT has not proven that allegation. Thus, for the reasons explained infra, Plaintiff's allegations of entrenchment do not provide an adequate basis for concluding that either Schwartz or Yoshimoto was interested in the BFC Transaction.
Plaintiff also contends that Schwartz and Yoshimoto lacked independence because they were dependent on Abdo for their compensation. Particularly, Abdo served as chairman of both Benihana's compensation committee and nominating committee and as a member of the executive committee.[153] Defendants deny that Schwartz and Yoshimoto were beholden to Abdo, contending that Abdo lacked unilateral power to affect their positions. Defendants also argue that the cases cited by BOT do not apply because they relate to Rule 23.1 and not 8 Del C. § 144(a)(1).[154]
In Rales, the court analyzed the independence issue on a motion to dismiss.[155] In that case the interested directors were brothers who held a 44% controlling interest in the company.[156] One employee director received approximately $1 million per year from the company and the other received $300,000 per year from another company in which the brothers served as vice presidents and owned a majority of the stock.[157] The court found that the interested directors' position as chairman of the company's executive committee placed them in a position to exert considerable influence over the other directors who were employees of the company. Therefore, the court concluded that reasonable doubt existed as to whether the employee directors could consider impartially an action that was contrary to the interest of the interested directors. The situation here is quite different.
Unlike Rales, this case involves a post-trial assessment of independence. The Court has the benefit of a full record, including the opportunity to consider Schwartz's trial testimony and review Yoshimoto's deposition. In addition, both Schwartz and Yoshimoto had multi-year employment contracts that established their base salaries and prohibited their termination except for cause.[158] Furthermore, *177 Abdo did not have unilateral power to determine the employee directors' bonuses and other compensation. Instead, he chaired a three member committee charged with that responsibility.
This Court will not find a director beholden unless the purported controlling person has "unilateral" power to substantially affect the director.[159] Plaintiffs concede that there is no evidence that Abdo ever threatened to use his power as chairman of the committee to affect the officers' compensation adversely.[160] Thus, based on the evidence presented at trial I find that Schwartz and Yoshimoto were independent.
Even if I concluded that Schwartz and Yoshimoto were "interested" based on concerns about incumbency (which I have not) or lacked independence, their conflicts would not vitiate the approval of the BFC Transaction by the disinterested and independent majority.[161] Because a majority of the disinterested and independent directors approved the BFC Transaction, the interested nature of that transaction does not render it either void or voidable solely for that reason, provided the material facts as to Abdo's and any other director's or officer's interest were disclosed or known to the Benihana Board.[162]
c. Becker
BOT contends that Becker was not independent because he and Abdo serve as outside directors of Bluegreen Corporation, a subsidiary of BFC.[163] BOT further emphasizes that Abdo invited Becker to join the Bluegreen board,[164] for which Becker receives $44,000 per year as compensation.[165]
Defendants argue that none of these facts is out of the ordinary or demonstrates that Becker's directorship at Bluegreen was of such importance to him, financially or otherwise, that it clouded his judgment with respect to the BFC Transaction.[166] Defendants further contend that the cases cited by BOT are not apposite, because they are pretrial decisions, and therefore do not support a conclusion that BOT met its burden at trial in challenging Becker's independence from Abdo.[167]
I agree. Becker's appointment to the Bluegreen board did not involve extraordinary circumstances; people normally get appointed to boards through personal contacts. Further, BOT has not proven that Becker's Bluegreen appointment combined with his modest compensation clouded his judgment with respect to the BFC Transaction.
This Court has held that a finding for purposes of a motion to dismiss that reasonable doubt exists as to a director's independence or disinterest has "very limited significance."[168] Such a determination *178 only enables a plaintiff to proceed to discovery and potentially to trial, where the plaintiff must prove by a preponderance of the evidence that the director in fact lacked independence or was interested.[169] Thus, I do not find persuasive the pre-trial decisions cited by BOT.
Turning to the post-trial decisions cited, BOT asserts that the reasoning in Kahn v. Tremont Corp. controls this decision.[170] According to BOT, Becker, like the directors in Kahn, lacks independence because he "had previous affiliations with [Abdo, the interested party] or companies that he controlled and, as a result received significant financial compensation or influential positions on the boards" of companies Abdo controlled.[171]
Plaintiff's reliance on Kahn is misplaced. First, the board member in Kahn received more than ten times the compensation Becker receives for his position on the Bluegreen board.[172] Second, unlike this case, three of the directors in Kahn failed to attend the informational meetings concerning the transaction; yet, they promptly ratified suggestions of the director to whom the court held they were beholden.[173] Consequently, the factual showing in Kahn was much stronger than the evidence BOT presented here. Thus, the holding in Kahn does not support a post-trial finding that Becker was not independent or that he was interested in the BFC Transaction.
The facts in In re MAXXAM, Inc., another post-trial decision cited by Plaintiff, also are far more egregious than this case.[174] In In re MAXXAM, the court identified three board members who lacked independence. The financial compensation those directors received greatly exceeded Becker's compensation as a Bluegreen director.[175] Becker's relatively small compensation of $44,000 did not make him beholden to Abdo. Thus, Plaintiff failed to meet their burden at trial in demonstrating that Becker's position on the Bluegreen board made him beholden to Abdo.
Next BOT asserts that Becker lacked independence from Schwartz because he had been Schwartz's close friend for 40-45 years and the two met every ten *179 to fourteen days.[176] This relationship does not destroy Becker's independence, however. "[A]llegations of mere personal friendship or a mere outside business relationship, standing alone, are insufficient to raise a reasonable doubt about a director's independence."[177] In this case, the evidence only shows that Becker had a longstanding friendship with Schwartz. This alone does not render Becker interested in the BFC Transaction or prove he lacked independence, especially where, as discussed elsewhere in this opinion, Schwartz was not interested in the Transaction and did not lack independence.
Plaintiff further contends that Becker's hostility toward BOT precluded him from acting independently. Specifically, BOT relies on Becker's deposition testimony that he wasn't comfortable with BOT running a major part of the Company. Defendants accuse Plaintiff of mischaracterizing Becker's deposition. They contend that the deposition refers to concerns about Rocky Aoki's influence over the Company, not BOT's.
Specifically, Becker had indicated that he didn't know if he would have been in favor of an alternative that involved selling $10,000,000 of the preferred stock to each of BFC and BOT. When asked why at his deposition, Becker explained:
Well, because of all the things that have happened with the trust, Benihana and Rocky being a convicted felon, I am not sure I would feel comfortable for the other shareholders of the company if we had a felonnot controlling but having severe influence over such a significant part of the company.[178]
Rather than demonstrating that Becker was "hostile to BOT," as Plaintiff claims, this testimony suggests that he simply was wary of Rocky Aoki's involvement in Benihana. Moreover, even if Becker were hostile to BOT, that fact alone would not be sufficient, in my opinion, to demonstrate that Becker either was an interested director or lacked independence from Schwartz and Abdo for purposes of the BFC Transaction.
3. Material facts disclosed or known
BOT argues that the Voting Directors were uninformed because they were not aware: (a) that Abdo himself negotiated on behalf of BFC, (b) that significant changes to the term sheet were made as a consequence of the negotiations with BFC, or (c) of the correct net debt figures. According to BOT, the actions of Schwartz, Dornbush and Abdo constitute undisclosed self-dealing, deception and manipulation of the Board which require application of the entire fairness standard.
To be informed a board does not need to know every fact. Rather, the board is responsible for considering material facts that are reasonably available, not those that are immaterial or out of the board's reasonable reach.[179] The term "material" in this context means "relevant and of a magnitude to be important to directors in carrying out their fiduciary duty of care in decisionmaking."[180]
*180 a. Abdo's negotiation of the Transaction on behalf of BFC
BOT argues that Abdo concealed his interest in the BFC Transaction too long.[181] Specifically, they assert that Schwartz, Dornbush and Abdo were required to disclose Abdo's interests in the BFC Transaction before the January 29 and February 17 Board meetings.[182] Plaintiff contends that Abdo had two different interests in the BFC Transaction that he failed to timely disclose to the Board: (1) that he previously discussed purchasing Benihana stock from the Aoki children; and (2) that he represented BFC in the negotiations. Defendants contend that Abdo fully and timely informed the Board about his interests in the BFC Transaction at the May 6 meeting.[183] They dismiss Abdo's discussions with the Aoki children as immaterial to the BFC Transaction and contend that the Board members knew that Abdo acted on behalf of BFC.
There are several problems with Plaintiff's argument that Abdo had a duty to disclose prior discussions with the Aoki children to the Benihana Board in connection with the January 29 and February 17 Board meetings. First, after hearing the testimony and considering the available evidence, I have found that Abdo did not approach Kevin Aoki at their September 2003 dinner meeting about the possibility of Abdo purchasing BOT's stock in Benihana.[184] Further, that allegation related only to Abdo's interest in the stock; there is no mention of a purchase on behalf of BFC. Second, there is no evidence of any other communication between Abdo and any of the Aoki children regarding a possible purchase of BOT shares until the March 2004 lunch meeting he had with Kevin. In addition, the evidence indicates that Abdo did not approach his partner at BFC, Levan, about having BFC purchase $20 million worth of Benihana convertible preferred stock until immediately after the February 17 Board meeting. Thus, I find that neither Abdo nor BFC had made a decision to attempt to purchase the convertible preferred shares at the time of the February 17 meeting. Therefore, Abdo did not breach any disclosure obligation to Benihana or his fellow directors in failing to disclose his or BFC's interest at the February 17 and earlier meetings.
The facts relating to Abdo's participation in the negotiations with Morgan Joseph are as follows. Two or three days after the February 17 meeting, and with Levan's approval, Abdo advised Joseph that BFC had an interest in purchasing the Benihana convertible preferred stock being offered to finance the Construction and Renovation Plan. Benihana welcomed Abdo's involvement. In early April 2004, Morgan Joseph sent its private placement memorandum to BFC and negotiations began between Joseph and Abdo. The negotiations continued through the end of April. By agreement, Benihana did not shop the issuance to anyone else during that period. Schwartz sent the negotiated term sheet to the Board on April 30, 2004, but did not indicate BFC was the purchaser. Schwartz informally identified BFC's role to Becker, Sturges, Sano and possibly Pine before the Board meeting on May 6, at which the directors reviewed the proposed transaction.
As a member of the Benihana Board Abdo had an "unremitting obligation" *181 to deal candidly with his fellow directors.[185] This obligation requires directors to take affirmative steps to disclose any interest they may have in a transaction.[186] Absent special circumstances in which the board would have reason to expect earlier disclosure, however, a director has no duty to disclose his interest in a transaction until he seeks board approval of the transaction.[187]
Here, the disinterested directors, at least, knew that Abdo acted on behalf of BFC before the May 6 meeting. Schwartz recalled having conversations with Becker, Sturges, Sano, and possibly Pine, before the May 6 meeting, informing them of Abdo's involvement.[188] Further, Abdo made a presentation to the Board on behalf of BFC at the May 6 meeting. Thus, the directors knew that Abdo represented BFC. Also, Morgan Joseph, not Abdo, negotiated the terms on behalf of Benihana.
BOT suggests that Abdo's participation in the negotiations was unfair, because he attended the meetings at which Benihana's Board determined the parameters of their proposed stock offering. Plaintiff also argues that by failing to disclose Abdo's involvement in the negotiations, Schwartz and others tainted the process. The Board, however, did not vote for the final terms of the transaction at the February 17 meeting; instead, they approved a course of action and considered the terms for the Preferred Stock offering discussed at that meeting more akin to a "wish list."[189] Nor did BOT prove at trial that Abdo knew at the February 17 meeting that BFC would offer to purchase the Preferred Stock. Further, the Board had adequate time to consider the transaction after they knew that Abdo acted on behalf of BFC. For example, after the May 6 meeting and before the BFC Transaction was consummated, the Board met on May 20 and again on June 11, and voted to proceed with the transaction after considering BOT's objections and the purported alternatives suggested by BOT's counsel.[190] Benihana also obtained a fairness opinion from Morgan Joseph before they consummated the BFC Transaction.
BOT also insinuates that BFC obtained better terms in the Transaction than it would have otherwise, because Abdo negotiated the deal after having attended the January and February Board meetings. The evidence does not support that conclusion. As Joseph explained at trial, the negotiations involved give and take on a number of points, but Benihana "ended up where we wanted to be" in what Joseph "considered material aspects, the amount, the two takedowns, the dividend and conversion premium."[191]
*182 In addition, Abdo's interest in acquiring Benihana stock was not material to the BFC Transaction. None of the directors testified that they might have voted differently on the BFC Transaction had they known of Abdo's earlier indications of interest in buying Benihana stock. Abdo's potential purchase for a million dollars of an option to acquire Benihana stock from the Aoki children is not analogous to a significant investment of over $20 million by BFC. I therefore find unpersuasive BOT's argument that Abdo should have told the Board about his discussions with the Aoki children in September 2003. First, as previously found, the Aoki children initiated that contact with Abdo. Hence, Abdo was not actively seeking to purchase Benihana stock. Second, the Aoki children did not communicate with Abdo again until March 2004. Consequently, BOT failed to prove that Abdo's discussions with the Aoki children ever reached a point at which he would have been required to inform the Board about them.
b. "no significant changes to the term sheet"
Plaintiff asserts that Joseph deceived the Board as to the nature and extent of the negotiated changes Morgan Joseph and BFC made to the term sheet.[192] They contend that Joseph misled the Board at the May 6 meeting when he told them that there had been "no significant changes in the term sheet."[193] Characterizing this statement as "an obvious deception," BOT contends the following material changes were made to the term sheet:
(1) While the term sheet proposed by Morgan Joseph provided for perpetual preferred stock and gave BFC no right to force a redemption, Abdo requested and Joseph agreed to give BFC the right to force Benihana to redeem the full $20 million at any time after ten years at BFC's option; (2) While the term sheet proposed by Morgan Joseph had given Benihana the option of not issuing the second $10 million tranche, Abdo requested and Joseph agreed to make that issuance mandatory; (3) While the term sheet proposed by Morgan Joseph did not provide the purchaser with pre-emptive rights to purchase a proportional amount of any new voting securities issued by Benihana, Abdo requested and Joseph agreed to give such rights to BFC; and (4) While the term sheet proposed by Morgan Joseph provided that the purchaser would have the right to appoint an additional director to the Benihana Board if Benihana missed 4 consecutive dividend payments, Abdo requested and Joseph agreed to give BFC the right to appoint the additional director if Benihana missed just 2 consecutive dividend payments.[194]
Defendants deny that Joseph's statement that there were "no significant changes" deceived the Board. They argue that Plaintiff has not produced any evidence that Joseph intended to deceive the Board or that the Board culpably ignored any material fact contained in the term sheet.[195]
The parties do not dispute that changes were made to the term sheet. In fact the Board expected that changes would be made to the January 29 term sheet.[196]*183 Thus, my analysis centers on whether the Board did not know about any significant changes.
The Board knew of several changes in the term sheet. For example, the January 29 term sheet called for an interest rate of 6% plus or minus 0.5%, but the May 6 term sheet provided for a rate outside that range, 5%. The Board discussed this change at the May meeting.[197] Moreover, the directors took home the May board book that contained the May 6 term sheet, and therefore had an opportunity to review the term sheet.
Benihana's negotiator, Joseph, believed that although changes had been made to the term sheet, Benihana ended up where it wanted to be. Joseph described the changes that evolved through negotiation as follows:
We negotiated the approvals required for material corporate actions. I thought BFC was reasonable in their request. Those negotiations were not terribly intense. They made some suggestions. We asked to move a few of them around, and that was okay. On the board seats, we had some discussions and got it down to one. So I ended up quite satisfied that we had a transaction that, in what I considered material aspects, the amount, the two takedowns, the dividend and conversion premium. This sort of hierarchy of importance and you can get hung up on all these points, but you got to remember what's most important. On the important points we ended up where we wanted to be.[198]
I find this testimony credible and that Joseph honestly believed that the changes to the term sheet were not significant. Hence, I find that Joseph did not mislead the Board.
c. Correct net debt figures
Plaintiff contends that Joseph and Schwartz misled the Board at the February 17 Board meeting when they told them that Benihana expected to have $37.3 million of net debt at the close of their fiscal year, on March 30, 2004.[199] In particular, Plaintiff asserts that Schwartz and Joseph knew they had presented incorrect net debt figures to the Board.[200] According to Plaintiff, this deception caused the Board to decide not to rely solely upon the Wachovia Proposal to finance the renovation.[201] Defendants deny that Joseph and Schwartz intentionally deceived the Board at the February 17 meeting.[202] Further they contend that even though the projections ultimately proved to be incorrect, this *184 misstatement was immaterial because the Board received correct and accurate information at the May 6, 2004 Board meeting.[203]
At trial Joseph and Schwartz explained why the actual net debt figures differed from the projections. The disparity resulted in part from unforeseen delays in certain projects, caused by issues related to zoning, building inspections, and review by architectural boards.[204] For example, the Philadelphia location was delayed due to problems complying with zoning ordinances.[205] I find that Joseph and Schwartz did not intentionally misstate the net debt figures.[206]
Additionally, although the Board had the wrong net debt figures at the February 17 meeting, they did not make any irreversible decision based on that information. In fact, the Board met again on May 6 to consider debt financing. At the meeting, Joseph, acting on behalf of Morgan Joseph,
made the point, wanted to make the point thatsome capital expenditures had been delayed so that the debt balance end of '04 was less than we projected earlier. And there was some discussion about this page [which reflects the updated cash flow projections based on the base case] at theat the board meeting. And we pointed out that based on our conversation with management, we believed that these were temporary deferrals as opposed to fundamental long-term changes in capital needs.
Q. And did those changes result in any changes in your conclusions?
A. No, they did not.[207]
Finally, the alleged misstatement in net debt figures was immaterial to the decision to use equity financing. The Defendant Directors testified that the decision to finance the renovations of the majority of the Benihana restaurants with equity rather than debt resulted from a desire to avoid the debt to EBITDA covenant that Wachovia required.[208] Benihana expected these renovation efforts to last at least five years.[209] Some Directors feared that this covenant might restrict Benihana's access to necessary funds, thereby hindering the renovation plan if Benihana had a bad year.[210] Moreover, while the Board may have considered the net debt figures important in determining what kind of financing alternatives to pursue, those figures comprised only a small part of the overall package of information presented to the directors. Based on all the evidence, I find that the alleged misstatement in the net debt figures was unintentional and immaterial in view of the later correction.
*185 4. Conclusion (applicability of § 144)
While I find that the Benihana Board's approval of the BFC Transaction meets the requirements of 8 Del. C. § 144(a)(1), that section merely protects against invalidation of a transaction "solely" because it is an interested one.[211] "Nothing in the statute sanctions unfairness to [the Company] or removes the transaction from judicial scrutiny."[212] Defendants assert that if they meet the requirements of § 144(a)(1), the transaction is beyond the reach of entire fairness. That is not necessarily correct.
Satisfying the requirements of § 144 only means that the BFC Transaction is not void or voidable solely because of the conflict of interest.
While non-compliance with §§ 144(a)(1), (2)'s disclosure requirement by definition triggers fairness review rather than business judgment rule review, the satisfaction of §§ 144(a)(1) or (a)(2) alone does not always have the opposite effect of invoking business judgment rule review.... Rather, satisfaction of §§ 144(a)(1) or (a)(2) simply protects against invalidation of the transaction `solely' because it is an interested one. As such, § 144 is best seen as establishing a floor for board conduct but not a ceiling.[213]
Thus, equitable common law rules requiring the application of the entire fairness standard on grounds other than a director's interest still apply.[214]
Because BOT also contends that the Director Defendants breached their fiduciary duties of loyalty and care, my analysis does not end with the "safe harbor" provisions of § 144(a).
C. Improper Primary Purpose
Plaintiff contends that the Board approved the BFC Transaction for the improper purpose of entrenching the Board members in office.[215] Defendants argue that BOT has not met their burden on this issue because: (1) BOT has not shown that any of the directors subjectively had entrenchment as the sole or primary purpose of their actions; (2) the BFC Transaction had a de minimis entrenchment effect, if any, given Benihana's preexisting corporate governance structure; and (3) a majority of the directors voting on the BFC Transaction did not have an entrenchment purpose and their assent to the transaction was not the result of fraud or manipulation by their fellow-directors.[216]
Corporate fiduciaries may not utilize corporate machinery for the purpose of perpetuating themselves in office.[217]*186 A plaintiff charging a primary purpose of entrenchment bears a heavy burden of proof at trial.[218]
A successful claim of entrenchment requires plaintiffs to prove that the defendant directors engaged in action which had the effect of protecting their tenure and that the action was motivated primarily or solely for the purpose of achieving that effect.[219]
Where a board's actions are shown to have been taken for the purpose of entrenchment, they may not be permitted to stand.[220]
The fact that a plan has an entrenchment effect, however, does not mean that the board's primary or sole purpose was entrenchment.[221] Conversely, where the objective sought in the issuance of stock is not merely the pursuit of a business purpose but also to retain control, a court will not accept the argument that the control effect of an agreement is merely incidental to its primary business objective.[222]
Plaintiff asserts that Dornbush and Schwartz pursued the BFC Transaction in order to entrench themselves in office. BOT further asserts that Dornbush and Schwartz subsequently misled the Board when they convinced them that debt financing did not represent the best mechanism to fund the renovation project. Additionally, Plaintiff contends that Dornbush and Schwartz felt threatened by Keiko Aoki because Dornbush testified that "if Keiko gained control," Schwartz would have to "weather the storm" because she "presumably would be hostile to management."[223] Dornbush further testified that he "shared" a "concern" that, upon obtaining control of Benihana, Keiko Aoki, would "remove all of the people who were there for 20 years of service."[224] BOT also contends that, after the BFC Transaction, Schwartz persuaded Sano to switch directorships with him precisely "so that [he][was]n't at risk of being removed from the board of directors of Benihana if BOT could, together with other stockholders, win the election" at the 2004 annual meeting.[225]
Although, as Plaintiff points out, Keiko may be "hostile to management," it still would take her several years to exert meaningful control over Benihana. Further, although Keiko's potential hostility may have given the directors a reason to entrench themselves that does not mean ipso facto that the directors approved the BFC transaction primarily or solely for that purpose. The law requires more than just a motivation to entrench.[226]
Dornbush was a named partner of a law firm that is "general counsel to Benihana."[227]*187 For fiscal year 2003, the law firm, where Dornbush's son also was a partner, received fees from Benihana of more than $1,000,000.[228] Dornbush is 75, however, and no longer a profit sharing partner in his law firm. Dornbush separately received $5,000 a month from Benihana for consulting services.[229] Dornbush testified at trial and I found him to be a credible witness. Having considered Dornbush's testimony and that of several other witnesses and having reviewed the relevant documentary evidence, I find that Dornbush did not facilitate the BFC Transaction primarily or solely for the purpose of protecting his tenure or that of any other director.
Although Schwartz had no significant source of income other than the compensation he received from Benihana,[230] he has an employment agreement with Benihana that prevents his termination as CEO, without cause, until 2009. Even after completion of the BFC Transaction, BOT is still the largest stockholder of Benihana. Moreover, although BFC generally invests for the long term and does not frequently change management, there is no evidence of any special relationship between BFC or Abdo on the one hand and Schwartz and Dornbush on the other. BFC presumably will expect good performance from Benihana and its managers. Hence, it is reasonable to infer that BFC would not hesitate to remove Schwartz from his positions if grounds for a termination for cause existed.
BOT also cites various actions Schwartz took in 2003 and 2004 that it contends support a finding that Schwartz acted for an improper entrenchment purpose. For example, Plaintiff suggests that Schwartz acted improperly when he switched directorships with Sano. By making that change, Schwartz had the Class A, instead of the Common, stockholders vote for his election.[231] This action shows that Schwartz recognized the threat BOT potentially posed to his directorship. The switch, however, effectively reduced BOT's ability to remove Schwartz from office, thus reducing his motivation to approve the BFC Transaction solely or primarily for entrenchment purposes.
Plaintiff also asserts that Dornbush's law firm and Schwartz looked into the possibility of issuing a large number of Class A shares, just to dilute the BOT shares.[232] They further assert that Dornbush even admitted that had the shares been issued for that reason, it would have been for a non-legitimate purpose.[233]
In my opinion, Plaintiff exaggerates the importance of this incident. Schwartz explained that Benihana constantly considered the effect of a stock issuance that would combine the Common and Class A shares.[234] Before the BFC Transaction, the Common and Class A shares had unequal *188 voting rights.[235] The Class A shareholders exclusively elect 25% of the directors and have 1/10 vote per share; the Common Stock vote on the remaining 75% of directors.[236] Schwartz testified that the Common shareholders and the Class A shareholders constantly encouraged Benihana to consider combining the two share classes because it would increase the Company's liquidity.[237] This was particularly important to Benihana because the constant complaint from Wall Street was that "there's no liquidity because of this situation."[238] Therefore, Benihana had legitimate reasons for considering a stock issuance that might have the effect of diluting the BOT shares.
On August 28, 2003, Schwartz sent a fax to Dornbush discussing the effect on voting rights if Benihana continued to issue a dividend of 10 or 15% per year.[239] Schwartz calculated that if Benihana issued a 10% dividend every year then by 2016 the amount of Common Stock outstanding would fall below the 12.5% threshold for triggering the Class A shares ability to participate with the Common Stock in the election of their 75% of the directors.[240]
Another hypothetical scenario Schwartz discussed with Dornbush around September 2003 was the feasibility of issuing over 16 million Class A shares and thereby causing the percentage of Common Stock to fall below 12.5% of the total.[241] Such a transaction would have diluted BOT's voting power to less than 30%. As previously mentioned, Dornbush indicated that such a transaction would not be feasible and would be for a nonlegitimate corporate business purpose.
I find that Schwartz's consideration of the latter scenario, even if only in passing, shows that he was concerned about BOT's control of Benihana in late 2003. Considering all the evidence, including the testimony of Schwartz and Dornbush, however, I find that Schwartz's concern did not infect his own or the Board's decisionmaking process in connection with the BFC Transaction. I likewise conclude that neither Dornbush nor a majority of the members of the Benihana Board had entrenchment or dilution of BOT as their sole or primary purpose in approving the BFC Transaction. Instead, I find that the directors who approved the BFC transaction did so on an informed basis, acting in good faith, and believing they were acting in the best interests of Benihana.
Plaintiff cites three cases in which the court found a motive to entrench because the Board could have addressed the asserted need by alternative nondilutive means and failed to give an adequate explanation as to why the directors chose a dilutive financing scheme. Defendants assert that each of these cases is distinguishable. I will address each in turn.
In Canada Southern Oils v. Manabi Exploration Co., the board approved a dilutive issuance which caused the majority shareholder to lose control of the company.[242] The board claimed it needed to issue the shares to raise funds to solve *189 their financial crisis. The court, however, did not believe the company had a major financial crisis and had doubts as to whether the directors could justify the dilutive issuance without giving plaintiff the opportunity to purchase the shares.[243]
Further, the court found persuasive several facts not present in this case. First, the directors never offered the controlling shareholder the option to purchase the shares, choosing instead to blindly assume they would not help.[244] In this case BOT had the opportunity to help fund the construction and Renovation Plan, but failed to make any proposal demonstrating that they had the necessary funds. Second, the notice for the directors' meeting made no reference to the possibility of selling shares of the company.[245] In contrast, the Benihana directors met several times to discuss their funding options and knew each time they would discuss the funding issue. The court in Canada Southern Oils held that:
When the undisputed facts are viewed cumulatively I find it reasonabl[e] to infer that the primary purpose behind the sale of these shares was to deprive plaintiff of the majority voting control. Hagan and his associates did too much too soon with too little disclosure to justify a contrary conclusion.[246]
That is not the case here.[247] The Benihana Board had valid reasons to use equity as opposed to debt financing. Everyone, including Kevin Aoki, agreed that the Company needed to proceed with its Construction and Renovation Plan. Benihana carefully considered the BFC Transaction and had Morgan Joseph explore the option of debt financing. Morgan Joseph concluded that debt financing was not the best option because they feared it might reduce the flexibility Benihana needed to take advantage of attractive acquisition opportunities that might present themselves.[248] For example, the Wachovia financing offer contained a provision limiting the amount Benihana could borrow to 1.5 times EBITDA. This restriction, which spanned five years, could have substantially limited Benihana's ability to borrow funds.
Morgan Joseph also recommended that Benihana obtain equity financing first so that it could gain flexibility, and then use that financing as leverage to negotiate better terms on their existing line of credit with Wachovia.[249] In Joseph's words, "[T]he oldest rule in our business is you raise equity when you can, not when you need it."[250] Thus, unlike the situation in Canada Southern Oils, I find the Benihana Board had legitimate and substantial reasons for favoring the BFC Transaction over relying exclusively on debt financing.
Plaintiff relies on Packer v. Yampol for the proposition that "[a]n inequitable purpose can be inferred where the directors' conduct has the effect of being unnecessary under the circumstances, of thwarting shareholder opposition, and of perpetuating management in office."[251] The situation *190 in Packer v. Yampol, however, was far more egregious than here. In Packer the board approved the issuance of stock in the midst of a proxy fight. The issuance included "supervoting" features, conferring upon the holders 44% of the corporation's total voting power. This allowed defendants to "virtually assur[e] the outcome of the election of directors."[252]
As previously stated, Benihana had a legitimate need for financing that reasonably could be satisfied through equity financing. Secondly, Benihana did not issue the stock in the midst of a proxy contest; rather the stock issuance was conceived, presented and negotiated months before any contest, or even the threat of a contest. Finally, unlike Packer, the stock issuance did not "virtually assur[e] the outcome of the election of directors." In fact, after the BFC Transaction, BOT won a proxy contest to remove one of the incumbent directors from his seat.[253]
Condec Corp. v. Lunkenheimer Co.[254] is equally distinguishable. There the transaction at issue was a share exchange that brought in no new capital to the Company and had no corporate purpose other than to reduce plaintiff's stock holdings.[255] The court also noted the "haste with which the basic ... transaction was hammered out."[256] Such extreme circumstances do not exist in this case.
Further, even if the Court were to have found, which I did not, that one or two of the Benihana directors acted for the sole or primary purpose of entrenchment, a majority comprised of other directors voted to approve the BFC Transaction and I have found that their assent to the transaction was not the result of fraud or manipulation by their fellow directors. An entrenchment effect alone, even assuming such an effect exists in this cause, is not enough to demonstrate a primary or sole purpose to entrench.
Therefore, Plaintiff has failed to meet their burden as to the claim of improper purpose. I find that the primary purpose of the BFC Transaction was to provide what the directors subjectively believed to be the best financing vehicle available for securing the necessary funds to pursue the agreed upon Construction and Renovation Plan for the Benihana restaurants.
D. Director Defendants' Alleged Breaches of the Duty of Loyalty
BOT contends that Schwartz, Dornbush and Abdo, with the help of Morgan Joseph, manipulated the board process that led to the approval of the BFC Transaction, thereby breaching their fiduciary duties. Further, Plaintiff asserts that each of the directors breached their duty of loyalty by approving the BFC Transaction *191 in order to protect their own incumbency.[257]
The Delaware Supreme Court has described the duty of loyalty as follows:
Corporate officers and directors are not permitted to use their position of trust and confidence to further their private interests.... A public policy, existing through the years, and derived from a profound knowledge of human characteristics and motives, has established a rule that demands of a corporate officer or director, peremptorily and inexorably, the most scrupulous observance of his duty, not only affirmatively to protect the interests of the corporation committed to his charge, but also to refrain from doing anything that would work injury to the corporation, or to deprive it of profit or advantage which his skill and ability might properly bring to it, or to enable it to make in the reasonable and lawful exercise of its powers. The rule that requires an undivided and unselfish loyalty to the corporation demands that there be no conflict between duty and self-interest.[258]
No safe-harbor exists for divided loyalties in Delaware.[259] The duty of loyalty, in essence, "mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the stockholders generally."[260] "The classic example that implicates the duty of loyalty is when a fiduciary either appears on both sides of a transaction or receives a personal benefit not shared by all shareholders."[261]
In my opinion, Schwartz, Dornbush and Abdo, did not manipulate the Board to approve the BFC Transaction, either individually or in concert with one another or Morgan Joseph. As discussed above, the directors did not act out of a motivation to entrench themselves or any other self-interest or as a result of domination or control by an interested director. In addition, because the Board is staggered, it would have taken Keiko Aoki two or three years after Rocky Aoki's death to remove the directors from their positions, even if the BFC Transaction had not occurred.
Having already found that a majority of disinterested and independent directors approved the BFC Transaction and that the Transaction was not entered into for an improper purpose, I find no grounds to believe that the directors breached their fiduciary duty of loyalty. BOT has the burden of proving their contrary allegation by a preponderance of the evidence. They have not met their burden. Therefore, I conclude that none of the Director Defendants breached their fiduciary duty of loyalty.
E. Director Defendants' alleged breaches of the duty of care
Plaintiff contends that the directors violated their fiduciary duty of care by failing to inform themselves of basic information about the BFC Transaction.[262] Defendants argue that even if the directors failed properly to inform themselves, their conduct in this case does not *192 rise to the level of gross negligence, and therefore cannot constitute a violation of the duty of care.[263]
The duty of care includes a duty that directors inform themselves, before making a business decision, of all material information reasonably available to them.[264] The duty also includes a requirement that directors reasonably inform themselves of alternatives.[265]
Director liability for breaching the duty of care "is predicated upon concepts of gross negligence."[266] In the duty of care context gross negligence has been defined as "reckless indifference to or a deliberate disregard of the whole body of stockholders or actions which are without the bounds of reason."[267] Because duty of care violations are actionable only if the directors acted with gross negligence, and because in most instances money damages are unavailable to a plaintiff who theoretically could prove a duty of care violation, such violations are rarely found.[268]
The challenged directors' conduct in this case does not rise to the level of gross negligence. First, the directors were encouraged to take the February board books home and study them. These books outlined alternative methods of financing the BFC Transaction.[269] Second, Morgan Joseph specifically discussed the change in net debt figures at the May 6 meeting and distributed the final term sheet with BFC to the directors.[270] The Board also obtained a fairness opinion from Morgan Joseph.
Further, the Board met several times after the May 6 meeting to discuss the BFC Transaction. The Board met on May 20 and June 11, and voted to proceed with the transaction after considering BOT's objections and the purported alternatives suggested by BOT's counsel. Additionally, the disinterested and independent directors who voted in favor of the transaction constituted a majority of the Board. These facts demonstrate that the Board took adequate steps to review the BFC Transaction. Therefore, the directors did not breach their fiduciary duty of care.
F. Summary of the Court's Application of the Business Judgment Rule
In In re RJR Nabisco, Inc. Shareholders Litigation, the Court stated:
The business judgment form of review encompasses three elements: [1] a threshold review of the objective financial interests of the board whose decision is under attack (i.e., independence), [2] a review of the board's subjective motivation (i.e., good faith), and [3] an objective review of the process by which it reached the decision under review (i.e., due care).[271]
In this case, I have followed those steps and I have first concluded that a majority of the disinterested and independent directors approved the BFC Transaction. *193 Then, I found that the directors acted with a good faith belief that equity financing represented the best method to finance Benihana's Construction and Renovation Plan and that the directors believed equity financing best served the interests of the Company. Finally, after reviewing the process through which the directors approved the Transaction I have found that the directors reached their decision with due care. Consequently, the Board validly exercised their business judgment in approving the BFC Transaction. This Court will not disturb that decision.
III. CONCLUSION
For the reasons stated in this Opinion, the Court concludes that the Benihana Board validly approved the BFC Transaction and denies all BOT's claims for relief, whether asserted individually or derivatively. In particular, the Court holds that the BFC Transaction was not void ab initio as ultra vires and that the Director Defendants did not breach any fiduciary duty to Benihana or its stockholders in connection with the BFC Transaction. Because Plaintiff has failed to establish liability on the part of any of the Director Defendants, I also dismiss Plaintiff's claims against BFC for aiding and abetting those Defendants.
Defendants counsel shall prepare a proposed form of judgment and submit it, on notice, within 10 days.
IT IS SO ORDERED.
NOTES
[1] After post-trial briefing and argument, the parties became engaged in settlement negotiations and requested that the Court defer rendering an opinion pending the outcome of those negotiations. In August 2005, the parties withdrew that request after their efforts to settle failed.
[2] The following summary includes the facts pertinent to the issues presented at trial. For additional background facts see Benihana of Tokyo, Inc. v. Benihana, Inc., 2005 WL 583828 (Del.Ch. Feb. 28, 2005).
[3] In the Amended Verified Complaint ("Complaint") BOT states that it "brings this action both individually and derivatively on behalf of Benihana, Inc. and its stockholders." Compl. at 1. Certain Defendants moved to dismiss any derivative claims in the original complaint on the ground that they were not derivative in nature. In response, BOT confirmed that Counts IIII are direct claims, but asserted that Counts IV, for breach of the duty of loyalty, and V, for breach of the duty of care, are both direct and derivative in nature. Defendants based their motion in part on technical defects in Counts IV and V that BOT corrected in its Amended Verified Complaint, filed October 8, 2004.
In assessing whether a claim is direct or derivative the Court must determine "(1) who suffered the alleged harm (the corporation or the suing stockholders, individually); and (2) who would receive the benefit of any recovery or other remedy (the corporation or the stockholders, individually)." Tooley v. Donaldson, Lufkin, & Jenrette, Inc., 845 A.2d 1031, 1033 (Del.2004). Certain aspects of Counts IV and V are derivative. In particular, Count IV alleges that the Director Defendants engaged in acts of unfair dealing and consummated the BFC Transaction for an unfair price. That is a derivative claim. Noerr v. Greenwood, 1997 WL 419633, at *2 (Del.Ch. July 16, 1997) (characterizing as derivative a claim for unfair dealing in connection with a self-interested option issuance). Count V alleges, among other things, that the Director Defendants breached their fiduciary duties to Benihana by engaging in a self-dealing transaction without exercising the appropriate quantum of care. That, too, is a derivative claim. Levine v. Smith, 1989 WL 150784, at *1 (Del.Ch. Nov.27, 1989). Defendants' arguments to the contrary are unpersuasive. Therefore, Defendants' motion to dismiss the derivative claims is denied.
[4] Kyle Aoki also is employed at Benihana.
[5] PTO at 3.
[6] Id.
[7] Tr. at 826 (Abdo). Citations in this form refer to the trial transcript and, where it is unclear from the text, the witness testifying.
[8] Id.
[9] Tr. at 758 (Abdo). Abdo identified Benihana as one of those companies.
[10] PTO, Admitted Fact 9.
[11] Tr. at 840 (Abdo).
[12] Tr. at 759-60 (Abdo).
[13] Tr. at 840.
[14] Id.
[15] Tr. at 768, 840-42 (Abdo).
[16] Tr. at 768.
[17] See Benihana, Inc. Form 10-K/A, filed Sept. 4, 2001 for fiscal year ending Apr. 1, 2001, at Ex. 10.07, § 8 (Schwartz) and Ex. 10.12, § 8 (Yoshimoto), http://www.sec.gov/A rchives/edgar/data/9 35226/XXXXXXXXXXXXXX 0010-/form10-k2001.t xt; see also Benihana, Inc. Form 10-K, filed July 2, 2004 for fiscal year ending March 28, 2004, at Ex. 10.18 (renewal of Schwartz's employment contract through 2009), http://www.sec.gov/A rchives/edgar/data/9 35226/XXXXXXXXX XXXXXXXXX/form1 0-k2004.txt.
[18] Id.
[19] See, e.g., JX 6, 10; Tr. at 771 (Abdo).
[20] See Tr. at 149-50, 153-54 (Kana Aoki), 235, 254 (Kevin Aoki). Dornbush testified that he told Schwartz that if Keiko were hostile to management, "you [referring to Schwartz] and the other executives have employment agreements in place, and you'll have to weather the storm or do what you want to do at that point in time." Dornbush Dep. at 164. Schwartz, the CEO of Benihana, is 63 years old and has an employment agreement with Benihana that prevents his termination except for cause until 2009.
[21] Tr. at 29 (Schwartz).
[22] Schwartz Dep. at 69.
[23] Id.
[24] JX 21, 22, 23; Tr. at 28-30 (Schwartz).
[25] Tr. at 1053-55 (Dornbush).
[26] Tr. at 245-46 (Kevin Aoki).
[27] See DX 122.
[28] Tr. at 150 (Kana Aoki).
[29] Tr. at 249 (Kevin Aoki).
[30] See DX 123; Tr. at 160-61, 192 (Kana discussing Rocky Aoki's threat to cut her and Kevin out of his will entirely if they did not do as he requested with regard to the Trust).
[31] Tr. at 250-51 (Kevin Aoki), 1027-28 (Dornbush).
[32] DX 123. The record is unclear as to how the exercisability of the proposed option would relate to Rocky Aoki's health or even his death. The parties never reached the stage of exchanging a written proposal for such an option.
[33] Tr. at 1028.
[34] Tr. at 1029.
[35] Tr. at 256.
[36] See Tr. at 182-84 (Kana Aoki), 1028 (Dornbush).
[37] Tr. at 553-54, 561 (Burris). Mark Burris is Benihana's CFO.
[38] Benihana restaurants typically use teppan style cooking, which involves cooking on a large griddle usually built into the diner's table. In recent years Benihana acquired the Ra and Haru restaurant chains, which focus more on sushi style food preparation.
[39] Tr. at 558 (Burris).
[40] JX 29.
[41] The evidence indicated that many events outside of the Company's control can affect Benihana's earnings. Consumers view Benihana as a restaurant to go to for celebratory occasions. Therefore, periods of time when the social climate does not support celebrating, such as during the gulf war and post 9/11, can negatively affect Benihana's earnings. See Tr. at 556-57 (Burris).
[42] JX 29.
[43] Id.; Schwartz Dep. at 176-77.
[44] JX 30; Tr. at 38-39 (Schwartz). In the past, Morgan Joseph had given Benihana financial advice in the form of fairness opinions and assistance on equity offerings. Tr. at 618-19 (Joseph). Fred Joseph, the Morgan Joseph representative who advised Benihana regarding the matters at issue in this litigation, testified at trial.
[45] Tr. at 620-21 (Joseph).
[46] Tr. at 621.
[47] Tr. at 621-22.
[48] See JX 32.
[49] Tr. at 623. See also JX 36 (board book prepared by Morgan Joseph for the January 9 Executive Committee meeting).
[50] See JX 36.
[51] Tr. at 106 (Schwartz), 298-99 (Atkins), 703 (Joseph).
[52] See JX 37; Tr. at 638-39 (Joseph).
[53] Tr. at 630-31.
[54] Tr. at 631.
[55] Tr. at 640-41.
[56] Tr. at 76-78 (Schwartz), 649 (Joseph).
[57] Schwartz Dep. at 274.
[58] Tr. at 54-55 (Schwartz).
[59] Tr. at 650; see also Tr. at 646-47 (Joseph) (regarding conversion right to Common Stock), 797 (Abdo).
[60] See JX 96 (Stock Purchase Agreement).
[61] See Tr. at 651.
[62] Tr. at 67 (Schwartz), 657 (Joseph).
[63] Tr. at 651.
[64] Tr. at 636.
[65] Tr. at 631-32 (Joseph).
[66] Tr. at 659 (Joseph).
[67] Tr. at 799-800 (Abdo).
[68] Id.
[69] Tr. at. 800, 866 (Abdo).
[70] Tr. at 801 (Abdo).
[71] Tr. at 72 (Schwartz).
[72] Tr. at 652 (Joseph).
[73] Tr. at 656 (Joseph).
[74] Tr. at 662 (Joseph). Morgan Joseph had the authority to negotiate whether the purchase price would be paid in cash or common stock. Id.
[75] Id. Benihana reportedly issued the second tranche on August 4, 2005. See Letter to Court from C. Barr Flinn, dated August 22, 2005.
[76] See Tr. at 664 (Joseph). The parties negotiated that Benihana would not add an additional director seat to the Board. Instead, Abdo would continue to serve on the Board but serve in the capacity of BFC's representative. Additionally, though BFC obtained the right to receive an additional director seat after two consecutive quarters of missed dividends, rather than four as Benihana initially hoped for, Morgan Joseph considered the negotiated term, "fairly standard." Id.
[77] PTO at ¶ 23. BFC requested this term and Benihana did not object. See Tr. at 663-64 (Joseph).
[78] This result was consistent with Morgan Joseph's prediction that it would be difficult for Benihana to get a perpetual maturity in the issuance. Tr. at 649. Additionally, Morgan Joseph obtained "the right for [Benihana] to pay that redemption in stock if they wanted to at their option." Tr. at 654.
[79] Tr. at 663, 665 (Joseph). These terms were considered very standard.
[80] Tr. at 665. Benihana wanted to avoid this, but, in the end, Morgan Joseph opined that it was a reasonable fee.
[81] Tr. at 649. This was better than the "six percent, plus or minus a half" Morgan Joseph told Benihana to be prepared to pay.
[82] See Tr. at 663 (Joseph), 804 (Abdo). This term was likely to benefit Benihana because pre-announcement prices generally exceed pre-closing prices. In fact, the pre-announcement conversion price in this instance was higher.
[83] Tr. at 655.
[84] Tr. at 90 (Schwartz).
[85] Tr. at 89-90, 92, 93.
[86] Tr. at 657.
[87] Tr. at 96 (Schwartz).
[88] Tr. at 95-96 (Schwartz), 1062-63 (Dornbush).
[89] Tr. at 95 (Schwartz).
[90] In fact Abdo made the presentation to the board on behalf of BFC at the May 6 meeting. JX 66 at 2. See also JX 68.
[91] Tr. at 226-28 (Kevin Aoki).
[92] Tr. at 227 (Kevin Aoki).
[93] Id.
[94] Tr. at 228 (Kevin Aoki).
[95] Tr. at 142 (Kana Aoki).
[96] Id.
[97] See JX 88.
[98] Defendants objected to the admission of this offer on hearsay grounds. Tr. at 682-84. After considering this objection and consistent with my ruling at trial (Tr. at 685-86), I will admit PX 78 for the limited purpose of showing what was submitted to the Board, but not for the truth of the matter asserted in the document.
[99] Tr. at 117-19 (Schwartz).
[100] Id.
[101] Id.
[102] Tr. at 928-29 (Sturges).
[103] Id. Joseph testified that he believed the Yamano Offer was inferior because he "was very much put off by the fact it was subject to due diligence. When someone comes in and they want to tell you they want to do a deal, you have a bird in hand. And there's the subject of due diligence. That can be an immense risk, unless they're a well-known, prestigious institution; and you know they know all they're going to know about the company." Tr. at 678-79.
[104] Tr. at 124 (Schwartz).
[105] PX 86. As with PX 78, I will admit PX 86 to the extent it shows what Cornell said and the proposal it put forward, but not for the truth of the matters asserted in the document.
[106] Tr. at 678-79; This offer had short term financing which even Cornell's witness admitted would not be appropriate for long term capital expenditures. Kanakis Dep. at 48-49, 52-53.
[107] PX 82. At the pretrial conference Defendants objected to the admission of this offer on hearsay grounds. See supra n. 98. I overrule Defendants' objection for the same reasons as the Cornell Offer.
[108] PX 678-79.
[109] See JX 88.
[110] See id. Abdo, Dornbush and Kevin Aoki abstained from the vote.
[111] See Certificate of Incorporation, Art. 4(b).
[112] See JX 96.
[113] The Court granted in part the request for expedited proceedings.
[114] Benihana of Tokyo, 2005 WL 583828.
[115] The parties agree that BOT's claims I through III are direct. Id. at *9. See supra n. 3.
[116] The NASDAQ Stock Market on which Benihana is listed had advised the Company that NASDAQ's rules required that the BFC Transaction be approved by the Audit Committee or other independent body of the Board. See JX 131.
[117] Pl.'s Opening Pretrial Br. Ex. 19, Art. Fourth.
[118] SPA, Art. 4(k)(ii). The Certificate of Designations for the convertible preferred stock incorporated the terms of the SPA by reference. Certificate of Designations, Sec. 2.
[119] SPA, Art. 4(k)(i), (ii).
[120] Defs.' Post-Trial Ans. Br. at 45 (quoting Frank Balotti & Jesse A. Finkelstein, The Delaware Law of Corporations & Business Organizations, § 5.16 (2004)) (discussing Garza v. TV Answer, Inc., 1993 WL 77186 (Del.Ch. Mar. 15, 1993)).
[121] See 8 Del. C. §§ 151(a), (b) and (e). The DGCL is a part of the certificate of incorporation of every Delaware corporation. See 8 Del. C. § 394.
[122] 8 Del. C. § 151(a). See also Staar Surgical Co. v. Waggoner, 588 A.2d 1130, 1135 (Del.1991).
[123] 8 Del. C. § 151(g) (emphasis added).
[124] Pl.'s Opening Pretrial Br. Ex. 19, Art. 4(b).
[125] See Stock Purchase Agreement ¶ 4(k).
[126] Centaur Partners, IV v. Nat'l Intergroup, Inc., 582 A.2d 923, 928 (Del.1990) (citing Berlin v. Emerald Partners, 552 A.2d at 488, Hibbert v. Hollywood Park, Inc., 457 A.2d at 342-43, and Ellingwood v. Wolf's Head Oil Ref. Co., 38 A.2d 743, 747 (Del.1944)). See also Staar, 588 A.2d at 1136 (stating that "a corporate charter is both a contract between the State and the corporation, and the corporation and its shareholders" and that "[t]he charter is also a contract among the shareholders themselves"); Waggoner v. Laster, 581 A.2d 1127, 1134 (Del.1990).
[127] Smith v. Nu-W. Indus., Inc., 2000 WL 1641248, at *3-4 (Del.Ch. Oct. 25, 2000).
[128] David A. Drexler, Lewis S. Black, Jr. & A. Gilchrist Sparks, III, Delaware Corporate Law and Practice, § 6.02[3] (2002).
[129] 8 Del. C. § 102(b)(3).
[130] See Balotti at Form 1.12 ("The holders of the Common Stock shall have no preemptive rights to subscribe for any shares of any class of stock of the Corporation whether now or hereafter authorized.").
[131] JX 95, Art. 4.
[132] See Andrew Nichols, Shareholder Preemptive Rights, 39-DEC BBJ 4, 24 (1995) ("[A] preemptive right may be viewed as a term of art which refers only to a right granted to all the shareholders, but does not include contractual rights granted to a subset of the shareholders who negotiate with the issuer for their individual right to acquire additional shares in defined circumstances. Second, the intent of the legislature in adopting provisions limiting or reversing the common law rule creating preemptive rights may have been only to reach the imposition of such rights as a matter of common law, but not to preclude individually negotiated contractual rights.").
[133] Id. at 27.
[134] In that regard, I note that the preemptive rights apply only to the Preferred Stock and the owner of the Preferred Stock. If, for example, BFC converted certain of the Preferred Stock and sold one half of the resulting common shares, there would be no preemptive rights with respect to those shares. BFC would continue to have preemptive rights, however, in the converted shares and the preferred shares it still retained. Additionally, the preemptive rights provided for in the SPA (¶ 4(k)) do not apply to any stock issuance after the Termination Date, defined as "the date on which the Purchaser ("BFC") and its Affiliates cease to own at least 25% of the total number of Preferred Shares [under the SPA] outstanding." SPA, ¶ 4(k)(ii).
[135] Cooke v. Oolie, 2000 WL 710199, at *13 n. 41 (Del.Ch. May 24, 2000).
[136] HMG/Courtland Props., Inc. v. Gray, 749 A.2d 94, 114 (Del.Ch. 1999).
[137] Cinerama, Inc. v. Technicolor, Inc., 663 A.2d 1156, 1169-71 (Del.1995); In re Cox Commc'ns, Inc. S'holder Litig., 879 A.2d 604, 614-15 (Del.Ch.2005).
[138] When a court reviews a board's decision that is challenged as a breach of duty, "it should decline to evaluate the wisdom and merits of a business decision unless sufficient facts are alleged with particularity, or the record otherwise demonstrates, that the decision was not the product of an informed, disinterested, and independent board." Mills Acquisition Co. v. Macmillan, Inc., 559 A.2d 1261, 1279 (Del.1988); see also Aronson v. Lewis, 473 A.2d 805, 812 (Del.1984); Pogostin v. Rice, 480 A.2d 619, 624 (Del.1984); Smith v. Van Gorkom, 488 A.2d 858, 872 (Del.1985). It is only after the presumption of the business judgment rule is rebutted that the burden shifts and the fiduciary must "demonstrate that the transaction complained of was entirely fair to the stockholders." Williams v. Geier, 671 A.2d 1368, 1378 (Del.1996).
[139] Aronson, 473 A.2d at 812.
[140] 746 A.2d 244, 264 n. 66 (Del.2000). See also In re Walt Disney Co. Deriv. Litig., 2005 WL 2056651, at *36 n. 464 (Del.Ch. Aug. 9, 2005). The Delaware Supreme Court defines "disinterested directors as those directors that neither appear on both sides of a transaction nor expect to derive any personal financial benefit from it in the sense of self-dealing, as opposed to a benefit which devolves upon the corporation or all stockholders generally." Williams, 671 A.2d at 1377 n. 19 (internal citations omitted). Likewise, "independent means that a director's decision is based on the corporate merits of the subject before the board rather than extraneous considerations or influences." Id. (internal citations omitted).
[141] Odyssey Partners, L.P. v. Fleming Companies, Inc., 735 A.2d 386, 407 (Del.Ch.1999).
[142] Orman v. Cullman, 794 A.2d 5, 24 (Del. Ch.2002).
[143] Aronson, 473 A.2d at 816.
[144] In re MAXXAM, Inc., 659 A.2d 760, 773 (Del.Ch.1995).
[145] Aronson, 473 A.2d at 815.
[146] Rales v. Blasband, 634 A.2d 927, 936 (Del.1993).
[147] In their brief BOT makes similar assertions for the other directors, but they do not provide any further detail regarding how the BFC Transaction removes a threat to their incumbency in the context of their "director independence" or interest arguments. Instead, BOT discussed its incumbency arguments in the sections of its briefs challenging the propriety of the directors' purpose. Accordingly I treat that aspect of BOT's argument in the "improper purpose" section of this opinion.
[148] Defs.' Post-trial Ans. Br. at 13.
[149] Grobow v. Perot, 539 A.2d 180, 188 (Del. 1988).
[150] Grobow v. Perot, 526 A.2d 914, 923 (Del. Ch.1987).
[151] Solomon v. Armstrong, 747 A.2d 1098, 1126-27 (Del.Ch.1999).
[152] Kahn v. MSB Bancorp, Inc., 1998 WL 409355, at *3 (Del.Ch. July 16, 1998).
[153] Schwartz Dep. at 89; Abdo Dep. at 14.
[154] Defendants' attempt to distinguish the cases cited by BOT because they deal with independence in the context of demand excusal lacks merit. In Aronson, which defined the test for demand excusal under Chancery Court Rule 23.1, the court cited 8 Del C. § 144(a)(1) as the proper standard for determining director independence under Rule 23.1. 473 A.2d 805. Moreover, Defendants have not cited any case that supports their position that the test for independence under § 144(a)(1) differs from that under Rule 23.1.
[155] 634 A.2d 927.
[156] Id. at 930.
[157] Id. at 937.
[158] See Benihana, Inc. Form 10-K/A, filed Sept. 4, 2001 for fiscal year ending Apr. 1, 2001, at Ex. 10.07, § 8 (Schwartz) and Ex. 10.12, § 8 (Yoshimoto), http://www.sec.gov/A rchives/edgar/data/9 35226/XXXXXXXXXXXXXX 0010/form10-k2001.tx t. According to Benihana's 10K for the fiscal year ended March 28, 2004, Schwartz's salary ranged from $317,308 to $339,195 and his bonuses from $57,334 to $114,000 between 2002 and 2004. During the same period, Yoshimoto's salary increased from $174,519 to $186,135 and his bonuses ranged from $61,000 to $39,334. JX 97 at BNH000561.
[159] Telxon Corp. v. Meyerson, 802 A.2d 257, 264 (Del.2002).
[160] Pl.'s Post-trial Reply Br. at 13 n. 16; see In re Delta and Pine Land Co. S'holders Litig., 2000 WL 875421, at *8 (Del.Ch. June 21, 2000) (dismissing claim because complaint lacked allegations that chairman of compensation committee exercised financial influence or control over employee directors).
[161] Cinerama, Inc. v. Technicolor, Inc., 663 A.2d 1156, 1168 (Del.1995).
[162] 8 Del. C. § 144(a)(1).
[163] Pl.'s Opening Post-trial Br. at 33.
[164] Becker Dep. at 11.
[165] Id. at 9, 11-14.
[166] Defs.' Post-trial Ans. Br. at 15.
[167] Id. at 14-15.
[168] Siegman v. Tri-Star Pictures, Inc., 1989 WL 48746, at *12 (Del.Ch. May 5, 1989).
[169] Aronson, 473 A.2d at 812.
[170] Pl.'s Post-trial Reply Br. at 13 (citing Kahn v. Tremont Corp., 694 A.2d 422 (Del. 1997)).
[171] Id. (citing Kahn, 694 A.2d at 429-30).
[172] Becker received $44,000 per year for serving on the Bluegreen board whereas the director in Kahn received $10,000 a month as a consultant to the company and over $325,000 in bonuses. Kahn, 694 A.2d at 429-30.
[173] Id.
[174] 659 A.2d at 774.
[175] Id. The court discussed the three board members' financial dependence as follows:
"(1) In 1988 a MAXXAM subsidiary retained former Governor John Connally (who had recently emerged from personal bankruptcy and was not financially independent) as a consultant. Under the terms of his consulting contract, Governor Connally was paid $250,000 per year, and the contract was renewed annually until Governor Connally's death in 1993.(2) John Seidl had been Chairman and CEO of another controlled entity, since 1989. In that capacity, Mr. Seidl received an annual salary of $450,000, and in the year of the Mirada transaction, he received additional compensation of over $4.8 million through a Kaiser incentive plan. (3) William Leone was President of MAXXAM from 1980 to 1990. In his last year as MAXXAM's President, Leone received over $900,000 in compensation from that company. After the end of his term he entered into a one year $250,000 consulting contract with a MAXXAM subsidiary. That contract was operative at the time of the transaction." Id.
[176] Pl.'s Opening Post-trial Br. at 33.
[177] Beam v. Stewart, 845 A.2d 1040, 1051-52 (Del.2004); In re Western Nat'l Corp. S'holders Litig., 2000 WL 710192, at *12 (Del.Ch. May 22, 2000) (rejecting inference that longtime friendships prevented the director from being independent).
[178] Becker Dep. at 127-28.
[179] Brehm v. Eisner, 746 A.2d 244, 259 (Del. 2000).
[180] Id. at 260 n. 49 (internal quotations omitted). In the different context of a disclosure to stockholders, "[a]n omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote." Id. (internal quotations omitted).
[181] Pl.'s Post-trial Rely Br. at 4.
[182] Id. at 5.
[183] Defs.' Post-trial Ans. Br. at 20.
[184] See supra, B.
[185] HMG/Courtland Props., 749 A.2d at 119.
[186] Id.
[187] Cf., e.g., Metro Commc'n Corp. BVI v. Advanced Mobilecomm Tech., Inc., 854 A.2d 121, 153 (Del.Ch.2004) (no fiduciary duty to make disclosures to stockholders except when requesting stockholder action); Raskin v. Birmingham Steel Corp., 1990 WL 193326, at *5 (Del.Ch. Dec. 4, 1990) ("The state law duty of candor arises when the board elects to or has a duty to seek shareholder action. If the board does not seek shareholder action ... it has, in my opinion, no distinctive state law duty to disclose material developments with respect to the company's business.").
[188] Schwartz Dep. at 89-90, 92, 93.
[189] Schwartz Dep. at 274.
[190] These ratifications, as well as the October 27, 2004 ratification after consideration of the allegations in BOT's Amended Complaint, provide additional, independent grounds to conclude that the informational component of 8 Del. C. § 144(a)(1) was satisfied.
[191] Tr. at 655.
[192] Pl's Opening Post-trial Br. at 5.
[193] Id. at 5 (citing Tr. at 95-96 (Schwartz), 996-97 (Pine)).
[194] Id. at 5-6 (internal record citations omitted).
[195] Defs.' Post-trial Ans. Br. at 21-22.
[196] Tr. at 918-19 (Sturges) ("Q. By the way, the sheet that was in the January 29 book, did you consider that to be a developed term sheet, or what was your view of that document? A. There was, as I recall, a one-page outline in the January 29 book, which I considered to be a wish list, a financing that Morgan Joseph thought could be achieved. But I certainly expected, as had been my experience with investment bankers saying what the financing is going to look like, you know, and then the ultimate end product, there is very often, as a result of give and take and a negotiation, some changes. And Morgan Joseph went through kind of the evolution of the term sheet and where it now stood as a result of discussions with BFC.").
[197] Tr. at 919-20 (Sturges).
[198] Tr. at 655; see also Tr. at 648-55.
[199] Pl.'s Opening Post-trial Br. at 7 (citing Tr. at 731 (Joseph), 67 (Schwartz)). At the close of the fiscal year Benihana actually reported net debt of $19.3 million. Joseph Dep. at 21.
[200] Pl.'s Opening Post-trial Br. at 7 (relying on Schwartz's testimony that "there was not much likelihood that Benihana's net debt would go above $20 million by the end of the fiscal year" and that the board of directors "certainly knew that Benihana's net debt was not going to go above ... $28 million.")
[201] Id.
[202] Defs.' Post-trial Ans. Br. at 23.
[203] Id.
[204] Tr. at 754 (Joseph), 588 (Burris).
[205] Tr. at 588 (Burris).
[206] See, e.g., Tr. at 588 (Burris) ("[T]hose kind of things you can't predict with any degree of certainty whether the project is going to be completed or not. It's certainly prudent that itto complete these projects, to estimate these projects to be completed for the purpose of maintaining our financial security.")
[207] Tr. at 657; see also Tr. at 754 (Morgan Joseph learned about the change in net debt figures "during our due diligence in preparing the private placement memorandum and then pointed it out quite extensively at the May 6th board meeting.").
[208] See, e.g., Tr. at 910-12 (Sturges), 967-68 (Pine).
[209] Tr. at 658 (Joseph).
[210] Tr. at 910-12 (Sturges), 968-71 (Pine).
[211] HMG/Courtland Props., 749 A.2d at 114 n. 24.
[212] Fliegler v. Lawrence, 361 A.2d 218, 222 (Del.1976).
[213] HMG/Courtland Props., 749 A.2d at 114 n. 24 (internal citations omitted).
[214] "[Section] 144 has been interpreted as dealing solely with the problem of per se invalidity.... The somewhat different question of when an interested transaction might give rise to a claim for breach of fiduciary dutyi.e., to a claim in equityas left to the common law of corporations to answer. Mere compliance with 144 did not necessarily suffice." In re Cox Commc'ns, 879 A.2d at 614-15.
[215] Pl.'s Opening Post-trial Br. at 26. Plaintiff further contends that a by-product of the BFC Transaction is the dilution of BOT's controlling interest from just over 50 percent to approximately 36 percent. Id. at 1. To the extent that some or all of the Defendant Directors had a primary purpose to dilute BOT's stock ownership, that also could constitute an improper purpose. Flight Options Int'l, Inc. v. Flight Options, LLC, 2005 WL 2335353 (Del.Ch. July 11, 2005).
[216] Defs.' Post-trial Ans. Br. at 27.
[217] Schnell v. Chris-Craft Indus., Inc., 285 A.2d 437, 439-40 (Del.1971).
[218] Nomad Acquisition Corp. v. Damon Corp., 1988 WL 383667, at *1 (Del.Ch. Sept. 20, 1988).
[219] In re Fuqua Indus., Inc. S'holder Litig., 1997 WL 257460, at *10 (Del.Ch. May 13, 1997) (emphasis added).
[220] Schnell, 285 A.2d at 439.
[221] Williams v. Geier, 1994 WL 514871, at *3 (Del.Ch. Sept. 9, 1994).
[222] Condec Corp. v. Lunkenheimer Co., 230 A.2d 769, 776 (Del.Ch.1967).
[223] Pl.'s Post-trial Reply Br. at 15 (citing Tr. at 1038 (Dornbush)).
[224] Tr. at 1039.
[225] Schwartz Dep. at 391.
[226] See In re Fuqua Indus., Inc., 1997 WL 257460, at *10.
[227] Tr. at 1041 (Dornbush).
[228] Dornbush Dep. at 15-16; Tr. at 1042 (Dornbush).
[229] Tr. at 1042 (Dornbush).
[230] Tr. at 6 (Schwartz).
[231] See Schwartz Dep. at 391.
[232] Pl.'s Post-trial Reply Br. at 16-17.
[233] Id. at 16 (citing Tr. at 1054-55 (Dornbush)).
[234] Tr. at 28 (Schwartz). He testified that "[w]e constantly asked that question, was there any way that the company considering, is the company discussing the commonthe combination of the two shares, collapsing the [common and class A] shares so that it would become one vote, one share, and there would be more liquidity." Id.
[235] Tr. at 24.
[236] Id.
[237] Tr. at 29 (Schwartz).
[238] Id.
[239] JX 21.
[240] Id. He also calculated that if Benihana issued a 15% dividend of Class A shares every year then by 2011 the outstanding Common stock would fall below the threshold. Id.
[241] See supra, at 7-8.
[242] 96 A.2d 810 (Del.Ch.1953).
[243] Id. at 813-14.
[244] Id. at 813.
[245] Id.
[246] Id.
[247] Among other differences, Canada Southern Oils dealt with a preliminary injunction, which involves a different standard than a post-trial situation like this case.
[248] Tr. at 631-32 (Joseph).
[249] Tr. at 630-31.
[250] Tr. at 631.
[251] 1986 WL 4748, at *16 (Del.Ch. Apr.18, 1986).
[252] Id. at *9.
[253] The proxy contest occurred after BFC purchased the first tranche of Preferred Stock. In its brief, BOT argues that the margin by which it won was so small that it would have lost had the second tranche already occurred. Pl.'s Post-trial Reply Br. at 17 (citing JX 103; Atkins Dep. at 218-19). That argument relies on speculation, and BOT presented no other evidence that suggests that the BFC Transaction virtually assured the election of any directors. To the extent BOT's complaint is that it might no longer control the election of certain directors, there is no evidence that anything in the Certificate of Incorporation, the bylaws, or a separate contract gave BOT the right to control the Company or to be protected from dilution. See Harrah's Entm't, Inc. v. JCC Holding Co., 802 A.2d 294, 314 (Del.Ch.2002) (customary for agreements concerning board control to be cemented by voting agreements).
[254] 230 A.2d 769 (Del.Ch.1967).
[255] Id.
[256] Id.
[257] Pl.'s Opening Post-trial Br. at 41.
[258] Guth v. Loft, Inc., 5 A.2d 503, 510 (Del. 1939); In re Walt Disney Co., 2005 WL 2056651, at *33-34.
[259] Weinberger v. UOP, Inc., 457 A.2d 701, 710 (Del.1983).
[260] Cede & Co. v. Technicolor, Inc., 634 A.2d 345, 361 (Del.1993).
[261] In re Walt Disney Co., 2005 WL 2056651, at *33-34 (internal quotations omitted).
[262] Pl.'s Opening Post-trial Br. at 41.
[263] Defs.' Post-trial Ans. Br. at 34-35.
[264] Aronson, 473 A.2d at 812.
[265] UIS, Inc. v. Walbro Corp., 1987 WL 18108, at *2 (Del.Ch. Oct. 6, 1987).
[266] Aronson, 473 A.2d at 812.
[267] Tomczak v. Morton Thiokol, Inc., 1990 WL 42607, at *12 (Del.Ch. Apr. 5, 1990) (internal quotations omitted).
[268] In re Walt Disney, 2005 WL 2056651, at *33.
[269] Tr. at 633-40 (Joseph).
[270] Tr. at 657.
[271] 1989 WL 7036, at *13 (Del.Ch. Jan. 31, 1989).
| {
"pile_set_name": "FreeLaw"
} |
740 F.2d 963
South Carolina Health Care Ass'nv.Heckler
83-1764
United States Court of Appeals,Fourth Circuit.
7/13/84
1
D.S.C.
REVERSED AND REMANDED
| {
"pile_set_name": "FreeLaw"
} |
225 So.2d 557 (1969)
SILVER BLUE LAKE APARTMENTS, INC., a Florida Corporation, John Leisenring, Harold M. Diamond and Bernard Sandel, Appellants,
v.
SILVER BLUE LAKE HOME OWNERS ASSOCIATION, INC., a Corporation Not for Profit Existing under the Laws of the State of Florida, William M. DeLisa and Harris J. Buchbinder, Appellees.
No. 68-1102.
District Court of Appeal of Florida. Third District.
July 29, 1969.
Rehearing Denied September 2, 1969.
*558 Kastenbaum, Mamber, Gopman, Epstein & Miles, Miami Beach, Horton & Schwartz, Miami, for appellants.
Shutts & Bowen and Thomas H. Anderson and Karl Vance Hart, Homer Q. Kimbrell, Miami, for appellees.
Before PEARSON, C.J., and HENDRY and SWANN, JJ.
PER CURIAM.
Appellant Silver Blue Lake Apartments, Inc., owns land which borders upon an 80-acre man-made lake. Several hundred apartment units owned by appellant are situated on this land. Appellant's property line extends a few feet into the lake. Individual appellants Harold M. Diamond and Bernard Sandel are officers of the appellant corporation. Individual appellant John Leisenring is a tenant in an apartment unit owned by the corporate appellant. They appeal from a final judgment entered in an action by Silver Blue Lake Homeowners Association, Inc., and individual owners of underlying land. The complaint sought to enjoin the allegedly unreasonable use of the surface of the lake by the tenants of Silver Blue Lake Apartments, Inc.[1]
The final judgment ordered generally that only owners of a portion of the lake bed would be entitled to use the lake and specifically that the tenants of Silver Blue Lake Apartments, Inc., were not entitled to such use. We agree with this ruling and affirm the judgment appealed from. We think this holding is consistent with the holdings in Duval v. Thompson, Fla. 1959, 114 So.2d 791; Florio v. State ex rel. Epperson, Fla.App. 1960, 119 So.2d 305, 80 A.L.R.2d 1117. The trial court made the following findings of fact:
"* * * Silver Blue Lake is located in Dade County and is a man-made non-navigable lake which resulted from the excavation of limerock for a number of years. It is a relatively small lake covering only approximately 80 acres. Some ten years or more ago the northern half *559 of the lake was platted into two waterfront subdivisions for single family dwellings with each home owner's property extending into the water. Apparently the individual home owners have used the entire lake since that time and their children often swim in the lake close to shore. For a period in excess of ten years a portion of the lake owned by an Optimist Club has been used as a Boy's Club with a Club House and supervised instruction in sailing, swimming and water safety for young boys. Approximately three years before this suit was filed, the Defendant, SILVER BLUE LAKES APARTMENTS, INC. purchased a tract of land bordering on a small portion of the southern boundary of the lake and extending eight or ten feet into the lake. The corporation then as now is composed of three stockholders and officers. Thereafter, the corporate Defendant began construction of a large apartment complex on the purchased lands. For some period of time it has had several hundred rental units in operation and at the time of trial it had a substantial number of additional units under construction. In addition, Defendant owns additional vacant land which, it is only reasonable to assume, will be used for construction of future rental units. Some seven or eight years ago the individuals owning homes on Silver Blue Lake formed the Silver Blue Lake Home Owners Association, Inc. Title to the bulk of the lake bed was conveyed to the ASSOCIATION, as discussed below. Membership in the ASSOCIATION by its By-Laws is limited to persons owning homes on Silver Blue Lake. The ASSOCIATION adopted rules of safety and patterns for boat traffic on the lake and has continually attempted to police the lake to enforce commonly accepted standards for safety and restrict its use to authorized persons. In this it has been joined by and has received the co-operation of, nearly all the property owners other than the APARTMENTS, INC. When APARTMENTS, INC. began operations and continuing to the present day it advertised that its tenants could have the right to a complete use of the lake. The principals in APARTMENTS, INC. and some of their tenants applied for, and were admitted to membership in the ASSOCIATION. They agreed to abide by the By-Laws and Rules of the ASSOCIATION. However, soon after the apartments opened and continuing to the present time there has been almost continual conflict between the tenants of the apartments and the individual home owners on the lake. APARTMENTS, INC. originally purchased two power boats which they rented to tenants but this practice has been discontinued since the institution of this suit.
"There is abundant evidence to support the argument of the home owners that the conduct of the tenants has interfered with their use of the lake. Persons boating from the APARTMENTS, INC. have failed to follow commonly accepted standards of safety. They have deliberately attempted to swamp boats operated by small children. They have run speedboats with skiers in among small children swimming near shore. They have run power boats late at night. They have followed too close to other water skiers. Many other acts of reckless disregard to the rights of the individual home owners to use the lake could be cited. When police were summoned in an attempt to remove the boats operated by persons from the apartments the officers were assured by counsel for APARTMENTS, INC. that the tenants were legally entitled to use the lake freely. As a result the officers would not remove the tenants of the apartments without some determination of the rights of the tenants to use the lake freely. The officers did remove outsiders who might come on the lake. In addition to the foregoing, one of the principal complaints of the home owners is that the use of the lake by the tenants of the apartments creates such congestion *560 on the lake that others can no longer enjoy boating on the lake in safety. In fact at least one of the home owners testified that his family now usually went elsewhere to go boating because of the congestion and unsafe condition at Silver Blue Lake. The evidence shows that there have usually been at least eight to ten boats docked at the apartments, and in addition that there are numerous other boats on trailers around the apartments, which are used on the lake. In addition there were indications that the tenants of the apartments perhaps brought in additional boats on occasion. The Lake is small yet there was credible testimony that on occasions there would be twelve, fifteen or more power boats operating on the lake at one time. The Defendant, APARTMENTS, INC. presented defense witnesses who testified that over a number of years they had never seen over two, three or four power boats operating on the lake at one time. The Court does not find this testimony credible.
"The Court having found that the rights of the individual property owners to use Silver Blue Lake have been and are being unreasonably interfered with, this Court must pass upon the nature of the relief to be awarded."
The trial court's conclusion that Silver Blue Lake Apartments, Inc., has, by permitting its tenants unrestricted use of the surface, made an unreasonable use of the lake surface is amply supported by the evidence.
The appellant corporation does not attack the court's findings of fact in any of its points on appeal. The appellant corporation argues first that by completely forbidding the corporation's tenants from using the lake surface, the trial court unconstitutionally discriminated against it and denied it of its "constitutional rights to the use of its property." The corporation premises its argument on the ground that the trial court should have limited itself to restraining the tenants from using the lake in an unreasonable manner. We cannot accept this argument since, as we said above, we understand the judgment appealed from to rule that the expansion of the appellant corporation's rights by passing them on to hundreds of tenants was the act the court ruled to be unreasonable. We agree with the trial court's conclusion that the appellant corporation may not multiply its right of use by the total number of its tenants and pass the increase to the tenants.
In support of its position the appellant corporation relies upon Florio v. State, ex rel. Epperson, Fla.App. 1960, 119 So.2d 305, for a holding that a tenant may not be restrained from any use of surface water unless the owner may be so restrained. It is our view that the cited case does not support that proposition.
In Florio the court was presented with a case involving a public beach on one side of a lake. There was no mention of the nature of the ownership of the remainder of the lake. There was no discussion of whether there was an attempt to multiply existing rights which in and of itself created such congestion as to interfere with the other owners' use of the lake. The court found that the defendants had adopted rules of safety whereas in our case it is the plaintiffs which have been safety-conscious. Nevertheless the court in Florio did approve of the lower court's granting injunctive relief to complainant curtailing the activities of defendants.
Thus in the Florio case and the present case injunctive relief was proper. As far as the present case is concerned the most crucial distinction is the difference in the relief which the trial court allowed. In the Florio case the trial court completely barred all the defendants from water skiing on the lake and allowed all of the plaintiffs to continue to water ski on the lake. The court said this constituted a wrongful discrimination and a denial of equal protection.
The judgment in the present case is not discriminatory but applies equally to *561 all parties. The trial court, faced with a situation where one owner of a small portion of the lakefront is attempting to dominate the lake by multiplying its rights to use the lake, has held that only the owners of land lying under the lake may use all of the waters of the lake. This is a reasonable classification which treats all owners equally. The guiding principle in considering the constitutional guaranty of equal protection of the laws is that all parties shall be treated alike under like circumstances and conditions. See 16 Am.Jur.2d Constitutional Law § 488. The judgment appealed from meets this test.
The controlling law in the State of Florida is found in Duval v. Thomas, Fla. 1959, 114 So.2d 791, 794, and Duval v. Thomas, Fla.App. 1958, 107 So.2d 148. In these opinions it is clear that Florida recognizes and applies the rule that when an owner's lawful use for such purposes as fishing, recreation, and irrigation is unreasonably interfered with that owner will have the remedy of injunction. A reading of this record supports the trial judge's conclusion that the result of the appellant corporation's use of the lake as an adjunct of its apartment development has been to deprive the remaining owners of their lawful use of the lake. There is no way other than the injunction remedy granted to preserve to the appellee owners the beneficial use of their property.
The trial judge based his judgment upon an additional ground. He found that the appellant corporation's predecessor in beneficial title had by deed transferred the bulk of its ownership in the lake bottom to the appellee association. The court found that the intent and purpose of the conveyance was to give the appellee association control over the use of the lake as far as the lands retained by the appellant corporation's predecessor were concerned. Appellant's remaining points on appeal are directed to this ground for the judgment. Because we have found that the judgment must be affirmed upon the basis already discussed, we do not think it is necessary to prolong this opinion by a discussion of these remaining points on appeal. It is sufficient to point out that we agree with the trial judge's finding:
* * * * * *
"To allow APARTMENTS, INC. and its tenants to have unrestricted use of the lake would deprive the ASSOCIATION of its beneficial use of the property in violation of the very intent of the parties at the time of the conveyance. The position of the parties has now changed. APARTMENTS, INC. has reaped its benefit of the bargain with the home owners. Its land has been rezoned and has been developed accordingly. To allow its tenants the free and unobstructed use of the lake will make it impracticable, if not impossible, for the home owners to use the lake. Such a result would be inequitable."
Accordingly the judgment is affirmed.
NOTES
[1] See Silver Blue Lake Apartments, Inc. v. Silver Blue Lake Home Owners' Association, Inc., Fla.App. 1966, 191 So.2d 61.
| {
"pile_set_name": "FreeLaw"
} |
432 Pa. Superior Ct. 354 (1994)
638 A.2d 976
In re ADOPTION OF Courtney STICKLEY.
Appeal of George McCOOK.
Superior Court of Pennsylvania.
Argued November 9, 1993.
Filed January 27, 1994.
Reargument Denied April 4, 1994.
*356 Joseph M. Lamonaca, Exton, for appellant.
Robert M. Diorio, Media, for Joanne Stickley, Participating Party.
Before WIEAND, OLSZEWSKI and POPOVICH, JJ.
OLSZEWSKI, Judge:
George McCook appeals from the March 16, 1992, order terminating his parental rights to his daughter, Courtney Stickley. Courtney was born on April 7, 1986. Her parents, McCook and Joanne Stickley, were married on May 14, 1988, subsequently divorced, and were involved in a child support and custody dispute. Stickley filed a petition for the appointment of a guardian ad litem for Courtney. In the petition, Stickley, who has remarried, alleged that McCook is not Courtney's natural father and requested paternity testing. A hearing on the petition was held on November 12, 1991. At that hearing, the parties entered an agreement on the record whereby Stickley was to file a petition to voluntarily terminate McCook's parental rights and McCook agreed he would sign it. According to the agreement, McCook was to have a final visit with his daughter before the hearing on the petition to terminate, and Stickley was to reimburse McCook $3,500 for sums McCook had paid in child support. Apparently, this agreement was made in order to settle the custody dispute and to end the necessity for paternity testing. It also appears that Stickley has as her ultimate goal the adoption of Courtney by her current husband.
Stickley filed a petition to confirm consent to adoption on February 14, 1992, and a hearing on that petition was held on March 16, 1992. McCook refused to attend the hearing even though he was in the building. McCook's attorney attended the hearing only long enough to inform the court that his client was not willing to sign a consent to adoption or a *357 consent to relinquish his parental rights. Also, at the hearing, Stickley's attorney indicated that McCook had refused the $3,500 reimbursement check. The court then entered an order which stated in part:
[T]he Court finds that the averments of the Petition are true, that the requirements of the Adoption Act in this regard have been complied with, and that the consent of the natural father, GEORGE McCOOK, have [sic] knowingly, intelligently and voluntarily surrendered all parental rights to COURTNEY STICKLEY, born on April 7, 1986.
It is, therefore, ORDERED and DECREED that all the parental rights of GEORGE McCOOK to his child, COURTNEY STICKLEY, born on April 7, 1986, are hereby terminated forever.
Order, 3/16/92. McCook filed exceptions to this order on April 7, 1992. Stickley filed a motion to dismiss, averring that McCook did not file his exceptions within the time limit prescribed by Local Orphan's Court Rule 7-1-1. The trial court dismissed these exceptions with prejudice on August 4, 1992. McCook then filed this timely appeal.
McCook contends that his exceptions were timely filed and the court erred in finding that he had knowingly, intelligently, voluntarily and freely consented to the voluntary termination of his parental rights. Due to the unorthodox procedure which led to the termination of McCook's parental rights, we reverse.
According to the agreement, Stickley was to file a petition to voluntarily terminate McCook's parental rights. Under the Adoption Act, McCook would have to file the petition, not Stickley. A parent may voluntarily relinquish his parental rights to an adult intending to adopt the child. 23 Pa.C.S.A. § 2502. Section 2502 provides:
When any child under the age of 18 years has been for a minimum period of 30 days in the exclusive care of an adult or adults who have filed a report of intention to adopt required by section 2531 (relating to report of intention to adopt), the parent or parents of the child may petition the *358 court for permission to relinquish forever all parental rights to their child.
Id. Section 2503 requires the court to conduct a hearing, at which the petitioner must appear, on such a petition before entering a decree terminating the parental rights.
The record discloses that no report of intention to adopt Courtney was filed. Section 2531(c) does not require the filing of such a report when the child is related by blood or marriage to the person receiving or retaining physical custody. Thus, Stickley would not have had to file a report of intention to adopt, nor would Courtney's step-father if he had been a party to this proceeding. Section 2502, however, explicitly states that a parent may petition the court for permission to voluntarily relinquish his rights only when the child has, for 30 days, been in the care of an adult who has "filed a report of intention to adopt required by section 2531." 23 Pa.C.S.A. § 2502(a). The statute does not contemplate this situation relinquishment to a natural parent. See, e.g., Petition of Varner, 68 D. & C.2d 552 (1973) (holding § 302, predecessor to § 2502, inapplicable and that the court did not have jurisdiction to grant father's petition to voluntarily terminate his rights where father wanted to relinquish his rights in favor of his ex-wife, the natural mother). Furthermore, the statute only addresses those instances where the parent bringing the petition is the one whose rights will be terminated. Common sense dictates that this statute is not meant to allow one parent to petition for the voluntary termination of the parental rights of the other parent. Thus, § 2502 is inapplicable to this case.
Recognizing that she could not file a petition to voluntarily terminate McCook's parental rights, Stickley filed a petition to confirm consent to adoption pursuant to § 2504(a). Section 2504, entitled "Alternative procedure for relinquishment," provides:
If the parent or parents of the child have executed consents to an adoption as required by section 2711 (relating to consents necessary to adoption) but have failed for a period of 40 days after executing the consent to file or proceed with *359 the petition for voluntary relinquishment of parental rights provided for in this subchapter, the [adoptive parent or parents] may petition the court to hold a hearing for the purpose of confirming the intention of the parent or parents to voluntarily relinquish their rights and duties as evidenced by the consent or consents to the adoption, the original of which shall be attached to the petition.
23 Pa.C.S.A. § 2504(a). After a hearing, of which the consenting parent must receive notice, "the court may enter a decree of termination of parental rights in the case of a relinquishment to an adult." Id. at § 2504(b).
In order for the lower court's ruling to be valid, McCook must have executed a consent to an adoption pursuant to § 2711. That section requires the parent of an adoptee who is under 18 to execute a written consent, with signatures of two witnesses, to the adoption of his child. 23 Pa.C.S.A. § 2711(d). "A consent to an adoption may only be revoked prior to the earlier of either the entry of a decree of termination of parental rights or the entry of a decree of adoption. . . [and] shall be in writing. . . ." Id. at § 2711(c). McCook never executed the required written consent to an adoption. The lower court's order and opinion considered the November 12, 1991, agreement entered on the record as McCook's consent. Our review of the record, however, indicates that no written consent was ever executed nor was a court order adopting this agreement ever filed. Thus, the requirements of § 2711 have not been met because McCook did not execute a written consent.
Furthermore, if an oral agreement in court may operate as consent under § 2711, McCook revoked that consent before a decree of termination or of adoption was entered. McCook's refusal to accept the check tendered pursuant to the agreement, his refusal to attend the March 16, 1991 hearing, and his attorney's statements at the hearing all evidence McCook's intent not to relinquish his parental rights. To the contrary, they evidence McCook's desire to revoke his consent. At the hearing, McCook's attorney stated:
*360 [O]n Friday or Saturday, I saw a letter from my client saying he was not going to sign either a consent to the adoption or a consent to relinquishing parental rights.
He is downstairs in Courtroom No. 9, and his position is that he will not sign either a consent to an adoption or a consent to the relinquishment.
N.T., 3/16/92, at 5. After this, the court entered the decree terminating McCook's parental rights. It is obvious that McCook evidenced a desire not to voluntarily terminate his parental rights before those rights were terminated. Thus, the lower court erred in entering the decree of termination.
Both the lower court and Stickley rely on the case of In re Voluntary Termination of Parental Rights to M.L.O., 490 Pa. 237, 416 A.2d 88 (1980), for the proposition that "a party seeking to disturb a Decree of Voluntary Termination of Parental Rights for the purpose of adoption must show that the consent given to the termination was not intelligent, voluntary and deliberate." Opinion at 4. This is a correct statement of the law, however, reliance on this case is misplaced. This standard only applies where a party attempts to revoke his consent after the termination decree has been entered. In M.L.O., the natural mother's petition to relinquish her parental rights was granted and a decree of termination was entered. Four months later, the mother petitioned the court to set aside that decree claiming her consent was not voluntary, intelligent and deliberate. Here, McCook never executed a valid consent, or, even if he did, he revoked it prior to the entry of the decree. A parent may revoke his consent to an adoption before a decree of termination or of adoption is entered. 23 Pa.C.S.A. § 2711(c); K.N. v. Cades, 288 Pa.Super. 555, 432 A.2d 1010 (1981). Thus, the court did not have the authority to "voluntarily" terminate his parental rights and McCook is not required to prove his consent was not voluntary. In addition, we note that McCook's attempted revocation is evidence that his consent was not voluntary. See, In re Fritz, 460 Pa. 265, 333 A.2d 466 (1975) (teen-age mother's written consent held not to have been voluntary where her conduct after the consent was given and the decree *361 was entered indicated that she did not intend to give up her son).
Termination of parental rights is a drastic measure that should not be taken lightly. Not only are George McCook's rights at stake here, but Courtney's right to a relationship with her father is also at stake. Our Supreme Court has written:
To effect an adoption, the legislative provisions of the Adoption Act must be strictly complied with. Our courts have no authority to decree an adoption in the absence of the statutorily required consents. Nor may exceptions to the Adoption Act be judicially created where the Legislature did not see fit to create them.
In re Adoption of E.M.A., 487 Pa. 152, 153, 409 A.2d 10, 11 (1979). Likewise, we will not terminate parental rights upon a petition to confirm consent to adoption where the statutory requirements have not been satisfied. We also decline to dismiss the appeal for a procedural error where the result is to forever extinguish the parent-child relationship.
Order reversed without prejudice to the filing of a petition that complies with statutory prerequisites. Jurisdiction relinquished.
| {
"pile_set_name": "FreeLaw"
} |
6 A.3d 1047 (2010)
Alice Marie SCOTT
v.
COMMONWEALTH of Pennsylvania, DEPARTMENT OF TRANSPORTATION, Bureau of Driver Licensing, Appellant.
Commonwealth Court of Pennsylvania.
Submitted on Briefs May 7, 2010.
Decided August 4, 2010.
Publication Ordered October 4, 2010.
*1048 Terrance M. Edwards, Asst. Counsel and Harold H. Cramer, Asst. Chief Counsel, Harrisburg, for appellant.
Regis J. McNally, Pittsburgh, for appellee.
BEFORE: LEADBETTER, President Judge, and BROBSON, Judge, and FLAHERTY, Senior Judge.
OPINION BY Judge BROBSON.
Appellant Department of Transportation, Bureau of Driver Licensing (DOT), appeals from an order of the Court of Common Pleas of Allegheny County (trial court). The trial court sustained the statutory appeal of Alice Marie Scott (Licensee) from DOT's order that suspended her driving privileges for one year after she refused to submit to chemical testing based upon suspicion that she was driving while under the influence of alcohol. We reverse the trial court's order.
At a hearing before the trial court, DOT presented the testimony of Officer Gary *1049 Watkins (Officer Watkins) of the Police Department of the Borough of Castle Shannon. Officer Watkins testified that on November 15, 2008, he observed Licensee driving her vehicle into the opposing lane of traffic. (Reproduced Record (R.R.) 17a.) He stated that when he approached Licensee in her vehicle, Licensee placed gum in her mouth and that he had to knock on the vehicle's door three separate times before she responded to him. (Id.) Officer Watkins smelled alcohol on Licensee's breath, despite the fact that she had placed gum in her mouth before opening her car door. (R.R. 18a.) After administering the "Gaze Nystagmus" field sobriety test to Licensee, Officer Watkins observed several indications of insobriety, including a swayed gait while walking and swaying while standing still. Thereafter, Licensee refused any additional field tests. (R.R. 18a-19a.) Officer Watkins testified that, based upon his experience, he believed Licensee was not safe to drive and placed her under arrest for driving under the influence of alcohol. (R.R. 19a.) Officer Watkins and his patrol partner had to use force to place Licensee in the police car. (R.R. 20a.) Officer Watkins asked Licensee to submit to blood-alcohol testing, but she refused. (Id.) Officer Watkins then read Implied Consent Form DL-26 to Licensee. (Id.) Licensee then again refused to submit to chemical testing. (Id.)
Officer Watkins also testified regarding Licensee's demeanor following her arrest. His testimony indicates that Licensee was uncooperative, alert, and cognizant. (R.R. 21a-22a.) Licensee told Officer Watkins that she "wanted her son to come up and punch [Officer Watkins] in the face." (R.R. 22a.)
At the hearing before the trial court, Licensee offered into the record an April 9, 2009 deposition of her treating physician, Nenad Janicijevic, M.D., to which DOT did not object. (R.R. 30a-31a.) Dr. Janicijevic also employs Licensee as a medical assistant in his medical practice. (Id.)
Licensee testified that Officer Watkins did not tell her why he had pulled her over. That factor, she claimed, led to her "emotional state" at the time, which she described as including a pounding heart, trouble breathing, sweaty hands, fear, and nervousness. (R.R. 32a-34a.) Licensee stated that she did not remember Officer Watkins reading the implied consent warnings and that "if I had known and understood, I certainly would not have denied anything to lose my license for a whole year." (R.R. 34a-35a.) Licensee refused to answer a question from DOT's counsel as to whether she had been drinking that night. (R.R. 37a.) She also testified that she did not take a Zanax until she returned home. (R.R. 38a.)
On October 6, 2009, the trial court issued its order, sustaining Licensee's appeal. The trial concluded that Licensee established that, because of a medical conditionpanic disorder, Licensee could not make a knowing and conscious refusal to submit to chemical testing.
DOT raises the following issues in its appeal: (1) whether the trial court erred in concluding that Licensee satisfied her burden of proving that she was not capable of making a knowing and conscious decision to refuse to submit to chemical testing, and (2) whether Licensee failed to establish that alcohol consumption did not contribute to her alleged inability to make a knowing and conscious refusal to submit to chemical testing.[1] In response, *1050 Licensee, in addition to asserting that there was ample evidence to support her claim of an inability to refuse Officer Watkins' request in a knowing and conscious manner, asserts that (1) DOT did not establish that Officer Watkins adequately informed Licensee of the implied consent law, and (2) there is no evidence in the record indicating that alcohol played a role in Licensee's refusal to submit to chemical testing.
In a license suspension case where DOT suspends a license based upon a licensee's refusal to submit to chemical testing, DOT has the burden of proving the following elements: (1) a police officer arrested a licensee based upon reasonable grounds to believe that the licensee was driving under the influence of alcohol; (2) the officer asked the licensee to submit to chemical testing; (3) the licensee refused to submit to such testing; and (4) the officer provided a warning to the licensee that the licensee's failure to submit to testing would result in the suspension of his license. Banner v. Dep't of Transp., Bur. of Driver Licensing, 558 Pa. 439, 737 A.2d 1203 (1999).
Once DOT establishes that a licensee refused to submit to testing, the burden shifts to the licensee to establish that she was not physically capable of submitting to testing. Dep't of Transp., Bureau of Driver Licensing v. Ingram, 538 Pa. 236, 252, 648 A.2d 285, 293 (1994). When, as in this case, a licensee alleges that she could not make a knowing and conscious refusal because of a medical disability, the licensee must submit competent, unequivocal medical testimony to prove the licensee's inability to submit to testing.[2]Id.
DOT argues that Dr. Janicijevic's testimony was not unequivocal, and, therefore, was not competent to support the trial court's legal conclusion. In workers' compensation cases, where a claimant or employer often must offer competent, unequivocal medical testimony in order to satisfy the burden of proof, we have often repeated the notion that the question of whether expert medical testimony satisfies that requirement is a question of law subject to our review. Somerset Welding & Steel v. Workmen's Comp. Appeal Bd. (Lee), 168 Pa.Cmwlth.78, 650 A.2d 114, 117 (1994). In such cases, we review the testimony as a whole and may not base our analysis on a few words taken out of context. Id.
In Barbour v. Department of Transportation, Bureau of Driver Licensing, 557 Pa. 189, 732 A.2d 1157 (1999), our Supreme Court considered the question of what evidence constitutes competent medical evidence, such as would support a conclusion that a licensee has a condition unrelated to the consumption of alcohol that makes the licensee's refusal to submit to chemical testing unknowing. In that case, a licensee sustained a serious head injury in an accident while he was driving. A medical expert, who also testified by deposition, likened the injury to a gunshot wound. The doctor testified to a reasonable degree of medical certainty that the injury from the accident probably rendered the licensee unconscious and that the licensee suffered *1051 from amnesia after the accident. Consequently, the licensee would not have been able to comprehend questions posed to him immediately after the accident. The doctor acknowledged that, when he examined the licensee six to seven hours after the accident, licensee's ingestion of alcohol contributed to his cognitive impairment. Nevertheless, the doctor testified that, based upon his experience, a person suffering from the injury the licensee had sustained would not be able to provide a knowing refusal of chemical testing.
The Supreme Court concluded that this Court had improperly increased the licensee's burden of proof by requiring a medical expert's opinion to be certain and without doubt. Instead, a medical expert need testify only within a reasonable degree of medical certainly that a medical condition or injuries made the licensee "incapable of rendering a conscious and knowing refusal." Barbour, 557 Pa. at 195, 732 A.2d at 1160-61.
With these legal standards in mind, we review Dr. Janicijevic's testimony to consider whether it is equivocal. We quote pertinent parts of his testimony below:
Q. Did Alice Scott come to you on November the 15th and describe the situation that she faced in the police station the previous evening?
A. Yes, she did, yeah.
Q. And what did she describe?
A. Well, she described that she was stopped by the police, and she got nervous and anxiety, and I guess she got in quarrel with them. I don't know which kind of details they are. But my understanding is that she had the panic attacks, and as a result of this panic attacks, she was not able basically to control what she was telling, and that resulted that she was not able to properly, to properly think or understand what she was asked to do.
. . . .
Q. Now. Based on the information that you have from Alice Scott and otherwise, Doctor, and based on your experience and your medical expertise, can you state to a reasonable medical certainty whether Alice Scott was capable of making a knowing and conscious refusal or consent to the police officer's request that she submit to a blood test. . . ?
A. Well, my understanding of her illness, I feel that there is a probability that, due to anxiety, she was not capable of making conscience refusal of police officer's request to submit to the blood test because I don't think that she was able to comprehend mentally what she was asked, what kind of consequences that result. Because, you see, what panic disorder is, panic attacks, this attacks of, intense attacks of anxiety, and they manifested with multi-faceted symptoms.
(R.R. 59a-61a.) Dr. Janicijevic then described the numerous symptoms that can accompany panic attacks, including chest discomfort, shortness of breath, stomach distress, sweating, hot flashes, light headedness, unsteady gait, fear, delusions, cognition of reality, and lack of behavioral control. The colloquy in the deposition then continued as follows:
Q. And has Alice Scott exhibited the symptoms you described during the course that she was your patient?
A. Yeah, yes. She had, she had similar symptoms, which they observed that she has a problem. That's why she's treated here.
Q. And did she describe having the, some of those symptoms that night at the police station?
A. Some of those symptoms, correct.
*1052 Q. And with respect to her ability, is it your opinion that she could not give consent or make a knowing or conscious refusal to a reasonable degree of medical certainty?
A. Reasonable medical certainty, talking about probabilities, okay.
Q. Yes.
A. It is my opinion that if she would have a panic attacks and anxiety, she could have not be able to understand consciously.
(R.R. 62a (emphasis added).)
Upon a review of his deposition testimony, we agree with DOT that Dr. Janicijevic's testimony was equivocal on the question of whether Licensee, in fact, suffered a panic attack the evening of her arrest, which prevented her from making a knowing and conscious refusal to submit to chemical testing. Dr. Janicijevic clearly testified that Licensee suffered from panic attacks. He also clearly testified that if Licensee had a panic attack the night she was arrested, she would have difficulty understanding Officer Watkins' request to submit to chemical testing. Finally, Dr. Janicijevic testified that Licensee's symptoms on the evening of her arrest, as Licensee described them to him, were consistent with a panic attack. But although he testified that, based upon his understanding of Licensee's illness, there was a "probability" that, because of anxiety, she was not able to make a knowing or conscious refusal, Dr. Janicijevic did not testify with a reasonable degree of medical certainty that Licensee, in fact, had a panic attack the night of her arrest.[3] Based on this record, then, we must conclude that Licensee failed to establish, through unequivocal expert medical testimony, that she suffered from a panic attack the evening of her arrest, which prevented her from making a knowing and conscious refusal to submit to chemical testing.[4]
As a counter to DOT's arguments on appeal, Licensee argues that DOT failed to establish that Officer Watkins adequately informed Licensee of the implied consent laws. Licensee argues that, under the circumstancesnamely, Licensee's apparent *1053 irrational behaviorOfficer Watkins was required to explain the implied consent law requirements to her either in more detail or repeatedly. Licensee asserts that in every case in which courts have found the provided warnings to be adequate, the police officer or officers involved made a "bona fide" effort to ensure that the licensee was actually warned of the consequences of a refusal. Licensee does not detail the extent to which a police officer must go to make sure that a licensee understands the implied consent law, but asserts that Officer Watkins' effort in this case was insufficient because of Licensee's behavior.
None of the cases upon which Licensee relies definitively provide that an officer requesting a licensee to submit to chemical testing has a duty to repeat the implied consent warnings. By contrast, Officer Watkins' description of his actions that night reveals that he read Licensee the implied consent warnings. When Licensee said she wanted a lawyer, Officer Watkins explained that under the implied consent law, she had no right to an attorney for the purpose of chemical testing. (R.R. 21a.) Therefore, we reject Licensee's argument that Officer Watkins failed to provide Licensee with an adequate briefing or warning with respect to the implied consent law.
Based upon the foregoing, we conclude that the trial court erred in concluding that Licensee satisfied her burden to prove that she could not make a knowing or conscious refusal to submit to chemical testing. Accordingly, we reverse the trial court's order sustaining Licensee's statutory appeal and reinstate DOT's suspension of Licensee's driving privileges.
ORDER
AND NOW, this 4th day of August, 2010, the Order of the Court of Common Pleas of Allegheny County is REVERSED.
NOTES
[1] This Court's standard of review of a trial court's order sustaining a licensee's statutory appeal of a suspension of driving privileges is limited to considering whether factual findings are supported by competent evidence, and whether the trial court erred as a matter of law or abused its discretion. Todd v. Dep't of Transp., Bureau of Driver Licensing, 555 Pa. 193, 198, 723 A.2d 655, 658 (1999).
[2] The trial court apparently concluded that DOT had satisfied its initial burden, because otherwise it would not have had to address Licensee's affirmative defense.
[3] This conclusion is supported by the Dr. Janicijevic's own medical reports, which are part of the record. In those reports, Dr. Janicijevic nowhere states that he believed that Licensee had a panic attack that night. Rather, he states that "[i]t is my understanding" that Licensee had a panic attack. He also stated in those reports that based "upon these facts related to me by [Licensee] and based upon her medical condition, it is my opinion to a reasonable degree of medical certainty that [Licensee] was incapable of making a knowing and conscious refusal or consent to a . . . request that she submit to a blood test." Although the doctor used the words "within a reasonable degree of medical certainty," he does not indicate the "facts" that Licensee related to him. Consequently, the inference we draw from the initial phrase "it is my understanding" is that the doctor's opinion was based on statements Licensee made to him, indicating that she believed she had a panic attack that night. (R.R. 84a-85a.)
[4] DOT argues that, in order for Licensee to sustain her burden of proof, Dr. Janicijevic was required to testify that any alcohol Licensee drank that night could not have been a contributing factor to her alleged inability to make a knowing and conscious refusal. Because we agree with DOT that Dr. Janicijevic's testimony was equivocal on the question of whether Licensee actually suffered a panic attack at the time of her arrest, we need not address this issue. DOT further argues that, because Licensee submitted only deposition testimony of her treating physician, the trial court's credibility determinations and the weight the trial court assigned to this evidence are not binding on this Court. DOT argues that we may evaluate Dr. Janicijevic's deposition testimony independently and that we are not bound by the factual findings the trial court made based upon that deposition testimony. Based upon our conclusion above that Dr. Janicijevic's testimony was equivocal, we need not address this argument either.
| {
"pile_set_name": "FreeLaw"
} |
In The
Court of Appeals
Sixth Appellate District of Texas at Texarkana
______________________________
No. 06-03-00244-CR
______________________________
PONCE DELEON McCLEARY, JR., Appellant
V.
THE STATE OF TEXAS, Appellee
On Appeal from the Sixth Judicial District Court
Lamar County, Texas
Trial Court No. 19654
Before Morriss, C.J., Ross and Carter, JJ.
Memorandum Opinion by Chief Justice Morriss
MEMORANDUM OPINION
Ponce Deleon McCleary, Jr., has appealed from his conviction by a jury for aggravated
assault with a deadly weapon. The jury assessed his punishment at eleven years' imprisonment.
Appointed counsel filed a statement of lack of appealable issues pursuant to Anders
in which he
stated that, based on his review of the record, there was no viable argument as to ineffective
assistance of counsel, sufficiency of the evidence, admissibility of evidence, or chain of custody, and
that he did not find any appealable errors in his review.
In his statement of lack of appealable issues pursuant to Anders, counsel states that (1) he
diligently reviewed the appellate record and the applicable law, (2) he found no grounds of error on
which an appeal could be based, (3) in his opinion, the appeal is without merit and is frivolous, and
(4) he served a copy of this brief on McCleary with a letter informing him of his right to examine
the record and to file a pro se brief on his own behalf. In counsel's brief, counsel reviews the
indictment, voir dire, evidence introduced at trial, arguments, jury charge, and objections made by
trial counsel during the underlying proceedings. With citations to the record and legal precedent,
counsel explains why he concludes the appeal is without merit. The brief meets the requirements
of Anders in presenting a professional evaluation showing why there is no basis to advance an
appeal. See Anders, 386 U.S. at 744–45; Stafford v. State, 813 S.W.2d 503, 509–10, 510 n.3 (Tex.
Crim. App. 1991); High v. State, 573 S.W.2d 807, 812–13 (Tex. Crim. App. [Panel Op.] 1978).
McCleary has filed a pro se brief with this Court. In the brief, he argues the evidence was
insufficient to support the verdict. We apply the legal and factual sufficiency standards as articulated
by Zuniga v. State, 144 S.W.3d 477, 484 (Tex. Crim. App. 2004). There was testimony from three
separate witnesses that McCleary fired a gun at the victim. There was no evidence to the contrary.
McCleary has directed us to testimony that no shell casings were found where the bullets were
supposedly fired toward the victim, but this evidence is not such as to cast doubt on the jury's verdict
in this case. The evidence is legally and factually sufficient.
McCleary also argues that the trial court erred by admitting hearsay evidence of a prior
inconsistent statement of a witness. Specifically, he complains that the testimony of the victim,
Terry Hickson, was inconsistent because McCleary had testified that he had stayed the night with
his girlfriend (Kimberly) because she was about to have a baby, but that the prior witness statement
taken from Hickson showed that the baby had already been born and that he was on his way to her
house at 6:00 a.m. the morning of the shooting.
Hickson testified that the baby had been born at the time and acknowledged on cross-examination that he had told police he had gone to the girlfriend's house about 6:00 a.m. Then, on
recross examination, Hickson was asked about the birth date of the child, which was actually five
days after the day of the shooting.
Hickson's testimony was not consistent with his statement, and he clearly was confused about
the dates involved. But he did testify clearly that McCleary was the shooter and that McCleary shot
at him on the morning of April 22, 2003. Inconsistency in testimony is not a reason to keep
testimony out of a trial, but does require a jury to sort through the evidence to determine what really
happened. Conflicts in the evidence are to be resolved by the jury. In doing so, it may accept one
version of facts and reject another or reject any of a witness' testimony. Penagraph v. State, 623
S.W.2d 341 (Tex. Crim. App. 1981). In so doing, it is the jury's job to judge the credibility of the
witnesses and the weight to be given their testimony, and it may resolve or reconcile conflicts in the
testimony, accepting or rejecting such portions thereof as it sees fit. Banks v. State, 510 S.W.2d 592
(Tex. Crim. App. 1974). Error has not been shown.
We have performed our independent review of the record, and based on our review and that
as set out by counsel, we find no reversible error.
We affirm the judgment.
Josh R. Morriss, III
Chief Justice
Date Submitted: February 1, 2005
Date Decided: March 10, 2005
Do Not Publish
| {
"pile_set_name": "FreeLaw"
} |
197 Wis.2d 144 (1995)
539 N.W.2d 883
WHIRLPOOL CORPORATION, a foreign corporation, Plaintiff-Respondent-Petitioner,
v.
Sharon ZIEBERT, Defendant-Petitioner,[]
ALLSTATE INSURANCE COMPANY, a foreign insurance company, Defendant-Third Party Plaintiff-Appellant,
v.
Jaclyn ZIEBERT, Third Party Defendant-Intervenor-Respondent,
Kenneth ZIEBERT, Metropolitan Life Insurance Company and Blain Supply, Inc., Third Party Defendants.
No. 93-3307.
Supreme Court of Wisconsin.
Oral argument October 5, 1995.
Decided November 16, 1995.
*147 For the plaintiff-respondent-petitioner there were briefs by J. Ric Gass, Mark M. Leitner and Kravit Gass & Weber, S.C., Milwaukee and oral argument by Mark M. Leitner.
For the defendant-petitioner there were briefs by Diane Loftus and F. William Russo & Associates, Milwaukee and oral argument by Gordon K Aaron of Alex, Aaron & Goldman, S.C., Milwaukee.
For the defendant-third party plaintiff-appellant, there was a brief by Robert J. Lauer, Christine M. Benson and Kasdorf, Lewis & Swietlik, S.C., Milwaukee and oral argument by Robert J. Lauer.
Amicus curiae brief was filed by Timothy J. Strattner, Linda Vogt Meagher and Schellinger & Doyle, S.C., Brookfield for the Civil Trial Counsel of Wisconsin and the Wisconsin Insurance Alliance.
Amicus curiae brief was filed by D. J. Weiss and Habush, Habush, Davis & Rottier, S.C., Rhinelander for the Wisconsin Academy of Trial Lawyers.
DONALD W. STEINMETZ, J.
The issue before this court is whether a family member exclusion clause in a homeowner's insurance policy can bar coverage for a third party contribution action brought against an insured. We hold that family member exclusion clauses which apply to contribution claims against an insured are not contrary to public policy.
Jaclyn Ziebert, at the age of three, injured her hand in a meat grinder allegedly manufactured by Whirlpool Corporation (Whirlpool) and sold by Blain Supply, Inc. (Blain). Jaclyn, along with her parents, Kenneth and Sharon Ziebert, and their health insurer, Metropolitan Life Insurance Company, filed an action *148 against Whirlpool and Blain in Milwaukee County Circuit Court to recover damages for Jaclyn's injuries. This appeal arises from a separate contribution action filed by Whirlpool against Sharon Ziebert and her homeowner's liability insurer, Allstate Insurance Company (Allstate), wherein Whirlpool alleges that Jaclyn's injuries were caused by Sharon Ziebert's negligent supervision.
Allstate moved for summary judgment in the contribution action, arguing that the family exclusion clause found in Sharon Ziebert's policy released it from any obligation to provide coverage to Sharon. The Milwaukee County Circuit Court, Louise M. Tesmer, Judge, denied the motion, but the court of appeals reversed and granted summary judgment in Allstate's favor. The court of appeals found that the family exclusion clause in question unambiguously included contribution claims such as the one brought by Whirlpool against Sharon. See Whirlpool Corp. v. Ziebert, 188 Wis. 2d 453, 456-57, 525 N.W.2d 128, 129-30 (1994). We find the conclusion reached by the court of appeals correct and affirm its decision.
This court will consider two questions in reaching this decision. The first, which has broader significance, is whether family exclusion clauses which apply to indirect claims, such as a contribution action, are contrary to public policy. Second, we must determine if the specific language of the family exclusion clause in this case includes contribution claims.
[1]
The first question involves issues of public policy and contract enforcement. When answering such questions, this court is mindful that the freedom to contract has long been protected in this state. See Journal/ Sentinel, Inc. v. Pleva, 155 Wis. 2d 704, 710, 456 *149 N.W.2d 359, 362 (1990); Watts v. Watts, 137 Wis. 2d 506, 521, 405 N.W.2d 305, 309 (1987). Although a court may question the validity of a contract on the grounds of public policy, this measure is extreme and should only be exercised in cases free from doubt. See Continental Ins. Co. v. Daily Express, Inc., 68 Wis. 2d 581, 589, 229 N.W.2d 617, 621 (1975). It is under these standards that we determine whether or not family exclusion clauses which relate to third party contribution claims are valid.
This is not the first time a question regarding family exclusion clauses has been before this court. In Shannon v. Shannon, 150 Wis. 2d 434, 456, 442 N.W.2d 25, 35 (1989) we found that:
Homeowner's insurance policies often cover liability for injury to third persons. These same policies frequently exclude coverage for liability to `residents' of the household . . . . The purpose has been explained so `as to exempt the insurer from liability to those persons to whom the insured, on account of close family ties, would be apt to be partial in case of injury.' . . . Thus, the exclusion protects insurers from situations where an insured might not completely cooperate and assist an insurance company's administration of the case.
Quoting A.G. v. Travelers Ins. Co., 112 Wis. 2d 18, 20-21, 331 N.W.2d 643, 644 (Ct. App. 1983) (citations omitted). We then specifically held that "such exclusions serve a legitimate purpose and are not contrary to public policy." Id. Shannon, however, only dealt with a direct suit against an insured family member. The question of whether a family exclusion clause may also reach to contribution claims by a third party was not before us. This is, therefore, a question of first impression for this court.
*150 The underlying concern in Shannon was the possibility of family member collusion in intra-family lawsuits. Because of the gravity of this concern, we did not require in Shannon that either party actually prove collusion on a case-by-case basis. Instead, this court assumed collusion in all cases, thereby finding that family exclusion clauses covering direct actions are not contrary to public policy.[1] The question is, then, whether such clauses should be allowed to also encompass indirect actions such as contribution claims. Most courts which have addressed this question have concluded that they should. See Groff v. State Farm Fire and Cas. Co., 646 F. Supp. 973, 975 (E.D. Pa. 1986); Chrysler Credit Corp. v. United Services Auto Ass'n, 625 So.2d 69, 73 (Fla. App. 1993); Utley v. Allstate Ins. Co., 24 Cal. Rptr. 2d 1, 4-5 (Cal. App. 1993); State Farm Fire and Cas. Co. v. Ondracek, 527 N.E.2d 889, 891 (Ill. App. 1988); Parker v. State Farm Mut. Auto Ins. Co., 282 A.2d 503, 508-09 (Md. Ct. App. 1971). We agree.
Ultimately, the reasoning supporting Shannon, collusion in intra-family lawsuits, is just as persuasive when applied to contribution claims. A real-world hypothetical demonstrates the possibility of collusion in indirect claims quite clearly. If Whirlpool did not have the financial resources to meet Jaclyn's judgment, a contribution claim against Sharon and Allstate may be the only source of funds. In such a situation, Sharon may be more concerned with her daughter receiving *151 compensation for her injuries than with cooperating fully with Allstate. Furthermore, it is unlikely that Sharon would defend herself with as much zeal as she would if her own assets were at stake.[2] The Eastern District Court of Pennsylvania, when faced with a similar question, correctly recognized that "[t]he potential for collusion is virtually the same in either situation [direct suits against family members or third party contribution claims against family members] at least in the sense that . . . the parents would have no incentive to defeat or reduce the claim." Groff, 646 F.Supp. at 975.
[2]
It must be noted that our decision does not imply any wrongdoing on the part of the Zieberts. In fact, the possibility of collusion in this case seems quite low, if not nil.[3] However, although this court never ignores the circumstances of a particular case, there are times when we must look beyond the immediate facts to principles of public policy and the broader ramifications that our decisions have on the people of this state as a whole. We are persuaded that the possibility of collusion is great enough to warrant allowing family exclusion clauses to cover contribution actions. Therefore, we hold that such clauses are not contrary to *152 public policy, even though there may be no collusion in this particular case.
[3,4]
The next issue is whether or not the language of this specific family exclusion clause encompasses contribution actions. Construction of an insurance policy is a question of law which this court reviews de novo. See Lambert v. Wrensch, 135 Wis. 2d 105, 115, 399 N.W.2d 369, 373-74 (1987). Insurance contracts are subject to the same rules of construction as other contracts. See Ehlers v. Colonial Penn. Ins. Co., 81 Wis. 2d 64, 74, 259 N.W.2d 718, 723 (1977).
[5-8]
The first step in such analysis is, of course, to examine the language of the policy itself. It is fundamental in Wisconsin that "ambiguities in coverage are to be construed in favor of coverage, while exclusions are narrowly construed against the insurer." Smith v. Atlantic Mut. Ins. Co., 155 Wis. 2d 808, 811, 456 N.W.2d 597, 598 (1990); see also Davison v. Wilson, 71 Wis. 2d 630, 635-36, 239 N.W.2d 38, 41 (1976). This rule of strict construction, however, is not applicable if the policy is unambiguous. See, e.g., Bertler v. Employers Insurance of Wausau, 86 Wis. 2d 13, 17, 271 N.W.2d 603, 605 (1978); D'Angelo v. Cornell Paperboard Products Co., 59 Wis. 2d 46, 49, 207 N.W.2d 846, 848 (1973); Leatherman v. American Family Mut. Ins. Co., 52 Wis. 2d 644, 650, 190 N.W.2d 904, 907 (1971). Furthermore, the principle of construing exclusions narrowly does not allow a court to completely eviscerate an exclusion which is clear from the face of the policy. Rules of construction cannot be used to rewrite the clear and precise language of a contract. See Gonzalez v. City of Franklin, 137 Wis. 2d 109, 122, 403 N.W.2d 747, 752 (1987); In re Marriage of Levy v. Levy, 130 Wis. 2d 523, *153 533, 388 N.W.2d 170, 174-75 (1986); Limpert v. Smith, 56 Wis. 2d 632, 640, 203 N.W.2d 29, 33-34 (1973); Meyer v. City of Amery, 185 Wis. 2d 537, 543, 518 N.W.2d 296, 298 (Ct. App. 1994).
In this case the family exclusion clause in question, even when construed narrowly, is unambiguous and clearly contemplates contribution claims. It states: "We do not cover bodily injury to an insured person . . . whenever any benefit of this coverage would accrue directly or indirectly to an insured person."[4]
A close reading of the policy language reveals that the key phrase is: "whenever any benefit of this coverage would accrue directly or indirectly to an insured person." (emphasis added). The term "direct" is defined as: "[i]mmediate; proximate; by the shortest course; without circuity; operating by an immediate connection or relation, instead of operating through a medium; the opposite of indirect." Black's Law Dictionary 459 (6th ed. 1990). A "direct" benefit, therefore, would accrue to Jaclyn Ziebert by way of a "direct" claim against Sharon Ziebert and Allstate. It is undisputed that Allstate would not be required to cover this type of action. The term "indirect" is defined as: "[n]ot direct in relation or connection; not having an immediate bearing or application; not related in the natural way." Black's Law Dictionary 773. An indirect benefit would incur to Jaclyn if Whirlpool won its contribution claim since the money Whirlpool receives will, in all *154 practical respects, be funneled through to Jaclyn. Jaclyn would receive, in the plainest sense of the word, an indirect benefit.
[9]
If possible, a court should interpret a contract so that all parts are given meaning. See Stanhope v. Brown County, 90 Wis. 2d 823, 848-49, 280 N.W.2d 711 (1979). Only by interpreting the policy in the above manner can this be accomplished. The direct/indirect benefit language was obviously meant to differentiate between two possible types of benefits and to clarify the policy language to ensure that contribution claims were included in the scope of the clause. The California Court of Appeals confronted identical language, albeit in a different context, and reached the same conclusion. See State Farm Mut. Auto. Ins. Co. v. Vaughn, 208 Cal. Rptr. 601 (Cal. App. 1984). In California, a statute had authorized automobile insurers to exclude from coverage "liability for bodily injury to an insured." Cal. Ins. Code § 11580.1(5)(c) (1982). The legislature then amended this section to exclude from coverage "liability for bodily injury to an insured . . . whenever the ultimate benefits of that indemnification accrue directly or indirectly to an insured." Cal. Ins. Code § 11580.1(5)(c). The California Court of Appeals specifically held that the additional language clarified the scope of the original language so that it was more clearly understood that contribution claims would be covered by the clause. It stated that the amendment was necessary to make clear "that there is no duty to indemnify an insured named in a cross-complaint where there would be no duty to indemnify if the insured were sued directly." Vaughn, 208 Cal. Rptr. at 603. The reasoning of the Vaughn court was sound.
*155 [10]
We are not persuaded by Whirlpool's argument that a contribution claim is not a bodily injury and therefore not covered under the language of the exclusion clause. Although Whirlpool is correct in asserting that we have scrupulously found that a claim for contribution is distinct from the underlying cause of actionState Farm Mut. Automobile Ins. Co. v. Schara, 56 Wis. 2d 262, 266-67, 201 N.W.2d 758, 760 (1972); Johnson v. Heintz, 73 Wis. 2d 286, 243 N.W.2d 815, 822-23 (1976); Schara and its progeny stand for the principle that a contribution claim based in tort should be treated no differently than one based in contract. See Schara, 56 Wis. 2d at 266-67. This in no way asserts or implies that a claim for contribution is wholly separate from the underlying claim. In fact, contribution claims are dependent and stem from the original action; without it they would not exist at all.
The liability being asserted in Whirlpool's contribution claim against Sharon Ziebert is based on the claim for damages suffered by Jaclyn Ziebert. That liability is identical whether there is a direct claim against Sharon Ziebert by her daughter or whether the claim is indirectly asserted through a contribution claim by Whirlpool. To say that Jaclyn Ziebert is not receiving a benefit because her recovery comes from a contribution claim rather than a direct claim for personal injuries is the ultimate tribute to form over substance. Such a conclusion defies both logic and common sense.
[11]
The decision of the court of appeals enforces the public policy of avoiding potential collusion between family household members. See Shannon, 150 Wis. 2d at 456. Furthermore, the language of the policy is clear *156 and unambiguous and clearly encompasses contribution claims, and, as such, legitimately precludes coverage to Sharon Ziebert.
By the Court.The decision of the court of appeals is affirmed.
NOTES
[] Motion for Reconsideration denied January 23, 1996.
[1] We do not find convincing Whirlpool's argument that the standard "cooperation clause" in most insurance policies adequately protects insurance companies from collusion. This argument was implicitly rejected in Shannon where the policy in question also contained such a cooperation clause. Furthermore, it is certainly not contrary to public policy for a party to bargain for multiple contractual protections.
[2] The insured's defense of his or her actions, of course, would be central to the determination of any such contribution claim.
[3] There are a number of factors which support Sharon's claim that there is no collusion in this case. These include: Sharon has her own claim against Whirlpool which would be diminished by any finding of negligence on her part; her policy limit may be quite low in relation to the injuries suffered by Jaclyn; and Sharon has retained her own counsel throughout these proceedings to represent her interests.
[4] It is undisputed that Kenneth, Sharon and Jaclyn Ziebert are all "insured persons" under the Allstate policy. The policy defines an "insured person" as:
You and, if a resident of your household:
a) any relative; and
b) any dependent person in your care.
| {
"pile_set_name": "FreeLaw"
} |
815 F.2d 80
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.UNITED STATES of America, Plaintiff-Appellee,v.Charlotte ADKINS, Defendant-Appellant.
No. 85-5895.
United States Court of Appeals, Sixth Circuit.
Feb. 3, 1987.
Before JONES and RYAN, Circuit Judges and CELEBREZZE, Senior Circuit Judge.
PER CURIAM.
1
Defendant Charlotte Adkins appeals her conviction for passing falsely altered money orders in violation of 18 U.S.C. Secs. 2 and 500 (1982). She alleges that she was denied effective assistance of counsel. We affirm the judgment of conviction.
2
In May 23, 1985, a federal grand jury sitting in the Eastern District of Kentucky returned a six count indictment against Charlotte Adkins and Annette Stamper. The six count indictment alleged that the two had altered and passed six duly issued Postal Service money orders. Adkins retained Samuel F. Kibbey as her attorney in the matter. She was arraigned on the charges contained in the indictment on May 31, 1985. She appeared in court at that time and pled not guilty to all six counts.
3
The money orders underlying the indictment had been issued by the U.S. Postal Service as follows:
4
Count Date Amount
1 March 2, 1985 $12.02
2 March 2, 1985 $11.14
3 March 2, 1985 $11.04
4 March 2, 1985 $12.40
5 March 2, 1985 $11.04
6 March 4, 1985 $10.84
5
Each money order was altered by adding a 4 in front of the issued amount, raising the value of each by $400. Each money order bore a false endorsement when cashed. The money orders were cashed at the following locations on the following dates:
6
Count Location City Date
1 Freight Station Liquor Morehead, Ky. March 2, 1985
2 Allen's IGA Morehead, Ky. March 2, 1985
3 Pic Pac Flemingsburg, Ky. March 3, 1985
4 Maloney's Flemingsburg, Ky. March 3, 1985
5 Convenient East Morehead, Ky. March 3, 1985
6 Allen's IGA Morehead, Ky. March 4, 1985
7
On the evening of March 4, 1985, at about 7:30 p.m., the money order at issue in Count 6 was cashed for the sum of $410.84. At approximately 11:30 p.m. that evening, Morehead, Kentucky police received a call from Convenient East stating that a woman in a Jeep vehicle, who had cashed a money order at the store the night before, had again tried to cash a money order. Shortly thereafter, Officer Richard Ingold stopped a 1979 Jeep Wagoneer driven by Adkins. Stamper was the only passenger in the vehicle at that time. Stamper identified herself to the officer as Betty Amburgey. A consent search was made of the vehicle and two purses found therein. A purse later identified as belonging to Stamper contained identification cards bearing the name used in cashing the money orders (Betty Amburgey). Adkins' purse contained $400 to $500. A cash receipt from Allen's IGA dated March 2, 1985, was found in the glove compartment. The vehicle also contained food items bearing Allen's IGA labels. Adkins identified Stamper as Betty Amburgey and told the police that she had not been to Allen's IGA on March 4th. Adkins further stated that she had driven Ms. Amburgey around in Morehead, Kentucky on March 3rd and 4th, but denied being in Morehead on March 2nd. She also denied purchasing money orders, or having been in Flemingsburg, Kentucky, or having any knowledge of Ms. Amburgey's activities relating to cashing money orders.
8
Adkins was brought to trial on September 9, 1985. She was represented by Kibbey during the trial. Stamper entered a plea of guilty to Count 1 of the indictment and agreed to testify against Adkins. Stamper testified that Adkins had been present when each money order was filled out and had driven her in a Jeep Wagoneer to each location where a money order was cashed. Stamper further testified that Adkins had assisted her in obtaining false identification and had received two-thirds of the proceeds.
9
The government called 12 other witnesses against Adkins. Testimony was presented that, as to the money orders cashed on March 2, 1985, Stamper was seen entering the passenger side of a Jeep being driven by an unidentified female. Further testimony was presented that Adkins was the person who had purchased the money orders underlying Counts 1, 2, 3, and 4.
10
Kibbey called Adkins to the stand to testify on her own behalf. He also called two other witnesses to testify on behalf of the defense. Franklin J. Carter was called in an attempt to impeach Stamper's credibility. Robert Bailey was also called, but he did not answer the court's subpoena. At this point, Kibbey rested his defense of Adkins and moved for a judgment of acquittal, which was denied. The jury found Adkins guilty of all six counts on September 9. When the verdict was announced, Kibbey declined the opportunity to poll the jury on its verdict.
11
On September 20, 1985, Ms. Adkins filed a pro se motion for a new trial. In support of the motion, Adkins asserted that, to her knowledge, Kibbey had failed to interview any of the prospective witnesses she had identified and asked him to interview. Adkins also claimed that Kibbey had failed to subpoena any of the witnesses that she had asked him to subpoena. Adkins' motion for a new trial further alleged that she did not receive fair representation. In effect, her motion for a new trial alleged ineffective assistance of counsel.
12
Adkins subsequently filed the statements of three persons in support of her motion with the court. The statement of Keith Whitten described his understanding that Kibbey would contact him before Adkins' trial. On September 7, 1985, two days prior to the trial, Whitten was told by Kibbey that he would not be needed to testify on September 9, 1985. Kibbey told Whitten that he would more likely be needed to testify on September 10, 1985. Kibbey, however, did not contact Whitten as he said he would during their conversation of September 7, 1985.
13
Clayton and Coadoey Binion also submitted statements in support of Adkins' motion. Both stated that in the presence of themselves and Adkins, Kibbey stated that he would not be offended if Adkins charged him with being incompetent. Both Binions stated that on September 9, 1985, Kibbey stated that he did not feel good on the day of the trial and he had not been able to "get into the defense."
14
Kibbey appeared with Adkins at her sentencing hearing on September 21, 1985. After the court explained to Adkins her right to appeal the conviction, she reminded the court that she had filed a motion for a new trial. The court noted that the only issue she had raised in the motion was an allegation of ineffective assistance of counsel. After commenting on Kibbey's experience as a trial attorney and stating that Kibbey gave her a "vigorous defense," the court overruled the motion. The court then sentenced Ms. Adkins to two years imprisonment on each of the six counts, to be served concurrently, and ordered her to make restitution in the sum of $2,400 to be paid prior to her release from probation and/or parole.
I.
15
On appeal, Adkins claims that she was denied effective assistance of counsel at her trial. She claims that her attorney made the following errors. First, he failed to investigate and produce witnesses to impeach Stamper. Second, he failed to interview and produce witnesses who would provide her with an alibi on the dates that she had allegedly altered the money orders. Third, he failed to file a motion for a new trial.1
16
The Supreme Court addressed the issue of ineffective assistance of counsel in Strickland v. Washington, 104 S.Ct. 2052 (1984). The Court noted that "[t]he benchmark for judging any claim of ineffectiveness must be whether counsel's conduct so undermined the proper functioning of the adversarial process that the trial cannot be relied on as having produced a just result." Id. at 2064. The Court stated that in order to have a conviction reversed, a defendant must: "First, ... show that counsel's performance was deficient..... Second, the defendant must show that the deficient performance prejudiced the defense. This requires showing that counsel's errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable." Id. "The defendant must show that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome." Id. at 2068.
17
Thus, a person claiming ineffective assistance of counsel must prove, first, that counsel's performance was deficient and, second, that she was prejudiced by counsel's performance. Adkins completely fails to prove that she was prejudiced by her counsel's performance. First, there is an overwhelming amount of evidence in support of the conclusion that Adkins was guilty of the crime with which she was charged. As the district court aptly noted, "if you would have had F. Lee Bailey in here or someone that enjoys his reputation, the outcome would have been exactly the same."
18
Adkins' ineffectiveness claims rests on two alleged errors by her counsel. The first was his failure to file a motion for a new trial. Although her counsel did fail to file a motion for a new trial, Ms. Adkins did file such a motion pro se. Although the motion was not timely filed, the district court did consider it. Therefore, Adkins was not prejudiced in this regard.
19
The second alleged error by counsel is that he failed to investigate and present witnesses who would have impeached Stamper and provided an alibi for Adkins. In light of the overwhelming evidence against Adkins, it is highly doubtful that, even if these witnesses had been produced, the outcome of the trial would have been different. Consequently, Adkins was not prejudiced in this regard either.
20
Therefore, the judgment of conviction is AFFIRMED.
21
RYAN, Circuit Judge (concurring in part; dissenting in part).
22
While I concur in the judgment of my colleagues that the defendant's conviction should be affirmed, I must respectfully dissent from my brothers' opinion in this case because I am satisfied that both the district court and this court are without jurisdiction to consider the appellant's ineffective assistance of counsel claim.
23
The ineffectiveness of counsel claim was raised in the district court in the appellant's pro se motion for a new trial, filed pursuant to Rule 33 of the Fed.R.Crim.P.
That rule states, in part:
24
"The court on motion of a defendant may grant a new trial to him if required in the interest of justice.... A motion for a new trial based on the ground of newly discovered evidence may be made only before or within two years after final judgment, but if an appeal is pending the court may grant the motion only on remand of the case. A motion for a new trial based on any other grounds shall be made within 7 days after verdict or finding of guilty or within such further time as the court may fix during the 7-day period."
25
The requirement of Rule 33 that the new trial motion "shall be made within 7 days after verdict or finding of guilty" is jurisdictional. United States v. Lara-Hernandez, (9th Cir.1948) citing Marion v. United States, 171 F.2d 185, 186 (9th Cir.1948).
26
The court is without power to consider an untimely motion for a new trial. Wright, Federal Practice & Procedure, Criminal 2d Sec. 558; U.S. v. Smith, 1947, 67 S.Ct. 1330, 331 U.S. 469, 91 L.Ed. 1610.
27
The motion in this case was untimely. The verdict was returned on September 9, 1985, and the new trial motion was filed on September 20, 1985. Since there was no claim that the motion was based upon "newly discovered evidence," it was required to be filed not later than September 18, 1985, since Saturdays and Sundays are excluded from the running of the seven days provided for in the rule.
28
We cannot acquire jurisdiction of a district court's decision on a new trial motion if the district court was without jurisdiction to entertain the motion. That is the situation here.
29
Considerations of the efficient administration of justice, certainly a logically compelling reason for considering the ineffectiveness claim on this appeal, cannot confer jurisdiction we do not have.
30
I would affirm the conviction on this direct appeal because the verdict of the jury is amply supported by the evidence but, for the reasons stated, I do not think we are free to reach the ineffective assistance of counsel claim at this time.
1
Generally, the procedure for pursuing a claim of ineffective assistance of counsel is through a 28 U.S.C. Sec. 2255 (1982) collateral attack. See, e.g., United States v. Birges, 723 F.2d 666, 670 (9th Cir.), cert. denied, 104 S.Ct. 1926 (1984). The reason for this is because such a claim cannot be properly considered "without the development of facts outside the original record." Id. In this instance, however, facts were developed outside of the record as a result of Adkins filing a motion for a new trial. Therefore, it would be inefficient for us to remand this case for further fact finding when there are sufficient facts in the record before us to resolve the issue
| {
"pile_set_name": "FreeLaw"
} |
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_____________________
No. 97-50769
_____________________
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
LISTON RANDOLPH POSEY, II,
Defendant-Appellant.
_________________________________________________________________
Appeal from the United States District Court for the
Western District of Texas
_________________________________________________________________
June 26, 2000
Before REYNALDO G. GARZA, JOLLY, and HIGGINBOTHAM, Circuit Judges.
E. GRADY JOLLY:
Liston Randolph Posey was convicted-–and is now serving a
sentence--for manufacturing in excess of one hundred marijuana
plants and for carrying a firearm during and in relation to a drug-
trafficking offense pursuant to 18 U.S.C. §§ 841(a)(1) and
924(c)(1). In this appeal, however, he only raises the district
court’s grant of the government’s post-judgment motion to dispose
of the evidence seized in connection with the charge resulting in
his conviction.
The indictment against Posey did not allege that the firearms
at issue were subject to criminal forfeiture. No criminal
forfeiture judgment was entered in the case. Furthermore, the
government has not followed the procedures for criminal forfeiture
set forth in Fed. R. Crim. P. 7(c)(2), 31(e), and 32(d)(2). Nor
did the government institute forfeiture proceedings under 26 U.S.C.
§§ 7321-28 and 18 U.S.C. § 924(d)(1) within 120 days of seizure of
the property. Because the government failed to follow the plain
language of any of these statutory requirements, the government was
not entitled to an order disposing of the property pursuant to 18
U.S.C. § 3665.1 See, e.g., Cooper v. City of Greenwood, 904 F.2d
302, 304 n.2 (5th Cir. 1990)(“Concededly 18 U.S.C. § 3665 . . .
provides for forfeiture of firearms used in perpetrating a felony
as punishment for the offense. However, this provision can be
invoked only if the indictment alleges the property subject to
forfeiture and a judgment of criminal forfeiture is
1
18 U.S.C. § 3665 states:
A judgment of conviction for transporting a stolen motor
vehicle in interstate or foreign commerce or for
committing or attempting to commit a felony in violation
of any law of the United States involving the use of
threats, force, or violence or perpetrated in whole or in
part by the use of firearms, may, in addition to the
penalty provided by law for such offense, order the
confiscation and disposal of firearms and ammunition
found in the possession or under the immediate control of
the defendant at the time of his arrest. The court may
direct the delivery of such firearms or ammunition to the
law-enforcement agency which apprehended such person, for
its use or for any other disposition in its discretion.
We find nothing persuasive in the government’s argument that the
discretion vested in the district court under this statute gives a
district court the latitude to ignore the above-cited statutory
sections.
2
entered.”)(citations omitted); United States v. Seifuddin, 820 F.2d
1074, 1075-79 (9th Cir. 1987).
The government argues that our statement in Cooper was dicta.
That being the case, it urges us to adopt the view that § 3665
vests the district court with virtually complete discretion to
enter a forfeiture order so long as some minimum level of due
process is afforded. We do not accept this invitation. First, the
plain language of § 3665 provides that the district court may order
forfeiture in the “judgment of conviction.” Section 3665 does not
grant the district court any such authority post-judgment. Second,
although our footnote in Cooper may have been dicta, we think it
states a correct view of the law. Given the plethora of the above-
cited statutory rules prescribing procedures that must be followed
should the government wish to seek a forfeiture, the government’s
concept of § 3665, either as vesting discretion in the district
court irrespective of these other rules, or as substituting some ad
hoc notion of due process in their stead, is plainly wrong.
Finally, United States v. Benson, 184 F.3d 936 (8th Cir. 1999),
does not control here.2 In sum, the government’s arguments are
2
Indeed, Benson did not even consider the question presented
here. Instead, the question in Benson was whether forfeiture under
§ 3665 was proper after the individual’s conviction under § 924(c)
had been found to be improper. It is apparent that the possible
impropriety of the forfeiture on the grounds raised here was not
argued in Benson.
3
completely meritless. We expect the government to comply with the
plain language of these rules in the future.
The order of the district court is
R E V E R S E D.
4
| {
"pile_set_name": "FreeLaw"
} |
562 F.2d 51
Youngv.Boyd
No. 76-1440
United States Court of Appeals, Fourth Circuit
6/30/77
1
W.D.Va.
AFFIRMED
| {
"pile_set_name": "FreeLaw"
} |
284 F.3d 721
Doree STEIN, Plaintiff-Appellant,v.John ASHCROFT, United States Attorney General, and Immigration and Naturalization Service, Defendants-Appellees.
No. 00-4326.
United States Court of Appeals, Seventh Circuit.
Argued November 5, 2001.
Decided March 21, 2002.
COPYRIGHT MATERIAL OMITTED George C. Pontikes, argued, Pontikes & Associates, Chicago, IL, for Plaintiff-Appellant.
Edward J. Messina, argued, Office of the United States Attorney, Chicago, IL, for Defendants-Appellees.
Before COFFEY, ROVNER and EVANS, Circuit Judges.
COFFEY, Circuit Judge.
1
Plaintiff-Appellant Doree Stein is employed by the Immigration and Naturalization Service (INS) Chicago District Office as a District Adjudication Officer (DAO). Stein brought suit against her employer alleging that the defendants failed to accommodate her disability in violation of the Rehabilitation Act of 1973, 29 U.S.C. § 794a. The district court granted the defendants' motion for summary judgment, and Stein appeals. We affirm.
BACKGROUND
2
Stein began employment with the INS Chicago District Office as a DAO in 1988. Her primary job responsibilities were interviewing applicants for United States citizenship and generating reports of those interviews, assisting applicants in the completion of the necessary forms, as well as processing completed applications. Stein's duties were primarily performed in her office at INS, but at times she would travel beyond the confines of the office (to places such as community centers, libraries, and churches) anywhere from one to five days per week to conduct "outreach" assignments. While working outside the office, Stein taught applicants about the procedure of becoming a U.S. citizen and conducted interviews. The outreach program required Stein to engage in moderate physical exertion not required in the office, such as standing for long periods, transporting and carrying boxes of files and office supplies, and setting up folding tables and chairs.
3
In May 1994, Stein was diagnosed as suffering from chronic upper left extremity pain and "myofacial pain syndrome,"1 as the cumulative result of several injuries (including a car accident and an incident in which Stein was physically attacked). Stein claims that this medical problem made it difficult for her to fully extend her left arm and to lift and carry heavy objects, including the boxes she transported to and from outreach assignments. In June 1994, Stein's treating physician sent a letter to the INS recommending that Stein "not do as much heavy lifting as she had been previously," but added that it was otherwise "acceptable that she goes out into the field for her work." In a subsequent letter to Stein's employer dated October 13, 1994, Stein's doctor amended his recommendation, stating that Stein was "released to sedentary employment.... She should not have duties that call her to perform repetitive motions of her left hand more than 33% of the time. She will need to have computer arm rests and equipment sufficient to minimize the quantity of her typing (i.e. efficient word processing software)." An occupational therapist was brought in to evaluate Stein's work station at INS and made recommendations intending to minimize the stress placed on the left side of her body. Furthermore, it was suggested that she use a properly adjusted "ergonomic" chair with proper posture, and that she position frequently used items in her work area more efficiently. In December 1994, Stein's doctor prescribed the use of a computer "set up in an ergonomically correct position" so as to "decrease the chance of overload to her neck, shoulder, arm, wrist and hand structures."
4
A month later, in January 1995, Stein's supervisor advised her that she would no longer be assigned to "outreach" duties. The supervisor explained that the work responsibilities and schedules of other INS employees did not make it feasible for someone to be available to assist Stein with transporting, carrying and lifting boxes of files. Additionally, Stein was informed that INS did not want her to risk further injury by attempting to lift heavy files, move and assemble furniture, or spend long periods sitting in non-adjustable chairs. In spite of the removal of outreach assignments from her duties, Stein's salary, title, and other job responsibilities remained the same. Stein continued to report to work every day and perform the duties required of a DAO.
5
In March 1995, Stein filed a complaint with the Equal Employment Opportunities Commission (EEOC) alleging that the removal of her outreach duties amounted to discrimination on the basis of a disability. While the EEOC's investigation was in progress, the INS requested a current medical evaluation of Stein's condition, and in April 1996 her physician wrote to INS that Stein was "physically able to perform the duties as a DAO," and was "able to work at a work site for a scheduled eight hour period of time, five days per week." The report further noted that the doctor had not seen Stein for a period of eleven months for any treatment or evaluation, and that it was his "impression that she had been back to work full time without any restrictions in terms of light duty at a desk."
6
In January 1998, the EEOC issued a decision finding that Stein had not been discriminated against on the basis of a physical disability. Stein filed this action alleging that the INS' decision to discontinue her outreach duties constituted a failure to accommodate her physical disability in violation of the Rehabilitation Act of 1973, 29 U.S.C. § 794a. The district court granted the defendants' motion for summary judgment on the ground that Stein had failed to present evidence sufficient to establish that she was "disabled" within the meaning of the Rehabilitation Act. Stein appeals.
DISCUSSION
7
The issue on appeal is whether the district court properly awarded summary judgment to the defendants on the grounds that Stein was not "disabled" within the meaning of the Rehabilitation Act of 1973. The district court's grant of summary judgment is reviewed de novo. Mt. Sinai Hospital v. Shalala, 196 F.3d 703, 707 (7th Cir.1999).
8
Section 505 of the Rehabilitation Act provides a private right of action for federal employees alleging employment-related discrimination on the basis of a disability. Hamm v. Runyon, 51 F.3d 721, 724 (7th Cir.1995); 29 U.S.C. § 794a. To succeed on a claim under the Rehabilitation Act, a plaintiff "must meet the threshold burden of establishing that he is `disabled' within the meaning of the statute." Roth v. Lutheran General Hospital, 57 F.3d 1446, 1454 (7th Cir.1995).
9
For purposes of the Rehabilitation Act, a person is "disabled" if he or she "has a physical or mental impairment which substantially limits one or more of such person's major life activities." Hamm, 51 F.3d at 724; 29 U.S.C. § 706(8)(B). Major life activities are defined as "functions, such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning and working." Roth, 57 F.3d at 1454; 29 C.F.R. § 1613.702(c).
10
The parties agree that Stein has a "physical impairment," but disagree as to whether the impairment "substantially limits a major life activity." Stein argues that the district court erred in concluding that her impairment does not substantially limit her major life activity of working, or substantially limit major life activities other than work.
11
1. The Major Life Activity of Working.
12
When the major life activity under consideration is that of working, a plaintiff must demonstrate that "she was significantly restricted in the ability to perform either a class of jobs or a broad range of jobs in various classes as compared to the average person having comparable training, skills and abilities." Davidson v. Midelfort Clinic, Ltd., 133 F.3d 499, 506 (7th Cir.1998); see also Sutton v. United Air Lines, Inc., 527 U.S. 471, 491, 119 S.Ct. 2139, 144 L.Ed.2d 450 (1999) (a plaintiff must show, "at a minimum," that she is "unable to work in a broad class of jobs.") Further, "[t]he inability to perform a single, particular job does not constitute a substantial limitation in the major life activity of working." Sutton, 527 U.S. at 491, 119 S.Ct. 2139, quoting 29 C.F.R. § 1630.2(j)(3)(i). In other words, "the impairment must substantially limit employment generally." Contreras v. Suncast Corp., 237 F.3d 756, 762 (7th Cir.2001).2
13
Stein's argument concerning the major life activity of working reflects a misconception of the applicable legal standards, which her appellate brief fails to cite or address. Stein contends that her removal from outreach duties resulted in lost opportunities for overtime pay, the "loss of merits points necessary for promotion," and a limitation on her ability to socialize and exchange ideas with her fellow DAOs. These allegations, even if true, do not fulfill Stein's burden to demonstrate that her impairment substantially limits her ability to work. We will not search the record in an attempt to make Stein's arguments for her. See Tyler v. Runyon, 70 F.3d 458, 465 (7th Cir.1995) ("[I]f an appellant fails to make a minimally complete and comprehensible argument for each of his claims, he [or she] loses regardless of the merits of those claims as they might have appeared on a fuller presentation.").
14
Stein has failed to present any evidence in support of the theory that her physical impairment precludes her from working in a broad class of jobs. Further, she does not dispute the district court's finding that she continues to hold the same position with INS that she held prior to the onset of her physical impairment, with the same title, salary, and general duties (other than outreach) of a DAO. Stein's inability to lift and carry heavy boxes of files to the extent necessary to perform her duties outside the office does not rise to the level of a restriction on her ability to work in a broad class of jobs. Contreras v. Suncast Corp., 237 F.3d 756, 763 (7th Cir.2001) (holding that the existence of a physician-imposed lifting restriction is insufficient to establish that an individual is precluded from working in the "broad class of jobs" necessary to establish the existence of a disability). A plaintiff's inability to perform "one narrow job for one employer" is insufficient to establish a disability. Davidson, 133 F.3d at 506. We are convinced that the district court properly concluded that Stein has failed to meet her burden to demonstrate that her physical impairment substantially limits her major life activity of working, or that she is regarded as having such a limitation. While Stein's impairment may preclude her from lifting and carrying heavy objects on outreach assignments, this is but one single aspect of her duties, and does not overcome her demonstrated ability to successfully perform the numerous other tasks required of her job.
15
2. Major Life Activities Other than Working.
16
Stein next argues that her physical impairment has substantially limited "major life activities" other than working. She contends that her impairment has caused "loss of sleep, impaired sexual relations, inability to participate in sports, inability to cut her food and inability to brush her hair." The only support for the existence of these physical limitations is Stein's own affidavit filed with the court, in which she merely states in conclusory fashion that these problems existed, without any factual support, examples, details, nor any indication as to whether the problems are currently extant or resolved, when, where or how the problems developed, how severe they were, or how long they may have lasted. Her affidavit failed to state whether she has ever been diagnosed as suffering from these specific limitations on her functioning or whether she has ever received medical treatment for them. Moreover, Stein's affidavit refers to these alleged problems only in the past tense, stating, "I had trouble sleeping because of [my] injuries," "My sexual relations were hindered," and, "After the attack I could not participate in sports, cut my food, or brush my hair." Furthermore we note that Stein has failed to present any medical records, evaluations or opinions that support either the past or present existence of these alleged specific limitations on her ability to function, i.e., lost sleep, impaired sexual relations, inability to participate in sports, cut food or brush her hair. The most recent medical evaluation from Stein's treating physician contained in the record states that he had not seen or treated her for eleven months and assumed she had returned to work full time, an eight hour day, five days per week, without any restrictions in terms of office work. The report also states that the doctor was imposing no specific limitations on her activities.
17
Bald and self-serving assertions in affidavits, unsubstantiated by any documentation or other testimony, are not sufficient to create a material issue of fact as to whether an impairment has substantially limited a major life activity. Contreras, 237 F.3d at 764. Further, the Supreme Court has recently held that a plaintiff who claims that an impairment substantially limits the major life activity of "performing manual tasks" must present evidence that the impact of the limitation is "permanent or long-term," and that "the extent of the limitation ... in terms of [the plaintiff's] own experience ... is substantial." Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184, 122 S.Ct. 681, 151 L.Ed.2d 615 (2002) (emphasis added). Stein's case is without merit in that she has failed to present any evidence, medical or otherwise, that her alleged specific limitations (brushing hair, cutting food, etc.) are permanent or long-term (or even currently existing), and the record contains no details of her own experience from which a reasonable fact finder could conclude that her alleged limitations are "substantial." It is the plaintiff's burden on summary judgment to demonstrate that he can "come up with evidence to show he could meet his ultimate burden of showing [a] ... recognized disability." Contreras, 237 F.3d at 763. Because Stein's claim that her physical impairment substantially limits major life activities "other than working" is not supported by any evidence in the record, the district court properly concluded that Stein failed to meet her burden of demonstrating that she was "disabled" within the meaning of the Rehabilitation Act.
18
The judgment of the district court is AFFIRMED.
Notes:
1
Stein's treating physician testified at his deposition that "myofacial pain syndrome" is "a muscle problem where patients have tender and sore areas over their muscles from using the muscle repetitively."
2
These decisions concerned application of the Americans with Disabilities Act (ADA), but the ADA's definition of "disability" was taken "almost verbatim" from the Rehabilitation Act, and "Congress' repetition of a well-established term carries the implication that Congress intended the term to be construed with pre-existing regulatory interpretations."Bragdon v. Abbott, 524 U.S. 624, 631, 118 S.Ct. 2196, 141 L.Ed.2d 540 (1998); Toyota Motor Manufacturing, Kentucky, Inc. v. Williams, 534 U.S. 184, 122 S.Ct. 681, 151 L.Ed.2d 615 (2002) (using Rehabilitation Act regulations to interpret the ADA); see also Hamm, 51 F.3d at 725 (using ADA case law to interpret the Rehabilitation Act).
| {
"pile_set_name": "FreeLaw"
} |
Filed 7/10/14 In re Dinah L. CA2/3
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(a). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115(a).
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION THREE
In re DINAH L., et al., Persons Coming B251669
Under the Juvenile Court Law.
(Los Angeles County
LOS ANGELES COUNTY Super. Ct. No. CK89595)
DEPARTMENT OF CHILDREN AND
FAMILY SERVICES,
Respondent,
v.
GABRIELLE L. et al.,
Defendants and Appellants.
APPEAL from an order of the Superior Court of Los Angeles County,
Terry Truong, Referee and Carlos E. Vazquez, Judge. Affirmed.
Aida Aslanian, under appointment by the Court of Appeal, for Appellant,
Gabrielle L.
Jack A. Love, under appointment by the Court of Appeal, for Appellant,
Leslie C.
Office of the County Counsel, John F. Krattli, County Counsel,
James M. Owens, Assistant County Counsel, and Aileen Wong, Deputy County
Counsel, for Respondent.
Gabrielle L. (mother) and Leslie C. (father) appeal from the juvenile court’s
jurisdictional findings made in connection with a subsequent petition in an ongoing
dependency case involving 13-year-old Dinah L., nine-year-old Elizabeth C.,
six-year-old Jacob L., and four-year-old Eduardo C.1 Mother and father contend there
was no substantial evidence supporting the court’s findings that father hit Jacob on the
shoulder or that mother allowed father to have unmonitored contact with the children.
We disagree and affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. Prior Child Abuse Referrals of Neglect and Physical Abuse
There were multiple child abuse referrals in this case. In October 2005, the
Department of Children and Family Services (Department) received a referral alleging
that the children were unkempt. The Department did not investigate the allegation as it
was unable to locate the referral source.
In November 2010, an anonymous caller alleged that she often heard mother
screaming at the children and that the children were left home alone at night. In
January 2011, the Department received a third referral alleging that Elizabeth, who was
six years old at the time, was not being fed at home and had said that father hits her with
his shoe when he is angry. During the Department’s investigation of these referrals,
Elizabeth told the social worker that her parents hit her with a shoe, that father hits her
brothers who were one and three years old at the time, and that mother “told her not to
1
Father is the biological father of Elizabeth and Eduardo, and was found to be the
presumed father of all four children.
2
say that her father hit her with a belt.” The Department found that the neglect and
physical abuse allegations were substantiated.2
2. The Department Receives a Referral Regarding Eduardo’s Head Trauma
On September 1, 2011, the Department received a referral alleging physical
abuse of one-year-old Eduardo. Eduardo had fallen off the swing at daycare, sustaining
a head injury. At the hospital, x-rays showed “ ‘unexplained healing rib fractures’ ”
which the doctor opined had occurred at an earlier date. When a social worker
interviewed the family, the parents denied that Eduardo had sustained any injuries while
in their care.
On September 7, 2011, a petition was filed alleging that Eduardo had sustained
“injuries [that] would not ordinarily occur except as the result of deliberate,
unreasonable and neglectful acts by the child’s mother and father who had care, custody
and control of the child.” These acts were alleged to have placed both Eduardo and his
siblings at risk of physical harm. The case was assigned to Referee Terry Truong. At
the detention hearing, the court detained the children from mother only, and ordered the
three older children released to father over the Department’s objection. Eduardo was
detained in shelter care.
On September 19, 2011, the Department filed an Interim Review Report with the
following evidence: (1) mother said she had been the victim of domestic violence for
ten years, and was “terrified of [father] because he threatens her regularly by telling her
2
The Department initiated a case based on these substantiated allegations, but the
record does not indicate how that case was processed or resolved.
3
that he will ‘destroy her and her family’ ”; (2) Dinah, who was 10 years old at the time,
said that father had “slapped her in the face very hard” and had “hit” her siblings;
(3) maternal grandmother said that father “pushed and hit the children”; (4) the daycare
worker said that “many times when [father] is in the home she can hear him screaming
at the children”; and (5) father admitted to having hit Elizabeth. Included with the
report was a doctor’s statement opining that Eduardo’s head trauma and rib fractures
were “most consistent with inflicted injury, child abuse.”
The Department recommended removing the children from the parents’ care and
assessing maternal grandmother as a possible caretaker. However, at trial setting
conferences on September 21, October 14, November 7, and November 28, 2011, the
court rejected the Department’s recommendation and ordered that the three older
children remain in father’s custody.
On December 21, 2011, the Department filed a Supplemental Report, stating that
father “ha[d] not been cooperative with following court orders, maintaining contact with
this [department investigator] or [the social worker] . . . ha[d] failed to ensure that the
children receive services as referred,” and had refused to allow court-ordered visits with
maternal grandmother. Included with the Department’s report was a statement by
a forensic expert opining that Eduardo’s injuries were “classic shaken baby syndrome
and blunt force head trauma.” The expert reported that the “bleeding occurred around
[Eduardo’s] brain at least several weeks prior to the swing incident,” and the “[rib]
fractures . . . are weeks old. . . . The nature of these injuries suggests that Eduardo has
been a chronic victim of abuse or neglect or both.” The Department requested that the
4
children be detained from father and placed in foster care. However, the court did not
detain the children, and, on December 22, 2011, allowed mother to move back into the
home.
At the jurisdiction hearing on February 2, 2012, the court sustained the petition
under Welfare and Institutions Code, section 300 and removed Eduardo from the
custody of both parents.3 The court ordered that the three older children remain in
father’s custody. Mother and father were offered reunification services, ordered to
participate in parenting classes, and were allowed visitation with Eduardo.
On August 2, 2012, the Department reported to the court that the parents had
been compliant with court orders and the Department case plan. However, the
Department noted that “the perpetrator” of Eduardo’s injuries was still unknown, and
assessed the potential of future risk to the children as moderate. At the review hearing
that day, the court returned all four children to the custody of both parents.
3. The Department Receives Another Referral Alleging Physical Abuse
On December 7, 2012, the Department received a referral alleging that Dinah and
Elizabeth were being physically abused by father. 4 A social worker interviewed the
girls the following week. Dinah said that father “hits her . . . ‘a lot,’ ” and had choked,
slapped and kicked her. Elizabeth said that father had hit her with a belt on her bare feet
and “makes her stick three fingers inside his mouth and then he bites her fingers.” He
3
All further statutory references are to the Welfare and Institutions Code.
4
Father was also arrested the following week on an outstanding warrant pending
misdemeanor charges for child abuse. The record does not reveal the nature of those
charges or how the criminal action against father was resolved.
5
was “abusive daily.” Dinah said that father also “puts his hand under her shirt and rubs
her stomach, which makes her feel uncomfortable.” Both children said that father
abused their siblings in the same manner and that they were frightened of him.
Dinah also said that she had told mother that father had choked her and had put
his hand under her shirt, and mother had responded that she would talk to father.
Mother admitted to the social worker that she was aware father had choked Dinah, and
said she had “observed Dinah holding her neck and coughing.” However, mother also
said she “had no knowledge that father was abusive to her children,” and now denied
there had ever been any domestic violence. On December 28, 2012, the court granted
a warrant for removal and the children placed with maternal grandmother.
One week later, the court returned the three younger children to mother’s care.
Dinah remained with maternal grandmother. The court allowed father to have
monitored visits with the children but ordered that the visits were “not to be monitored
by the mother or maternal grandmother.” The Department filed a supplemental petition
alleging that father physically abused the three older children and that mother knew of
the abuse but allowed father to have unlimited access to the children.
4. The Court is Provided With Continued Evidence of Father’s
Physical Abuse and Mother’s Noncompliance With the Case Plan
The Department interviewed the family further on January 16, 2013. Dinah said
that mother had witnessed father hitting Eduardo, who was then two years old.
However, mother still denied that father hit the children, and now claimed that she never
knew that father had choked Dinah. The “[f]amily preservation team” stated that,
6
“based on statements from the children, father has been physical[ly] abusing the[m] for
the duration of their lives.” The Department also reported that mother was not
compliant with family preservation services, and that Elizabeth said father still visited
the home and had hit her and her brother in the past two days. Based on this evidence,
the Department recommended removing the children from both parents’ care and
placing them with maternal grandmother. However, at the review hearings on
January 24 and 31, 2013, the court ordered that the three younger children remain in
mother’s care.
In April 2013, the Department reported to the court that mother was still
uncooperative with the Department: she had not allowed the social worker to visit the
children in the home, had missed appointments with the social worker, and had not
returned “countless phone calls.” On these grounds, the social worker said that she was
unable to make “accurate assessment of the children . . . [or] assess whether the father []
is in the home [-] this places the children at great risk for further abuse or neglect.” The
Department also submitted a letter from the children’s school principal stating that
Elizabeth had told a staff member that father is “around” but that mother told Elizabeth
to say that “father did not live with them, that he did not hit them and she has not seen
her father in a long time.”
On April 4, 2013, the court sustained the supplemental petition regarding father’s
physical abuse and mother’s failure to protect.5 Children’s counsel requested that Dinah
5
All rulings prior to April 4, 2013, were made by Referee Terry Truong. At that
point, Judge Carlos Vasquez was assigned to the case.
7
be permitted to return to mother’s custody as the other siblings were there and there
“doesn’t seem to be any risks at this point in time . . . . ” The Department objected on
the grounds that mother had failed to protect the children. The court ordered that the
children remain in mother’s custody. Father was still allowed visits monitored by
a Department-approved monitor.
5. The Children Are Finally Removed From Parental Custody
On May 16, 2013, the Department reported receiving a referral from a school
staff member stating that Jacob complained that his shoulder was hurting because father
had hit him on the shoulder the night before. The caller said she did not observe any
“marks on [Jacob’s] shoulder.” The caller further stated that, two months prior, school
staff had seen father in the car with mother when mother came to pick Jacob up from
school. At that time, Jacob said to a staff member that father was in the home, and
mother immediately denied it.
The Department interviewed the children. Elizabeth said that father “sometimes
comes over and spend[s] the night.” Jacob showed the social worker a “reddish color
mark” on his shoulder, and, when asked what happened, said that “ ‘my dad hit me with
a belt.’ ”
On May 20, 2013, the Department received another referral from a mandated
reporter stating that Jacob had disclosed that father had hit him with a belt and mother
had hit him “with her hand on his mouth.” The caller observed a “mark/scab” under
Jacob’s right eye and “numerous little ‘dots’ around the mouth.” Jacob further said that
mother used a belt to hit him and “had even hit him on his genital area.” The court
8
authorized the detention of the children, and they were placed with maternal
grandmother.
On June 3, 2013, a supplemental petition (the Second Supplemental Petition)
was filed alleging that father physically abused Jacob by striking the child’s shoulder
with a belt, and that mother had failed to comply with court orders by allowing father to
visit the children without a court-approved monitor present. In the Detention Report,
the social worker stated that mother continued to be uncooperative: mother had only
allowed the social worker to visit the home once in the past six months, and had not
allowed the social worker to view the two bedrooms in the home. At the detention
hearing, the court continued the children’s placement with maternal grandmother.
In the Jurisdiction/ Disposition Report, the Department reported that mother
continued to deny that father had had access to the children. The Department
recommended that the children not be reunified with mother. On September 10, 2013,
the court sustained the Second Supplemental Petition’s allegations regarding father’s
physical abuse of Jacob and mother’s failure to protect, removed the children from
mother’s custody, and ordered reunification services for both parents. Mother and
father timely appealed.
CONTENTIONS
Mother and father argue there was no substantial evidence supporting the
juvenile court’s findings that father physically abused Jacob and mother failed to protect
him.
9
DISCUSSION
1. Standard of Review
Review of the sufficiency of the evidence to uphold juvenile dependency
jurisdiction is limited to a determination of whether there is any substantial evidence to
support the juvenile court’s findings. (In re Rocco M. (1991) 1 Cal.App.4th 814, 820.)
Under this standard of review, the whole record is examined in a light most favorable to
the findings and conclusions of the juvenile court, and under deference to the lower
court on issues of the credibility of the evidence and witnesses. (In re Savannah M.
(2005) 131 Cal.App.4th 1387, 1393.) We do not reweigh the evidence, evaluate the
credibility of witnesses or resolve evidentiary conflicts. The appellant has the burden to
demonstrate there is no evidence of a sufficiently substantial nature to support the
findings or orders. (In re Dakota H. (2005) 132 Cal.App.4th 212, 228.) “If there is any
substantial evidence, contradicted or uncontradicted, which will support the judgment,
we must affirm.” (In re Tracy Z. (1987) 195 Cal.App.3d 107, 113.)
2. Mother’s Appeal
Mother contends that the record contained contradictory evidence regarding
Jacob’s shoulder injury: one school staff member said, on May 13, 2013, that Jacob
“had no marks on his shoulder,” and three days later, a social worker observed
a “reddish-color mark” on Jacob’s shoulder. However, upon reviewing a record for
substantial evidence, we do not resolve evidentiary conflicts, but defer to the juvenile
court’s credibility assessments of witnesses. Here, the juvenile court had the authority
10
to find the social worker’s account of Jacob’s injury credible, and to discount
observations by the school staff member.
Mother also contends there was insufficient evidence that father had caused
Jacob’s shoulder injury or that mother knew about it. This argument is without merit.
First, two mandated reporters and a social worker reported that Jacob had told them
father hit him on his shoulder. Second, these statements were corroborated by
a “reddish” mark on Jacob’s shoulder observed by the social worker. Third, when
Elizabeth was interviewed regarding these allegations, she said that father “sometimes
comes over and spends the night.” Fourth, it was reasonable for the court to infer from
evidence father was at mother’s home, that mother knew he was there. Mother had also
obstructed the social worker’s access to the apartment, from which the court could have
reasonably inferred that she was hiding evidence father was living there. Such
a conclusion was also suggested by mother’s repeated statements defending father and
denying the abuse, despite having previously acknowledged that father had abused both
her and the children.
All of this constitutes substantial evidence in support of the court’s finding that
father struck Jacob on the shoulder and mother allowed father access to the children in
violation of the court’s order that all his visits be monitored by a Department-approved
individual. In addition, when this evidence is considered within the context of the entire
record which contains overwhelming evidence that father was regularly beating the
11
children and that mother defended him at the cost of her children’s safety there is
abundant evidence in support of the juvenile court’s latest jurisdictional finding.6
3. Father’s Appeal
Father contends there was no evidence (1) he had visited the children in the
family home, or (2) had struck Jacob on the shoulder. As explained above, substantial
evidence supports these findings.
6
A really disturbing question raised by this distressing record is why the juvenile
court repeatedly returned the children to mother and father’s custody for over two and
one half years when it was clear father was physically abusing the children and mother
was not protecting them.
12
DISPOSITION
The jurisdictional order is affirmed.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
CROSKEY, J.
WE CONCUR:
KLEIN, P. J.
ALDRICH, J.
13
| {
"pile_set_name": "FreeLaw"
} |
161 Cal.App.3d 734 (1984)
207 Cal. Rptr. 589
DONALD V. COCKBURN, Plaintiff and Respondent,
v.
SANTA MONICA COMMUNITY COLLEGE DISTRICT PERSONNEL COMMISSION, Defendant and Appellant; SANTA MONICA COMMUNITY COLLEGE DISTRICT, Real Party in Interest and Appellant.
Docket No. 69794.
Court of Appeals of California, Second District, Division Two.
October 24, 1984.
*736 COUNSEL
Jones & Matson and Urrea C. Jones, Jr., for Defendant and Appellant and for Real Party in Interest and Appellant.
Grubbs & Collins and V. James Smith for Plaintiff and Respondent.
OPINION
ROTH, P.J.
The Santa Monica Community College District Personnel Commission (Commission) and Santa Monica Community College District (College) appeal from the judgment of the superior court granted in favor of Donald Cockburn (respondent) pursuant to his petition for writ of mandate to set aside the decision of the Commission rendered on December 22, *737 1981, which terminated his employment with College as an instructor and ordered his dismissal.
The superior court judgment rendered on December 25, 1983, set aside and vacated the Commission's decision and ordered the Commission to reinstate respondent, redetermine the penalty of dismissal, and impose a penalty not inconsistent with its opinion. Paragraph two thereof recites in pertinent part: "2. As a condition of reemployment, Petitioner shall continue with regularly scheduled psychological consultations until such time as Dr. Marshall Levy or other competent psychologist renders a written report to Real Party in Interest's Administrative Dean of Personnel Services that Petitioner has been rehabilitated."
Respondent had been employed by College as a laboratory technician and instructor in the physical sciences department for approximately 17 years. His job included hiring and supervising student laboratory assistants.
Duria Suncar, an 18 year old Oriental student at the college, asked respondent about employment as a lab assistant. On February 6, 1981, she was interviewed by respondent. A complaint filed with College on February 20, 1981, by Duria alleges the following occurred on February 6: "Complainant, Doria Suncar, was sent to be interviewed for work in the chemistry lab by Dell Wade in Financial Aids. [Respondent] met her and put her to work immediately washing beakers. He then asked her to come with him to the basement to do some work. In the basement he held her hand, asking how her hands felt washing all those dishes. He then grabbed her, holding her tightly. He kissed her on the cheek then on the mouth, saying afterwards, `o.k., go to work.' Five or ten minutes later he tried to embrace her again. Complainant said `no, I don't want to.' In about five minutes she told him she was leaving. She did not return. Two weeks later she returned to Financial Aids and asked for another job. She said she had not come back sooner because she was confused, and then told Ms [sic] Wade what had happened in the Chemistry lab."
The sexual assault outlined above was admitted by respondent and is fortified by abundant uncontradicted evidence. It was the sole basis of the Commission's decision. The judgment of the superior court vacated it for the reason that respondent prior to his hearing had not received a notice as required by Education Code section 87031[1] and Miller v. Chico Unified School Dist. (1979) 24 Cal.3d 703 [157 Cal. Rptr. 72, 597 P.2d 475].
*738 (1) The California Supreme Court has construed Education Code section 87031 to require that "Unless the school district notifies the employee of such derogatory material within a reasonable time of ascertaining the material, so that the employee may gather pertinent information in his defense, the district may not fairly rely on the material in reaching any decision affecting the employee's employment status." (Miller v. Chico Unified School Dist., supra, 24 Cal.3d 703, 713.)[2]
(2) Our perusal of the record convinces us that appellants complied in all respects with the Education Code and Miller. Respondent had notice within reasonable and ample time as required of any and all prior misconduct and/or derogatory statements available to appellants and did actually avail himself of its use.
We proceed to detail the sequence of the events prior to the hearing before the Commission.
On February 24, 1981, Dean Gelvin met with respondent and Richard Masada, chairman of the College's physical science department, to discuss the complaint. Respondent was advised that "this type of alleged conduct" was unprofessional, the authority in supervisory relationship was not to be abused, and told that his future job performance would be monitored. The substance of a second meeting between the three held on March 5 was memorialized in a document dated March 6 and is identified as "Permanent Employee Unsatisfactory Job Performance Second Notice." This notice, among other things, indicated that "[Respondent] has failed to comply with the Merit System Rule [5.1300.3.] All fellow employees must receive courteous treatment." The notice also stated: "The additional improvement required [of respondent]: Student employees must be treated with respect. It is expected that all students employed in the physical science department will receive the same treatment. No behavior with sexual overtones will be permitted in the laboratory or basement stockroom areas." The notice went on to state: "Mr. Masada and Mrs. Gelvin will be available to discuss with respondent any situations that arise at any time. If there are difficulties which we cannot resolve or consider beyond our abilities, we shall assist [respondent] in finding appropriate counseling to deal with this problem.
"Additional improvement in job performance must be made in the immediate future. You will be reevaluated on May 5, 1981. If satisfactory *739 improvement has not been made you may be subject to future disciplinary action."
The reference in the "second notice" to section 5.1300.3 lists dismissal as a penalty for its violation.
On April 2 a meeting was held between Chairman Masada, Dean Gelvin, Dr. Richard Moore, president of the College, Dean Benita Haley, administrative dean of personnel services and Ms. Vance. At this meeting Ms. Vance told the group that "similar" complaints had been lodged against respondent.
On April 3, Dean Haley and Dr. Moore met once more with respondent. The pertinent issues discussed at this meeting were memorialized in a letter dated April 6 signed by respondent and the administrative dean as follows:
"Dear [Respondent]:
"I requested a meeting with you on April 3, 1981, as a result of a thorough review of your `Unsatisfactory Job Performance Second Notice' signed on March 6, 1971. Dr. Richard Moore, superintendent and president attended our meeting.
"The purpose of the meeting was to discuss with you the topic of the unsatisfactory notice which was a complaint filed on February 20, 1981, by Duria Suncar, a student helper, describing sexual harassment.
"You were reminded that you have been made aware of `over-familiarity with female student helpers' in a `Notice of Need for Work Improvement' on October 20, 1977, and that this continued willful failure of good conduct tending to injure public service was a sufficient single cause for recommending your dismissal to the Board of Trustees. (Merit System Rule 5.1300.3-A) During the discussion that Dr. Moore and I had with you, you admitted that the complaint was an accurate account of what had occurred between Duria Suncar and yourself on Feb. 6, 1981 regretted the incident had ever occurred, stated no such actions with students had ever been taken by you before, and said nothing like that would occur again.
"It is our decision that a recommendation will be made for your dismissal. However, Dr. Moore advised you that the recommendation to dismiss would be delayed for a two month period. During the next two months you are to have eight one-hour meetings with the college psychologist, Dr. Lynne Boylan. The week of June 8 you are to make an appointment with *740 Dr. Moore and me at which time a decision will be made regarding a recommendation for dismissal."
Dr. Boylan on April 8, by letter, advised Dean Haley that to avoid any conflict of interest charges it would be wise to substitute a psychologist independent of the college. She recommended Dr. Marshall Levy.
In response to Dean Haley's request for an evaluation of respondent, on April 29 Dr. Levy said he would accept the employment if appellant would "communicate his current situation to his wife."
Respondent, after calling on Dr. Levy, decided he would not submit to evaluation on that condition. On May 4, 1981, he informed Dean Haley that he would retire and on that day submitted his request for retirement to the board of trustees of College. The board accepted respondent's offer to retire and on the same day notified Dean Haley. Dean Haley advised respondent of the board's action by letter dated May 9, 1981. However, on May 6, 1981, two days after Dean Haley had delivered respondent's retirement request to the board of trustees and after it had been accepted by the board, Dean Haley advised Dr. Levy that College desired to retain his services for 12 therapy sessions with respondent. Respondent agreed to ask his wife to participate in the sessions as required.
On June 15, 1981, respondent, by hand written letter to Dr. Moore advised that it was the opinion of Dr. Levy "... I am qualified to continue working in my job. He stated ... he knows... I would never again commit such an act...." Respondent then withdrew his request for retirement. On July 27, 1981, Dr. Levy reported his study by letter addressed to James L. Grubbs who had been retained by respondent as counsel.
On August 4, the board of trustees of College rejected respondent's withdrawal of his request to retire and dismissed him.
There is a distinction we think in a proceeding before the board which was initiated by respondent with a written request for retirement followed by a request to the board to withdraw such request after its acceptance and a proceeding initiated by the board wherein the board makes charges and holds a hearing to enable respondent to reply to the same. The parties however, treated the board's denial of the retirement request as the board's decision to dismiss respondent on the charge of misconduct of which respondent had been given written notice. Respondent appealed to the Commission on that theory and appellants accepted it.
*741 Appearing before the Commission respondent charged that the punishment imposed by board was excessive and board had relied not on the Suncar incident, the single charge against respondent, but also on documents or complaints with which he should have been but was not confronted as required by Education Code section 87031.
On December 11, 1981, the Commission found as follows: "1. That on August 4, 1981, at a regular meeting, The Board of Trustees of the Santa Monica Community College District took action to dismiss the [respondent] for cause as stated in Personnel Commission Rule 5.1300.3-A `willful failure of good conduct tending to injure the public service,' alleging that [respondent's] conduct toward Ms. Duria Suncar on February 6, 1981, was discourteous and inappropriate.
"2. That prior to this meeting the [respondent] was notified of the charges and at this meeting the [respondent] was given the opportunity to respond before action was taken by the Board.
"3. That the [respondent] has stated by declaration that on February 6, 1981, he approached Ms. Duria Suncar, a student worker in his charge, and grabbed and held her tightly and kissed her on the cheek and attempted physical contact a second time which she objected to and rejected.
"4. That in his position as Laboratory Technician, Physical Science, [respondent] was responsible for the supervision of several student assistants, placing him in a position of responsibility and trust.
"5. That the procedure for dismissal prescribed in Rule 5.1300.50 was properly carried out by the Board.
"6. That the procedure prescribed in Education Code 87031 and rule 7.300, which provides for the notification of the [respondent] by the Administration whenever information of a derogatory nature is placed in District personnel records, was not properly followed by the Board in several instances." The Commission then rendered the following decision: "Pursuant to the foregoing Findings of Fact, the Personnel Commission makes the following decision:
"1. That [respondent] breached his trust and responsibility for the supervision of students.
"2. That [respondent's] conduct toward Ms. Suncar on "February 6, 1981, constitutes failure of good conduct and is sufficient cause for dismissal.
*742 "3. That the action of dismissal by the Board be sustained.
"4. That all materials maintained by the District which do not bear the signature of the originator and which were not presented to the [respondent] prior to entry in the District files be purged and destroyed."
On February 13, 1983, respondent filed a petition for a writ of mandate in superior court. After a hearing, judgment was entered as recited in the opening paragraph hereof. This appeal followed.
We have assumed that section 87031 as construed by Miller, supra, 24 Cal.3d 703, means that respondent had the right to know within a reasonable time any of the derogatory evidence, oral or written, that would be used against him at the hearing before the board or Commission. The question was first raised by respondent before the Commission by way of Education Code section 87031. Respondent appeared before the Board on August 4, 1981, and before the Commission in late November 1981.
The specific allegedly omitted derogatory complaints identified by respondent consist of: 1. A letter from Ms. Vance to Dick Wohlgemuth, the then physical sciences department chairman, dated June 29, 1978. In this letter Ms. Vance states: "We have, to date, received four complaints against [respondent] ... The complainants have all stated that [respondent] has made lewd remarks about and to women and has on occasion put his hands on them in a suggestive manner."
2. An unsigned complaint by Claudia Thoreson, received by Ms. Vance on June 12, 1978.
3. An unsigned complaint by David Moore, received by Ms. Vance on June 12, 1978.
The exhibits[3] before the Commission demonstrate respondent was fully informed not only of all the conversations between members of the faculty *743 heretofore set forth at which he was present, but also of the substance of such conversations at which he was not present and at which complaints against him had been discussed, all of which took place during the investigation made by faculty members after a specific complaint was filed on February 20, 1981, by Duria. Respondent was immediately alerted and told under the euphemism of evaluation of his work and/or for work improvement as an instructor he was being evaluated by reason of the Suncar incident on a psychological basis and actually advised to seek psychiatric treatment. However, when his peers decided after much discussion that a specific complaint must be filed, a complaint was filed charging him with "... wilful failure of good conduct leading to injure the public service ... [and] recommendation for dismissal ..." he was and had been specifically advised of the reasons therefor.
The exhibits show a complete knowledge by respondent of the Wohlgemuth (1978) incident. They contain letters from students hired by respondent complimenting respondent as an instructor employed during those prior years hopefully as rebuttal to the prior complaint with which he was confronted. It is worth noting too, that the exhibits demonstrate how respondent, weeks before any counsel appeared on his behalf, was kept meticulously informed by appellants of all of his rights in writing before he delivered his request for retirement to the Board and after it had been accepted by the Board.
Finally, the exhibits embrace the complete written report of Dr. Levy dated July 27, 1981, addressed to respondent's counsel which states in one of its opening paragraphs his knowledge of the effort of College to properly evaluate the Suncar incident and its significance with respect to continued employment by College. Thus if further proof were required of respondent's knowledge of prior complaints of "... over familiarity with female student helpers ..." the doctor's letter supplies it.
"The patient understands your referral as being for the purpose of evaluating his emotional status and further acknowledges that he was aware that the findings and recommendations would be communicated to his employer and might thus further jeopardize his employment status. Though a great deal of information was obtained in the course of the evaluation, I am limiting this report to those issues relating to and thus seen as pertinent to his continued employment. I urge this material be treated with the maximum of discretion and confidentiality. [Italics added.]
*744 "PRESENT SITUATION
"The patient is charged under the public service merit system with violation of rule 5.1300.3A. Specifically, the patient is charged with sexual harassment growing out of an incident on February 6, 1981, and a subsequent complaint lodged by the student on February 20, 1981.
"The official complaint by the student indicates that after having been put to work on her initial day of employment, washing beakers in the chemistry lab, the patient held the student's hand, asking how her hands felt, and then holding her tightly, kissed her on the cheek, then on the mouth, saying afterwards, `Okay, go to work.'
"Five or ten minutes later, he attempted to embrace the student again and she said, `No, I don't want to.' The student left about five minutes after the last incident and did not return to work, reporting to Financial Aides [sic], asking for another job, explaining what had transpired, and indicating that she had not come back sooner because she was confused.
"It should be noted that a prior need for improvement notice, dated October 20, 1977, is contained in the patient's personnel file and refers to `over-familiarity with female student helpers.' The patient denied all allegations in the 1977 reprimand regarding over-familiarity with females students, noting that he had not been stand-offish and distant from students, saying they are people also.
"In contrast to the denial of the 1977 allegation, the patient admits to all essential details as noted in the student's charges, dated February 20, 1981, and referring to the above-noted incident, dated February 6, 1981. When asked to explain his obviously inappropriate behavior, the patient spoke of being upset, shocked and amazed, adding that he hadn't slept well and remains concerned over the loss of his job and `deplorable behavior.'"
In pertinent part, the report also states: "It is my opinion that this patient can be rehabilitated without presenting a danger to himself or others. Specifically, the possibility of a recurrence of the above behavior appears to be very minimal given ongoing therapy and monitoring....
"A critical focus in assuring appropriate control of behavior should be to concentrate in therapy on the patient making ongoing appropriate connections between the critical intervening variable between himself and his behavior, namely his feelings.... Specifically, the following treatment plan is recommended to assure that this patient will not reoffend:
*745 "1. Individual psychotherapy, coupled with conjoint marital therapy on a once-weekly basis. (This will offer the therapist an opportunity to make significant interventions in the family constellation as well as obtain ongoing data.)
"2. With the permission of the patient and his wife, this therapist would be willing to monitor the patient's progress as well as report to the school psychologist on an as-needed basis."
When the board met on August 4, 1981, presumably it had before it all the exhibits including, with respondent's consent, the Dr. Levy letter of July 27. Respondent was represented by counsel at the board hearing and had full knowledge of all the evidence in the exhibits. We find nothing to show the use before the board of any prior derogatory statements and/or prior misconduct of which respondent did not have prior notice and knowledge.
There is nothing in Miller, supra, 24 Cal.3d 703 or in Education Code sections 87031, 44031 or 44664 which requires appellants to give a specific written notice detailing prior derogatory remarks or misconduct which may be used in aid of a specific charge and that what occurred in Miller with respect to a general charge of incompetence (wherein the omissions were actually a part of the intrinsic proof of the incompetence generally charged). At bench there was a specific charge proved beyond a reasonable doubt.
The Commission, however, although in our opinion it would have been justified to do so, did not use any of the prior misconduct or derogatory statements, and implicitly repudiated the same by its statement that prior derogatory conduct and/or statements "... was not properly before the Board...." Its findings are incisive as is its disposition of the single charge before it.
"1. That respondent breached his trust and responsibility for the supervision of students.
"2. That respondent's conduct toward Ms. Suncar on February 6, 1981, constitutes failure of good conduct and is sufficient cause for dismissal."
(3) The question remaining is the propriety of the judgment of dismissal imposed by the Commission. Concededly the specific charge made against respondent is true. It is admitted by the express terms of the superior court judgment which disapproves of the dismissal but recommends the consideration of a judgment less absolute and more favorable to respondent.
*746 We do not agree the judgment of the Commission is excessive nor does the record in any logical or sound respect by substantial evidence and/or the weight of the evidence suggest the Commission abused its discretion when it imposed the judgment of dismissal.
If however one assumes the judgment appealed from is sound, such assumption must rest wholly upon the opinion expressed by the psychologist in his letter of July 27, 1981. When the letter is analyzed in the light of the admitted facts and those inherent in the judgment appealed from the inevitable conclusion which must be drawn is that College cannot without great moral and financial risk to College and the general public reinstate respondent even temporarily. In our opinion too, College has no pragmatic option to employ respondent in any capacity even if and when respondent is reported to be completely rehabilitated.
Thus Ebersol v. Cowan (1983) 35 Cal.3d 427, 434 [197 Cal. Rptr. 601, 673 P.2d 271], holds: "... if the agency [for third party action purposes] knew or should have known of the dangerous propensities Mark Cates exhibited in the instant case it might have had a duty to advise persons foreseeably coming in contact with the student." (See also Tarasoff v. Regents of University of California (1976) 17 Cal.3d 425 [131 Cal. Rptr. 14, 551 P.2d 334, 83 A.L.R.3d 1166]; Peterson v. San Francisco Community College Dist. (1984) 36 Cal.3d 799, 807, 809, 815 [205 Cal. Rptr. 842, 685 P.2d 1193].)
Analyzed in the light of the record the psychologist's opinion ventured in his July 27 letter is not sound and certainly is not one sufficient to set aside and nullify the decision of the Commission on the ground that the Commission abused its discretion in assessing a proper punishment.
We have explored the evidence in more than usual detail as it almost demonstrates an impeachment of the opinion of Dr. Levy. To illustrate: the record shows Dr. Levy rendered the same opinion to respondent on or some days prior to June 15 approximately six weeks before July 27, 1981. In pertinent part the letter in its opening paragraph says: "The patient was seen in my offices on July 17 and July 18, 1981, for a total of nine hours of interviews and psychological diagnostic testing...."
On June 15, respondent transmitted to Dr. Moore, president of the College as his reason for withdrawing his request to retire the opinion of Dr. Levy expressed to him that he could be rehabilitated. In the written report and prognosis dated July 27, Dr. Levy fixes July 17 and 18 as the days on which he spent a total of nine hours with respondent. If there were any prior *747 treatments they are not mentioned in the letter of July 27. On the results accumulated in those July hours the doctor elects to base his prognosis to the effect respondent can be rehabilitated but only on condition that respondent continue treatment as is ordered by paragraph 2 of the superior court judgment set forth in the opening paragraphs of this opinion.
Further, the doctor's opinion shows respondent's rehabilitation is conditioned in an important respect by a continuance of respondent's marital relationship which has been subjected to serious strain in the past. Dr. Levy is optimistic that the marital situation too can be with psychological help satisfactorily adjusted.
Dr. Levy signs his letter of July 27 as a Ph.D. licensed clinical psychologist/forensic, and states in part: "Parenthetically, it should be noted that some problems reflecting difficulty in short-term memory appear to reflect a relatively long-term static condition dating back to a plane crash [respondent] suffered as a Marine pilot in World War II. While he has evidently compensated for this difficulty, further examination is recommended to rule out the 1 percent chance of an active rather than static lesion."
Parenthetically we note he is not an M.D. and clearly not a specialist on dormant lesions. We do not consider him qualified even on a "forensic" basis to express an opinion on a 1 percent possibility that the accident suffered by respondent as a Marine pilot in World War II resulted in "an active or other than a static lesion."
Thus if and when "a written report [has been rendered] that respondent has been rehabilitated" by "... Dr. Marshall Levy or other competent psychologist" respondent must be automatically and permanently reinstated.
Could a hearing be requested? Would the report of a psychiatrist or any other evidence be acceptable? Assuming that paragraph 2 of the judgment is valid, it is uncertain, inequitable to all the parties and it abdicates judicial authority.
The litigation before this court is not a child custody contest wherein judicial authority is on occasion in large part usurped by experts. At bench the judicial authority is totally usurped. The report admits respondent is not yet rehabilitated but pursuant to the opinion of a named psychologist or a reasonable facsimile that he will or may be reinstated if the conditions set forth in the letter of July 27 are fulfilled on some unspecified date in the future. Thus the judgment compels College to conditionally reinstate respondent *748 irrespective of the obvious legal and financial burdens which may ensue.
We hold, however, that the facts detailed with respect to the specific literal charge and all its inherent innuendoes were overwhelmingly proved, and that procedural requirements for the hearing before the board and/or Commission were complied with in all respects. The Commission and the courts have a grave responsibility not alone to respondent but also to the appellants and their personnel, the professors, instructors and students they embrace, and to the general public.
The judgment is reversed. Superior court is directed to vacate its judgment and enter a new and different judgment dismissing respondent's petition. Costs to appellant.
Compton, J., and Gates, J., concurred.
Respondent's petition for a hearing by the Supreme Court was denied January 17, 1985.
NOTES
[1] Education Code section 87031 states in part: "Materials in personnel files of employees which may serve as a basis for affecting the status of their employment are to be made available for inspection of the person involved.... Information of a derogatory nature ... shall not be entered or filed unless and until the employee is given notice and an opportunity to review and comment thereon. An employee shall have the right to enter, and have attached to any such derogatory statement, his own comments thereon."
[2] In Miller, the court actually discusses and interprets Education Code sections 44031 and 44664 which for all pragmatic purposes applies to this case to Education Code section 87031 and we so treat it.
[3] Additional references from the exhibits supporting the conclusion that respondent had notice of the derogatory materials are:
July 10, 1981, letter from Dean Haley to respondent.
October 20, 1977, "Notice Need for Work Improvement."
April 6, 1981, letter from Dean Haley to respondent.
July 27, 1981, report of Dr. Levy.
July 13, 1978, letter from Dick Wohlgemuth to respondent.
April 26, 1981, report from Dr. Boylan to Dean Haley.
June 29, 1978, letter from respondent to "Dick," and the hearing transcript, pages 24, 57, 61 and Wohlgemuth's testimony generally, pages 64, 114, 172-173.
| {
"pile_set_name": "FreeLaw"
} |
650 F.2d 509
16 ERC 1132, 11 Envtl. L. Rep. 20,815
POTOMAC ELECTRIC POWER COMPANY, Petitioner,v.ENVIRONMENTAL PROTECTION AGENCY, Douglas M. Costle,Administrator, and Jack J. Schramm, RegionalAdministrator, Environmental ProtectionAgency, Respondents.
No. 80-1255.
United States Court of Appeals,Fourth Circuit.
Argued Nov. 12, 1980.Decided June 4, 1981.
George V. Allen, Jr., Washington, D. C. (William P. Barr, Shaw, Pittman, Potts & Trowbridge, Washington, D. C., Alan G. Kirk, II, Potomac Electric Power Company, Washington, D. C., on brief), for petitioner.
Bingham Kennedy, Dept. of Justice, Washington, D. C. (Todd Joseph, Environmental Protection Agency, Angus MacBeth, Acting Asst. Atty. Gen., David Mayer, Environmental Protection Agency, Washington, D. C., on brief), for respondents.
Before WIDENER, PHILLIPS and ERVIN, Circuit Judges.
JAMES DICKSON PHILLIPS, Circuit Judge:
1
The Potomac Electric Power Company (PEPCO) has petitioned this court, pursuant to § 307(b)(1) of the Clean Air Act, 42 U.S.C. § 7607(b)(1), for review of a decision of the Environmental Protection Agency (EPA), through one of its regional administrators, finding that the boiler at PEPCO's Chalk Point Unit $ 4 electric generating station is subject to the new source performance standard (NSPS), see 40 C.F.R. § 60.40 et seq., promulgated by the EPA for fossil fuel-fired steam generating units under the Clean Air Act, 42 U.S.C. § 7401 et seq. The regional administrator's decision was based on his determination that PEPCO had not "commenced construction" of the Chalk Point Unit $ 4 boiler prior to EPA's publication of the relevant NSPS on August 17, 1971.
2
Two questions are presented by PEPCO's petition for review of the regional administrator's decision.1 First, is the EPA's interpretation of the regulations it has promulgated for determining whether an NSPS is to be applied to a particular facility "plainly erroneous"? Second, was the regional administrator's decision, on application of the EPA's regulations and interpretation of those regulations to the facts of this case, arbitrary, capricious or an abuse of discretion? Answering both questions in the negative, we affirm the decision of the regional administrator that PEPCO's Chalk Point Unit $ 4 must comply with the NSPS promulgated for fossil fuel-fired steam generators.
3
* Because the decision of the EPA concerning the applicability of an NSPS to a particular facility turns largely upon the facts of each case, a brief review of the facts underlying PEPCO's present petition for review is essential for an understanding of our disposition of this appeal. Chalk Point Units $ 3 and $ 4 are two of the four electric generating facilities that collectively comprise PEPCO's Chalk Point Generating Station south of Aquasco, Maryland. At the core of each unit is an oil-fired boiler designed to generate steam to power a turbine that produces electricity. The two units share several ancillary facilities, including a common water treatment system, fuel oil tank farm and control room, and a single building houses the boilers and turbines for both units. Units $ 3 and $ 4 were planned in the late 1960s as a single procurement and were to be placed in service "back to back" in 1974 and 1975. A sudden and unprecedented decline in electricity use following the Arab Oil Embargo of 1973, however, caused construction of both units to be slowed after their commencement. Unit $ 3 was placed in service in 1975; Unit $ 4 is scheduled to go into operation in the fall of 1981.
4
The information that PEPCO later submitted to the EPA indicates that negotiations for the construction of Unit $ 4 were commenced in 1970 and that PEPCO was dealing primarily with General Electric (GE), United Engineers & Constructors (UE&C) and Combustion Engineering (CE). PEPCO's negotiations with GE were for the main turbine-generator and boiler feed pump turbines. On March 12, 1971, PEPCO awarded the order to GE subject to the final approval of PEPCO's board of directors and mutually agreeable contract terms. On March 25, 1971, GE confirmed the order but stipulated that PEPCO could cancel the order without charge up to the earlier of the 30-month period prior to shipment or the release of the units for engineering and manufacturing. On June 30, 1971, PEPCO notified GE of approval of the order by its board of directors. On August 2, 1971, the units were released by GE for design and manufacture. A formal contract for the units, however, was not signed until April 23, 1973.
5
PEPCO's negotiations with UE&C were for engineering and construction services at the Chalk Point site. The contract for these services was signed on November 12, 1974 but had an "effective date" of April 12, 1971. This contract covered services for both Units $ 3 and $ 4. Prior to August 17, 1971, UE&C had developed drawings that indicated the planned construction of Unit $ 4. Site preparation for Unit $ 4, however, did not begin until late 1971.
6
PEPCO's negotiations with CE were for fabrication of the boiler to be used in Unit $ 4. On August 17, 1970, PEPCO received a price quotation from CE on a boiler unit for an undetermined facility; that boiler was eventually used in Unit $ 4. A CE "Parts Shipment Forecast" dated February 18, 1971 listed this unit for initial parts shipment during the first quarter of 1973. The unit was listed as a "Forecast Unit" that was identified by an internal control number as contrasted to listing as a "Booked Unit" identified by a domestic contract number.
7
On March 11, 1971, CE stated in a letter to PEPCO that it had committed space in its production schedule for the Unit $ 4 boiler pending a final decision by PEPCO. Also included in the letter were a price quotation and a projected delivery date. On July 12, 1971, PEPCO sent a letter to CE stating that "we are now considering a design for proposed Chalk Point No. 4." This letter concluded with the statement that, "(s)ubject to a mutually satisfactory contract, it is our intent to award the No. 4 boiler unit to you." This letter also referred to a meeting between PEPCO and CE to be held on August 3, 1971 to review a design proposal for Unit $ 4.
8
Although a CE engineering and production team began to design the Unit $ 4 boiler after CE's August 3 meeting with PEPCO, no subcontracts were let or materials acquired prior to August 17, 1971. On October 26, 1971, CE prepared a "Contract Abstract" for Unit $ 4 that included descriptions of the major boiler components, the total price, shipping and payment conditions, and an "award date" of July 12, 1971.
9
A formal contract for the Unit $ 4 boiler was not executed until April 18, 1973, at which time fabrication of the boiler was 75% complete. Affidavits later sworn to by PEPCO's Vice President for Nuclear Engineering and Environmental Affairs and CE's principal representative in the boiler negotiations, however, indicate that the parties felt that they had a binding agreement based on PEPCO's letter of July 12, 1971.
10
Construction of Chalk Point Unit $ 4, although slowed or "deferred" as a result of the 1973 oil embargo, has continued substantially uninterrupted to the present day. It was not until May 20, 1977, however, that PEPCO, pursuant to 40 C.F.R. § 60.5(a), requested a ruling from the EPA on whether Unit $ 4 would be subject to the NSPS for fossil fuel-fired steam generating units published by the EPA on August 17, 1971. Appended to this request were 156 pages of pertinent documents.
11
Fifteen months after receiving PEPCO's request, EPA communicated its first response to PEPCO a request for further information. This request, dated August 17, 1978, stated that the EPA had "preliminarily determined" that Unit $ 4 was subject to the 1971 NSPS for steam electric plants but requested additional information to determine the "exact status" of the unit. The reasons given for the EPA's preliminary determination were that construction of Unit $ 4 had been neither continuous nor of reasonable length, as required by 40 C.F.R. § 60.2(i). PEPCO supplied the requested information and urged that the EPA make its decision "just as quickly as possible."
12
At a meeting requested by PEPCO that took place on July 3, 1979, the EPA informed PEPCO for the first time that its ruling would turn on the question whether a "contractual obligation" to construct the Unit $ 4 boiler existed before August 17, 1971. Following PEPCO's compliance with two more EPA requests for information, the EPA staff briefed the regional administrator in October 1979 and again in March 1980. His final ruling on PEPCO's Chalk Point Unit $ 4 request was published on March 27, 1980. 45 Fed.Reg. 20,155 (1980). In this ruling the regional administrator determined that, because PEPCO had not entered into a "contractual obligation" on the Unit $ 4 boiler the "affected facility" in the present case PEPCO had not "commenced construction" at its Chalk Point Unit $ 4 prior to the EPA's publication of the NSPS for steam electric plants on August 17, 1971. He therefore concluded that the NSPS for steam electric plants was applicable to Unit $ 4.
II
13
Before addressing the specific issues raised by this appeal, a brief discussion of the regulatory scheme out of which they arise is essential. Section 111 of the Clean Air Act, 42 U.S.C. § 7411, requires that the EPA promulgate new source performance standards (NSPS), reflecting the best demonstrated pollution control technology, for application to any new stationary source, "the construction or modification of which is commenced after the publication of (the NSPS) applicable to such source." The only statutory guidance that the EPA is given in promulgating the NSPS, however, is the definition of "stationary source" in § 111(a)(3) of the Clean Air Act, 42 U.S.C. § 7411(a)(3), as "any building, structure, facility, or installation which emits or may emit any air pollutant."
14
Based on this loosely defined statutory authorization, the EPA has promulgated a detailed regulatory scheme establishing and implementing the NSPS. See 40 C.F.R. Part 60. Included in this regulatory scheme is a subpart dealing with the procedural applications of the NSPS that are established in other subparts, see id. Subpart A, which is applicable "to the owner or operator of any stationary source which contains an affected facility, the construction or modification of which is commenced after the date of publication in this part of any standard applicable to that facility," id. § 60.1 (emphasis added). The term "affected facility" is defined as "any apparatus to which a standard is applicable." Id. § 60.2(e). The word "construction" is defined as the "fabrication, erection, or installation of an affected facility." Id. § 60.2(g). The word "commenced" is defined to require a showing "that an owner or operator has entered into a contractual obligation to undertake and complete, within a reasonable time, a continuous program of construction or modification." Id. § 60.2(i) (emphasis added).
15
Based on its interpretation of the regulations it has promulgated pursuant to the authorization of § 111 of the Clean Air Act, 42 U.S.C. § 7411, the EPA has contended that PEPCO's Chalk Point Unit $ 4 is subject to the NSPS for steam electric plants because PEPCO was unable to establish that, prior to the EPA's publication of the applicable NSPS on August 17, 1971, it had entered into a "contractual obligation" for "construction" of its Unit $ 4 boiler which the EPA contends is the "affected facility" so that PEPCO could not cancel that obligation without incurring "significant liability," either because an agreed upon cancellation fee had come into operation or because the manufacturer of the facility had made expenditures in reliance upon an agreement for construction of the facility. PEPCO, on the other hand, has contended that, under well-settled principles of contract law, it had entered into a "contractual obligation" for the construction of Chalk Point Unit $ 4 generating station, based either on its contract with UE&C to construct the entire Unit $ 4 generating station which PEPCO contends is the "affected facility" or on its contract with CE to construct the boiler that is to be used in that generating station.
16
We note at the outset that some of PEPCO's contentions may be read as challenging not only the EPA's interpretation of its regulations but also the regulations themselves. To the extent that the regulations themselves are challenged, the challenge is untimely and in the wrong court; section 307(b) of the Clean Air Act, 42 U.S.C. § 7607(b), requires that challenges to EPA regulations of nationwide applicability be brought within 60 days of promulgation in the United States Court of Appeals for the District of Columbia Circuit. Since the procedural regulations governing application of the NSPS that are now under consideration were promulgated by the EPA on December 23, 1971, see 36 Fed.Reg. 24,876 (1971), any challenge to those regulations could only have been brought in the District of Columbia Circuit on or before February 23, 1972. This court therefore has jurisdiction to review only the EPA's interpretation of those regulations, and the scope of that review is limited to whether the EPA's interpretation is plainly erroneous. See Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965); Talley v. Mathews, 550 F.2d 911, 919 (4th Cir. 1977).
A.
17
With respect to whether a "contractual obligation" was entered into for Unit $ 4 prior to publication of the applicable NSPS, PEPCO has argued persuasively that it had entered binding contracts with UE&C and CE prior to August 17, 1971 or, at the very least, it was liable to those companies on a theory of promissory estoppel. However, while principles of contract law undoubtedly would have been reasonable standards by which to determine the existence of a "contractual obligation" for purposes of 40 C.F.R. § 60.2(i), the fact remains that contract law principles are not the standards that were chosen by the EPA for that purpose. Therefore, we must restrict our analysis in the present case to whether the "significant liability" test contended for by EPA is a plainly erroneous interpretation of "contractual obligation."
18
The EPA has presented two cogent policy reasons for the use of its "significant liability" standard. The first policy argument is based on the congressional goal in § 101 of the Clean Air Act, 42 U.S.C. § 7401, of ensuring the best demonstrated system of pollution control in new sources of air pollution without requiring costly retrofitting of existing sources of pollution. See H.R.Rep.No. 95-294, 95th Cong., 1st Sess. 184-86 (1977), U.S.Code Cong. & Admin.News 1977, p. 1077. The EPA interpretation of "contractual obligation" effectuates this goal by requiring a commitment to construction of a polluting facility that cannot be entered into simply for purposes of avoiding the NSPS requirements while leaving the polluting company the option of cancelling or postponing the commitment with the incursion of little or no liability. Stated another way, the EPA's interpretation effectively requires the incorporation of new pollution control technology by all those who can do so without incurring "significant liability" as a result of the cancellation of a previous commitment.
19
The second policy reason asserted by EPA is essentially one of administrative convenience. The requirement of significant liability, based on either a cancellation fee or expenditures made in reliance on a construction contract by the contractor for a polluting facility, provides bright-line documentation by which the EPA may quickly and easily determine whether an applicant for exemption from NSPS has incurred a "contractual obligation" meriting that exemption. This interpretation thus avoids the often convoluted application of contract principles to masses of business correspondence that would be the result under PEPCO's interpretation.
20
Support for this argument is amply supplied by PEPCO's contention in the present case that it is "common practice" in the utility industry for a utility to use a "letter of intent" to signify the award of a "binding contract" to a contractor for the construction of an electric generating facility and that PEPCO's "award letter" of July 12, 1971 to CE was such a letter of intent. For the EPA to find a "contractual obligation" on the basis of this contention, however, would require the EPA to gather evidence of the purported usage of trade in the utility industry and to then determine whether the "award letter" of July 12, 1971, or possibly some other piece of documentation submitted by PEPCO, comported with this "common practice." When this type of inquiry is multiplied by the number of different industries in which the NSPS regulations must be applied, the EPA's argument of administrative convenience is transformed into one bordering on administrative necessity.
21
PEPCO has argued that these policy considerations should be rejected as post hoc reasoning. This argument, however, is undercut by the EPA's consistent determination in three earlier decisions that utilities that fail to meet the requirements of the "significant liability" test will not be exempted from NSPS.
22
For example, upon the request of the United Illuminating Company for a determination whether its New Haven, Connecticut steam electric generating unit was subject to the NSPS for fossil fuel-fired steam generating units, see Letter from William J. Cooper, Chairman of the Board, United Illuminating Company to the Office of General Enforcement, Environmental Protection Agency (Feb. 29, 1972), reprinted in Joint Appendix at 222, the EPA originally ruled that the utility's conditional letter of intent to a manufacturer for fabrication of the facility's boiler did not constitute a "contractual obligation," see Letter from William H. Megonnell, Director, Division of Stationary Source Enforcement, Environmental Protection Agency to William J. Cooper (May 9, 1972), reprinted in Joint Appendix at 227. It reversed this ruling, however, when the utility was able to produce a purchase order from the boiler manufacturer to a supplier of parts to be used in manufacturing the boiler. See Letter from William H. Megonnell to William J. Cooper (Nov. 2, 1972), reprinted in Joint Appendix at 230.
23
Similarly, in ruling on a request for a determination of NSPS applicability from Tampa Electric Company, the EPA concluded that the utility's Big Bend Unit $ 3 was not subject to the relevant NSPS because the utility had incurred a "contractual obligation" based on an apparent liability to the boiler manufacturer of $950,000 as a result of certain purchase orders the manufacturer had entered with suppliers prior to August 17, 1971. See Memorandum from Charles A. Perry, Assistant Regional Counsel to Ron Hausmann, Office of General Counsel, Environmental Protection Agency (July 18, 1977), reprinted in Joint Appendix at 235-37; Memorandum from Edward B. Reich, Director, Division of Stationary Source Enforcement to Fran Phillips, Regional Counsel, Region IV, Environmental Protection Agency (Sept. 30, 1977), reprinted in Joint Appendix at 238-39.
24
Finally, in the request for determination of the Hawaiian Electric Company, the EPA was asked to rule on the applicability of the relevant NSPS to the utility's Kahe Power Plants $ 5 and $ 6. See Letter from Richard E. Bell, Manager, Environmental Department, Hawaiian Electric Company to Office of General Enforcement, Environmental Protection Agency (July 5, 1972), reprinted in Joint Appendix at 231-32. The cancellation date with respect to the Kahe Unit $ 5 boiler was listed as "none," and with respect to the Unit $ 6 boiler it was July 1, 1972. Id. Based on the assumption that Hawaiian Electric could withdraw without cost from its letters of intent to construct the two boilers prior to the expiration of the stated cancellation dates, the EPA held that the utility had incurred a "contractual obligation" for the first boiler prior to August 17, 1971 but that no such obligation arose for the second boiler until July 1, 1972. See Letter from Edward B. Reich, Chief, Enforcement Proceedings Branch, Environmental Protection Agency to Richard E. Bell (July 18, 1972), reprinted in Joint Appendix at 233-34. Although the "significant liability" standard was never expressly stated in any of these previous rulings, the reasoning applied in each of the decisions is consistent with the test now articulated by the EPA.
25
Judicial support for the EPA's present interpretation can be found in United States v. City of Painesville, 431 F.Supp. 496 (N.D.Ohio 1977), aff'd, 644 F.2d 1186 (6th Cir. 1981), in which the court upheld an NSPS applicability ruling by the EPA that is consistent with the "significant liability" standard. In Painesville a municipal utility had executed a letter of intent with one boiler manufacturer in 1970, but it changed the design of the boiler to be fabricated and, on July 28, 1972, executed a contract with a second boiler manufacturer for construction of the redesigned boiler. Id. at 498. The EPA argued that the commencement of construction of the "affected facility" dated from either the execution of a formal contract with the boiler manufacturer or the progression of construction at the building site to the point that a change in design would have required the facility already erected to be modified in order to comply with the relevant NSPS. Id. at 500. Adopting EPA's definition of "commencement" as a reasonable interpretation of the NSPS applicability regulations that was in keeping with the intent of Congress in enacting § 111 of the Clean Air Act, the district court found that "construction" of the new power plant had not "commenced" prior to August 17, 1971 because neither of the specified events had occurred prior to that time. Id. at 500-01. While the Painesville court admittedly did not construe the phrase "contractual obligation," it must be remembered that that phrase is found in the definition of "commenced" in 40 C.F.R. § 60.2(i) and that a finding of a "contractual obligation" must therefore be thought of as nothing more than a means of making the ultimate determination of whether "construction" has "commenced."
26
Based on the persuasive policy justifications presented by the EPA and that agency's consistent application of the "significant liability" standard, which has been upheld by other courts, we conclude that the EPA's requirement of "significant liability" to demonstrate a "contractual obligation" sufficient to exempt a pollution source from compliance with the relevant NSPS is not a plainly erroneous interpretation of 40 C.F.R. § 60.2(i).
B.
27
A similar analysis can be applied to the EPA's conclusion that a power plant's boiler is the "affected facility" for which a "contractual obligation" had to exist for exemption in the present case. PEPCO contends that this interpretation is unreasonable and that the only reasonable interpretation is that "affected facility" refers to an entire electric generating facility and not just its boiler. The EPA's interpretation, however, is supported by a number of considerations.
28
First, EPA's interpretation comports with a tracing of the relevant regulations. "Affected facility" is equated in 40 C.F.R. § 60.2(e) with "any apparatus to which a standard is applicable." With respect to a steam electric plant, the "affected facility" to which the NSPS is applicable is "each fossil fuel-fired steam electric generating unit." Id. § 60.40(a)(1). "Fossil fuel-fired steam generating unit" is in turn defined as a "furnace or boiler." Id. § 60.41(a). Thus, the definition of "affected facility" as a "boiler" seems compelled by a reading of the pertinent regulations.
29
Second, the EPA's present ruling that PEPCO must demonstrate that it had incurred a "contractual obligation" concerning its Unit $ 4 "boiler" is consistent with the EPA's earlier NSPS exemption rulings. For example, in ruling on the request for exemption of United Illuminating Company, the EPA stated that the "pertinent issue is whether a binding agreement was entered into for the boiler, the 'affected facility' under 40 C.F.R. 60.40 and 60.41(a)." Letter from William H. Megonnell, Director, Division of Stationary Source Enforcement, Environmental Protection Agency to William H. Cooper, Chairman of the Board, United Illuminating Company (May 9, 1972), reprinted in Joint Appendix at 227-28. Similarly, in responding to a request for exemption by the Hawaiian Electric Company, the EPA stated that "the key question is whether construction of the K-5 and K-6 boilers commenced after August 17, 1971." Letter from Edward B. Reich, Chief, Enforcement Proceedings Branch, Environmental Protection Agency to Richard E. Bell, Manager, Environmental Department, Hawaiian Electric Company (July 18, 1972), reprinted in Joint Appendix at 233-34. Likewise, in reviewing its 1975 decision that Tampa Electric Company's "Big Bend No. 3 fossil fuel-fired boiler unit was an existing source for NSPS requirements," Memorandum from Charles A. Perry, Assistant Regional Counsel to Ron Hausmann, Office of General Counsel (July 18, 1977), reprinted in Joint Appendix at 235-37, the EPA focused its attention on the utility's "letter of intent to purchase a boiler from Riley-Stoker Company," coupled with the utility's "apparent liability to Riley-Stoker for $950,000," Memorandum from Edward B. Reich, Director, Division of Stationary Source Enforcement to Fran Phillips, Regional Counsel, Region IV (Sept. 30, 1977), reprinted in Joint Appendix at 238-39. Finally, in Painesville the EPA based its exemption determination on an examination of the time at which "construction of the 'affected facility,' the boiler, commenced," United States v. City of Painesville, 431 F.Supp. at 500, and the court found that examination to be "fully supported by the language of the regulation," id.
30
Third, the EPA's interpretation that the "boiler" is the "affected facility" in the instant case is consonant with the statutory definition of "stationary source" found in § 111 of the Clean Air Act, 42 U.S.C. § 7411. In ASARCO, Inc. v. EPA, 578 F.2d 319 (D.C. Cir. 1978), the District of Columbia Circuit held that the definition of "stationary source" limits the application of NSPS to individual polluting facilities rather than entire plants. At issue in ASARCO was a challenge to the EPA's use of the "bubble concept," under which an NSPS was applied as a result of a modification in a polluting facility only if the modification produced a net increase in the total emissions from the entire industrial plant in which a number of polluting facilities were grouped under an imaginary bubble. Id. at 321-25. The court rejected the "bubble concept" and held that under the § 111 definition of "stationary source" the EPA could not change the unit to which the NSPS applied "from a single building, structure, facility or installation the unit prescribed in the statute to a combination of such units." Id. at 327.
31
PEPCO contends, on the other hand, that the District of Columbia Circuit's holding in Alabama Power Co. v. Costle, 606 F.2d 1068 (D.C. Cir. 1979) (per curiam), prohibits the EPA from premising its exemption decision on an examination of the time at which construction is commenced on a "piece of equipment" such as a "boiler" rather than a "common sense industrial grouping" that is a "functional entity." Even assuming, arguendo, that Alabama Power, a decision dealing with a construction of the PSD provisions of the Clean Air Act has validity with respect to construction of similar provisions under the NSPS portion of that Act,2 we simply do not believe that Alabama Power stands for the proposition for which PEPCO has cited it.
32
In Alabama Power the court was asked to pass on the validity of the EPA's regulatory definition of "source" to include "any structure, building, facility, equipment, installation or operation (or combination thereof) which is located on one or more contiguous or adjacent properties and which is owned or operated by the same person (or by persons under common control)." Id. at 1077. The court found that the EPA had "exceeded its statutory authority by including within its definition of 'stationary source' the terms 'equipment and operation.' " Id. The District of Columbia Circuit went on, however, to "rule that EPA has considerable latitude in defining the four remaining terms 'structure,' 'building,' 'facility' and 'installation' to include a wide range of pollution-emitting sources within the reach of the PSD provisions," and that "(t)o the extent EPA intended its definition of the term 'stationary source' to constitute an interpretation of the four statutory terms for purposes of the PSD part, it may recast its definition in appropriate fashion." Id. We believe that, with its emphasis on recasting the regulatory definition, the Alabama Power court intended to require only a procedural modification that would bring the EPA's regulation clearly within the discretion given that agency by the statute rather than a substantive restriction that prohibited the EPA from focusing on "equipment" or "operation" in any manner.
33
The Alabama Power court's use of the phrase "common sense industrial grouping" must similarly be reviewed in context. The EPA's previously quoted definition of "source" had been challenged as too broad by environmentalists, who relied on the District of Columbia's earlier holding in ASARCO that a "stationary source" could be comprised of only a single facility as opposed to a combination of facilities. Id. In attempting to distinguish ASARCO in such a way that the EPA could continue to use a definition of "stationary source" that included a combination of "sources," the Alabama Power court held that, while a "stationary source" could be comprised of only one "facility," the "EPA has latitude to define the term 'facility,' to encompass an entire plant or other 'common sense industrial grouping' appropriate to the PSD review and permit process." Id. Moreover, the court noted that the EPA had the discretion to broaden, in an appropriate fashion, its definition of "facility," which at that time was defined as " 'an identifiable piece of process equipment.' " Id. at 1977 n.14 (quoting 40 C.F.R. §§ 51.24(b)(5), 52.21(b)(6)). Thus, although the Alabama Power court recognized the "latitude" or "discretion" of the EPA to define "facility" as an "entire plant or other 'common sense industrial grouping,' " by negative implication it found nothing wrong with the existing definition of that term as "an identifiable piece of process equipment" a definition that is at least as narrow as the EPA's definition of "affected facility" in the present case as the "furnace or boiler."
34
The salient feature of the Alabama Power decision that PEPCO seems to overlook is the emphasis of the District of Columbia Circuit on a definition of "facility" that is "appropriate to the PSD review and permit process." Id. at 1077. Indeed, the Alabama Power court stated in a footnote following its discussion of the EPA's "latitude" in defining terms that "the definitions applicable to each set of provisions (PSD or NSPS) must be reasonably appropriate for the purpose of those sections." Id. at 1077 n.14.
35
The EPA has, we believe, pointed out a significant difference between the PSD and NSPS programs that justifies a different construction of the definition of "stationary source" that is to be applied to the two programs. It argues that, because the purpose of the PSD program is to preserve existing air quality in those portions of the country where the air is now cleaner than the National Ambient Air Quality Standards require, the emphasis in that program should be upon the net emissions from an entire plant resulting from construction or modification of one or more emitting sources within the plant. The NSPS regulations, on the other hand, require the use of the best demonstrated pollution control technology in the construction or modification of a pollutant-emitting facility without regard to the effect the emissions from that facility will have on overall air quality. It is therefore appropriate in the NSPS program for the EPA to focus on the "affected facility" to which the NSPS will be applied and in which the best demonstrated technology must be incorporated. Thus, we conclude that the EPA's emphasis in its exemption decision on the "boiler" as the "affected facility" constitutes neither too broad a definition of "stationary source" under ASARCO nor too narrow a definition of that term under Alabama Power.
36
Finally, and perhaps most persuasively, the EPA's requirement for exemption of a "contractual obligation" for construction of the "boiler" as the "affected facility" is supported by common sense. PEPCO contends that the EPA can base its exemption determination only on construction of a "functional entity" and that, therefore, the EPA should find an exemption if there was a "contractual obligation" for any portion of PEPCO's Chalk Point Unit $ 4, including its turbine generator and the equipment and buildings it shares with Unit $ 3, that is essential to its ultimate operation as a power plant. Such a construction, however, would create a means of avoidance of the NSPS that we do not believe Congress possibly could have intended. Through the simple expedient of planning generating units in tandem and providing for their use of some common equipment or facilities a practice that utility companies seem to follow often a utility could obtain exemption of both units from the NSPS even though it actually "commenced construction" of only one unit prior to publication of the relevant NSPS and the best demonstrated technology could be incorporated into the second unit at little or no retrofitting cost. Such a two-for-one exemption is obviously absurd, but it is the logical result of PEPCO's interpretation of the unit for which a "contractual obligation" must be incurred in order to qualify for an exemption.
37
We therefore conclude that it is not plainly erroneous for the EPA, in making its exemption determination, to focus on a power plant's boiler as the "affected facility" for which a "contractual obligation" had to exist prior to publication of the relevant NSPS.
C.
38
While we conclude that it was reasonable for the EPA to focus on the "boiler" of Unit $ 4 as the "affected facility," we do not believe that construction of the equipment required to support that "boiler" is totally irrelevant to an NSPS exemption determination. The EPA contends that its regulatory definition of "construction" as "fabrication, erection, or installation of an affected facility," 40 C.F.R. § 60.2(g), refers only to "erection" or "installation" of an "affected facility" following its "fabrication." Although PEPCO has not expressly challenged this EPA interpretation, we believe such a challenge is implicit in PEPCO's contention that its contract with UE&C, which was responsible for preparation of the facilities that would accept the boiler, was a contract for construction of the boiler. Moreover, in response to this challenge, we find that the EPA's interpretation of its regulatory definition of "construction" is plainly erroneous.
39
We find that the only reasonable interpretation of the regulatory definition of "construction" is one that covers construction of those structures and facilities that are essential to the eventual "erection" and "installation" of an "affected facility." This finding is compelled by three considerations. First, limiting the scope of the words "erection" and "installation" to the actual erection and installation at the building site of an "affected facility" following its fabrication would render the words superfluous in the context of an NSPS exemption determination. The EPA's exemption decision would always turn on the existence of a "contractual obligation" for the "fabrication" of an "affected facility" that must necessarily precede its actual "erection" and "installation." Our interpretation, on the other hand, gives effect to all the words used to define "construction" in 40 C.F.R. § 60.2(g).
40
Second, the EPA's present interpretation of "construction" is inconsistent with the position taken by that agency in Painesville. Before the Painesville court the EPA argued that the construction of the "affected facility" in that case also a power plant boiler commenced "when actual construction at the building site was started for a particular type of boiler, so that modification of existing physical construction would be required if the boiler specifications were changed to accommodate anti-pollution control devices." United States v. City of Painesville, 431 F.Supp. at 500. While decision in Painesville turned on the reasonableness of the EPA's interpretation of its definition of "commenced" under 40 C.F.R. § 60.2(i), the EPA's present interpretation of "construction" conflicts with the position it took in Painesville because it has the effect of limiting examination for evidence of a "contractual obligation" to expenditures for "fabrication" of the "affected facility" and places "actual construction at the building site" outside the scope of review. Our interpretation, however, brings the EPA's definition of "construction" into consonance with its definition of "commenced."
41
Finally, the EPA's interpretation of "construction" is simply at odds with the congressional desire that industry not be required to institute costly retrofitting of existing facilities to accommodate the best demonstrated pollution-control technology mandated by the NSPS provisions. See H.R.Rep. No. 95-294, 95th Cong., 1st Sess. 184-86 (1977). As PEPCO has persuasively pointed out, the major expenditures incurred in incorporating new emission control technology into an electric generating unit are for expansion of buildings and modification of equipment that support an "affected facility" rather than for modification of the "affected facility" itself. Therefore, it would clearly thwart the legislative intent to look only at the "contractual obligation" for "fabrication" of the boiler in determining whether a utility's "construction" of a new generating facility had "commenced" to such an extent that it would be unreasonable to require the utility to modify that facility to accommodate new emission control technology. Our own interpretation, to the contrary, effectuates the congressional purpose in enacting the NSPS provisions by broadening the scope of examination of "construction" of an "affected facility" to include "contractual obligations" for the construction of facilities essential to the eventual "erection" and "installation" of an "affected facility."
III
42
Having passed on the validity of the EPA's interpretation of the regulations essential to decision in the present case, we now turn to the question whether the regional administrator's ultimate decision denying an exemption to PEPCO was arbitrary, capricious or an abuse of discretion. See Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971). Although we note two flaws in the reasoning on which the regional administrator based his decision, we do not think that decision was an abuse of discretion inasmuch as our correction of the flaws does not change the ultimate result.
43
The regional administrator erred first in stating that it has been the "EPA's consistent interpretation of the term 'contractual obligation' in previous NSPS determinations" that it be demonstrated by an agreement that, if terminated, would result in a "substantial loss." 45 Fed.Reg. at 20,156. As we have already found, the requirement to be discerned from prior EPA decisions is one of "significant liability" rather than "substantial loss."3 However, while we think that it is important to note the distinction between the two standards, we find that it has no effect on the validity of the regional administrator's ultimate decision in the present case because PEPCO has failed to demonstrate liability for construction of any sort, much less liability lying between "significant" and "substantial."
44
The regional administrator's other error was in restricting his examination for a "contractual obligation" for "construction" of the "affected facility" to PEPCO's possible liability for fabrication of the boiler itself. Under what we have determined to be the appropriate interpretation of "construction," as defined in 40 C.F.R. § 60.2(g), the regional administrator should have broadened the scope of his inquiry to include "contractual obligation" for the construction of structures and equipment essential to the eventual "erection" and "installation" of the "affected facility." Again, however, correction of this flaw in the regional administrator's decision has no effect on the ultimate exemption determination.
45
PEPCO has contended that, even if it had not incurred a "contractual obligation" for "fabrication" of the boiler by CE prior to the August 17, 1971 publication of the relevant NSPS, it had, prior to that date, entered into "contractual obligations" with GE for construction of the turbine-generator and with UE&C for the on-site construction of the entire Chalk Point Unit $ 4 facility. Because construction of the turbine-generator is not essential to the eventual "erection" and "installation" of the boiler, PEPCO's negotiations with GE are irrelevant under even our interpretation of "construction."PEPCO's possible "contractual obligation" to UE&C, on the other hand, is clearly relevant to the exemption determination in the instant case. PEPCO has failed, however, to produce any evidence of liability to UE&C for "construction" of the on-site structure essential to the eventual support of the boiler prior to August 17, 1971. At best, PEPCO can only point to "engineering work, project design and construction management" that UE&C had performed prior to publication of the relevant NSPS. As the Painesville court noted, however, "if the only work made fruitless by the need to meet antipollution standards is in the design or planning of a new source, then operators are required to modify those designs or operating plans to meet new stationary source emission standards," and such an interpretation "is given credence by Congress' use of the word 'construction' in (§ 111(a)(3)) rather than the words 'planning' or 'designing.' " United States v. City of Painesville, 431 F.Supp. at 501 n.8. Because PEPCO has been unable to produce any evidence of "significant liability" to UE&C for actual construction at the Unit $ 4 site prior to August 17, 1971, we believe that the regional administrator's failure to consider that possibility is inconsequential.
46
With the modifications indicated, we affirm the decision of the EPA's regional administrator denying exemption of PEPCO's Chalk Point Unit $ 4 from compliance with the relevant NSPS published by the EPA on August 17, 1971.
47
AFFIRMED AS MODIFIED.
1
PEPCO has also contended that it is entitled to relief from the ruling in any event because of the regional administrator's delay in making his determination. We find this contention to be without merit for two reasons
First, although PEPCO cites a number of cases in which federal courts have compelled by injunction agency action wrongfully withheld in violation of a statutory duty, see, e. g., Deering Milliken, Inc. v. Johnston, 295 F.2d 856, 861-64 (4th Cir. 1961) and 5 U.S.C. § 706(1) provides the authority to "compel agency action unreasonably delayed," as the court found in EEOC v. Raymond Metal Products Co., 385 F.Supp. 907, 914 (D.Md.1974), aff'd, 530 F.2d 590 (4th Cir. 1976), § 706(1) "was clearly intended for situations where an agency has failed to take appropriate action and not for situations where the agency action has been taken in an allegedly unreasonable time." (Emphasis added.)
Second, even if this court were to recognize PEPCO's potential right to relief, we believe PEPCO would be estopped from asserting any prejudice resulting from the EPA's delay in acting on its request for an NSPS exemption by its own lengthy delay in requesting that exemption. Although PEPCO began construction on its Chalk Point Unit $ 4 facility in late 1971, it did not ask for a ruling on the applicability of the NSPS to that facility, which PEPCO admittedly had the burden of requesting, 40 C.F.R. § 60.5(a), until 1977. PEPCO suggests that it only discovered the possibility of the NSPS' applicability to this facility two months prior to its request for a ruling. In view of the fact that several other utilities had long before requested rulings in this precise matter, we think that this major utility must be charged with at least constructive notice at a much earlier time, saving any question of actual notice.
2
The EPA's NSPS regulations are promulgated under the authority of § 111 of the Clean Air Act, 42 U.S.C. § 7411. The PSD regulations, however, find their statutory mandate in §§ 160-169 of the Act, 42 U.S.C. §§ 7470-7479. The unit to which the NSPS regulations are to apply is a "stationary source," which is defined as "any building, structure, facility, or installation which emits or may emit any air pollutant," § 111(a)(3), Clean Air Act, 42 U.S.C. § 7411(a) (3). Although the unit to which the PSD regulations are to apply is the facially different one of a "major emitting facility," that term is defined in § 169(1) of the Act, 42 U.S.C. § 7479(1), as any of a number of "stationary sources of air pollutants" that emit specified amounts of prohibited pollutants, and the Alabama Power court held that the definition of "stationary source" in § 111(a)(3) controlled the meaning of that term when used in the PSD part, Alabama Power Co. v. Costle, 606 F.2d at 1077. The court went on to point out, however, that the individual terms "facility," "building," "structure" and "installation" used to define "stationary source" in § 111(a)(3) are not defined by statute and that the EPA could define the terms differently to effectuate the different purpose of the NSPS and PSD provisions. Id. at 1077 n.13. Thus, the Alabama Power court's decision on the EPA's construction of those terms for purposes of the PSD part should be considered of little, if any, precedential value in construing the same terms for purposes of the NSPS regulations
3
The regional administrator's use of the phrase "substantial loss" is understandable because that was the term used in an internal agency memorandum directed to the regional administrator in March 1980. See Joint Appendix at 199-200. We do not believe, however, that the term was used in that memorandum or in the regional administrator's decision as a short-hand reference to the "substantial loss" standard that the EPA has applied in exempting sources from the PSD requirements. See, e. g., Montana Power Co. v. EPA, 608 F.2d 334, 340 (9th Cir. 1979). To the contrary, the discussion of EPA policy in which the term is used in the March 1980 memorandum, see Joint Appendix at 199, as well as the more detailed discussion in another memorandum directed to the regional administrator, see Memorandum from R. Sarah Compton, Director, Enforcement Division to Jack J. Schramm, Regional Administrator (March 7, 1980) reprinted in Joint Appendix at 174-98, clearly articulate a standard for establishing a "contractual obligation" that the EPA now refers to as one of "significant liability." Therefore, we regard the regional administrator's reference to "substantial loss" as a loose use of technical language rather than the application of a new and higher requirement for establishing a "contractual obligation." Moreover, even were the phrase used in the latter sense, as our subsequent discussion in text demonstrates, this error did not affect the ultimate outcome
| {
"pile_set_name": "FreeLaw"
} |
513 P.2d 324 (1973)
David William MARR, Appellant,
v.
The STATE of Oklahoma, Appellee.
No. A-18108.
Court of Criminal Appeals of Oklahoma.
August 1, 1973.
Burke G. Mordy, Ardmore, for appellant.
Larry Derryberry, Atty. Gen., Michael Jackson, Asst. Atty. Gen., for appellee.
*325 OPINION
BUSSEY, Judge:
Appellant, David William Marr, hereinafter referred to as defendant, was charged, tried and convicted in the District Court of Carter County, Case No. CRF-72-114, for the offense of Possession of A Firearm, After Former Conviction of a Felony, his punishment was fixed at three (3) years imprisonment and from said judgment and sentence, a timely appeal has been perfected to this Court.
Because of the ultimate conclusions reached, we do not deem it necessary to recite a detailed statement of facts.
Hudson Crouch, an enforcement agent for the Oklahoma Alcoholic Beverage Control Board, testified that on May 2, 1972, he observed the defendant and three other subjects in an intoxicated condition at a liquor store. He advised them that they should go home and get off the streets. A short time later he observed the same persons at another liquor store. He attempted to place them under arrest and they drove off. He pursued the vehicle and observed one of the subjects, Jerry Dan Pelton, pointing a lever-action rifle at him. The defendant reached up and pulled the gun down each time Pelton tried to point it at him. Upon subsequently getting the automobile stopped, he found a lever-action .22 rifle under the vehicle. The subjects were taken to the Carter County Sheriff's Office and advised of their rights against self-incrimination. He asked Jerry Dan Pelton if he was aware of the penalty for being in the possession of a firearm after having been convicted of a felony. Wherein the defendant stated "It's not Jerry Dan's gun, it's mine." (Tr. 58)
Defendant asserts five propositions of error, only two of which we deem necessary to discuss in this opinion. Defendant first asserts that the trial court made an error in mentioning defendant's previous felony conviction in impaneling the jury and in conducting the trial in a one-stage proceeding. In Baeza v. State, Okl.Cr., 478 P.2d 903 (1970) we stated in the second Syllabus:
"The charge of Carrying a Firearm After Former Conviction of a Felony, 21 O.S. 1961, § 1283, must be tried in a two stage proceeding as set forth in Harris v. State, Okl.Cr., 369 P.2d 187. In the first stage, the jury shall determine if defendant is guilty of carrying a firearm. If the jury finds him guilty of carrying such weapon, then and in that event a second stage of the trial shall be held and evidence of a former conviction introduced and an instruction given on the penalty for carrying a firearm after former conviction of a felony."
We observe that the trial court was aware of our holding in Baeza, supra, but concluded that the instant case was distinguishable. We concur with the trial court's ruling. In 1971 the Legislature passed 21 O.S. § 1289.7 which provides:
"A person may carry or transport in a motor vehicle a rifle, shotgun or pistol, unloaded, at any time."
In overruling defendant's motion for new trial, the trial court succinctly stated:
"But, as to the points in the case, my point was that under the law as I understand *326 it as handed down by the legislature, as far as the evidence is concerned, this man was committing no crime, unless it was by virtue of the fact that he had previously been convicted of a felony, that point and that point alone was the only thing that made him guilty of a crime. That being the case I could see no possible way that I could submit the case to a jury in a two stage proceedings. I am not going to sit here and ask a jury to find a man guilty of the crime of carrying an unloaded rifle in a car, or not guilty, when that is not a crime." (Tr. 107-108)
We thus conclude that because of the passage of 21 O.S. § 1289.7 that the previous convictions of a felony is a necessary element of the crime charged which should be pleaded and proven during the State's case in chief in a one stage proceeding. In Conway v. State, Okl.Cr., 483 P.2d 350, wherein the defendant was charged with Escaping From the State Penitentiary, we held that it was incumbent upon the State of Oklahoma to set forth the reasons and grounds for which defendant was legally incarcerated.
The final proposition contends that "neither the Information nor the evidence in chief of the State of Oklahoma support the verdict defendant has committed a crime under the law of the State of Oklahoma." Title 21 O.S. § 1283 provides as follows:
"It shall be unlawful for any person having previously been convicted of any felony in any court of a state or the United States to carry on his person, or in any vehicle which he is operating, or in which he is riding as a passenger, any pistol, imitation or homemade pistol, machine gun, sawed-off shotgun or rifle, or any other dangerous or deadly firearm which could be as easily concealed on the person, in personal effects or in an automobile, as a sawed-off shotgun ..."
In the instant case the evidence adduced that the defendant was a convicted felon and that a .22 caliber rifle was in automobile in which defendant was a passenger. We concur with defendant's contention that 21 O.S. § 1283 does not prohibit a convicted felon from carrying a rifle in a vehicle unless the same is sawed-off. Defendant succinctly points out in his brief that "it is once again contended by the defense in this matter that not only is 21 O.S. § 1283 vague as to whether or not a rifle is included or only a `sawed-off rifle' but that it would be `absurd' to believe that the Oklahoma Legislature would prohibit a felon from possessing a rifle and not an automatic shotgun. To the contrary, 21 O.S. § 1283 was directed at a weapon which `could be as easily concealed on the person, in personal effects or in an automobile, as a sawed-off shotgun."
The judgment and sentence is accordingly reversed and remanded.
BLISS, P.J., and BRETT, J., concur.
| {
"pile_set_name": "FreeLaw"
} |
133 F.3d 925
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.Linda CAMARILLO; Charles Camarillo, Plaintiffs-Appellants,v.ALLSTATE INSURANCE COMPANY; Louis H. Abramson, Defendants-Appellees.
No. 96-56216.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Dec. 3, 1997.Decided Dec. 31, 1997.
1
Before: SCHROEDER and KOZINSKI, Circuit Judges, and WHYTE,** District Judge.
2
MEMORANDUM*
3
Linda and Charles Camarillo appeal the district court's summary judgment, pursuant to Rule !56, Fed.R.Civ.P., in favor of Allstate Insurance Company on the Camarillos' claim for breach of implied covenant of good faith and fair dealing in handling the Camarillos' claim for homeowners' insurance benefits after the Northridge earthquake.
4
We have carefully reviewed the record and the contentions of the parties, and conclude that there was no genuine issue of material fact as to whether Allstate unreasonably delayed or withheld benefits on the Camarillos' claims. Rather, the record reflects that the company followed the terms of the policy and; Allstate has justified its conduct between the time of the earthquake and the eventual settlement. The implied covenant was not bleached.
5
Appellants have not shown that they suffered any prejudice as a result of the district court's handling of Allstate's Motion for Summary Judgment.
6
AFFIRMED.
**
Honorable Ronald M. Whyte, United States District Judge for the Northern District of California, 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 9th Cir. R. 36-3
| {
"pile_set_name": "FreeLaw"
} |
STATE OF WEST VIRGINIA
SUPREME COURT OF APPEALS
In Re: D.R. and A.F. FILED
June 10, 2013
RORY L. PERRY II, CLERK
No. 13-0069 (Roane County 11-JA-12 and 11-JA-13) SUPREME COURT OF APPEALS
OF WEST VIRGINIA
MEMORANDUM DECISION
Petitioner Mother, by counsel Betty Clark Gregory, appeals the Circuit Court of Roane
County’s order terminating her parental rights, which was entered on December 19, 2012. The
guardian ad litem, Anita Ashley, filed her response on behalf of the children and a supplemental
appendix. The West Virginia Department of Health and Human Resources (“DHHR”), by
Charlene Vaughan, its attorney, has filed its response.
This Court has considered the parties’ briefs and the record on appeal. The facts and
legal arguments are adequately presented, and the decisional process would not be significantly
aided by oral argument. Upon consideration of the standard of review, the briefs, and the record
presented, the Court finds no substantial question of law and no prejudicial error. For these
reasons, a memorandum decision is appropriate under Rule 21 of the Rules of Appellate
Procedure.
An emergency custody order was entered by the Magistrate Court of Roane County on
August 19, 2011. On August 23, 2011, the DHHR filed its petition initiating the instant abuse
and neglect case. This petition alleged that Petitioner Mother knowingly and intentionally
inflicted physical injuries to D.R. by causing bruising on his left arm and cheek, bruising on his
face in March of 2011, and knowingly and intentionally inflicted mental and emotional abuse by
threatening and cursing at D.R. The petition also alleged that Petitioner Mother subjected A.F. to
abuse by being present in the home while the abuse towards D.R. occurred. Moreover, the
petition also noted that Petitioner Mother had her parental rights terminated in a prior case.1
Petitioner Mother voluntarily, intelligently, and with the assistance of counsel waived her
right to an evidentiary hearing and admitted to leaving bruises on D.R. The circuit court held that
Petitioner Mother was an abusing and neglecting parent and that the children were abused and
neglected children. At the disposition hearing, the circuit court stated petitioner has failed to
accept responsibility for the reason her children were removed, she has a poor prognosis for
future improvement, she failed to take advantage of therapy while awaiting disposition, she
continues to have problematic visits with her children, she has received every service available
but failed to put into practice what she has learned, and the current circumstances are “eerily
1
A final order entered by Judge Nibert on March 16, 2006, terminated Petitioner Mother’s
parental rights. An amended order entered by Judge Nibert on March 29, 2006, terminated only
Petitioner Mother’s visitation rights.
1
identical” to the prior adjudication. Based on the aforementioned reasons, the circuit court found
that there was no reasonable likelihood that the conditions of abuse and neglect could be
substantially corrected in the near future.
The Court has previously established the following standard of review:
“Although conclusions of law reached by a circuit court are subject to de novo
review, when an action, such as an abuse and neglect case, is tried upon the facts
without a jury, the circuit court shall make a determination based upon the
evidence and shall make findings of fact and conclusions of law as to whether
such child is abused or neglected. These findings shall not be set aside by a
reviewing court unless clearly erroneous. A finding is clearly erroneous when,
although there is evidence to support the finding, the reviewing court on the entire
evidence is left with the definite and firm conviction that a mistake has been
committed. However, a reviewing court may not overturn a finding simply
because it would have decided the case differently, and it must affirm a finding if
the circuit court’s account of the evidence is plausible in light of the record
viewed in its entirety.” Syl. Pt. 1, In Interest of Tiffany Marie S., 196 W.Va. 223,
470 S.E.2d 177 (1996).
Syl. Pt. 1, In re Cecil T., 228 W.Va. 89, 717 S.E.2d 873 (2011). To begin, Petitioner Mother
argues that the Child Protective Service (“CPS”) worker failed to submit written reports of the
Multidisciplinary Treatment Team to the circuit court and that she was tricked into admitting to
abusing D.R. in return for the recommendation that she receive an improvement period. The
DHHR argues that safety services were offered, but Petitioner Mother was not able to improve
her parenting skills. Further, petitioner’s own witness testified that Petitioner Mother failed to
acknowledge she was guilty of abuse. The DHHR and the guardian ad litem argue that the
admission of abuse was made freely and voluntarily and there is no evidence that Petitioner
Mother was tricked into admitting to abusing D.R. They also argue that Petitioner Mother failed
to prove that the conditions of abuse and neglect could be substantially corrected in the future.
Upon our review of the record, this Court finds no error in the circuit court’s termination
of Petitioner Mother’s parental rights, including its denial of an improvement period. Pursuant to
West Virginia Code § 49-6-12, the parent has the burden to prove by clear and convincing
evidence that he or she would substantially comply with an improvement period. Subsequently,
the circuit court has the discretion to grant or deny such an improvement period. There is no
evidence that Petitioner Mother was tricked into admitting to the abuse. The record clearly shows
that Petitioner Mother was properly advised of her rights prior to admitting to abusing D.R. and a
family case plan was filed on September 13, 2012. Additionally, a review of the testimony
reveals that Petitioner Mother has failed to acknowledge the abuse during therapy and that no
further services could be provided to Petitioner Mother that have not already been offered. We
have previously held that
in order to remedy the abuse and/or neglect problem, the problem must first be
acknowledged. Failure to acknowledge the existence of the problem, i.e., the truth
of the basic allegation pertaining to the alleged abuse and neglect or the
2
perpetrator of said abuse and neglect, results in making the problem untreatable
and in making an improvement period an exercise in futility at the child's
expense.
W.Va. Dep’t of Health and Human Res. ex rel. Wright v. Doris S., 197 W.Va. 489, 498, 475
S.E.2d 865, 874 (1996).
Next, Petitioner Mother argues that the circuit court improperly admitted into evidence,
over an objection, her psychological evaluation which contained information about her past drug
use that was too remote in time, and she was not given the opportunity to cross-examine the
authors of the report. Petitioner Mother also argues that the circuit court improperly allowed a
CPS worker to testify as an expert regarding fetal alcohol syndrome. The DHHR responds that
the guardian ad litem inquired about the results of the reports with Petitioner Mother and the
physicians disclosed to her that the reports would be shared with the DHHR and others involved
with the case. The guardian ad litem argues the reports were court-ordered and the therapist’s
testimony mirrored the evaluation. The DHHR and guardian ad litem note that the CPS worker
was never qualified as an expert witness on fetal alcohol syndrome, and the worker testified
based on the information in the file, her prior training, and her observations.
Upon review, the Court finds no error in the circuit court’s decision to introduce
Petitioner Mother’s psychological evaluation or to permit a CPS worker to testify about fetal
alcohol syndrome. “‘Rulings on the admissibility of evidence are largely within a trial court’s
sound discretion and should not be disturbed unless there has been an abuse of discretion.’ State
v. Louk, 171 W.Va. 639, 301 S.E.2d 596, 599 (1983).” Syl. Pt. 3, State v. Payne, 225 W.Va. 602,
694 S.E.2d 935 (2010) (internal citations omitted). The Court finds no error in regard to the CPS
worker’s testimony. Specifically, Petitioner Mother has failed to identify any particular instance
of this witness giving expert testimony on the effects of fetal alcohol syndrome and the circuit
court never qualified the witness as an expert. With regard to the psychological evaluation,
Petitioner Mother testified about the factual history, it was disclosed that the report would be
shared with the DHHR and other professionals, Petitioner Mother reviewed the evaluation with
her attorney, and the therapist’s testimony substantially mirrored the psychological evaluation.
For these reasons, the circuit court did not abuse its discretion in admitting the psychological
evaluation or in allowing the CPS worker to testify.
Finally, Petitioner Mother argues it was plain error for the circuit court to rely on
information that was not presented during the disposition hearing to terminate her parental rights.
Specifically, Petitioner Mother argues the circuit court improperly considered a prior order
terminating her parental rights which was later amended to terminate only her visitation. The
DHHR and guardian ad litem argue that despite this error by the circuit court, the remaining
evidence was sufficient to deny Petitioner Mother an improvement period. The guardian ad litem
argues that Petitioner Mother failed to dispute that the current circumstances were almost
identical to the circumstances which resulted in the prior termination of her visitation. The
DHHR adds that they have provided services to Petitioner Mother for over a decade, there are no
additional services that have not already been provided, the DHHR had attempted to reunite the
family, and Petitioner Mother minimizes her conduct.
3
Upon our review, the Court finds that the circuit court erroneously found that Petitioner
Mother had a prior termination of her parental rights. Regardless, there was sufficient evidence
upon which the circuit court properly terminated Petitioner Mother’s parental rights. Thus, the
Court finds that this error was harmless. A review of the record shows that there was no
reasonable likelihood that the conditions of abuse and neglect could be substantially corrected in
the near future because Petitioner Mother had been receiving services as early as 2000; had been
given every service available; failed to take responsibility for her actions which, resulted in the
filing of this action; and failed to take advantage of therapy while awaiting disposition. The
circuit court was presented with sufficient evidence upon which it could have based findings that
there was no reasonable likelihood to believe that conditions of abuse and neglect could be
substantially corrected in the near future, and that termination was necessary for the children’s
welfare. Pursuant to West Virginia Code § 49-6-5(a)(6), circuit courts are directed to terminate
parental rights upon such findings.
This Court reminds the circuit court of its duty to establish permanency for the children.
Rule 39(b) of the Rules of Procedure for Child Abuse and Neglect Proceedings requires:
At least once every three months until permanent placement is achieved as
defined in Rule 6, the court shall conduct a permanent placement review
conference, requiring the multidisciplinary treatment team to attend and report as
to progress and development in the case, for the purpose of reviewing the progress
in the permanent placement of the child.
Further, this Court reminds the circuit court of its duty pursuant to Rule 43 of the Rules of
Procedure for Child Abuse and Neglect Proceedings to find permanent placement for the
children within twelve months of the date of the disposition order. As this Court has stated,
[t]he [twelve]-month period provided in Rule 43 of the West Virginia Rules of
Procedures for Child Abuse and Neglect Proceedings for permanent placement of
an abused and neglected child following the final dispositional order must be
strictly followed except in the most extraordinary circumstances which are fully
substantiated in the record.
Syl. Pt. 6, In re Cecil T., 228 W.Va. 89, 717 S.E.2d 873 (2011). Moreover, this Court has stated
that
[i]n determining the appropriate permanent out-of-home placement of a child
under W.Va.Code § 49-6-5(a)(6) [1996], the circuit court shall give priority to
securing a suitable adoptive home for the child and shall consider other placement
alternatives, including permanent foster care, only where the court finds that
adoption would not provide custody, care, commitment, nurturing and discipline
consistent with the child's best interests or where a suitable adoptive home can not
be found.
Syl. Pt. 3, State v. Michael M., 202 W.Va. 350, 504 S.E.2d 177 (1998). Finally, “[t]he guardian
ad litem's role in abuse and neglect proceedings does not actually cease until such time as the
4
children is placed in a permanent home.” Syl. Pt. 5, James M. v. Maynard, 185 W.Va. 648, 408
S.E.2d 400 (1991).
For the foregoing reasons, we find no error in the decision of the circuit court and the
circuit court’s order is hereby affirmed.
Affirmed.
ISSUED: June 10, 2013
CONCURRED IN BY:
Chief Justice Brent D. Benjamin
Justice Robin Jean Davis
Justice Margaret L. Workman
Justice Menis E. Ketchum
Justice Allen H. Loughry II
5
| {
"pile_set_name": "FreeLaw"
} |
342 S.W.3d 492 (2009)
Wayne B. GILLARD
v.
James A. TAYLOR, et al.
No. W2008-00937-COA-R9-CV.
Court of Appeals of Tennessee, Western Section, at Memphis.
February 19, 2009 Session.
March 18, 2009.
Application for Permission to Appeal Denied by Supreme Court September 28, 2009.
*493 Gary H. Nichols, Michael R. Flynn, Memphis, TN, for Appellant, Nationwide Insurance Company.
Eugene A. Laurenzi, Memphis, TN, for Appellee, Wayne B. Gillard.
OPINION
J. STEVEN STAFFORD, J., delivered the opinion of the court, in which ALAN E. HIGHERS, P.J., W.S. and HOLLY M. KIRBY, J., joined.
Police officer who was injured while driving his patrol car brought this action against his automobile insurer to recover uninsured motorist benefits under his personal policy. The trial court denied insurers' motion for summary judgment, finding that the regular use exception found in the policy was ambiguous. The insurance company appeals. We reverse and remand.
The relevant facts of this case are undisputed. Appellee Wayne Gillard began working as a police officer for the City of Memphis in August of 1999. On April 21, 2002, Officer Gillard was assigned to patrol the 221st Ward in a 1998 Crown Victoria police cruiser (the "Cruiser") owned by the City of Memphis. The record indicates that Officer Gillard would drive the Cruiser whenever it was assigned to him, which was approximately sixty percent of the time. If Officer Gillard was not assigned the Cruiser, he would be assigned another cruiser from the fleet.
On April 21, 2002, during his shift, Officer Gillard's Cruiser was involved in a three-car accident, which was caused by Defendant James Taylor. At the time of the accident, Mr. Taylor was uninsured. As a result of the accident, Officer Gillard sustained injuries to his neck. The City of Memphis paid Officer Gillard's medical expenses in the amount of $41,000, and also paid Officer Gillard his regular salary while he was recuperating.
Following the accident, Officer Gillard gave notice under the uninsured motorist coverage provision of a Nationwide Insurance Company ("Appellant") policy. This policy was held by Officer Gillard's wife's uncle, Purnell Blackwell. Officer Gillard was a named insured on Mr. Blackwell's policy. Nationwide denied coverage to Officer Gillard on grounds that his use of the City of Memphis Cruiser constituted a "regular use" and was therefore excluded from coverage under the Nationwide uninsured motorist policy.
On February 25, 2004, Officer Gillard filed a personal injury lawsuit against Mr. Taylor, and a declaratory judgment action against Nationwide. The declaratory judgment action gives rise to the instant appeal. Nationwide answered the complaint on May 4, 2004, and the trial court issued an order severing the declaratory judgment action from the personal injury suit against Mr. Taylor.
On May 1, 2006, Nationwide filed a motion for summary judgment in the declaratory judgment action. Officer Gillard filed a response in opposition to Nationwide's motion on May 31, 2006. The first hearing on the motion for summary judgment was held on February 23, 2007. The parties were given an opportunity to file supplemental memoranda of law in support of their respective positions on the summary judgment motion. A second hearing was held on April 5, 2007. At this hearing, the trial court again requested more research and advised that judgment would be reserved until further hearing. On June 3, 2007, the parties were again before the *494 court for a hearing on the motion for summary judgment. On August 14, 2007, the trial court entered its order, denying Nationwide's motion for summary judgment. On August 24, 2007, Nationwide filed a motion for interlocutory appeal, which motion the trial court granted by order of November 16, 2007. This Court granted Nationwide's Tenn. R.App. P. 9 application for interlocutory appeal on May 2, 2008.
Nationwide raises two issues for review as stated in its brief:
1. Whether the trial court erred in denying the motion for summary judgment of Nationwide by holding as a matter of law that the regular use exclusion contained in the Nationwide uninsured motorist insurance policy is ambiguous.
2. Whether the trial court erred in holding as a matter of law that the offset provision contained in the Nationwide insurance policy is not applicable to this case.
It is well settled that a motion for summary judgment should be granted when the movant demonstrates that there are no genuine issues of material fact and that the moving party is entitled to a judgment as a matter of law. See Tenn. R. Civ. P. 56.04. The party moving for summary judgment bears the burden of demonstrating that no genuine issue of material fact exists. See Bain v. Wells, 936 S.W.2d 618, 622 (Tenn.1997). On a motion for summary judgment, the court must take the strongest legitimate view of the evidence in favor of the nonmoving party, allow all reasonable inferences in favor of that party, and discard all countervailing evidence. See id. In Byrd v. Hall, 847 S.W.2d 208 (Tenn.1993), our Supreme Court stated:
Once it is shown by the moving party that there is no genuine issue of material fact, the nonmoving party must then demonstrate, by affidavits or discovery material, that there is a genuine, material fact dispute to warrant a trial. In this regard, Rule 56.05 provides that the nonmoving party cannot simply rely upon his pleadings but must set forth specific facts showing that there is a genuine issue of material fact for trial.
Id. at 211 (citations omitted).
Summary judgment is only appropriate when the facts and the legal conclusions drawn from the facts reasonably permit only one conclusion. See Carvell v. Bottoms, 900 S.W.2d 23, 26 (Tenn.1995). Because only questions of law are involved, there is no presumption of correctness regarding a trial court's grant or denial of summary judgment. See Bain, 936 S.W.2d at 622. Therefore, our review of the trial court's grant of summary judgment is de novo on the record before this Court. See Warren v. Estate of Kirk, 954 S.W.2d 722, 723 (Tenn.1997).
In Naifeh v. Valley Forge Life Ins. Co., 204 S.W.3d 758 (Tenn.2006), the Tennessee Supreme Court restated the following principles that guide our courts in the interpretation of an insurance policy:
In interpreting an insurance contract, we must determine the intention of the parties and give effect to that intention. Christenberry v. Tipton, 160 S.W.3d 487, 494 (Tenn.2005); Bob Pearsall Motors, Inc. v. Regal Chrysler-Plymouth, Inc., 521 S.W.2d 578, 580 (Tenn.1975). An insurance policy must be interpreted fairly and reasonably, giving the language its usual and ordinary meaning. Parker v. Provident Life & Acc. Ins. Co., 582 S.W.2d 380, 383 (Tenn.1979). When there is doubt or ambiguity as to its meaning, an insurance contract must be construed favorably to provide coverage to the insured. Christenberry, 160 S.W.3d at 494. However, the contract may not be rewritten by the Court. Id.; *495 see also Tenn. Farmers Mut. Ins. Co. v. Witt, 857 S.W.2d 26, 32 (Tenn.1993).
Naifeh, 204 S.W.3d at 768.
The policy at issue here reads, in relevant part, as follows:
COVERAGE EXCLUSIONS
This coverage does not apply to:
* * *
4. Bodily injury suffered while occupying a motor vehicle:
a. owned by;
b. furnished to; or
c. available for the regular use of you or a relative, but not insured for Auto Liability coverage under this policy. It also does not apply to bodily injury from being hit by any such motor vehicle.
Tenn.Code Ann. § 56-7-1201(a)(2) provides that any named insured may reject uninsured motorist coverage. This provision of the Tennessee Code has been found to be valid and enforceable. See, e.g., Weiss v. State Farm Fire & Cas. Co., 107 S.W.3d 503, 505 (Tenn.Ct.App.2001). In Terry v. Aetna Cas. & Sur. Co., 510 S.W.2d 509 (Tenn.1974), our Supreme Court held that Tennessee's uninsured motorist statutes do not provide for broad coverage, but effectuate a limited and narrow purpose. Id. at 513-14. As discussed by our Supreme Court in Hill v. Nationwide Mut. Ins. Co., 535 S.W.2d 327 (Tenn. 1976):
Authorities accepting the [narrow coverage theory] point out that vehicular liability insurance is ordinarily written upon and follows particular scheduled vehicles. It is not written upon named individuals, and is not like general health or accident insurance coverage. The liability policy covers a scheduled vehicle, and extends its protection, through omnibus clauses, not only to the named insured but to members of his family and other persons using the vehicle with permission, subject to prescribed conditions and exclusions.
Hill, 535 S.W.2d at 330 (footnote omitted). Moreover, this Court has held that a "regular use" exclusion in insurance policies does not contravene public policy. Shepherd v. Fregozo, 175 S.W.3d 209, 217 (Tenn.Ct.App.2005) (citing Sandoz v. State Farm Mut. Auto. Ins. Co., 620 So.2d 441 (La.App. 3 Cir.1993)).
In Shepherd, this Court addressed a factually similar situation to the one at bar, in which a police officer was injured in an automobile accident while on-duty in his assigned cruiser. In affirming the trial court's grant of summary judgment in favor of the insurer on grounds that the regular use exclusion was enforceable, the Shepherd Court stated:
[T]he standard "regular use" exclusion "predates the advent of uninsured motorist coverage, it being born and matured by cases interpreting basically the same exclusionary language as to liability coverage. The Fourth Circuit Court of Appeals provides the readily apparent purpose of the exception, which is standard in automobile liability policies and in policies providing uninsured motorist coverage.
The great weight of authority is in accord with the interpretation of this provision by Judge Chestnut in Aler v. Travelers Indemnity Co., D.C.Md., 92 F.Supp. 620, 623 [(1950)], where he said:
This case involved the construction and application of the so-called "drive other automobiles" clause of the present standard automobile liability policy. The general purpose and effect of this provision of the policy is to give coverage to the insured while engaged in the only infrequent or merely casual *496 use of an automobile other than the one described in the policy, but not to cover him against personal liability with respect to his use of another automobile which he frequently uses or has the opportunity to do so. . . .
Shepherd, 175 S.W.3d at 212 (citing Campbell v. Aetna Cas. & Sur. Co., 211 F.2d 732, 736 (4th Cir.1954)).
The Shepherd Court did much of the work of accumulating and analyzing the relevant case law on regular use exceptions to uninsured motorist coverage, and we quote it extensively:
Further expositive of the "regular use" exclusion in its applicability to the case at bar are those cases where an employer provides a fleet of vehicles which may be randomly assigned to a particular employee. In City of Jackson v. Freeman-Howie, Inc., 239 Miss. 84, 121 So.2d 120 [ (1960) ], the Supreme Court of Mississippi held:
The proof clearly shows that insured's employer furnished for the regular use of insured a truck, either one of about ten, although insured did not regularly use any particular one of the fleet of ten trucks. Two or three trips a week were made by insured as driver of one of the ten trucks of his employer, and he made other trips as helper on one of the trucks. It cannot be said that insured's use of the employer's trucks was other than regular use.
The question narrows to this: Does the term "regular use" in the exclusionary clause refer to one specific automobile? As stated, the obvious purpose of the exclusionary clause is to limit the extension of medical payments coverage to casual or infrequent use of occupancy of automobiles other than the one defined in the policy, in this case the insured's Chevrolet. It is regular use of other automobiles that brings the exclusionary clause into operation, and if insured's employer assigns him one specific automobile for regular use or a number of automobiles, any one of which may be assigned for a particular trip, the result is the same. An automobile is furnished insured "for regular use" in either event. We know of no authority holding to the contrary.
Moore v. State Farm Mutual Automobile Ins. Co., 239 Miss. 130, 121 So.2d 125, 126-27 (1960).
While Tennessee courts have not dealt specifically with a case involving the "regular use" exclusion as it relates to uninsured motorist coverage, this Court has made it clear as to liability coverage that the "regular use" exclusion is applicable and enforceable.
[United Servs. Auto. Ass'n v. Couch, 643 S.W.2d 668 (Tenn.Ct.App.1982)]. . . .
* * *
In sister jurisdictions, a body of law has developed under the "regular use" exclusion as it relates to police vehicles available for regular use to policemen. . . . In O'Brien v. Halifax Ins. Co. of Massachusetts, 141 So.2d 307, Plaintiff was a police officer employed by Ormond Beach, Florida, and was insured as to his personal automobile by the Defendant insurance company. In his work as a police officer, Plaintiff was expected to and did use whichever one of four city-owned cars was assigned to him. While driving one of such vehicles, he was involved in an accident and sustained various personal injuries. He sued his private insurance company for medical benefits under his policy of insurance. The trial court, applying the "regular use" exclusion, directed a verdict for the defendant, and the District Court of Appeals *497 of Florida, relying on Moore v. State Farm Mutual Auto. Ins. Co., 239 Miss. 130, 121 So.2d 125 (1960) affirmed the judgment.
The holding in the Moore case that an exclusionary clause involved in that case, identical to that in the instant case, is not ambiguous when read in conjunction with the general coverage clause, appears to represent the majority opinion in this country, as pointed out by the Louisiana Court of Appeals in an exhaustive discussion of this area of the law in Leteff v. Maryland Casualty Co., 91 So.2d 123 ( [La.App.] 1956). . . .
O'Brien v. Halifax Ins. Co. of Mass., 141 So.2d 307, 308 (Fla.Dist.Ct.App.1962). Galvin v. Amrica Mutual Ins. Co., 11 Mass.App.Ct. 457, 417 N.E.2d 34 (1981) is a case that on its facts closely parallels the case at bar. Galvin was a Boston police officer who owned a personal vehicle insured by Amica Mutual Insurance Company. His policy included uninsured motorist coverage. While on duty and operating his police cruiser, he was involved in a collision. . . . He brought suit against Amica under his uninsured motorist coverage, and the insurer denied coverage under the "regular use" exclusion in the policy. The particular cruiser that Galvin was driving was one of a pool of twelve or more Boston police cruisers which could have been assigned to Galvin at random on any given duty shift. . . .
The trial court entered judgment for the defendant, and the Court of Appeals affirmed and stated the following:
Galvin's counsel contends that the language of the regular use exclusion, "an auto ... regularly used by you," should be taken as referring only to a particular vehicle and not to all the vehicles in a pool of vehicles regularly available to the insured motorist. We do not agree and see no ambiguity in the words used. A heavy majority of the decision elsewhere interpret such words (in closely similar policy language) as treating all motor vehicles in a pool, any one of which is available to the person insured, as within the regular use exclusion. The authorities are collected in 13 Couch §§ 45:1050 to 45:1065, especially §§ 45:1055 and 45:1059 (1965 & Supp. 1980). See Annot. 86 A.L.R.2d 937, especially § 7(b).
One decision elsewhere upon the regular use exclusion is very close on its facts to the present case. See Kenney v. Employers' Liab. Assur. Corp., 5 Ohio St.2d 131, 132, 134-135, 214 N.E.2d 219 (1966). There, as in this case, a policeman was injured in one of several cruisers available in a pool. The policeman was not allowed to recover under his own policy. The opinion (at 134-135 [214 N.E.2d 219]) said, "[O]n the facts of this case, we do not believe that the words `an automobile. . . furnished for the regular use' of plaintiff are ambiguous or can reasonably be interpreted so as not to describe the cruiser in which plaintiff was riding at the time of his injury. . . . In order to be excluded under this exclusionary clause, an automobile need not be a single particular automobile regularly furnished to the named insured. Thus it is well settled that an automobile will be excluded under such policy provisions although it is only one of a group of automobiles from which an automobile is regularly furnished to the named insured by his employer. . . ."
Galvin v. Amica Mut. Ins. Co., 11 Mass. App.Ct. 457, 417 N.E.2d 34, 35-37 *498 (1981). (footnotes omitted [and additional citations].).
Shepherd, 175 S.W.3d at 212-16.
In United Servs. Auto. Ass'n v. Couch, 643 S.W.2d 668 (Tenn.Ct.App.1982), United Services Automobile Association issued a liability insurance policy to Ms. Couch on her vehicle. Her son, who lived with her, was operating a non-owned vehicle, which was provided to him by his employer, when he was involved in an accident. The trial court declared coverage, finding that the son's use of the work vehicle was not contemplated in the regular use exclusion of the policy. On appeal, this Court reversed the trial court, finding that it was clear that the automobile driven by the son was used by him in his work on a regular basis. This Court reasoned:
The issue of regularity hinges not so much upon the regularity of the working time of the operator, but upon the regularity with which the vehicle was furnished or available. In the present case, it is uncontroverted that the vehicle was regularly, i.e., constantly, available to the employees of Mr. Canterbury, including William Couch, III, when he was on duty. In this sense, the vehicle was regularly available to Couch within the meaning of the policy exclusion.
Couch, 643 S.W.2d at 672.
In Murphy v. Chadwell, No. 02A01-9705-CV-00105, 1998 WL 117407 (Tenn. Ct.App. Mar. 17, 1998), the plaintiff was injured when she was involved in an automobile accident with the defendant, who was uninsured. Id. at *1. In Murphy, as in the case at bar, the plaintiff argued that the term "regular use" was ambiguous and created a genuine issue of material fact. Id. at *4. Although we noted that authority concerning the definition of "regular use `is scant,'" relying upon both Couch and Moore, we found that the term "regular use" as used in an uninsured motorist policy is unambiguous. Id. at *5.
In the recent case of Hostottle v. Nationwide Mut. Ins. Co., No. 89036, 2007 WL 3203063 (Ohio Ct.App. 8 Dist. Nov. 1, 2007), the Ohio Court of Appeals addressed the meaning of the term "regular use" in a Nationwide uninsured motorist insurance policy. Relying upon prior case law, the Ohio Court noted that the term "regular use" has been defined as "frequent, steady, constant or systematic." Id. at *2. The Hostottle Court concluded that a police officer's use of a police car nearly every day he worked constituted regular use, so as to fall within the exception in the policy. Id. at *4. Consequently, the court reversed the trial court's denial of Nationwide's motion for summary judgment, seeking to have uninsured motorist coverage denied. Id.
In a recent Pennsylvania case, the Superior Court concluded that the term "regular use" in an uninsured motorist policy was not ambiguous and that the words "suggest a principal use as distinguished from a casual or incidental use." Brink v. Erie Ins. Group, 940 A.2d 528, 532 (Pa.Super.2008).
Tennessee courts have similarly defined the term. In United Servs. Auto. Ass'n v. Couch, 643 S.W.2d 668 (Tenn.Ct.App.1982), we stated:
Definitions of the word, "regular" include:
3a steady or uniform in course, practice or occurrence; not subject to unexplained or irrational variation; steadily pursued; orderly, methodical.
b (1) returning, recurring or received at stated, fixed or uniform intervals, (2) functioning at uniform intervals,
4a constituted, selected, made or otherwise handled in conformity with established *499 or prescribed usages, rules or discipline.
(Webster's Third International Dictionary, Unabridged.)
Steady or uniform in course, practice or occurrence; not subject to unexplained or irrational variation. [Rooney] Rodney v. City of Omaha, 104 Neb. 260, 177 N.W. 166 [ (1920) ]. Made according to rule, duly authorized, formed after uniform type, built or arranged according to established plan, law or principle. Merchants' Nat. Bank of Los Angeles v. Continental Nat. Bank of Los Angeles, 98 Cal.App. 523, 277 P. 354, 361 [(1929) ]. Antonym of "casual" or "occasional." Palle v. Industrial Commission, 79 Utah 47, 7 P.2d 284, 290, 81 A.L.R. 1222 [ (1932) ].
(Black's Law Dictionary Fourth Edition)
Couch, 643 S.W.2d at 671-72.
Black's Law Dictionary defines "regular use," as used in an insurance policy context, to be "[a] use that is usual, normal, or customary, as opposed to an occasional, special, or incidental use." Black's Law Dictionary,1540-41 (7th ed.1999). This definition succinctly states the meaning of "regular use," and comports with other definitions set out in the previously decided cases. Because of its plain and simple language, we adopt the Black's Law Dictionary definition of "regular use."
The question now becomes whether Officer Gillard's particular use of the Cruiser constitutes "regular use" under the above definition. At his deposition, Officer Gillard testified, in relevant part, as follows:
Q. How many times a month were you assigned that vehicle [i.e., the Cruiser] in January, February, March, April of 2002?
A. I would say about 60 percent.
Q. If you weren't assigned that vehicle were you assigned another vehicle in the pool?
A. Yes.
Q. Was there any other particular vehicle that you were assigned?
A. No.
Q. Is there any general custom that takes place in the Memphis Police Department regarding assignment of vehicles? What I mean by custom is are they assigned on a seniority basis, on regularity of use? Is there any custom whatsoever on assignment?
A. They are assigned to a ward.
Q. On each day when you reported to work in 2002 were you assigned some vehicle from that ward?
A. Yes.
Q. And that vehicle was provided to you by the City of Memphis?
A. Yes.
Q. And it was provided to you for your use [in] your employment as a police officer?
A. Yes.
* * *
Q. Was there any day when you weren't assigned to a vehicle.
A. No.
Q. Was that vehicle assigned to you only when you were on the [job]?
A. Yes.
Q. Was the vehicle returned after each shift?
A. Yes.
From this testimony, we conclude that a reasonable jury could only find that Officer Gillard's use of the Cruiser meets the definition of regular use set out above. By his own testimony, Officer Gillard was assigned a vehicle from the fleet every day that he was on duty. His use of a fleet *500 vehicle, therefore, was "usual, normal, [and] customary, as opposed to occasional, special, or incidental." Based upon our discussion above, the fact that Officer Gillard was assigned a different vehicle approximately forty percent of the time, does not negate a finding of "regular use." As stated by this Court in Shepherd, "`it is regular use of other automobiles that brings the exclusionary clause into operation, and if insured's employer assigns him one specific automobile for regular use or a number of automobiles, any one of which may be assigned for a particular trip, the result is the same. An automobile is furnished insured `for regular use' in either event. We know of no authority holding to the contrary.'" Shepherd v. Fregozo, 175 S.W.3d at 213 (quoting Moore v. State Farm Mut. Auto. Ins. Co., 239 Miss. 130, 121 So.2d 125, 126-27 (1960)). Consequently, we find that the trial court erred in denying Nationwide's motion for summary judgment.
Because we have determined that the Nationwide policy does not provide coverage to Officer Gillard in this case, we decline to address Nationwide's second issue.
For the foregoing reasons, we reverse the order of the trial court, and remand the case for entry of an order granting summary judgment in favor of Nationwide. Costs of this appeal are assessed against the Appellee, Wayne B. Gillard, for which execution may issue if necessary.
| {
"pile_set_name": "FreeLaw"
} |
Error: Couldn't open file '/var/www/court-listener/alert/assets/media/pdf/2009/12/15/Arnesen_v._DVA.pdf': No such file or directory.
| {
"pile_set_name": "FreeLaw"
} |
443 B.R. 698 (2011)
In re Kiya CARMICHAEL, Debtor(s).
Deutsche Bank National Trust Company, as Trustee of Ameriquest Mortgage Securities, Inc., Asset Backed Pass Through Certificates, Series 2005-R5 Under the Pooling and Servicing Agreement Date as of June 1, 2005, Without Recourse, Plaintiff(s)
v.
Damion Carmichael and Kiya Carmichael, Defendant(s).
Bankruptcy No. 10-10943-SR. Adversaiy No. 10-193.
United States Bankruptcy Court, E.D. Pennsylvania.
February 1, 2011.
*700 Laura E. Vendzules, Esquire, Jesse N. Silverman, Esquire, Dilworth Paxson LLP, Philadelphia, PA, for Deutsche Bank.
Robert B. Eyre, Esquire, A. Jordan Rushie. Esquire, Foehl & Eyre, P.C., Media, PA, George Conway, Esquire, Office of the United States Trustee, Philadelphia PA, for Damion and Kiya Carmichael.
OPINION
STEPHEN RASLAVICH, Chief Judge.
Introduction
Before the Court is Plaintiff Deutsche Bank's Motion for Summary Judgment. It is opposed by the Defendants who are the debtors in this bankruptcy case. Briefs were submitted. The Court next took the motion under advisement. For the reasons which follow, the Motion for Summary Judgment will be granted.
*701 Procedural Background
This matter began in state court where Deutsche filed a Complaint in Mortgage Foreclosure. A default judgment was entered and then opened. Debtors filed an Answer and New Matter to which Plaintiffs filed a reply. The New Matter consists of an affirmative defense which makes up the thrust of their opposition.
Bankruptcy Filing and Removal
Before the state court ruled on the summary judgment motion, Debtors filed bankruptcy and removed the matter to this court. The parties have filed supplemental briefs but, for the most part, the record is as it was before the state court of Common Pleas.[1]
Standard for Summary Judgment
Motions for summary judgment are governed by Rule 1035.1 et seq. of the Pennsylvania Rules of Civil Procedure ("Pa.R.Civ.P."). Rule 1035.2 states that
After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law
(1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report, or
(2) if, after the completion of discovery relevant to the motion, including the production of expert reports, an adverse party who will bear the burden of proof at trial has failed to produce evidence of facts essential to the cause of action or defense which in a jury trial would require the issues to be submitted to a jury.
Pa.R.C.P. 1035.2. Where such a motion is opposed, Rule 1035.3 provides, in pertinent part:
(a) Except as provided in subdivision (e), the adverse party may not rest upon the mere allegations or denials of the pleadings but must file a response within thirty days after service of the motion identifying
(1) one or more issues of fact arising from evidence in the record controverting the evidence cited in support of the motion or from a challenge to the credibility of one or more witnesses testifying in support of the motion, or
(2) evidence in the record establishing the facts essential to the cause of action or defense which the motion cites as not having been produced.
Pa.R.C.P. 1035.3. Both the motion and any response may be supported by affidavits of persons competent to testify thereon. Pa.R.C.P. 1035.4. In sum, where there is no genuine issue of material fact and the moving party is entitled to relief as a matter of law, summary judgment may be entered. Where the non-moving party bears the burden of proof on an issue, he may not merely rely on his pleadings or answers in order to survive summary judgment. Failure of a non-moving party to adduce sufficient evidence on an issue essential to his case and on which he bears the burden of proof establishes the entitlement of the moving party to judgment as a matter of law. The court will view the record in the light most favorable to the non-moving party, and all doubts as to the existence of a genuine issue of material fact must be resolved against the moving party. Evans v. Sodexho, 946 A.2d 733, 737-738 (Pa.Super.2008), quoting Murphy v. Duquesne Univ. of the Holy *702 Ghost, 565 Pa. 571, 777 A.2d 418, 429 (Pa.2001) (internal citations and quotation marks omitted).
Summary Judgment in Mortgage Foreclosure
The Court turns first to what is required for a movant to be entitled to summary judgment in mortgage foreclosure. Entry of summary judgment is appropriate in a mortgage foreclosure action where mortgagors "admit that the mortgage is in default, that they have failed to pay interest on the obligation, and that the recorded mortgage is in the specified amount." Cunningham v. McWilliams, 714 A.2d 1054, 1057 (Pa.Super.1998) (citing Landau v. Western Pennsylvania National Bank, 445 Pa. 217, 225-26, 282 A.2d 335, 340 (1971)). Additionally, averments in a responsive pleading are deemed admitted when not denied specifically or by necessary implication. Pa.R.C.P. 1029(b); see also Cercone v. Cercone, 254 Pa.Super. 381, 387, 386 A.2d 1, 3 (1978) (finding defendant was required to specifically deny factual allegations in complaint where defendant is in position to know truth or falsity of allegation). A general denial or demand for proof will be deemed an admission. Id. More specifically, in a mortgage foreclosure action, the mortgagors, aside from the mortgagee or assignee, are the only parties with sufficient knowledge to base a specific denial. New York Guardian Mort. Corp. v. Dietzel, 362 Pa.Super. 426, 429, 524 A.2d 951.
Attached in support of Deutsche's Motion is the Affidavit of Kathy Sath [?][2], Vice President and Assistant Secretary of CitiResidential Lending, as Attorney in Fact for the movant. The affiant states from personal knowledge that the mortgage is held by Deutsche pursuant to a Pooling and Services Agreement dated June 1, 2005 (Affidavit, ¶ 4);[3] that the underlying loan is in default because no monthly payments of interest or principal have been made since March 1, 2007 (Id., ¶ 5); and that Defendants were consequently given the requisite notice of Deutsche's intention to foreclose under Pennsylvania law (the Act 91 Notice) (Id., ¶ 6). How do they Defendants respond?
Originally, the Defendants had challenged Deutsche standing to foreclose, but they subsequently withdrew that challenge. See Brief in support of Cross-Motion, 11; Debtors' Supplemental Brief, 3. Here they offer no evidence that disputes any of the foregoing. Instead, they question the affiant's competence to testify. They explain that she is employed by CitiResidential Lending as opposed to either AMC or Deutsche. What the Court observes, however, is that the CitiResidential is described as attorney in fact. In other words, CitiResidential is acting on behalf of Deutsche. See PXRE Corp. v. Terra Nova Ins. Co. Ltd., 76 Fed.Appx. 485, 492 (3d Cir.2003)("The American and English Encyclopedia of Law (2d Ed.) vol. 3, p. 281, defines an attorney in fact as `any private or special agent appointed for some particular or definite purpose not connected with a proceeding at law, by formal authority, called a letter or power of attorney, in which is expressed the particular act or acts for which he is appointed and the extent of his authority.'") But more to the point, Defendants have already *703 admitted in their Answer the crucial facts upon which the affiant would testify: i.e., that, indeed, they have not made a mortgage payment since March 1, 2007. See Answer, ¶ 5. As for evidence of their own, the Defendants offer only the Affidavit of their counsel, Mr. Eyre. That affidavit does no more than recite the basis for their affirmative defense, infra, that Deutsche cannot claim to be a holder in due course. It is to that defense to which the Court now turns.
Debtors' Affirmative Defense in Context
Defendants contend that at the loan's inception, AMC induced them to sign the mortgage note with fraudulent representations. Although Deutsche was not the original lender who made the loan, Debtors go on, they may raise their fraud claim against Deutsche's foreclosure complaint.
Were it framed as a counterclaim, such a claim would not be allowed in this context. A defendant in a mortgage foreclosure action can only raise counterclaims which arise from the same transaction or occurrence from which the plaintiff's action arose. See Pa.R.C.P. 1148. That rule, however governs only counterclaims in mortgage foreclosure action and does not apply to new matter. See First Wisconsin Trust Co. v. Strausser, 653 A.2d 688, 692-693, 439 Pa.Super. 192, 200-201 (Pa.Super.1995).
Deutsche's Response
Deutsche does not dispute the Defendant' claim of fraud with regard to certain representations that the original lender, Ameriquest, may have made. Deutsche's position is that it was not aware of such claims when it purchased the loan from Ameriquest. As a result, Deutsche maintains that it is a holder in due course immune from the Debtors' fraud claims.
The FTC Holder Rule
As a threshold matter, the Defendants assert that Deutsche is precluded from raising defenses under applicable federal regulations. They refer here to the FTC Holder Rule:
In connection with any sale or lease of goods or services to consumers, in or affecting commerce as "commerce" is defined in the Federal Trade Commission Act, it is an unfair or deceptive act or practice within the meaning of section 5 of that Act for a seller, directly or indirectly, to:
a. Take or receive a consumer credit contract which fails to contain the following provision in at least ten points, bold face, type:
NOTICE
ANY HOLDER OF THIS CONSUMER CREDIT CONTRACT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE DEBTOR COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED PURSUANT HERETO OR WITH THE PROCEEDS HEREOF. RECOVERY HEREUNDER BY THE DEBTOR SHALL NOT EXCEED AMOUNTS PAID BY THE DEBTOR HEREUNDER.
or,
b. Accept, as full or partial payment for such sale or lease, the proceeds of any purchase money loan (as purchase money loan is defined herein), unless any consumer credit contract made in connection with such purchase money loan contains the following provision in at least ten point, bold face, type:
[same as above].
16 C.F.R. § 433.2 (2005). However, the FTC Holder Rule, by its terms, does not apply to mortgage loans for the purchase of real estate, as in this case. See 41 F.R. 20024 (Friday, May 14, 1976) (excluding purchases of real estate from affected transaction); see also In re Woodsbey, 375 B.R. 145, 149-150 (Bankr.W.D.Pa.2007) *704 citing Kaliner v. MERS (In re Reagoso), 2007 WL 1655376 at *6 (Bankr.E.D.Pa., June 6, 2007) citing Johnson v. Long Beach Mortg. Loan Trust 2001-4, 451 F.Supp.2d 16, 55 (D.D.C.2006). Therefore, Defendants may not rely on that rule in attempting to assert set-offs or recoupment as against Deutsche Bank for the claims they have against the original lender. It will be state law which determines what defenses the Defendants may raise as to Deutsche's foreclosure rights.
Holder in Due Course Under Pennsylvania Law
Pennsylvania law does recognize that a holder of commercial paper may raise a defense of good faith. Deutsche asserts innocence as to any claims of fraud which the Debtor would have against the original lender, here, AMC. As a holder in due course, Deutsche declares, it is not vicariously liable for its predecessor's torts. A determination of whether Deutsche has established such status follows.
Mortgage Loan as Negotiable Instrument
The threshold requirement for holder in due course (HDC) status is that the party asserting that defense be a holder of a negotiable instrument. Thus, the first element for the present analysis is whether what Deutsche holds is a negotiable instrument. A negotiable instrument is defined as
[] an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order, if it:
(1) is payable to bearer or to order at the time it is issued or first comes into possession of a holder;
(2) is payable on demand or at a definite time; and
(3) does not state any other undertaking or instruction by the person promising or ordering payment to do any act in addition to the payment of money, but the promise or order may contain:
(i) an undertaking or power to give, maintain or protect collateral to secure payment;
(ii) an authorization or power to the holder to confess judgment or realize on or dispose of collateral; or
(iii) a waiver of the benefit of any law intended for the advantage or protection of an obligor.
13 Pa.C.S.A. § 3104(a). Defendants say that a mortgage cannot be a negotiable instrument. Defendants' Brief, 7. However, it is not a mortgage which Deutsche holds, but a promissory note. The mortgage serves to secure that note. Under Pennsylvania law, a promissory note accompanied by a mortgage may be a negotiable instrument. Mellon Bank, N.A. v. Ternisky, 999 F.2d 791, 796 (4th Cir.1993) (applying Pennsylvania law to hold that mortgagee was holder in due course).
Is Deutsche a Holder in Due Course?
Having determined that the note is a negotiable instrument, the Court turns to whether the record demonstrates that Deutsche acquired the note in good faith (i.e., in due course). The circumstances which indicate innocence are as follows:
(1) the instrument when issued or negotiated to the holder does not bear such apparent evidence of forgery or alteration or is not otherwise so irregular or incomplete as to call into question its authenticity; and
(2) the holder took the instrument:
(i) for value;
(ii) in good faith;
(iii) without notice that the instrument is overdue or has been dishonored or that there is an uncured default with respect to payment of another instrument issued as part of the same series;
*705 (iv) without notice that the instrument contains an unauthorized signature or has been altered;
(v) without notice of any claim to the instrument described in section 3306 (relating to claims to an instrument); and
(vi) without notice that any party has a defense or claim in recoupment described in section 3305(a) (relating to defenses and claims in recoupment).
13 Pa.C.S.A. § 3302(a).
There is no allegation of forgery or alteration (subsection (a)(1)). Likewise, the PSA demonstrates that Deutsche took the loan for value and in good faith (subsection (a)(2)(i), (ii)). Defendants contend that Deutsche's innocence is in question when considering ¶ 2(iii) above. By the time of the assignment, they explain, the loan was already nine months in default. Defendants' Brief in Opposition to Summary Judgment, 3. Deutsche contests that premise arguing that the assignment occurred at least two years earlier. What does the record show?
Debtors' Defaults/Deutsche's Knowledge
In April 2005, the mortgage loan in question was made by Ameriquest Mortgage Company (AMC) to the Defendants. This much is admitted. See Answer to Foreclosure Complaint, ¶ 3. To demonstrate when Deutsche obtained the loan, Deutsche offers the Affidavit of Ronaldo R. Reyes, V.P. According to Mr. Reyes, AMC, Ameriquest Mortgage Services (AMS), and Deutsche entered into a Pooling and Services Agreement (PSA) on June 1, 2005. Reyes Affidavit, ¶ 7. Pursuant to the PSA, AMC sold the Debtors' loan to AMS which immediately conveyed the loan to Deutsche. Id., ¶¶ 11-17. Along with the loan, the PSA provided that AMS would also deliver to Deutsche "an original Assignment assigned in blank" as well as any "original recorded intervening assignment or complete chain of assignment from the original to the person assigning the mortgage to Deutsche." Id., ¶ 13 quoting PSA, § 2.01(iii), (iv).[4] Although the Assignment from AMC to Deutsche would not be recorded until 3 months after Deutsche filed this foreclosure complaint, the PSA had already conveyed the Debtors' mortgage loan from AMC to AMS and then on to Deutsche 2½ years earlier. For that reason, the Court finds that Deutsche took the loan well before it ever went into default. Accordingly, the Court finds Deutsche to have been a holder in due course.
Defenses to HDC Status
Yet even a holder in due course is susceptible to certain prescribed defenses of an obligor/borrower. Section 3305 provides, in pertinent part:
(b) Right of holder in due course to enforce obligation.The right of a holder in due course to enforce the obligation of a party to pay the instrument is subject to defenses of the obligor stated in subsection (a)(1), but is not subject to defenses of the obligor stated in subsection (a)(2) or claims in recoupment stated in subsection (a)(3) against a person other than the holder. 13 Pa.C.S.A. § 3305(b) (emphasis added). The defenses stated in subsection (a)(1) are:
(1) a defense of the obligor based on:
(i) infancy of the obligor to the extent it is a defense to a simple contract;
(ii) duress, lack of legal capacity or illegality of the transaction which, under other law, nullifies the obligation of the obligor;
(iii) fraud that induced the obligor to sign the instrument with neither knowledge *706 nor reasonable opportunity to learn of its character or its essential terms; or
(iv) discharge of the obligor in insolvency proceedings;
13 Pa.C.S.A. § 3305(a)(1). Which of those defenses, if any, might apply?
As it turns out, none. There is no claim of infancy, duress or other lack of legal capacity. Neither is there raised a discharge of the obligation. That leaves the fraud defense in subparagraph (iii). This provision does not include fraud in all its forms: it draws a distinction between certain types of fraud-based defenses. Subsection (a)(1)(iii) thus preserves as against the HDC on the claim of fraud that is alleged to have occurred in the execution of the instrument, i.e., fraud in factum. Therefore, it precludes other frauds such as a fraudulent inducement to enter into the transaction. See In re Balko, 348 B.R. 684, 698 n. 18 (Bankr.W.D.Pa.2006) (explaining that fraud in the inducement is not a real defense to a holder in due course); Exchange Intern. Leasing Corp. v. Consolidated Bus. Forms Co., Inc., 462 F.Supp. 626, 628 (W.D.Pa.1978) ("Under Pennsylvania only fraud in the factum as opposed to fraud in the inducement, is a defense to a holder in due course"); Equitable Discount v. Fischer, 12 Pa. D. & C.2d 326, 329-330 (1957); Catasauqua Nat. Bank v. Miller, 60 Pa.Super. 220, 1915 WL 4398 at *3 (Pa.Super.) ("The great fabric of commercial business in this country rests largely upon the proposition, long recognized and everywhere accepted, that a negotiable note is `a courier without luggage,' and that innocent holders for value, who take such paper in due course of business, are not to be bound or affected by any secret equities between the maker of such paper and the payee named."); Ternisky, supra, 999 F.2d at 796 (applying Pennsylvania law to hold that where bank held mortgage in due course purchaser could not raise defense of fraud in the inducement); cf. Mellon Bank, N.A. v. Pasqualis-Politi, 800 F.Supp. 1297, 1302 (W.D.Pa. 1992) (holding that fraud in the inducement could not be asserted a defense of recoupment against judgment of mortgage foreclosure, where fraudulent inducement was not part of or incident to creation of mortgage). As it turns out, the fraud claim which the Defendants would impute to Deutsche consists of a claim of fraudulent inducement. They maintain that they were fraudulently persuaded to refinance their mortgage loan based on representations that if it would be beneficial for them to refinance, then they would later be permitted to refinance notwithstanding the existence of a prepayment penalty in the note. Simply put, these claims may not be raised as to Deutsche, but they are in no way barred as to AMC, the original lender.
UTPCPL
In addition to the fraud in the inducement claim, Defendants raise the affirmative defense of state consumer protection law, the Unfair Trade Practices and Consumer Protection Law[5] (New Matter, ¶¶ 71 to 74). The UTPCPL protects consumer against unfair or deceptive practices[6] and is thus akin to the fraud in the inducement claims discussed, supra. Indeed, the Defendants' claim even used the predicate "induced" to explain how they were allegedly lured into the mortgage with AMC in the first place. See ¶ 72. Accordingly, they would likewise be subject to the holder in due course defense. See also In re Reagoso, supra at *6 citing State Street Bank & Trust Co. v. Strawser, 908 F.Supp. 249, 252 (M.D.Pa. 1995).
*707 Breach of Contract
Additionally, Defendants construe the same facts which support their fraud in the inducement claims as a breach of contract (New Matter, ¶¶ 75 to 80). They are referring here to certain alleged promises made by an AMC representative with regard to the note's prepayment penalty. Defendants maintain that AMC assured them that in the event that they needed to refinance the note, then such prepayment penalty would be waived. In other words, the original parties to the loan contract (i.e., AMC and the Defendants) orally modified one of its terms and that AMC breached that oral argument. Defendants argue that such breach should be enforced against Deutsche. Is such a claim likewise barred against an HDC?
It is. To repeat, § 3305(b) specifically provides that "[t]he right of a holder in due course to enforce the obligation of a party to pay the instrument is ... not subject to the defenses of the obligor stated in subsection (a)(2) ..." 13 P.S. § 3305(b). The defenses of subsection (a)(2) are:
a defense of the obligor stated in another section of this division[7] of the obligor or a defense that would be available if the person entitled to enforce the instrument were enforcing a right to payment under a simple contract
13 Pa.C.S.A. § 3305(a)(2). The Comment to subsection (a)(2) explains:
Subsection (a)(2) states other defenses that, pursuant to subsection (b), are cut off by a holder in due course. These defenses comprise those specifically stated in Article 3 and those based on common law contract principles. Article 3 defenses are nonissuance of the instrument, conditional issuance, and issuance for a special purpose (Section 3-105(b)); failure to countersign a traveler's check (Section 3-106(c)); modification of the obligation by a separate agreement (Section 3-117); payment that violates a restrictive indorsement (Section 3-206(f)); instruments issued without consideration or for which promised performance has not been given (Section 3-303(b)), and breach of warranty when a draft is accepted (Section 3-117(b)).
Milton v. Wilshire Credit Corporation (In re Milton), 2005 WL 6508305 at *10-11 (Bankr.E.D.Pa., July 26, 2005) quoting 13 Pa.C.S.A. § 3305 Uniform Commercial Code-Comment 1990 (emphasis added). The subsection renders the HDC immune from breach of contract claims. Any promise or agreement by AMC to waive the prepayment penalty which it later would not honor is just such a claim. As such, it may not be raised as a defense to Deutsche's enforcement of the note. In sum, none of the causes of action raised in Defendants' New Matter are viable as to Deutsche.
Miscellaneous Defenses
Lastly, Defendants also raise a series of other defenses and challenges in their New Matter. They question the reasonableness of the itemized attorney's fee in the Complaint, the assessment of late charges, and raise other common law defenses (e.g., estoppel, unclean hands (equity) and lack of consideration.) See New Matter, ¶¶ 81-86. A defendant has the burden of proof as to new matter. See Speight v. Mahalis, 8 Pa. D. & C. 5th 49, 58, 2008 WL 6581343 (May 28, 2008, Pa. Com.Pl.) These Defendants have offered no evidence or authority in support of these specified defenses.[8]
*708 Summary
Based on the evidence offered by Deutsche and the lack of any contrary evidence from Defendants, Deutsche is entitled to a judgment in mortgage foreclosure. Nothing in the Court's ruling, however, constitutes an adjudication on the merits of Defendants' fraud claim against Ameriquest Mortgage Company.
An appropriate Order follows.
ORDER
AND NOW, upon consideration of Deutsche Bank's Motion for Summary Judgment, the Defendants' Response, after hearing held, and for the reasons set forth in the attached Opinion, it is hereby
ORDERED, that the Motion for Summary Judgment will be granted in favor of Deutsche Bank and against the Defendants.
NOTES
[1] Neither party contends that a mortgage foreclosure proceeding is within this Court's core jurisdiction. Notwithstanding, Deutsche has filed a statement pursuant to Bankruptcy Rule 9027(e)(3) agreeing to the entry of a final order in this non-core matter.
[2] Nowhere is this affiant's name typed out; only a signature appears at the end of the document. Therefore, the Court does its best in reciting what it believes to be the affiant's last name.
[3] The recording of that mortgage did not occur until 3 months after the foreclosure complaint was filed. Defendants initially objected to Deutsche's status as a real party in interest to foreclose but has since withdrawn that argument based on controlling Pennsylvania law. See Defendants' Supplemental Brief, 3.
[4] Although the Reyes Affidavit did not attach a copy of the PSA, the Defendants' Cross-Motion does. See Cross-Motion, Ex. 2. It contains the quoted provision.
[5] 73 P.S. § 201-1 et seq.
[6] 73 P.S. § 201-3.
[7] This refers to Division 3. Negotiable Instruments, of Title 13, Commercial Code of Purdon's Pennsylvania Statutes and Consolidated Statutes.
[8] With regard to the claim of excessive attorney's fees, the Court observed that Deutsche correctly sets forth the law of the Commonwealth of Pennsylvania on the point: See 15 Pa.Prac. § 4:9 (observing that an attorney's fee provision in a mortgage must be reasonable); see also Warden v. Zanella, 283 Pa.Super. 137, 140, 423 A.2d 1026, 1028 (1980) (same); Eastgate Enterprises, Inc. v. Bank & Trust Co. of Old York Road, 236 Pa.Super. 503, 504, 345 A.2d 279, 280 (1975) (same). An attorney's fee of 5% has consistently been held to be fair and reasonable. See, e.g., First Federal Savings & Loan Ass'n v. Street Road Shopping Center, Inc., 68 Pa. D. & C.2d 751, 756 (Bucks County, 1975) (citing cases); see also Phila. Accep. Corp. v. Krapf, 35 Pa. D. & C.3d 101, 105 (1984) (finding that in a mortgage foreclosure action, an attorney's fee in the amount of ten percent of original principal borrowed due on a mortgage is a reasonable commission where the attorney has to prepare and file a complaint, respond to new matter, engage in routine discovery and attend a one-half day trial).
| {
"pile_set_name": "FreeLaw"
} |
800 F.Supp.2d 970 (2011)
MIDTRONICS, INC., et al., Plaintiffs,
v.
AURORA PERFORMANCE PRODUCTS LLC, etc., et al., Defendants.
No. 06 C 3917.
United States District Court, N.D. Illinois, Eastern Division.
August 3, 2011.
*971 H. Roderic Heard, Barnes & Thornburg LLP, Chicago, IL, Robert L. Wagner, Picadio Sneath Miller & Norton, P.C., Pittsburgh, PA, for Plaintiffs.
Michael M. de Angeli, Jamestown, RI, Patrick J. Kelleher, Drinker Biddle & Reath LLP, Chicago, IL, for Defendants.
FINDINGS OF FACT AND CONCLUSIONS OF LAW
MILTON I. SHADUR, Senior District Judge.
On July 11, 2008 this Court issued its memorandum opinion and order ("Opinion," 2008 WL 2745941) reflecting its Markman analysis that construed language contained in various claims of United States Patent 5,821,756 (the "'756 Patent") owned by plaintiff Midtronics, Inc. ("Midtronics") and still in suit here.[1] Extensive further litigative activity by the parties culminated in a four-day bench trial on the merits at the beginning of 2011.
Regrettably, since then this Court's unavoidably extensive and ongoing necessity to deal with other cases on its calendar, often (though not always) of an emergent nature, has prevented it from devoting the type of undivided attention required for the in-depth review and analysis essential to resolution of the complex and technical issues posed by the trial. But fortuitously the unanticipated postponement of two successive scheduled trialsinitially the resetting of a trial that had been set to begin on August 15 and then the forced deferral of the trial that had been scheduled to begin on August 1[2]has enabled *972 this Court to go forward with its resolution of this case now.
This litigation has been conducted by able and experienced counsel on both sides from the outset, and that has continued through the trial and the post-trial submission of detailed proposed findings of fact ("Findings") and conclusions of law ("Conclusions") by each, comprising fully 45 pages and 204 paragraphs on Midtronics' part and 43 pages and 248 paragraphs on defendants' part. In its more than three decades on the bench this Court has never before adopted a litigant's proposed Findings and Conclusions in fullinstead it has always made extensive revisions and rewrites to generate what is clearly its own work product (although that process, of course, typically uses the submissions of the prevailing party's qualified counsel as the takeoff point en route to this Court's final product).
This case, however, has generated the exception that proves the rule. For this Court to recast the excellent submission by Midtronics' counsel, creating a revised set of Findings and Conclusions just to demonstrate that it has given full consideration to the issues, would frankly be make-work, undertaken only to confirm that this Court has indeed given such comprehensive consideration to the competing submissions (as it has). This opinion will instead expressly adopt Midtronics' skillful and persuasive Revised Proposed Findings of Fact and Conclusions of Law,[3] setting out here an abbreviated recapitulation of the proposed Findings and Conclusions that have led this Court to rule in Midtronics' favor in all respects. From a procedural point of view, this treatment is intended to conform to the directive prescribed by Fed. R.Civ.P. ("Rule") 52(a)(1).
To begin with, neither side has challenged this Court's resolution of their competing contentions as to claim construction as set out in the Markman Opinion and as accurately summarized at M. Findings 37-43. Nor, of course, are the parties' respective presentations of background matters meaningfully different, although Midtronics' opening Findings 1-36 are more fully attuned to serve as a springboard for what follows here.
First as to infringement, M. Findings 44-104 provide chapter and verse to confirm that defendants' Accused Products (defined in M. Finding 47) contain every limitation of Claims 1 through 4 of the '756 Patent. Many aspects of that determination are really not disputed by defendants (see, e.g., M. Findings 51, 56, 77, 85, 91, 95, 99 and 103), and as to the rest Midtronics' position has all the better of it. Without this Court's seeking to be exhaustive in the latter respect, one important issue merits special mention: M. Finding 64 shows conclusively why defendants' contention "that the Accused Products do not measure a change in current because they only make one actual measurement of current" is totally empty of merit.
There is likewise no predicate for defendants' disclaimer of willful infringement on their part under the standard set by the en banc opinion in In re Seagate Tech., LLC, 497 F.3d 1360, 1371 (Fed.Cir.2007). M. Findings 111-25 demonstrate the satisfaction of that standard in detail, and this Court expressly finds that the clear and convincing evidence here has proved willful infringement. Defendants' motion challenging willfulness (Dkt. 190), previously taken under advisement, is of course denied.
As for the validity of the '756 patent, defendants' claim of obviousness is *973 no better than makeweight. There is no question that Midtronics satisfies the factual inquiries called for in Procter & Gamble Co. v. Teva Pharms. USA, Inc., 566 F.3d 989, 994 (Fed.Cir.2009):
The obviousness determination turns on underlying factual inquiries involving: (1) the scope and content of prior art, (2) differences between claims and prior art, (3) the level of ordinary skill in pertinent art, and (4) secondary considerations such as commercial success and satisfaction of a long-felt need. Graham v. John Deere Co., 383 U.S. 1, 17, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966).
And the seminal decision in Graham, id. adds the "failure of others" to the mix. Here none of the prior art references sought to be called upon by defendants in that respect shows obviousnessnot the '416 Patent (see M. Findings 134-39) nor any of the other sources pointed to by defendants (see M. Findings 140-54). And as for the Grahamtaught secondary considerations, each of them weighs heavily against rather than for a finding of obviousness (see M. Findings 156-61).
With Midtronics thus entitled to prevail on the merits as to both infringement and validity, the propriety of injunctive relief must be considered next. On that score eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006) teaches:
According to well-established principles of equity, a plaintiff seeking a permanent injunction must satisfy a four-factor test before a court may grant such relief. A plaintiff must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction.
eBay, id. goes on to vest the decision for the grant or denial of permanent injunctive relief in this Court's exercise of equitable discretion. Here the irreparability of harm is confirmed by M. Findings 164-66, the inadequacy of remedies at law is shown by M. Findings 168-73, the balancing of hardships in Midtronics' favor is established by M. Findings 175-78 and the advancement of the public interest is amply demonstrated by M. Findings 180-82. Hence Midtronics is entitled to a permanent injunction prohibiting defendants and their employees, agents, officers, owners and affiliates from making, using, offering for sale or selling within the United States or importing into the United States defendants' AA350, AA400, AA500, AA500P or AA550P products (or products not colorably different than those products) until the expiration of the '756 Patent on May 1, 2012.
That leaves for consideration only whether Midtronics, as the prevailing party across the board, should be granted an award of its reasonable attorney fees and expenses pursuant to 35 U.S.C. § 285.[4] And because the Findings in that respect must be viewed through the lens of the principles applicable to such awards, this opinion first turns to an exposition of those principles.
To begin with, the district court is given broad discretion in that regard (see, e.g., Takeda Chem. Indus., Ltd. v. Mylan Labs., Inc., 549 F.3d 1381, 1385 (Fed.Cir.2008)), although it must of course adhere to the teaching of the Court of Appeals for the Federal Circuit in exercising *974 that discretion. And on that score, less than two months ago that court reconfirmed the importance (though not necessarily the controlling impact) of a finding of willful infringementhere is what it said in Spectralytics, Inc. v. Cordis Corp., 649 F.3d 1336, 1349, 2011 WL 2307402, at *11 (Fed.Cir.13), citing Transclean Corp. v. Bridgewood Servs., Inc., 290 F.3d 1364, 1379 (Fed.Cir.2002):
Although an attorney fee award is not mandatory when willful infringement has been found, precedent establishes that the court should explain its decision not to award attorney fees.
And Spectralytics, id. went on to explain the absence of a one-to-one correlation between an enhancement of damages under Section 284 and a fee award under Section 285:
For example, attorney misconduct or other aggravation of the litigation process may weigh heavily with respect to attorney fees, but not for enhancement of damages.
Because Seagate, 497 F.3d at 1371 has set a showing of objective recklessness as the hurdle to surmount in proving willful infringement so as to permit an award of enhanced damages under Section 284, Midtronics' ability to clear that hurdle operates a fortiori to justify an attorney fee award under Section 285. And in this instance M. Findings 191-202 readily evince that ability: They set out in detail the objective recklessness of defendants' litigation conduct.[5] Accordingly this Court determines that Midtronics is entitled to an award of its reasonable attorney fees and litigation expenses as part of the relief to which its status as prevailing party creates an entitlement.
Conclusions
In sum, the Findings call for a complete victory in favor of Midtronics and against defendants. More specifically:
1. Argus and BPPower infringed Claims 1 through 4 of the '756 Patent through their offers for sale, sales and importation of their AA350, AA400, AA500, AA500P and AA550P battery testers.
2. Such infringement by those defendants was willful.
3. Those defendants have failed to prove by clear and convincing evidence that any of Claims 1 through 4 is or are invalid.
4. Midtronics is entitled to permanent injunctive relief in the form stated earlier. Midtronics shall promptly submit a proposed permanent injunction order setting forth the terms of such an injunction.
5. Because this action qualifies as an exceptional case under Section 285, Midtronics is entitled to its reasonable attorney fees and expenses (including the fees of its opinion witnesses).
Finally, this action is set for a status hearing at 9 a.m. August 16, 2011 to discuss the timetable and procedures as to the lastmentioned award, together with any other tag ends that the parties believe need to be buttoned up.
NOTES
[1] When this action was first filed, another Midtronics patent (U.S. Patent 4,912,416, the "'416 Patent") was also at issue, but in light of its expiration as well as Midtronics' decision to pursue injunctive relief but not damages, the '416 Patent has dropped out of consideration as an added predicate for relief to Midtronics. For their part, defendants Aurora Performance Products LLC d/b/a Argus Analyzers ("Argus") and BPPower Inc. ("BPPower") have sought to turn the tables by arguing the existence of the '416 Patent as part of an obviousness defense to invalidate the '756 Patent, but Midtronics' Proposed Findings of Fact 134-39 have effectively torpedoed that contention.
[2] That second deferral took place on the eve of trial, unfortunately by reason of the death of plaintiff's lead counsel.
[3] Those will respectively be cited here as "M. Finding" and "M. Conclusion."
[4] All further references to Title 35's provisions will simply take the form "Section."
[5] It is unnecessary to explore defendants' subjective mindset, for Seagate and later Federal Circuit authority regularly apply the objective standard (see, e.g., iLOR, LLC v. Google, Inc., 631 F.3d 1372, 1377 (Fed.Cir.2011) and cases cited there).
| {
"pile_set_name": "FreeLaw"
} |
110 Ill. App.2d 1 (1968)
249 N.E.2d 287
Joan Domke, Plaintiff-Appellant,
v.
Ethel McCue, Individually, and as Executor of the Will of Agnes S. Graser, Deceased, Dorothy Gerding and Dorothy Sullivan, as Executor of the Will of James H. Sullivan, Deceased, Peter J. Sullivan, et al., Defendants-Appellees.
Gen. No. 52,128.
Illinois Appellate Court First District, Second Division.
October 15, 1968.
Amended on Rehearing April 29, 1969.
*2 Ehrlich, Bundesen & Cohn, of Chicago (Russell Bundesen, of counsel), for appellant.
McKinley, Price & Fako, for Ethel McCue, Werner H. Sommers, for Dorothy Sullivan, Wilson & McIlvane, for Dorothy Gerding, and Gregory A. Gelderman, all of Chicago, for Peter J. Sullivan, Marie S. Dunne, Isabell Stephens, Virginia DeTauble, Adele Sullivan and Genevieve Sullivan, appellees. (Paul E. Price, of counsel.)
ON REHEARING
MR. JUSTICE BURKE delivered the opinion of the court.
This appeal is taken from a judgment entered against plaintiff, Joan Domke, on her complaint for the construction of a will.
Testatrix, Agnes S. Graser, died on September 13, 1964, and her will was admitted to probate on October 22, 1964. The pertinent paragraphs of the will read as follows:
"THIRTEENTH: I give and bequeath unto ROSE SULLIVAN, a widow of DR. F.J. SULLIVAN, deceased, now residing [sic] at 4501 North Malden Street, Chicago, Illinois, if living at the time of my death, the sum of FIVE THOUSAND DOLLARS ($5,000.00). In the event of the death of MRS. ROSE SULLIVAN prior to my decease, then and in such event, I give and bequeath unto her daughter, MRS. *3 HERBERT (JOAN S.) DOMKE, now residing c/o Kane Hospital, Pittsburgh 16, Pennsylvania, if living at the time of my death the sum of ONE THOUSAND DOLLARS ($1,000.00).
. . . . . .
"NINETEENTH: In the event of insufficiency of the assets contained within my estate to pay in full the legacies mentioned in articles first to sixteenth, inclusive, then and in such event, the legacies enumerated in the preceding two paragraphs shall lapse and legacies in paragraph [sic] three to fifteen inclusive shall be abated pro rata.
"TWENTIETH: All of the rest, residue and remainder of my estate, real, personal or mixed, or [sic] which I may die, [sic] seized or possessed or in any wise entitled to, I give unto ANDREW W. SULLIVAN, now residing at Buena Park Hotel, 4145 Broadway, Chicago, Illinois, if living, otherwise to be distributed equally among my nieces and nephews as enumerated in Paragraphs 1 to 13 or the survivors thereof." (Emphasis supplied.)
Andrew W. Sullivan, testatrix's brother and only living collateral relative at the time the will was executed, predeceased testatrix and, pursuant to paragraph 20 of the will, the residual estate was to be shared equally by her "nieces and nephews as enumerated in Paragraphs 1 to 13" of the will.
On July 8, 1965, Jean Sullivan, et al., heirs of George Sullivan (who was one of the legatees named in the will and who predeceased the testatrix), filed a complaint to construe the will. Plaintiff entered her appearance in those proceedings, but filed no pleadings nor took any action to establish herself as a residuary legatee or otherwise assert a claim in the estate. Motions to dismiss the Sullivan will construction proceedings were filed by *4 several of the defendants therein; the motions were sustained by the trial court on March 30, 1966.
The executor of the estate elected to construe paragraph 20 of the will to exclude paragraph 13, thereby excluding plaintiff, a niece of the testatrix, from participation in the residual estate. This was reflected in the executor's final account which was filed on August 16, 1966. Apparently on the same day plaintiff filed objections to the final account, contending that the wording of paragraph 20 includes paragraph 13, thereby entitling her to a share in the residual estate. Some of the defendants herein filed answers, together with an affidavit and exhibits, to plaintiff's objections and plaintiff filed a reply thereto.
On October 7, 1966, plaintiff commenced this proceeding for the construction of the will. Her complaint was dismissed on motion of the defendants, the judgment stating in part that "the words `paragraphs 1 to 13' set forth in Paragraph 20 of the will exclude the plaintiff Joan Domke as a beneficiary of the residuary estate of the testatrix, in light of all the language of the entire will." It was further held that defendants' claim of res judicata and laches on plaintiff's part was without merit. From this judgment plaintiff prosecutes this appeal.
Plaintiff maintains that the word "to" in the phrase "Paragraphs 1 to 13" in paragraph 20 of the will is to be construed as a word of inclusion in keeping with the intention of the testatrix to benefit all her nieces and nephews as manifest by the provisions in the will, and that the trial court erred in construing the word as one of exclusion.
[1-3] Courts are without power, under the guise of interpretation, to alter a testator's will or to make a new will for him. Vollmer v. McGowan, 409 Ill. 306, 99 NE 2d 337. In every will construction case, the question for the court is "not what the testator meant to say, *5 but what he meant by what he did say." Hull v. Adams, 399 Ill. 347, 352, 77 NE2d 706. In Turek v. Mahoney, 407 Ill. 476, 95 NE2d 330, the court stated at pages 481 and 482.
"The intention of a testator is to be ascertained in two ways, either from the words employed by him, to which all rules of construction give way, or by finding his presumed intention gathered by the application of rules of construction applicable to all cases where the meaning is obscure, doubtful or uncertain."
It is apparent that when the testatrix wanted a paragraph to be included within a specific grouping of paragraphs, she employed language rendering it unmistakably clear that such was her intention. Thus, in paragraph 19 she provides that in the event there should be an insufficiency of assets in the estate to cover the legacies set out in paragraphs "first to sixteenth, inclusive," those legacies provided for in "the preceding two paragraphs," i.e., 17 and 18, were to lapse and the legacies provided for in paragraphs "three to fifteen inclusive" were to be abated pro rata.
It is also apparent from an analysis of the entire will that the testatrix had a very exact understanding of her will, its structure and its contents. Paragraph 1 provides that all taxes due by reason of the testatrix's death shall be paid out of the residual of her estate. Paragraphs 2 through 15 contain specific legacies to relatives of the testatrix. Paragraph 2 provides that a stated sum of money go to one of testatrix's nieces to be used for the benefit of testatrix's brother, Andrew, who was her only living collateral relative at the time the will was executed and who was also the primary residual beneficiary named in paragraph 20. Further, of those legacies designated by testatrix to lapse or to abate *6 pro rata in the event of insufficient funds, the legacy in paragraph 2 for Andrew's benefit was not one.
Only those legacies to the more distant relatives and to nonfamily beneficiaries were to lapse or to abate pro rata. The legacies in paragraphs 17 and 18, which were designated to lapse in the event of insufficient funds, were specific legacies to a doctor and to a charity, nonfamily beneficiaries. The legacies in paragraphs 3 through 15, which were to abate pro rata in the event of insufficient funds, were specific legacies to the more distant relatives of testatrix. It should also be pointed out that the only other devise which was not designated to abate pro rata or to lapse for lack of assets in the estate, as the bequest in paragraph 2 for the benefit of Andrew, is contained in paragraph 16 which provides for a specific bequest of money for Masses to be said over a period of years for the repose of testatrix's soul. It is therefore clear that testatrix had a complete understanding of the structure and contents of her will, and that what she did and what she said was what she meant to do and say.
In paragraph 20, testatrix provides that her residual estate be distributed "equally among my nieces and nephews as enumerated in Paragraphs 1 to 13" of the will. In forbearing to employ the word "inclusive" in reference to those paragraphs, she intended a different meaning to be ascribed to that phrase than when she employed the word "inclusive" twice in the preceding paragraph 19. When she said "Paragraphs 1 to 13" she meant what she said.
In 95 CJS, Wills, § 611, page 815, it is stated:
"Use of different words in the will applying to the same subject matter indicates or raises a strong presumption that the testator had in view different results, especially where associated with a qualifying expression in one part of the will that is omitted in the other."
*7 See also Edgar County Children's Home v. Beltranena, 402 Ill. 385, 84 NE2d 363.
[4] We are in agreement with defendants' position that to construe the word "to" to mean "inclusive" would do violence not only to the intention of the testatrix, but also to the generally accepted rules of construction. 86 CJS, page 909, defines the word "to" as a word of "exclusion, unless, by necessary implication, it is manifestly used in a different sense." Our courts of review have uniformly adhered to such construction. See Stearns v. Sweet, 78 Ill. 446; Clark v. Ewing, 87 Ill. 344; Martin v. New York, C. & St. L.R. Co., 346 Ill. App. 467, 105 NE2d 122. Plaintiff contends that the decedent desired to treat all of her nieces and nephews with substantial equality and that to bar plaintiff from participation in the residuary estate is patently in disregard of the plan of distribution reflected by the will. However, testatrix placed plaintiff in a separate category from the other nieces and nephews in that plaintiff, under paragraph 13 of the will, is the only niece or nephew to whom a contingent but no specific bequest was made. Plaintiff also contends testatrix intended a class gift to her nieces and nephews under the residual clause, but testatrix limited the beneficiaries thereunder to those "enumerated in Paragraphs 1 to 13."
Plaintiff's claim of the denial of the right to show by extrinsic evidence that the word "to" is a word of inclusion is asserted for the first time in this Court. No extrinsic evidence was pleaded or offered which would support plaintiff's contention that the word "to" was intended by the testatrix to be a word of inclusion. When the court sustained defendants' motion to dismiss, plaintiff did not seek to file an amended complaint in which she might have set forth facts in support of her theory, that the evidence would reflect that a different meaning should be ascribed to the word "to" as used in the will, other than its obvious connotation. See Benson v. Isaacs, *8 22 Ill.2d 606, 177 NE2d 209; In re Estate of Leichtenberg, 7 Ill.2d 545, 131 NE2d 487. See also Jackman v. Kasper, 393 Ill. 496, 516, 66 NE2d 678.
The view we take of the testatrix's will renders it unnecessary to consider the matters raised by defendants with respect to res judicata and laches.
For these reasons the judgment is affirmed.
Judgment affirmed.
McNAMARA, J., concurs.
LYONS, P.J., dissenting:
I cannot concur in the result reached by the majority. At the outset, the defendants argue that plaintiff and/or plaintiff's attorney were guilty of laches, in that plaintiff failed to assert her claim until after the filing of the final account, even though she had full knowledge of the position asserted by the executor and other heirs. Plaintiff argues that the court reached the right conclusion in denying defendants' contentions that laches barred plaintiff's claim.
I agree with plaintiff. The order appealed from specifically found against the defendants on the issue of laches. It is true, as defendants point out, that one, where the ruling of the trial court is correct it is of no consequence that the reason assigned may be incorrect and two, that a judgment may be sustained by any argument and by any basis appearing in the record which demonstrates that the judgment is correct. There is, however, ample evidence in the record to support the finding of no laches by the lower court. Plaintiff's counsel filed an affidavit which stated that affiant was never informed by any party that it was the intention of the testator to exclude Joan Domke; that neither he nor his client was ever furnished a copy of the Illinois Inheritance Tax return, nor advised that plaintiff was being *9 excluded as a residuary legatee until the final account was offered; that affiant never believed it necessary to take any steps to assert her right to distribution and that affiant and his client had no knowledge of any partial distribution other than to Dorothy Sullivan. No affidavits were filed by defendants in the instant case. Furthermore, plaintiff was prepared to offer evidence to support the allegations raised in the plaintiff's affidavit.
The defendants next argue that the failure of plaintiff to assert her rights in the earlier proceedings of Jean Sullivan, et al., to construe the will of Agnes Graser precluded her from filing a second proceeding for a construction of the will. Essentially, the defendants are raising the issue of res adjudicate. The elements of res adjudicata, sometimes referred to as estoppel by judgment, are: (1) the identity of the cause of action; (2) the identity of the parties or their privies; (3) the identity of necessary issues of law and fact; and (4) the entry of a judgment or decree based on a determination of necessary issues.
In the instant case the second element fails in that there was no identity of parties or their privies. The plaintiffs in the first suit by Jean Sullivan, et al., were neither nieces nor nephews of the decedent and were involved in no way in the second suit.
The third element also fails in that there was no identity of factual issues. The first suit resolved one issue, namely, were Jean Sullivan and the other children of George Sullivan entitled to take the share to which George Sullivan, a nephew of the decedent, would have been entitled had he survived the testator. In the second suit, the issue was whether the words "paragraphs One to Thirteen" included paragraph Thirteen, thereby including or excluding plaintiff as a beneficiary of the residuary estate.
*10 Furthermore, the order of the trial court specifically found contrary to the defendants' contention, that the bar of res adjudicata did not apply.
Thus, having disposed of the procedural issues raised by the parties the issue of whether the court reached the right conclusion in construing the word "to" as a word of exclusion remains. Plaintiff contends that the word "to" is to be construed as a word of inclusion while the defendants contend that the lower court properly construed it as a word of exclusion.
In 86 CJS, 909, it is stated:
The word "to" is generally defined to be a word of exclusion unless, by necessary implication, it is manifestly used in a different sense. However, "to" is not necessarily a term of exclusion, and it is sometimes used in an inclusive sense, that is, as a word of inclusion, and thus it may have either an inclusive or an exclusive meaning, and in each case the meaning which will be attributed to it will depend on the subject matter and the manifest intention with which it is used.
In Black's Law Dictionary, 4th ed, the word "to" is defined thusly: "This is a word of exclusion when used in describing premises; it excludes the terminus mentioned.... It may be a word of inclusion...."
It is plaintiff's position that the will is ambiguous and to find the intent of the testatrix, the entire will, including the scheme of distribution, must be examined. It is defendants' position that there is no ambiguity in the will and that the intent of the testator can be found by the plain language used by the testator.
The defendants contend that the use of different words in the will applying to the same subject matter indicates, or raises a strong presumption, that the testator had in mind different results, especially when associated with a qualified expression in one part of the will which *11 is omitted in the other. The defendants point out that in Paragraph 19 the language "First to Sixteenth inclusive" and "Third to Fifteenth inclusive" was used by the testator and that in Paragraph 20 the language "One to Thirteen" was used without the use of the word "inclusive" and that testator intended a different meaning.
In 95 CJS, 815, it is stated:
Use of different words in the will applying to the same subject matter indicates or raises a strong presumption that the testator has in view different results, especially where associated with a qualifying expression in one part of the will that is omitted in the other.
This rule finds recognition in Edgar County Home v. Beltranena, 402 Ill. 385, 84 NE2d 363 (1949), where the court said:
The testator must be considered to have used language with ordinary intelligence, and if he did so he clearly would not adopt these different modes of expression without intending a difference of meaning. It is only by recognizing the latter terminology as mere precatory expressions that an inconsistency can be avoided.
Plaintiff contends that this rule of construction applies only when the intent of the testator is clear and not when the will is ambiguous. Plaintiff argues that if the decedent had so clearly in mind what she meant, then following her prior language in Paragraph Nineteenth, she undoubtedly would have said in Paragraph Twentieth: "... among my nieces and nephews as enumerated in paragraphs 1 to 12 inclusive." I agree. It is apparent that the testatrix thought of the word "to" as a word of inclusion in Paragraph Nineteenth and it is reasonable to assume that she did not think otherwise in Paragraph Twentieth. If, in fact, she had thought *12 of the word "to" as a word of exclusion, certainly she would have stated in Paragraph Nineteenth, "... in Articles First to Seventeenth," and "... and legacies in Paragraphs three to sixteen."
The pleadings, however, in the instant case consisted of plaintiff's complaint for construction of the will and the defendants' motion to dismiss the complaint. I would hold that it was improper for the trial court to dismiss the complaint. The motion to dismiss should have been denied and the defendants given the opportunity to answer the complaint. This would have allowed the parties to introduce evidence of the testatrix's intent.
In arriving at this conclusion, I take notice of the fact that decedent's will was prepared by the same lawyer who is of counsel on the defendants' brief and who referred to the words in Paragraph Twentieth of the decedent's will as Paragraphs 1 and 13, in his motion to dismiss the amended complaint and the second amended complaint in the first supplemental proceeding. This and other facts would undoubtedly be brought out by plaintiff in the hearing regarding the construction of the testatrix's will.
For the above reasons I would reverse the judgment of the lower court and remand for further proceedings to determine the testator's intent.
| {
"pile_set_name": "FreeLaw"
} |
622 F.Supp. 121 (1985)
James FERNHOFF, Plaintiff-Appellant,
v.
TAHOE REGIONAL PLANNING AGENCY and Does I-XX, Defendants-Appellees.
No. CV-R-83-431-ECR.
United States District Court, D. Nevada.
October 22, 1985.
*122 James Fernhoff, in pro per.
Heaton, Doescher & Owen, Ltd., Carson City, Nev., for defendants-appellees.
ORDER
EDWARD C. REED, Jr., District Judge.
Plaintiff has appealed to the Ninth Circuit Court of Appeals from the summary judgment entered in favor of defendant Tahoe Regional Planning Agency (TRPA), which judgment dismissed the action. The Order granting summary judgment has been published at 599 F.Supp. 185. On July 24, 1985, the Ninth Circuit denied Plaintiff's motion to submit new evidence, but without prejudice to its presentation to this district court. Plaintiff now has made such a motion here.
The new evidence is a letter dated April 7, 1977, on TRPA stationery and signed by an Asst. Engineer/Investigator of the Agency. The letter was addressed to the Planning, Public Works and Building Departments of the counties and cities (both in Nevada and in California) that border on Lake Tahoe. The subject of the letter was parcel maps. The letter writer noted that, in several cases, parcels or lots had been created in violation of a particular TRPA Land Use Ordinance that limited density of dwelling units and amount of land coverage. The last paragraph of the letter reads:
"To insure that all land divisions conform to Agency regulations, we request that a copy of all proposed parcel maps, including property line adjustments, be sent to this office prior to City or County approvals. We will review them at staff level and provide specific ordinance interpretations where necessary."
Plaintiff alleges that the letter constitutes newly discovered evidence which he uncovered only after all appeal briefs had been submitted to the Ninth Circuit. It is his position that the letter is a written policy letter of the TRPA, and that it activated the "deemed approved" clause of the California-Nevada interstate compact to regulate the Lake Tahoe Basin. That clause states, in pertinent part, that whenever under any policy adopted by the TRPA the Agency is required to review or approve any proposal, the Agency shall take final action on the proposal within 60 days after it has been delivered to the Agency. "If the Agency does not take the final action within 60 days, the proposal shall be deemed approved." The point being made by Plaintiff is that TRPA's position in this litigation always has been that the Agency did not require review of parcel maps for developments of as small a magnitude as Plaintiff's, therefore the "deemed approved" clause was inapplicable. The letter establishes, in Plaintiff's opinion, that review of Douglas County's approval of his tentative parcel map was required by the TRPA policy set forth in the letter. Thus, the Agency's failure to act within 60 days resulted in its automatic approval of Douglas County's approval, Plaintiff argues.
Oral arguments were heard on October 7, 1985, by the Ninth Circuit in connection with Plaintiff's appeal of the summary judgment against him. An opinion has not yet been filed, however, so that Plaintiff's motion to supplement the record with new evidence has not been rendered moot.
Fed.R.Civ.P. 60(b) authorizes a court to relieve a party from a final judgment by reason of newly discovered evidence. One prerequisite for obtaining such relief is a showing that the evidence is of such a character that it would probably change the outcome of the proceedings. Giordano v. McCartney, 385 F.2d 154, 155 (3rd Cir.1967); United States v. Walus, 616 F.2d 283, 288 (7th Cir.1980); Rayor v. United States, 323 F.2d 519, 523 (9th Cir. 1963). Plaintiff's evidence does not fulfill this requirement. This is because he never has had a valid, unqualified permit to proceed with the development of his land.
Where TRPA has failed to take final action on a proposal within 60 days, the operational effect of its failure is that the *123 decision of the local authority in effect stands affirmed. California Tahoe Regional Planning Agcy. v. Jennings, 594 F.2d 181, 189 (9th Cir.1979). Plaintiff's application to Douglas County for a permit was forwarded by the County to TRPA. Four days later, on December 13, 1977, TRPA advised Douglas County that the application was not in compliance with the Agency's Land Use Ordinance 9.31. Further information was requested. On December 29, 1977, the Douglas County Planning Commission approved Plaintiff's tentative parcel map, subject to certain specified conditions. These conditions included documenting legal access to the parcel, identifying (1) land capability, (2) land use district, (3) existing land coverage and (4) building footprints, and paving the road.
Plaintiff employed a bulldozer to grade a road on May 12, 1978. Four days later he was arrested and charged with violating both County and TRPA ordinances, as well as State statute. On May 19, 1978, Douglas County commenced a civil action seeking injunctive relief that would prohibit Plaintiff from doing further grading or tree cutting. Plaintiff stipulated that he would refrain from such activities. On May 31, 1978, a Nevada District Court approved an order based on the stipulation. Quite clearly, Douglas County (which Plaintiff alleges is the source of his permit) did not regard Plaintiff as having complied with the conditions precedent.
TRPA sent Plaintiff a letter on September 26, 1980. In the letter it directed Plaintiff to recontour and revegetate the road he had bulldozed. The letter was sent in connection with TRPA's denial of Plaintiff's request for a variance from land coverage restrictions. Several months later, on January 15, 1981, Plaintiff sued Douglas County for a writ of mandate requiring the County to issue all necessary approvals and permits. It must have been unmistakeably clear at that time that Plaintiff had received no valid approval or permit to develop his land.
A stipulation was entered in that case; it was filed on March 7, 1983. It stated that the tentative parcel map had been approved by the Douglas County Planning Commission, on December 29, 1977, subject to subsequent review and approval by the Douglas County Board of Commissioners. Further, the stipulation required Plaintiff to provide improvement plans to the County. Likewise, the stipulation required Plaintiff to obtain an administrative permit from TRPA for environmental impact from his road before the County would issue its construction permit for the road (which was meant to serve the individual lots). Finally, Plaintiff was obligated either to complete construction of the road or to provide a letter of credit prior to recordation of his parcel map. The State Court ratified and confirmed the stipulation and ordered the parties to abide by its terms, on March 11, 1983 (filed March 22, 1983). Obviously, Plaintiff still did not have a valid permit.
TRPA advised Plaintiff, on June 28, 1983, that it could not consider his application for an administrative permit, because construction of the road would be in violation of its Land Use Ordinance 81-5 (adopted November 1982). The instant lawsuit was commenced October 26, 1983.
The law in Nevada is that vested rights against changes in a zoning law arise only after (1) a building permit has been issued and (2) the permittee has incurred considerable expense in reliance thereupon. City of Reno v. Nevada First Thrift, 100 Nev.Adv.Op. 102, 686 P.2d 231, 233-34 (1984); Board of Cty. Com'rs v. CMC of Nevada, Inc., 99 Nev. 739, 670 P.2d 102, 107 (1983). Plaintiff has never had a building or construction permit. Therefore, he has never had a vested right against any zoning changes that might restrict the development of his land. Nor would any default approval (failure to act within 60 days) by TRPA immunize the County's conduct re issuance of construction permits from judicial review. California Tahoe Regional Planning Agcy. v. Jennings, supra at 594 F.2d 189.
The statute of limitations argument of Petitioner is inapposite. The 25-day limitation *124 provided in NRS 278.0235 is limited to actions against the agency or governing body for relief from its zoning final actions.
Plaintiff's allegation that TRPA's conduct was fraudulent, in not disclosing to him the April 7, 1977 letter, won't withstand scrutiny either. The belief of the TRPA staff member, at an August 18, 1983, meeting in the office of Plaintiff's then-attorney, that "verbal policy" required Douglas County to send Plaintiff's tentative parcel map to TRPA, may have been an honest belief. A Fed.R.Civ.P. 60(b)(3) motion for relief from a judgment because of the fraud of an adverse party requires the moving party to establish fraud by clear and convincing evidence. Petition of Cardines, 366 F.Supp. 700, 707 (D.Guam 1973).
F.R.A.P. 10(e) allows a district court to transmit supplemental material to the court of appeals if anything material to either party is omitted from the record on appeal. As discussed above, the April 7, 1977, letter is not material because it cannot change the fact that Plaintiff never has had a valid construction permit.
IT IS, THEREFORE, HEREBY ORDERED that Plaintiff's motion to supplement the record on appeal with newly discovered evidence be DENIED.
IT IS FURTHER ORDERED that the Clerk of this Court shall send a courtesy copy of this Order to the Ninth Circuit Court of Appeals.
| {
"pile_set_name": "FreeLaw"
} |
Staron v Decker Assoc., LLC (2016 NY Slip Op 00354)
Staron v Decker Assoc., LLC
2016 NY Slip Op 00354
Decided on January 20, 2016
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 January 20, 2016
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Second Judicial Department
REINALDO E. RIVERA, J.P.
JOHN M. LEVENTHAL
ROBERT J. MILLER
COLLEEN D. DUFFY, JJ.
2013-10687
(Index No. 18264/11)
[*1]Maria Staron, plaintiff,
vDecker Associates, LLC, defendant third-party plaintiff-appellant, Perfectaire Co., Inc., defendant third-party defendant- respondent, et al., defendant; et al., third-party defendant.
Litchfield Cavo, LLP, New York, NY (Kevin J. Donnelly of counsel), for defendant third-party plaintiff-appellant.
Leon R. Kowalski, Brooklyn, NY (McGaw, Alventosa & Zajac [Joseph Horowitz and Andrew Zajac] of counsel), for defendant third-party defendant-respondent.
DECISION & ORDER
In an action to recover damages for personal injuries, the defendant third-party plaintiff, Decker Associates, LLC, appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Bunyan, J.), dated July 24, 2013, as denied its motion to strike the plaintiff's note of issue, granted those branches of the motion of the defendant third-party defendant Perfectaire Co., Inc., which were for summary judgment dismissing its cross claim and third-party cause of action for contractual indemnification insofar as asserted against Perfectaire Co., Inc., and denied its cross motion, in effect, for summary judgment on its cross claim and third-party cause of action for contractual indemnification insofar as asserted against Perfectaire Co., Inc.
ORDERED that the order is affirmed insofar as appealed from, with costs.
The plaintiff alleged that she was injured when she fell while descending an interior staircase in a building owned by the defendant third-party plaintiff, Decker Associates, LLC (hereinafter Decker), due to insufficient lighting. On the date of the plaintiff's accident, the defendant Athens Electric, Inc. (hereinafter Athens Electric), which had entered into a contract with Decker to perform certain electrical work in the building, disconnected the electricity to the common areas of the building to perform electrical work in connection with the installation of a cooling tower. Decker entered into a separate contract with the defendant third-party defendant Perfectaire Co., Inc. (hereinafter Perfectaire), to install the cooling tower. The plaintiff contends that she fell during the period when Athens Electric had disconnected the power to perform its work.
The plaintiff commenced this action against Decker to recover damages for personal injuries. Decker commenced a third-party action against Perfectaire and Athens Electric for contribution and common-law and contractual indemnification. The plaintiff then amended her complaint to add Perfectaire and Athens Electric as defendants. After the plaintiff filed a note of [*2]issue, Decker moved to strike the plaintiff's note of issue, arguing that further discovery was necessary to determine the relationship between Perfectaire and Athens Electric. Perfectaire moved for summary judgment dismissing the complaint, all cross claims, and the third-party complaint insofar as asserted against it. Decker cross-moved, in effect, for summary judgment on its cross claim and third-party cause of action for contractual indemnification against Perfectaire. The Supreme Court granted Perfectaire's motion and denied Decker's motion and cross motion. Decker appeals, challenging the dismissal of its cross claim and third-party cause of action for contractual indemnification against Perfectaire and the denial of its motion and cross motion.
A party's right to contractual indemnification depends upon the specific language of the relevant contract (see Campisi v Gambar Food Corp., 130 AD3d 854, 855; Desena v North Shore Hebrew Academy, 119 AD3d 631, 636; Roldan v New York Univ., 81 AD3d 625, 628). The promise to indemnify should not be found unless it can be clearly implied from the language and purpose of the entire agreement and the surrounding circumstances (see Hooper Assoc. v AGS Computers, 74 NY2d 487, 491-492).
Here, Perfectaire established its prima facie entitlement to judgment as a matter of law dismissing Decker's claim for contractual indemnification against it. The contract between Decker and Perfectaire requires Perfectaire to indemnify Decker for a claim of bodily injury "arising out of or resulting from performance of the Work" Perfectaire agreed to perform under the contract. Perfectaire established, prima facie, that the work Perfectaire agreed to perform for Decker pursuant to the contract between Perfectaire and Decker did not include the electrical work performed by Athens Electric. Perfectaire also established, prima facie, that Athens Electric was not its subcontractor. It is undisputed that Athens Electric did not have a contract with Perfectaire, and therefore it was not a subcontractor as that term is defined in the contract. Thus, the indemnification provisions of the contract between Perfectaire and Decker were not triggered, as the plaintiff's accident did not arise out of or result from work performed by Perfectaire or a subcontractor of Perfectaire.
In opposition, Decker failed to raise a triable issue of fact as to whether Athens Electric was a subcontractor of Perfectaire or whether the plaintiff's accident arose out of or resulted from Perfectaire's work.
Accordingly, the Supreme Court properly granted that branch of Perfectaire's motion which was for summary judgment dismissing Decker's cross claim and third-party cause of action for contractual indemnification insofar as asserted against it, and denied Decker's cross motion, in effect, for summary judgment on its cross claim and third-party cause of action for contractual indemnification against Perfectaire. The court also properly denied Decker's motion to strike the plaintiff's note of issue.
RIVERA, J.P., LEVENTHAL, MILLER and DUFFY, JJ., concur.
ENTER:
Aprilanne Agostino
Clerk of the Court
| {
"pile_set_name": "FreeLaw"
} |
377 So.2d 615 (1979)
Edward DePRIEST
v.
STATE of Mississippi.
No. 51411.
Supreme Court of Mississippi.
December 5, 1979.
*616 Farese, Farese & Farese, John Booth Farese, Ashland, for appellant.
A.F. Summer, Atty. Gen. by Carolyn B. Mills, Sp. Asst. Atty. Gen., Jackson, for appellee.
Before ROBERTSON, P.J., and BROOM and COFER, JJ.
ROBERTSON, Presiding Justice, for the Court:
Edward DePriest and James Crockett were jointly indicted in the Circuit Court of Lee County for the sale of "a quantity of Phenmetrazine, a Schedule II drug under the Uniform Controlled Substances Act of the State of Mississippi", to Shirlene Anderson, an undercover agent of the Mississippi Bureau of Narcotics.
After a full trial, the jury returned a verdict of "guilty as charged" against Edward DePriest. When the jury could not agree on a verdict for James Crockett, a mistrial was declared as to him. DePriest was sentenced to six years in a facility designated by the Department of Corrections, with two years suspended for good behavior.
DePriest has assigned three errors:
1. The trial court erred in refusing the defendant's request for a directed verdict or peremptory instruction since the state failed to meet its burden of proof.
2. The trial court erred in failing to give a circumstantial evidence instruction.
3. The trial court erred in allowing inconsistent jury verdicts for codefendant Crockett and defendant DePriest.
About 8:00 p.m. January 28, 1977, Shirlene Anderson and a confidential informant entered the Top Out Club in Tupelo. DePriest, the manager of the Club, came over to Agent Anderson's table and introduced himself. Shortly thereafter, James Crockett came over to Anderson's table and introduced himself. Crockett asked Anderson if she used drugs, and if she would like to buy some preludin, which is an amphetamine drug. Agent Anderson replied that she did not use drugs but would like to buy some for a friend, whereupon Crockett went up to the bar. Anderson testified:
"A DePriest was at the bar already. They carried on a conversation for a short period of time. Not a long conversation. Then he returned to the table with the drugs.
Q Did Crockett have the drugs in his hand when he returned?
A Yes, he had them in his hand wrapped up in some tissue paper. And he removed the drugs from this tissue paper and placed them in my hand and then I placed the money [a $20 bill] in his hand.
Q I see. Did you see Crockett hand the $20.00 to DePriest?
A I witnessed Crockett reach across the counter and hand DePriest something, which I believe to be money. Then I got up to go up there to make sure.
Q Did you see what, if anything, DePriest did with whatever he was handed?
*617 A Yeah. DePriest didn't put the money in the cash register. I know that. He put it up under the cash register, down like a shelf like. And while I was sitting there, I noticed others purchasing drugs. And he was putting the money at the same place."
On redirect examination, Anderson testified:
"Q Could you tell whether or not Mr. Crockett received that white tissue paper when he went to the bar?
A Yes, he received it when he went to the bar.
Q Do you know whether or not he got it from DePriest?
A At that time DePriest was the only person standing talking to Crockett and at that particular place at that particular time."
This was not a wholly circumstantial evidence case. Part of the evidence was direct and part circumstantial. So it was a case for the jury to decide under proper instructions.
It was not a case for a directed verdict or peremptory instruction, so the trial court was correct in overruling defendant DePriest's motions for such instructions.
Defendant next contends that the trial court erred in failing to give a circumstantial evidence instruction. Not being a wholly circumstantial evidence case, the trial court was correct in not giving a circumstantial evidence instruction that the defendant must be found guilty beyond a reasonable doubt and to the exclusion of every other reasonable hypothesis.
It is apparent to this Court that counsel for defendant DePriest did not consider this a wholly circumstantial evidence case because when the instructions were being passed on the trial judge deleted from court's instructions 2 and 3 "and to the exclusion of every reasonable hypothesis." The court then remarked:
"All right, with those two deletions, are there any objections?"
To the court's question, DePriest's counsel answered:
"I have no objection, Your Honor."
Not only did DePriest's counsel not object to court's instructions 2 and 3 but also was granted defense instruction 2 that required the state to prove its case beyond a reasonable doubt only.
Rule 42, Mississippi Supreme Court Rules, provides:
"The judges of the circuit courts of Mississippi have adopted uniform rules of procedure for the circuit courts, and among those rules adopted is Rule 14 requiring attorneys to file jury instructions with the circuit clerk and to deliver copies of the instructions proposed to be given the jury to opposing counsel before the trial. The rule further provides that attorneys are required to dictate their specific objections to an instruction offered, thus giving the trial judge an opportunity to pass upon the objections before the case is argued before the jury.
"After considering the foregoing rule, we are convinced that it will aid in promoting better judicial procedure and should be implemented by this Court. It is, therefore, the rule of this Court that no assignment of error based on the giving of an instruction to the jury will be considered on appeal unless specific objection was made to the instruction in the trial court stating the particular ground or grounds for such objection. However, in extreme cases this Court may raise an objection to a jury instruction in order to prevent manifest injustice." (Emphasis added).
According to the record, defense counsel had no objection to the court's amended instructions 2 and 3, so there's no question that our Rule 42 applies and thus there is no merit in the defendant's contention that the trial court erred when it failed to grant a circumstantial evidence instruction.
Lastly, the appellant contends that the trial court erred in allowing inconsistent jury verdicts for co-defendants Crockett and DePriest.
*618 This same contention was made in Newell v. State, 308 So.2d 68 (Miss. 1975). In Newell, the Court followed the modern rule that "criminal verdicts as between two or more defendants tried together need not demonstrate rational consistency." In Newell, one defendant was convicted of rape while his co-defendant was acquitted of the came charge. In Newell, we refused to reverse on account of inconsistent verdicts.
In the case at bar, a mistrial was declared as to co-defendant Crockett because of a hung jury. This is not a ground for reversal of the guilty verdict as to DePriest.
His conviction and sentence are, therefore, affirmed.
This case was considered by a conference of the judges en banc.
AFFIRMED.
PATTERSON, C.J., SMITH, P.J., and SUGG, WALKER, BROOM, LEE, BOWLING and COFER, JJ., concur.
| {
"pile_set_name": "FreeLaw"
} |
F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES CO URT O F APPEALS
September 7, 2006
FO R TH E TENTH CIRCUIT Elisabeth A. Shumaker
Clerk of Court
JO H N A . FLEM IN G ,
Plaintiff-Appellant,
v. No. 06-1048
(D.C. No. 04-cv-2048-LTB)
JO A NN E B. BA RN HA RT, (D . Colo.)
Commissioner of the Social Security
Administration,
Defendant-Appellee.
OR D ER AND JUDGM ENT *
Before BARRETT, BROR BY, and EBEL, Circuit Judges.
Plaintiff John Fleming appeals from the district court’s denial of his motion
for attorney fees under the Equal A ccess to Justice Act (EAJA), 28 U.S.C. § 2412.
W e have jurisdiction under 28 U.S.C. § 1291, and we AFFIRM .
*
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore
ordered submitted without oral argument. This order and judgment is not binding
precedent, except under the doctrines of law of the case, res judicata, and
collateral estoppel. The court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
After Fleming’s application for disability insurance benefits was denied, he
requested a hearing before an administrative law judge (ALJ). Fleming was not
represented by counsel at the hearing. The A LJ found that Fleming had severe
bilateral degenerative joint disease (DJD) in his knees, but the ALJ denied relief
on the basis that Fleming retained the residual functional capacity (RFC) to
perform his past relevant work and was therefore not disabled. The Appeals
Council denied Fleming’s request for review. Fleming appealed, and the district
court reversed and remanded for further proceedings.
The district court found three legal errors in the ALJ’s decision: (1) failure
to make the necessary findings at each of the RFC assessment phases–specifically
the ALJ’s failure to address plaintiff’s functional capacity to stand and walk in an
eight-hour workday; (2) the resulting failure to adequately address Fleming’s
standing/walking limitations in the operative hypothetical presented to the
vocational expert; and (3) the ALJ’s failure in his heightened duty to adequately
develop the record, in light of the fact that plaintiff was not represented by
counsel. Based upon these errors, the district court found that the A LJ’s
assessment of Fleming’s RFC in the fourth step of the five-step analysis was not
grounded in substantial evidence in the record. See 20 C.F.R. § 404.1520(a)(4);
Fischer-Ross v. Barnhart, 431 F.3d 729, 731 (10th Cir. 2005) (“The Social
Security Administration employs an oft-repeated five-part sequential evaluation
process for determining whether a claimant is disabled.”).
-2-
Fleming filed a motion for fees under the EA JA. The district court denied
the motion, concluding that, when viewed under a totality of the circumstances,
the C ommissioner’s position was reasonable in fact and law, and therefore
substantially justified.
Under the EAJA, a fee award is required if (1) Fleming is a “prevailing
party”; (2) the position of the United States was not “substantially justified”; and
(3) there are no special circumstances that make an award unjust. 28 U.S.C.
§ 2412(d)(1)(A ). The EAJA explains that the “position of the United States” is
“in addition to the position taken by the United States in the civil action, the
action or failure to act by the agency upon which the civil action is based.”
Id. § 2412(d)(2)(D). The only dispute in this appeal is whether the government’s
position was substantially justified.
The government’s position was substantially justified if it was “justified in
substance or in the main–that is, justified to a degree that could satisfy a
reasonable person.” Pierce v. Underwood, 487 U.S. 552, 565 (1988) (quotation
omitted). The Supreme Court equated this standard with a reasonable basis both
in law and fact, and the position of the government will be deemed to be
substantially justified if there is a genuine dispute, or if reasonable people could
differ as to the appropriateness of the contested action. Id. M oreover, the
government’s “position can be justified even though it is not correct . . . and it
-3-
can be substantially (i.e., for the most part) justified if a reasonable person could
think it correct . . . .” Id. at 566 n.2.
In opposing Fleming’s motion for fees, the Commissioner contended that
the government’s position prior to the district court’s reversal was substantially
justified. In her brief on the merits, the Commissioner had conceded that the
ALJ’s assessment of RFC was defective. However, she argued that the A LJ’s
failure to make findings on Fleming’s standing/walking capacity was harmless
error in light of the other evidence in the record that she contended supported the
ALJ’s decision. Specifically, the Commissioner pointed to the fact that the ALJ
placed “great weight” on the opinion of a non-treating physician, who concluded
that Flem ing could “sit, stand and walk for an eight-hour workday with
reasonable breaks.” Aplt. App., Vol. 1 at 72 (quotations omitted). As to the
adequacy of the ALJ’s development of the record, the Commissioner argued that
the hearing transcript showed that Fleming had received a full and fair hearing.
In reviewing Fleming’s motion for fees, the district court assessed the
government’s position, as viewed under the totality of the circumstances. See
Comm’r, INS v. Jean, 496 U.S. 154, 161-62 (1990) (“[T]he EA JA–like other
fee-shifting statutes–favors treating a case as an inclusive whole, rather than as
atomized line-items.”). It noted that the ALJ had reviewed all the evidence in the
record, which “although admittedly conflicting, could have been sufficient to
support the A LJ’s conclusions if [the] functions of standing and walking were
-4-
properly addressed.” Aplt. App., Vol. 1 at 4. The district court characterized the
Commissioner’s position below, including her proper concession of error and her
argument that it was harmless, as not unreasonable in fact or in law under the
circumstances of this case, and therefore substantially justified.
W e review the district court’s decision that the government’s position was
substantially justified for abuse of discretion. Gilbert v. Shalala, 45 F.3d 1391,
1394 (10th Cir. 1995). “A n abuse of discretion occurs when the district court
bases its ruling on an erroneous conclusion of law or relies on clearly erroneous
fact findings,” Kiowa Indian Tribe of Okla. v. Hoover, 150 F.3d 1163, 1165
(10th Cir. 1998), or when the district court’s decision is “arbitrary, capricious or
whimsical, or results in a manifestly unreasonable judgment,” M oothart v. Bell,
21 F.3d 1499, 1504-05 (10th Cir. 1994) (quotations omitted). This court “must
carefully scrutinize the district court’s exercise of its discretion, but we may not
. . . substitute our own judgment for that of the trial court.” Kiowa Indian Tribe,
150 F.3d at 1165 (quotation omitted) (alteration in original).
Fleming argues that the district court improperly applied the legal standard
for EAJA fees. He contends that the district court’s reasoning in finding
substantial justification based upon the government’s harmless error argument
amounts to a post hoc justification of the ALJ’s decision. W e disagree. W ith this
argument, plaintiff conflates the merits analysis of whether the government’s
legal position was wrong–which is not in dispute–with the determination whether
-5-
its position was substantially justified. Fleming’s approach to assessing
substantial justification applies twenty-twenty hindsight, rather than examining
the government’s position as it w as litigated. See Pierce, 487 U.S. at 566 n.2.
(noting that government’s “position can be justified even though it is not
correct”); Gonzales v. Free Speech Coalition, 408 F.3d 613, 620 (9th Cir. 2005)
(observing importance of avoiding hindsight in assessing government’s position).
The district court did not make legally inconsistent findings regarding
substantial evidence, as the plaintiff contends. On the merits, the district court
considered whether there was substantial evidence to support the ALJ’s decision
and found that there was not. In subsequently deciding Fleming’s fee motion, the
court assessed whether it was reasonable in law and in fact for the Commissioner
to argue there was substantial evidence. See Fulton v. Heckler, 784 F.2d 348, 349
(10th Cir. 1986). In reversing and remanding on the merits, the district court
declined the Commissioner’s invitation, under a harmless error analysis, to supply
the missing RFC findings regarding standing and walking. However, in denying
Fleming’s fee motion, the district court held it was not unreasonable for the
Commissioner to concede the ALJ’s error, yet argue it was harmless, even though
that position did not ultimately carry the day. The district court found the
government’s position to be substantially justified in this case, not because the
error was harmless, but because it was not unreasonable under the circumstances
of this case to argue that it was harmless.
-6-
Based on our review of the record and given our deferential standard of
review, we cannot conclude that the district court abused its discretion. It
appropriately considered whether the government’s position was reasonable in
law and fact, under circumstances as to which reasonable minds could differ. See
Pierce, 487 U.S. at 565. W e do not find that the district court was arbitrary,
capricious or exercised manifestly unreasonable judgment in reaching its
conclusion that the government’s position was substantially justified. See
M oothart, 21 F.3d at 1504-05. Because w e do not have a definite and firm
conviction that the lower court made a clear error of judgment or exceeded the
bounds of permissible choice, the trial court’s decision will not be disturbed. See
id. at 1504.
The judgment of the district court is AFFIRMED.
Entered for the Court
W ade Brorby
Circuit Judge
-7-
| {
"pile_set_name": "FreeLaw"
} |
NOTE: This order is nonprecedential
United States Court of Appeals
for the FederaI Circuit
IN RE BATS TRADING, INC. (ALs0 KNOWN As BATS
EXcHANGE, INc.), THE NASDAQ OMX GROUP, INC.,
NASDAQ 0MX PHLX, INC., INTERNATIONAL
SECURITIES EXCHANGE, LLC, CHICAGO BOARD
OPTIONS EXCHANGE, INCORPORATED, NYSE
EURONEXT, NYSE ARCA, INC., NYSE AM`EX, LLC,
SECURITIES INDUSTRY AUTOMATION
CORPORATION, 0PTIONS PRICE REPORTING
AUTHORITY, BOSTON 0PTIONS EXCHANGE
GROUP, LLC, CME GROUP, INC., BOARD OF
TRADE OF THE CITY 0F CHICAGO, INC., AN1) NEW
YORK MERCANTILE EXCHANGE, INC.,
Petiti0ners.
Miscel1ane0us D0cket N0. 964
On Petiti0n for Writ of Mandamus to the United
States District C0urt for the Eastern District of Texas in
case noS. 09-CV-0327, Judge Le0nard Davis.
ON PETITION FOR WRIT OF MANDAMUS
ORDER
2
BATS Trading, Inc. et al. submit a petition for a writ
of mandamus to direct the United States District Court
for the Eastern District of Texas to vacate its orders
denying transfer and to direct transfer to the United
States District Court for the S0uthern District of NeW
York.
Upon consideration thereof,
IT IS ORDERED THAT:
Rea1time Data, LLC is directed to respond no later
than November 12, 2010.
FOR THE CoURT
2 6 /sf Jan Horba1y
Date J an Horba1y
C1erk
cc: Keith J. Grady, Esq.
Scott F. Partridge, Esq. U.S.COURFEl|l'=`§B’EALS FOR
David R. Francescani, Esq. per 2 6 wm
M1chael M. Murray, Esq.
Stephen J. Kastenberg, Esq. _(
J ames H. Shalek, Esq.
Robert A. Cote, Jr., Esq. 7
C1erk, United States District Court For The Eastern
District Of TexaS
s19
| {
"pile_set_name": "FreeLaw"
} |
9 B.R. 901 (1981)
In re Maxine KIRBY a/k/a Maxine Kirby Rodriguez, Trustee, Debtor.
PROVIDENT NATIONAL BANK, Plaintiff,
v.
Maxine KIRBY a/k/a Maxine Kirby Rodriguez, Trustee,
and
Margaret Graham, Trustee, Defendants.
Bankruptcy No. 80-02516G, Adv. No. 81-0066G.
United States Bankruptcy Court, E.D. Pennsylvania.
March 27, 1981.
*902 Brett K. Kunin, Philadelphia, Pa., for plaintiff, Provident National Bank.
Stokes E. Mott, Jr., S. Simpson Gray, Philadelphia, Pa., for debtor/defendant, Maxine Kirby a/k/a Maxine Kirby Rodriguez, trustee.
Margaret Graham, Philadelphia, Pa., trustee.
OPINION
EMIL F. GOLDHABER, Bankruptcy Judge:
The issue which confronts us in the case at bench is whether a debtor who owns property as a fiduciary may file a petition under chapter 13 both as an individual and as a trustee where she does not earn any income as trustee but only in her individual capacity. We conclude that she may not because, as a trustee, she is not "an individual with a regular source of income" as required by § 109(e) of the Bankruptcy Code ("the Code").
The facts of the instant case are as follows:[1] On November 12, 1972, Maxine W. Kirby ("the debtor") and her then husband, Charles G. Kirby, executed a purchase money mortgage to the Provident National Bank ("Provident") in the amount of $12,500 on premises located at 723 Dorset Street, Philadelphia, Pennsylvania. Because of a default on that loan, Provident instituted mortgage foreclosure proceedings in the state court and entered judgment against the debtor and her husband on July 3, 1980. Thereafter, Provident filed a writ of execution and the premises were scheduled for sheriff's sale on October 6, 1980.
On October 3, 1980, the debtor, under the name of Maxine Kirby, filed a petition for an adjustment of her debts under chapter 13 of the Code. When the Sheriff of Philadelphia County was served with a copy of the petition he ordered the sale of the premises stayed.
At the time of the filing of the debtor's petition, the property which had been scheduled for sale was titled in the name of "Maxine W. Kirby, Trustee," because the premises had been transferred by the debtor and her former husband to the debtor as trustee for their two children. Although the debtor had originally filed her petition under chapter 13 solely in her individual name, she subsequently, in an effort to stay the sheriff's sale, amended her petition so that the caption read "Maxine Kirby, a/k/a Maxine Kirby Rodriguez, Trustee."[2]
Provident then filed a complaint for relief from the automatic stay provisions of § 362(a) of the Code in which it also requested that the petition of the debtor as trustee be dismissed.[3] At the trial, the only *903 evidence offered by Provident was the testimony of the debtor who was called as an adverse witness and conceded that she had no income in her capacity as trustee. On the basis of that testimony, Provident argued that the debtor as trustee was not an individual with a regular source of income and, therefore, was not eligible for relief under chapter 13 of the Code. Accordingly, Provident alternatively requested that the automatic stay be modified to permit it to proceed against the property held by the debtor as trustee or that the chapter 13 case of the debtor as trustee be dismissed. The debtor offered no evidence at the trial but simply argued that the stay should not be lifted because there was a significant amount of equity in the property and that the property was necessary to the debtor's chapter 13 plan, neither of which averments was disputed by Provident.
With respect to the motion to dismiss the chapter 13 case of the debtor as trustee, we agree with Provident that the debtor as trustee is not eligible to file a petition under chapter 13 of the Code. Section 109(e) of the Code provides: "Only an individual with regular income . . . may be a debtor under chapter 13 of this title" and § 101(24) defines an "individual with regular income" to include "an individual whose income is sufficiently stable and regular to enable such individual to make payments under a plan under chapter 13 of this title, other than a stockbroker or a commodity broker."
While we cannot categorically state that one who acts as a trustee or in any other fiduciary capacity may never file a petition under chapter 13,[4] we conclude that such an individual may not file a petition under chapter 13 unless he has a regular source of income. In the case sub judice the debtor has admitted that she has no income in her capacity as trustee. Therefore, we conclude that she is ineligible in her capacity as trustee to file a petition under chapter 13. Accordingly, we will dismiss the chapter 13 case filed by the debtor in her capacity as trustee.
Neither the debtor nor Provident offered any testimony on the issues relevant to a modification of the automatic stay.[5] Each assumed that the dismissal of the petition of the debtor as trustee makes that issue moot. Because of the lack of evidence, we are unable to determine whether the debtor as an individual has any interest in the realty to which she holds title "as trustee." Since Provident, as the party requesting relief from the stay, has the burden of proof on the issue of the debtor's lack of equity or interest in the property,[6] its failure to present any evidence on that issue is fatal to that portion of its complaint which seeks modification of the automatic stay. Lacking such evidence we cannot determine whether the automatic stay applies and we must deny the complaint founded on that unproven premise.
NOTES
[1] This opinion constitutes the findings of fact and conclusions of law required by Rule 752 of the Rules of Bankruptcy Procedure.
[2] Apparently neither party considers it important that the property is held by "Maxine Kirby, Trustee" whicle the amended petition was filed by "Maxine Kirby Rodriguez, Trustee."
[3] Provident's motion to dismiss was based on two grounds: (1) that the debtor has failed to make the payments required under and outside of the plan and (2) that the debtor as trustee was not eligible for relief under chapter 13. At the trial Provident requested that we postpone a decision on the first basis for its motion until it could get a reply from Margaret Graham, the chapter 13 standing trustee, as to the debtor's payments under the plan.
[4] We have been unable to find any cases or commentary which address this exact issue.
[5] See 11 U.S.C. § 362(d).
[6] See id. at § 362(g).
| {
"pile_set_name": "FreeLaw"
} |
763 F.2d 169
10 Soc.Sec.Rep.Ser. 38, Unempl.Ins.Rep. CCH 16,124Jack W. INGLE, Appellant,v.Margaret M. HECKLER, Secretary of Health & Human Services, Appellee.
No. 84-1886.
United States Court of Appeals,Fourth Circuit.
Argued April 5, 1985. Decided June 5, 1985.
Julie A. Waltz, Asheville, N.C., for appellant.
Clifford C. Marshall, Asst. U.S. Atty., Asheville, N.C. (Charles R. Brewer, U.S. Atty., Asheville, N.C., on brief), for appellee.
Before SPROUSE and WILKINSON, Circuit Judges, and BUTZNER, Senior Circuit Judge.
PER CURIAM:
1
Jack W. Ingle appeals from the district court's order granting summary judgment for the Secretary of Health and Human Services. Ingle sought review under 42 U.S.C. Sec. 405 of the Secretary's final decision denying his claim for disability. The district court found that the decision was supported by substantial evidence. We affirm.
2
Ingle raises only one issue on appeal, whether the Secretary properly determined that he had sufficient transferable skills so that his impairments would not prevent him from performing other work. Ingle contends that a proper application of the skill requirements, 20 C.F.R. Sec. 404.1568 (1984), would result in a finding that he had no transferable skills, and he would be entitled to an affirmative finding of disability based on the residual functional capacity tables. Compare 20 C.F.R., Part 404, Subpart P, Appendix 2, Table No. 1, Rule 201.06 with Rule 201.07.
3
After a remand to the administrative law judge by the Social Security Appeals Council, Ingle's skills were evaluated by a vocational expert who testified at the administrative hearing. Before the district court, Ingle argued that the vocational expert incorrectly categorized some of Ingle's abilities as "skills." The district court agreed that basic abilities to read, write and count are not skills within the meaning of the Social Security Act. These abilities were not acquired through work experience or through education providing for direct entry into skilled work. See 20 C.F.R. Sec. 404.1568(d). See also Weaver v. Secretary of HHS, 722 F.2d 310, 311-12 (6th Cir.1983) (dexterity, coordination and other natural talents are not specific job skills); Blake v. Secretary of HHS, 528 F.Supp. 881, 885 (E.D.Mich.1981) (distinguishing "basic work activities" or aptitudes from skills).
4
Notwithstanding the overbroad classification of Ingle's abilities, the district court found that other abilities identified by the vocational expert, such as record keeping, use of firefighting machinery and tools, and responding to emergency situations, were skills that the Secretary properly could find to be transferable to other work.
5
Having considered the entire record, including Ingle's vocational report and the testimony of the vocational expert, we agree with the district court that the Secretary's decision is supported by substantial evidence, and that Ingle's skills and impairments were evaluated according to the correct legal standards. We therefore affirm the judgment of the district court.
6
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
729 F.2d 1454
Ray (Clarence)v.Styles (Phillip B.)
NO. 84-8014
United States Court of Appeals,fourth Circuit.
MAR 22, 1984
1
Appeal From: W.D.N.C.
2
CPC DENIED-DISMISSED.
| {
"pile_set_name": "FreeLaw"
} |
17 F.3d 1431
U.S.v.Carroll (Dennis B.)
NO. 93-1387
United States Court of Appeals,Third Circuit.
Jan 25, 1994
Appeal From: E.D.Pa.,
Ditter, J.
1
AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
In the United States Court of Federal Claims
No. 18-1566C
(Filed: December 11, 2018)
(Re-Filed: February 5, 2019) 1
**************************
SYNAPTEK, INC.,
Plaintiff,
Bid protest; post-award bid
v. protest; FAR 15.308 (2018);
FAR 9.105-2(a)(1) (2018);
THE UNITED STATES,
best value determination;
Defendant, price reasonableness;
responsibility determination.
and
OPEN SAN CONSULTING, LLC,
Intervenor.
**************************
Jerry A. Miles, Rockville, MD, for plaintiff, with whom was Christine
Funk.
Reta Emma Bezak, Trial Attorney, United States Department of
Justice, Civil Division, Commercial Litigation Branch, Washington, DC,
with whom were Joseph H. Hunt, Assistant Attorney General, Robert E.
Kirschman, Jr., Director, Deborah A. Bynum, Assistant Director, for
defendant. Theresa S. Keenan, Department of the Navy, NAVSUP FLC
Norfolk, assistant counsel.
1
This opinion was originally issued under seal to permit the parties an
opportunity to propose redactions on or before February 4, 2019. The
government and intervenor proposed redactions on February 4, mooting
intervenor’s December 31, 2018 motion to redact. Plaintiff did not file
proposed redactions. We thus adopt defendant’s and intervenor’s agreed-
upon redactions.
Matthew Moriarty, Lawrence, KS, for intervenor. Matthew T.
Schoonover, Steven J. Koprince, and Haley E. Claxton, of counsel.
OPINION
BRUGGINK, Judge.
This is a post-award bid protest by Synaptek, Inc. (“Synaptek”), of an
award by the United States Department of the Navy, NAVSUP Fleet
Logistics Center (“the Navy”), of a contract for information technology
(“IT”) support services for the National Defense University (“NDU”) to
Open SAN Consulting, LLC (“OSC”).
The parties filed cross-motions for judgment on the administrative
record. The matter is fully briefed, and we held oral argument on December
6, 2018. Because the Navy properly documented its award and its analysis
was reasonable, we grant defendant’s and intervenor’s motions for judgment
on the administrative record and deny plaintiff’s motion.
BACKGROUND
The Navy issued a small business set-aside solicitation to procure IT
services for the NDU, intending to award a single, firm fixed price, indefinite
delivery, indefinite quantity type contract to the responsible offeror who
represented the best value to the government. The Navy planned to award a
contract without discussions and reserved the right to award the contract to
an offeror who was not the lowest priced offeror.
The Source Selection Evaluation Board (“SSEB”) would consider the
following factors, listed in descending order of importance: Management
Approach, Performance Approach, and Past Performance. Management
Approach and Performance Approach were rated Unacceptable, Marginal,
Acceptable, Good, or Outstanding. Past Performance was rated No
Confidence, Limited Confidence, Neutral Confidence (or Unknown
Confidence), Satisfactory Confidence, or Substantial Confidence. To be
eligible for award, an offeror had to be rated at least Acceptable overall. The
Source Selection Authority (“SSA”) would evaluate price for
reasonableness.
2
The Navy received twelve proposals. The SSEB determined that four
offerors were eligible for award, listed from first to last place: Synaptek,
OSC, [ ], and [ ]. The SSEB rated Synaptek Outstanding and
rated OSC Good. [ ]
OSC was rated Outstanding on Management Approach, Good on
Performance Approach, and Unknown Confidence on Past Performance. On
Management Approach, the SSEB determined that OSC provided “multiple
strengths, and risk of unsuccessful performance is low.” Administrative
Record (“AR”) 522. For Task 5.1 Program Management, the SSEB assigned
OSC a strength based on OSC’s “management program managed by a long
term Project Manager and [ ].” Id. It also assigned
OSC strengths for Task 5.1 for its “holistic 11 area project management
methodology,” “a proprietary [
],” and “program management
methodology.” Id. The SSEB assigned strengths to OSC for the rest of the
Management Approach tasks but noted that OSC’s proposal only marginally
addressed anticipated risks. Overall, the SSEB found that OSC presented a
“well-constructed, logical and efficient strategy” for its Management
Approach and its multiple strengths outweighed the single risk. AR 525.
On Performance Approach, the SSEB determined that OSC presented
a “thorough approach to Program Management, Cyber Security and
Transition.” AR 528. OSC’s weakness was Task 5.6 Technology Planning
and Modernization, where the SSEB determined that OSC “does not provide
specifics on how the offeror will embark on the evaluation and identification
of the needs of the organization.” AR 526-27. The SSEB nevertheless
determined that OSC “did illustrate an understanding and of approaches to
modernization in other areas of the document . . . and this is considered
adequate.” AR 527. The SSEB also noted that OSC did not address certain
memorandums to record under Cyber Security. The SSEB found that due to
OSC’s “empowered management style,” “appropriately addressed” Cyber
Security, and “strong transition plan,” OSC had demonstrated “a well-
constructed, effective approach.” AR 528.
OSC presented three references for Past Performance; each was
“Somewhat Relevant.” AR 531. The SSEB nevertheless ranked OSC
“Unknown Confidence (Neutral)” because OSC’s “performance record is so
sparse that no meaningful confidence assessment rating can be reasonably
assigned.” AR 532. Although it had performed in a DoD environment,
3
because OSC had not performed in a DoD educational environment, OSC
did not demonstrate similar complexity. The SSEB noted that OSC’s
references “indicated a customer focused management that met or exceeded
timelines, and provided forward facing staff which exceeded quality
metrics.” AR 533.
The SSEB rated Synaptek Outstanding on both Management
Approach and Performance Approach and rated it Substantial Confidence on
Past Performance. Regarding Management Approach, the SSEB determined
that Synaptek’s proposal was exceptional, noting, however, that its approach
to managing its subcontractor performance and its assessment of risks in
undertaking this project were thorough rather than exceptional. Synaptek’s
Management Approach, overall, “contained multiple strengths which lend
toward low risk effective performance.” AR 537.
Regarding Performance Approach, the SSEB found that Synaptek’s
approach was exceptional except for Cyber Security Support, which was
thorough. Synaptek’s Transition-In Plan was exceptional in part because
GDIT, the incumbent, is a proposed subcontractor for Synaptek.
Synaptek offered three references, one of which was “Very Relevant”
while the other two were “Somewhat Relevant.” AR 542. Its first reference
indicated that it was a subcontractor on the incumbent contract and therefore
it had similar experience. Overall, the SSEB had a “high expectation that
Synaptek will successfully perform the required effort.” AR 543.
In its summary, the SSEB wrote that both OSC and Synaptek received
Outstanding for the most important factor, Management Approach. “[T]he
Synaptek approach [is] slightly superior as there were no weakness[es] in the
Synaptek Management Approach while the OSC Edge approach contained a
significant weakness in risk component.” AR 545. Likewise, Synaptek was
rated higher than OSC on Performance Approach, because it did not have
any weaknesses compared to OSC’s Technology and Modernization
weakness. Finally, although both “received strong feedback, touting high
quality service[] levels and a strong customer focus,” Synaptek was rated
Substantial Confidence whereas OSC was rated Unknown Confidence. AR
546.
Before heading into the SSA’s price evaluation and best value
determination, Synaptek and OSC held first and second place, respectively,
with [ ] and [ ] the final two acceptable offerors. The price
4
proposals of all offers ranged from a low of $35,185,276 to a high of
$79,912,424. The range of acceptable offers included the following price
proposals:
Price Non-
Non-Price
Offeror Total above Price
Rating
Low Ranking
[ ] [ ] [ ] LOW 4
OSC Good $44,290,359 [ ] 2
[ ] [ ] [ ] [ ] 3
Synaptek Outstanding $62,009,284 [ ] 1
AR 567.
The total difference between Synaptek and OSC is $17,718,925.
For the SSA’s price analysis, offerors provided fully burdened labor
hour rates for 32 labor categories, 75% of which were performed in DC, 20%
performed in Norfolk, Virginia, and 5% performed at the contractor site for
the five-year ordering period. The price competition was in accordance with
Federal Acquisition Regulation (“FAR”) 15.404-1(b)(2)(i) (2018) and the
SSA deemed that section satisfied because two or more responsible offerors,
competing independently, submitted price offers. The SSA compared the
total proposed price of the offerors. She then used a comparative analysis to
determine which proposal represented the best value, considering the “[n]on-
price proposal more important than the offeror’s price proposal.” AR 566.
The SSA concluded that OSC, “as the offer ranked second from a non-price
standpoint and although slightly higher than the lowest price [ ] offer[,] . . .
is determined to represent the best value to the Government, price and other
factors considered.” AR 567.
The SSA began by explaining that “[p]otential contributors to the
price delta” between the eligible offerors’ prices include “the fact that direct
labor rates and indirect cost pools are individual to each company . . . .” AR
568. Additionally, because each of the labor categories in the solicitation
5
permitted equivalency offsets for education and experience, the solicitation
allowed for “a good deal of flexibility in the development of resource pools
to satisfy the requirement and thereby contributes to the price delta among
the offerors.” Id. The SSA determined OSC’s price to be fair and reasonable
in comparison to the other prices.
Next, the SSA compared OSC’s price to “prices being paid for similar
services under the predecessor Task Order.” Id. For “Change Manager” and
“Cyber Security Specialist,” OSC’s price was [ ] and [ ] higher than
the historical data. For all other labor categories, OSC’s price was lower,
ranging from [ ] to [ ] for an average of [ ] lower than the
historical data. The SSA explained that the difference was at least in part
attributable to the use of “published GSA Alliant rates” when actual rates
were not available. The SSA found that OSC’s rates compared favorably to
the prior contract.
The SSA also compared OSC’s price to prices obtained through data
from the Bureau of Labor Statistics and an industry survey. She compared
not only OSC’s price to that metric but also [ ]’s lower price. The SSA
found that OSC’s rate was favorable and that its lower price may be
attributable to the use of the Bureau’s hourly mean wage rate, from which
there could be variance above or below.
Finally, the SSA compared OSC’s price to the Independent
Government Estimate (“IGE”). The IGE was $74,158,350, primarily
calculated using the median GSA Alliant rates, which are drawn from more
than fifty companies. The GSA Alliant rates contain “a wide range of labor
category pricing, which results in varying pricing [from] the offerors.” AR
573. Because the GSA Alliant rates were higher than even the incumbent’s
published rates and had used a slightly higher than market escalation rate, the
SSA discounted the helpfulness of the IGE. She assumed that “the
environment of the instant acquisition maximized competitive behavior
techniques relative to preparation of proposals.” Id. She acknowledged that
OSC was lower than the comparative prices but concluded that its price was
reasonable.
After this comparison, the SSA conducted the best value
determination. She began by acknowledging that OSC was ranked second to
Synaptek on the technical factors. The SSA compared OSC’s and Synaptek’s
performance on the individual factors. For Management Approach, the most
6
important factor, she noted that Synaptek demonstrated no weaknesses
whereas OSC demonstrated one weakness for failure to specifically identify
risks and mitigation techniques. She wrote that “Synaptek was slightly
superior to OSC,” even though both offerors were rated Outstanding. AR
575. For Performance Approach, the SSA reviewed both offers and
concluded that Synaptek “is considered superior to” OSC even though both
offerors presented multiple strengths. Id. Synaptek provided a better
Technology and Modernization plan than OSC, but the SSA noted that OSC
“appropriately addressed” each area of Cyber Security. Id. Finally, on Past
Performance, Synaptek was also the technically superior offeror, “[d]ue to
the strong feedback on the very relevant reference” to the incumbent
contract. Id. OSC did not provide a very relevant reference even though
OSC’s experience “demonstrated similar scope and magnitude when viewed
in the aggregate.” Id. The SSA found that OSC’s primary weakness was lack
of experience in a DoD educational environment, despite its experience in
other DoD environments.
The SSA concluded that Synaptek is “the technically superior
proposal when compared to OSC Edge based on its slightly superior
Management Approach and its superior Performance Approach and Past
Performance.” AR 576. The SSA noted, “However, Synaptek’s price is
40.1% higher than the OSC Edge proposed price.” Id. She explained why
Synaptek’s premium was not the best value to the government:
Although the Synaptek Management Approach was
determined to be slightly superior in the area of risk
identification[,] the OSC Edge Management Approach was
nonetheless considered Outstanding, offering a well-
constructed, efficient strategy for performance. The
Performance Approach of Synaptek was considered
Outstanding, with multiple strengths; the OSC Edge was
considered Good, with multiple strengths which offset a
weakness in the Technology and [M]odernization area. The
Past Performance of Synaptek was rated Substantial
Confidence, providing the incumbent reference for which
above satisfactory performance was supported. OSC Edge
provided references which were considered somewhat relevant
in the aggregate; however, the references met the scope and
magnitude of the requirement but lacked one component of the
7
complexity of the educational environment. Strong feedback
was received on the references. Despite a rating of Unknown
Confidence (Neutral) in Past Performance, it is noted the rating
stems from the lack of one component of complexity, but
otherwise meets the requirements. This, along with the strong
feedback [that] was obtained from the references, limits the
risk associated with the Neutral rating. OSC Edge received the
highest rating for the most important factor, a Good rating for
the second most important factor, and the strong feedback in
Past Performance. Therefore, the non-price superiority of the
offer submitted by Synaptek does not warrant a price premium
of 40.1% (or $17,718,925).
Id.
The SSA then compared OSC’s offer to the two Acceptable offerors.
The SSA determined that “OSC Edge’s proposal is superior to [
] based on OSC Edge’s multiple strengths . . . .” Id. “Both offerors received
a rating of Unknown Confidence in Past Performance, primarily due to the
lack of the complexity component of performance in an educational
environment, thereby rendering the ratings approximately equal.” Id. She
concluded, “As [ ] was ranked below OSC from a non-price
standpoint, with the OSC considered superior to [ ] in two of the
three evaluation factors, and priced 20.9% higher than OSC, award to
[ ] would not be the best value to the Government.” Id.
Likewise, OSC was ranked technically superior on Management
Approach and Performance Approach compared to [ ]. The SSA found
that “[a]lthough OSC Edge is priced 2.68% higher than [ ], the strengths
in the OSC Edge non-price proposal, particularly in the areas of Cyber
Security, management of personnel qualifications and transition support the
nominal price difference between OSC Edge and [ ].” AR 577.
The SSA concluded that OSC’s performance risk is low:
While the Technical Evaluation labeled OSC Edge’s
Past Performance a rating of Unknown/Neutral, indicating a
performance record that is so sparse that no meaningful
confidence assessment rating can be reasonably assigned, the
SSA reviewed the underlying details of the technical
evaluation and references OSC Edge provided and considers
8
OSC Edge’s Past Performance to be more appropriately rated
Satisfactory Confidence, indicating the Government has a
reasonable expectation that the offeror will successfully
perform the required effort.
Id.
The SSA concluded that OSC could overcome its lack of work in a
DoD educational environment since it had performed in “multiple DoD
environments . . . giving the SSA a reasonable expectation that OSC Edge
would be able to adapt to the educational environment and perform
satisfactorily. Furthermore, OSC Edge performance met or exceeded all
quality metrics under the references.” AR 577-78. The SSA wrote that OSC
had been determined responsible and that its price was fair and reasonable.
After consideration of the non-price and price factors, the SSA recommended
award to OSC.
The Navy identified OSC as the apparent awardee on November 22,
2017. Synaptek filed a size protest on November 14, which the SBA denied.
Synaptek next filed a protest at the agency on December 13 while
simultaneously appealing the SBA’s denial of its size protest. The Navy
dismissed the agency protest as premature on January 3, 2018. The SBA
OHA denied Synaptek’s appeal.
The Navy awarded the contract to OSC on January 5, issuing a bridge
contract to the incumbent, GDIT, through February 28 to allow time for
transition to OSC. Synaptek and Envistacom [
] filed GAO protests on January 15 and 16, 2018. GAO dismissed
these protests as premature, because the Navy had not yet given debriefings.
The Navy delivered debrief letters on January 31 and both offerors
filed GAO protests on February 5. GAO dismissed a portion of Synaptek’s
protest but directed the Navy to respond to certain allegations.
On February 28, 2018, the Navy issued another bridge action to GDIT
for performance through July 31. On March 1, the Navy notified GAO that
it intended to take corrective action regarding the Envistacom and Synaptek
protests. GAO dismissed the protests on March 8.
For corrective action, the Navy determined that Envistacom’s
allegations warranted reevaluation by the SSEB of Envistacom’s proposal.
The SSA reviewed Synaptek’s allegations and determined that SSEB
9
reevaluation of Synaptek’s and OSC’s proposal was not necessary, but the
SSA did choose to consider Synaptek’s allegations in detail in her second
source selection decision. Ultimately, the SSEB’s reevaluation of
Envistacom did not change the Navy’s determination of offerors eligible for
award. After review of Synaptek’s protest allegations, the SSA agreed that
two positive aspects of OSC’s evaluation should be changed, but that those
two changes did not alter OSC non-price factor ratings or its overall rating.
In the second source selection decision, the SSA repeated the
summary of each proposal before returning to the price analysis. The SSA
added two price comparison components in the source selection decision.
First, the SSA compared “the average fully burdened rate of the bridge
action” to “the average proposed fully burdened rate of the instant
acquisition.” AR 656. She divided “the estimated price by the labor hours for
both the existing contract and the proposed acquisition.” Id. She found that
OSC’s “average fully burdened rate for the instant acquisition is [ ] . . .
which is [ ] lower than the existing bridge rates,” [ ]. Id. The SSA
reasoned that, due to factors such as GDIT’s [ ] pass through rate,
equivalency offsets, and a competitive environment, OSC’s price was
reasonable. Id.
The SSA also added a direct comparison of OSC and Synaptek.
OSC’s price “is less than, or within a [ ] delta of the proposed Synaptek
price for approx. [ ] of the proposed labor categories. In addition, there is
a[ ] delta between the proposed OSC Edge price and the Synaptek price
for the Operations Manager labor category.” Id. The SSA explained that the
current solicitation reduced the Operations Manager requirements and this
reduction contributed to the price difference. The SSA noted that the
equivalency offsets permitted “a good deal of flexibility in the development
of resource pools to satisfy the requirement and thereby contributes to the
price delta among the offerors.” Id. The SSA wrote that the Navy anticipated
offers to create a variety of structures for their labor category proposals. The
SSA again acknowledged that OSC price was lower than Synaptek’s but
found OSC’s price fair and reasonable.
Finally, the SSA reviewed Synaptek’s allegations regarding OSC’s
deficiencies. The SSA adjusted OSC’s rating in two respects. First, the SSA
reviewed the SSEB’s evaluation of OSC’s Management Approach. Synaptek
alleged that OSC impermissibly had failed to indicate a permanent Program
10
Manager and that OSC’s transitional, independent consultant Program
Manager created operational risk.
The SSA found that the solicitation included a Program Manager
labor category, but that OSC was not required to appoint a permanent
representative at the outset. OSC should have identified that program
manager as a consultant, but the SSA did not find OSC’s failure to disclose
material. The SSA removed OSC’s assigned strength for a long-term Project
Manager. Since OSC had at least three other named strengths under
Management Approach and because the [
] went beyond the solicitation’s requirements, the SSA determined
that the removal of one strength did not warrant downgrading OSC from
Outstanding for Management Approach.
Second, Synaptek alleged that OSC’s Past Performance was
overrated, because “[t]he SSEB determined that OSC Edge demonstrated
similar scope and magnitude when viewed in the aggregate but not similar
complexity.” AR 662. The SSA reviewed OSC’s references and agreed with
Synaptek that the original assessment was incorrect. OSC proposed to
perform 56.5% of the work and only one of its references listed OSC as the
prime contractor performing the work. That contract involved one of the task
areas implicated by the solicitation and was [ ] of the magnitude of the
solicitation. Therefore, OSC’s references were not of similar scope,
magnitude, or complexity. The quality of the performance and reviews
provided were satisfactory, however. The SSA found that the adjustment to
how OSC’s references were viewed in the aggregate did not change the
Unknown Confidence rating. The SSA “acknowledge[d] that OSC’s Past
Performance does create some risk and this is reflected in the best value trade
off section below.” AR 662.
The SSA did not make changes based on Synaptek’s remaining
allegations. Synaptek argued that OSC’s proposal to [
] created staffing risk. The SSA disagreed, noting that the [
] was permissible and in fact contributed to the strength of
OSC’s plan.
Synaptek also alleged that OSC would not be able to hire or retain
personnel with the required cyber security qualifications. The SSA reviewed
OSC’s proposal and the SSEB’s evaluation and found that OSC had not
departed from the solicitation and that its Staff Management Database
11
appeared capable of ensuring qualified staff. The SSA noted that, if OSC
failed to retain qualified staff, it would be a contract administration issue.
Synaptek also critiqued OSC’s ability to comply with the
subcontracting limitation. The SSA’s review satisfied her that OSC had
proposed its subcontractors properly, explained their role in OSC’s
performance, and proposed appropriate monitoring to ensure compliance
with the subcontracting limitation. The SSA noted that actual noncompliance
during performance was a contract administration issue.
Finally, Synaptek alleged that OSC’s Performance Approach was
overrated. The SSA found this allegation to be vague, but nevertheless
reviewed the SSEB’s evaluation and determined that an adjustment was not
warranted.
In the SSA’s new best value determination, OSC was in second place,
even after considering “the noted changes to the evaluation made by the SSA
through the corrective action.” AR 664. The SSA incorporated the changes
to OSC’s strengths into the best value analysis and determined, once again,
that Synaptek was “slightly superior” to OSC on Management Approach,
“superior” on Performance Approach, and “far superior” on Past
Performance. AR 665-66. The SSA’s conclusion relied on the comparisons
between Synaptek and OSC:
Synaptek is considered to be the technically superior
proposal when compared to OSC Edge based on its slightly
superior Management Approach and its superior Performance
Approach and far superior Past Performance. However,
Synaptek’s price is 40.1 % higher than the OSC Edge proposed
price. Although the Synaptek Management Approach was
determined to be slightly superior in the area of risk
identification; the OSC Edge Management Approach was
nonetheless considered Outstanding, offering a well-
constructed, efficient strategy for performance. The
Performance Approach of Synaptek was considered
Outstanding, with multiple strengths; the OSC Edge was
considered Good, with multiple strengths which offset a
weakness in the Technology and modernization area. The Past
Performance of Synaptek was rated Substantial Confidence,
providing the incumbent reference for which above
12
outstanding performance was supported. OSC Edge was rated
Unknown Confidence (Neutral) in Past Performance, primarily
based on the lack of similar references by OSC Edge as the
prime contractor. Despite Synaptek’s proposal being
technically superior to OSC Edge, it is determined that the non-
price superiority of the offer submitted by Synaptek does not
warrant a price premium of 40.1 % (or $17,718,925). The
Government acknowledges that OSC Edge provides an
increased risk of performance when compared to Synaptek,
largely as a result of the Past Performance factor, and that the
solicitation stated that the non-price proposal is more important
than the offeror’s price proposal, however, the price premium
to Synaptek is too significant. OSC Edge received the highest
rating for the most important factor, a Good rating for the
second most important factor, and an Unknown/Neutral rating
for Past Performance indicating that OSC Edge has the ability
to perform albeit with a moderate risk of performance.
AR 666.
The SSA also compared OSC to [ ] and to [ ] again,
reaching the conclusion that OSC remained the superior offeror. The SSA
increased OSC’s level of performance risk to “moderate,” but recommended
award to OSC. AR 668.
After the Navy awarded the contract to OSC, Synaptek protested once
again at GAO. GAO ultimately denied the protest, finding that the Navy
reasonably determined that OSC would adhere to the subcontracting
limitation and that the Navy’s best value tradeoff was reasonable.
Synaptek filed its complaint in this court on November 9, 2018.
DISCUSSION
Synaptek advances three arguments: that the Navy turned the best
value determination into an award to the lowest price technically acceptable
offeror; that the Navy’s evaluation of OSC’s technical proposal was
unreasonable; and that the Navy’s responsibility determination lacked a
13
rational basis and was not documented properly. 2 Our review of the Navy’s
decision considers whether it was “arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law. . . .” 5 U.S.C. § 706
(2018); 28 U.S.C. §1491(b)(4) (2018).
The present solicitation sought the best value for the government from
among the eligible proposals. “‘Best value’ means the expected outcome of
an acquisition that, in the Government’s estimation, provides the greatest
overall benefit in response to the requirement.” FAR 2.101. The government
may use a best value tradeoff analysis “when it may be in the best interest of
the Government to consider award to other than the lowest priced offeror or
other than the highest technically rated offeror.” FAR 15.101-1(a). When
making the best value determination, the SSA must use her “independent
judgment” to decide “based on a comparative assessment of proposals
against all source selection criteria in the solicitation.” FAR 15.308. The SSA
must document her decision, including “the rationale for any business
judgments and tradeoffs made or relied on by the SSA, including benefits
associated with additional costs. Although the rationale for the selection
decision must be documented, that documentation need not quantify the
tradeoffs that led to the decision.” Id.
A plaintiff seeking to disturb the SSA’s best value determination bears
a significant burden, because the SSA has a high degree of discretion in
determining which proposal offers the best value to the government. Galen
Med. Assocs., Inc. v. United States, 369 F.3d 1324, 1330 (Fed. Cir. 2004);
E.W. Bliss Co. v. United States, 77 F.3d 445, 449 (Fed. Cir. 1996).
I. The SSA’s Price Analysis and Best Value Determination
Before turning to the SSA’s best value determination, we note that the
common thread running through Synaptek’s arguments is that OSC’s price
2
Synaptek’s argument on its motion for judgment on the administrative
record omitted certain arguments raised in its complaint: (1) the Navy
unreasonably rated OSC’s price proposal because OSC’s price proposal is
unrealistically low; (2) the Navy unreasonably determined that OSC is able
to comply with the limitation on subcontracting rule; (3) the Navy
unreasonably failed to conduct corrective action; and (4) GAO’s summary
dismissal prejudiced Synaptek. As if still advanced, we have considered
those arguments, and we find that none of these arguments warrant granting
Synaptek’s motion.
14
proposal is too low to realistically guarantee that the Navy will reap the
benefits promised in OSC’s proposal. Synaptek does not contend that the
price analysis itself violated the FAR but rather that it was irrational to
believe OSC’s price is reasonable. The SSA here was required to review the
prices for reasonableness, not realism, and we must be careful not to conflate
the standards. See AR 24. The SSA considered the reasonableness of OSC’s
price in comparison to the other offerors, Synaptek’s price, the prior contract,
the bridge contract, the IGE, and market data. It is true that OSC’s price was
lower than each of these data points, but the SSA did not ignore that fact.
Instead, the SSA explained why she believed OSC’s price was lower than
each of the comparison prices. Given that the SSA gave logical reasons why
OSC’s price could be lower than the others and explained why certain data
points did not provide an accurate comparison, we see no reason to determine
that her analysis was irrational.
Turning to the best value analysis, Synaptek argues that the Navy
prioritized price over the technical factors in its best value tradeoff, violating
the terms of the solicitation by swapping a best value tradeoff for a lowest
price technically acceptable analysis. We disagree. The best indicator that the
SSA performed a best value analysis is the fact that the SSA recommended
OSC, not [ ], for award. [ ] had the lowest price proposal and was rated
Acceptable. OSC, on the other hand, was more expensive than [ ], rated
Good rather than Acceptable, and was technically superior to both [ ] and
[ ].
Furthermore, price was a factor, even though it was less important
than the technical factors. The best value analysis must take price into
account when it is an evaluation factor and the SSA is required to document
the “benefits associated with additional costs.” FAR 15.308. Here, the SSA
properly considered whether Synaptek’s plan warranted $17 million in
additional costs when compared to a “Good” proposal from an offeror whose
primary disadvantage was not having operated in the NDU educational
environment. The SSA’s determination that OSC offered the best value to
the Navy is an example of the government’s flexibility “to consider award to
other than the lowest priced offeror,” [ ], “or other than the highest
technically rated offeror,” Synaptek. FAR 15.101-1(a).
Synaptek also contends that the SSA’s source selection decision was
conclusory, drawing comparisons to First Line Transp. Sec., Inc. v. United
15
States, 100 Fed. Cl. 359, 382-84 (2011) and Femme Comp Inc. v. United
States, 83 Fed. Cl. 704, 757-770 (2008).
In First Line, “[o]n a short form attached to the SSEB
recommendation, the SSA stated that ‘[a]fter consideration of the
information provided to me by the technical and price evaluation members
and after accomplishing an independent review and assessment of the
technical and price consensus reports, I hereby determine that AKAL
Security is the best value offer solution by utilizing the trade-off method.’”
100 Fed. Cl. at 383. Unlike a single form with no explanation, the SSA here
explained her thought process. Particularly in the post-corrective action
source selection decision, the SSA’s decision reflects a judgment that at
points diverges from or corrects the SSEB’s recommendations and that
compares OSC not only to the technically superior offer but also to the other
two eligible proposals.
Moreover, unlike the SSA in Femme Comp Inc. who adopted a flawed
SSEB technical evaluation and minimized or conflated the difference
between offerors, here in both the original and the post-corrective action
source selection decision, the SSA repeatedly acknowledged Synaptek’s
technical superiority, which ranged from “slightly” to “far more” superior
than OSC. See 83 Fed. Cl. at 757-770. The SSA directly compared the two
offerors on each technical factor. She weighed the increased risk attributable
to OSC but found that when the technical superiority of Synaptek was
coupled with its 40.1% price premium, the Navy was prepared to bear the
additional moderate risk associated with OSC’s offer that had multiple
strengths, few weaknesses, and the preferable price. Synaptek believes the
SSA should have “quantif[ied] the tradeoffs” that led to choosing OSC,
which is detail that the FAR expressly states the SSA is not required to
include. FAR 15.308. We agree that the SSA could have made a more
detailed analysis, but the SSA’s decision is properly documented.
II. Technical Proposal
Regarding the technical proposal, Synaptek makes a variety of
arguments that OSC was overrated on the first two factors and that the Navy
ignored risks that it should have considered in OSC’s technical proposal.
First, Synaptek argues that the Navy did not consider the risk that OSC would
not be ability to execute its proposal. The SSA did consider OSC’s ability to
execute its approach, however. See AR 659-62. In the corrective action, the
16
SSA reviewed OSC’s proposal for all the weaknesses that Synaptek alleged
and found that the materials OSC provided indicated that it could perform
successfully, albeit with some risk. Synaptek’s doubts notwithstanding, the
SSA considered Synaptek’s allegations.
Synaptek also argues that OSC’s failure to propose a full-time
Program Manager should have resulted in an assigned weakness. We
disagree.
The solicitation required the contractor to “provide a Program
Manager (PM) as a primary point of contact who shall provide management,
direction, administration, quality control, and leadership of the execution of
any TO.” AR 47. The program manager would “serve as the Government’s
major point-of-contact,” “provide overall leadership and guidance for all
contractor personnel,” and be “ultimately responsible for the quality and
efficiency” of performance. AR 68. Additionally, “[t]he PM shall have
organizational authority to execute the requirements. The PM shall assign
tasking to contractor personnel, supervise on-going technical efforts, and
manage overall task order performance.” AR 68. The solicitation does not
require a single, permanent program manager for the duration of the contract.
OSC named a Program Manager, [ ], AR 260, thus meeting
the Program Manager requirement. Synaptek seizes on the word “on-going,”
but OSC does not suggest that its Program Manager will not continually
supervise technical efforts.
The SSA considered the fact that OSC may present risk due to
replacing Mr. [ ] after the transitional period. She also accounted for
OSC’s proposal of a [ ] that was not required by the
solicitation. Synaptek’s disagreement with the SSA’s reasonable assessment
that OSC’s Program Manager approach will be effective is insufficient to
demonstrate the decision was arbitrary and capricious or irrational.
Synaptek also argued that the Navy overrated OSC’s Performance
Approach. Synaptek does not actually challenge the content of OSC’s
proposal, however. Instead, it casts aspersions on OSC’s finances, citing
materials that were not before the Navy at the time of the SSEB’s or the
SSA’s evaluation and that we decline to consider. Synaptek does not connect
the dots as to why the Navy should have abandoned the written proposals
and sought additional information when the solicitation expressly provided
that the Navy would not hold discussions.
17
Synaptek’s related argument that OSC’s Performance Approach is
overrated because its employees will not have the required certifications is
without support in the record. OSC’s proposal spelled out its process for
maintaining certified employees, explained its subcontractors’ roles, and
warranted that its employees would be properly credentialed. Synaptek may
disagree, but without more its allegations are insufficient to disturb the
Navy’s award.
The last component of Synaptek’s argument that OSC’s Performance
Approach should not have been rated “Good,” is that the Navy ignored the
serious risk that OSC will pay its employees at below-market rates. This
argument is another iteration of Synaptek’s disbelief that an offeror at a price
point significantly lower than its own could perform the requirements of the
contract. Synaptek merely presents an alternative way to view the IGE and
market cost data, which that the SSA viewed differently. But Synaptek does
not meaningfully challenge the SSA’s explanations for how OSC’s price
reasonably could differ from the comparison prices.
OSC made representations in its proposal, on which the SSA was
entitled to rely, and among those statements was an explanation of how it
offered competitive employment packages that include more than the base
salary. In any event, OSC was in the middle of the range of prices for offerors
overall and slightly lower than the middle of prices from eligible offerors.
The SSA’s adoption of the Good rating for Performance Approach was not
unreasonable.
III. Responsibility Determination
Finally, Synaptek argues that the Navy did not properly document its
responsibility determination and, in any event, could not have determined
rationally that OSC is a responsible offeror. “The contracting officer’s
signing of a contract constitutes a determination that the prospective
contractor is responsible with respect to that contract.” FAR 9.105-2(a)(1)
(2018). Contracting officers “are ‘generally given wide discretion’ in making
responsibility determinations and in determining the amount of information
that is required to make a responsibility determination.” Impresa
Construzioni Geom. Domenico Garufi v. United States, 238 F.3d 1324, 1335
(Fed. Cir. 2001) (quoting John C. Grimberg Co. v. United States, 185 F.3d
1297, 1303 (Fed. Cir. 1999)). The court will afford the agency’s
determination of responsibility the presumption of regularity until the
18
protestor rebuts the determination with evidence that demonstrates that the
determination was arbitrary and capricious. Id.
The contracting officer signed the award of the contract to OSC. AR
780. Moreover, the contracting officer included a checklist responsibility
determination in her Contract Review Board Presentation after corrective
action. AR 628. Synaptek has not demonstrated that the agency ignored
relevant information that was before it or pointed to information that the
Navy should have sought out that would have disqualified OSC. We will not
disturb the Navy’s exercise of discretion in determining OSC a responsible
offeror.
CONCLUSION
In sum, because the Navy properly awarded the contract to OSC, we
grant defendant’s and intervenor’s motions for judgment on the
administrative record and deny plaintiff’s motion. The Clerk is directed to
enter judgment for defendant. No costs.
s/Eric G. Bruggink
ERIC G. BRUGGINK
Senior Judge
19
| {
"pile_set_name": "FreeLaw"
} |
United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS November 3, 2003
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 02-60759
Summary Calendar
JEET SINGH,
Petitioner,
versus
JOHN ASHCROFT, U.S. ATTORNEY GENERAL,
Respondent.
Petition for Review of an Order of the
Board of Immigration Appeals
BIA No. A70-007-358
Before HIGGINBOTHAM, DAVIS and PRADO, Circuit Judges.
PER CURIAM:*
Jeet Singh, a native and citizen of India, seeks review of an
order of the Board of Immigration Appeals (“BIA”) denying his
motion to reopen his deportation proceeding and rejecting his
request for relief under the Convention Against Torture. For the
following reasons, his petition for review is DENIED.
Singh entered the United States on June 5, 1994, without
inspection, and was apprehended by immigration officials soon
*
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.
thereafter. On June 8, officials with the Immigration and
Naturalization Service (“INS”) served on Singh an Order to Show
Cause (“OSC”). The OSC advised Singh that he was required by law
to provide an address and telephone number where notices could be
sent, that he would have a hearing before an immigration judge, and
that he could be deported if he failed to appear at the hearing.
Singh refused to provide a United States address. Singh’s
deportation hearing was held on July 13, 1994, but he did not
appear. The immigration judge (“IJ”) ordered Singh deported in
absentia.
Four years later, Singh filed a motion to reopen his case and
submitted a corresponding application for asylum. The IJ denied
Singh’s motion and concluded that Singh had received proper notice
of the deportation hearing. Singh appealed this decision to the
BIA, and he also filed a second motion to reopen his deportation
proceedings with the BIA under the Convention Against Torture. The
BIA rejected both of his arguments.
In his current petition, Singh first argues that the BIA erred
in concluding that he received sufficient notice of his deportation
hearing. He claims that he did not speak or understand English and
thus did not understand the requirements set forth in the OSC.
In reviewing the BIA’s denial of a motion to reopen, we apply
“a highly deferential abuse of discretion standard.”1 We review
1
See Lara v. Trominski, 216 F.3d 487, 496 (5th Cir. 2000).
2
the BIA’s factual findings to ensure that they are supported by
substantial evidence. The BIA’s conclusion must be “based upon the
evidence presented and [must be] substantially reasonable.”2 We
“may not reverse the BIA’s factual conclusions unless the evidence
was ‘so compelling that no reasonable factfinder could conclude
against it.’”3
We conclude from a review of the record that the BIA did not
abuse its discretion in refusing to reopen Singh’s case. There is
ample evidence in the record indicating that Singh spoke and
understood English when he received the OCR. Not only did Singh
sign a certification indicating that he understood English, but he
also provided immigration officials with detailed personal
information, which they used to prepare a specialized immigration
form.
Singh next argues that his case should be reopened because he
received ineffective assistance by an immigration consultant, who
prepared an asylum application for him shortly after the
deportation order was issued. Singh claims that this ineffective
assistance constitutes an exceptional circumstance sufficient to
justify recission of the deportation order. His argument is
without merit.
2
Ontunez-Tursios v. Ashcroft, 303 F.3d 341, 350 (5th Cir.
2002).
3
Lopez De Jesus v. INS, 312 F.3d 155, 158-59 (5th Cir. 2002)
(citing Chun v. INS, 40 F.3d 76, 78 (5th Cir. 1994)).
3
A deportation order may be rescinded upon a motion to reopen
if an alien demonstrates that his failure to appear at a
deportation hearing was caused by exceptional circumstances.4
Exceptional circumstances, however, are defined as “exceptional
circumstances ... beyond the control of the alien,” such as
“serious illness of the alien or illness or death of the spouse,
child, or parent of the alien, but not including less compelling
circumstances.”5 Singh neither argues nor demonstrates that the
alleged ineffective assistance of his immigration consultant was a
circumstance beyond his control that caused him to fail to appear
at his deportation hearing. In fact, the alleged ineffective
assistance occurred two months after Singh failed to appear at the
deportation hearing.
Moreover, Singh’s argument is time-barred. As a general rule,
motions to reopen based on exceptional circumstances must be filed
within 180 days of entry of the deportation order.6 Singh does
not argue that his motion to reopen – filed four years after the
original deportation order – was made within this time period, but
instead requests that we equitably toll the running of this period
until the date that he hired his current counsel. Singh never
4
8 U.S.C. § 1252b(f)(2) (repealed 1996); see also id. §
1229a(e)(1) (2003).
5
Id.
6
See Id. § 1252b(c)(3) (repealed 1996); see also id. §
1229a(b)(5)(C)(i) (2003).
4
states when he hired his attorney, however, and there is no
evidence of this date in the record.
Singh’s final argument is that the BIA erroneously concluded
that his motion to reopen based on the Convention Against Torture
(“CAT”) was time-barred. This argument is without merit.
Under the regulations implementing the CAT, aliens who were
ordered deported prior to March 22, 1999, may move to reopen the
order if they file by June 21, 1999.7 Since Singh’s final
deportation order was entered on July 13, 1994, he could have filed
his motion under the CAT at any time up until June 21, 1999. He
did not file his motion seeking protection under the CAT until July
6, 1999, well after the regulatory deadline.
Singh argues that we should equitably toll the regulatory
deadline because he received inadequate notice of his deportation
hearing and ineffective assistance by his immigration consultant.
However, neither ground provides justification for tolling. As
noted above, the record indicates that Singh did receive proper
notice of his hearing. In addition, Singh retained his current
attorney at least as early as November 1998, when he filed his
initial motion to reopen based on alleged lack of notice. Singh
does not explain why his current attorney could not file a motion
under the CAT before the June 21, 1999, deadline. Thus, the BIA’s
conclusion that his CAT application was time-barred was a
7
See 8 C.F.R. § 201.18(b)(2)(i).
5
reasonable interpretation of the regulations.8
For the foregoing reasons, Singh’s petition is DENIED.
8
Lopez-Gomez v. Ashcroft, 263 F.3d 442, 444 (5th Cir. 2001)
(“[W]e will defer to the BIA’s interpretation of immigration
regulations if the interpretation is reasonable.”).
6
| {
"pile_set_name": "FreeLaw"
} |
828 F.Supp. 267 (1993)
Ann M. CUDONE and Daniel Cudone, Plaintiffs,
v.
John F. GEHRET, M.D., and John F. Gehret, M.D., P.A., a Delaware corporation, Defendants.
Civ. A. No. 91-585 MMS.
United States District Court, D. Delaware.
July 21, 1993.
*268 Richard A. Zappa, of Young, Conaway, Stargatt & Taylor, Wilmington, DE, for plaintiffs.
Warren B. Burt, of Burt & Burt, Wilmington, DE, for defendants.
OPINION
MURRAY M. SCHWARTZ, Senior District Judge.
Plaintiffs, Ann and Daniel Cudone, filed suit against John Gehret, M.D., and John F. Gehret, M.D., P.A., alleging medical malpractice in Dr. Gehret's diagnosis and treatment of Ms. Cudone's breast cancer. The case was tried to a jury which rendered a verdict in favor of defendants. Plaintiffs have now moved for a partial new trial on the issues of causation and damages. For the reasons that follow, the Court will order the matter be retried in its entirety.
I. FACTUAL AND PROCEDURAL BACKGROUND
In October of 1989 Ann Cudone found a lump the size of a pea (approximately 1 cm × 1 cm) in her left breast while performing a self examination. She went to see her gynecologist, Dr. Gehret, within two or three days. Docket Item ["D.I".] 65 at A-3-5. *269 According to Ms. Cudone, Dr. Gehret felt the lump she brought to his attention, but told her it was merely fibrocystic. Id. at A-6. According to Dr. Gehret, he did not feel the lump. D.I. 70 at B-207. In any event, Dr. Gehret did not diagnose Ms. Cudone as having breast cancer in October of 1989.
In July of 1990 Ms. Cudone felt the lump had increased in size. D.I. 65 at A-9. Ms. Cudone was diagnosed as having breast cancer in August of 1990. Id. A-30-34. By this time the lump measured 2.2 cm × 3.5 cm × 4.5 cm. Plaintiffs' Exhibit 7. The cancer was found to have spread to one regional lymph node. D.I. 70 at B-74-75.[1] Upon diagnosis Ms. Cudone underwent surgery for a mastectomy. D.I. 70 at B-73-74. She also received chemotherapy as part of her treatment regimen. D.I. 65 at A-34.
Mr. and Ms. Cudone filed suit against John Gehret, M.D., and John F. Gehret, M.D., P.A. ["defendant"] on October 24, 1991, alleging medical malpractice in Dr. Gehret's diagnosis and treatment of Ms. Cudone's breast cancer. The case was tried to a jury from approximately 9:00 a.m. to 3:30 p.m. each day beginning April 26, 1993. On Friday, April 30, 1993 at 12:30 p.m. the jury began deliberations. Later that day the jury completed its first week of duty and was discharged for the weekend at 3:30 p.m., as per the usual schedule. The jury resumed deliberations at 9:00 a.m. Monday May 3, 1993. At 11:35 a.m. that morning, the jury indicated that it could not reach a unanimous verdict in the case. At sidebar, counsel for plaintiff broached the possibility of giving the jury a "dynamite charge," D.I. 69 at F-5, and then withdrew his suggestion. D.I. 69 at F-7-8. The Court, therefore, told the jury, inter alia, "I think at this point it is far too early to excuse you. I think you should make additional efforts to attempt to arrive at a verdict. You are excused to go to the jury room." D.I. 69 at F-9. The jury further deliberated through the afternoon. Just as 3:30 p.m. approached, the hour at which the jury would have been discharged for the day and instructed to return in the morning to begin their seventh day of service, the jury sent out a note that their deliberations were at an end. The jury had answered the first two questions of a six question verdict form in such manner as to render further deliberation unnecessary. To the first question, "Do you find that the defendant John F. Gehret was negligent in any manner?" the jury responded, "Yes." To the second question, "Did the defendant John F. Gehret's negligence proximately cause any harm to the plaintiff, Ann M. Cudone?" the jury responded, "No."
II. STANDARD FOR GRANT OF A NEW TRIAL
Plaintiffs request the Court to grant a new trial on the issue of causation on the basis that the jury's verdict was against the great weight of the evidence. "`The authority to grant a new trial ... is confided almost entirely to the exercise of discretion on the part of the trial court' ..." American Bearing Co., Inc. v. Litton Indus., 729 F.2d 943, 948 (3d Cir.) (quoting Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 191, 66 L.Ed.2d 193 (1980)), cert. denied, 469 U.S. 854, 105 S.Ct. 178, 83 L.Ed.2d 112 (1984). However, where the ground on which a new trial is sought is that the jury's verdict was against the great weight of the evidence, the judge should proceed cautiously, since whenever a new trial is granted on this ground the judge has necessarily substituted his or her judgment, at least to some extent, for that of the jury. Klein v. Hollings, 992 F.2d 1285, 1290 (3d Cir.1993). Thus, a new trial should only be granted where "a miscarriage of justice would result if the verdict were to stand," the verdict "cries out to be overturned," or where the verdict "shocks our conscience." Williamson v. Consolidated Rail Corp., 926 F.2d 1344, 1353 (3d Cir.1991). This standard for grant of a new trial is less rigorous than the standard for grant of judgment as a *270 matter of law. Thus, even where there exists that "minimum quantum of evidence" from which the jury might reasonably find in favor of the nonmoving party, Dryer v. ARCO Chem. Co., 801 F.2d 651, 654 (3d Cir.1986), cert. denied, 480 U.S. 906, 107 S.Ct. 1348, 94 L.Ed.2d 519 (1987), a new trial may be granted. Roebuck v. Drexel Univ., 852 F.2d 715, 735-36 (3d Cir.1988).
The district court has less discretion in granting a new trial where the subject matter of the suit is "simple and within a layman's understanding," but has greater discretion where the subject matter is complex "such as passing `upon the nature of an alleged newly discovered organic compound in an infringement action.'" Klein, 992 F.2d at 1290 (quoting Lind v. Schenley Indus., Inc., 278 F.2d 79, 90-91 (3d Cir.), cert. denied, 364 U.S. 835, 81 S.Ct. 58, 5 L.Ed.2d 60 (1960). Furthermore, the discretion of the district court judge in granting a new trial is particularly important where the ground for such grant is that the verdict was against the great weight of the evidence because "the district court [is] able to observe the witnesses and follow the trial in a way [the appellate court] cannot replicate...." Roebuck, 852 F.2d at 735. See also Williamson, 926 F.2d at 1353 (quoting Roebuck, 852 F.2d at 735).
III. DISCUSSION
In arriving at its verdict, the jury necessarily determined that although Dr. Gehret was negligent in his treatment of Ms. Cudone, that negligence did not cause any of the three injuries Ms. Cudone alleged she had sustained. A new trial, therefore, should be granted if the Court finds the great weight of the evidence shows Dr. Gehret's negligence caused any one of the three injuries allegedly sustained by Ms. Cudone. Those three injuries were described to the jury in the charge as follows: (1) "Mrs. Cudone's breast cancer was more advanced by the time of its eventual diagnosis"; (2) she required "more extensive treatment than otherwise would have been required"; and (3) the negligence "has placed her more at risk for her breast cancer recurring and having a shortened life expectancy as a result of said recurrence."[2] The Court will examine the jury's finding as to each injury, seriatim.
A. CANCER BECAME MORE ADVANCED
Plaintiff's first alleged injury was that defendant's negligence in failing to timely diagnose her breast cancer caused the cancer to become "more advanced by the time of its eventual diagnosis." At the time of diagnosis Ms. Cudone's primary tumor measured 4.5 cm in its longest dimension and had metastasized to involve one regional lymph node. Defendant focuses on the evidence tending to prove or disprove the existence of metastasis to that regional node by the time defendant should have diagnosed Ms. Cudone's cancer in October of 1989. Under plaintiffs' theory of the case, in October of 1989 when Dr. Gehret should have diagnosed Ms. Cudone's lesion, the cancer existed only as a small, approximately 1 cm, tumor with no metastasis to any lymph nodes. Defendant argues the jury's verdict is explained by the fact that they accepted defendant's theory of the case, namely that in October of 1989 the cancer had already metastasized to the node. According to defendant, because by October of 1989 the cancer had already "advanced" to the stage at which it existed when eventually removed in August of 1990 (i.e., primary lesion with involvement of one regional node), the "advance" of the cancer to involve one regional node was in no way related to Dr. Gehret's failure to diagnose and treat Ms. Cudone's cancer in October of 1989. The Court holds such a jury finding to be against the great weight of the evidence.
Five experts testified as to this issue at trial. Four experts testified that to a reasonable degree of medical probability there had been no nodal involvement in October of 1989. The fifth expert testified that it was impossible to say whether or not there was nodal involvement in October of 1989. Dr. Mikund Didolkar, a surgical oncologist, the Director of Surgical Oncology at Sinai Hospital and an Associate Professor of Surgery at Johns Hopkins University, testified that in his opinion in October of 1989 Ms. Cudone *271 would have been T-1, N-0, M-0.[3] D.I. 70 at B-85. The N-0 designation refers to the fact that none ("0") of the regional lymph nodes would have been cancerous. Dr. Didolkar explained that he arrived at this conclusion because microscopic examination of the cancerous lymph node he removed during Ms. Cudone's surgery revealed a very early form of pathology. The fact that in August of 1990 there was this very early indication of spread to the node, he explained, made it unlikely that cancer would have been present in the node in October of 1989, ten months earlier. D.I. 70 at B-86, B-93.
Dr. Michael Dillon, a gynecological oncologist who teaches and engages in private practice at Johns Hopkins, testified on direct examination that to a reasonable degree of medical probability Ms. Cudone "certainly would have been a T-1, N-0, M-0" in October of 1989. D.I. 66 at C-45. Again, the N-0 designation indicates that no nodes were involved at that time. His testimony on cross examination was the same. D.I. 66 at C-61-62. Dr. James Vogel, an internist with a subspecialty in medical oncology and hematology who teaches at Mount Sinai School of Medicine and at Beth Israel Hospital, also testified that in October of 1989 Ms. Cudone's cancer had not yet spread to any regional lymph nodes. "In 1989 she would have been a in my opinion, a T-1, N-0, M-0, or Stage 1." D.I. 70 at B-157. Finally, Dr. Marshall Klaven, an obstetrician/gynecologist a Vice-Chairperson of Obstetrics and Gynecology at Hahnemann University and Chairperson of the Department of Obstetrics and Gynecology at Crozer-Chester Medical Center, also indicated Ms. Cudone's cancer had not involved regional lymph nodes in October of 1989 calling her a "Stage I" at that time. D.I. 65 at 94-95.
The one expert whose testimony was not in complete harmony with that of the others was defendant's expert Dr. James Stark. On direct examination Dr. Stark's testimony was as follows:
Q. Is there any way you can tell whether the tumor had metastasized to a node in October of 1989?
A. I don't think you can tell that with certainty.
Q. Can you explain that, please.
A. Well, sure. If you the only way you could know that, really, since this lady was not operated on and you don't have the node in your hand in October of 1989, is to go back and search the medical literature for some guidance as to what the likely situation would have been in her lymph nodes at that time.
Unfortunately, the medical literature is essentially silent on this issue for a very good reason. That is to say, no one willingly, knowingly, would take someone with breast cancer and not treat them. The only way you could get this kind of information, how fast lymph nodes became positive, was to take women and deliberately delay treating them. Since we don't do that in a civilized world, there is no literature that is really relevant to the issue of how fast a lymph node becomes positive. I don't think that anyone can know with certainly [sic] whether that lymph node was involved with cancer in October of 1989. I don't think it's knowable.
D.I. 68 at E-12-13 (emphasis added). Again on cross examination he testified:
Q. Doctor, in testifying here today, you're not saying that the cancer that Mrs. Cudone has metastasized in October of 1989, you're saying you you don't have an opinion one way or the other whether it did or didn't and don't believe it can be determined; is that right?
A. The last is the most appropriate. I don't think it can be determined whether or not she had a lymph node involved in October of 1989.
Q. You're not in here telling us that your opinion is that it did not or it did metastasize?
*272 A. That is correct.
D.I. 68 at E-24.
Such testimony is not sufficient to overcome the overwhelming testimony produced that to a reasonable degree of medical certainty Ms. Cudone's lymph node was cancer-free in October of 1989. First, viewing the testimony in the light most favorable to the defendant, Stark's testimony did not directly contradict the opinion given by all the other experts addressing this issue. What he did say, was that he did not know, and felt it was impossible to know, whether the node was cancerous in October 1989 because the literature is silent. At best, and read charitably, his testimony can be viewed as casting some doubt on the certainty of the medical opinion expressed by all the other doctors. However, Dr. Stark's testimony to the intrinsic nature of cancer progression weakens further the charitable meaning attributed by the Court to Dr. Stark's testimony. On cross examination he testified that the nature of cancer is such that the probability of metastasis increases with the passage of time and growth of the primary cancer. D.I. 68 at E-24. This testimony corroborates the opinion expressed by all the other experts. As Ms. Cudone's cancer was just barely at the detectible stage in October of 1989, Stark's testimony would indicate a relatively low probability of metastasis at that time.
Second, Dr. Stark's testimony only goes to the inability to determine metastatic condition by comparison to medical literature. However, at least one expert, Dr. Didolkar, expressly stated a basis for opinion other than comparison to scientific literature. Dr. Didolkar testified that his opinion was based on pathological evidence derived from the excised lymph node and that such pathological evidence caused him to conclude that the node had been cancer-free in October 1989. This evidence stands uncontradicted.[4]
In summary, the jury's verdict cannot be explained by claiming the jury credited defendant's theory of the case over plaintiffs'. If the jury did so, it acted against the great weight of the evidence. Dr. Didolkar's testimony that the node found to be cancerous in August of 1990 would not have been cancerous in October of 1989 stands uncontradicted and unimpeached. In light of this the jury should not have found that the node could have been cancerous in October 1989. Further, the great majority of expert testimony repeatedly stated that to a reasonable degree of scientific certainty the node was not cancerous in October of 1989. For the jury to equate a lone opinion, that it is impossible to determine whether or not the node was cancerous in October of 1989, with a finding that the node was cancerous in October of 1989, not only renders the jury's verdict against the great weight of the evidence but shocks the conscience of this Court. A new trial will be ordered on this ground.
B. MORE EXTENSIVE TREATMENT REQUIRED
Defendant also asserts the jury's finding of no proximate cause is supportable on the issue of whether his negligence caused Ms. Cudone to undergo more extensive treatment than would have been needed if he had properly diagnosed her breast cancer in October of 1989.[5] Ms. Cudone's treatment upon diagnosis in August of 1990 included a mastectomy, reconstructive surgery and chemotherapy. *273 Defendant must therefore demonstrate there was evidence which showed that even if defendant had diagnosed Ms. Cudone's cancer in October of 1989 she would have still undergone a mastectomy and reconstructive surgery (rather than merely a lumpectomy as plaintiff argued) and would have had to undergo similar chemotherapy. No such demonstration can be made on the record.
There was conflicting evidence as to whether Ms. Cudone would necessarily have undergone the same chemotherapy regimen if defendant had diagnosed her cancer in October of 1989. Plaintiffs' experts Dr. Didolkar and Dr. Gordon testified that if her cancer had been diagnosed in October 1989 when it was T-1, N-0, M-0 chemotherapy would not have been administered. D.I. 66 at C-111; D.I. 70 at B-87, B-117. Defendant's expert Dr. Stark testified that if Ms. Cudone had been T-1, N-0, M-0 in October 1989 he believed she would have needed chemotherapy anyway. D.I. 68 at E-15. From this conflicting evidence the jury could have found that Ms. Cudone's treatment in terms of chemotherapy would not have differed irregardless of defendant's negligence.
The opposite conclusion, however, is mandated as to the surgical portion of Ms. Cudone's treatment. Plaintiffs' expert Dr. Didolkar testified that if Ms. Cudone's cancer had been diagnosed in October 1989 before it had spread to any regional nodes, no mastectomy would have been required. Dr. Didolkar opined that the much less drastic surgical procedure known as a "lumpectomy" would have been all that was required under those conditions and as a result, Ms. Cudone would not have needed any reconstructive surgery. D.I. 70 at B-86. None of defendant's experts contradicted this testimony.
The Court finds that plaintiffs presented evidence that Dr. Gehret's failure to diagnose Ms. Cudone's cancer in October of 1989 before it had spread to any regional nodes caused Ms. Cudone to undergo more extensive surgical treatment than would have been necessary in the absence of such failure. As this evidence was uncontroverted, the jury should have found Dr. Gehret's negligence caused Ms. Cudone to suffer more extensive treatment. The jury's verdict, however, necessarily implies that it reached a contrary conclusion. For this reason, plaintiff's motion for a new trial on this ground must be granted.
C. INCREASED RISK
The third injury allegedly sustained by Ms. Cudone was an increase in the risk that her cancer will recur. Plaintiffs contend that if defendant had properly diagnosed Ms. Cudone's breast cancer in October of 1989 the probability that her cancer would recur after treatment would have been very low. According to plaintiff, the probability that her cancer will recur is now dramatically higher because of the late date at which diagnosis and treatment finally occurred.[6] Defendant asserts there is evidence to support what he posits was the jury's conclusion that Dr. Gehret's negligent failure to diagnose and treat Ms. Cudone's cancer in October of 1989 did not result in any increase in the risk that Ms. Cudone's cancer will recur. The Court agrees with defendant.
Plaintiffs did present compelling evidence that Ms. Cudone suffered a drastic increase in the risk that her cancer will recur as a result of Dr. Gehret's negligent failure to diagnose. Dr. Klaven testified that if Ms. Cudone's cancer had been diagnosed in October 1989 when there was no nodal involvement her chance of recurrence would have been approximately 5%-8%, but that her present risk of recurrence is 35%-40%. D.I. 65 at A-95-96. Dr. Didolkar testified that if her cancer had been diagnosed in October 1989 under T-1, N-0, M-0 conditions her chance of recurrence would have been 25%-30% or less. He placed her present chances of recurrence at 50%-60%. D.I. 70 at B-88. Finally, Dr. Vogel testified Ms. Cudone's risk of recurrence would have been up to 25% if her cancer had been diagnosed in October 1989, but that because diagnosis did not occur *274 until August 1990, there is now a 55% chance that her cancer will recur. D.I. 70 at B-158.
Defendant presented two experts on the issue of increased risk of recurrence, Dr. Robert Baker and Dr. Stark. Dr. Baker testified that if Ms. Cudone had been T-1, N-0, M-0 in October of 1989 her risk of recurrence at that time would have been approximately 20% but that her present risk is at least 50%. D.I. 67 at D-60-61. Thus, Dr. Baker's testimony is aligned with that of plaintiffs' expert, Dr. Vogel. In contrast, Dr. Stark testified that he would place Ms. Cudone's present risk of recurrence at only 20% and that if there had been some cancer present in the node in October of 1989 he believed her prognosis at that time would have been virtually the same as it is today, i.e. 20%. D.I. 68 at E-13-14. Dr. Stark also supported defendant's theory in a second way. He testified that even assuming Ms. Cudone had been T-1, N-0, M-0 in October 1989, i.e., no cancer in the node, her risk of recurrence would not have been very different from present, placing it at 5%-10%.
Defendant's evidence is sufficient to withstand plaintiffs' motion for a new trial predicated on this ground. First, the testimony of defendant's expert, Dr. Stark, directly contradicted plaintiffs' (and one of defendant's) experts thereby creating an issue of expert credibility which is ill suited to judicial intrusion. Second, unlike defendant's arguments as to Ms. Cudone's first alleged injury, i.e., the advancement of the cancer between October 1989 and August 1990, there is no overwhelming consensus among plaintiffs' experts. On the prior issue each expert, except Dr. Stark, gave the same bright line answer to the same black and white question: Was there any nodal involvement in October 1989? "No." And the one expert not in line with the others, Dr. Stark, did not answer, "Yes." On the instant issue each expert assigned different statistical ranges to Ms. Cudone's risk of recurrence in October and in August. The jury is permitted to take such differences into consideration when weighing the evidence. The Court finds sufficient support for the jury verdict on issue. This ground will not support plaintiffs' motion for a new trial.
IV. CONCLUSION
Defendant has advanced various explanations of the jury's verdict. The Court finds sufficient evidence in the record to support defendant's explanations as to how Dr. Gehret's negligence in failing to diagnose Ms. Cudone's cancer did not result in an increase in the risk that her cancer will recur. The Court finds, however, that the jury's determination that Dr. Gehret's negligence did not cause Ms. Cudone's cancer to become more advanced was against the great weight of the evidence. That jury determination also shocks the conscience of the Court. The Court also finds that the jury's determination that Dr. Gehret's negligence did not cause Ms. Cudone to undergo more extensive treatment was against the great weight of the evidence.
Plaintiffs have urged that if a new trial is granted, the jury finding that Dr. Gehret breached his duty of care should be taken as established for purposes of a second trial. The issues of what the duty of care was and whether it was violated were not only hotly contested, but in my view, neither plaintiffs nor defendant could confidently predict what the jury would decide on that issue. Given the jury's inexplicable answer to the interrelated question of causation, a new trial should be granted in its entirety. Gasoline Products Co., Inc. v. Champlin Ref. Co., 283 U.S. 494, 500, 51 S.Ct. 513, 515, 75 L.Ed. 1188 (1931) (partial, rather than full, new trial should not be granted where the issue to be retried is interwoven with the issues proposed to be left standing).
An order will issue in conformity with this opinion.
NOTES
[1] Ms. Cudone's cancer at that point was classified as T-2, N-1, M-0 or "Stage II." The T-2 designation indicates that the size of the primary tumor placed it in an intermediate size classification category (2 cm to 5 cm). The N-1 designation indicates that the cancer had spread to one regional lymph node by this time. The M-O designation indicates there was no known metastasis to distant organs.
[2] There was no objection to this part of the jury charge.
[3] The T-1 designation indicates that the size of the primary tumor would have placed the lesion in the smallest size classification category (tumors less than 2 cm). The N-0 designation refers to the fact that none of the regional lymph nodes would have been cancerous. The M-0 designation indicates there would have been no metastasis of the cancer to distant organs. The T-1, N-0, M-0 designation indicates a "Stage I" cancer.
[4] In addition, although the parties do not argue it, the Court seriously questions how any reasonable jury could determine Ms. Cudone's cancer did not "advance" significantly after October 1989. There was absolutely no dispute that in October of 1989 the size of her primary tumor was approximately the size of a pea or smaller (approximately 1 cm by 1 cm or less) and that upon removal in August of 1990 it measured 3.5 cm × 4.5 cm × 2.2 cm. Plaintiffs' Exhibit 7. Her cancer, therefore, can be said to have advanced in that it grew from a small lesion to a much larger one due to Dr. Gehret's failure to diagnose. This increase in size changed the medical designation of the tumor from N-1 (denoting tumors smaller than 2 cm) to N-2 (denoting tumors of 2 cm to 5 cm). Such "advance" in size and designation makes it difficult to accept that Dr. Gehret's failure to diagnose Ms. Cudone's cancer in October of 1989 did not proximately cause her cancer to advance.
[5] It should be noted that plaintiffs' theory that Ms. Cudone required more drastic therapy due to Dr. Gehret's negligence is based on the assumption that if Dr. Gehret had properly diagnosed Ms. Cudone's cancer in October of 1989, the stage of the cancer at the time would have been such that no nodes would have been involved.
[6] As noted in the previous section, plaintiffs' theory that Ms. Cudone experienced an increase in risk of recurrence is based on the assumption that if Dr. Gehret had properly diagnosed Ms. Cudone's cancer in October of 1989, the stage of the cancer at the time would have been such that no nodes would have been involved.
| {
"pile_set_name": "FreeLaw"
} |
UNPUBLISHED ORDER
Not to be cited per Circuit Rule 53
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
April 12, 2006
Before
Hon. RICHARD D. CUDAHY, Circuit Judge
Hon. DIANE P. WOOD, Circuit Judge
Hon. DIANE S. SYKES, Circuit Judge
No. 03-3988
UNITED STATES OF AMERICA, Appeal from the United States District
Plaintiff-Appellee, Court for the Northern District of
Illinois, Eastern Division
v.
No. 03-CR-351
DEMETRIUS DAVIS,
Defendant-Appellant. James F. Holderman,
Judge.
ORDER
Demetrius Davis was convicted of possessing a gun despite a prior felony
conviction, 18 U.S.C. § 922(g)(1), and sentenced to 120 months’ imprisonment, the
statutory maximum, id. § 924(a)(2). He appealed, raising two arguments that are
relevant here. First, he contended that the district court improperly increased his
sentence based on prior convictions even though no jury had determined the facts of
those convictions beyond a reasonable doubt. But we held that this argument was
foreclosed by Almendarez-Torres v. United States, 523 U.S. 224 (1998), and
explained that Davis had not argued that the district court relied on any
information barred from its consideration by Shepard v. United States, 544 U.S. 13
(2005). Second, Davis maintained that the district court erroneously applied the
sentencing guidelines as mandatory. See United States v. Booker, 543 U.S. 220
(2005). He was right about this second argument, so we ordered a limited remand
No. 03-3988 Page 2
to find out whether the judge would have imposed the same sentence under an
advisory regime. See United States v. Paladino, 401 F.3d 471, 483–84 (7th Cir.
2005). The judge has since informed us that he would have imposed the same
sentence.
Although his sentence was properly calculated and presumptively
reasonable, see United States v. Mykytiuk, 415 F.3d 606, 608 (7th Cir. 2005), Davis
now maintains that it is unreasonably long. To this end, he insists that his history
of substance abuse compels a lower sentence. Yet the district court considered that
history and decided that the competing interest of protecting the public from the
likelihood of recidivism warranted the sentence that it gave. The choice was the
sentencing court’s, not ours, and there is nothing about this case that renders that
choice unreasonable. See United States v. Williams, 436 F.3d 767, 768–69 (7th Cir.
2006); United States v. Williams, 425 F.3d 478, 480–81 (7th Cir. 2005), cert. denied,
126 S. Ct. 1182 (2006).
Davis’s next contention warrants more discussion. He asserts that the
district court, while answering the narrow question we posed in our limited
remand, improperly cited a police report that said that Davis threatened to kill an
11-year-old child during an armed robbery that resulted in one of his several prior
convictions. The court’s use of this report, Davis says, contravenes our decision in
United States v. Lewis, 405 F.3d 511, 515 (7th Cir. 2005). In Lewis, we held that a
district court erred by classifying a conviction for robbery a “crime of violence”
under U.S.S.G. § 2K2.1(a)(4)(A) in reliance on police affidavits asserting facts to
which Lewis did not admit. Although “robbery always is a ‘crime of violence’,” we
explained, it was error to rely on the report. Lewis, 405 F.3d at 515. “The district
judge,” we wrote, “may well have used the affidavit’s allegations when deciding
where in the range to sentence Lewis, which would misconceive the nature of a
recidivist enhancement. What matters is the fact of conviction, rather than the
facts behind the conviction.” Id.
But here, unlike in Lewis’s case, there is no indication that at sentencing the
district court considered the police report. Instead, the court first cited the report
when it was time under Paladino to say whether, in its discretion, it would lower
the sentence, 401 F.3d at 483–84, so the question is not the propriety of the
sentence as originally imposed. Moreover, Lewis left open the possibility that,
although the court could not use the affidavits to determine the application of the
guidelines adjustment, it could use them to otherwise guide its discretion. Lewis,
405 F.3d at 515 (“The United States does not argue that it would have been
appropriate to use these affidavits to decide where in the range to sentence Lewis, if
they were not appropriately used to classify his prior conviction.”). That is
consistent with the long-established law that a sentencing court may look at
materials like this report. See United States v. Hankton, 432 F.3d 779, 789–90 (7th
No. 03-3988 Page 3
Cir. 2005) (noting that sentencing judge may consider virtually unlimited kinds of
evidence relating to the defendant’s entire history, so long as the evidence is
reliable); United States v. Hardamon, 188 F.3d 843, 850 (7th Cir. 1999) (same); see
also United States v. Torres, 977 F.2d 321, 330 & n.4 (7th Cir. 1992) (“We note that
while arrest record alone will not justify a departure, detailed police investigation
reports may supply reliable information of prior similar adult criminal conduct.”)
(citing United States v. Terry, 930 F.2d 542, 545–46 (7th Cir. 1991)). Davis does not
argue that the information was inaccurate. And after all, unlike a case under the
Armed Career Criminal Act, the statutory maximum under the advisory regime
remained unchanged. See United States v. Welch, 429 F.3d 702, 704 (7th Cir. 2005).
Finally, Davis’s Shepard argument is not really a contention that the
sentence is unreasonable in light of the factors under 18 U.S.C. § 3553(a), but
rather that the procedure used by the court to arrive at the sentence was wrong, see
United States v. Rodriguez-Alvarez, 425 F.3d 1041, 1045–46 (7th Cir. 2005), petition
for cert. filed, (Jan. 5, 2006) (No. 05-8615). Such an error may be harmless, see id.,
and here it was (if there was any error at all). All that concerns us is that the judge
would have imposed the same sentence under an advisory regime and that the
sentence is reasonable, see Paladino, 401 F.3d at 483–84, so the judgment of the
district court is AFFIRMED.
| {
"pile_set_name": "FreeLaw"
} |
996 So.2d 863 (2008)
WALKER
v.
STATE.
No. 2D07-5899.
District Court of Appeal of Florida, Second District.
October 31, 2008.
Decision without published opinion. Affirmed.
| {
"pile_set_name": "FreeLaw"
} |
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.